Allowed

M. Gurmurthy Sastry, v. M/s Singareni collieries Com. Ltd.

Telangana HC8 Dec 2006WP/23086/1994

Case brief

AI extract

What is this about?

Petitioner sought retrospective extension of tenure and E-9 Grade. Court denied retrospective tenure for a public tenure post due to public interest concerns during investigation but directed review for E-9 Grade as charges were dropped post-retirement without misconduct findings.

What did the court decide?

Directing respondents to reconsider petitioner's case for E-9 Grade from date juniors were promoted and pay arrears if eligible; denied retrospective extension of tenure as Director (Finance).

M. Gurmurthy Sastry, Vs M/s Singareni collieries… — Service and Employment | Telangana HC (2006)

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THE HON’BLE SRI JUSTICE GODA RAGHURAM

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WRIT PETITION NO. 23086 OF 1994

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Between :

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M. Gurumurthy Sastry, S/o Late M.Gopalam, Hyderabad

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… Petitioner

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And

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M/s Singareni Collieries Company Ltd., rep by its Chairman & Managing Director, Hyderabad, and others.

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… Respondents

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THE HONOURABLE SRI JUSTICE GODA RAGHURAM

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WRIT PETITION NO.23086 OF 1994

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ORAL ORDER

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The petitioner seeks the following reliefs :-

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“i. Declaring the action of the Respondent No.5 in referring the anonymous petition dated.03-12-1991 to A.C.B for a registered enquiry as illegal and arbitrary;

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ii. Declare that the petitioner be treated as Director(Finance) from 25-2-1992 till retirement on superannuation i.e.31-7-1994 without any break and order payment of pay and allowances for the said period treating the period of leave as on duty, since the preliminary report of A.C.B formed the basis for discontinuing the petitioner as Director, the contents of which were found to be baseless:

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iii. Grant exemplary damages for the harassment and mental agony caused to the petitioner by his (respondent No.5) motivated and vindictive actions;

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And

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iv. To grant such other relief or reliefs as this Hon’ble Court may deem fit and proper in the circumstances of the case.”

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The petitioner joined the service of the 1^st respondentCorporation some time in 1964. The 1^st respondent is an agency and instrumentality of the State. On that count of this there is no disputation. On selection by Public Enterprises Selection Board the petitioner was appointed as Director (Finance) in 1988 with effect from 25-05-1988 on a two (2) year tenure. By the order dated.26-09-1990 the petitioner’s tenure was extended for a further two years. The extended tenure was until 24-05-1992. The petitioner was entitled to be consideration for further extension of the tenure till his superannuation. He was however denied the extension and on the expiry of the tenure by 24-05-1992 was posted as Chief of Internal Audit, a position in the E-8 Grade, the Grade from which he was appointed as Functional Director (Finance) in 1988.

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In 1987 the petitioner apprehending that he was not being considered for the post of Director (Finance), filed W.P.No.5705 of 1987. Pursuant to directions in the said writ petition the petitioner was considered by the Public Enterprises Selection Board and appointed as Director (Finance) with effect from 25-05-1988. The terms of the appointment communicated to the petitioner on 31-08-1988 specified that the appointment is for a period of two(2) years and that continuation beyond the first year is subject to a special assessment of his performance. Thereafter, on special assessment of his performance, by an office order dated.25-08-1989 he was continued for the fullness of his tenure of two(2) years. On 26-09-1990 the petitioner was informed that his tenure as Director (Finance) was extended for a further period of two years.

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On 25-05-1992 the petitioner learnt that one Sri T.V.Subba Rao was appointed as the Director (Finance) on the expiry of the

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petitioner’s tenure. Assailing this appointment, the petitioner filed W.P.No.8457 of 1992. On behalf the Corporation though no counteraffidavit was filed in W.P.No.8457 of 1992, it was urged that the petitioner had appeared before the relevant selection committee which considered his claims “ but in view of the report of A.C.B the committee found that it would not be proper to continue him as Director (Finance)”. In the circumstances Sri T.V.Subba Rao was appointed as Director (Finance). On behalf of the Secretary to the Government, Energy, Environment, Science and Technology and the Chief Secretary to the Government of A.P. (respondent nos.2 and 3) it was argued that the petitioner’s claim [for consideration as Director (Finance)] was deferred to obtain a report of the A.C.B. Thereafter on getting those reports and in view of the remarks of the Managing Director of the Corporation, the committee felt that it was not desirable to appoint the petitioner for a 3^rd term and thus Sri T.V.Subba Rao was appointed.

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W.P.No.8457 of 1992 was dismissed by the learned single Judge of this Court by the judgment dated.12-03-1993. The learned single Judge on an analysis of the relevant Rules (pertaining to the creation, process of selection and appointment to the post of Functional Director in the respondent-Company) concluded that the posts of Functional Directors were created in 1985; they are selection posts and not promotional; were not governed by any service Rules except certain administrative practices; and that the appointments are made by a process of selection by an appropriate level committee. The learned single Judge further recorded that in the year 1988 and 1990 the petitioner was considered and found to have the relevant qualifications and appointed as Director (Finance) and his tenure was also extended. During the currency of the extended tenure there was a complaint about misconduct allegedly committed by the petitioner while serving as a Director (Finance). After appropriate levels of consultation the complaint received against the petitioner was referred

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to the A.C.B, which was directed to investigate into the matter and submit a report. Since the petitioner’s case for extension of tenure was coming up for consideration the A.C.B was directed to submit a preliminary report by 10-05-1992. A preliminary report was submitted on 11-05-1992 by the A.C.B which recorded certain adverse comments on the reputation of the petitioner. The A.C.B preliminary report also recommended (gratuitously as it were) that it was not desirable to continue the petitioner as Director (Finance) or in any focal post pending further investigation. Thereafter the appropriate selection committee considered the records of all the officers within the zone for consideration and decided not to recommend for extension of the petitioner’s tenure as Director (Finance). Eventually on the basis of an interview, Sri T.V.Subba Rao was seen having the necessary credentials for appointment and was accordingly recommended and eventually appointed. The learned single Judge rejected the petitioner’s challenge to the appointment of Sri T.V.Subba Rao and declined to grant the declaration that the petitioner is entitled to continue as Director (Finance). The learned single Judge observed that in view of the cloud over the petitioner’s record, on account of the pending A.C.B enquiry and the preliminary report submitted by the said Organization, the supersession [of the petitioner’s claim for the post of Director (Finance)] was impeccable and was not liable to be interfered with. Responding to another grievance of the petitioner regarding promotion to E-9 Grade on the assertion that during his tenure as Director (Finance) many of his juniors in the substantive post in E-8 Grade were promoted to E-9 Grade, the learned single Judge directed the Corporation to consider the petitioner’s claim for salary in the E-9 scale from the date on which E-9 scale was introduced in the Company service.

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Aggrieved by the judgment in the writ petition the petitioner preferred Writ Appeal No.428 of 1993. In the Appeal it was urged that as the term of the current Director (Finance) would come to a close, the

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case of the petitioner be considered for appointment as Director (Finance). The learned Division Bench disposed of the Writ Appeal by the judgment dated.24-09-1993 with an observation that when the authorities convene to consider appointment to the post of Director (Finance) after the present term of Sri T.V.Subba Rao is over, they would consider the cases of all concerned including the petitioner and also take the final repot of the A.C.B into consideration and directed accordingly.

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The observations of the learned Division Bench, that the final report of the A.C.B may also be taken into consideration by the authorities, are seen to have been recorded in the peculiar set of facts. If the investigation by the A.C.B had proceeded to its conclusion either by way of filing the final report into the court of competent jurisdiction or by way of filing of a charge-sheet for the prosecution of the petitioner for any criminal misdemeanor, then the conclusion of guilt or otherwise of the petitioner would have to await judicial determination. The A.C.B is but an investigating agency. It is not authorized to determine guilt or to record convictions. The A.C.B merely investigates and places the product of investigation before the State or the Judicial authorities, for determination. Determination of guilt is not and cannot be the function of an investigating agency and the A.C.B is no exception to this.

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In the pragmatic running of public institutions however and in the context of the considerable time lag between the initiation and conclusion of investigation, how to deal with an employee under a cloud of grave allegations, is a problem that besets every public sector employer. To manage this dilemma, Government and public enterprises devise several establishment practices to deal with employees facing prosecution or allegations of misconduct. Sealed cover procedures; deferment of promotions; and suspension pending enquiry are some of the measures employed to deal with such exigencies. Accordingly, an officer facing a disciplinary enquiry on serious allegations of misconduct is not considered for promotion

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unless it’s a promotional post in a much lower category.

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On exoneration from the charges however, either by a court of competent jurisdiction or in a departmental enquiry, the detriment visited upon such employee is offset by a review of his case for the lost promotion, a promotion which the employee was denied an accent of the severely of allegations pending at that point in time. It is in this established context of service law architecture that the learned Division Bench [in the judgment in Writ Appeal No.428 of 1993] observed that on the expiry of the current tenure of Director (Finance), if the petitioner’s case comes up for consideration it should be so considered including by taking into account the final report of the A.C.B. It is a trite principle that judgments should not be interpreted like statues. They have a meaning only in a particular factual context and are not intended to be general explosions of principle.

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If the petitioner had for instance been convicted by the criminal court by the time the Director (Finance) post came up for consideration, the employer would be entitled to look into the order of conviction passed by the court of competent jurisdiction and would not decline to do so on the ground that the Division Bench had observed that the report of the A.C.B should have been considered. Equally if the petitioner was acquitted by Criminal Court, the final report of the A.C.B would not be a relevant input for consideration, as the investigatorial record would have merged in the judicial determination.

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After the disposal of WA No. 428/93 and on completion of the tenure of Mr. T.V Subba Rao as Director (Finance) in April 1993, the final report of the ACB was received by the Company. For reasons best known to the employer and the State of AP [ reasons not shared with this court in any of the counter affidavits] it was decided that the petitioner should be proceeded against in a disciplinary enquiry and not prosecuted. He was issued a charge sheet on 14.5.1993 setting out the statement of imputations of misconduct. Thereafter by office order dated 10.1.1996 the Company passed an

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order “accordingly further action on the charge sheet is dropped.”

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The learned Standing Counsel for the Company has produced, for the perusal of this court, the file pertaining to the order dated 10.1.1996. In a note dated 29.11.1994 of the Company it is recorded that the views of the Director (Tech), Director (CP&C) and Director (Finance) were sought on the three charges leveled against the petitioner and in the context of the explanation submitted by him on 17.5.1993. The Director (Tech) by his note dated 30.7.1993 commented that in so far as Charge-1 is concerned, there is no material to indicate the Director’s involvement in passing of the contractors’ bills under reference. The Director (CP&C) in his note dated 30.7.1993 had remarked in respect of Charge-2, that there was no loss to the Company and in the dealings referred to in the charges, no favouritism was shown to any Company, to the detriment of the employer’s interest. The Director (Finance) remarked that the nature of the charge was not severe. Besides marginal trespassing, if any, is common and the money stake is also negligible. Thereupon the decision was taken to drop the charges.

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From the chronology of facts leading to the aborted disciplinary enquiry against the petitioner, the conclusion is irresistible that the petitioner was neither subjected to prosecution nor to a departmental enquiry to conclusion. Prosecution was not initiated at all. Departmental proceedings were aborted mid way on the basis of the notes put up by the three Directors, that the petitioner’s involvement into the allegations of misconduct was not substantiated; The Director (Finance) chose an easy option by noting that the money stake was negligible. What is not clear to this court is whether smaller misappropriations if any, are not misappropriations. Such are the inscrutable ways of public sector management.

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The essence of the matter however is that the charges against the petitioner were dropped. There is thus no determination of the petitioner’s guilt in respect of any of the allegations leveled against

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him.

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It would appear that pursuant to the order of the Division Bench [in WA No. 428 of 1993 dated 29.4.93], the selection committee met on 22.5.93 and considered the bio-data and performance appraisal report of the petitioner and Mr. T.VSubba Rao for the period 1988-89 to 199293 together with the report of the ACB and noted that the ACB has not fully exonerated( the petitioner ) but had suggested departmental action as some of the charges were not found established. The Committee also found that a charge sheet was already issued to the petitioner to which he had submitted an explanation and the matter was under the examination of the disciplinary authority. Considering the material and the fact that the petitioner would retire on 31.7.1993 (on superannuation) the Committee did not consider the petitioner suitable for the post of Director (Finance). Thereafter the Committee considered the record of Sri T.V.Subba Rao and recommended extension of his tenure till his superannuation on 31.10.1993.

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Regarding the grant of the E-9 Grade to the petitioner, the Selection Committee recorded that the petitioner’s case was already considered for the E-9 scale in the meeting on 26.9.1992 and he was not recommended for E-9; that this fact was not brought to the notice of this court and should now be brought to the notice of this court. In what proceedings the Corporation planned to bring to the notice of this court, that the petitioner’s case was already considered and rejected for the E9 scale, is not clear. The writ petition was over as well as the writ appeal. Be that as it may.

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It is apparent from the record of the Selection Committee dated 22.5.1993, that the reasons for rejecting the petitioner’s case for Director (Finance) are the final report of the ACB, the performance appraisal report, the fact that the petitioner was on leave on medical grounds ever since he demitted the office as Director (Finance) in May 1992 and his impending superannuation on 31.7.1993.

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As the charges against the petitioner in the departmental enquiry were dropped, by the order dated 10.1.1996 and in the context of the fact that the charges were dropped as the three Directors (whose views were solicited) found no misconduct by the petitioner, in fairness the case of the petitioner ought to have been reviewed for extending to him the benefit of E9 scale. But the petitioner had retired by then and 2 ½ years earlier, on 31.7.1993. The charges were dropped by proceedings dated 10.1.1996. Why an exalted selection committee be inconvenienced with the reconsideration of a retired employee’s case, is a factor that probably weighed with the respondents. There was no review conducted, period.

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The petitioner has alleged mala fides on the part of the 5^th respondent, the former Managing Director of the respondent-Company, who is alleged to have catalyzed the investigation by the ACB and thereafter the disciplinary enquiry. In Para-5 of the writ petition the petitioner very vaguely pleaded:

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“Now I have every reason to believe that the petition dated.03-12-1991 of the so called Bikshapathi was the brainchild of respondent No.5 in order to see that the post of Director (Finance) was taken away from me for my not toeing his line in favour of the German firm which necessitated exercise of his casting vote favouring the firm.”

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Apart from speculative allegations of mala fides there is nothing substantial pleaded in the writ petition nor any the supporting material marshalled, which justifies consideration of the allegations of mala fides. An enquiry was initiated against the petitioner on the basis of a complaint received. Whether the complaint is true is to be determined in an enquiry, by an agency like the A.C.B or departmentally. The petitioner at that time was holding a focal and an important position on the Board of the respondent-Company, as Director (Finance). Such a high level position must be occupied by an officer beyond suspicion. If the Management felt that the complaint against the petitioner should be investigated and by the ACB, that per se does not justify an inference

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of mala fide. That eventually, such investigation came to naught is a different matter. But mere initiation of an investigation and reference to the ACB cannot be termed arbitrary, irrational or mala fide.

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The petitioner‘s supersession for a further extension of tenure in 1992 has been found valid by the learned single Judge, in WP No. 8475/92. The learned Division Bench concurred with the perception. As the petitioner was under a cloud and under investigation for serious allegations of misconduct in office and having regard to the nature of the post [Director (Finance)], public interest concerns justify the supersession of the petitioner’s claim for extension of tenure as Director (Finance), at that point of time. There is an established legal policy that public interest out-weighs private concerns( jura publica anteferenda privatis). The interest of the respondent-Corporation, an instrumentality of the State, to have at cutting edge levels of its administration persons with impeccable credentials and record of integrity, cannot be overemphasised.

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In the circumstances, the petitioner was rightly excluded for further extension in 1992. He retired on superannuation on 13.7.1993. Nearly 2 ½ years later, in 1996 he was exonerated of the charges, by that ambiguous device of “dropping of charges” for whatsoever reason, administrative lethargy including, the respondent must therefore be considered to have found the petitioner clean. The conclusion is compelling that the employer did not consider the petitioner as having committed any misconduct. That is a natural inference from the order dated 10.1.1996, dropping the charges against the petitioner.

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Consequently the respondents were obligated to review the case of the petitioner afresh for grant of E9 Grade, w.e.f, the date on which his juniors in E8 scale were elevated to E9 Grade. This the respondents ought to have done as a normal corollary of being a public sector organization bound by the equity injunctions of the Constitution. But such voluntary conduct in conformity with the constitutional mandate has not occurred. Therefore, the justification for

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judicial review.

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As is apparent from the selection committee proceedings dated 22.5.1993, the ACB report which “had not fully exonerated” the petitioner and had suggested departmental action was the principal criterion, which weighed with the respondents in declining to award the petitioner the E-9 scale as well as extension of tenure as Director (Finance). Further action on the ACB report was aborted in the departmental enquiry. Therefore the respondents are required to review the case of the petitioner for extension of E9 Grade.

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In so far as the petitioner’s claim for retrospective consideration for extension of the tenure in the post of Director (Finance) in 1992 is concerned, in the considered view of this court such a plea is misconceived. The petitioner served as Director (Finance) for one term and was also considered for extension for another term of two years, i.e., 1988-92. Before his case for consideration for another extension came up, he suffered the cloud of investigation. Public interest concerns rightly weighed with the employer not to consider the petitioner for extension of tenure and resultantly Mr. T.V.Subba Rao was appointed as Director (Finance) in May 1992.

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As the post of Director (Finance) is despite being a post in the hierarchy of the establishment of the Company, is nevertheless a tenure post. The post is also a focal post at a higher and policy making level of the establishment of the respondent-Company. Such a post cannot be kept vacant till the person within the zone of consideration is cleared of the allegations against him. The post must be filled as soon as it becomes vacant. In this view of the matter, the filling up the post in 1992 with Mr. T.V.Subba Rao and to the exclusion of the petitioner, is a conduct which suffers from no infirmity. As the post of Director (Finance) was filled up with the appointment of Mr. T.V.Subba Rao in May 1992 and the respondent-Company, a public sector undertaking, has also paid the salary and other emoluments of Mr. Rao, it is not in the public interest that the petitioner should be

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directed to be considered notionally for appointment as Director (Finance) w.e.f the date from which Mr. Rao was so appointed, in 1992.

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In conclusion, the writ petition is allowed directing the respondents to reconsider the case of the petitioner for granting him the E9 Grade w.e.f. the date his immediate junior in E-8 Grade was so granted (E-9 Grade) giving due consideration to the fact that the departmental inquiry against him pursuant to the chargesheet dated 14.5.1993 was dropped by the office order dated 10.1.1996; and also that the ACB investigation did not proceed to the prosecution of the petitioner. If the petitioner, on such fresh consideration as directed above, is found eligible for grant of E-9 Grade, he shall be paid the arrears of salary and other emoluments and any other benefits that would accrue to him on the grant of E-9 grade. The review as directed herein shall be made within a period of two months from the date of receipt of a copy of this order and the result of the review, the decision taken and the reasons for the decision shall be communicated to the petitioner within the time specified.

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The writ petition is allowed as above. No order as to costs.

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Dated: 08.12.2006 ----------------------------Pvsn/Tsnr Justice G. Raghuram

M. Gurmurthy Sastry, v. M/s Singareni collieries Com. Ltd.

Case brief

What is this about?

What did the court decide?

M. Gurmurthy Sastry, v. M/s Singareni collieries Com. Ltd.

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