Two habeas corpus conferences under Article 226 were dismissed. The court held that recovery of partial terminal benefits from employees sanctioned for negligence or failure to collect dues was legal and proportional.
No order as to costs; the writ petitions are dismissed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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[3300 ]
HIGH COURT FOR THE STATE OFTELANGANA AT HYDERABAD (Special Original Jurisdiction)
TUESDAY, THE TWENTY FIFTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY FIVE
PRESENT
THE HONOURABLE SRI JUSTICENAGESHBHEEMAPAKA
WRIT PETITION NOS: 8945 OF 2012AND 222960F 2013
W.P.NO: 8945 OF 2012
Between:
P.N. Swamy, S/o Bala SangamaiahRetd General lVlanager, R/o Flat No. G-7, Sreenivasam, Opp to NOMA, Hyderabad
...PETITIONER
AND
...RES'ONDENTS
Petition under Article 226 of theConstitutionof lndia prayingthat in the circumstances stated in the affidavitfiledtherewith,the High Courtmay be pleased to issue an order, direction of writ,moreparticularlyone in the nature of Writ of lrrlandamus declaring the action ofthe 2nd respondents in issuingthe proceedings No. 2'15 (1)/Admn.IV/DC -112009, dated07 01.2012, isillegal, arbitrary and unjust and consequently setaside the proceedings No.2'1 5 (1)/Admn.lV/DC-1t2009, dated 07.01.20'12, issued bythe 2nd respondent,.
Counsel for the Petitioner: SRI G.RAVI MOHAN Counsel for the Respondents: SRIM.AJAY KUMAR, SC FOR TG KUDA
W.P.N O: 22296 OF20'13
Between:
...PETITIONERS AND The Chairman Telanqana C Lrmrted,atHyderabaa.)iaryDevelopment-corporation, Federation
(C.T is amended as per C.O dt. 2OtO6l2O23 in lA 01/2023.)
...RESPONDENTS
petition under Articre 226 0f the constitution of rndia praying that in the circumstances stated in the affidavit fired therewith, the High court may be preased to issue a writ, order or direction more particurarry one in the nature of Writ of Mandamus declaring the action to the re spondent in recovering the amount of Rs.g,22,0001 t ry rmpugned proceedings dated- Og.12.2011 as illegat, arbitrary and unjust and consequen,y set aside the proceedings dated09.12.201.1 and proceedings dated_27.0..2013 and direct the respondent to pay amount of Rs.8,22,000/_.
Counsel for the petitioners: SRI c*RAvl MOHAN counset for the Respondent: SRt n;r.eJniiijileR, sc FoR TG KUDA
The Court made the foilowing: COMMON ORDER
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,u, tr'-) wp_894s 2012& wp _22296 _)Ol3 N8K, J
Cqv
THE HON,BLE SRIJUSTICE NAGESHBHEEMAPAKA
WRIT PETITION No.8945 of2012
AND
WRIT PETITION No.22295of 2013
COMMON ORDER:
The issue and thegrievance in these writ petitions being similar,they are analogously heardand takenup for disposal by this common order.For discussion, the factsin wP No.22296of 2013 are takenwherevernecessary.
petitioner-PN Swamy was appointed as Assistant Accounts officer in the 2nd respondent-AndhraPradeshDairyDevelopment Cooperative Federation Limited (now renamed asTelanganaDairy Developmentcooperative Federation Limited)in the year LgTg,andthereafter obtained promotionsand finally became the GeneralManager (Finance & Personnel)in the year 2008 and retired from service on30.06.2009. lt is allegedthat the petitioner displayed negligence towardsdutyand committed irregularities while working as Senior Accounts Officerat Milk Product Factory Hyderabad, during 30.11.2006 to 20.OL.IOO7,andnot informed the ManagingDirector about the abnormally risingduesduring12.08.2008to 12.09.2008 due to non-payment of necessary amountby the MilkDistributors on the same day beforelifting of the stocks, and47 cheques issuedby the Milk Distributorsto the Dairy Federation weredishonoured due to insufficient funds, thereby the Dairy Federation sustainedhuge losses. The respondent-Dairy Federationissued charge sheet tothe petitioneron 10.07.2009alleging seven charges'An enquiry was conductedby appointinga retiredDistrictJudgeas Enquiry
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the petitioner was herd suirtv or ,r""*'d:i: ,"J::J i'il-t.J' ssued Pe,i,.ner t::",:'.H':; ;:::*J::f#,:::: :::H,;,1,uwas Rs.7,84,ooo /.rrom the iii :':t'':',n"o,r,lr::. benefits of the petitioner' The same is charenged in this writ rJ:;:'"'
petitioner_Syed Anwar (since died, per LR) was appointed in the respondent_orga nizatic on 16'09'1975 as Zon Inspector at Hyderabad. Thereafter te ootrin.' ,d promofions ,ru ,rtirr] became the Generar Manager (Markefing) prior to his retirement on,.r",, three sets of charges. The first one dated 26.o2.2t31'03'2oog' He was issued and the third on 16.05.2009. alreging n".or,oor,second ono3.o4.2oo9, negligence' lack of supervision etc., due to \ ross of Rs.3,13,39,740 r-n''ntherespondent-o'"''n"' therefore tnt t"'o;t'""1"t'::il:Hil:T order dated og.1.z 2o71,and terminalbenefits"r,n"**["J-d an amount of Rs'8'22'ooo/' from the
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wp 8945_2012 & wp_22296 2013 NBK,1
next Bank working day and, in case of default, the Milk Distributor is liable to pay penalty of Rs.25,000/- in case of dishonour of cheque for the first-time, and further action under Negotiable lnstruments Act, 1881, rests with the Director or Managing Director, or General Manager (Marketing), who are the signing authority on the Agreement. lt is further contended that the 3'd respondent-General Manager, Marketing, is the appropriate authority for imposing fine and for recovery of money, including transport charges, from the Milk Distributors if there is any default in payment as per Clause 8 of the Agreement. lt is contended that none of these issues were narrated before the Enquiry Officer by the Management Witness, and the Management has never stated anything about the payment responsibility as per the Agreement. It is also contended that the Management witness who were examined were not at all connected with the issue nor do they have any knowledge about this issue to state before the Enquiry Officer, and the Enquiry Officer himself acted as Management Witness and described the issue without there being any statement by the Management Witness, and the discussion in the enquiry is beyond the scope of evidence available before the Enquiry Officer. lt is contended that as per the findings of the Enquiry Officer, the Distributors agreed that there was no cheque bouncing from 07.02.2008 onwards and in fact it was further recorded that the petitioner should be hampered financial commitments through inventory purchase, and it was not a routine meeting as alleged by the enquiry officer, and it was a specific meeting for recovery of amount by the Distributors. lt is also contended that the Management Witnesses were also involved in the case and were issued charge sheets and therefore their evidence cannot be considered. lt is contended that the Enquiry Officer came to the conclusion that M-5 Document shows that the
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petitioner was not responsible for accumulation of dues andthe 2nd and 3rd respondents, in spite ofknowledgethat there were defaults in paymentby the Milk Distributors, extended theircontract and they never soughtany permission or called for remarks frompetitiongr, and the 2nd and3rd respondents coiludedwith Milk Distributors. ln that situation petitionercan only be a spectator, andhe is not appropriate authorityto commenton the Agreement as heis not a party to it. lt is contended that for the milk that has been supplied by therespondent-DairyFederation,the Milk Distributorsare supposed to make advancepaymentsand thereafter take the stocks, and upon default by MilkDistributors, the respondent-Dairy Federation insteadof recovering the amounts orfiling cases underNegotiable lnstrumentsAct against Milk Distributors, soughtto recoverthe amountsfrom terminal benefits of thepetitionerand therefore the sameis bad in law. Learned counsel further contendsthat even assuming thereis fault on the part of the petitioners, it is not thepetitioners alonewho canact against the interestof the organization andit is the entire system where every personis involved in the issue.
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wp-8945,2012& w9 -22296.2011 NBK,]
thereis no accumurationof arrears beyondthe fimit underBank Guarantees and othersecuritiesgiven by them' lt is furthersubmitted that the milk distributorshave not regularlyremittedthe requisite amountsfor the milk therebythe payment dues piledup surpassing the bank guaranteesthey put with therespondent-DairyFederation' lt is the specificcontentionof the respondent-Dairy Federationthat the issueof non-payment was broughtto the noticeof the petitioner dailyin a statementissuedby the AccountsOfficer showingthe details of bounced chequesclearly and the petitionerfailedto initiateanyeffective actionto collectthe arrears or reduce the arrears to the normallimit withinthe cover of the securities/ bank guarantee givenby the Agentsdespitebeing the regulator of the terms and conditionsof the contracts.lt is also contendedthat in viewof the seriousness of the allegations againstthe petitioner, he was given a charge sheet dated 24'03'2009as per APDDCFCDARulesNo 5' 9' 37 and 38 as he was in the cadre of Officer' and had it beenworkmen,then APDDCFCertifiedStanding Orderswould be applicable'Learned counselwould contendthat the petitioneris primo focie responsiblefor non-collection of dues to the tune of Rs'6'O9'77 '223and the petitionersubmitted explanationon 30'03'2009 denyingthe charges' Petitionerretiredfrom service on 31'03'2009 on attainedthe age of superannuation,pending disciplinary proceedings'lt is contended that on noticingfurther allegations' an additionalchargesheet dated 16'05'2009was issuedalleging that the petitioner has committed followingalleged acts of misconductin connectionwith the non-realisationof Rs '6'09 '77 '223/- Irom the Distributors/ Transportersunder the APDDCFConduct' Disciplineand Appeal Rules1983' lt is submitted that Sri DV' RamanaMurthy'District & Sessions Judge(Retd) as EnquiryOfficer to enquireinto the charges' The
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enquiry officer submittedhis reportdated19.08.2011by holding that the charges of negligenceof work, disobedience, dishonesty,acting in a manner that isprejudicial to theinterests of the organization and falsification of records. Thereafter, aShow Causenotice dated 05.11.2011 was issued proposing the punishment of recovery of the totalloss ofRs.3,13,39,7401- from the terminalbenefits such as gratuity,EarnedLeaveencashmentand other amountsdue towards the partial recoupment of the pecuniary loss cause to the organization besidesreserving the rightto recover the rest ofthe outstandingLMS due to asper law. Petitioner submittedhis explanation dated 23.71.2071denyingthe charges,and since the explanationto the ShowCause notice was not satisfactorythe proposedpunishment off recovery oftotal loss from the terminal ltis contendedthat this Courtin the order dated24.71.2OLO has directed the respondentto concludethe disciplinaryproceedings against thepetitioner withinsix months and in compliance of the orders of this Court, the disciplinary case was finalizedand proceedings dated 09.12.2011 were issued. lt is further contended thatthe petitioner; being the Head of Marketing wing, hasfailed to initiate or propose the action to terminate the contractor and that itis theduty of the petitionerto handle the subjectof regulating the appointment of distributors,collecting security depositsand other terms and conditionsentrustedwith the duty of calling tenders etc., as such he cannot disown hisresponsibility. lt is further contended that the enquiry was conducted bya retiredDistrict Judge in a fair manner givingall reasonable opportunity to thepetitioner andproper evidence was adduced with relevant records on behalf ofthe management, and that it is not correct to state that the enquiry officer went beyondthe scope ofevidence.lt is further contended that though the Chief Executive of theOrganizationcan
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terminate the contract but this does not debarthe petitioner whois the Head of Marketing department to initiate orpropose the actionto terminate the contractor without being continued. lt is further contended thatit is the duty of the petitioner to handle the subject of regulating the appointmentof the distributors, collecting security deposits andother terms and conditions entrust.ed with the duty of calling tenders etc. lt is further contendedthat basing on the Report of the Special Secretary to the Government,charges have been framed against eight other employees of theOrganization, however, since the charges were notproved against thesaidemployees, further action was dropped against those employees videproceedingsdated 25.1O.2O12.|t is contended that charges against thepetitioner who is Head of Marketing was heldproved and the respondent-organization is veiy much considerate in withholding only apartial amount ofRs.8,22,000/- from out of the terminal benefits of Rs.3,13,39,7 40/-. Learned counselwould therefore contend that there is no illegality in theimpugnedorder dated 09.12.2011 directing recovery of Rs.8,22,000/- inpartial recoupment ofthe financialloss of Rs.3,13,39,7401-.
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$'D 3945-2012& qp 22296 2OI3 NBK, ]
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retired DistrictJudge,who providedthe pefitionerwith reasonable opportunityto defend himself'The Enquiry Report'dated19'08'201fis based onevidence adduced by the management'including records of bouncedchequesandarrears,andthepetitioner'sallegationthattheEnquiry Officer exceededthe scopeof the evidence is not substantrated'lt may be noted thatthe petitioner's negligenceresulted in a significantfinancial loss of Rs. 3,13,39,740/-to the organization'The recoveryof Rs' 8'22'000/- fromthe petitioner's terminalbenefits is a partial recoupment of this loss and the same cannot besaid to be illegalor disproportional'and the respondenthas been consideratein withholding only a fractionof the total loss from the petitioner's terminalbenefits.The disciplinary proceedings were conducted in accordance withthe APDDCFConduct, Discipline'and AppealRules'1983' The respondentcompliedwiththedirectionsofthisCourtdated24'11'2010' concludingtheproceedingswithinthestipulatedtimeframe.Theimpugned order datedOg.l2.2}71doesnot suffer from any illegality'
SD/-N. SRIHARI ASSISTA.NTREGISTRAR //TRUE COPYII \t'{ SE,3TION OFFICER To 1 One C C to SRIG RAVI MOHAN, Advocate[OPU 2 One CC toSRI N/,AJAY KUMAR,SC FOR TGKUD loPUCl 3 Two CD CoPies PSK 6\kc:n
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HIGH COURT
DATED:2510212025
COMMON ORDER
WP.Nos.8945 of 2012AND 22296 of 2013
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DISMISSTNG THE WRITPETITIONS WITHOUT COSTS
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3 issues framed by the court
Whether the recovery of a portion of an employee's terminal benefits for organizational financial loss constitutes illegal punishment.
Whether the disciplinary proceedings conducted by a retired District Judge were fair and lawful.
Whether the General Manager was appropriately responsible for the loss of money due to defaulting milk distributors.
2 provisions across 2 enactments
P.N. Swamy
Syed Anwar (L.R.)
1. The Board of Directors, Andhra Pradesh Dairy Development Co-op Federation Ltd.
2. The Managing Director, Andhra Pradesh Dairy Development Co-op Federation Ltd.
3. The General Manager (Marketing), Andhra Pradesh Dairy Development Co-op Federation Ltd.
1. Chairman, Telangana Co-operative Dairy Development Corporation
Nagesh Bheemapaka
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
