Praveen S/O Prabhakarrao Jawale Vs. Maharashtra State Electricity Distribution Company Ltd. and Another - Court Judgment

Excerpt:
constitution of india - articles 14 and 16 - articles 21 - prevention of corruption act, 1988 - section 7, 13(1)(d) read with section 13(2) – petitioner/employee is employed as junior engineer with the respondent no.1 and he demanded and accepted an certain amount as bribe and was caught while doing so by police personnel of anti corruption department - petitioner was kept under suspension and served with notice of show cause - petitioner had applied for time, which request was declined – employee stated intention of the respondent no.2/employer to proceed to take recourse to sr 90 against the petitioner as described in the suspension order being illegal, contrary to law and un-constitutional, the suspension order deserves to be quashed and set aside – petitioner stated.....oral judgment: (a.h. joshi, j.) 1] rule. rule made returnable forthwith and taken up for final hearing with the consent of learned advocates for the parties. 2] heard learned advocate for the petitioner and learned advocate for the respondent nos.1 and 2. 3] the facts involved in the case are summarized as follows: a] the petitioner is employed as junior engineer with the respondent no.1. b] while the petitioner was serving at the distribution centre at aurangabad in chhawani sub-division in division no.1, it is alleged that on 1.3.2011, he demanded and accepted an amount of rs.5,000/- as bribe and was caught while doing so (red handed) by police personnel of anti corruption department, aurangabad. c] crime no.3005/2011 under section 7, 13(1)(d) read with section 13(2) of the prevention.....

Judgment:

Oral Judgment: (A.H. Joshi, J.)

1] Rule. Rule made returnable forthwith and taken up for final hearing with the consent of learned Advocates for the parties.

2] Heard learned Advocate for the petitioner and learned Advocate for the respondent nos.1 and 2.

3] The facts involved in the case are summarized as follows:

a] The petitioner is employed as Junior Engineer with the respondent no.1.

b] While the petitioner was serving at the Distribution Centre at Aurangabad in Chhawani Sub-Division in Division No.1, it is alleged that on 1.3.2011, he demanded and accepted an amount of Rs.5,000/- as bribe and was caught while doing so (red handed) by Police personnel of Anti Corruption Department, Aurangabad.

c] Crime No.3005/2011 under Section 7, 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988 was registered against the petitioner.

d] By communication dated 4.3.2011, the petitioner was kept under suspension in contemplation of the action under Maharashtra State Electricity Distribution Company Employees' Service Regulation No.90 from the date of registration of offence.

e] The petitioner has been served with notice of show cause under Service Regulation No. 90. This notice is dated 10.4.2013, and its copy is on record at Exhibit D pages 35A to 35C.

f] The petitioner was called to furnish reply within seven days.

g] The petitioner had applied for time, which request was declined.

h] The petitioner filed a tentative reply on 10.5.2013.

i] Under the administrative Circular No.117 dated 9.8.2007, the Executive Director is empowered to take action under Service Regulation No.90 notwithstanding any other subordinate officer than the Executive Engineer being the competent authority to initiate disciplinary proceedings.

4] The prayers contained in the writ petition in nutshell are as follows:

[a] Quash Service Regulation No.90 being contrary to law and un-Constitutional.

[b] Declare Clause No.4 of the Administrative Circular No.117 dated 9.8.2007 as ultraviresthe Articles 14 and 16 of the Constitution of India.

[c] Action taken by the respondent under Section Service Regulation No.90 (in short, SR 90) be declared as wrong and ultra vires the Articles 14 and 21 of the Constitution of India.

[d] Restrain the employer from conducting any inquiry whatsoever under Service Regulation No.90 or Regulation No.88.

5] Foundation of the prayers, as seen in the petition and as orally argued is as follows:

[i] Action under Section Service Regulation No.90 (in short, SR 90) being wrong and ultra vires the Articles 14 and 21 of the Constitution of India :

[a] SR 90 confers upon the employer an unguided, unbridled, arbitrary and unchannalized power, though SR 90 suggests opportunity of making statement than opportunity of hearing.

[b] There are no grounds as to why regular inquiry as prescribed by SR 88 can be dispensed with.

[c] A rule contained in Service regulations in various other semi-Government organizations and Corporations which provided for power to effect termination simplicitor of a permanent employee without inquiry and barely by giving notice or payment of notice pay have, been held to be ultravires, being in violation of guarantee of fairness, equity, and in breach of guarantee against arbitrariness.

[d] Principles of natural justice are inbuilt in any contract of employment with public undertaking and when removal is sought to be done on account of any conduct which is a misconduct. Observance of principles of natural justice in matters of removal on account of misconduct is imperative.

[e] Power to dispense with regular inquiry would mean by any permutation and combination, dispensation of principles of natural justice. Such a conduct is disregarded by law, equity and good conscience.

ii] Quash Service Regulation No.90 being contrary to law and un-constitutional :

[a] Dispensation of observance of principles of natural justice by taking recourse to SR 90 is bad because it violates guarantee of fairness in the matter of executive action.

[b] Being caught while accepting bribe (red handed) is a most fragile ground.

[c] Law does not create or carve out a presumption that when somebody is caught while receiving bribe / money or gratification (red handed), such person is ipso facto guilty of offence or misconduct without formal proof thereof in accordance with law.

[d] Therefore, indicting somebody for action under SR 90 amounts to taking action based on a supposition that misconduct is proved without full-fledged and formal inquiry upon due observance of principles of natural justice, and hence it is violation of Constitutional guarantee of fairness.

iii] Declare Clause No.4 of the Administrative Circular No.117 dated 9.8.2007 as ultraviresthe Articles 14 and 16 of the Constitution of India :

[a] Summary procedure is to be initiated by the Executive Director whenever there is trap by Anti Corruption Department thereby the fact of trap and being caught "red handed" is the cause of suspension. Satisfaction based on facts and objectively, as to commission of the misconduct subject matter is not provided by SR 90.

[b] Action of summary procedure exclusively based on the fact of trap would, thus, mean that it is a sort of mechanical action and there is no room for application of mind on the part of the competent authority.

iv] Restrain the employer from conducting any inquiry whatsoever under Service Regulation No.90 or Regulation No.88 :-

The petitioner considers that he is not a public servant being an employee of the respondent no.1 which is a company owned by Maharashtra State Electricity Board, due to any provision of law or fiction of law.

v] To quash the suspension order dated 4.3.2011 :-

The intention of the respondent no.2 to proceed to take recourse to SR 90 against the petitioner as described in the suspension order being illegal, contrary to law and un-Constitutional, the suspension order deserves to be quashed and set aside.

6] Learned Advocate for the petitioner has placed on record judgments in support of the contentions for the purpose mentioned against the judgments cited below :-

S.L. Kapoor V/s Jagmohan and others.AIR 1981 SC 136	Even admission of facts by delinquent does not justify departure from principles of natural justice. Independent proof of prejudice due to non-observance of principles of natural justice is not necessary. Non-observance of principles of natural justice itself is a prejudice and vitiates the impugned action.
Rattan Lal Sharma V/s Managing Committee and others.AIR 1993 SC 2155	Principles of natural justice are applicable to whole range of administrative power. It is impossible to define parameters of natural justice.
BasudeoTiwary V/s Sido Kanhu University and others. AIR 1998 SC 3261	Action without adhering to principles of natural justice is like playing Hamlet without the Prince of Denmark.
PrakashRatan Sinha V/s State of Bihar and others. (2009) 14 SCC 690	Administrative decisions of the instrumentality of the State are subject to doctrine of equality and fair-play as incorporated in Articles 14 and 21 of the Constitution. Theory of "useless formality" or doctrine of "futile exercise" cannot justify a unilateral  dministrative decision.
Workmen of Hindustan Steel Ltd. and others V/s Hindustan Steel Ltd. and others. AIR 1985 SC 215	Decision of the employer to dispense with inquiry must satisfy the Court thatholding of inquiry will eitherbe counter productive or may cause such irreparable and irreversible damage which in the facts of the case need not be suffered.
W.B. State Electricity Board V/s Desh Bandhu Ghosh and others. AIR 1985 SC 722	Regulation enabling Board to terminate services of permanent employee by giving three months notice is totally arbitrary and confers on Board a power of vicious discrimination.
Central Inland Water Transport Corporation Ltd. V/s Brojo Nath Ganguly / Tarun Kanti Sengupta. AIR 1986 SC 1571	Rule empowering Corporation to terminate services of permanent  employees withoutgiving any reason and by giving notice is void u/s 23 of the Contract Act being opposed to public policy, ultra vires Article 14 of the Constitution and violative of directive principles contained in Articles 39A and 41.
Divisional Controller, MSRTC, Nagpur V/s Shridhari Padmakar Dharmadhikari. 1990 II CLR Bombay 72	Regulation 61 of the Bombay State Transport Employees Service Regulations authorizing termination of services of permanent employee by simple notice of 60 days is arbitrary and unreasonable and,therefore, violative of Article 14 of the Constitution so also violative of Section 23 of the Contract Act being opposed to public policy.
Delhi Transport Corporation V/s D.T.C. Mazdoor Congress and others. AIR 1991 SC 101	Service Regulation providing removal ofpermanentemployee from service without assigning any reasons is arbitrary, unfair, unjust, unreasonable and opposed to public policy and cannot be validated by reading down. Rule of law necessarily contemplates absence of arbitrary power.
D.K. Yadav V/s J.M.A. Industries Ltd. (1993) 3 SCC 259	Duty to act in just, fair and reasonable manner must be read into the provisions. Termination of services results in depriving right to livelihood implicit under Article 21 of the Constitution and should be effected in accordance with just, fair and reasonable procedure. It must withstand the test of Article 14 of the Constitution of India.

7] The petition is opposed by the respondent nos.1 and 2 and they have urged to maintain and uphold their action.

8] Learned Advocate Shri S.M. Godsay has urged in support of his contentions that the question as to propriety of action under SR 90 had come before the Court in various matters. He contends that in none of these cases, the scheme of service regulations as SR 90 was held to be ultra vires. He relies on unreported judgment of this Court between ArunkumarJ. Patil V/s MSEDCL in Writ Petition No.4692/2010 decided at Bombay on 23.6.2010 wherein action taken by the Board was considered to be proper.

9] In all fairness, learned Advocate Shri S.M. Godsay has brought to the notice of this Court various judgments in which Courts had occasion to deal with and scrutinize the action of the respondent company taken under SR 90 and even in few cases on facts, the recourse to action under SR 90 was not upheld. Judgments in various cases are namely:-

1] Managing Director, MSEDCL V/s Mohan Agashe. Writ Petition No.6751/2008decided on 17.11.2008 at Bombay.

2] RameshSonawane V/s MSEDCL Writ Petition No.6513/2011 decided on 23.12.2011 at Aurangabad.

3] Vijay Pandurang Jogi V/s MSEDCL Writ Petition No.8005/2011decided on 15.3.2012 at Aurangabad.

4] VasantTupekar V/s MSEB 2007 (1) Bom.C.R. 862(A'bad).

5] MukundChaware V/s MSEDCL C.A. 1221/2009 in WP 3932/2008decided on 15.7.2009 at Aurangabad.

6] MSEDCL V/s Mukund Chaware Writ Petition No.3932/2008decided on 15.7.2009.

7] DhyanyakumarBondale V/s MSEDCL 2009 (0) BCI 604 (Nagpur).

8] SudhakarChapke V/s MSEDCL 2012 (6) Bom.C.R. 553(Nagpur).

10] This Court has perused all judgments listed in foregoing paragraph. In most of those cases, the Constitutional validity of SR 90 was not the question for adjudication. The matter under scrutiny was as regards the propriety thereof. Therefore, these judgments do not tend to throw light or operate as precedent on the point of Constitutional validity of SR 90.

11] Now this Court has to consider the scheme of Service Regulations 88, 89 and 90. Copy of these Regulations is on record at Exhibit C from pages 27 to 35 of the paper book.

12] The regulations run at quite some length. It shall suffice to describe the tenor and contents of SR 88, 89 and 99 which is done as here-in-below :Description of Regulations 88 and 89 :-

● SR 88 is a regulation which provides for formal (full-fledged) departmental inquiry in relation to major misconduct.

● It provides for detailed procedure as to the competent authority, as to who shall initiate and conduct the inquiry and its procedure, etc.

● The scheme of Regulation 88 is to ensure observance of principles of natural justice.

● Regulation 89 carves out exception. Relevant exception is the action under Regulation 90.

Description of Regulation 90 :-

● This regulation carves out a procedure where the competent authority is to hold summary proceedings without following procedure prescribed in SR 88 and take decision "on the evidence available" after charge-sheeting the employee concerned as prescribed in the Annexure 3 and after giving him an opportunity to make a statement.

● Clauses (a) to (e) thereof pertain to the circumstances where Regulation 90 can be resorted to.

● Relevant clauses for the purpose of present case are Clauses (a) to (c).

● These clauses are quoted below for ready reference:-

[a] where the employee is caught redhanded having committed or while committing an act of misconduct,

[b] where there is obvious evidence of the act of misconduct having been committed or,

[c] where the misconduct or misbehavior is considered too grave and convincing to warrant or justify the normal procedure to be followed.

13] The proposition of law as emerging from various judgments cited and relied on by learned Advocate for the petitioner, as principle of law governing the field are not disputed by the respondents. Those can be drawn in nutshell as follows:-

[a] Non-observance of principles of natural justice itself is a prejudice.

[b] That the case is obvious and if the employee has no defence, it does not constitute a ground to dispense with observance of principles of natural justice.

[c] The belief that the employee or the relater has no defence to be set up is an act of prejudging by the employer or the opponent in the guise of describing the case as one of obvious nature and hence in its very inception the action violates the principles of natural justice.

14] In Central Inland Water Transport Corporation Ltd. V/s Brojo Nath Ganguly / Tarun Kanti Sengupta (AIR 1986 SC 1571), it is held that as a matter of public policy, equity and good conscience come into play even in the matters of contract of employment considering the collective effect of Articles 14, 39A and 41 of the Constitution of India. Therefore, any rule which obviates observance of principles of natural justice would be per se ultra vires.

15] In various other judgments relating to service laws and even in judgments referred to in these judgments, it is held that a service rule which authorizes a discharge simplicitor of a permanent or quasi-permanent employee on account of any reasons including loss of confidence are akin to pleasure doctrine is ultraviresthe Constitutional guarantee under Article 14 of the Constitution of India.

16] Even in the judgments relied upon by the respondents, in the latest judgment in SudhakarChapke V/s MSEDCL (2012 (6) Bom.C.R. 553 (Nagpur), resume of various other earlier judgments is taken, this Court (Coram: Smt.Vasanti A. Naik and A.B. Chaudhari, JJ.) took a view that the misconduct of the employee which was in the nature of taking bribe from the contractor was considered to be unfitting for recourse under SR 90 and it was held that proper course should have been an action under SR 88.

17] Now the question urged before us primarily is as to whether SR 90 stands to the acid test of being intra vires. Test of ultra vires in relation to power of the management to take action has to be seen as to whether it is free from any scope for arbitrariness.

18] The relevant text contained SR 90 which is the "authorizing clause" needs to be referred once again. It is quoted for ready reference as below:-

“90. SUMMARY PROCEEDINGS

The Competent Authority may hold summary proceeding/s in case,

[a] ..... ..... .....

[b] ..... ..... .....

[c] ..... ..... .....

[d] ..... ..... .....

[e] ..... ..... .....

withoutfollowing the procedure prescribed in Service Regulation 88 and take a decision on the evidence available after charge-sheeting the employee concerned, as prescribed in Annexure 3 and after giving him an opportunity to make a statement.

19] It will be evident from the portion quoted above that the crux of empowering section is in the words "take a decision on the evidence available" and "after giving him an opportunity to make a statement".

The key words, which are quoted, contained in the empowering regulation lead to conclusions namely:

i] That action under Regulation 90 can be taken barely on evidence as may be available and the employee is to be given an opportunity "to make a statement.”

ii] The key words "evidence available" have to be read from the guide provided in enabling clauses. Those enabling clauses (a) to (e) are contained in SR 90. Those clauses can be analyzed further as follows:

a] Employees caught redhanded;

b] That there is obvious evidence;

c] That the misconduct is grave and convincing and warrants observance of normal procedure.

d] Conviction;

e] That the employee is about to retire.

20] The Regulation 90 carves out a category of acts which empowers the competent authority to take action by way of summary procedure and rather by dispensing with even "summary inquiry".

21] The Service Regulation No.90 contemplates action in the background that the employee concerned is "caught redhanded" i.e. caught while taking money / bribe, gratification or committing any other grave misconduct or caught while he was actually committing misconduct.

22] The language contemplates those set of words to describe and those circumstances to constitute "evidence available". It shall thereby mean that whatever are the accusations or imputations against the employee and the evidence of alleged "being caught redhanded" are being taken to be conclusive without those being proved in accordance with law based on legal evidence.

23] Whenever an employee is being dealt with on the basis of said "evidence available", it empowers the officer concerned to take action in his own judgment and the said regulation does not prescribe, provide for, make it imperative or condition precedent that reasons for taking recourse to SR 90 must be recorded.

24] Had the rule provided a scheme of recording of reasons, those reasons become the ground of objective foundation. Any such scheme is totally absent.

25] The nature of defence provided in summary inquiry ordinarily is assurance of observance of principles of natural justice and not the total dispensation thereof in any case.

26] The word "summary" is to be seen in contrast with "formal" inquiry as contemplated by SR 88 or in ordinary parlance having full-fledged inquiry conforming to each stage needed to be observed for complying with the rule of audialterem partem.

27] Either of the inquiries do not contemplate or presume total dispensation with observance of principles of natural justice in the process of departmental inquiry. In the present case, the enabling clause has an unquestionable tenor of total dispensation of observance of principles of natural justice. All that is contemplated is giving him an opportunity to make a statement. Making a statement is in the nature of an empty formality or ritual since the scheme on which it is founded contemplates dispensation with formal inquiry under Regulation 88.

28] Considering the collective ratio of the judgments relied upon namely S.L. Kapoor V/s Jagmohan and others (AIR 1981 SC 136) where nonobservance of principles of natural justice on the ground that the person concerned need not be heard as he has no defence or that the grounds against him are obvious, is on its face violation of principles of natural justice. Whenever principles of natural justice are violated, such an action is potentially and inherently violative of Article 14 of the Constitution of India.

29] Article 14 of the Constitution is an injunction against the State or any of its authority. Reading the ratio as laid down in Central Inland Water Transport Corporation Ltd. case (supra), even if there be a case of private employee of an establishment which is owned and controlled by Government or Government Corporation, and an action which shows to an employee exit, by showing a power under the rules, such power exercisable sheerly at option and will of an employer would be opposed to public policy and doctrine of Constitutional justice assures guarantee against arbitrariness.

30] The language in which SR 90 is drafted is an exhibit of Henry Eighth Rule in a veil and comes in the teeth of injunction against unreasonableness and arbitrariness being akin to Wednesbury's rule.

31] Considering the totality of dictate and edict contained in the judgment of Central Inland Water Transport Corporation Ltd. case and all other judgments by which various rules of discharge simplicitor have been struck down, the SR 90 comes in the teeth of injunction against arbitrariness and deserves to be quashed and set aside.

32] The question that still remains is as to whether the order of suspension can be called into question.

33] Insofar as the suspension is concerned, whether the recourse under SR 88 or SR 90, if prima facie the circumstances alleged against an employee do portray the possible picture that misconduct if proved may lead to major penalty of dismissal, it would be certainly open to the employer to take recourse to action such as suspension.

34] On facts of the case, it is seen that the incident had occurred on 1.3.2011. The action of suspension was taken on 4.3.2011 anticipating and visualizing action under SR 90. Pertinently enough the summary charge-sheet is dated 10.4.2013. It is clearly after two years and one month.

35] The emergency which would be a propelling force behind taking recourse to summary action had by then vanished, however, by itself would not constitute a ground to quash the suspension order since it would be open to the petitioner to make a representation to the employer against suspension and we hope that if any such representation is made, the employer would take appropriate action thereon.

36] Insofar as the latter prayers for quashing the action on the ground that the petitioner is not a public servant, this Court was not really led to scrutinize this issue considering the nature of submissions advanced. Probably the petitioner does not want an adjudication at this stage since the said issue he would choose to contest in the proceedings under the Prevention of Corruption Act, 1988, which he will have to face by way of trial. We, therefore, decline to record any finding on this point.

37] It is made clear that we have not expressed any opinion on the fact of matter and prospects of departmental or criminal proceedings.

38] In the result, the petition partly succeeds. Rule is made partly absolute in following terms:

[A] We restrict our direction to quashing of the Service Regulation 90 only, which we accordingly do and make the Rule absolute in terms of prayer clause (B).

[B] Insofar as suspension of the petitioner is concerned, we have indicated in paragraph no. 16 as to the course which may be adopted by the petitioner.

[C] The prayers which we have not adjudicated are left open for taking appropriate recourse by the parties, particularly in the light of discussion in paragraph no.16.

[D] No order as to costs.