Nagendra Pal Singh Vs. Union of India and Others - Court Judgment

Dr. Dharam Paul Sharma, Member (J) :

The present application, filed by the applicant, under Section 19 of the Administrative Tribunals Act, 1985 is directed against the punishment order dated 26.09.2007 (Annexure A-1) issued by the Sr. Superintendent of Post Offices, Aligarh Division, Aligarh being the Disciplinary Authority and the order dated 26.03.2008 (Annexure A-2) passed by the Director, Postal Services, O/o the Postmaster General Agra Region, Agra, being the Appellate Authority. The said punishment order was passed by the Disciplinary Authority under Rule 16 of the Central Civil Services (Classification, Control and Appeal) Rules, 1965 (in short CCS(CCA) Rules) imposing minor penalty on the applicant of stoppage of increment for one year without cumulative effect and recovery of rupees two laces from his pay in 67 monthly installments (66 installments of Rs.3000/- each and 67th installment of Rs.2000/-). The appeal filed against the said order was rejected by the Appellate Authority vide his order dated 26.03.2008 (Annexure A-2). Both these orders are impugned in these proceedings.

2. The facts of the case, in brief, are that the applicant while working as Asstt. Postmaster, (Sub Account) Head Post Office, Aligarh during the period from 13.05.2003 to 19.05.2004 supplied 300 blank passbooks of Saving Bank Recurring Deposit and Monthly Income Scheme in the break up of 100 each to Ramghat Road Sub Post Office, Aligarh through office Invoice No.L/Sub account/Invoice No.1/03-04 dated 27.05.2003 through S.O. Slip on 28.05.2003. As per instant provisions, the Sub Post Master, Ram Ghat Road, P.O, Aligarh must acknowledge these passbooks and return one copy to the APM, Aligarh HPO duly acknowledging the passbooks sent and the APM, Aligarh HPO on receipt of the said copy of invoice must check and paste the same in the office guard file for record. In the present case, the applicant failed to obtain the copy of Invoice sent and did not paste the same in the Office Guard File. It further transpires that Shri Daya Ram Singh Rawal, the then Sub-Postmaster Ramghat Road did not take these passbooks in his account and committed fraud of Rs.32,35,000/- by issuing forged passbooks to the public against the money taken from the customers who came to deposit their money in Post Office Schemes. Thereupon, a Memo of charge sheet dated 24.11.2006 was issued to the applicant under Rule 16 of CCA (CCS) Rules alleging that the applicant has committed gross negligence in performing his duties and violated Rule 6(2) (a) of the Saving Bank Manual Volume-I and English translation of the charges leveled against the applicant is Annexure A-3 which reads as follows:Statement of Misconduct or Misbehaviour leveled againt Shri Nagendra Pal Singh Sub Postmaster, A.M.U. Sub Post office, Aligarh. Shri Nagendra Pal Singh Sub Postmaster A.M.U. Sub Post office, Aligarh, while working as Asstt. Postmaster Sub Account Head Post office Aligarh, during the period from 13.05.2003 to 19-052004, supplied 300 blank passbooks 100-100 each of Saving Bank Recurring Deposit and Monthly Income Scheme, to Ramg hat Road Sub Post office through Sub Account Slip on 27.05.03. But the second copy of the Invoice No. M/Sub Account/Invoice No.1/03-04 dated 27.05.03, which is returned by the Sub Postmaster after receipt, did not obtain, and not pasted the same on the original copy of the Invoice, and its non receipt was not challenged by him to the Sub Postmaster Ramg hat Road, nor he brought this serious irregularity into the notice of higher authorities Shri Daya Ram Singh Rawal, the then Sub-Postmaster Ramg hat Road, taking its advantage did not taken these passbooks in account on receipt of these blank passbooks Shri Daya Ram Singh Rawal issued the forged passbooks to the depositors, and he did not account for the amount in Govt. accounts and misappropriated the amount Rs.32,35,000/-Thus it is alleged that Shri Nagendra Pal Sing violated the provision of Rule 6(2) (a) of Saving Bank Manual Volume one and Rule 3 (1) (ii) of CCS (Conduct) Rules, 1964.

3. The applicant sought inspection of certain documents vide letter dated 7.12.2006, which was duly provided. He has stated that, as he did not receive the copy of invoice, he wrote a letter to the then SPM, Aligarh requesting that the receipted copy of invoice may be sent to him immediately. A reply was sent by the then SPM, Aligarh that the passbooks sent have been received and the receipted invoice had already been returned by him.

4. Thereafter, the Disciplinary Authority passed the order of punishment, as referred to above. The appeal filed against the order of Disciplinary Authority was also rejected by the appellate authority. Both these orders have been challenged in the present case.

5. The impugned order has been assailed primarily on the ground that it is not a case of the respondent that the blank passbooks were not received at its destination as is evidenced by the letter bearing endorsement of the then Ram Ghat SPM, Aligarh that the passbooks had in fact been received. It is the then SPM, Aligarh who did not enter these passbooks in the Stock Register. This was not the part of duty of the applicant as he was not entrusted with outdoor duties. This was the duty of the outdoor staff and officers who visit and inspect the offices to ensure that the passbooks are duly entered in the stock register. There is no link between Daya Ram Singh Rawal, the then Ram Ghat SPM, Aligarh and the applicant regarding the aforesaid fraud and the fraud was committed by Daya Ram Singh Rawal, the then SPM, Aligarh alone for which disciplinary proceedings were conducted and he was jailed. The allegation against the applicant is that he did not obtain the receipted copy of invoice and paste the same in the office guard file. Even if he would have done it, still Daya Ram Singh Rawal could have committed fraud. Thus, there is no direct link regarding loss between the then SPM Daya Ram Singh Rawal and the applicant. Further more, the applicants letter sent to SPM, Aligarh on which there is an endorsement, referred to above, has not been considered while passing the impugned orders. On the other hand, the respondents had made an enquiry to ascertain the genuineness of the designation stamp as well as the signature of the then SPM, Aligarh on the aforesaid endorsement but the result of the same was not provided to the applicant. The impugned orders are thus vitiated being based on extraneous matter.

6. At the hearing, learned counsel for the applicant strongly urged that the loss, if any, caused to the department was as a result of the fraud committed by the then SPM Daya Ram Singh Rawal. The allegation against the applicant is that he has not pasted the receipted copy of invoice in the Office Guard File. Even if, the applicant had not pasted the copy of invoice, the fraud would have still committed by the SPM, Aligarh. Further more, the fraud reveals use of certain passbooks, which were not sent by the applicant to the then SPM, Aligarh. Further more, there is no whisper in the order of punishment as to how and on what basis, the Disciplinary Authority arrived at the conclusion that recovery of rupees two lacs should be made from the applicants pay. In case the then SPM Daya Ram Rawal had committed the fraud, the entire amount should have been recovered from him. The impugned orders do not reveal as to how the loss has been apportioned between the applicant and Shri Daya Ram, the sole offender and how rupees two lacs are made recoverable from the applicant while the loss caused was Rs.32,35,000/-. The applicant has also assailed the imposition of two penalties for the same lapse.

7. It appears that the applicant has submitted a statement of defense upon which the respondents made enquiry from the then Daya Ram Singh Rawal who denied his signature and the designation stamp on the endorsement made on the applicants letter. In view of this, the respondents did not accept the defense of the applicant as they found the letter relied upon by the applicant in his defense being a forged one. In this regard, learned counsel for the applicant referred to and relied on the case of Ministry of Finance and another Vs. S.B.Ramesh (1998 SCC (Land S) 865 wherein it was, inter alia, held that the witnesses whose statements are relied on must be produced failing which the report would be vitiated. The case in State of andhra Pradesh Vs. S.M.Nizamuddin Ali Khan (1976) 4 SCC 745) was also referred to in support of his contention that the enquiry would be vitiated by consideration of extraneous matter without opportunity of rebuttal. In Tejkunwar Chouhan Vs. The Union of India and Ors. (2006(3) ATJ, 24 (CAT, Jabalpur Bench), the order of disciplinary authority based on extraneous matter was quashed as it proceeded on habitual absenteeism which was neither a part of article of charge nor did the disciplinary authority itself took it into account. On the strength of these authorities, the learned counsel for the applicant strongly urged that the statement of SPO Ram Ghat, Aligarh could have been relied upon by the respondents only if the same was subjected to the cross-examination of the applicant. The recovery too is bad and contrary to the administrative directions issued by the Government on the subject.

8. The respondents, on the other hand, opposed the application stating that the applicant failed to obtain the receipted copy of invoice and did not paste the same in office guard file and that the applicant neither wrote any letter to the then SPM, Ram Ghat Road regarding nonreturn of copy of invoice and that the applicant did not report the incident to his superiors. This showed lack of dedication and gross negligence in performing duties by the applicant and this is also in violation of Rule 6 (2) (a) of Saving Bank Manual Volume I which enjoins upon him a duty to have obtained the receipt of invoice and paste the same in Guard File and its failure in obtaining requisite invoice helped the then SPM Daya Ram Singh Rawal in committing fraud of Rs.32,35000/-. Instruction 22 (b) below Rule 11 of CCS (CCA) Rules specifically provides for penalty of recovery of pecuniary loss caused by the Government employee to the Government. The impugned order is thus in accordance with law.

9. We have given our careful consideration to the respective submissions made by both the parties. We have carefully perused the record of the case.

10. Before dealing with the case on merits, it would be expedient to recapitulate the rules and administrative instructions on the subject. Rule 11 of CCS (CCA) Rules provides for imposition of following minor penalties:

(i) censure;

(ii) withholding of his promotion;

(iii) recovery from his pay of the whole or part of any pecuniary loss caused by him to the Government by negligence or breach of orders;

(iv) withholding of increments of pay;

11. The question whether more than one penalty can be imposed for one and the same lapse has been clarified by Administrative Instruction dated 30.3.1981 which reads as follows:

(9) Imposition of two penalties for one lapse/offence:-

A question has been raised as to whether two statutory penalties can be imposed for a single offence committed by an official. Instructions in this behalf already exist, but it is advisable to reiterate them for ready recapitulation. It has been laid down that while normally there will be no need to impose two statutory penalties at a time, the penalty of recovery from pay of the whole or part of any loss caused by an official to the Government by negligence or by breach of order can be imposed along with another penalty. Para. 108 of the P and T Manual, Volume-III, also lays down that in addition to the penalty of recovery, technically there is no bar to impose any statutory penalty if the circumstances of the case justify it. The punishing authority should, however, bear in mind that when more than one penalty is imposed, one of which is recovery of pay of the whole or part of loss caused to the Government, the net cumulative effect on the Government servant should not be of such a severity so as to make it impossible for him to bear the strain.

2. The aforesaid instructions would reveal that while normally there should be no necessity for imposing to 3o penalties at a time, there is no bar to awarding the penalty of recovery along with any other penalty. But in such cases also, the severity of the strain vis- -vis the nature of offence committed by the official should be carefully assessed and borne in mind by the punishing authority. Further, the penalties indicated in Rule 11 of the CCS(CCA) Rules, are graded only. Accordingly, when the penalty of recovery is awarded, there should be no necessity to award a lower penalty. The necessity to award another penalty should arise only when it is considered absolutely necessary to award a higher penalty like reduction.

(D.G.P and Ts No.105/26/81-Vig. III, dated the 30th March, 1981.)

12. In view of the aforesaid, imposition of stoppage of increment for one year without cumulative effect as well as recovery of rupees two laces against the applicant is not open to any objection under the law.

13. As regards the recovery of any pecuniary loss caused to the Government by negligence or breach of contract from his pay, it is to be noted that this penalty is not to be levied in all the cases or charges leveled under the rules. On the other hand, this penalty can be imposed only in respect of such misconduct which has resulted in pecuniary loss to the Government and where no such loss is caused, penalty of recovery of loss cannot be imposed although the misconduct in such a case may attract other penalties. It may be expedient to note in this regard the administrative instructions that have been issued on this subject as follows:

(22) Imposition of the penalty of recovery:- (a) General Condition :-In the case of proceedings relating to recovery of pecuniary losses caused to the Government by negligence, or breach of orders of a Government servant, the penalty of recovery can be imposed only when it is established that the Government servant was responsible for a particular act or acts of negligence or breach of orders or rules and that negligence or breach caused the loss. In a case of loss caused to the Government, the competent disciplinary authority should correctly assess in a realistic manner the contributory negligence on the part of an officer and while determining any omission or lapses on the part of an officer, the bearing of such lapses on the loss considered and the extenuating circumstances in which the duties were performed by the officer shall be given due weight. The amount of recovery of loss ordered as measure of penalty can be reduced by the punishing authority at any later stage if it is found that the amount of loss sustained by the Government is less than that originally calculated. If, however, the loss is subsequently found to be nil, the case has to be reviewed by the competent authority for imposing an appropriate penalty. That authority will not, however, be competent to impose a penalty higher than that of recovery.

(Rules 106, 107 and 111 of P and T Mannual, Vol.II)

(b) Manner in which charge-sheet to be framed.-

As is well known the penalty of recovery from pay is a special type of penalty which cannot be awarded in all types of misconduct. Rule 11(3) of the CCS(CCA) Rules,1965, clearly prescribes that the penalty of recovery from pay of the whole or part of the loss caused by the Government servant to the Government by negligence or breach of orders on his part can be awarded to him. Thus, the rule itself makes it clear that this penalty can be awarded only in a case where it has been established that the negligence or breach of orders on the part of a Government servant has led to the loss to the department. Instructions were also issued in the past bringing the special provision of the rule to the notice of all concerned, but it has been observed that the requirement of the rule could not be properly appreciated by most the disciplinary authorities. In a recent Court case, an order of penalty of recovery has been set aside on the ground that the disciplinary authority merely established certain lapses on the part of the government servant without explaining the facts leading to the loss and the manner in which the lapses on the part of the Government servant had a link with the loss sustained by the department. No appeal has been filed in this case as it was found that it would not be possible to sustain the order of the penalty of recovery which was not consistent with the rule referred to above. A number of frauds or misappropriations are committed and it is not always possible to recover the entire amount of loss from the real culprit. In some cases, it is not even possible to locate the real culprit and accordingly it becomes impossible to take action against the subsidiary offenders with primary object of recovering loss sustained by the department. It should be clearly understood by all the disciplinary authorities that while an official can be punished for good and sufficient reason, the penalty of recovery can be awarded only if the lapses on his part have either led to the commission of the fraud or misappropriation or frustrated the enquiries as a result of which it has not been possible to locate the real culprit. It is, therefore, obligatory that the charge sheet should be quite elaborate and should not only indicate clearly the nature of lapses on the part of the particular official but also indicate the modus operandi of the frauds and their particulars and how it can be alleged that but for the lapses on the part of the officials, the fraud or misappropriation could be avoided or that successful enquiries could be made to locate the stage at which the particular fraud had been committed by a particular person. This will enable the accused not only to submit a defense against the allegation brought against him but also to explain how the lapses had not contributed to the loss in any manner. The Disciplinary Authority is also required to give a clear finding in the punishment order on both these points. If it is not done, the order, awarding the penalty of recovery will be liable to be set aside. The Heads of Circles and Administrative Offices, etc. are requested to bring these instructions to the notice of all concerned so that the disciplinary proceedings for a penalty of recovery may not suffer from a procedural flaw.

(D.G. P andT No.114/176/78- Disc. II, dated the 13th February,1981)

(23) Entire loss should be recovered from the delinquent official- No limit to quantum or period of recovery- References are being received in this Department seeking clarification whether the instructions contained in DG, P and T Letter No.3/313/70-Disc.-I dated 17.8.1971 (not printed) are applicable to Government servants serving in other Ministries/ Departments also.

2. The DG, P and Ts instructions mentioned above provide that recovery from the pay of a Government servant s a punishment for any pecuniary loss caused by him to the Government by negligence or breach of orders, should not exceed and of his basic pay, (i.e. excluding dearness pay or any other allowances) and should not be spread over a period of more than three years. However, no such limits have been prescribed in the statutory rules, i.e., in Rule 11 (iii) of the CCS (CCA) Rules,1965.

3. The matter has been examined in consultation with the Ministry of Law. It was observed that the DG, PandT instructions prescribed the procedure to effect the recovery of the amount levied as penalty in terms of Rule 11 (iii) of the CCS (CCA) Rules,1965 and these procedural instructions cannot amend, supersede, or modify the substantive provisions of Rule 11 (iii) of the CCS (CCA) Rules,1965. While it is expected that in imposing the penalty of recovery of pecuniary loss the Disciplinary Authority should not display such severity that a Government servant suffers hardship disproportionate to his negligence/misconduct that led to the loss, it is not necessary to fix a rigid limit for the purpose of such recovery. The DG, Pand T instructions would, therefore, be treated as unwarranted. Therefore, the implication of this OM is to recover the entire loss from the delinquent official but the recovery may be spread over till entire loss is recovered.

(G.I., Dept. of Per.and Trg, O.M NO.11012/1/2000-Estt. (A). dated the 6th September,2000)

14. From the aforesaid it is seen that the penalty of recovery can be imposed only when misconduct alleged to have been committed by Government servant, has caused pecuniary loss sought to be recovered from him. Pecuniary loss to the Government as a result of misconduct committed by the Government servant is a condition precedent for imposing this penalty of recovery. If there is no direct link between this misconduct on the part of the government servant on one hand and the pecuniary loss sought to be recovered from him, the result would be that this penalty recovery cannot be imposed on him. There must be cause-and -effect relationship between the misconduct of the government servant and the pecuniary loss caused to the government. From this, it follows that the pecuniary loss is such which directly flows from the misconduct on the part of the government servant and not to be arrived at in some circuitous manner by establishing any remote and distant connection between the two.

15. Further more, if the penalty of recovery is proposed to be imposed, it would be necessary that the Charged Officer is duly informed of it and nature of lapses as well as link of the relevant loss should clearly be brought out in the charge sheet so as to enable the Charged Officer to put up his defense lest the penalty may be vitiated on account of denial of reasonable opportunity of being heard in the matter. Besides, the Disciplinary Authority is required to give a clear finding in the punishment order not only on the lapses committed by the Government servant but also the manner in which the lapses on the part of the Government servant had a link with the loss sustained by the department.

16. Viewed the present case in the light of the aforesaid, we find that the order of punishment (Annexure A-1) does not deal with the essential ingredients required for the aforesaid lapses based on which any recovery can be legitimately ordered. Admittedly, the applicant has not obtained the receipted copy of invoice from Ram Ghat Road SPM and pasted the same on the Guard File of the office as required under rules. There is no dispute in this regard. In the statement of defense, the applicant has stated that the SPM, Ram Ghat Road had sent the applicants letter with an endorsement that the passbooks have been duly received and the same is on record. During enquiry from Shri Rawal, he refused the receipt and return of the said letter by him. Thus, the facts that the then SPM Daya Ram Singh Rawal denied to have made any endorsement on the letter sent by the applicant and the designation stamp on the said letter is also not official one and the fact that the statement of Shri Daya Ram Singh Rawal was obtained at the back of the applicant on which the Disciplinary Authority had relied, clearly vitiate the impugned orders of punishment. The respondents should have confronted the applicant with the denial made by the then SPM Daya Ram Singh Rawal before they could rely on it under the law. Besides, there is no whisper in the order of the Disciplinary Authority as to how the lapses on the part of the applicant led to the commission of the fraud by the then SPM Daya Ram Singh Rawal and how it could be alleged that but for the lapses on the part of the applicant the fraud or misappropriation would have been avoided. In any case Daya Ram Singh Rawal, the then SPM, Ram Ghat Road, PO had been apprehended and prosecuted and was ultimately sentenced. Nothing is on record to indicate as to what amount, if any, has been recovered from said Daya Ram Singh Rawal. Nor there is anything to show as to how the Disciplinary Authority has apportioned the pecuniary loss between the applicant and Shri Daya Ram Singh Rawal. The order of disciplinary authority is silent as to how and on what basis the recovery of rupees two lacs has arrived at. We find substance in the applicants contention that even if the passbooks have been taken on stock register still fraud could have been committed. This is evident from the fact that there are certain other Passbooks which were duly received and acknowledged by SPM, Ram Ghat Road, yet the same were used in the commission of fraud. Furthermore, the duty to ensure that passbooks were duly taken on stock register, was of the concerned staff and not of the applicant. If factum of not taking the passbooks on stock register is a cause of pecuniary loss then it was the field staff concerned that was more responsible than the applicant, who was only responsible to paste the receipted copy of invoice on the office guard file. Above all, the Memo date 24.11.2006 issued under Rule 16 of the CCS (CCA) Rules also did not clearly allege that lapses committed by the applicant led to pecuniary loss in the case. On the other hand taking advantage of the situation Shri Daya Ram Singh Rawal the then SPM was said to have committed fraud.

17. Though the order of appellate authority is elaborate than the Disciplinary Authority nevertheless it cannot rectify deficiency that has vitiated the order of disciplinary authority. However, the order of Disciplinary Authority failed to show as to how the conclusion for recovery of amount of rupees two laces arrived at in respect of which responsibility has been fixed on the applicant, especially having regard to the fact that fraud has also been committed by the then SPM, Aligarh Daya Ram Singh Rawal by using the passbooks of Mahila Samridhi Yojna that have duly been taken on stock register.

18. For the foregoing reasons, the imposition of penalty of recovery from the applicant cannot be sustained. The impugned order of Disciplinary Authority imposing two penalties being amenable to segregation, need not be quashed in entirety. It would be in order if that part of the order which has been found to be bad in law is segregated and quashed, leaving the remaining part of the order intact. Accordingly, imposition of penalty of withholding of one increment without cumulative effect is upheld while quashing the imposition of the penalty of recovery of rupees two laces from the pay of the applicant is quashed and set aside.

19. The OA is accordingly partly allowed as aforesaid. No order as to costs.