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Judgment
Sabyasachi Bhattacharyya, J.
The present revision arises from a suit, inter alia seeking a declaration that the purported decision alleged to have been taken in the meeting of the
council of the defendant Institute held on 13th April 2018 to revert the plaintiff to the post of the Additional Secretary of the Institute of the Cost
Accountants of India (the first defendant / present petitioner) is bad in law, without jurisdiction and not enforceable, and for consequential reliefs,
including mandatory injunction directing the defendants to imm-ediately set aside, withdraw, quash, rescind and cancel the said decision.
The plaintiff / present opposite party no. 1 was appointed as an Add-itional Secretary of the first defendant/petitioner on July 9, 2012 by direct
recruitment, on his own application and upon an interview being held. The opposite party no. 1 was subsequently promoted to the post of Secretary of
Council on November 7, 2015 by a resolution of the petitionerInstitute, followed up by an office order dated November 24, 2015.
However, on January 3, 2018 the concerned Ministry constituted a Factfinding Committee to enquire into allegations against the opposite party no. 1
and to give a report in that regard. Such Committee submitted a report on February 2, 2018, recommending corrective measures, including
withdrawing the decision to promote the opposite party no. 1 to the post of Secretary and reverting him back to the post of Additio-nal Secretary upon
recovery of excess salary paid to him, for allegedly having been promoted in alleged violation of rules and norms of the petitioner, initiating disciplinary
proceedings and suspending the opposite party no. 1 with immediate effect, restricting his entitlement to subsistence allowance.
On March 19, 2018, the Ministry of Corporate Affairs forwarded the report of the said Committee to the Council of the petitionerInstitute for taking
necessary corrective action.On April 7, 2018, a notice was issued calling an extraordinary meeting of the Council, which was held on April 13, 2018,
when a resolution was taken by the Council to revert the opposite party no. 1 and to forfeit and realize the excess salary paid to the opposite party no.
On April 16, 2018 two orders were passed by the Council. By Order No. 2, opposite party no. 1 was reverted to the post of Additional Secretary.
By Order No. 2, he was suspended.
Being thus aggrieved, opposite party no. 1 instituted the suit challenging primarily the meeting dated April 13, 2018 as well as for consequential reliefs.
In the said suit, opposite party no. 1 filed an application for temporary and ad interim injunction, inter alia restraining the petitioner and other defendants
from taking any coercive measure on the basis of the decision dated April 13, 2018, from causing interruption to the plaintiff / opposite party no. 1
from discharging duties as Secretary of the present petitioner, and ancillary prayers.
Upon ad interim injunction being refused by the trial court, the plaintiff / opposite party no. 1 preferred against such refusal a miscellaneous appeal,
bearing Miscellaneous Appeal No. 107 of 2018, and moved an application for temporary and ad interim injunction in connection with the said appeal.
By the impugned order dated May 19, 2018, the appellate court passed an ad interim order of injunction restraining the petitioner and other
defendants/respondents from giving any effect to the resolution dated April 16, 2018 till June 26, 2018. Being aggrieved by and dissatisfied with the
said ad interim order of injunction, the first defendant / petitioner has taken out the present application under Article 227 of the Constitution of India.
Learned senior counsel for the petitioner submits that the impugned order is devoid of reasons and ought to be set aside on that score alone, apart
from there being other grounds of challenge. This apart, it is submitted, the opposite party no. 1 had previously instituted a suit for similar reliefs, which
fact had been suppressed while moving the injunction application in the appellate court below. This apart, it is submitted, the opposite party no. 1 also
annexed incomplete documents before the appellate court.
Learned senior counsel for the petitioner further argues that in the garb of the impugned order of ad interim injunction, the appellate court passed an
order of status quo ante, thereby virtually granting the relief sought for in the suit itself, which was a patent jurisdictional error. Lastly, it is argued on
behalf of the petitioner that the opposite party no. 1 failed to comply with the provisions of Order XXXIX Rule 3 (a) of the Code of Civil Procedure
inasmuch as the requisites were not put in within the statutory period, nor were complete copies of the plaint and injunction served on the petitioner.
As such, in any event, the ad interim injunction order ought to be vacated.
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Elaborating on his arguments, learned senior counsel for the petitioner cites Section 35 (1) of the Cost and Works Accountants Act, 1959, which
provides that the Cen-tral Government may from time to time issue such directions to the Council as in the opinion of the Central Government are
conducive to the fulfilment of the objects of the said Act and in the discharge of its functions, the Council shall be bound to carry out any such
directions. He further places reliance on Rule 76 (d) of the relevant Officers Service Rules (1983) of the petitioner
Institute. The said subRule reads as follows:
“76. The following shall not amount to a penalty within the meaning of these Rules; … … … …
(d) Reversion to a lower post or grade of an employee officiating in a higher post or grade on the ground that he is considered after trial, to be
unsuitable for such higher post or grade or on administrative grounds unconnected with his conduct.†-
According to learned senior counsel for the petitioner, the said two provisions are the repository of the power of the Council to revert the opposite
party no. 2 to the post of Additional Secretary. The corrective measure meted out was only a reversion as envisaged in Rule 76 (d), on the
‘administrative ground’ of the promotion of opposite party no. 1 being unlawful and de hors the rules of the petitioner Institute. On the other
hand, initiation of disciplinary proceedings and suspension were directed under Rule 91 of the said Rules, which mandates an enquiry for imposing
major penalties specified in clauses (e), (f) and (g) of Rule 75 of the said Rules.
While controverting such contentions, learned senior counsel appearing for the contesting opposite party no. 1 submits that the fundamental principle of
Natural Justice, Audi AlteramPartem, was violated by the petitioner in imposing penal consequence upon the opposite party no. 1 without giving any
opportunity of being heard to the said opposite party. Learned counsel points out that under Rule 75 of the aforesaid Office Service Rules, Major
Penalties includes, under clause (e) of the said Rule, “Reduction to a lower post or grade or to a lower stage in a time scaleâ€. According to
learned counsel, the present case fell within the ambit of such major penalty, necessitating a prior hea-ring being given to the opposite party no. 1, and
not a mere reversion on administrative grounds, as contemplated in Rule 76 (d).
Even if Rule 76 (d) is taken in its totality, reversion to a lower post or grade on the ground of being unsuitable would necessitate a prior trial.
Moreover, since the conduct of the opposite party no. 1 was also considered in the report of the FactFinding Committee, it could not be said that the
‘reversion’ if it was so at all, was “unconnected with his conductâ€, as contemplated in Rule 76 (d) to obviate a trial. Hence, it is submitted
that the opposite party no. 1 was entitled to a fair hearing before any of the punishments could be meted out to him. The other argument advanced on
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behalf of the opposite party no. 1 is that the Council of the petitionerInstitute, for all- practical purposes, reviewed its own order, passed three years
ago, promoting the opposite party no. 1 to the post of Secretary, by reducing him to a lower post and directing refund of excess salaries paid to him.
This apart, learned senior counsel for the opposite party no. 1 submitted that the extraordinary meeting called to punish the opposite party no. 1 was
not preceded by requisite notice and was otherwise de hors the Rules of the petitionerInstitute. Upon hearing both sides and perusing the materials on
record, it is evident that the challenged action of the petitioner amounted to a major penalty, in the form of reduction to a lower post or grade or to a
lower stage in a time scale, as envisaged in Rule 75 (e) of the Officers Service Rules, and not a mere reversion to a lower post, as contemplated in
Rule 76 (d).
One of the indicators in that direction is the consequence of -recovery of excess salary which visited such reduction of grade. In case of a
‘reversion’, there could not be a recovery of the salary paid in the interregnum, as would follow a reduction to a lower post or grade or lower
stage in a time scale. Moreover, the argum-ent advanced by learned senior counsel for the petitioner, as to the downgradation of opposite party no. 1
being a mere reversion on “administrative groun-dsâ€, since the promotion was an administrative gaffe, does not cut ice. The punishment meted out
by reducing the post of opposite party no. 1 was not only a fullfledged reduction to a lower post or grade or to a lower stage in a time scale as
contemplated in Rule 75 (e), the same was in the least a reversion on the ground that opposite party no. 1 was unsuitable in view of his conduct. It is,
in fact, evident from the report of the FactFinding Committee, that opposite party n-o. 1 was hauled up in the report even for allegedly not informing
the Council of the relevant Rules of the petitionerInstitute at the time of his promotion. So, under no stretch of imagination, the reversion, if at all,
could be said to be unconnected with the conduct of opposite party no.1.
As such, opposite party no. 1 was entitled, in any event, to a hearing, if not a fullfledged trial, before his post being reduced to that of Additional
Secretary. Thus, the cardinal principle of Natural Justice, Audi AlteramPartem, was undoubtedly violated by the petitioner in reducing opposite party
no. 1 in grade, without giving any hearing to him. This apart, it was rightly pointed out by le-arned senior counsel for the opposite party no. 1, that
opposite party no. 1 was already an Additional Secretary, and the ‘promotion’ to the post of Secretary was just a lateral movement and not a
change in post as such, to attract penalty. -
The other point raised on behalf of opposite party no. 1, as to the Council of the petitionerInstitute not having power of review of its own order
granting promotion, that too after a long gap of three years, when valuable rights had already accrued in favour of opposite party no. 1, deserves
consideration. Undoubtedly, the power of review is a creature of statute and the Council of the petitionerInstitute does not appear to have such a
power within the four corners of the Cost and Works Accountants Act, or the connected Rules and Regulations, or even under the Officers Service
Rules governing the petitioner.
The contention of the petitioner, that Section 35 of the said Act, read with Rule 76 of the aforementioned Rules, confers such power, cannot be
accepted. In any event, the punishment meted out to opposite party no. 1 is on the face of it penal and falls within the category of Major Penalties as
envisaged in Rule 75 (e) of the Officers Service Rules. Even if such action was considered as a Reversion under Rule 76 (d), opposite party no. 1
would have a right of prior trial before such punishment being meted out. This is all the more supported by the fact that such demotion of opposite
party no. 1 was coupled with recovery of the excess salary paid, which would take the demotion beyond the pale of an ordinary, routine reversion on
administrative grounds, unconnected with his conduct.
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Accordingly, there was a sufficient prima facie case on the part of the plaintiff/opposite party no. 1 to go for trial, justifying an ad interim injunction
being granted by the appellate court below. As to suppression, there does not appear to have been any material suppression having relevance on the
grant of injunction. Since all documents relied on in the plaint were, in any event, annexed to the injunction application, a copy of which was served by
the opposite party no. 1 on the petitioner, and since the substantial and relevant portion of the report of the Fact Finding Committee was annexed by
the opposite party no. 1 with his injunction application, there could not be said to be any suppression on that score.
As to the filing of a previous suit by opposite party no. 1, the same was also mentioned in the injunction application, albeit in a cryptic reference. In any
event, as rightly pointed out by learned senior counsel for opposite party no. 1, such suit was primarily to challenge an interim order of the petitioner
asking the opposite party no. 1 to abstain from functioning as Secretary till any decision was taken as to his reversion/ reduction. Such cause of action
became infructuous when it was merged with the subsequent reduction in post and other consequential penalties, including suspension, recovery of
excess salary and grant of mere suspension allowance to opposite party no. 1. Moreover, it was categorically submitted by learned senior counsel for
opposite party no. 1, on instruction, that opposite party no.1 was ready to forego the previous suit, which had, according to learned senior counsel,
become infructuous.
Hence it could not legitimately be said that opposite party no. 1 had actually suppressed anything material or relevant. It was submitted on behalf of
opposite party no. 1 that necessary requisites were put in by opposite party no. 1 for service of copies of the plaint and injunction application with 24
working hours, since the order of ad interim injunction was passed on a Saturday and a Sunday intervened, before the requisites were put in on the
succeeding Monday. As such, the allegation of violation of Order XXXIX Rule 2 (a) of the Code of Civil Procedure does not stand on sound footing,
at its best being arguable and subject to factual considerat-ion not being fit to be entertained in an application under Article 227 of the Constitution of
India.
At this juncture, it would be relevant to refer to certain judgments, which were relied on by the opposite party no. 1. The first such judgment, reported
at (1974)1 SCC 218 (State of Uttar Pradesh & Ors. â€"vs Sughar Singh), laid dow-n that the right to the post or the rank and the p-resence of the evil
consequences are the two tests to decide whether the order is punitive and merely because in a particular case, one of the aspects is emphasized does
not amount to any discrepancy or contradiction in principles.
The next cited judgment was reported at (2-007) 1 SCC 331 (Shekhar Ghosh â€"vs Union of India & Anr.), where the right of predecisional hearing
was harped, where the decision involves civil consequences. The Natural Justice principle of Audi AlteramPartem was held to be a sine qua non for a
departmental proceeding. Both the said citations are relevant and apply to the present case, since in the case at hand also, no hearing was granted to
opposite party no. 1 before demoting him. This apart, learned senior counsel for opposite party no. 1 also cites a judgment reported at (1971) 3 SCC
844 (Patel Narshi Thakershi & Ors. â€"vs Shri Pradyuman Singhji Arjunsinghji) which laid down that the power to review is not an inherent power
and must be conferred by law either specifically or by necessary implication.
The said judgment is also apt on the facts of the present case and supports the contentions of opposite party no. 1 to that effect. The last judgment
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cited by opposite party no. 1 was reported at (2015) 4 SCC 334 (State of Punjab & Ors. â€"vs Rafiq Masih (White Washer) & Ors.). It was laid
down therein inter alia that recovery of amount paid in excess without fault of the recipient was impermissible in various cases. The said judgment is
also relevant insofar as the recovery sought by the petitioner from opposite party no. 1 was due to no fault of the opposite party no. 1.
As to the other argument of the petitioner, that the appellate court had virtually granted status quo ante in the garb of injunction, the said argument
does not hold water, since the injunct-ion granted was in aid of the suit and the relief claimed in the miscellaneous appeal and could be- granted
legitimately in the facts of the case, where a strong prima facie- case has been made out by the opposite party no. 1 insofar as the violation of Natural
Justice was concerned in not granting him a hearing before demot-ing him to the post of Additional Secretary without solid reasons.
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Moreover, the Council of the petitioner Institute prima facie did not have the power of review, which was exercised in recalling a three yearold order
of promotion granted to the opposite party no. 1. In its overzealousness to toe the line of the Central Government in the form of directives, the
petitioner appears to have denied the opposite party no. 1 the pre decision right of hearing, which is a cardinal feature of Natural Justice befitting any
civil society where the Rule of Law is prevalent. Moreover, a power of review was exercised by the Council of the petitionerInstitute which was not
vested in the said Council, as such vitiating the action complained of by opposite party no. 1.
Hence, although the impugned order of the appellate court was a bit lacking in sufficiency of reasons, some rudiments of reasons found place in the
impugned order and the same was not entirely devoid of reason. Moreover, the conclusion of the impugned order is otherwise justified on the premise
as discussed herein and as such ought not to be set aside merely because a second view was possible in the opinion of this Court.
Since there was no jurisdictional error in the exercise of discretion by the appellate court below, this Court is not inclined to interfere with the
impugned order. Accordingly, C.O. No. 1587 of 2018 is dismissed on contest without, however, any order as to costs. However, it is made clear that
the observations made in this order and in the order impugned herein are all tentative and only for the purpose of deciding the ad interim prayer for
injunction and will not be binding on the appellate court and/or the trial court at any subsequent stage.