AI Structured Summary
Not yet generated for this judgment
Judgment
S.P. Kukday, J.—Rule. Rule made returnable forthwith. With the consent of learned Counsel for the parties, this petition is heard finally at the stage of admission. Learned Counsel for the Respondent waives service.
In the present petition filed under Article 226 of the Constitution, the Petitioner seeks issuance of writ of mandamus for directing Respondent to pay an amount of Rs. 6,82,921/- to the Petitioner towards the dues to which she is entitled on account of the death of her husband.
The facts, which are relevant for the purpose are that Rameshchandra Sharma was working as a Manager of Maharashtra State Warehousing Corporation at Ahmednagar. While discharging his duties, Shri Rameshchandra Sharma issued No Objection Certificate dated 24th April, 1992 for mutation of the land outside the compound in favour of the neighbouring occupier. It was found by the Corporation that the Manager had no authority to issue such certificate and in fact, the certificate which was issued was unwarranted as it was in respect of the land belonging to the Corporation. The issuance of No Objection Certificate was treated as misconduct and disciplinary enquiry was initiated against Shri Rameshchandra Sharma. On the conclusion of the enquiry, punishment was imposed on the delinquent. He was demoted to the post of Deputy Manager with the entry in his service record that he shall never be promoted to any other post during tenure of his service. The delinquent was also directed to pay the price of 2 quant has of land at the market rate in the event the decision of the revenue authorities goes against the Corporation and it sustains loss. The delinquent did not file any appeal against the order of this punishment. In due course he retired from service w.e.f. 3Lst August, 2004. Soon after retirement, Shri Sharma expired on 21.9.2004. On demise of the husband, the Petitioner approached Respondent-Corporation for retiral benefits. The Respondent, however, refused to pay the amount of Rs. 6,82,921/- due towards the retiral benefits on the ground that final decision has not been rendered in the matter pertaining to the mutation of the concerned land. The Respondent intimated the Petitioner that the amount would be withheld till the decision of the revenue proceeding and if the decision goes against the Corporation, loss, if any, would be recovered from the retiral benefits.
The Respondent has filed affidavit in reply wherein it is admitted that the husband of the Petitioner was in employment and that she is entitled to the retiral benefits. However, the Respondent claim that in view of the order of punishment dated 17th September, 2003, the Corporation is entitled to recover loss, if any, suffered by the Corporation pertaining to the dispute regarding mutation of the land. According to the Respondent, as the matter is yet to be decided, the Petitioner has no legal right to claim the amount of Rs. 6,82,921/- at this stage.
Undisputedly, husband of the Petitioner Mr. Rameshchandra Sharma was in the employment of the Respondent/Corporation. A communication by the Respondent-Corporation dated 12th September, 2006 which is annexed as Exhibit-D to the petition, discloses that the total retiral benefits come to Rs. 6,82,921/-. The controversy is restricted only to the right of the Respondent to recover the loss which may be caused to it from the retiral benefits. In view of the punishment imposed on the employee by the order dated 17th September, 2003.
According to learned Counsel for the Petitioners Shri Katneshwarkar, the order imposing penalty is erroneous in so far it directs recovery of loss, which may be caused on the conclusion of the proceedings pertaining to the property belonging to the Respondent-Corporation. According to learned Counsel, unless the loss is quantified or has been actually caused, the punishment contingent on happening of future event, cannot be imposed. Learned Counsel for the Respondent Shri Dankh has, however, pointed out that the authorities have imposed punishment on the delinquent. The delinquent was accordingly reverted to the post of deputy manager and has not preferred any appeal against the order imposing punishment. The order has, therefore, attained finality. The Respondent is entitled to recover any loss, which may be caused on account of the misconduct of the delinquent from the retiral benefits. Therefore, as no appeal is preferred, no infirmity can be found with the order passed by the Disciplinary Authority.
We are dealing with the matter arising out of the disciplinary enquiry initiated against husband of the Petitioner for the misconduct committed by him. There is no dispute that husband of the Petitioner is held guilty of misconduct in so far as he issued No Objection Certificate in respect of the land belonging to the Corporation though he had no such authority. The dispute in respect of mutation of this landed property is pendent before the revenue authorities. The Respondent is contesting the issue. However, as there is a possibility of loss being caused, the disciplinary authority, in addition to the penalty of reversion, has imposed a penalty for recovery of the loss, which may be caused to the Corporation.
We are aware of the scope of judicial review in these matters. In such cases, generally the principles evolved in the case of Associated Provincial Picture Houses v. Wedneshbury Corporation 1948 (1) KB 223 are applied. The scope of judicial review is limited to the cases, where the order is contrary to law, where relevant factors were not considered or irrelevant factors were considered or the decision was one, which no reasonable person could have taken. Principles, governing judicial review are also enunciated in the case of Council for Civil Services Union v. Minister of Civil Service 1983 (1) AC 768. Reference is made to these principles, by the Apex Court in the matter of Om Kumar v. Union of India 2001 (2) SCC 386 . In the present case, the propriety of imposing penalty of recovery of loss which is not quantified, but is likely to be caused in the event or an adverse decision has been questioned. The Respondent has filed compilation of the Service Rules applicable to its employees. The Respondent has adopted the Service Rules applicable to the Government servants. In the compilation placed on record, Chapter-VI deals with conduct and discipline and appeals. Section 2 of this Chapter refers to imposition of penalties and the disciplinary authorities. Section 75 refers to the penalties. Section 75(1)(a) specifies minor penalties, which are as under: (a) Minor penalties;
(i) Censure;
(ii) Fine;
(iii) Withholding of his promotion;
(iv) Recovery from pay of the whole or part of any pecuniary loss caused to the Corporation;
(v) Withholding of increments of pay including stoppage of increment at an efficiency bar. If any for the period up to three years without cumulative effect.
It is therefore apparent that recovery from pay or the whole or part of any pecuniary loss caused to the Corporation is one of the minor penalties. There can be no dispute that the Respondent-Corporation is entitled to recover pecuniary loss caused to it on account of misconduct of the employee. However, the foundation for imposing this penalty is causing of loss. In the present case, the loss has not been caused to the Corporation. The penalty imposed on the delinquent refers to the future events, which may or may not result in causing of loss to the Corporation. Learned Counsel for the Petitioner has raised an objection for imposition of such penalty. It is apparent that such a contingency is not considered and no provision is made for imposition of penalty in such a contingency where loss can be resulted in future. There is nothing on record to show that the proceeding in respect of the property belonging to the Corporation would be decided within a certain period. Whatever might be the decision of the revenue authorities, the appeals are provided and either party is likely to pursue this remedy of filing of an appeal. It is, therefore, apparent that the proceeding may be prolonged for a considerable period. At this stage, it is not possible to predict the final outcome of the proceeding. The penalties provided in the Disciplinary Rules refer to the actual loss caused. The Rules do not provide for imposition of penalty for recovery of loss which might be caused in future. In our considered opinion, the approach in prescribing the penalty and restricting the penalty to the loss actually caused, is realistic and appropriate. It would be hazardous to provide for a penalty in respect of uncertain contingent event. If the Department/employer suffers a loss on account of the misconduct of the employee. It is permissible for the employer to recover the loss either from the pay or from the gratuity of the delinquent/employee. However, the proceedings can be taken on only after the loss is sustained and not in the expectation of loss, which may or may not be caused. In the present case, the Respondent has not suffered any loss on account of the misconduct of the delinquent. In these circumstances, we are inclined to sustain contention of learned Counsel for the Petitioner that the penalty imposed on the delinquent, depending on uncertain event as per se illegal. Thus, though the order of punishment has attained finality, the Respondent cannot take advantage of the said order to withhold retiral benefits. The Petitioner is thus entitled to receive the retiral benefits. The amount is quantified at Rs. 6,82,921/-, Payment of this amount has been withheld by the Respondent-Corporation by having recourse to the order of penalty. Which could not have been imposed in view of Section 75(1)(a)(iv) of the service Rules applicable to the Respondent Corporation. The Respondents are, therefore, liable to pay interest on the amount due. The Petitioner has claimed interest at the rate of 18% p.a. from the date of retirement till the actual payment is made. In our considered opinion interest cannot be awarded at such a rate in the facts and circumstances of the case, where the Respondent appears to have been misled in view of the imposition of the penalty, which was not permissible under the Rules. We, therefore, allow interest at the rate of 6% per annum from the date of retirement till the actual payment is made. The petition is therefore, allowed in aforesaid terms. Amount of Rs. 6,82,921/- be paid to the Petitioner with interest at the rate of 6% per annum from the date of retirement of her husband from service till the date of payment. Rule is, therefore, made absolute in the aforesaid terms. However, there shall be no order as to costs.