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Judgment
K.K. Sasidharan, J.—This writ petition is directed against the order dated 2 January, 2008 in W.P. No. 11308 of 2006 whereby and
whereunder, the order imposing punishment on the first respondent was quashed.
THE FACTS IN OUTLINE
The first respondent joined the service of the Tamil Nadu Housing Board, in the year 1964. He was originally appointed as Junior Assistant at
Coimbatore. Subsequently, he was promoted as Divisional Accountant in the year 1973.
While the matters stood thus, on 22 June, 1998, one week before his superannuation, he was suspended from service on the ground of alleged
commission of irregularity in the matter of cost finalization. The appellant alleged that the first respondent processed the cost finalisation proposal
relating to Tatabad Scheme in the year, 1987 and got it approved at the level of Executive Engineer and Administrative Officer, Coimbatore
Housing Unit instead of obtaining the approval of the Board and thereby committed grave irregularities in cost finalisation and thus violated Section
20 of the Tamil Nadu Housing Board Officers and Servants Conduct Regulations, 1963. It was also alleged that on account of his act of
finalisation of cost at a lesser rate, the appellant sustained loss of Rs. 17,29,521/-.
The first respondent submitted his explanation to the charges. According to the first respondent, as per the circular of the appellant dated 1
December, 1986 cost finalisation of the completed Scheme up to March, 1982 has to be done at the Divisional level and it was only in respect of
the scheme completed after 1 April, 1982, it has to be sent to the Board for approval. Therefore, there was nothing wrong in finalising the cost, as
the acquisition in question and the cost finalisation were prior to 1 April, 1982. With respect to the second charge regarding the Act of causing loss
to the appellant to the tune of Rs. 17,29,521/-, the first respondent submitted that there was no enhancement in the award amount and the extra
demand was only on account of enhancing the solatium as well as statutory interest.
Since the explanation was not satisfactory, the appellant appointed an Enquiry Officer. The Officer conducted the enquiry and submitted his
report dated 17 September, 1999 wherein it was reported that the charges were not proved. Though the appellant accepted the said report, the
Government was not agreeable and accordingly, a fresh enquiry was initiated. The second enquiry also resulted in giving a negative report,
absolving the first respondent from charges.
The Managing Director of the Housing Board disagreed with the findings given by the second enquiry officer. Accordingly, a show cause notice
was issued to the first respondent to show cause as to why he should not be punished for his misconduct. The first respondent submitted his
explanation point to point as to why he was not responsible for the alleged loss sustained by the appellant. However, the Managing Director was
not prepared to accept the said explanation. Accordingly, it was decided to impose punishment of withholding one third pension besides recovery
of a sum of Rs. 8,64,760.50 from the first respondent. The report of the Board was submitted to the Government for approval. The Government,
after due consideration, accorded approval of the Board''s resolution dated 11 April, 2003 with a modification in the punishment that recovery
should be only a sum of Rs. 4,32,380.25. The punishment of withholding one third pension was approved.
The appellant, on receipt of the order passed by the Government dated 29 September, 2003 issued the impugned proceedings dated 7
October, 2003 whereby and whereunder the punishment of with-holding one third pension for a period of one year besides recovery of a sum of
Rs. 4,32,380.25 was imposed on the first respondent. The first respondent challenged the proceedings dated 7 October, 2003 in W.P. No.
11308 of 2006.
Before the learned Single Judge, the first respondent contended that it was only after the disposal of the Land Acquisition Original Petition by
the Reference Court, he prepared the final cost and that too only in accordance with the prevailing instructions. It was also contended that in the
cost list, there was a clear indication that the appeal filed against the said judgment was pending before the High Court. It was only after his
retirement, the sale deeds were executed by the then Executive Engineer and by the time the appeal was disposed of by the High Court. Therefore,
only those officers, who were incharge of the matter, were responsible for the alleged loss to the Society.
The appellant justified the disciplinary action on the ground that the act of the first respondent caused financial loss to the Housing Board as the
plot owners were not prepared to pay the remaining amount, subsequent to the execution of the sale deed. Therefore, the first respondent alone
was responsible and his act cannot be said to be one made within the four corners of the existing circulars issued by the Board.
The learned Judge found that the enquiry was initiated after a period of nine years and as such, it caused substantial prejudice to the first
respondent. The explanation submitted by the appellant that the matter was delayed on account of the pendency of the Land Acquisition
Proceedings was not accepted by the learned Single Judge. Accordingly, the learned Judge allowed the writ petition. It is the said order which is
impugned in this writ appeal.
THE SUBMISSIONS ON THE APPEAL:
The Learned Additional Advocate General appearing on behalf of the appellant contended that the first respondent, being an officer at the Unit
level, was not expected to prepare the final cost of plots. However, he prepared the final cost and notice was also issued to the allottees.
Subsequently, the sale documents were executed in favour of the allottees on the basis of the said final cost. Though, the compensation amount
was enhanced by the High Court in the first appeal, the appellant was not in a position to collect the said amount from the allottees on account of
the execution of sale deed. Therefore, the appellant was justified in taking action against the first respondent for his gross indiscipline as well as for
sustaining loss to the Board.
The learned Senior Counsel for the first respondent supported the order passed by the learned Single Judge. According to the learned Senior
Counsel, the first respondent acted only as per the existing circular, which clearly provides for fixing the final cost at the division level. It was only
subsequently, a fresh circular was issued, whereby it was stipulated that final cost should be prepared only with the approval of the Board. The
said circular has only prospective effect with effect from 1 April, 1982. The scheme in question was finalised much prior to the cut off date and as
such, the first respondent has not committed any misconduct so as to take disciplinary proceedings against him.
DISCUSSION:
The first respondent functioned as Divisional Accountant in Coimbatore Division of the appellant Board for the period from 27 August, 1986
to 6 June, 1988. The scheme in question, known as ""Tatabad Scheme"" at Coimbatore was floated in the year 1975. It was a composite scheme
for the purpose of constructing 145 houses and 120 flats. The construction commenced in the year 1975 and it was completed in 1977. It was
handed over to the allottees in the year 1977 itself. Thereafter, the allottees approached the Board by way of series of representations to finalise
the cost, so as to enable them to get the sale deed. The appellant appears to have prepared the final cost, as per the direction given by the Unit
Head. This fact is evident from the file. By that time, the award of the Sub Court was also passed and as such, the enhanced compensation
awarded by the Sub Court was also taken into account along with capitalisation of interest up to 31 March, 1987 and accordingly, final cost was
calculated as on 31 March, 1987. While preparing the final cost, the first respondent has also indicated that the appeal against the award was
pending before the High Court at the instance of the appellant.
The First Appeal preferred by the appellant was disposed of by the High Court as per judgment and decree dated 4 July, 1989 in A.S. No.
42 of 1985. The operative portion of the judgment reads thus:
...We are of the view that the court below cannot be stated to have committed any error in having fixed the compensation in respect of the
acquisition pre-acquired properties in the year 1971 at Rs. 5/- per sq.ft.
The claimants, however, would be entitled to enhanced solatium at 30% instead of 15% awarded by the Court had been dealt with and
disposed of by the Court on 11.5.1983 in between 30.4.1982 and 24.9.1984 and as per the decision of the Supreme Court reported in Union of
India and Anr. v. Ragubir Singh (dead) by L.Rs. etc. 1985(2) Judgment Today 427, they would be entitled to the benefit of Higher solatium at 30.
The claimants would also be entitled to the payment of interest at 9% p.a. on the excess amount of compensation awarded by the court from
27.1.1975, whose possession of lands were taken upto the date of payment of such excess amount, into court as decided in Assistant Collector,
Tiruvallur v. C. Ramamoorthy Appeal No. 34/1985. Subject to this, the appeal is dismissed.
The appeal was disposed of on 4 July, 1989. It was only thereafter the sale deeds were prepared by the Division. The first respondent was
transferred on 6 June, 1988 and as such, he was not a party to the preparation of sale documents after the disposal of First Appeal by the High
Court.
There was no appeal at the instance of the land owners against the award of the Reference Court. Therefore, what was challenged before this
Court was only the decree of the Sub Court and it was only at the instance of the appellant. The amount awarded by the Reference Court was
confirmed by this Court. By the time, the land Acquisition Act was amended and the solatium was enhanced from 15% to 30%. Therefore, what
was awarded as per the judgment and decree in appeal was only the enhanced solatium as well as interest. However, the value fixed by the
Reference Court was maintained. Hence, it cannot be said that the award amount was enhanced only in the appeal and therefore, the first
respondent was not justified in preparing the final cost, before the disposal of the appeal .
It is a matter of record that the final cost was prepared by the first respondent on 25 February, 1987. However, the sale deeds were executed
only after receipt of the appellate judgment by the Division. The officers at the Division failed to take action to revise the final cost in the light of the
judgment of this Court. In fact, only 104 sale deeds were executed by that time and therefore, it was not correct on the part of the appellant to
contend that all the sale deeds were executed in favour of the allottees and therefore it was not possible to recover the balance amount from them.
Admittedly, there was an indication in the final cost prepared by the appellant about the pendency of appeal before the High Court. The pendency
of the appeal and the subsequent amendment made to the Land Acquisition Act enhancing the solatium cannot be put against the first respondent.
The question is whether there was some evidence against the first respondent to sustain the charges.
The appellant initially appointed Thiru N. Durai Arasu, Superintending Engineer as the enquiry officer on 26 June, 1999. The Enquiry Officer
conducted the enquiry and ultimately found that the charges were baseless. The report was accepted by the Board and they have exonerated the
first respondent from the charges. The said proceeding was sent to the Government. However the Government was not prepared to accept the
resolution. It was only in such circumstances, second enquiry was ordered. Subsequent enquiry was conducted by Thiru P.A. Somnath,
Superintending Engineer. The Enquiry Officer found that the first respondent acted only in accordance with the guidelines issued by the Tamil Nadu
Housing Board and as such, the delinquent was not responsible for the alleged loss. Accordingly, report was submitted indicating that the charges
were not proved. It was only at that point of time, the Managing Director took up the matter and disagreed with the findings given by the Enquiry
Officer.
The Managing Director after rejecting the report submitted by the Enquiry Officer, issued notice to the first respondent, to show cause as to
why, punishment should not be imposed on him. Though, the first respondent submitted detailed explanation, the appellant was not prepared to
accept the defence. Accordingly, the appellant decided to impose punishment on the first respondent by withholding one third pension besides
recovery of a sum of Rs. 8,64,760.50. The matter was placed before the Government for approval. The Government as per proceedings dated 29
September, 2003 approved the resolution with modification regarding punishment. The Government modified the punishment by withholding one
third pension payable to the first respondent besides recovery of a sum of Rs. 4,32,380.25. The order passed by the Government on 29
September, 2003 was implemented by issuing the impugned order dated 7 October, 2003.
The appellant as per their circular dated 1 December, 1986 issued detailed guidelines as to how the final cost has to be arrived at. As per the
said circular, permission was granted to the Divisional Office to prepare the final cost without reference to the Board. However, there was a
stipulation that such estimates should be in respect of works executed prior to March, 1982. The appellant has no dispute with respect to the
factual position that the project in question was completed prior to March, 1982. Therefore, the Circular dated 1 December, 1986 alone was
applicable to the subject case. It is not as if the first respondent has suppressed the factum of filing the appeal before the High Court. The file
produced by the appellant contains details of the final cost. There is a note appended to the said final cost indicating the pendency of First appeal.
It is not as if the sale deeds were executed immediately after preparing the final cost by the first respondent. The sale deeds in favour of the
allottees were executed only after the disposal of the First Appeal by this Court. Therefore, by the time the sale deeds were executed, the officers
of the Division at Coimbatore were fully aware of the judgment and decree passed by the High Court. The first respondent was fully justified in
preparing the final cost taking note of the enhancement given by the Reference Court. The interest was capitalised for the prescribed period as per
the circular. In such circumstances, there was nothing wrong on the part of the first respondent in preparing the final cost.
The appellant would be justified in taking action against the first respondent for recovery of the alleged loss, in case, an appeal was preferred
by the claimants, challenging the award of the Reference Court and the compensation was enhanced in such appeal. It was within the knowledge of
all concerned that the appeal was only at the instance of the Board. What was paid in addition to the original market value to the claimants, were
only solatium and interest and the liability has arisen only because of the statutory amendment. Ultimately, the first respondent was made a
scapegoat.
The contention regarding financial loss also appears to be incorrect. The final cost was once again calculated by the appellant as per
proceedings dated 2.7.2000. It shows that the rate per sq.ft. was worked out at Rs. 16.83. However, the final cost prepared by the first
respondent shows that the cost was at Rs. 17.16. Therefore, the final cost prepared by the first respondent was more than the final cost ultimately
fixed by the Board taking note of the judgment in the First Appeal. The said point was also not considered by the Disciplinary authority.
The other question is whether there were any relevant materials available with the appellant to take a different view by disagreeing with the
views taken by the Enquiry Officer. Initially, there was an enquiry and it was followed by a second enquiry and both resulted in giving clean chit to
the first respondent. The enquiry officer has given a clear finding that the mistake was only on those officials, who issued the sale deed without
verifying the High Court judgment. The enquiry officer also found that the total demand of Rs. 17,29,521/- made in 1995 cannot be taken as a loss
inasmuch as the said amount includes balance 50% of the enhanced compensation payable as per the High Court judgment with solatium and
interest upto the date of payment. The enquiry officer also found that only 101 sale deeds were executed out of 265 allottees and therefore it was
possible to collect the revised cost from the remaining allottees. The enquiry officer also found that the issue of sale deed was not the function of
the Divisional Accountant. In any case, it was clear that the first respondent left the Coimbatore Division as early as on 6 June, 1988.
The first respondent was in no way responsible for the payment of additional amount on account of solatium consequent to the Amendment of
the Land Acquisition Act. It is not as if the enquiry officer has not verified all these aspects. The enquiry officer has gone into the factual aspects
and arrived at a correct conclusion that the first respondent was not at all responsible for the alleged acts.
When the first respondent has clearly indicated in the final cost that the appeal was pending before the High Court, the concerned officials
should have verified the disposal of the appeal before issuing the sale deeds. Therefore, the first respondent was in no way responsible for the
alleged loss sustained by the Board.
There is no dispute that Judicial Review is confined only to the decision making process. In the subject case, there was no appeal. It is true that
Clause 35 of the Tamil Nadu Housing Board Service Regulation, 1969 provides an appeal to the Government in case penalty was awarded by the
Board. However, in the present case, it is a matter of record that penalty was imposed only with the approval of the Government. Therefore
Government was a party to the order punishing the first respondent. It is not open to the Government once again to sit in appeal over its own
decision. Therefore, the entire matter was at large before the learned Single Judge.
The Supreme Court in State of U.P. and Another Vs. Man Mohan Nath Sinha and Another, observed that Judicial Review is permissible in
case the decision was so arbitrary and capricious that no reasonable person could ever have arrived at that conclusion, or on similar grounds. The
observation reads thus:
The High Court may undoubtedly interfere where the departmental authorities have held the proceedings against the delinquent in a manner
inconsistent with the rules of natural justice or in violation of the statutory rules prescribing the mode of enquiry or where the authorities have
disabled themselves from reaching a fair decision by some considerations extraneous to the evidence and the merits of the case or by allowing
themselves to be influenced by irrelevant considerations or where the conclusion on the very face of it is so wholly arbitrary and capricious that no
reasonable person could ever have arrived at that conclusion, or on similar grounds.
When there was nothing to suggest that the action of the first respondent caused loss to the Housing Board, it is too strange that the Board has
taken a decision to recover the alleged loss from him. The Board only wanted to correct the records and under the guise of doing so, proceeded
against the first respondent, who was not at all responsible for execution of the sale deeds after the judgment passed by this Court. When the
appellant themselves have issued the circular, as to how the final cost has to be calculated and indicating the need for collecting the final cost at an
early date, they cannot subsequently turn round and accuse the first respondent for having prepared the final cost. There was no mala fides alleged
against the first respondent and it was not their case that he was the beneficiary on account of such preparation of final cost. The first respondent
acted only within the parameters laid down by the appellant Board. So long as the circular dated 1 December, 1986 remain unamended, it was not
open to the Board to disown its own decision and to take action against the officer, who acted in strict obedience to the instruction. In fact, in the
circular dated 1 December, 1986 itself there were indications that the delay in finalising the final cost, affects the financial position of the Board.
Therefore it was a decision taken by the appellant Board to prepare the final cost at the divisional level.
Therefore we are of the considered opinion that there were no justifiable materials before the Housing Board to take a different view by
ignoring the report submitted by the enquiry officer. In fact, the report of the first enquiry officer was accepted by the Board. It was only at the
instance of the Government, second enquiry was ordered. The original decision of the Board was to accept the report of the Enquiry Officer by
absolving the first respondent and to take action against those officers, who were instrumental in issuing the sale deeds.
Admittedly, the Government is the Appellate Authority. Therefore, there was no question of sending the proceedings by the disciplinary
authority to the Appellate Authority. The so called appeal appears to be a mockery, inasmuch as the decision taken by the Housing Board
exercising the powers of the Disciplinary authority would be only with the approval of the Government. Therefore, the Government is in the
position of the disciplinary authority. Therefore, there is no point in filing appeal before the Government.
There is yet another factor also which vitiates the entire proceedings. The final cost was prepared on 25 February, 1987. It was processed as
per the note sent by the Executive Engineer in November, 1988. However, it was only in the year 1998, first enquiry was initiated against the first
respondent. It was followed by another enquiry initiated in the year 2001 by appointing the Enquiry Officer as per proceedings dated 9.11.2001.
Therefore there was a long delay in initiating departmental proceedings. When the first respondent was in the verge of retirement, the appellant
initiated departmental proceedings. The First Appeal was disposed of by this Court on 4 July, 1989 and sale deeds were executed in the year
1990. However, for the reasons best known to the appellant, departmental proceedings were initiated only in the year 1998 and this unreasonable
delay was not explained in so many words. Therefore, the learned Single Judge was perfectly correct in his finding that undue delay caused
substantial prejudice to the first respondent.
The learned Senior Counsel for the first respondent by placing reliance on the judgment of the Supreme Court in P.V. Mahadevan v. Md. T.N.
Housing Board 2005(6) SCC 636 submitted that the appellant has also initiated proceedings against Thiru P.V. Mahadevan, who issued the sale
deed in the year 1990. The charge memo was issued only in the year, 2000 for the irregularity committed in the year 1990. The matter was taken
up before the Supreme Court and the entire proceedings were quashed on account of delay. The facts of the said case are almost similar to the
facts on hand.
Therefore, we are of the considered view that there were no materials much less sufficient materials to proceed against the first respondent.
There was unreasonable and unexplained delay in initiating the proceedings and it also vitiated the entire disciplinary proceedings. Therefore we do
not find any merits in the contention raised by the appellant.
It is appropriate to reproduce the observation of the Supreme Court in Harjinder Singh v. Punjab State Warehousing Corporation 2010(1)
Scale 631, which reads thus:
It need no emphasis that if a man is derived of his livelihood, he is deprived of all his fundamental and constitutional rights and for him the goal of
social and economic justice, equality of status and of opportunity the freedoms enshrined in the Constitution remain illusory. Therefore, the
approach of the courts must be compatible with the constitutional philosophy of which the Directive Principles of State Policy constitute an integral
part and justice due to the workman should not be denied by entertaining the specious and untenable grounds put forward by the employer - public
or private.
In the result, the writ appeal is dismissed. The appellant is directed to settle the retirement benefits due to the first respondent within six weeks
from today. No costs.