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2007(4) Supreme 616
SUPREME COURT OF INDIA
(From Bombay High Court)
H.K. Sema & R.V. Raveendran, JJ.
M/S Goa Shipyard Ltd. — Petitioner
versus
Babu Thomas — Respondent
Appeal (civil) 851 of 2005
Decided on : 30-05-2007
Counsel for the Parties :
For the Appellant : Surendra Desai, Sr. Adv., Amarjit Singh Bedi, Ms. I. Bimola Devi, P. Kumar and Aruneshwar Gupta, Advocates.
For the Respondent : L. Nageswara Rao, Sr. Adv., Haris Beeran (for M/s Lawers Knit & Co.) Advocate.
Service Law – Disciplinary Proceedings – Competent Authority – Amendment to Service Rules to redesignate the Disciplinary, Appellate and Reviewing Authorities for imposing minor and major penalties with effect from 8.1.1996 approved by circulation on 18.3.1996 in its original form – Petitioner dismissed during the interregnum period by Managing Director who was competent as per unamended rules – However after he amendment, the Board of Directors ratifying the order issued by MD - Since the order of the Managing Director had been ratified by the Board of Directors such ratification related back to the date of the order and validated it – High Court’s order allowing the respondents’ writ petition by upholding the preliminary contention that the CMD did not have the authority and jurisdiction to pass the order of Dismissal set aside – Matter restored to High Court. (Para 15)
(2006) 5 SCC 96 ; (1997) 3 SCC 371 – Relied upon.
(2005) 8 SCC 130; (1995) 2 SCC 474 - Distinguished.
Facts of the case :
The respondent was appointed by Chairman and Managing Director as Joint Manager (Security) by an order dated 18.1.1991. On 26.8.1991 he was given additional charge as officiating Manager-Personnel and Administration. It is stated that on 14.9.1994 the respondent was caught red handed by C.I.D./Crime Branch of Goa Police while demanding illegal gratification of Rs.20,000/- from one Shri Chennaiah, a cleaning labour contractor employed by the appellant. He was placed under suspension by an order dated 15.9.1994 in contemplation of the disciplinary proceedings. On 15.12.1994, 13 counts of charges were levelled against the respondent.
On 4.1.1995 one Shri N.P. Kumar was appointed as an Inquiry Officer. The respondent in the interregnum filed Writ Petition before the High Court of Bombay at Goa challenging the inquiry proceedings on the grounds that relevant documents were not furnished to him, legal assistance was not provided and subsistence allowance was not correctly paid.
The Inquiry Officer completed the inquiry and submitted its report on 19.9.1996 holding that the charges No. (i), (ii), (v), (vi). (vii), (x)(a), (x)(c), (xi), (xii) and (xiii) were proved against the respondent and charges (iii), (iv), (viii) and (ix) were withdrawn by the Management and further holding that charge (x)(b) was not proved. A Show Cause Notice dated 5.10.1996 was issued to the respondent as to why the Inquiry Report and findings should not be accepted. After examining the reply dated 31.10.1996 to the show cause notice the respondent was dismissed from service.
Aggrieved thereby the respondent preferred Writ Petition before the High Court of Bombay at Goa. The High Court held that as per the CDA Rules (unamended), the Board was the Disciplinary Authority and therefore the dismissal order by a lower authority namely CMD was without authority. On this ground alone, the order of dismissal passed by the CMD on 21.1.1997 and the Appellate Authority’s order dated 27.9.1997 rejecting the appeal were set aside by the High Court by the impugned order.
Findings of the Court :
Ratification of the MD’s order by Board of Directors after amendment was valid in law.
JUDGMENT
H.K.SEMA,J.—
The challenge in this appeal is to the order of 25th November, 2003 passed by the Division Bench of the High Court of Bombay at Goa in Civil Writ Petition No. 414 of 1997 whereby the order of dismissal of the respondent dated 21.1.1997 dismissing him from service passed by the Chairman and Managing Director and also the order of the Appellate Authority (Board) of 27.9.1997 confirming the order of dismissal were set aside. This appeal is preferred by M/s Goa Shipyard Ltd. Few facts may be noted.
2.The respondent was appointed by Chairman and Managing Director as Joint Manager (Security) by an order dated 18.1.1991. On 26.8.1991 he was given additional charge as officiating Manager-Personnel and Administration. It is stated that on 14.9.1994 the respondent was caught red handed by C.I.D./Crime Branch of Goa Police while demanding illegal gratification of Rs. 20,000/- from one Shri Chennaiah, a cleaning labour contractor employed by the appellant. He was placed under suspension by an order dated 15.9.1994 in contemplation of the disciplinary proceedings. On 15.12.1994, 13 counts of charges were levelled against the respondent namely (i) demanding and collecting illegal gratification, (ii) accepting bribe of illegal gratification for recruitment in Petitioner company, (iii) withholding authorised payments for extorting money or bribe, (iv) financial loss caused to the company by misleading the Management by intentionally furnishing wrong advice; (v) misuse of contract employee; (vi) violation of company’s policy on recruitment; (vii) creating of new posts and converting security assistants as Personnel Administration Assistants without sanction of the appropriate authority; (viii) attempt to extort money from contractors; (ix) prejudicing the company and its contractors by influencing a wage agreement; (x)(a) financial irregularities, improprieties and fraud and non accounting of company’s funds; (x)(b) wrongful appropriation of money from the imprest account of Shri M.R. Furtado; (x)(c) non-accounting of appropriation of advance drawn by Shri M.R. Furtado; (xi) possession of pornographic materials; (xii) misuse of company’s car; and (xiii) unauthorized telephone bills of office and residential phones.
3.On 4.1.1995 one Shri N.P. Kumar was appointed as an Inquiry Officer. The respondent in the interregnum filed Writ Petition No.137 of 1995 before the High Court of Bombay at Goa challenging the inquiry proceedings on the grounds that relevant documents were not furnished to him, legal assistance was not provided and subsistence allowance was not correctly paid. The High Court by its interim order dated 2.5.1995 granted interim stay of inquiry proceedings. By another order dated 10.7.1995 the High Court vacated the interim stay and allowed the disciplinary authority to proceed in accordance with principles of natural justice and in accordance with law and directed the appellant to furnish copies of all relevant documents to the respondent. The Writ Petition was disposed of on 26.7.1995 directing the appellant to complete the disciplinary proceedings within four months and the respondent was also allowed to be represented by a lawyer of his choice during the disciplinary proceedings. In the interregnum Cmdr. S.K.Mutreja was appointed as an Inquiry Officer in place of Shri N.P. Kumar, who has since resigned.
4.The conduct and discipline of all officers of the appellant were governed by the Goa Shipyard Officers’ Conduct, Discipline and Appeal Rules,1979 (‘CDA Rules’ for short). On 15.12.1995, an amendment to the CDA Rules proposing substitution of the Schedule to the said Rules, was circulated to the Board of Directors, vide Circular Board Resolution No.13 of 1995 for approval by circulation. The purpose of the proposed amendment was to redesignate the Disciplinary, Appellate and Reviewing Authorities for imposing minor and major penalties. The said amendment to CDA Rules were approved by circulation, by the Board of
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