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IN THE HIGH COURT OF DELHI AT NEW DELHI
C.HARI SHANKAR, J.
K.KRISHNA KURUP - Petitioner
Versus
M/S M.M.T.C. LTD. - Respondent
W.P.(C) 8208 of 2002 & CM APPL. 13910 of 2002
Decided on : 02-07-2018
MMTC - V - K. KRISHNA KURUP - MMTC EMPLOYEE - CONDUCT, DISCIPLINE AND APPEAL RULES, 1975 - CHARGE-SHEET - INQUIRY - PUNISHMENT - WRIT PETITION - JURISDICTION - CERTIORARI - MISCONDUCT - NEGLIGENCE - GROSS NEGLIGENCE - PROPORTIONALITY OF PUNISHMENT - PUBLIC SECTOR UNDERTAKINGS - PUBLIC MONIES - JUDICIAL CONSCIENCE.
Fact of the Case:
The petitioner, K Krishna Kurup, was working as Manager (Finance and Accounts) [hereinafter referred to as “Manager (F & A)”] at the Indore SRO of MMTC. He was transferred to the Indore SRO from the Cochin SRO in January 1995. The respondent, MMTC, alleged that during the period January 1995 to January 1996, the petitioner was responsible for financial matters at the Indore SRO, which included implementation of systems and procedures relating to finance, and supervision and monitoring thereof. Included in the scope of these duties, it was contended by the respondent, was the necessity to ensure prompt realisation of payments, in respect of CC rods manufactured by Sterlite and lifted by the customers, so that prompt remittances, to Sterlite, could be made. The petitioner was served with a charge-sheet dated 12th May, 1997, proposing to hold an inquiry, against him, under Rule 25 of the MMTC Employees Conduct, Discipline and Appeal Rules, 1975 (hereinafter referred to as “the rules”), and inviting his response thereto. The charge-sheet contained two Articles of Charge. Inasmuch as the Second Article of Charge was dropped, the necessity of making any reference, thereto, stands obviated. Article 1, of the Articles of Charge against the petitioner, as contained in the said Memorandum was, however, exhaustive and detailed, and, instead of attempting to paraphrase the same, reproduction of the Statement of Imputation of misconduct, in respect of the said Article of Charge, would be more appropriate.
Finding of the Court:
The Court found that the petitioner was grossly negligent in the discharge of his duties and responsibilities which resulted in MMTC not being able to realise from Messrs Hindustan Transmission Products Ltd. (HTPL) a sum of approx. 15.92 crores in respect of 896.801 MT of CCC copper rods of Sterlite-make sold to them from MMTC’s Indore office against 13 inland LCs (details given in the statement enclosed to the charge-sheet). The Court also found that the petitioner failed to take immediate action to submit the documents to the bank in time, even after his attention was drawn to the fact that the documents were not being submitted to the bank as per the terms and conditions mentioned in the LCs and that this was likely to result in serious problems for the Company.
Issues: 1. Whether the petitioner was responsible for ensuring remittances, against the LCs provided by HTPL, by the Bank, during his tenure? 2. Whether the petitioner was guilty of negligence in failing to ensure that the LCs, accompanied by all relevant documents and details, were presented to the Bank in time? 3. Whether the punishment awarded, or imposed, on the petitioner was, or was not, proportionate to the misconduct committed by him?
Ratio Decidendi: 1. The Court held that the petitioner was responsible for ensuring remittances, against the LCs provided by HTPL, by the Bank, during his tenure, as he was, at the time, Manager (Finance) at the Indore SRO of the MMTC. 2. The Court held that the petitioner was guilty of negligence in failing to ensure that the LCs, accompanied by all relevant documents and details, were presented to the Bank in time, as the evidence indicated that, despite the fact that the documents, and L/Cs, were handed over, in time, to the petitioner, for being presented to the Bank, he effectively slept over the same, resulting in lapsing of the L/Cs and failure to obtain payments, from the bank, against them. 3. The Court held that the punishment awarded, or imposed, on the petitioner was proportionate to the misconduct committed by him, as the petitioner was found to be grossly negligent in the discharge of his duties, which resulted in colossal financial loss to the MMTC.
Final Decision: The writ petition was dismissed.
C. HARI SHANKAR, J.
1. On 14th December, 1998, an agreement was entered into, between M/s Sterlite Industries India Ltd (hereinafter referred to as “Sterlite”) and the Mineral and Metals Trading Corporation of India Ltd (hereinafter referred to as “MMTC”), the respondent herein. Under the said agreement, MMTC was to undertake storage, handling and marketing of continuous cast copper rods (hereinafter referred to as “CC rods”) manufactured by Sterlite, in various states. Sale, of the rods, was to be undertaken, by MMTC, on consignment basis, at various places in India. Though the Agreement provided that MMTC would sell only against 100% advance, or against financial arrangements made by the customer, it had been earlier decided, in a meeting held on 20th January, 1994, between Sterlite and MMTC, that MMTC could extend credit to the customers of the rods, but on its own terms and at its own risk. In case such credit was extended by MMTC to the customers of the rods, it was decided that payment, to Sterlite, would, nevertheless, be made, by MMTC, on delivery of the rods being effected to the customers. Acting on the basis of this understanding, MMTC sold CC rods to M/s Hindustan Transmission Products Ltd (HTPL), from time to time, under Letters of Credit (hereinafter referred to as “L/Cs”), opened by HTPL with the Punjab National Bank (hereinafter referred to as “the Bank”), during 1995.
2. The petitioner K Krishna Kurup, who was working, theretofore, at the Cochin Sub-Regional Office (SRO) of the MMTC, was transferred, in January, 1995, to the Indore SRO of MMTC, as Manager (Finance and Accounts) [hereinafter referred to as “Manager (F & A)”]. The respondent contends that, during the period January 1995 to January 1996, the petitioner was responsible for financial matters at the Indore SRO, which included implementation of systems and procedures relating to finance, and supervision and monitoring thereof. Included in the scope of these duties, it is contended by the respondent, was the necessity to ensure prompt realisation of payments, in respect of CC rods manufactured by Sterlite and lifted by the customers, so that prompt remittances, to Sterlite, could be made.
3. Alleging that the petitioner was remiss in ensuring that 13 LCs, relating to CC rods, manufactured by Sterlite and supplied, by MMTC to HTPL, were submitted, in time, to the Bank, so that payments would be made by the Bank there against, as also in ensuring that the said L/Cs, when submitted, were in order and accompanied by all requisite documents, the petitioner was visited with a charge-sheet dated 12th May, 1997, proposing to hold an inquiry, against him, under Rule 25 of the MMTC Employees Conduct, Discipline and Appeal Rules, 1975 (hereinafter referred to as “the rules”), and inviting his response thereto. The charge-sheet contained two Articles of Charge. Inasmuch as the Second Article of Charge was dropped, the necessity of making any reference, thereto, stands obviated. Article 1, of the Articles of Charge against the petitioner, as contained in the said Memorandum was, however, exhaustive and detailed, and, instead of attempting to paraphrase the same, reproduction of the Statement of Imputation of misconduct, in respect of the said Article of Charge, would be more appropriate:
“1. Shri K K Kurup, Manager (F&A), was transferred to Indore SRO from Cochin SRO, and he reported for duty in Jan 1995. During the period Jan 1995 to Jan 1996, Shri Kurup was responsible for the Finance Function at Indore SRO which included implementation of systems and procedures relating to Finance function and for supervision and monitoring of the same.
2. In respect of sale of CC copper rods of Sterlite-make from Indore SRO to various customers, Shri Kurup was responsible for prompt realisation of payments due in respect of the material lifted by the customers and remittances to Messrs Sterlite Industries Ltd. Mumbai. However, Shri Kurup was grossly negligent in the disch
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