Gunasekaran v. Fertilizers & Chemicals Travancore Ltd.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE SMT. JUSTICE P.V.ASHA** **FRIDAY, THE 25TH DAY OF AUGUST 2017/3RD BHADRA, 1939** **WP(C).No. 6182 of 2017 (W) ---------------------------** ## **PETITIONER:** - **-----------** ## **GUNASEKARAN,** **AGED 55 YEARS, S/O.E.MANNANGATTY, BADGE NO.573, MANAGER - TRAINING (UNDER SUSPENSION), FACT TRAINING CENTRE, UDYOGAMANDALAM, PIN:683501, NOW RESIDING AT CHOLAN STREET SBS NAGAR, PONTHOTTAM, VILLUPURAM, TAMIL NADU, PIN: 605 602.** **BY ADVS.SRI.T.N.SURESH SRI.V.S.ANU MON SMT.A.S.CHINJU DUTH SMT.DHANUJA VETTATHU** ## **RESPONDENT(S):** **--------------** **1. THE FERTILIZERS & CHEMICALS TRAVANCORE LTD, REPRESENTED BY ITS CHAIRMAN & MANAGING DIRECTOR, UDYOGAMANDALAM, PIN: 683 501.** **2. THE CHAIRMAN & MANAGING DIRECTOR, THE FERTILIZERS & CHEMICALS TRAVANCORE LTD, UDYOGAMANDALAM, PIN: 683 501.** **3. THE CHIEF GENERAL MANAGER (HR), DISCIPLINARY AUTHORITY, THE FERTILIZERS & CHEMICALS TRAVANCORE LTD, UDYOGAMANDALAM, PIN: 683 501.** **BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.GOPINATH SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS SRI.PAULOSE C. ABRAHAM SMT RAMOLA NAYANPALLY** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 25-08-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **K.V.** ## **WP(C).No. 6182 of 2017 (W) ---------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS -----------------------** - **P1 THE TRUE COPY OF THE APPRECIATION DATED 12.08.2003 ISSUED BY THE CHAIRMAN AND MANAGING DIRECTOR OF 1ST RESPONDENT TO THE PETITIONER.** - **P2 THE TRUE COPY OF THE PERFORMANCE EXCELLENCE AWARD 2006 DATED 15.08.2006 BY THE 1ST RESPONDENT TO THE PETITIONER.** - **P3 THE TRUE COPY OF THE FIR IN CRIME NO: RC 2(A)/2014 OF CENTRAL BUREAU OF INVESTIGATION COCHIN** - **P4 THE TRUE COPY OF THE SUSPENSION ORDER DATED 31.03.2014 ISSUED BY THE 1ST RESPONDENT** - **P5 THE TRUE COPY OF THE 1ST RESPONDENT EMPLOYEES (CONDUCT, DISCIPLINE & APPEAL) RULES 1977 OF THE 1ST RESPONDENT.** - **P6 THE TRUE COPY OF THE STATUTORY APPEAL DATED 29.04.2014 SUBMITTED BY THE PETITIONER TO THE 2ND RESPONDENT.** - **P7 THE TRUE COPY OF THE CHARGE SHEET IN CC NO: 2/2015 IN CRIME NO: RC2(A)/2014 PENDING BEFORE THE HON'BLE CBI 11 COURT, ERNAKULAM.** - **P8 THE TRUE COPY OF THE REPRESENTATION DATED 06.07.2016 SUBMITTED BY THE PETITIONER TO THE 2ND RESPONDENT.** - **P9 THE TRUE COPY OF THE MEMORANDUM OF CHARGE ISSUED BY THE 3RD RESPONDENT/DISCIPLINARY AUTHORITY TO THE PETITIONER.** - **P10 THE TRUE COPY OF THE REPRESENTATION DATED 09.08.2016 SUBMITTED BY THE PETITIONER TO THE 2ND RESPONDENT.** - **P11 THE TRUE COPY OF THE JUDGMENT DATED 2/9/2016 OF THIS HONOURABLE HIGH COURT IN WPC NO 27701/2016.** - **P12 THE TRUE COPY OF THE SUPPLEMENTAL REPRESENTATION DATED 28.9.2016 SUBMITTED BY THE BY THE PETITIONER TO THE 3RD RESPONDENT.** - **P13 THE TRUE COPY OF THE ORDER/PROCEEDINGS DATED 18.11.2016 OF THE 3RD RESPONDENT/DISCIPLINARY AUTHORITY.** **RESPONDENT(S)' EXHIBITS NIL -----------------------** **/TRUE COPY/** **K.V. P.S.TO JUDGE** ## **P.V.ASHA J.** **-----------------------------------W.P.(C).No.6182 of 2017 -------------------------------------** Dated this the 25[th] day of August, 2017 ## **J U D G M E N T** Petitioner, who is presently under suspension, had been working as Deputy General Manager of the respondent- Company. While he was working as Manager (Training), he was placed under suspension, as per Ext.P4 order dated 31.03.2014, consequent to the registration of crime No. RC 2(A)/2014CBI/COCHIN. Crime registered in Ext.P3 was to the effect that the petitioner acquired assets disproportionate to the source of his income. Thereafter Ext.P9 memo of charge was issued to him on 07.07.2016, with the main allegation that he did not disclose acquisition of certain properties in the annual property returns (APR) submitted for the year 2004 and for the years from 2006 to 2011. Disciplinary action was proposed against him alleging that the repeated omission to mention the valuable assets procured by him from APRs and keeping the acquisition hidden, points to lack of integrity; his acts and omissions mentioned therein amounted to violation of Rule 4 (a),(i), (ii) and (iii), Rule 17(a), (b) and (c) and thereby he committed misconduct under Rule 7(w), (x) of the FACT Employees' (Conduct, Discipline and Appeal) Rules, 1977 (the W.P.(C).No.6182 of 2017 2 Rules) for Managerial Personnel. 2. Rule 17(a) of the Rules provides that no employee of the company shall, except with the previous sanction of the competent authority acquire or dispose of any immovable property either in his own name or in the name of any member of his family. Rule 17(b) provides that no employee of the company shall, except with the previous sanction of the competent authority enter into any transaction concerning any immovable or movable property with a person or a firm having official dealing with the employee or his subordinates. Rule 17(c) provides that every employee of the company shall report to the competent authority every transaction concerning movable property owned or held by him. Rule 7 (w) and (x) relates to the habitual breach of any law applicable to the company and conduct unbecoming of an employee. 3. Petitioner submitted Ext.P10 explanation to this memo of charges pointing out that criminal case- C.C.No.2/2015 was pending before the CBI Court II, Ernakulam in respect of the very same issue. He requested to keep in abeyance the disciplinary action till the disposal of the criminal case. After submitting a representation Ext.P10, petitioner approached this Court, in W.P.(C).No.27701 of 2016 challenging the disciplinary proceedings pointing out that proceeding with departmental action against him when the criminal case is W.P.(C).No.6182 of 2017 3 pending on the very same charges will seriously prejudice his defence in the criminal case. This Court had called for a report from the CBI so as to ascertain the nature of charge in the criminal proceedings. The CBI furnished a report before this Court, the allegation was that during the period from 01.01.2007 to 31.12.2011, while petitioner was working as Assistant Manager (Safety) Ernakulam and as Assistant Manager, Sales, Villupuram Agro Service Centre, acquired assets either in his name or in the name of his wife and children, disproportionate to his known source of income. The details of the assets in his possession during the said period with reference to the income he had received, were also furnished. The crime was registered for offences under Section 13(1)(e) r/w 13(2) of the Prevention of Corruption Act, 1988. 4. After taking note of the judgment of the Apex Court in **Paul Anthony v. Bharath Gold Mines Ltd.** reported in AIR 1999 SC 1416, this Court by Ext.P11 judgment dated 02.09.2016 disposed of the writ petition directing the competent authority to consider and pass orders on the submissions of the petitioner, as also the impact of the ruling cited by him especially the judgment in **Paul Anthony's** case. Thereafter, the petitioner submitted a supplementary representation Ext.P12, relying on a series of judgments. Chief General Manager issued Ext.P13 order thereafter rejecting his request. W.P.(C).No.6182 of 2017 4 The respondents came to the conclusion that charges framed by the CBI and the charges framed by the disciplinary authority are distinct and different. It was found that the evidence, if any adduced in the disciplinary proceedings may not have a bearing on the criminal case and there was no possibility of his defence getting prejudiced, if the disciplinary proceedings go on. This writ petition is filed at this stage challenging Ext.P13 also. 5. Learned counsel for the petitioner points out that the observations made by the respondent in Ext.P13 that the petitioner did not point out that the issue involved in the disciplinary proceedings are not grave in nature; that he admitted that both the proceedings are not one and the same, etc., are factually incorrect and that he has never made any such statement and therefore it is necessary to direct the respondents to reconsider the same and pass fresh orders. It is argued that the respondent did not pass orders in tune with the direction of this Court and therefore the matter has to be sent back for re-consideration. Relying on the judgment in **Paul Antony** 's case it was argued that the inclusion of the Investigating Officer as witness No.2 and the memo of charge including the very same charge of acquisition of assets disproportionate to the sources of income would show that the evidence in both the cases would be one and the same and W.P.(C).No.6182 of 2017 5 therefore the departmental proceedings should be kept in abeyance. 6. The respondents have filed a statement to the effect that the charges alleged in the criminal case and in the disciplinary proceedings are distinct and different. The crime registered by the CBI is under Section 13(2) r/w Section 13(1)(e) of the PC Act. At the same time, the charges in the departmental enquiry are to the effect that he did not furnish information regarding the acquisition of assets in the annual Property Returns he filed; he entered into transactions in respect of the properties, without prior approval from competent authority, etc. They also relied on a series of judgments which permit criminal proceedings as well as departmental proceedings simultaneously. 7. Heard the learned counsel for the petitioner and learned Standing Counsel for the respondents. 8. The allegations levelled against the petitioner in the departmental proceedings and criminal proceedings are distinct and different. All the charges alleged against the petitioner arise out of the failure to declare transactions/acquisition of properties in the Annual Property Returns submitted by the petitioner during the years 2004 to 2011. While alleging these omissions/failures to declare, the respondents have also alleged that the source for certain W.P.(C).No.6182 of 2017 6 transactions are not disclosed or justifiable. Except for that, the charges in the departmental proceedings are entirely different from those in the criminal proceedings. 9. As rightly pointed out by Ms.Ramola, the learned counsel for the respondents, the issue arising in this case is similar to the one considered by the Apex Court in **Hindustan Petroleum Corporation V Sarvesh Berry** [(2005) 10 SCC 471] **,** in which the departmental action was permitted when delinquent officer was facing criminal proceedings for offences under the Prevention of Corruption Act, for acquisition of disproportionate assets, in the criminal court. The present case is identical to the one which Apex Court considered, as evident from paragraph 4 of the judgment which reads as follows: “Matter was carried in appeal by the employee before the Division Bench of the High Court in writ appeal and by the impugned judgment the High Court held that there were 3 charges indicated in the charge-sheet. The first related to possession of assets disproportionate to the known sources of income and the other two related to misconduct in ( _a_ ) not filing correct property returns and/or ( _b_ ) not filing return at all for some years as required under Rule 13(1) ( _c_ ) of the Hindustan Petroleum Management Employees’ (Conduct, Discipline and Appeal) Rules, 1976 (in short “the Rules”). The third charge related to failure of the respondent employee to file property returns for the years 1991-92, 1994-95, 1995-96, 1996-97 and 1997-98. The High Court stated that though Charges 2 and 3 related to nondisclosure or non-submission of property returns they are relatable to the first charge relating to possession of assets disproportionate to the known sources of income. It would not be safe to permit the appellants to continue the departmental proceedings till completion of criminal case. However, an opportunity was given to take steps for early disposal.” W.P.(C).No.6182 of 2017 7 ## 10. In paragraph 7 it was found as follows: “7. It is a fairly well-settled position in law that on basic principles, proceedings in criminal case and departmental proceedings can go on simultaneously, except in some cases where departmental proceedings and criminal case are based on the same set of facts and the evidence in both the proceedings is common. It is in these cases, the court has to decide, taking into account the special features of the case, whether simultaneous continuance of both would be proper.” ## 11. In Paragraphs 13 of the judgment, it was concluded ## with the following finding: “13. It is to be noted that in cases involving Section 13 (1)( _e_ ) of the PC Act, the onus is on the accused to prove that the assets found were not disproportionate to the known sources of income. The expression “known sources of income” is related to the sources known to the authorities and not the accused. The Explanation to Section 13(1) of the PC Act provides that for the purposes of the section, “known sources of income” means income derived from any lawful source and such receipt has been intimated in accordance with the provisions of any law, rules or orders for the time being applicable to a public servant. How the assets were acquired and from what source of income is within the special knowledge of the accused. Therefore, there is no question of any disclosure of defence in the departmental proceedings. In the criminal case, the accused has to prove the source of acquisition. He has to satisfactorily account for the same. Additionally, issues covered by Charges 2 and 3 cannot be the subject-matter of adjudication in the criminal case.” 12. In the light of the said judgment and on consideration of the facts and circumstances arising in this case, I find that the contention of the petitioner that the continuance of the disciplinary action will prejudicially affect him and the same cannot be allowed to be continued is unsustainable. 13. However the main grievance of the petitioner that investigating officer is also going to be examined as witness W.P.(C).No.6182 of 2017 8 No.2 and that will cause serious prejudice to his defence, requires to be examined. It is also pointed out that the nonfurnishing of source for acquisition of assets is also alleged against him while alleging the failure to declare the acquisitions. It is true that the respondents have in the Articles of charges Annexure I to Ext.P9 memorandum, while explaining the transactions not declared in the APRs for certain years, have alleged that the source for purchase is not shown/source is not justifiable. But the articles charges do not specifically raise any charges for the acquisition of assets disproportionate to known source of income. 14. On consideration of rival contentions, I find that the grievance raised by petitioner over the examination of the investigating officer/CBI officer in the departmental proceedings, and the enquiry into the allegations relating to source of income requires to be redressed. 15. In the statement of allegations, most of the allegations relate to failure to declare the acquisitions/transactions. However respondents are alleging that the source for the acquisition is not disclosed or is not justifiable in respect of certain transactions. Though the nature of evidence required in departmental proceedings and criminal proceedings are different, I find that interest of justice would be met if the allegations relating to source of W.P.(C).No.6182 of 2017 9 income is kept aside for the time being and if the investigating officer is removed from the witness list. In the above circumstances there shall be a direction to the respondents that the proposed enquiry shall be confined to the allegations other than those relating to the source of income for the transactions alleged in the memo of charges and that the investigating officer shall be removed from the witness list. It is made clear that the respondents shall be free to conduct the inquiry in respect of the allegations relating to the source of income after the criminal proceedings are over, and to examine the investigating officer in case such an enquiry is found necessary. The writ petition is disposed of with the above directions. Sd/- **P.V.ASHA, JUDGE.** AS