Kerala State Beverages (Manufacturing & Marketing) Corporation Limited v. P.G.Vijayan

IN THE HIGH COURT OF KERALA AT ERNAKULAM THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR & THE HONOURABLE MRS. JUSTICE MARY JOSEPH WEDNESDAY, THE 11TH DAY OF APRIL 2018 / 21ST CHAITHRA, 1940 WA.No. 1327 of 2017 IN WPC. 3438/2009 ------------------------------------AGAINST THE JUDGMENT IN WP(C) 3438/2009 DATED 08-02-2017 APPELLANT(S)/RESPONDENTS. ------------------------- 1 KERALA STATE BEVERAGES (MANUFACTURING & MARKETING) CORPORATION LIMITED,BEVCO TOWER, VIKAS BHAVAN P.O, PALAYAM,THIRUVANANTHAPURAM- 695033. REPRESENTED BY ITS MANAGING DIRECTOR. 2 THE MANAGING DIRECTOR, KERALA STATE BEVERAGES (MANUFACTURING & MARKETING) CORPORATION LIMITED, BEVCO TOWER, VIKASBHAVAN P.O, PALAYAM, THIRUVANANTHAPURAM- 695033. BY ADV.SRI.NAVEEN.T., SC, KERALA STATE BEV.CO. RESPONDENT(S)/PETITIONER.: ------------------------- P.G.VIJAYAN REGIONAL MANAGER (RETD), KERALA STATE BEVERAGES (M & M) CORPORATION LTD, RESIDING AT PATHIPALLIYIL HOUSE, PALA, KOTTAYAM DISTRICT PIN-686575. BY ADV. SRI.DEEPU THANKAN THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 11-04-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **C.T. RAVIKUMAR & MARY JOSEPH, JJ.** ## **==========================** ## **W.A. No.1327 OF 2017** **==========================** Dated this the 11[th] day of April, 2018 ## **JUDGMENT** _Ravikumar, J._ This appeal is filed against judgment dated 8.2.2017 passed by a learned Single Judge in W.P.(C).No.3438 of 2009. The respondent herein was the petitioner and the appellants herein were the respondents, in the said writ petition. For the sake of convenience, the parties are referred to hereafter in this judgment in accordance with their rank and status in this appeal. The respondent filed the writ petition challenging Exts.P11, P14 and P16 orders. While the respondent was working as Regional Manager (Central Zone), he was suspended from the service of the Kerala State Beverages (Manufacturing & Marketing) Corporation Ltd.(for short 'the Corporation'), as per Ext.P1 order dated 10.3.1998 with effect from the said date. Evidently, he was so placed under suspension in view of **W.A.1327/2017** 2 the registration of a case viz., VC7/1997/EKM at Vigilance and Anticorruption Bureau, Ernakulam under sections 7 and 13(2) read with section 13(1)(d) of the Prevention of Corruption Act. The allegation was that an amount of Rs.16,378/- was recovered from the drawer of the office table of the respondent by the Vigilance and Anti-corruption Bureau during a surprise check conducted on 11.09.1997 at Warehouse, Tripunithura. After the trial, he was convicted and sentenced by the Enquiry Commissioner and Special Judge, Thrissur in C.C.No.11/99. The respondent challenged his conviction and sentence in Crl.A.No.789/2000 before this Court and as per Ext.P2 judgment dated 29.6.2005, he was acquitted. Pursuant to the reversal of the order of conviction, he was reinstated in service as per Ext.P3 order dated 5.8.2005. In Ext.P3 order, it was stated that he is reinstated with immediate effect pending departmental action against him and regularisation of the period of suspension would be considered later on merits. After his reinstatement in service, disciplinary proceedings were commenced against him by issuing **W.A.1327/2017** 3 Ext.P4 memo of charges dated 9.8.2005. An enquiry was conducted and on its culmination, the enquiry officer submitted Ext.P11 report to the disciplinary authority in May, 2006 holding both the charges as proved. Thereafter, the disciplinary authority issued Ext.P12 notice dated 9.11.2007 requiring him to show cause within 15 days as to why he should not be discharged from service of the Corporation in terms of Rule 83(vii) of the Kerala State Beverages Corporation Employees Service Rules and as per the Kerala Civil Services (Classification, Control and Appeal) Rules, 1960 (for short, KCS (CC & A) Rules). After the receipt of Ext.P12 notice, the respondent had shown cause as per Ext.P13 whereunder he had also requested for regularisation of the period of suspension. The respondent received Ext.P12 show cause notice on 12.11.2007 and he retired from the service of the Corporation on 21.11.2007. Thereafter, the period of suspension was regularised as per Ext.P14 order dated 1.7.2008 as hereunder:- “In view of the above and in the circumstances narrated above, even though there is grave **W.A.1327/2017** 4 misconduct on the part of delinquent officer, the suspension period of Shri.P.G.Vijayan, Regional Manager (Rtd.) i.e., from 10/03/1998 to 5/08/2005 is regularized treating the period as duty for all purpose except for pay and allowances. The pay and allowances of the suspension period are limited to subsistence allowance already drawn/paid. Thus, the disciplinary action initiated against Shri.P.G.Vijayan, Regional Manager (Rtd.) on the ground of grave misconduct is finalized accordingly.” 2. Aggrieved by Ext.P14 order whereby his period of suspension was treated as duty for all purposes except for pay and allowance and limiting the pay and allowances to subsistence allowance already drawn/paid, the respondent preferred Ext.P15 appeal before the Board of Directors of the Corporation. It was rejected vide Ext.P16 order. It is in the said circumstances that the writ petition has been filed by the respondent. The learned Single Judge, after considering the rival contentions and relevant provisions, passed the impugned judgment whereby Exts.P12 and P14 were set aside and the first appellant/first respondent therein was directed to pass fresh orders on the question of regularisation of the period of **W.A.1327/2017** 5 suspension of the respondent herein from 10.3.1998 to 5.8.2005 taking note of Ext.P2 and the findings contained therein and without reference to the unconcluded disciplinary proceedings initiated against the respondent, within three months from the date of receipt of a copy of the judgment. It is aggrieved by the aforesaid inhibitions as per the impugned judgment confining the scope of consideration of the aforesaid question only to the criminal proceedings, rather, restraining them from considering the question of regularisation of the period of suspension without reference to the unconcluded disciplinary proceedings that this appeal has been filed. 3. We have heard the learned counsel for the appellants and also the learned counsel appearing for the respondent. In the appeal, the appellants are challenging the quashment of Exts.P12 and P14 besides the aforesaid inhibitions that virtually confined the scope of consideration on the question of regularisation of the period of suspension. As noticed hereinbefore, going by the impugned judgment, the question of regularisation of the period of suspension **W.A.1327/2017** 6 has to be decided without reference to the unconcluded disciplinary proceedings initiated against the respondent. The learned counsel for the appellants submitted that when on same set of facts criminal proceedings and disciplinary proceedings were initiated, even if disciplinary proceedings could not be completed due to the retirement of the incumbent from service prior to the conclusion of the disciplinary proceedings, for the purpose of regularising the period of suspension and for considering the entitlement of the incumbent on reinstatement for the backwages, the factum of reversal of the conviction and also the factum of inability to conclude the disciplinary proceedings owing to the retirement prior to its conclusion are not valid and justifiable to limit the scope of consideration only to the aspects pertaining to the criminal proceedings. In other words, in such circumstances, putting a rider that the said question shall be decided without reference to the unconcluded proceedings is not in accordance with law and therefore, unsustainable, it is submitted. In short, the contention is that the said **W.A.1327/2017** 7 question has to be considered taking into account all the attending circumstances and essentially, such right is available to the employer and the inhibition, as aforesaid, on such right is impermissible and unsustainable. Further, the learned counsel for the appellants submitted that though on reversal of conviction in an appeal by the appellate court, the conviction would stand obliterated, that by itself is no ground for the employee concerned to claim full backwages as a matter of right. It is further submitted that the question that the entitlement to full pay and allowances during the period of suspension would depend upon the opinion of the competent authority whether the suspension was wholly unjustified or not. To drive home the aforesaid contentions, the learned counsel for the appellants relied on various authorities such as **State Bank of India and another v. Mohammed Abdul Rahim** [ **(2013) 11 SCC 67]** , **Greater Hyderabad Municipal Corporation v. M.Prabhakar Rao [(2011) 8 SCC 155, Ranchhodji Chaturji Thakore v. Superintendent Engineer, Gujarat Electricity Board, Himmatnagar, (Gujarat)** **W.A.1327/2017** 8 **and another [AIR 1997 SC 1802], Banshi Dhar v. State of Rajasthan and another [(2007) 1 SCC 324]** and a Division Bench decision of this Court in **Union of India v. Gopinath [ILR 2003 (2) Kerala 593].** 4. Per contra, the learned counsel for the respondent submitted that there can be no room for doubt that when a conviction entered in criminal proceedings was reversed by the appellate authority, the conviction would stand obliterated and in such circumstances, there is absolutely no reason for depriving the employee concerned full back wages during the period of suspension especially when no penalty was imposed on such employee in the disciplinary proceedings initiated against him. In elaboration of the contention, it is submitted that when the disciplinary proceedings initiated could not reach its logical conclusion, it is impermissible to rely on the unconcluded disciplinary proceedings for considering the question of regularisation of the period of suspension and consequently, the entitlement to the back wages. The learned Single Judge is therefore, right in holding **W.A.1327/2017** 9 that the question of entitlement to back wages should be decided without reference to the unconcluded disciplinary proceedings, it is submitted. 5. In the light of the rival contentions, the question to be decided is whether the judgment of the learned Single Judge putting the aforesaid inhibitions in the matter of consideration of the question of regularisation of the period of suspension and as a result on the question of entitlement to backwages as aforesaid, invites interference? In the light of the decisions of the Apex Court in **Ranchhodji Chaturji Thakore** 's case (supra), **M.Prabhakar Rao** 's case (supra), **Mohammed Abdul Rahim** 's case (supra), **Banshi Dhar** 's case (supra) and in **Gopinath** 's case (supra), there is absolutely no room for any dispute with respect to the position that reversal of conviction in an appeal by itself would not confer any right on an employee on his reinstatement pursuant to the acquittal, to claim the full back wages during the period he was kept out of service pursuant to the registration of a criminal case which ultimately ended **W.A.1327/2017** 10 in acquittal, as a matter of right. As held by the Apex Court, no hard and fast rule could be laid down in that aspect. It depends upon the facts and circumstances of each case. In the light of the decision in **Mohammed Abdul Rahim** 's case (supra), consequent to the acquittal by the appellate court, the initial order of conviction would stand obliterated and such reversal of conviction of the employee concerned would entitle him to be reinstated in service. But at the same time, the question is whether that by itself make him entitled to full back wages. In **Banshi Dhar** 's case (supra), the Apex Court held that the grant of back wages in such circumstances is not automatic and the entitlement is to be judged in the context of the totality of the facts of a given case. We will consider the said question a little later. In **Dev Praksh Tewari v. UP.Co-op Institutional Service Board [(2014) 7 SCC 260],** the Apex Court held that in the absence of specific provisions for continuance of disciplinary proceedings after retirement, no orders could be passed as an order finalising the disciplinary proceedings. In other words, if the disciplinary **W.A.1327/2017** 11 proceedings were initiated against an employee while he was in service, but it did not reach its logical conclusion prior to his retirement, such proceedings could not be continued for the purpose of imposition of any penalty and if any loss was caused to the establishment concerned owing to such alleged misconduct, the proceedings could be continued solely for quantifying the loss. In such circumstances, a separate order has to be passed in relation to the question of regularisation of the period during which such employee was kept out of service. In the case on hand, admittedly, the respondent was placed under suspension not in contemplation of disciplinary proceedings but solely owing to the registration of criminal case based on the same set of facts which later led to the initiation of an unconcluded disciplinary proceeding. He was kept out of service from 10.3.1998 to 5.8.2005. The criminal proceedings ended in his conviction. Subsequently, in the appeal, the order of conviction was reversed and he was acquitted. Thus, initial conviction got obliterated and immediately thereafter, he was **W.A.1327/2017** 12 reinstated in service. True that in Ext.P3 order by which he was reinstated in service, it is stated that his reinstatement is pending disciplinary action and the question of regularisation of his service would be decided later, on merits. Evidently, disciplinary proceedings were initiated against the respondent after his reinstatement as per Ext.P12. However, in the disciplinary proceedings initiated under Ext.P4, the disciplinary authority could not pass an order finalising the disciplinary proceedings imposing any penalty on the respondent owing to the fact that immediately after issuance of show cause notice proposing punishment, he retired from service on attaining the age of superannuation. In the light of the decision in **Dev Praksh Tewari** 's case (supra), in such circumstances, an order in the nature of finalisation of the disciplinary proceedings could not have been passed unless it is specifically permitted under the relevant rules. But at the same time, the fact is that under Ext.P14, the pay and allowances of the respondent during the suspension period was limited to subsistence allowance already drawn/paid, not as a penalty **W.A.1327/2017** 13 on conclusion of the disciplinary proceedings and in fact, it was so done while regularising the period of suspension. True that as per Ext.P14, the period of suspension was regularised as duty for all purposes except for pay and allowances and then the pay and allowances was confined to the subsistence allowance already drawn/paid. Evidently, the respondent herein preferred an appeal which culminated in Ext.P16 order on being aggrieved by Ext.P14 order confining his entitlement to back wages only to the subsistence allowance already drawn/paid during the period of suspension. In short, the question is whether in such circumstances, the consideration as to the issue of regularisation of the period of suspension and subject to its decision entitlement of pay and allowances during such period has to be confined only to the cause of criminal proceedings and Ext.P2 judgment and whether the learned Single Judge was right in holding that the said question has to be considered and orders shall be passed without reference to the unconcluded disciplinary proceedings. The appellants contended that the learned Single Judge **W.A.1327/2017** 14 ought not to have interfered with Ext.P14 and that the quashment of Ext.P12 may be a mistake as evidently it was only a notice proposing imposition of penalty of discharge from service issued at a time when he was in service. Going by the decision in **Dev Praksh Tewari** 's case (supra), in the absence of specific provisions for continuance of disciplinary proceedings after retirement, no orders of the nature of finalisation of disciplinary proceedings could be passed. But, in the case on hand, as noticed hereinbefore, it was issued at a time when the respondent was very much in service. Nevertheless, the proposed punishment could not have been imposed on him after 21.11.2007 owing to the fact that as on that date, he retired from the service of the Corporation on attainment of the age of superannuation. But, how can that be a ground for quashing Ext.P12? We are of the view that what was intended to be quashed and as such, actually quashed were Exts.P14 and P16. Ext.P14 is the order whereby the entitlement to back was restricted to subsistence allowance wages already drawn/paid and Ext.P16 is the order passed by the appellate authority **W.A.1327/2017** 15 on Ext.P15 appeal. In such circumstances, it can only be taken that as per the impugned judgment, actually Exts.P14 and P16 were quashed and therefore, the question to be considered is after the quashment of Exts.P14 and P16, how the question of entitlement to back wages should be considered. The learned Single Judge, as already noticed, put a restriction on the scope of consideration of the said question. We have already found that in the light of the decisions referred (supra), no error of law could be attributed in granting liberty to consider the question of entitlement to back wages. The question is should it be considered only with reference to the criminal proceedings and whether why it should be done without reference to the unconcluced disciplinary proceedings invites interference. It is true that the disciplinary proceedings initiated against the respondent could not reach its logical conclusion owing to the retirement of the respondent ahead of finalisation of the same. As per Ext.P14, an order regularising the period of suspension was passed and in and vide the said order, it was held that the entitlement of the respondent to the **W.A.1327/2017** 16 back wages was limited only to the subsistence allowance already drawn/paid. A bare perusal of Ext.P14 order which was affirmed in Ext.P16 would reveal that in ordering so, the unconcluded disciplinary proceedings were also taken into account. 6. The learned counsel for the appellants contended that merely because no final order could be passed in the disciplinary proceedings even after the receipt of enquiry report could not be a reason to hold that the findings in the enquiry report should be eschewed and should not be taken into account while considering the question of entitlement to back wages. In the case on hand, undisputed position is that after the enquiry proceedings, Ext.P11 report was submitted in May, 2006 and the respondent had retired from service only in November, 2007. The disciplinary authority though received it in May 2006, sans reasons, did not issue show cause notice immediately thereafter. The petitioner who was to retire from service on 21.11.2007 was served with Ext.P12 show cause notice dated 9.11.2007 proposing imposition of penalty of discharge from service **W.A.1327/2017** 17 only on 12.11.2007. The appellants cannot be heard to contend that after receipt of enquiry report, sufficient time was not there to conclude the disciplinary proceedings in accordance with law. At the time of receipt of the enquiry report, sufficient time was available with the disciplinary authority to pass appropriate orders in finalisation of the proceedings, in accordance with law. Thus, the fact is that the delay in taking appropriate action based on the enquiry report deprived opportunity to the disciplinary authority to pass appropriate final order in the disciplinary proceedings. Going by the provisions under Rule 8 of the Rules, in respect of matters relating to service not covered by the said rules, similar rules in government service shall be followed. The question of regularisation of the period of service and entitlement to backwages in respect of government service are dealt with under the provisions under section 56 of Part I of the Kerala Service Rules (for brevity, 'KSR'). True that in that context, Rule 10 and Rule 18 of the KCS (CC&A) Rules also assume relevance. Going by Rule 10 of the KCS **W.A.1327/2017** 18 (CC&A) Rules, a government servant could be placed under suspension in contemplation of disciplinary proceedings invoking the power under section 10 (a) and it is possible to place the government servant under suspension in case or whether a case was registered in respect of criminal investigation of the trial. Going by Rule 18(b) of KCS (CC&A) Rules, in a case where conviction is subsequently set aside in appeal or otherwise and the government servant is acquitted of the charges, the order of dismissal or removal ceases to have effect and revised orders shall be issued forthwith to reinstate him in service entitling him of the benefits to which he would have been entitled had he been in service. True that in the case on hand, even after his initial conviction by the trial court, the appellant herein did not terminate the services of the respondent. He was kept only under suspension till the appellate authority reversed the order of conviction. Ext.P3 itself would reveal that pursuant to his acquittal by the trial court, after cancelling the order of suspension, the respondent was reinstated in service. Thus, it is evident that no order terminating his **W.A.1327/2017** 19 service was passed while the judgment of conviction was in force. The learned counsel for the respondent referred to section 18(b) to canvass the position that even in a case where an order of conviction followed by an order of dismissal or removal from service, when once the conviction is set aside in appeal, revised order for reinstating the employee concerned is bound to be passed and further that even in such circumstances, the said employee cannot be deprived of all benefits to which he was entitled to. It is submitted that the case of the respondent stands on a firmer footing than such an employee. When an employee faced the order of dismissal from service following an initial order of conviction on his acquittal subsequently, he is entitled not only to get reinstated but also to get all further benefits grantable in accordance with law. The learned counsel for the appellants contended that in view of the circumstances obtained in this case, the relevant provision for considering the entitlement of the respondent to backwages, is Rule 56B of Part I KSR, to be precise, Sub rule 3 of the said rule. **W.A.1327/2017** 20 It is submitted that in such circumstances what would decide the question whether the respondent is entitled to get backwages in full, is the satisfaction of the authority concerned on the question whether the suspension was wholly unjustified. It is the submission that in such circumstances, it cannot be said that the unconcluded disciplinary proceedings are totally irrelevant for such consideration. It is further submitted that the said aspects and in fact, the enquiry report can also be taken into account in that regard. Even while considering such contentions, the fact that a timely action on receipt of enquiry report could have averted this present situation cannot be ignored. Evidently, the enquiry report was received by the disciplinary authority in May, 2006 and the respondent had retired from service only in November, 2011. Thus, there is unexplained delay on the part of the disciplinary authority in concluding the disciplinary proceedings while the respondent was in service and the respondent was deprived of such an opportunity while he was in service. No provision was brought to our attention enabling the disciplinary **W.A.1327/2017** 21 authority to continue with the disciplinary proceedings after the retirement of the delinquent employee. It could not be presumed that the respondent could not have succeeded in convincing the appellate authority regarding the unsustainability of the report. After depriving him such an opportunity and especially, in such circumstances, solely because of the delay in taking appropriate action by the disciplinary authority, the authorities concerned are not justified in relying on the enquiry report, in the facts and circumstances of this case. We are of the considered view that the impugned order is the outcome of rightful conclusions and hence we do not propose to interfere with the restriction of the scope of consideration of the respondent's entitlement to backwages by the learned Single Judge. In other words, the inhibition not to refer to unconcluded proceedings does not warrant any interference and hence, it is maintained. At the same time, in the light of the decisions referred (supra), we do not find any reason to hold that the learned Single Judge was not justified in granting opportunity to the respondent to consider the question of **W.A.1327/2017** 22 entitlement to backwages with reference to the records of the criminal proceedings. In short, this appeal fails and accordingly, it is dismissed. **Sd/-** **C.T. RAVIKUMAR** **(JUDGE)** **Sd/MARY JOSEPH (JUDGE)** **spc/** **W.A.1327/2017** 23 **C.T. RAVIKUMAR, J.** **JUDGMENT September, 2010** # **W.A.1327/2017** 24