Paul C. Paulose v. Cochin Shipyard Ltd. & The Deputy General Manager (Finance), Cochin Shipyard Ltd.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE SMT. JUSTICE P.V.ASHA** **MONDAY ,THE 03RD DAY OF SEPTEMBER 2018 / 12TH BHADRA, 1940** ## **WP(C).No. 6274 of 2013** ## **PETITIONER/S:** **PAUL C.PAULOSE AGED 60 YEARS S/O.C.K.PAULOSE, RESIDING AT CHEMBAKASSERIL, ST. MARTIN ROAD, PALARIVATTOM, COCHIN 682 025.** **BY ADVS. SRI.K.JAJU BABU (SR.) SMT.C.S.SINDHU KRISHNAH SMT.LIJITTA G.MATHEW SMT.S.SIMY SRI.R.SANJITH** ## **RESPONDENT/S:** **1 COCHIN SHIPYARD LTD. PERUMANOOR P.O, COCHIN 682 015, REPRESENTED BY ITS CHAIRMAN & MANAGING DIRECTOR.** **2 THE DEPUTY GENERAL MANAGER (FINANCE) COCHIN SHIPYARD LTD, KOCHI 682 015.** **BY ADVS. SRI.M.PATHROSE MATTHAI (SR.) SMT.MARIAM MATHAI SRI.M.PATHROSE MATTHAI (SR.) SRI.SAJI VARGHESE** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 03.09.2018, ALONG WITH WP(C).4541/2013, WP(C).25971/2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** WP(C).No. 6274/13&CON.CASES 2 ## **P.V.ASHA, J.** **==> picture [332 x 11] intentionally omitted <==** **Dated this the 3[rd] day of September, 2018** ## **JUDGMENT** **The petitioners in these cases are employees of Cochin Shipyard. As a common issue is involved, all these cases are heard together and are disposed of by this common judgment. Parties and documents referred to in this judgment are as described in WP(C) No.4541 of 2013, unless otherwise specified.** **2. WP(C) No.4541 of 2013 is filed challenging Exts.P1 to P5 orders directing that petitioners shall appear before the enquiry officer as and when directed; and seeking a direction to the respondents to reinstate the petitioners in service with immediate effect. The learned Senior Counsel appearing for the petitioners submit that all the petitioners except the 3[rd] petitioner Sri.C.J.Vijayan, retired from service during the pendency of this writ petition. All those who retired have already received their gratuity, based on directions of the Authority under the Payment of Gratuity Act. It is stated that they have also received the Provident Fund amount in their accounts and the only remaining terminal benefit due is terminal surrender of earned leave. With respect to the 3[rd] petitioner it is pointed out that he is due to** WP(C).No. 6274/13&CON.CASES 3 **retire only in the year 2020. As all the petitioners in this writ petition are workmen and the Standing Orders applicable to them do not permit continuance of disciplinary proceedings after retirement, the grievance of the 3[rd] petitioner alone subsists. The learned Senior Counsel argued that the retention of the 3[rd] petitioner under suspension for such a long period since the year 2012, is unwarranted and in the light of various judgments of this court and the apex court the respondents are to be directed to reinstate him.** **3. Exts.P1 to P5 are orders issued by the 4[th] respondent-the Deputy General Manager of the Cochin Shipyard, directing the petitioners to appear for an enquiry before the enquiry officer, pursuant to Ext.P19 series of memo of charges issued to them with respect to their acts as office bearers of Cochin Shipyard Staff Cooperative House Construction Society, Ltd (hereinafter referred to as 'the Society'). It is pointed out that criminal cases were registered against the petitioners alleging commission of offences as to falsification of records, misappropriation of funds, cheating, etc during their tenure as office bearers of the Society, in purchasing land for the members of the society for construction of house. It is stated that FIR itself was stayed initially and as at present all further proceedings stand stayed as per order dated 18.07.2018 in Crl.M.A.4130 of 2018 in Crl.RP No.849 of 2018. Therefore it is argued that in the light of the judgment of the apex court in** _**Capt.M.Paul**_ WP(C).No. 6274/13&CON.CASES 4 _**Anthony vs. Bharat Gold Mines Ltd. And another : (1999) 3 SCC 679**_ **the departmental proceedings cannot be allowed to be continued since the charges in Ext.P19 series of memo of charges are also the same and relating to the very same incident for which criminal proceedings were initiated, which is stayed from the very beginning.** **4. It is also pointed out that respondent Shipyard had published Ext.P21 notice dated 9.7.2012 stating that Shipyard is not responsible for the functioning of the Co-operative Society or its activities. The memo of charges were issued subsequent to the said notice. It is also pointed out that along with IA No.3969 of 2013 filed along with the reply affidavit petitioners have produced Ext.P33(2) dated 06.01.2011 which is a letter addressed to the Central Government in which Shipyard had stated that the allegations against the former office bearers of the Society were to be dealt with as per the provisions of the Co-operative Societies Act and disciplinary proceedings would be initiated if the criminal court convicted them. Despite that the memo of charges were issued to them. It is their further case that the allegations in the memo of charges Ext P19 series do not have any connection with the discharge of their official duties in the Shipyard.** **5. The respondents have filed counter affidavits explaining the incidents leading to the complaints against the petitioners and that the main allegation is that they cheated their fellow workmen in the** WP(C).No. 6274/13&CON.CASES 5 **shipyard and hence the charges were having connection with their employment under the respondent, when they themselves became members and office bearers of the society by virtue of their employment under the respondents. Stating that there is no absolute bar in proceeding with the departmental enquiry, when criminal proceedings are pending, the necessity to expedite the departmental action was pointed out, stating that the petitioners were due to retire from service and the Standing Orders do not permit to continue departmental action after retirement. It was also stated that when the writ petition against suspension was dismissed, they should not have sought for directions to re-instate them.** **6. Sri. Jaju Babu, the learned Senior counsel for the petitioners argued that continued suspension in the case of the 3[rd] petitioner would not be justified in the light of the judgment of this Court in** _**Haridas vs. District Judge : 1993 KHC 331, Mohammed Iqbal v. Divisional Forest Officer : 1997 KHC 474 Ramoo Ramesh v. Andhra Bank : 1992 KHC 298 and Ajay Kumar Choudhary v. Union of India through its Secretary and another : 2015 KHC 4191.**_ **7. In reply learned Standing Counsel pointed out that the departmental proceedings could not be completed only at the instance of the petitioners themselves. Sri. Saji Varghese, the learned Standing Counsel argued that no writ petition will lie against Ext P5 series which are merely notices issued directing the petitioners** WP(C).No. 6274/13&CON.CASES 6 **to appear for the enquiry. In the light of the judgment in** _**Union of India and another V. Kunisetty Satyanarayana : 2006 (12) SCC 28**_ **no writ will lie even against a charge sheet or show cause notice. The judgment in** _**Secretary, Ministry of Defence and others vs. Prabhash Chandra Mirdha : 2012 (11) SCC 565,**_ **was relied on and it was argued that unless the charge sheet is issued by an authority without jurisdiction, no writ will lie even against a charge sheet. Relying on the judgments in** _**Central India Coalfields Ltd., Culcutta vs. Ram Bilas Shobnath : AIR 1961 SC 1189, Tata Oil Mills Co.Ltd vs. The Workmen : AIR 1965 SC 155**_ **etc it is argued that that even in a case where there is only casual connection disciplinary proceedings can be initiated and therefore when petitioners could function as office bearers of the society only because of their employment under the respondents and the complaints against them are also from the employees of the respondent there was no illegality in proceeding against the petitioners. It is also pointed out that the respondents could not proceed with the departmental enquiry only because of the stay order passed by this Court at the instance of the petitioners, though several petitions were filed for vacating the interim order, after filing the counter affidavit. It is pointed out that when there is inordinate delay in completion of the criminal proceedings, the respondent Shipyard has every right to continue the departmental proceedings.** WP(C).No. 6274/13&CON.CASES 7 **8. In WP(C) No.25971/2005 and 6274/2013 the petitioner is one and the same and he is an officer who is governed by separate rules. The memo of charge was issued to him after the filing of the first writ petition. It is pointed out that as per rule 35(b) of the Conduct, Discipline and Appeal Rules of the 1[st] respondent, disciplinary proceedings instituted against an officer can be continued even after retirement. Therefore in respect of the petitioner in both these cases who is one and the same, proceedings can be continued despite his retirement in the year 2012. In the first writ petition he prayed for a declaration that he retired from service on 30.08.2012 and sought for directions to disburse his retirement benefits. It is pointed out that he has also received the Provident Fund Amount as well as gratuity. In the 2[nd] writ petition he is challenging Exts.P1 and P15. Ext.P1 therein is an order identical to Ext P1 to P5 in the W.P.(C) No.4541 of 2013, directing him to appear for the enquiry. Ext P15 is a letter rejecting his request to keep in abeyance the departmental action till the decision in the criminal case.** **9. The learned counsel for the respondents pointed out that even in the decision in** _**Paul Anthony's case (supra)**_ **the apex court has found that in case the criminal proceedings are getting delayed departmental proceedings can continue and therefore in respect of the 3[rd] petitioner as well as the petitioner in the other two writ** WP(C).No. 6274/13&CON.CASES 8 **petitions, there is no embargo in proceeding against them but for the interim order which was granted in this writ petition.** **10. Having heard the learned Senior Counsel appearing for the petitioners as well as the learned standing counsel for the respondents, it is seen that petitioners themselves had got the criminal proceedings as well as the departmental proceedings stayed. The departmental proceedings against the petitioners are seen stayed by this court as per order dated 15.02.2013. Crime no. 1546 of 2010 was registered against the petitioners, based on complaint dated 23.9.2010 submitted by an employee under the respondents. Chargesheet was filed against them before the Additional Chief Judicial Magistrate Court, Ernakulam for offences under Section 406, 409 and 420 read with Section 34 of IPC in 2012. The said charge sheet is seen stayed by this court as per order dated 27.07.2018 in Crl Rev. Pet. No. 849 of 2018. Immediately after the charge sheet was filed, the petitioners were placed under suspension as per orders issued on 16.08.2012, in contemplation of disciplinary proceedings, pointing out the filing of the charge sheet before the criminal court. Petitioners challenged the orders of suspension and the writ petition and thereafter the writ appeal filed by them were dismissed. The SLP against it was withdrawn. Ext P19 series of chargesheet were issued to them on 30.08.2012 The chargesheet contains allegations based on a complaint submitted by an employee** WP(C).No. 6274/13&CON.CASES 9 **of the Cochin Shipyard based on which chargesheet was filed before the court of Additional CJM against the petitioners for cheating, criminal breach of trust, misappropiation of funds of the society, etc during their tenure as office bearers of the society; several employees of the Cochin Shipyard, who are members of the society have lodged complaints against the petitioners before the management with the very same allegations; they did not inform the developments in the criminal proceedings and disobeyed the directions of the superiors; criminal investigations conducted against them caused irreparable damage to the fair name and goodwill of the Company, adverse reports/publiciry against the Company appeared in the press and media. They were alleged to have committed misconducts (a)punishable under Clause 24(4B)-any act or omission punishable under law, (b) Clause 24(1) disobedience to any lawful and reasonable order of a superior and Clause 24(12) of the standing orders -an action subversive of discipline. Petitioners have submitted Ext P20 series of explanations. Ext P1 to P5 were issued thereafter on 30.01.2013 informing the petitioners about the appointment of enquiry officer and Presenting Officer and informing that they would be given sufficient opportunity to defend and would be permitted to be assisted either by a co-worker or an office bearer of a trade union. They were also informed of the witnesses proposed to be examined: the Sub Inspector of Police, Town South** WP(C).No. 6274/13&CON.CASES 10 **Police Station, Ernakulam and 4 employees of the Shipyard, named therein. Petitioners were directed to appear before the Inquiry Officer as and when the Inquiry Officer required. Petitioners were directed to furnish the name of the defence assistant and the name of the witnesses they propose to examine, within 3 days of the receipt of the order. These writ petitions are filed after they filed Ext P22 series of representations requesting to keep in abeyance the proceedings pointing out that the inquiry and criminal proceedings are intrincically connected, stating that the documents relied on and witnesses to be examined in both the cases are one and the same. The enquiry which was proposed to be conducted as per Exts.P1 to P5 notices issued on 31.1.2013 is not yet held because of the interim order passed in this case. In the meanwhile all petitioners except the 3[rd] petitioner retired from service and no departmental action is permissible against them. Contention advanced on behalf of the 3[rd] petitioner is that departmental inquiry is barred in view of the criminal proceedings.** **11. The grievance of the 3[rd] petitioner is against the proposed enquiry. The enquiry was kept in abeyance at the instance of the petitioners. There is no hard and fast rule that whenever criminal proceedings are initiated the departmental proceedings have to wait for the decision in the criminal proceedings. The position is made clear by the apex court after discussing the earlier judgments on** WP(C).No. 6274/13&CON.CASES 11 **the point, in para 22 of the judgment in** _**Capt.M.Paul Anthony vs. Bharat Gold Mines Ltd. And another : (1999) 3 SCC 679**_ **which read as** **follows:** _**22. The conclusions which are deducible from various decisions of**_ _**this Court referred to above are:**_ - _**(i) Departmental proceedings and proceedings in a criminal case can proceed simultaneously as there is no bar in their being conducted simultaneously, though separately.**_ - _**(ii) If the departmental proceedings and the criminal case are based on identical and similar set of facts and the charge in the criminal case against the delinquent employee is of a grave nature which involves complicated questions of law and fact, it would be desirable to stay the departmental proceedings till the conclusion of the criminal case.**_ - _**(iii) Whether the nature of a charge in a criminal case is grave and whether complicated questions of fact and law are involved in that case, will depend upon the nature of offence, the nature of the case launched against the employee on the basis of evidence and material collected against him during investigation or as reflected in the charge-sheet.**_ - _**(iv) The factors mentioned at (ii) and (iii) above cannot be considered in isolation to stay the departmental proceedings but due regard has to be given to the fact that the departmental proceedings cannot be unduly delayed.**_ - _**(v) If the criminal case does not proceed or its disposal is being unduly delayed, the departmental proceedings, even if they were stayed on account of the pendency of the criminal case, can be resumed and proceeded with so as to conclude them at an early date, so that if the employee is found not guilty his honour may be vindicated and in case he is found guilty, the administration may get rid of him at the earliest.**_ ## **12. The contention of the petitioners is that both proceedings** **are based on the same incident, charges, witnesses and documents are one and the same and therefore proceeding with the departmental enquiry would be unconstitutional. The witnesses mentioned in Ext P1 to P5 are the investigating officer and the witnesses no.1 and 12 in the FIR Ext P15 filed against them and another person, whose name does not find a place in the FIR. The allegations levelled against** WP(C).No. 6274/13&CON.CASES 12 **the petitioners in the departmental proceedings originates on the same issue, for which criminal proceedings are initiated. In the complaint before the management also, allegation is about criminal breach of trust, cheating, etc. However the question of disobedience to superior officers, disrepute caused to the Company, etc in the charge memo are not covered by the criminal proceedings, though it originates from it. Now more than 5 years and 8 months elapsed since Ext P1 to P5 were issued. The departmental proceedings are kept in abeyance because of the criminal proceedings, which are again stayed in August 2018. Therefore as held in clause 5 of paragraph 22 of the judgment in Paul Antony's case, in view of the inordinate delay involved in the criminal proceedings, it is only proper that the respondents are allowed to proceed with the departmental proceedings. It is pertinent to note that the apex court, reiterated the position in** _**Stanzen Toyotetsu India (P) Ltd. v. Girish V., (2014) 3 SCC 636,**_ **after discussing the judgments in Paul Antony's case, State of Rajasthan V B. K. Meena: (1996)6 SCC 417, and the subsequent judgments on the point including KSRTC V M.G.Vital Rao: (2012) 1 SCC 442. In paragraph 16 of the judgment it was held as follows:** > _**16. Suffice it to say that while there is no legal bar to the holding of the disciplinary proceedings and the criminal trial simultaneously, stay of disciplinary proceedings may be an advisable course in cases where the criminal charge against the employee is grave and continuance of the disciplinary proceedings is likely to prejudice their defence before the criminal court. Gravity of the charge is, however, not by itself enough to determine the question unless the charge involves complicated question of law and fact. The court**_ WP(C).No. 6274/13&CON.CASES 13 _**examining the question must also keep in mind that criminal trials get prolonged indefinitely especially where the number of accused arraigned for trial is large as is the case at hand and so are the number of witnesses cited by the prosecution. The court, therefore, has to draw a balance between the need for a fair trial to the accused on the one hand and the competing demand for an expeditious conclusion of the ongoing disciplinary proceedings on the other. An early conclusion of the disciplinary proceedings has itself been seen by this Court to be in the interest of the employees.**_ ## **13. There the apex court directed to expedite the disposal of** **the criminal case, as it was found that all the courts below had concurrently directed to keep in abeyance the departmental proceedings. However the conclusion is that departmental proceedings shall be finalised at the earliest. In view of the stay order granted in the Criminal RP on 18.07.2018, it is not likeli that the criminal proceedings in the present case would be finalised in the near future.** **14. In the above circumstances of the case, I am of the view that it is necessary to see that the departmental proceedings are finalised at the earliest. In Ext P1 to P5 orders, the delinquent employees were assured sufficient opportunity to defend. Therefore there need not be any apprehension regarding the procedural formalities to be observed. Therefore eventhough the first two charges form the subject matter of the criminal proceedings, any further delay will adversely affect the delinquent employees as well as the employer.** **15. The learned Senior Counsel argued that the allegations against the petitioners do not have any connection with the official** WP(C).No. 6274/13&CON.CASES 14 **discharge of their duties and therefore no inquiry is warranted against the petitioners at this stage. As pointed out by Sri. Saji Varghese, the learned Counsel for the respondents, the allegations against the petitioners are in respect of the acts done by them during their tenure as Office bearers of the Society of which all the members are employees or ex-employees of the Shipyard. The society functions in an office in the premises of Shipyard in a building owned by Shipyard. All the members of the Society including its office bearers are employees/ex employees of the Shipyard. Therefore whether the alleged activities of the employees who are the members/office bearers while functioning in the society which is functioning in the premises of the Shipyard constitutes a misconduct under the relevant Standing orders/Regulations which govern them are all matters to be proved/disproved in the enquiry.** **16. I do not find any substance in the contention that departmental enquiry shall not be allowed to be proceeded because of the lapse of time, when the enquiry was not kept in abeyance at the instance of the respondents; but at the instance of petitioners themseleves.** **17. The Learned Senior Counsel argued that the continued suspension of the 3[rd] petitioner since the year 2012 is uncalled for and he is entitled to be re-instated. However no relief is seen sought against the suspension, in these writ petitions. It is seen** WP(C).No. 6274/13&CON.CASES 15 **that petitioners had unsuccesfully challenged the orders of suspension, resulting in Ext P18 judgment which was affirmed in the judgment dated 02.04.2014 in W.A. 522/2014 after which the petitioners approached the apex court and thereafter on 21.10.2016, they withdrew the SLP No. 26052/2014, filed against it. Even though several judgments were relied on in support of the contention seeking re-instatement, I find that the circumstances in which those judgments were rendered, are entirely different and hence those judgments are not applicable to the factual circumstances arising in the case. In Ramoo Ramesh's case (supra), charge sheet was issued only after 6 years of suspension. Even after 8 years of suspension there was no considerable progress in the enquiry. Re-instatement was directed in such circumstances. In Haridas' case, suspension was ordered on 02.11.1982, because of a criminal investigation against him; apart from that the respondent had not reviewed the order of suspension despite the direction of this court to review the same on receiving a copy of the final report in the criminal proceedings, though final report was submitted on 22.06.1989. Therefore the respondents were directed to re-instate him with effect from the date of final charge sheet. No memo of charge was issued for departmental action. In Mohamed Iqbal's case, no memo of charge was issued even after two years of the suspension. Therefore time bound directions were issued to expedite the enquiry. In Ajoykumar Choudhary's case** WP(C).No. 6274/13&CON.CASES 16 **(supra), the apex court directed that in a case where memo of charge is issued, a reasoned order shall be passed after three months of the suspension. No direction is called for on the re-instatement of the petitioner in this case, in the circumstances pointed out and also in view of the fact that the respondents are now being directed to expedite the departmental proceedings.** **18. As held in Paul Antony's case and also in Girish's case (supra), there is no embargo in proceeding with departmental and criminal proceedings simultaneously, as it is well settled that the degree of evidence required in both the proceedings are different. Therefore, though there are charges identical to those in the criminal proceedings, in view of the inordinate delay in finalising the criminal proceedings, I am of the view that there is nothing wrong in allowing the respondents to proceed with departmental proceedings.** **19. As the departmental proceedings got delayed only at the instance of the petitioners themselves I do not find any reason to interfere with the proceedings initiated against the 3[rd] petitioner as well as petitioner in the other two cases.** **20. As the notice of inquiry which is under challenge was issued in January 2013, respondents are free to issue fresh notice of inquiry. Though the three days' time stipulated in Ext P1 to P5 was too insufficient, now that the petitioners are aware of the** WP(C).No. 6274/13&CON.CASES 17 **proceedings, it will not be difficult for them to furnish the list of witnesses and the name of defence assistant, by the time notice is issued by the respondent regarding the enquiry, even if only three days' time is granted by the respondents in the notices to be issued afresh.** **Therefore these writ petitions are disposed of directing to finalise the departmental action against the 3[rd] petitioner in W.P. 4541 of 2013 and the petitioner in W.P.(C) No.25971 of 2012 and 6274 of 2013 as expeditiously as possible and at any rate within a period of three months from the date of receipt of a copy of the judgment.** **The writ petitions are disposed of accordingly.** **Sd/-** **P.V.ASHA** **JUDGE** rkc WP(C).No. 6274/13&CON.CASES 18 ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE NOTICE ISSUED BY THE RESPONDENTS BEARING NO.PERL/DA-9/0948/2012 DATED 24.1.13. EXHIBIT P2 TRUE COPY OF ORDER IN BA.A.NO.7038/10. EXHIBIT P3 TRUE COPY OF THE SAID ORDER IN C.M.P.NO.2364/2011. EXHIBIT P4 TRUE COPY OF THE MEMO ISSUED TO THE PETITIONER. EXHIBIT P5 TRUE COPY OF THE EXPLANATION TO MEMO SUBMITTED BY THE PETITIONER. EXHIBIT P6 TRUE COPY OF THE SUSPENSION ORDER BEARING NO.PERL/DA-9/0948/2012 DATED 16.8.2012. EXHIBIT P7 TRUE COPY OF THE RELEVANT PAGES OF THE CHARGE SHEET SUBMITTED IN CRIME.1546/10. EXHIBIT P8 TRUE COPY OF THE REPRESENTATION SUBMITTED BY THE PETITIONER REQUESTING TO WITH DRAW SUSPENSION. EXHIBIT P9 TRUE COPY OF THE CSL CONDUCT, DISCIPLINE & APPEAL RULES. EXHIBIT P10 TRUE COPY OF THE JUDGMENT IN WPC.NO.20289/12 DATED 3.9.12. EXHIBIT P11 TRUE COPY OF THE MEMORANDUM AND CHARGE SHEET SUBMITTED AGAINST THE PETITIONER. EXHIBIT P12 TRUE COPY OF THE EXPLANATION SUBMITTED BY THE PETITIONER TO THE CHARGE SHEET. EXHIBIT P13 TRUE COPY OF THE SAID PUBLIC NOTICE DATED 9.7.12 PUBLISHED IN MALAYALA MANORAMA DAILY. EXHIBIT P14 TRUE COPY OF THE REQUEST SUBMITTED BY PETITIONER REQUESTING TO KEEP THE INQUIRY IN ABEYANCE.** WP(C).No. 6274/13&CON.CASES 19 **EXHIBIT P15 TRUE COPY OF THE NOTICE DATED 14.2.13 ISSUED BY THE RESPONDENT. EXHIBIT P16 TRUE COPY OF THE INTERIM ORDER IN WPC.NO.4541/2013 DATED 15.2.2013. EXHIBIT P17 TRUE COPY OF THE ORDER OF CONTROLLING AUTHORITY DATED 28.8.2014. EXHIBIT P18 TRUE COPY OF THE ORDER OF APPELLATE AUTHORITY DATED 10.8.15. EXHIBIT P19 TRUE COPY OF THE ORDER OF CONTROLLING AUTHORITY DATED 30.10.15.** **RESPONDENTS' EXHIBITS : NIL**