S. MAHESH versus THE CHAIRMAN CUM MANAGING DIRECTOR, NEYVELI LIGNITE CORPORATION LTD. NEYVELI TAMIL NADU & ORS. on 29 October 2018

[2018] 13 S.C.R. 577

S. MAHESH

v.

THE CHAIRMAN CUM MANAGING DIRECTOR, NEYVELILIGNITE CORPORATION LTD. NEYVELITAMIL NADU & ORS.

(Civil Appeal No. 10812 of 2018)

OCTOBER 29, 2018

[ABHAY MANOHAR SAPRE AND INDU MALHOTRA, JJ.]

Service Law: Appointment – Propriety of – On facts,appointment of appellant, belonging to backward community asEngineering Supervisor, declared null and void on account of failureto produce original caste certificate – Challenge to – Single Judgeof the High Court quashed the said order, however, the DivisionBench upheld the order – On appeal, held: Appellant at the firstavailable opportunity and before joining the duties had sent a letteron his own to the Corporation that the Revenue Authorities haddeclined to issue the original caste certificate to him – Appellantalso requested the Corporation not to treat him as ‘reservedcandidate’ but treat him as ‘general candidate’ – Appellant did notsuppress any information relating to his caste certificate from theCorporation – Corporation by asking the appellant to join the duties,and later promoting him to the next higher grade, condoned thelapse and Corporation had no right to hold any DepartmentalEnquiry in relation to the issue of appellant’s caste certificate –Assuming that the Corporation could still probe the issue, theCorporation having held a Departmental Enquiry and imposingthe punishment on the appellant of reduction of his rank for a periodof 2 years with cumulative effect, the issue of caste certificateattained finality – Furthermore, assuming that the higher authorityhad the power to enhance the punishment, it could be exercisedwithin 30 days from the date of the order of punishment – However,the punishment order declaring the appellant’s appointment as nulland void was passed after 13 years from the date of passing of theoriginal punishment order – Thus, the entire action of theCorporation is arbitrary, unreasonable, and not sustainable in lawand order passed by Division Bench set aside.

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AAllowing the appeal, the Court

HELD: 1.1 Appellant at the first available opportunity andbefore joining the duties had sent a letter on his own to theCorporation informing therein that it was not possible for him toproduce the original caste certificate because the RevenueBAuthorities had declined to issue the original caste certificate tohim. Not only that, the appellant further on his own requestedthe Corporation not to treat him as “reserved candidate” but treathim as “general candidate”. In this way, the appellant, did notsuppress any information relating to his caste certificate fromthe Corporation. The Corporation, in these circumstances, hadCthree options; first, not to appoint the appellant which theCorporation did not opt; second, to grant some more time toproduce the caste certificate or any other material to prove theappellant’s caste which again the Corporation did not opt and thethird, to condone the lapse in filing the caste certificate andDproceed to consider the appellant’s case treating him as acandidate belonging to the general category for selection purposewhich the Corporation opted. The Corporation by their expressconduct having followed the third option and condoned the lapseby asking the appellant to join the duties, which the appellantdid, and later further promoting him to the next higher grade,Ethe issue relating to caste certificate lost its significance. Thus,the Corporation, had no right to hold any Departmental Enquiryin relation to the issue of appellant’s caste certificate becausethey condoned the issue of caste certificate by allowing theappellant to join the duties and later by promoting him to theFnext higher grade. [Para 27-31][584-C-H]

1.2 Assuming, however, that the Corporation could stillprobe the issue in relation to the appellant’s caste certificate afterallowing him to join, the Corporation having held a DepartmentalEnquiry and imposing the punishment on the appellant ofG“reduction of his rank to a lower stage by two stages in his timescale for a period of 2 years with cumulative effect”, the issue ofcaste certificate attained finality in all respect. The Corporationhad thereafter no power to raise the issue of caste certificateagain in any form against the appellant. In other words, the issueof caste certificate did not survive for any more considerationH

between the parties inasmuch as it was not a live issue betweenthe parties. [Para 32, 33] [525-A-C]

1.3 Assuming that the higher authority had the power toenhance the punishment imposed on the appellant by takingrecourse to powers under Rule 30, such power, could be exercisedby the authorities within 30 days from the date of the order ofpunishment. [Para 34] [585-C-D]

1.4 The punishment order was passed on 30.08.1997whereas the higher authority exercised his power under Rule 30on 07.07.2010 by which the punishment order dated 30.08.1997was cancelled and was substituted by an order declaring theappellant’s appointment as null and void. This order was passedbeyond a period of 30 days as provided in Rule 30 (3). In otherwords, the higher authority could pass the order under Rule 30for revoking the original order of punishment dated 30.08.1997as being bad and substituting it with another order declaring theappellant’s appointment as null and void within 30 days from thedate of punishment order i.e, it could be passed on or before30.09.1997 but not beyond this date. Since the order was passedalmost after 13 years from the date of passing of the originalpunishment order, and hence on the face, it was bad in law.[Para 35, 37] [585-E, G]

1.5 The entire action of the Corporation starting fromissuance of second charge memo dated 11.08.1995 and endingby passing the order dated 07.07.2010 is arbitrary, unreasonable,and mala fide exercise of the powers by the Corporation againstthe appellant and hence the same is not sustainable in law. In anyevent, the order dated 07.07.2010 which is subject matter of thisappeal is wholly arbitrary, unreasonable and is not legallysustainable. [Paras 25, 26] [584-A-B]

1.6 The Single Judge, rightly set aside the order impugnedin the writ petition whereas the Division Bench was not right insetting aside the order of the Single Judge. Therefore, thereasoning and the conclusion of the Division Bench cannot beconcurred with but are inclined to concur with the reasoning andthe conclusion arrived at by the Single Judge. The order passedby the Division Bench is set aside and the order passed by the A

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ASingle Judge (Writ Court) is restored. As a consequence, orderdated 07.07.2010 passed by the Director (Power) of theCorporation which set aside the order of punishment dated30.08.1997 and in its place substituted the order by declaringthe appellant’s appointment void ab initio is hereby quashed. [Paras39, 40 and 41][586-B-C]BCIVIL APPELLATE JURISDICTION : Civil Appeal No. 10812of 2018.

From the Judgment and Order dated 05.03.2018 of the HighCourt of Judicature at Madras in W.A. No. 273 of 2017.

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Ms. V. Mohana,Sr. Adv., P. R. Kovilan, Mrs. Geetha Kovilan,Ms. Jubli Momalia, Ms. Kashvi, C. M. Patel , Advs. for the Appellant.

Anil Nag, Adv. for the Respondent.

The Judgment of the Court was delivered by DABHAY MANOHAR SAPRE, J. 1. Leave granted.

2. This appeal is filed against the final judgment and order dated05.03.2018 passed by the High Court of Judicature at Madras in W.A.No. 273 of 2017 whereby the Division Bench of the High Court setaside the order dated 07.11.2016 passed by the learned Single Judge inEW.P. No. 15312/2010 and allowed the writ appeal filed by the respondentherein.

3. The controversy involved in the appeal is short. However, fewrelevant facts herein below need mention to appreciate the controversy.

4. The appellant (employee) was the writ petitioner whereas theFrespondent herein (employer) was the respondent in the writ petitionfiled by the appellant in the High Court of Madras against the respondentout of which this appeal arises.

5. The respondent herein is the Government Company known asNeyveli Lignite Corporation Ltd. It is mainly engaged in the business ofGmanufacture and sale of minerals (lignite). It has an office and businessactivity in South Arcot (Tamil Nadu).

6. The respondent (hereinafter referred to as “the Corporation”)being a fully owned Government Company is a “State” within the meaningof Article 12 of the Constitution of India and is thus amenable to the writHjurisdiction under Article 226/227 of the Constitution of India.

7. Pursuant to advertisement issued by the Corporation for theappointment of “Diploma Engineer Trainee Grade II (Electrical)”, theappellant was one of the candidates who applied for the said post. Theappellant was interviewed by the Corporation and selected for the saidpost. The Corporation on 28.01.1988 accordingly issued an appointmentletter to the appellant. (Annexure-P-1).

8. In terms of the appointment letter, the appellant was initiallyappointed on probation for a period of two years as Trainee and on itssuccessful completion, was to be appointed on regular basis asEngineering Supervisor (Electrical) on probation for a period of one yearand then to be absorbed as a regular employee. The appellant was alsorequired to execute Bond for a particular period.

9. At the time of the interview and the appointment, the appellanthad produced photocopy of his Scheduled Caste Certificate to theCorporation and had sought time to produce its original. The Corporationgranted the indulgence to the appellant for producing his originalScheduled Caste Certificate.

10. The appellant on 03.03.1988, however, sent a letter (AnnexureR-3) to the Corporation informing them that he belongsa community known as “Konda Reddi” which is a backward (SC)community. He said that he had approached the concerned RevenueAuthorities for obtaining caste certificate in the prescribed form so as toenable him to submit it to the Corporation but the Revenue Authoritiesinformed him that the Department has stopped issuing any suchcertificate. The appellant, therefore, expressed his inability to producethe original Scheduled Caste Certificate and requested the Corporationto treat him as a candidate belonging to the “General Category” insteadof “Reserved Category” in selection process.

11. The Corporation, on receipt of the aforesaid letter, issued aposting order no. 1416/P&A/VI-2/88-3 dated 02.05.1988 to the appellantand asked him to report for duty. The appellant was also allotted quarterin general category as a part of his service condition. The appellantaccordingly joined his duty on 02.05.1988.

12. It was almost after four years of his joining i.e on 24.05.1993,the Corporation served a memo to the appellant stating therein thatappellant had submitted false community certificate at the time of joiningand therefore why disciplinary action be not taken against him for filingsuch certificate.

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13. It is not in dispute that the Corporation though issued thismemo to the appellant but did not pursue the matter. On the other hand,the appellant was promoted to the rank of Junior Engineer Grade I witheffect from 01.06.1993 vide order dated 16.12.1993. The appellantaccordingly started working on the promotional post.

B14. On 11.08.1995, the Corporation issued second memo to theappellant reiterating the same charge for which the first memo wasissued. The appellant filed his reply and reiterated his stand which hehad taken in his letter dated 03.03.1988.

15. The Corporation then conducted a Departmental Enquiry andCrecorded the statements of the Corporation’s officials wherein the officialsadmitted that the appellant had sent a letter dated 03.03.1988 expressingtherein his inability to produce the original caste certificate and furtherrequesting the Corporation to treat him as general candidate instead ofreserved candidate. They also admitted that the appellant’s request wasaccepted by DGM/P&A.D

16. Despite this, the Corporation concluded in the enquiry that thecharge leveled against the appellant has been proved. The appellantwas accordingly awarded a punishment of “reduction of rank to alower stage by two stages in his time scale for a period of 2 yearswith cumulative effect”. The Corporation also ordered that henceforthEthe appellant be considered as general category candidate and that hewould not be allowed to avail any benefits which are extended to thereserved category candidates. The appellant felt aggrieved and filedDepartmental Appeal. It was, however, dismissed.

17. After three years i.e. on 20.09.2000, the Corporation for theFthird time issued a memo again asking the appellant to produce hiscommunity certificate in original for its verification. The appellant repliedto the said memo reiterating his earlier stand saying that he had alreadyinformed vide his letter dated 03.03.1988 and in the enquiry proceedingsto the Corporation that it was not possible to produce the original certificateGfor the reasons mentioned therein. The appellant further said that henever took any benefit of reserved candidate in the service because hisrequest to treat him as general candidate was accepted by theCorporation.

18. The Corporation did not stop here and lodged an FIR againstthe appellant on 30.07.2001 in PS Neyveli Town (Crime No.219) forfiling false caste certificate. On 04.11.2003, the Police Authoritiessubmitted a report that there was no case made out against the appellantin the FIR. On 15.07.2008, the Magistrate in RC No.56/2008, on perusalof the FIR and final report of the Police Authorities, closed the caseagainst the appellant.

19. After two years, the Corporation again renewed their effortsand this time, its director invoked the powers under Rule 30 of the NLCEmployees (Control and Appeal) Rules (hereinafter referred to as “theRules”) and by order dated 07.07.2010 substituted the punishmentimposed on the appellant vide order dated 30.8.1997 to that of declaringappellant’s appointment to be null and void.

20. The appellant, felt aggrieved, filed writ petition (W.P. No.1512/2010) in the Madras High Court questioning therein the legality andcorrectness of the order dated 07.07.2010. The Corporation contestedthe writ petition.

21. By order dated 07.11.2016, the learned Single Judge allowedthe appellant’s writ petition and quashed the order dated 07.07.2010.Feeling aggrieved of the order passed by the learned Single Judge, theCorporation filed intra court appeal before the Division Bench.

22. By impugned order, the Division Bench allowed theCorporation’s appeal, and while setting aside the order passed by thelearned Single Judge, dismissed the appellant’s writ petition and upheldthe order dated 07.07.2010 by which the appellant’s appointment washeld as null and void. It is against this order, the writ petitioner (appellantherein) felt aggrieved and filed the present special leave to appeal in thisCourt.

23. Heard Ms. V. Mohana, learned counsel for the appellant andMr. Anil Nag, learned counsel for the respondent(s).

24. Having heard the learned counsel for the parties and on perusalof the written submissions filed by the parties, we are constrained toallow the appeal and while setting aside of the impugned order, allow theappellant’s writ petition and restore the order of the Single Judge.

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25. In our considered opinion, the entire action of the Corporationstarting from issuance of second charge memo dated 11.08.1995 andending by passing the order dated 07.07.2010 is arbitrary, unreasonable,and mala fide exercise of the powers by the Corporation against theappellant and hence the same is not sustainable in law.

B26. In any event, the order dated 07.07.2010 which is subjectmatter of this appeal and with which we are really concerned in thisappeal is wholly arbitrary, unreasonable and is not legally sustainable.This we say for following reasons.

27. First, the appellant at the first available opportunity and beforeCjoining the duties had sent a letter on 03.03.1988 of his own to theCorporation informing therein that it was not possible for him to producethe original caste certificate because the Revenue Authorities had declinedto issue the original caste certificate to him.

28. Not only that, the appellant further on his own requested theDCorporation not to treat him as “reserved candidate” but treat him as“general candidate”. In this way, the appellant, in our opinion, did notsuppress any information relating to his caste certificate from theCorporation.

29. Second, the Corporation, in these circumstances, had threeEoptions; first, not to appoint the appellant which the Corporation did notopt; Second, to grant some more time to produce the caste certificate orany other material to prove the appellant’s caste which again theCorporation did not opt and the third, to condone the lapse in filing thecaste certificate and proceed to consider the appellant’s case treatinghim as a candidate belonging to the general category for selection purposeFwhich the Corporation opted.

30. Third, the Corporation by their express conduct having followedthe third option and condoned the lapse by asking the appellant to jointhe duties, which the appellant did, and later further promoting him to thenext higher grade, the issue relating to caste certificate lost its significance.G

31. Fourth, in the light of afore-mentioned reasons, the Corporation,in our opinion, had no right to hold any Departmental Enquiry in relationto the issue of appellant’s caste certificate because they condoned theissue of caste certificate by allowing the appellant to join the duties andlater by promoting him to the next higher grade.

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32. Assuming, however, that the Corporation could still probe theissue in relation to the appellant’s caste certificate after allowing him tojoin, the Corporation having held a Departmental Enquiry and imposingthe punishment on the appellant of “reduction of his rank to a lowerstage by two stages in his time scale for a period of 2 years withcumulative effect” by order dated 30.08.1997, the issue of castecertificate attained finality in all respect.

33. The Corporation had thereafter no power to raise the issue ofcaste certificate again in any form against the appellant. In other words,the issue of caste certificate did not survive for any more considerationbetween the parties inasmuch as it was not a live issue between theparties.

34. Fifth, assuming that the higher authority had the power toenhance the punishment imposed on the appellant by taking recourse topowers under Rule 30, such power, in our view, could be exercised bythe authorities within 30 days from the date of the order of punishment.

35. In this case, the punishment order was passed on 30.08.1997whereas the higher authority exercised his power under Rule 30 on07.07.2010 by which the punishment order dated 30.08.1997 wascancelled and was substituted by an order declaring the appellant’sappointment as null and void. This order was passed beyond a period of30 days as provided in Rule 30 (3) which in clear terms provides that“no order enhancing the punishment under this rule shall be madeafter a period of 90 days from the date on which the original orderof punishment was served on the employee charged “.

36. In other words, the higher authority could pass the order underRule 30 for revoking the original order of punishment dated 30.08.1997as being bad and substituting it with another order declaring the appellant’sappointment as null and void within 90 days from the date of punishmentorder i.e, it could be passed on or before 30.09.1997 but not beyond thisdate.

37. Since in this case, the order was passed almost after 13 yearsfrom the date of passing of the original punishment order, and hence onthe face, it was bad in law.

38. In the light of afore-mentioned reasons, we are of the opinionthat in whatever way the question is examined, the entire action of the A

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ACorporation and in particular the order dated 07.07.2010 which is subjectmatter of this appeal is found to be wholly arbitrary, unreasonable and,therefore, it is held legally unsustainable.

39. The Single Judge, therefore, rightly set aside the orderimpugned in the writ petition whereas the Division Bench was not rightBin setting aside the order of the Single Judge.

40. We cannot, therefore, agree with the reasoning and theconclusion of the Division Bench but are inclined to concur with thereasoning and the conclusion arrived at by the learned Single Judge inaddition to our own reasoning given above.

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41. In view of the foregoing discussion, the appeal succeeds andis hereby allowed. The impugned order passed by the Division Bench isset aside and the order passed by the Single Judge (Writ Court) is restored.

42. As a consequence, order dated 07.07.2010 passed by theDirector (Power) of the Corporation which set aside the order ofDpunishment dated 30.08.1997 and in its place substituted the order bydeclaring the appellant’s appointment void ab initio is hereby quashed.

Nidhi Jain

Appeal allowed.

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