UNION OF INDIA AND OTHERS versus M. DURAISAMY on 19 April 2022

[2022] 3 S.C.R. 51

UNION OF INDIA AND OTHERS

v.

M. DURAISAMY

(Civil Appeal No. 2665 of 2022)

APRIL 19, 2022

[M. R. SHAH AND B. V. NAGARATHNA, JJ.]

Service Law – Misconduct – Fraud – Defrauding publicmoney – Limited jurisdiction of the Court on proportionality of theorder of departmental authority – Respondent was a public servantin Post office – He committed fraud by way of fraudulent withdrawal/ non-credit of deposits in RD accounts – Punishment of ‘removal’from service imposed by the Disciplinary Authority – Tribunalinterfered with the punishment so imposed by modifying / substitutingthe same from ‘removal’ to ‘compulsory retirement’ – Order passedby Tribunal confirmed by the High Court – Neither the Tribunalnor the High Court found any irregularity or procedural lapses inconducting departmental enquiry – On appeal, held: Once, aconscious decision was taken by the Disciplinary Authority to removean employee on the proved misconduct of a very serious nature ofdefrauding public money, neither the Tribunal nor the High Courtshould have interfered with the order of punishment imposed by theDisciplinary Authority, which was after considering the gravity andseriousness of the misconduct – Merely because respondent hadworked for 39 years and in those years, there was no punishmentimposed and/or that he voluntarily deposited the defrauded amountalong with penal interest and therefore there was no loss to theGovernment/Department cannot be a ground to interfere with theorder of punishment imposed by the Disciplinary Authority andsubstitute the same from removal to that of compulsory retirement –Being a public servant in the post office, respondent was holdingthe post of trust – By such misconduct /act on the part of respondent,the reputation of the Postal department had been tarnished – Orderof Disciplinary Authority imposing punishment of ‘removal’ ofrespondent from service, accordingly, restored – Judicial Review.

Allowing the appeal, the Court

HELD:1. In the case on hand, the order passed by theTribunal, confirmed by the Division Bench of the High Court,

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Asubstituting the punishment of removal to that of compulsoryretirement is unsustainable. Neither the Tribunal nor the HighCourt have found any irregularity in conducting the departmentalenquiry. No procedural lapses have been found. In fact, therespondent employee admitted the charge of having defraudedRs.16,59,065/- and on detecting the fraud, he deposited theBdefrauded amount of Rs.16,59,065/- along with penal interest.But for the detection of the fraud, probably, the respondentemployee would not have deposited the defrauded amount. Once,a conscious decision was taken by the Disciplinary Authority toremove an employee on the proved misconduct of a very seriousCnature of defrauding public money, neither the Tribunal nor theHigh Court should have interfered with the order of punishmentimposed by the Disciplinary Authority, which was after consideringthe gravity and seriousness of the misconduct. [Para 8][59-B-E]

2. Merely because the respondent-employee had workedDfor 39 years and in those years, there was no punishment imposedand/or that he voluntarily deposited the defrauded amount alongwith penal interest and therefore there was no loss to theGovernment/Department cannot be a ground to interfere withthe order of punishment imposed by the Disciplinary Authorityand substitute the same from removal to that of compulsoryEretirement. Neither the Tribunal nor the High Court have, infact, considered the nature and gravity of the misconductcommitted by the delinquent officer. [Para 9][59-E-G]

3. Once it was found that the delinquent officer who wasserving in the post office had defrauded to the extent ofFRs.16,59,065/- and that too, by way of fraudulent withdrawal in asmany as 85 RD accounts and by way of non-credit of deposits in71 RD accounts, no sympathy on such an employee was warranted.Being a public servant in the post office, the delinquent officerwas holding the post of trust. Merely because subsequently theGemployee had deposited the defrauded amount and thereforethere was no loss caused to the department cannot be a groundto take a lenient view and/or to show undue sympathy in favourof such an employee. What about the loss caused to thedepartment by way of goodwill, name and fame of the department H

and its reliability amongst the public? By such a misconduct/acton the part of the delinquent officer, the reputation of thedepartment had been tarnished. Therefore, in the facts andcircumstances of the case, both, the Tribunal as well as the HighCourt have exceeded in their jurisdiction in interfering with thequantum of punishment imposed by the Disciplinary Authorityand to substitute the same to that of compulsory retirement.Consequently, the order passed by the Disciplinary Authorityimposing the punishment of removing the delinquent employeefrom service is hereby restored. [Paras 10, 12][59-H; 60-A-C;60-G]

Chairman & Managing Director, V.S.P. & Others v.Goparaju Sri Prabhakara Hari Babu, (2008) 5 SCC569 : [2008] 3 SCR 1184, and B.C. Chaturvedi v. Unionof India, (1995) 6 SCC 749 : [1995] 4 Suppl. SCR 644– relied on.

Maruti Udyog Ltd. v. Ram Lal, (2005) 2 SCC 638: [2005] 1 SCR 790; State of Bihar v. Amrendra KumarMishra, (2006) 12 SCC 561 : [2006] 6 Suppl. SCR 650;Regional Manager, SBI v. Mahatma Mishra,(2006) 13SCC 727 : [2006] 8 Suppl. SCR 216; State ofKarnataka v. Ameerbi, (2007) 11 SCC 681 : [2006]10 Suppl. SCR 329; State of M.P. v. Sanjay KumarPathak, (2008) 1 SCC 456 : [2007] 10 SCR 951; andUttar Haryana Bijli Vitran Nigam Ltd. v. Surji Devi,(2008) 2 SCC 310 : [2008] 1 SCR 1042 – referred to.

Case Law Reference

[1995] 4 Suppl. SCR 644[2008] 3 SCR 1184[2005] 1 SCR 790[2006] 6 Suppl. SCR 650[2006] 8 Suppl. SCR 216[2006] 10 Suppl. SCR 329[2007] 10 SCR 951[2008] 1 SCR 1042

relied onrelied onreferred toreferred toreferred toreferred toreferred toreferred to Para 3.3Para 3.3Para 3.3Para 3.3Para 3.3Para 3.3Para 3.3Para 3.3

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ACIVIL APPELLATE JURISDICTION : Civil Appeal No.2665of 2022.

From the Judgment and Order dated 30.08.2016 of the High Courtof Judicature at Madras in W.P. No.33303 of 2013.

Balbir Singh, ASG, Gurmeet Singh Makker, Shyam Gopal, SiddhanthBKohli, Ms. Suhasini Sen, R. Bala, Grish Chaudhary, Advs. for theAppellants.

G. Sivabalamurugan, Adv. for the Respondent.

The Judgment of the Court was delivered by

M. R. SHAH, J.C

1. Feeling aggrieved and dissatisfied with the impugned judgmentand order dated 30.08.2016 passed by the High Court of Judicature atMadras in Writ Petition No. 33303/2013, by which the High Court hasdismissed the said writ petition preferred by the appellants herein – Unionof India and others and has confirmed the order passed by the CentralDAdministrative Tribunal, Madras Bench (hereinafter referred to as the‘Tribunal’) in Original Application (OA) No. 357 of 2012 by which theTribunal allowed the said OA and modified the punishment from dismissal/removal from service to compulsory retirement, the Union of India andothers have preferred the present appeal.

E2. The facts leading to the present appeal in a nutshell are asunder:

E2. The facts leading to the present appeal in a nutshell are asunder:

That the respondent herein was serving as a Postal Assistant.While he was working as SPM Veppur SO during the period from 2004to 2007, he committed fraud by way of fraudulent withdrawal in 85 RDFaccounts and by way of non-credit of deposits in 71 RD accounts anddefrauded a sum of Rs.16,59,065/-. The fraud came to light when enquirieswere made based on the report of Postmaster, Srirangam vide letterdated 11.06.2007 about double payment of RD closure in respect ofsome RD accounts which revealed that the accounts were fraudulentlyclosed by the respondent herein for the second time by way of forgingGthe signatures of the depositors and a sum of Rs.52,395/- had beenwithdrawn from the said accounts by the respondent fraudulently. Furtherinvestigation brought to light the frauds committed by the respondentherein. Thereafter having come to know that the fraud has been detected,the respondent herein deposited a total sum of Rs.18,09,041/- (the amountHof fraud Rs. 16,66,439/- + penal interest of Rs.1,42,602/-).

2.1 A departmental enquiry was initiated against the respondentvide office memorandum dated 26.07.2010. Six charges were framedagainst the respondent. The respondent admitted the fraud in his defencerepresentation. An Inquiry Officer was appointed. The Inquiry Officerheld all the charges proved against the respondent – delinquent, as thedelinquent officer himself admitted all the charges in the preliminarysitting itself. The Inquiry Officer’s report was forwarded to the chargedofficial. The charged official submitted his representation on the InquiryOfficer’s report. Thereafter the Disciplinary Authority imposed thepenalty of ‘removal’ from service vide memo dated 19.01.2011, havingfound that the offence committed by the charged official – respondentherein was grave in nature and retention of such person in the departmentwould further hamper the services rendered to the public. Thedepartmental appeal against the order of removal from service came tobe dismissed.

2.2 The respondent – charged official challenged the order of‘removal’ before the Tribunal. Vide order dated 26.03.2012, the Tribunalpartly allowed the said original application and modified the order ofpunishment from ‘removal’ from service to that of compulsory retirementon sympathetic ground by observing that as such the delinquent officerhimself deposited the entire amount involved and therefore no loss hasbeen caused to the department. The Tribunal also noted that the delinquentofficer had completed nearly 39 years of service and has not sufferedany other punishment other than the present one. By observing so, theTribunal interfered with the order of punishment imposed by theDisciplinary Authority and modified the same to that of compulsoryretirement.

2.3 Feeling aggrieved and dissatisfied with the order passed bythe Tribunal modifying the order of punishment from removal to that ofcompulsory retirement, the department preferred a writ petition beforethe High Court. By the impugned judgment and order, the High Courthas dismissed the said writ petition. Hence, the department has preferredthe present appeal before this Court.

3. Shri Balbir Singh, learned Additional Solicitor General of Indiahas vehemently submitted that in the facts and circumstances of thecase, the Tribunal as well as the High Court have committed a graveerror in interfering with the order of punishment imposed by theDisciplinary Authority.

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A3.1 It is contended by Shri Balbir Singh, learned ASG that both,the Tribunal as well as the High Court have shown undue sympathy tothe delinquent officer who committed the fraud and defrauded the hugesum of Rs.16,59,065/- belonging to the RD account holders.

3.2 That the delinquent officer admitted the charges and theBmisconduct and he deposited the entire amount along with penal interestonly after the detection of the fraud committed by him. It is submittedthat looking to the serious proved misconduct and when the respondentwas holding a public office of confidence in the Postal Department andthereafter when a conscious decision was taken by the DisciplinaryAuthority to remove him from service, the same ought not to haveCinterfered with by the Tribunal as well as the High Court. It is urged thatmerely because the delinquent officer worked for 39 years and the presentone was the first misconduct and that the entire amount was deposited(after the fraud was detected)cannot be grounds to interfere with theconscious decision taken by the Disciplinary Authority to remove theDdelinquent officer from service.

3.3 Making the above submissions and relying upon the decisionsof this Court in the cases of B.C. Chaturvedi v. Union of India, reportedin (1995) 6 SCC 749 (paragraph 19); Chairman & ManagingDirector, V.S.P. & Others v. Goparaju Sri Prabhakara Hari Babu,Ereported in (2008) 5 SCC 569, as well as the other decisions of thisCourt in the cases of Maruti Udyog Ltd. v. Ram Lal, reported in(2005) 2 SCC 638; State of Bihar v. Amrendra Kumar Mishra,reported in (2006) 12 SCC 561; Regional Manager, SBI v. MahatmaMishra, reported in (2006) 13 SCC 727; State of Karnataka v.Ameerbi, reported in (2007) 11 SCC 681; State of M.P. v. SanjayFKumar Pathak, reported in (2008) 1 SCC 456; and Uttar HaryanaBijli Vitran Nigam Ltd. v. Surji Devi, reported in (2008) 2 SCC 310,it is vehemently submitted that as held by this Court in the aforesaiddecisions, the High Court cannot set aside a well-reasoned order passedby the Disciplinary Authority only on sympathy or sentiments. It isGsubmitted that in the aforesaid decisions, it is observed and held thatonce it is found that all the procedural requirements had been compliedwith, the Courts would not ordinarily interfere with the quantum ofpunishment imposed upon a delinquent employee.

4. The present appeal is vehemently opposed by the learned counselHappearing on behalf of the respondent – delinquent officer.

4.1 It is strenuously contended by the learned counsel appearingon behalf of the respondent that when the Tribunal, considering the factsand circumstances of the case, interfered with the order of punishmentimposed by the Disciplinary Authority, the High Court was absolutelyjustified in not interfering with the same. It is submitted that, as such, theTribunal assigned cogent reasons while modifying the punishment fromremoval to that of compulsory retirement. The same is rightly notinterfered with by the High Court. It is urged that the same may not beinterfered with by this Court, in exercise of powers under Article 136 ofthe Constitution of India.

4.2 It is also submitted that even otherwise on merits also, oncethe delinquent officer voluntarily deposited the entire amount along withinterest even before the departmental enquiry was initiated and therebyno loss has been caused to the department and considering the fact thatthe delinquent officer had a long service career of 39 years and duringthe entire career, there was no punishment imposed and now by theorder of compulsory retirement, he will get the retiral/pensionary benefits,which otherwise he would not be able to get in view of the order ofremoval from service, it is prayed not to interfere with the impugnedjudgment and order passed by the High Court as well as of the Tribunal.

5. We have heard the learned counsel for the respective partiesat length.

5. We have heard the learned counsel for the respective partiesat length.

The respondent herein, who at the relevant time was serving asPostal Assistant was subjected to a departmental enquiry for defraudinga sum of Rs.16,59,065/-. That during the period from 2004 to 2007, hecommitted fraud by way of fraudulent withdrawal in 85 RD accountsand by way of non-credit of deposits in 71 RD accounts and thusdefrauded a sum of Rs. 16,59,065/-. Only after the fraud came to light,the respondent – delinquent officer deposited the entire defrauded amountwith interest. However, as the misconduct was very serious, thedepartment initiated departmental enquiry for having failed to maintainabsolute integrity and devotion to duty as required of him by Rule 3(1)(i)and 3(1)(ii) of CCS (Conduct) Rules, 1964. The respondent – delinquentofficer admitted the charge. The Inquiry Officer submitted the reportand held all the charges proved. That thereafter, the Disciplinary Authorityconcurred with the findings recorded by the Inquiry Officer andconsidering the seriousness of the misconduct committed, passed anorder of removal. The Tribunal interfered with the quantum of punishment AB

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Aof removal imposed by the Disciplinary Authority and substituted thesame to that of compulsory retirement, mainly on the ground and reasoningthat the delinquent officer had completed 39 years of unblemished serviceand the entire amount of fraud with interest has been paid and recoveredfrom him and thus there is no financial loss caused to the department.The order passed by the Tribunal has been confirmed by the High Court,Bby the impugned judgment and order.

6. Therefore, the short question which is posed for theconsideration of this Court is, whether, in the facts and circumstances ofthe case, the Tribunal and the High Court were justified in interferingwith the punishment imposed by the Disciplinary Authority and modifying/Csubstituting the same from removal to that of compulsory retirement.

7. While answering the aforesaid question/issue, the decision ofthis Court in the case of Goparaju Sri Prabhakara Hari Babu (supra),on the judicial review and the limited jurisdiction of the High Court onthe proportionality of the order of departmental authority is required toDbe referred to.

In the said decision, after referring toa catena of judgments ofthis Court, it is observed and held by this Court that the jurisdiction of theHigh Court on the proportionality of the order of departmental authorityis limited. It is observed that it cannot set aside a well-reasoned orderEonly on grounds of sympathy and sentiments. It is further observed andheld that once it is found that all the procedural requirements had beencomplied with, courts would not ordinarily interfere with the quantum ofpunishment imposed upon a delinquent employee. It is further observedthat the superior courts, only in some cases may invoke the doctrine ofFproportionality, however if the decision of an employer is found to bewithin the legal parameters, the doctrine would ordinarily not be invokedwhen the misconduct stands proved.

7.1 In the case of B.C. Chaturvedi (supra), the High Courtinterfered with the order of punishment imposed by the DisciplinaryGAuthority and substituted the punishment of dismissal from service toone of compulsory retirement on the reasoning that the employee hadput in 30 years of service and that he had a brilliant academic record andthat he had earned promotion after the disciplinary proceedings wereinitiated. Setting aside the judgment and order passed by the High Court,this Court observed that the reasoning is wholly unsupportable. SuchH

reasons are not relevant or germane to modify the punishment. What isrequired to be considered is the gravity of the misconduct. In the saidcase, the employee was found to be in possession of assetsdisproportionate to the known sources of his income. Therefore, thisCourt observed and held that the interference with the imposition ofpunishment was wholly unwarranted.

8. Applying the law laid down by this Court in the aforesaiddecisions to the facts of the case on hand, the order passed by theTribunal, confirmed by the Division Bench of the High Court, substitutingthe punishment of removal to that of compulsory retirement isunsustainable. Neither the Tribunal nor the High Court have found anyirregularity in conducting the departmental enquiry. No procedural lapseshave been found. In fact, the respondent employee admitted the chargeof having defrauded Rs.16,59,065/- and on detecting the fraud, hedeposited the defrauded amount of Rs.16,59,065/- along with penalinterest. But for the detection of the fraud, probably, the respondentemployee would not have deposited the defrauded amount. Once, aconscious decision was taken by the Disciplinary Authority to removean employee on the proved misconduct of a very serious nature ofdefrauding public money, neither the Tribunal nor the High Court shouldhave interfered with the order of punishment imposed by the DisciplinaryAuthority, which was after considering the gravity and seriousness ofthe misconduct.

9. Merely because the respondent-employee had worked for 39years and in those years, there was no punishment imposed and/or thathe voluntarily deposited the defrauded amount along with penal interestand therefore there was no loss to the Government/Department cannotbe a ground to interfere with the order of punishment imposed by theDisciplinary Authority and substitute the same from removal to that ofcompulsory retirement. Neither the Tribunal nor the High Court have, infact, considered the nature and gravity of the misconduct committed bythe delinquent officer. Therefore, both, the Tribunal as well as the HighCourt had exceeded in their jurisdiction in interfering with the quantumof punishment imposed by the Disciplinary Authority.

10. None of the grounds/reasoning on which the order ofpunishment of removal has been interfered with by the Tribunal andaffirmed by the High Court are germane and can be sustained. Once itwas found that the delinquent officer who was serving in the post office AB

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Ahad defrauded to the extent of Rs.16,59,065/- and that too, by way offraudulent withdrawal in as many as 85 RD accounts and by way ofnon-credit of deposits in 71 RD accounts, no sympathy on such anemployee was warranted. Being a public servant in the post office, thedelinquent officer was holding the post of trust. Merely becausesubsequently the employee had deposited the defrauded amount andBtherefore there was no loss caused to the department cannot be a groundto take a lenient view and/or to show undue sympathy in favour of suchan employee. What about the loss caused to the department by way ofgoodwill, name and fame of the department and its reliability amongstthe public? By such a misconduct/act on the part of the delinquent officer,Cthe reputation of the department had been tarnished. Therefore, in thefacts and circumstances of the case, both, the Tribunal as well as theHigh Court have exceeded in their jurisdiction in interfering with thequantum of punishment imposed by the Disciplinary Authority and tosubstitute the same to that of compulsory retirement.

D11. In view of the above and for the reasons stated above, theimpugned judgment and order passed by the High Court as well as theorder passed by the Tribunal substituting the order of punishment fromremoval to that of compulsory retirement cannot be sustained and thesame deserve to be quashed and set aside.

E12. Accordingly, the present appeal is allowed. The impugnedjudgment and order passed by the High Court dated 30.08.2016 passedin Writ Petition No. 33303 of 2013 dismissing the same and confirmingthe judgment and order passed by the Tribunal dated 26.03.2013 in O.A.No. 357 of 2012 is hereby quashed and set aside. Consequently, orderdated 26.03.2013 passed by the Central Administrative Tribunal, MadrasFBench in O.A. No. 357/2012, by which the Tribunal substituted thepunishment of removal to that of compulsory retirement is hereby quashedand set aside. Consequently, O.A. No. 357/2012, preferred by thedelinquent officer, stands dismissed and the order passed by theDisciplinary Authority imposing the punishment of removing the delinquentGemployee from service is hereby restored. However, in the facts andcircumstances of the case, there shall be no order as to costs.

Bibhuti Bhushan Bose

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