Service Law : Reversion to Lowest Post as well as Reduction of Pay amounts to Double Punishment [Case Law]

Service Law - The order to the extent it directs reversion of the petitioner to the post of Special Assistant as well as reduction of her pay to the lowest stage of the reverted post is set aside, with liberty to the respondents to award a punishment in accordance with clause 37 of the Standing Orders. The writ petition is disposed of accordingly.

IN THE HIGH COURT OF KERALA AT ERNAKULAM

P.V. ASHA, J.

W.P.(C) No.27498 of 2015-J

Dated this the 8th day of May, 2018

PETITIONER(S)

SHEELA RANI C.R, MOHANAM HOUSE, ANICKADU.P.O., KOTTAYAM, PIN-686503.

BY ADVS.SRI.P.K.IBRAHIM SMT.K.P.AMBIKA SMT.A.A.SHIBI 

RESPONDENT(S)

1. THE KERALA STATE FINANCIAL ENTERPRISES LIMITED, "BHADRATHA", P.B.NO.510, MUSEUM ROAD, THRISSUR-680020, REPRESENTED BY ITS MANAGING DIRECTOR.

2. THE MANAGING DIRECTOR, KSFE LTD., "BHADRATHA", P.B.NO.510, MUSEUM ROAD, THRISSUR-680020.

3. DEPUTY GENERAL MANAGER (P&HR), KSFE LTD., "BHADRATHA", P.B.NO.510, MUSEUM ROAD, THRISSUR-680020.

BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.GOPINATH SRI.P.BENNY THOMAS SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS  

J U D G M E N T 

The petitioner, who was working as Assistant Manager under the Kerala State Financial Enterprises Limited - the 1st respondent, is aggrieved by the orders Exts.P7, P8, P10 and P12 orders. By Ext P7, the petitioner was awarded a punishment of reversion to the position of Junior most Special Grade Assistant with reduction in her pay as Special Grade Assistant at the time of her promotion from the post of Senior Assistant and barring her from applying for eligibility test for promotion to the post of Assistant Manager for a period of three years; by Ext P8, the period of her suspension was treated as such not counting for any service benefits; by Ext.P10 her appeal was rejected and by Ext.P12 order, her revision petition was rejected.

2. The petitioner joined the 1st respondent as a Junior Assistant on 3.4.1989. She was promoted as Special Grade Assistant as per order dated 18.11.1996 and thereafter as Assistant Manager as per order dated 31.10.2006. While working as Assistant Manager at Manarcad, she had passed qualifying test for promotion to the post of Manager Gr.IV for the year 2010. While so, she was placed under suspension as per Ext.P1 memo dated 22.7.2011, pending enquiry into allegations as to serious irregularities and misconduct. Ext.P2 memo of charge was issued thereafter on 13.12.2011. The allegations in the memo of charge were with respect to submission of her own cheques from her personal bank accounts alleging that she misused her official capacity as Asst.Manager; she delayed the presentation of cheques for collection to the banks and caused huge financial loss to the company; she kept 45 cheques in her personal custody for a long time and delayed the submission of the same for realization by the banks in violation of companies instructions; 38 cheques were dishonoured and 6 cheques could not be realized due to the expiry of dates; she did not submit the cheques to the bank promptly with ulterior motives though the cheques were towards payment of installment of various chitties; 83 cheques were realised after long period; she submitted cheques from her personal accounts for remittance of chitty accounts of various persons for her gain contrary to the instructions; created huge multiple liability in her name and that of her associates and that she made several corrections, falsifications and manipulations of documents of the branch.

3. The petitioner submitted Ext.P3 explanation on 27.12.2011 stating that heavy targets were imposed on the branch at the time when she took charge on 27.5.2009; for registering chitties at appropriate time she submitted her personal cheques as per the instructions of the Branch Manager and parties had remitted the amount; there was only one Assistant to assist her and from 2.12.2009 onwards she was given the additional charge of the Branch Manager; she was unable to finish the work in time due to dearth of staff and on account of her personal problems also she could not present the cheques for encashment; certain cheques were misplaced; she had remitted the amount covered by those cheques well before the order of suspension; as per the instructions of the then Manager she had issued cheques even for his daughter and relatives and that was due to the deficit in the number of chitties; she did not have any personal gain in those transactions which were intended for promoting the business of the company, etc. Pointing out that no monitory loss was caused to the branch she requested to drop the proceedings against her. A domestic enquiry was conducted and in Ext.P4 enquiry report the charges levelled against her were found proved. However, the petitioner points out that even while finding her guilty of charges the enquiry officer had recommended to take a lenient view in her case considering the fact that she had remitted the amount back in the light of her undertaking that she will not repeat such action and the fact that she is a widow. However, the 1st respondent issued a show cause notice on 30.4.2013 proposing to dismiss her from service. The petitioner thereupon submitted Ext.P5 reply again pointing out the circumstances under which the lapses occurred and pointing out the fact that she had remitted the amount in the suspense account of the 1st respondent. A hearing was thereafter conducted when the petitioner submitted Ext.P6 note again pointing out her difficulties. Ext.P7 order was issued thereafter awarding her punishment of reversion as junior most Special Grade Assistant with pay at the time of her promotion to the post of Special Grade Assistant and barring eligibility for applying for the test for promotion for three years. Following this the 3rd respondent issued Ext.P8 order treating the period of suspension as such, without counting the period of suspension for any purpose. The petitioner alleges that the 3rd respondent does not have any authority to issue Ext.P8 order and to impose another penalty. The appeal filed by the petitioner was rejected as per Ext.P10 order. The petitioner filed a revision petition before the Government and it was rejected as per Ext.P12 order saying that the Government does not have any appellate or revisional power over the orders passed by the first respondent.

4. The petitioner alleges that the punishment is highly disproportionate to the gravity of the charges. It is pointed out that she is deprived of 17 increments and promotions and other monitory benefits and therefore the punishment is to be termed as draconian and unjust. The petitioner was promoted as Special Grade Assistant in the year 1996 and became Assistant Manger in December 2006. It is pointed out that for the 24 years of her service till her posting at Manarcad Branch she had been working without giving room for any complaint. According to her, there was no financial loss to the company and the misconduct found against her, was only of an administrative nature. It is also pointed out that her salary came down to Rs.17,005/- on account of punishment, whereas she was drawing about Rs.40,000/- along with allowance at the time when she was placed under suspension. She also points out that she was unable to remit chitty instalments and her housing loan, on account of which revenue recovery proceedings were initiated against her and she was unable to look after her family.

5. The respondents filed a counter affidavit. The respondents have produced Ext.R1(a) internal audit report pursuant to which the petitioner was placed under suspension. In the internal audit report serious irregularities were found against the petitioner. Pursuant to the memo of charges Ext.P2 the petitioner submitted her explanation. As it was not satisfactory, a domestic enquiry was conducted in which the petitioner was found guilty of all the charges. After considering the representation of the petitioner against Ext.R1(c) inquiry report, Ext.R1(d) show cause notice was issued proposing punishment of dismissal from service. After considering her representation, taking a lenient view it was decided to reinstate the petitioner, in modification of the proposal to dismiss her and the punishment of reversion to the position of juniormost Special Grade Assistant was awarded. The respondents have produced Ext.R1(e) resolution of the Board which considered the appeal submitted by the petitioner by which it was decided to affirm the order of punishment. According to the respondents, the misconduct committed by the petitioner warranted the punishment of dismissal. But, in view of the undertaking of the petitioner that she would not repeat such misconduct in future, the management took a lenient view and imposed a punishment of reversion and the punishment is not disproportionate or excessive considering the seriousness of the charges.

6. The petitioner has filed a reply affidavit stating that disciplinary proceedings were initiated against her alone even though similar instances from other employees had also occurred. It is stated that even the predecessor manager of the bank was liable for delaying the submission of cheque while he was working in some other branch. But no action was taken either against him or against any other employees. It is also her case that she had issued the cheque on the instruction of the manager. It is also pointed out that the cheque happened to be dishonoured only because of the instructions issued by the manager to the bank and cheques were issued in the name of the petitioner even before and after she was given the charge of the manager including in the name of the daughter of the manager. Her predecessor as well as her successor were equally liable for the supervisory lapses but no action was taken against them. It is also pointed out that no financial loss was caused to the 1st respondent and that the dearth of staff in the branch increased her burden resulting in supervisory lapses. It is pointed out that denying increments in addition to reversion is harsh.

7. The learned counsel for the petitioner relied on the judgments in Gopal Singh v. State of Uttarakhand [(2013) 7 SCC 545] and Fr. James Aerthayil V N.K.Thomas: 2010(4) KLT 969 and argued that when the punishment is highly disproportionate it is necessary for this Court to interfere with the same under Article 226 of the Constitution of India. On the other hand, the learned Counsel appearing for the respondents, relying on the judgments of this Court in W.P(C).No.34258/2008, Om Kumar v. Union of India: (2001) 2 SCC 386, Devendra Swamy v. Karnataka SRTC: (2002) 9 SCC Union of India & Ors. v. Dwarka Prasad Tiwari :(2006) 10 SCC 388, Kendriya Vidyalaya Sangthan v. J.Hussain: (2013) 10 SCC 106, Union of India V P. Gunasekharan:(2015) 2 SCC 610,etc argued that this Court cannot go into the correctness or otherwise of the findings against the petitioner in a duly constituted departmental enquiry. It is pointed out that all the charges levelled against the petitioner were found against her and punishment is not one shocking to the conscience of the Court so as to interfere with the same and therefore no interference is required. It is also pointed out that the petitioner did not have any complaint regarding the procedure which was followed in conducting the enquiry. The punishment was awarded on the basis of the findings in a duly constituted enquriy in which the petitioner was given sufficient opportunity to defend and considering the gravity of the misconduct found proved against her.

8. The learned counsel for the petitioner relied on the judgment dt.14.3.2018 in W.P(C).No.31192 of 2015 and argued that punishment of reversion as well as reduction of her pay to the minimum of reverted post added with barring of her eligibility to submit application for promotion test is in violation of the provisions contained in the standing orders.

9. Having heard the contentions raised on either side, it is seen that the petitioner does not have any grievance regarding the procedure followed in the enquiry or against the findings. The grievance of the petitioner is that the respondents have not taken any action against any other employee in similar circumstances. The grievance is against the penalty imposed. As rightly argued by the learned Counsel appearing for the respondents, interference with the departmental proceedings by way of judicial review is very limited, as held in a catena of decisions including Union of India V P. Gunasekharan, (2015) 2 SCC 610, where the Apex Court held as follows: 

“13. Under Articles 226/227 of the Constitution of India, the High Court shall not: 

(i) reappreciate the evidence; 

(ii) interfere with the conclusions in the enquiry, in case the same has been conducted in accordance with law; 

(iii) go into the adequacy of the evidence; 

(iv) go into the reliability of the evidence; 

(v) interfere, if there be some legal evidence on which findings can be based.

(vi) correct the error of fact however grave it may appear to be; 

(vii) go into the proportionality of punishment unless it shocks its conscience.” 

The main ground alleged in the writ petition is dis-proportionality of punishment. Yet another ground is that no other employee is proceeded against for commission of similar acts. I find the said ground unsustainable.

10. Regarding dis-proportionality, the Apex Court in Kendriya Vidyalaya Sangthan v. J. Hussain, (2013) 10 SCC 106, while considering the scope of judicial review over the punishment of dismissal awarded to a non-teaching staff who reported before the Principal in an inebriated condition, held as follows: 

“In exercise of power of judicial review, however, the court can interfere with the punishment imposed when it is found to be totally irrational or is outrageous in defiance of logic. This limited scope of judicial review is permissible and interference is available only when the punishment is shockingly disproportionate, suggesting lack of good faith. Otherwise, merely because in the opinion of the court lesser punishment would have been more appropriate, cannot be a ground to interfere with the discretion of the departmental authorities.” 

11. In Dwaraka Prasad Tiwari's case (supra) the Apex court held that the court would not go into the correctness of the choice made by the administrator open to him and the court should not substitute its decision to that of the administrator. The scope of judicial review is limited to the deficiency in decision-making process and not the decision. In Chandra Kumar Chopra v. Union of India: (2012) 6 SCC 369, it was held that the test to be applied while dealing with the question is whether a reasonable employer would have imposed such punishment in like circumstances and whether the punishment imposed is really arbitrary or an outrageous defiance of logic so as to be called irrational and perverse warranting interference in exercise of the power of judicial review. As held in Om Kumar v. Union of India: (2001) 2 SCC 386, when an administrative decision relating to punishment in disciplinary cases is questioned as arbitrary under Article 14, the court is confined to Wednesbury principles as a secondary reviewing authority and will only have to see whether the administrator has done well in his primary role, whether he has acted illegally or has omitted relevant factors from consideration or has taken irrelevant factors into consideration or whether his view is one which no reasonable person could have taken. If his action does not satisfy these rules, it is to be treated as arbitrary.

12. In the present case, the petitioner had been working as an Assistant Manager of the first respondent. Financial irregularities are found against her. Even though the petitioner remitted the amount involved, the petitioner had been working as an Assistant Manager and she had to deal with the accounts in accordance with the instructions, rules and regulations of the 1st respondent. Remittance of amount from her account after committing a misconduct will not absolve the petitioner from the charges found against her and it will not in any way minimise the irregularities found. The judgments relied on by the learned counsel for the petitioner do not apply to the factual circumstances arising in the case. Judicial review is necessitated in cases where the punishment is shocking to the conscience of the Court. 1st respondent is a financial institution and severe financial irregularities are found against the petitioner while she was discharging her duties as Assistant Manager. In this case the penalty proposed was dismissal from service and the respondents have taken a lenient view and ordered reversion of the petitioner to the lowest grade. As rightly contended by the learned Standing Counsel this Court will not be justified in interfering with the orders of punishment when charges involving accounts and finance are found against officers like Assistant Manager. In these circumstances, no interference is called for on the ground of disproportionality.

13. However, in the judgment in W.P(C).No.31192/2015, I have held that reversion/reduction to lower post and reduction of pay are different punishments and the standing orders permit to award only one punishment. The petitioner therein was awarded with a punishment of reversion from the post of Manager Gr.IV to that of Assistant Manager coupled with reduction of pay to the lowest stage of Assistant Manager. It was held that reduction of the post coupled with reduction of pay to the lower time scale of the post to which she was reverted would amount to double punishment for which there is no provision. It was found that sub clause 4 of clause 37 of the standing orders of the Kerala State Financial Enterprises does not provide for punishment of reversion as well as punishment of reduction in pay. Para.13 to 16 of the judgment in W.P(C).No.31192/2015 read as follows: 

“13. However, it is necessary to examine the contentions regarding the punishment awarded to her, with reference to the standing orders of the respondents, part of which is Ext.,P21. Clause 37 provides for the punishments when employees commit breach of regulations or standing orders. Reversion is one of the punishments enumerated under Clause 37(4) which reads as follows: 

“Reduction to a lower position or grade or time scale or a lower stage in a time scale, provided that he shall not be reduced to a grade lower than the one to which he was originally recruited.” 

14. In the case of petitioner she was admittedly working as Manager Grade IV. She has been reverted not only as Assistant Manager, but her pay is reduced to the lowest stage of Assistant Manager, i.e., to the level when she got promoted from the post of Special Grade Assistant in the year 2000. Sub Clause (4) provides for reduction to `a' lower position or grade or time scale or to lower stage in a time scale. Therefore the respondents can impose either reduction to lower position or lower grade or else they can reduce her time scale of pay or they can reduce her to lower stage in the time scale. That shows that each of the reduction referred to are independent penalties which cannot be imposed together and simultaneously because the conjunctive used between each kind of reduction is “or”.

15. The next question is whether the respondents could revert the petitioner not only to the post just below the post she was occupying, but to a still lower post. The penalty enumerated in Sub clause (4) is reduction to `a' lower position or grade. It does not provide for reduction to any lower position. The condition that reduction shall not be to a post to which he/she was originally recruited does not enable the respondents to revert an employee to any grade. Reduction to a lower post can only mean reduction to the next lower post. Therefore the reduction of petitioner to the post of Assistant Manager when the petitioner has already served several years in the intervening post of Deputy Manager on promotion and was holding the post of Manager Gr.IV on her further promotion again after several years of service as Deputy Manager cannot be said to be one which can be imposed on her.

16. Apart from that, the reduction itself is coupled with another reduction to the lowest stage in the time scale of the post to which she was reduced. That amounts to double punishment for which there is no provision. Sub clause (4) does not authorise the respondents to impose two types of reduction i.e., reduction to lower position along with reduction to the lower scale, in that reverted post.” 

The petitioner herein has not raised any such contention regarding violation of standing orders. The punishment awarded in this case is reduction to the next lower post of Special Assistant with reduction of pay. In view of the aforesaid judgment in W.P(C).No.31192 of 2015 what is envisaged in clause 37(4) is reduction to a lower position or grade or time scale or a lower stage in a time scale. Following the same principle in this case though no such ground is raised in this writ petition, I find that reduction to the lowest stage coupled with reversion is illegal and contrary to sub clause 4 of clause 37 of the standing order. Barring of eligibility for appearing in the qualifying test for promotion is only consequential to reversion and that does not require any interference and it is also to be noted that now three years have elapsed.

14. The petitioner has got a grievance against Ext.P8 regarding the orders regularising the period of suspension as non-duty on the ground that it is issued by the 3rd respondent. But no provision is pointed out to show that the 3rd respondent is incompetent or that the authority which issued the order of suspension alone has to pass orders regularising the period of suspension or that the period of suspension shall be regularised in a particular manner once final orders imposing punishment are issued. No provision is pointed out or seen in the relevant standing orders. In case there is any provision which restricts the 3rd respondent from passing orders as contained in Ext.P8 , the petitioner shall be free to take up the matter before the appropriate authority and it is for such authority to pass orders in accordance with law.

15. In the above circumstances, the order Ext.P7 to the extent it directs reversion of the petitioner to the post of Special Assistant as well as reduction of her pay to the lowest stage of the reverted post is set aside, with liberty to the respondents to award a punishment in accordance with clause 37 of the Standing Orders.

The writ petition is disposed of accordingly.