TaxTMI 
TaxTMI 
2016 (3) TMI 152
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....the Official Liquidator to recommend the highest punishment that he could grant pursuant to the service conditions of the Company Paid Staff settled by this court from time to time, the last one being by an order dated 26th April, 1994. It will be useful to reproduce paragraph 4 (xii), (xiii) and (xv) of the said order and it reads as under:- "(xii) No person shall be employed as a Company Paid Staff without prior sanction of this court. (xiii) Services of the Company Paid Staff shall not be terminated without prior sanction of this court. (xv) In case it is found that any member of the Company Paid Staff is guilty of dereliction of duty, it will be open for the Official Liquidator to take appropriate action including termination of services against such member subject to granting him an opportunity of hearing and sanction of this court." 3. Pursuant to an order dated 10th April, 2003 this court directed the Official Liquidator to hand over leased equipments belonging to M/s. Centurion Bank Limited (CBL) through the Court Receiver. In order to comply with the order dated 10th April, 2003, the Official Liquidator vide office order dated 26th June, 2003 ....
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....und in dismantled condition with no markings over it. 7. Shri Shetty after the delivery was over returned to mumbai. This was some time in the second week of August, 2003. 8. In December, 2003 when the representatives of Al-Qahtani went to take delivery of their equipments, it was noticed that a major part of their equipments were missing. When Al-Qahtani brought this to the notice of the Official Liquidator, the Official Liquidator recorded the statement of Shri Shetty on 23rd December, 2003. This statement has been signed by Shri S.M. Shetty, Shri S.R. Kom, the then Official Liquidator, Shri P.G. Rao, Deputy Director (Tech.), Shri S.D. Patil, STA and Shri Mohanan P.N., Senior Assistant. Thereafter Shri Shetty addressed a letter dated 6th January, 2004 to the Official Liquidator. The enquiry officer has placed reliance on both these documents, viz., statement recorded on 23rd December, 2003 and letter dated 6th January, 2004 in his report dated 20th May, 2011 while holding Shri Shetty guilty of dereliction of duty and concealment of fact of removal of the machines belonging to Al-Qahtani which has prompted the Official Liquidator to recommend termination of services. 9. B....
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....elongs to the CBL. As a result, the machines belongs to Al-Qahtani have also been removed by the dismantling agent of the CBL. In this manner Mr. Shetty derelict his duty and concealed the fact of removal of the machines belongs to Al-Qahtani from the site." 11. I have heard the counsels and considered the enquiry report and documents. It is true that Shri Shetty was present at site between 1st July, 2003 to 9th August, 2003 but in the entire report the enquiry officer has not dealt with as to what was the role of Shri Shetty and what was he supposed to do at Kandla. In the enquiry report he has relied on the statement made by Shri C.L. Saraiya and statements made by Shri A.W. Ansari and Shri S.R. Kom. He has also, in the report in paragraph 10, mentioned that apart from the enquiry of Shri Shetty, there are four witnesses, viz., Shri C.L. Saraiya, the then JTA, Shri P.N. Mohanan, the then Senior Assistant company paid, Shri A.W. Ansari, the then Deputy Official Liquidator and Shri S.R. Kom, the then Official Liquidator have been examined on 2nd May, 2011 and 4th May, 2011 and the witness except Shri P.N. Mohanan have submitted their statement in writing with regard to the enqui....
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....for removing goods. The FIR has been lodged on 20th January, 2004 whereas the first statement of Shri Shetty was recorded on 23rd December, 2003 by the Official Liquidator on which reliance has been placed by the enquiry officer. On 2nd January, 2004 an office memorandum has been issued to Shri Shetty asking him to explain why disciplinary action should not be taken against him for dereliction of duty and concealment of facts. In the FIR dated 20th January, 2004 it is stated that the accused with the help of 20 labourers loaded the machinery belonging to Al-Qahtani and having no CBL mark representing that the same belonged to CBL and having full knowledge that the same did not belong to them and dishonestly and to ensure gain for them and without taking into confidence Official Liquidator's representative Shri Shetty. From the FIR it also appears that when the items were being removed not just these accused, the 22 labourers and Shri Shetty were present but also customs officers and 30 security guards, 2 gun men and 3 supervisors of Crack Agency Private Limited for each shift have been present. It is also stated that the representatives of CBL falsely represented to Shri Shetty....
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....by the enquiry officer, Officer of the Regional Director, Western Region of Shri Shetty some of which are reproduced are as under:- "Question: Since how long you were there? Answer: From 1.7.03 to 9.8.03, I was there. Question: What are the works you attended over there? Answer: They took me to customs office on the first day along with 7 persons and took permission from the customs officials. Thereafter, we went to identify the machineries belonging to CBL and before dismantling, the name and number of the machine will be indicated to the customs official. Thereafter, all the machines were dismantled and delivered one after one till 9.8.03. Dismantling and delivery was done simultaneously. During my stay I talked to Official Liquidator as well as Deputy Official Liquidator, Shri Ansari and requested for one more person to assist me in the process of exercising my duties. But they said you carry on your stay and you have nothing to do rather then signing delivery challan. So you are, therefore, directed to stay till the completion of handing over the machine to CBL and further one more order was issued and faxed to me on 5.8.04 to hand o....
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....by all the persons personally present there. Delivery challan shows the details of Truck Nos. and weight and details of the machinery and spare parts etc. There were about 51 Trucks used for the removal of the said machineries. During this period the other machineries of M/s. Al-Qahtani pipe and coating terminal which did not marked with "CBL" were also taken by the representative of Centurian Bank by saying falsely that all the properties belong to them only to Shri S.M. Shetty, the representative of Official Liquidator and took away in the above said 51 trucks used for the said purpose" I further mentioned in the FIR that "On 16.12.03 while examining the facts, Shri Dhiraj Kumar, Security Supervisor and Shri Vijay Pal Singh, the Gunman informed that during 1.7.03 to 9.8.03 the representative of Centurian Bank took away the machineries of M/s. Al- Qahtani pipe and caoting terminal along with the machineries of M/s. Centurian Bank by falsely saying that all these equipments belong to them and also did not give any list to the security guards. As explained above during the period from 3.7.03 to 9.8.03, the representative of the Centurina Bank Mumbai (1) Shri Mahesh Rane and....
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.... after discovering the irregularities. They cannot be initiated after lapse of considerable time. It would not be fair to the delinquent officer. Such delay also makes the task of proving the charges difficult and is thus not also in the interest of administration. Delayed initiation of proceedings is bound to give room for allegations of bias, malafides and misuse of power. If the delay is too long and is unexplained, the court may well interfere and quash the charges. But how long a delay is too long always depends upon the fact-, of the given case. Moreover, if such delay is likely to cause prejudice to the delinquent officer in defending himself, the enquiry has to be interdicted. Wherever such a plea is raised, the court has to weigh the factors appearing for and against the said plea and take a decision on the totality of circumstances. In other words, the court has to indulge in a process of balancing. Now, let us see what are the factors in favour of the respondent. a. .............. b. .............. c. .............." 20. The counsel for the Official Liquidator also submitted that Shri Shetty was not given opportunity to cross examine Shri Ko....
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.... in that letter dated 6th January, 2004 that requires an inference that Shri Shetty was not diligent in his work and requires to be removed from service. The letter reads as under:- "I submit that when I was deputed to Khandla in the matter of M/s. Otoklin Plants and Equipments Ltd. for delivery of leased machineries to Centurion Bank Limited through the Court Receiver, the representatives of Centurion Bank Limited, Court Receiver, the purchaser brought by Centurion Bank and their dismantling agent were present. During the delivery of machineries, on some occasions I have noticed that the representatives of Centurion Bank Limited trying to remove machineries not belonging to them and I have stopped the same. But it was not possible for me to identify the machineries after dismantling the same. The representative of the Centurion Bank Limited and Court Receiver alongwith their dismantling agent used to reach the premises much before my arrival and at some times they used to remain at the site even at night. Whenever I noticed that machineries other than the machineries belonging Centurion Bank are removed by them I objected and stopped. When I informed them that I will repo....
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....led and it was not possible to identify as to which belonged to CBL or which belonged to Al-Qahtani. Mr. Shetty has also stated that since he stopped the representatives of CBL from dismantling and lifting machineries other than the machineries belonging to CBL, he did not feel it necessary to report the matter to Official Liquidator. Mr. Shetty also stated that the customs officer were also their and verified the items loaded in the truck and they also signed the delivery challan. In the same breath Shri Shetty has stated that he apologises for the same. 24. When enquiry of Shri Saraiya was being conducted at that time Shri Shetty has stated when he asked for extra help to Official Liquidator and Deputy Official Liquidator it was refused as his job was only to sign delivery challans and the responsibility to see CBL machines were removed was that of the representative of the Court Receiver. There were security agents present, there were customs officers present. It was 50 acres plot and it was inside a custom bonded Free Trade Zone. None of these points which he has mentioned have been even dealt with by the enquiry officer in his report. The enquiry officer has not mentioned a....
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....tionary power and courts will not interfere in the quantum of punishment but if it appears that the punishment being suggested is based on a report, which has not considered all facts and circumstances or it has relied on statement recorded by persons who the employee states have forced him to give that statement and those people who are not made available for cross examination when the punishment recommended is unreasonable, the courts generally interfere. The discretionary power has to be judicially exercised by giving cogent reasons. Suspension is a very drastic action and has very drastic consequences. Termination from service is worse. The Competent Authority while passing an order or recommending the punishment should keep in mind the adverse effect which its order may have on the rights, liberties or interest of persons keeping in mind the purpose for which the rules framed were intended to serve. The person not only gets less or no pay but goes through the ignominy of having to face all his colleagues, family and friends while under suspension and after termination. He is shamed. When applied to public functionaries to recommend a punishment, it means a power or right confe....
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.... employee, he invariably pursues the issue in Court to ventilate his grievance, which again consumes time for its final conclusion. 33) Keeping these factors in mind, we are of the considered opinion that every employer (whether State or private) must make sincere endeavor to conclude the departmental inquiry proceedings once initiated against the delinquent employee within a reasonable time by giving priority to such proceedings and as far as possible it should be concluded within six months as an outer limit. Where it is not possible for the employer to conclude due to certain unavoidable causes arising in the proceedings within the time frame then efforts should be made to conclude within reasonably extended period depending upon the cause and the nature of inquiry but not more than a year." 30. Taking into account the totality of the facts and circumstances, I am of the view that the recommendation of the Official Liquidator in his further report dated 31st October, 2011 read with report dated 18th February, 2013 cannot be accepted. I find it difficult to even accept that Shetty could be faulted. At the same time this court by its order dated 16th January, 2006 decl....