Shri Rakesh Garg v. Union of India & Ors.

1. This writ petition has been preferred on behalf of the Petitioner under Articles 226 and 227 of the Constitution of India seeking quashing of the suspension order/charge sheet dated 25.09.2012, termination order dated 09.10.2012 and Appellate Authority’s order dated 22.01.2013, with consequential relief of reinstatement with back wages and seniority etc.

2. Factual matrix to the extent relevant and necessary and as averred in the writ petition is that Petitioner was appointed as an Accounts Officer at the Automotive Research Association of India (‘ARAI’) vide letter dated 25.01.2007 and joined w.e.f. 26.03.2007. With the merger of erstwhile ARAI in M/s. National Automative Testing and R&D Infrastructure Project (‘NATRiP’), Petitioner opted to be a part of International Centre for Automotive Technology (‘ICAT’) (erstwhile ARAI) w.e.f. 01.04.2007 and his services were confirmed vide letter dated 27.08.2008.

3. It is averred that the work and conduct of the Petitioner was excellent and he was given an appreciation award of Rs.3,000/- on 01.09.2008. He was also awarded an additional increment in the same year. Several appreciation letters were given to the Petitioner between 2009 to 2013 and his salary was revised from time to time and finally reached upto Rs.12,42,972/- per annum. Petitioner was re-designated as Deputy Manager (Finance) w.e.f. 01.01.2011 and thereafter promoted as Manager (Finance) w.e.f. 01.07.2012. Petitioner was rewarded by a special increment of 4% for his continued excellent performance and was given CEO trophy for two consecutive years i.e. 2010 and 2011 and On Spot Level-III Award (highest award for performance). During his tenure, the Finance Department won the Best Department Award. It is stated that during his entire service of 05 years, Petitioner was never issued any memorandum, advisory or warning for his work and conduct.

4. Petitioner avers that he was a whistle blower against the then Director, ICAT as he was indulging in misutilisation of funds of ICAT, Government grants etc. To cover up his misdeeds, the Director instructed the Petitioner to sign various documents, which the Petitioner refused to do and out of mala fide and vendetta, Director, ICAT issued directions, pursuant to which Petitioner was suspended vide order dated 25.09.2012. No show cause notice or charge sheet was issued and strangely and illegally in the same order, allegations were levelled against the Petitioner that he did not adhere to Clause 13 of ‘Terms and Conditions’ of appointment. Petitioner was called upon to file his reply within 72 hours, which he did on 28.09.2012, pointing out that ICAT had no authority to suspend him as there was no delegation from NATRiP. He also sought revocation of his suspension. However, Petitioner was terminated without any inquiry vide order dated 09.10.2012 on the ground that he had violated Clause 13, which prohibited an employee of ICAT from engaging himself in any other profession or business during the period of employment with ICAT, without permission from the Institute. The allegation was that Petitioner engaged himself as a partner with partnership firm called M/s. P.R. Garg & Associates and admitted this fact in his reply dated 28.09.2012. Appeal filed against the termination order was dismissed on 22.01.2013 by a cryptic and nonspeaking order by the Appellate Authority, leading to filing of this petition.

5. Mr. Sourabh Ahuja, learned counsel for the Petitioner submits that Petitioner was a confirmed employee of ICAT and yet his services were terminated without any departmental inquiry into the allegations levelled and the termination order is violative of the principles of natural justice. It is urged that the termination order is void ab-initio having been issued by an authority subordinate to the Disciplinary Authority. Mr. Ahuja points out that Petitioner was serving as Manager (Finance) at the relevant time and therefore, his Appointing/Disciplinary Authority was the Chairman/CEO, NATRiP, whereas the termination order was issued by Deputy Manager (HR), ICAT on instructions of and approval by Director, ICAT, both of whom are subordinate to the CEO, NATRiP and therefore, the termination order deserves to be set aside on this short ground.

6. In support of this plea, Mr. Ahuja draws the attention of the Court to a ‘Note’ dated 21.01.2013 signed by Sh. Sunil Kumar Sharma, Senior Administrative Officer (‘SAO’) and duly approved by Sh. Nitin Gokran, CEO & PD, NATRiP, wherein it was observed that the termination of the Petitioner by the Director, ICAT is not correct since he was not vested with the powers of the appointing authority of ICAT employees. As far as the employees of NATRiP and its divisions are concerned, CEO & PD, NATRiP is the only appointing authority and by virtue of his being an appointing authority, he is also the disciplinary authority. In the same Note, it is also observed that in case of the Petitioner, major penalty has been imposed by a subordinate authority, who was not competent to do so and therefore, regarding the appeal filed by the Petitioner against the termination, either he may be informed that ICAT had taken action as per the code of conduct and on acceptance of the charge by him or else to save the situation where the termination order is quashed by a Court, the termination order issued by Director, ICAT may be revoked and Petitioner may be tried afresh and appropriate orders be passed by CEO & PD, NATRiP. This, according to Mr. Ahuja, establishes that an incompetent authority passed the termination order and thereafter an attempt was made to cover-up the illegality. It is also argued that Petitioner did not admit the allegations levelled. In his reply to the suspension/charge sheet, he explained that he was not engaged with the partnership firm for any business but was seeking legal opinion and did not receive a penny as renumeration and his attendance at ICAT was 100%.

7. Learned counsel for Respondents No. 2 to 4 opposes the petition and argues that Petitioner has been rightly terminated as he had violated Clause 13 of the ‘Terms and Conditions’ of appointment whereby he was prohibited from engaging himself in any other profession or business during his employment with ICAT, without written permission from the Institute and Petitioner admitted his engagement as a partner with a partnership firm M/s. P.R. Garg & Associates. Responding to the contention of the Petitioner with regard to the termination by an incompetent authority, it is argued that Director, ICAT was the competent authority to terminate the services of the Petitioner as ICAT is a division of NATRiP and in that capacity, Respondent No. 3 was the Disciplinary Authority of the Petitioner. Once the Petitioner admitted his guilt that he was a partner with M/s. P.R. Garg & Associates, no further inquiry was required and it is not open to him to question the competence of the Disciplinary Authority. Learned counsel further submits that the Disciplinary Authority i.e. CEO & PD, NATRiP, Mr. Rajesh Singh had approved and sanctioned the termination order and thus assuming there was any irregularity in the termination order, the same was cured and in this context, points out to a ‘Sanction-cum-Approval Note’ dated 11.01.2011.

8. Mr. Vikram Jetley, learned Central Government Standing Counsel appearing for Respondent No.1/Union of India (‘UOI’) submits that UOI has no role to play in the matter as the issues involved pertain to Respondents No. 2 to 4 and it is an internal matter between the Petitioner and the said Respondents.

9. Heard learned counsels for the parties and examined their submissions.

10. The first and foremost issue that arises for consideration is whether the impugned termination order dated 09.10.2012 has been issued by the Disciplinary Authority or by an authority subordinate to the Disciplinary Authority as this issue would go to the root of the matter. Petitioner has made a categorical averment in the writ petition that the impugned termination order was issued by or at the instance of Director, ICAT whereas the Disciplinary Authority of the Petitioner was CEO/Chairman, NATRiP being his Appointing Authority. This averment is not controverted by Respondents No. 2 to 4 in the counter affidavit and all that is stated is that Respondent No. 3 has authority to terminate the employees and Respondent No. 3 is a division of Respondent No. 2 and both have full authority to take disciplinary action. Even this vague stand is contrary to the document filed on record by the Petitioner which is a Note dated 21.01.2013 signed by Sh. Sunil Kumar Sharma, SAO in which it is clearly mentioned that termination of the Petitioner by the Director, ICAT was not correct since he was not been vested with powers of Appointing Authority of ICAT employees and albeit being the Head of the office, Director, ICAT was responsible for ensuring proper discipline in the office, but no statutory power has been delegated to him to function as a Disciplinary Authority and it is only the CEO & PD, NATRiP who is the Appointing Authority and therefore the Disciplinary Authority of the employees. It is significant to mention that in the same Note, it is observed that since Petitioner has preferred an appeal to CEO & PD, NATRiP against his termination and has sought information under the Right to Information Act, 2005 with regard to his Disciplinary Authority, either it should be communicated to him that action has been taken on the basis of the acceptance of charges by him and as per the code of conduct or else to save the situation where the termination order is quashed by the Court, the termination order issued by Director, ICAT may be revoked for a fresh action by CEO & PD, NATRiP. In light of this, there can be no doubt that the Director, ICAT was neither the Appointing nor the Disciplinary Authority of the Petitioner and therefore, the termination order issued by him or at his instance cannot be sustained in law. It must also be noted that Director, ICAT is an authority subordinate to the Appointing Authority i.e. CEO & PD, NATRiP and had no powers to issue the termination order.

11. It is no longer res integra that services of an employee cannot be terminated by an authority below the Appointing Authority albeit the termination order can be passed by an authority superior to the Appointing Authority. This should not be construed to mean that an authority subordinate to the Appointing Authority cannot initiate disciplinary proceedings or issue a charge sheet. Law is settled that even where departmental proceedings are initiated by an authority lower in rank than the Appointing Authority, final order can be passed only by Appointing Authority or an authority higher than it. [Ref.: State of Madhya Pradesh and Others v. Shardul Singh, (1970) 1 SCC 108; State of U.P. and Another v. Chandrapal Singh and Another, (2003) 4 SCC 670; Union of India and Others v. Hasmukhbhai Hirabhai Rana, (2006) 12 SCC 373; A. Sudhakar v. Postmaster General, Hyderabad and Another, (2006) 4 SCC 348; Government of Andhra Pradesh and Another v. N. Ramanaiah, (2009) 7 SCC 165; Secretary, Ministry of Defence and Others v. Prabhash Chandra Mirdha, (2012) 11 SCC 565 and NKGSB Cooperative Bank Limited v. Subir Chakravarty and Others, (2022) 10 SCC 286]. In light of these judgments and in view of the admitted position that Director, ICAT was not the Appointing Authority and hence, the Disciplinary Authority of the Petitioner, the impugned order is untenable in law.

12. There is also substance in the contention of the Petitioner that the allegation levelled against the Petitioner that he violated Clause 13 of the ‘Terms and Conditions’ of appointment was not correct. Petitioner had in his response to the suspension/charge sheet dated 25.09.2012 categorically pointed out that he was associated with M/s P.R. Garg & Associates only for seeking legal updates and opinions and was not drawing any salary or remuneration from the partnership firm, as also that his association was known to the Management from day one. That he was not participating in any profession or business activities of the partnership firm was also established by the attendance record, which reflected 100% attendance of the Petitioner from 08:30 AM to 05:00 PM and he had not claimed any casual leave. None of these factors have been taken into consideration while passing the termination order. Learned counsel for the Petitioner is also right in submitting that in violation of principles of natural justice embodied in the well-known maxim audi alteram partem, no inquiry was held before imposing the harsh and extreme penalty of termination. Petitioner was a confirmed employee of ICAT and yet his services were terminated after seeking response within 72 hours to a notice dated 25.09.2012, styled as suspension/charge sheet. In the termination order, it is stated that the Management has sufficient evidence to prove their case but it is not understood that if sufficient evidence was available why no inquiry was held and a shortcut was adopted and this only lends support to the stand of the Petitioner that he was innocent and ICAT had no evidence against him and therefore adopted a shortcut method of terminating his services. ICAT has also overlooked the credentials/accomplishments/awards/rewards of the Petitioner in a short span of 5 years before imposing the extreme penalty of termination from service.

13. There is no substance in the argument of Respondents No. 2 to 4 that even if the termination order was issued by the Director, ICAT, approval was subsequently given by the CEO & PD, NATRiP and therefore, the irregularity, if any, stood cured. In V.C., Banaras Hindu University and Others v. Shrikant, (2006) 11 SCC 42, the Supreme Court has held that if an order is passed by an authority having no jurisdiction, subsequent approval by the competent authority cannot cure the defect as the initial order is a nullity. Even on a factual note, the submission that the CEO & PD, NATRiP had approved the termination order issued by Director, ICAT is wholly incorrect. The Sanction-cum-Approval Note dated 11.01.2011, heavily relied on is not a Note even remotely pertaining to the termination of the Petitioner, as the ‘subject’ would itself indicate. The Note was a proposal for ‘Approval for revision in organisational chart’ and two modifications were proposed: (a) Manpower in Power Train & VEL/Tracks/Bus Body department may be increased; and (b) Manpower in EMC, Passive safety and IT shall be shuffled. Relevant part of the Note dated 11.01.2011 is as follows:-

14. In view of the aforesaid observations and in light of the law laid down by the Supreme Court as referred to above, in my considered view, the termination order dated 09.10.2012 deserves to be quashed along with the suspension order and the order of the Appellate Authority.