Service Law; Sukumar N. Oommen Vs. Secretary to Government of India [Kerala High Court, 12-06-2016]

Service Law – Transfer Allowance – Suppressed the advance of travel allowance – there cannot be any misconduct on the part of the Managing Director of the Company in respect of withdrawal of transfer allowance, which is granted with the approval of Board of Directors consisting of Senior level Government Officials, particularly when Board’s decision is approved by General Body.

Service Law – Territorial Jurisdiction – Orders issued by the Central Government – High Court has jurisdiction in respect of orders issued by the Central Government, the seat of which is New Delhi.

Service Law – Territorial Jurisdiction – Orders issued by the Central Government – When a person is retired, recovery ordered against him, can be enforced only in the place in the State where he has assets.

IN THE HIGH COURT OF KERALA AT ERNAKULAM

C.N.RAMACHANDRAN NAIR & C.K.ABDUL REHIM, JJ.

W.A.No.500 of 2012

Dated this the 12th day of June, 2012

Sukumar N. Oommen Vs. Secretary to Government of India

AGAINST THE ORDER/JUDGMENT IN WPC.32178/2010 DATED 01-03-2012

FOR APPELLANT(S)/PETITONER: BY ADV. SRI.SUKUMARAN N OOMMEN (PARTY-IN-PERSON); FOR RESPONDENT(S)/RESPONDENTS: BY ADV. SRI.P.PARAMESWARAN NAIR,ASG OF INDIA, BY ADV. SRI.JOHN T.PAUL, SC FOR R2, BY ADV. SMT.REJITHA RAJAN

J U D G M E N T

Ramachandran Nair, J.

The appellant, an IAS Officer in the Tripura-Manippur cadre, who has also served on deputation in Government of India and also in Kerala, was selected by the Public Enterprises Selection Board as Chairman cum Managing Director of a Central Public Sector Company, namely M/s. Madras Fertilizers Limited (hereinafter referred to as the Company for short) located at Chennai. His selection was for appointment on permanent absorption basis. He was relieved from the State service on 04/09/2002 and joined as the Chairman cum Managing Director of the Company on 06/09/2002. He completed his 5 year tenure on 05/09/2007 and was allowed to retire from the Company. The appellant’s terms of appointment as CMD of the Company was issued only after six months of his joining the service i.e. on 31/03/2003. There was no provision in the terms of appointment to give him transfer allowance from Tripura to Madras. He claimed a total sum of Rs.1.07 lakhs towards transfer allowance from the Company. The Finance Department verified the claim and requested the Company Secretary to place it before the Board of Directors of the Company for considering for approval. According to the appellant, the claim was approved by the Board in their meeting, and the same was later approved in the General Body Meeting of the Company. The specific case of the appellant is that the Director Board which approved his transfer claim comprised of senior level officials like Financial Advisor to Government of India, a Senior Officer from the Ministry and representatives from the Financial Institutions, namely, ICICI Bank and IDBI, and also two representatives of Government of Iran, another shareholder of the Company. Though there was no dispute with regard to the reimbursement of transfer allowance to the appellant by the Company, the issue was raised by the Vigilance Officer, who was appointed in the Company in the year 2006. The appellant as the Managing Director, declined transfer claim of the Vigilance Officer, who came on transfer posting from FACT Cochin to the Company at Madras. According to the appellant, the Vigilance Officer joined in September, 2004 and claimed transfer allowance in 2005 not only for him but also for his wife, who was a teacher regularly employed in Chennai. When the Appellant disallowed the transfer claim of the Vigilance Officer, he made allegation against the appellant that the transfer claim made by the appellant and approved by the Board of Directors was irregular, based on which an enquiry was instituted in 2006. Even though based on the Vigilance Officer’s report, enquiry was conducted by the Government of India by calling for explanation from the appellant in May, 2007, and reply was promptly filed by the appellant on 30/05/2007, nothing was heard from Government of India until the Appellant retired on 05/09/2007. Since the appellant’s final retirement benefits were not released to him on account of the pendency of enquiry from 2006 onwards, the appellant sent a reminder in January, 2008. However, nothing was heard from the Government till 29/04/2010 when Ext.P15 was issued to him declaring that the transfer allowance taken by him which is for Rs.1.07 lakhs was irregular and the amount is to be recovered from him with interest. Another order received by the appellant which is almost contemporaneous with Ext.P15 is Ext.P16 dated 29/04/2010 wherein the Government of India has expressed displeasure about the selection of General Manager (Marketing and Distribution) made by the appellant in the Company in the year 2003. The appellant challenged Exts.P15 & P16 orders before this Court by filing Writ Petition which was rejected by the learned Single Judge for the reason that this Court has no territorial jurisdiction to entertain the WP(C) filed challenging Exts.P15 & P16. It is against this judgment, this Writ Appeal is filed by the appellant.

2. We have heard the appellant in person and also Shri.P.Parameswaran Nair, learned Assistant Solicitor General appearing for the 1st respondent and Shri.John T.Paul, learned Standing Counsel appearing for the 2nd respondent.

3. After hearing both sides and on going through the judgment, we are unable to uphold the findings of the learned Single Judge that this Court has no territorial jurisdiction in the matter. In the first place what we notice is that the appellant is a person regularly residing in Kerala and all the proceedings after his retirement in 2007 were continued against him in Kerala and recovery pursuant to Ext.P15 also has to be made against him in Kerala, if the amount held by the Company is not sufficient for adjustment. Besides this, the contention of the appellant is that since the enquiry and the impugned decisions evidenced by Exts.P15 & P16 are taken by Government of India in their station at New Delhi, this Court has jurisdiction in the matter.

4. In our view, the findings of the learned Single Judge that imposition of penalty is not integral part of cause of action is not tenable because when a person is retired, recovery ordered against him, can be enforced only in the place in the State where he has assets. This is a case where the appellant is a Keralite residing in Kerala after retirement in 2007 and Ext.P15 proceedings is nothing but demand of money which is recoverable from the appellant in Kerala by attachment and sale of whatever asset he has in Kerala and other places. On going through the decisions relied on by the learned Single Judge, we do not think the facts of any of those cases is comparable to the one in this case, wherein the grievance is personal and recovery, if at all, against which only the appellant has grievance will take place in Kerala. Further, this Court has jurisdiction in respect of orders issued by the Central Government, the seat of which is New Delhi. We therefore, allow the Writ Appeal by reversing the findings of the learned Single Judge on this issue and proceed to consider the case on merit. Even though the matter could be sent back to the learned Single Judge for decision on merit, both sides argued the case on merit before us. Further, this is a case of recovery initiated against a person who retired from a senior position in Government five years back. Since it would be unjust to delay the matter further, we proceed to consider the case on merit.

5. The appellant has a specific case that enquiry initiated against him is motivated by malafides and the Vigilance Officer of the Company is behind it. Even though the sequence of developments, particularly the inordinate delay in initiating enquiry against the appellant that too in respect of a matter approved by the Board of Directors of the Company, justify an enquiry against the Vigilance Officer on the specific ground of malafides, we do not think we should venture on it because the Vigilance Officer, who is said to be instrumental for initiating enquiry against the Appellant is not in the party array. We therefore, do not propose to enter into any findings on the role of the Vigilance Officer, who was provoked by the Appellant by denying him a small claim of transfer allowance claimed for himself and his wife. However, we find force in the contention of the appellant that the transfer allowance of Rs.1.07 lakhs was rightly given to him because the same was approved by the Board of Directors of the Company, which was approved by General Body. The admitted position is that the appellant was selected by the Public Enterprises Selection Board for appointment as Chairman cum Managing Director of a large public limited company and at the time of selection he was a Senior IAS Officer serving in Tripura Government. In fact his terms of appointment was issued after more than six months after his appointment and the order so issued on 31/03/2003 did not contain anything about the transfer allowance which he was entitled to. Both respondents 1 & 2 conceded the position that the appellant as a Senior IAS Officer is entitled to transfer allowance on retirement from regular Government service from his station to his place of residence. Instead of claiming transfer allowance from Government of Tripura for transfer to Kerala, on release from service on 04/09/2002 the appellant claimed transfer allowance from the new employer because he traveled from Tripura to Madras to join the Company as it’s CMD. The 2nd respondent’s allegation is that the appellant had taken advance of Rs.40,000/- from Tripura Government towards transfer allowance and the same was not disclosed to the Company while claiming transfer allowance from the Company. The appellant’s specific case is that advance taken was referred to in the salary certificate produced by him before the Company and there was no suppression. Further, according to the appellant, the transfer allowance advance of Rs.40,000/- taken by him from Tripura Government was returned to that Government with interest. On going through the enquiry report, the main allegation against the appellant is that he has suppressed the advance of travel allowance taken from Tripura Government. Learned counsel appearing for the 2nd respondent vehemently contended that the suppression of this fact amounts to misconduct and since the appellant had availed advance towards travel allowance from Tripura Government, he is not entitled to transfer allowance from the Company.

6. After hearing both sides, we are unable to accept the contention of the 2nd respondent because the advance is only an advance and unless the appellant puts a final bill for transfer allowance, the appellant is entitled to refund the advance to the State Government of Tripura, which admittedly the appellant has done. Further, it is not the drawal of advance from Tripura Government that is the subject matter of disciplinary action initiated against the appellant but it is the availing of transfer allowance from the 2nd respondent Company, the appellant is proceeded against in enquiry and disciplinary action. Admittedly the terms of appointment issued to the appellant did not provide for any transfer allowance, and it is in this context the appellant’s claim was put up before the Board of Directors, which approved it. We do not think there can be any misconduct on the part of the Managing Director of the Company in respect of withdrawal of transfer allowance, which is granted with the approval of Board of Directors consisting of Senior level Government Officials, particularly when Board’s decision is approved by General Body.

7. On the facts and circumstances stated above, we are convinced that the whole disciplinary proceedings initiated against the appellant is motivated and the delay in initiation and conclusion of the proceedings itself will vitiate it. We therefore, quash Ext.P15 proceedings as illegal, arbitrary and unsustainable.

8. The appellant is also challenging Ext.P16, which is an order issued by the Central Government on 29/04/2010, 3 years after his retirement, wherein the Government has conveyed their displeasure in the performance of the appellant in the recruitment of the General Manager (Marketing) in the Company, which happened during the tenure of his service. The appellant’s specific case is that General Manager (Marketing) was selected by the Board of Directors of the Company by constituting a sub committee consisting of Chairman & Managing Director and 3 others who interviewed the selected lady and found her suitable. According to the appellant, the lady appointed as General Manager has complained of even sexual harassment against the very same Vigilance Officer, who filed all the complaints against the appellant. We do not know how the appellant can be responsible when selection is made by the Chairman and Managing Director along with three other members nominated by the Board of Directors, who interviewed her and found her fit for the job.

9. Another allegation made against the appellant is that he misused office car and telephone while serving as Managing Director of the Company. Going by the sequence of developments as disclosed by the records produced we are convinced that the case is put up against the appellant only to harass him and probably the Vigilance Officer would be behind it. In any case, there is no significance for Ext.P16, wherein the Government has not proposed any action against the appellant but only expressed their displeasure. We do not find any justification or bonafides in Ext.P16 proceedings issued by the Government in the selection of General Manager, who is a lady, who had long experience in another big fertilizer Company, namely M/s.Fertilizers and Chemicals Travancore Ltd., Kochi, prior to her selection as General Manager of M/s.Madras Fertilizers Ltd.

We therefore allow the Writ Appeal by vacating Exts.P15 & P16 proceedings issued by the Central Government and direct the respondents to release the withheld retirement benefits, pension and other benefits due to the appellant and start paying regular pension due to the appellant within a period of one month from the date of receipt of a copy of this judgment.

This Writ Appeal is allowed as above.

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