The bench of Justices D. Y. Chandrachud and M. R. Shah was hearing an SLP (at the instance of the Municipal Council) arising out of a September 1, 2020 decision of the HC division bench, by which a February 20, 2020 order of a Single Judge setting aside the 1990 termination order and reinstating the respondent with full back wages and consequential benefits was affirmed.
The respondent-employee, who was a Lower Division Clerk in Nagar Panchayat, Kymore, MP, was terminated on June 4, 1990 over embezzlement charges. "The writ petition filed by the respondent in 1991 for challenging the order of termination was dismissed by the High Court in 1994 (on January 6, 1994), and as a result of the dismissal of the writ petition, the termination attained finality", records the Supreme Court order. In 2009, the petitioner filed another writ petition before the High Court contending that a 2008 audit had revealed that it was the then-accountant of the Nagar Panchayat who had misappropriated the amount in question and not the petitioner. This plea was disposed off by the High Court on November 6, 2009 with a direction to the petitioner-Municipal Council for considering the representation for reinstatement of the respondent. By order dated February 9, 2010, his representation came to be rejected by the respondent-Panchayat. Finally, in 2010, the petitioner instituted a third writ petition before the High Court challenging the 1990 order of termination and the 2010 order rejecting his representation. "In 2009, a direction was issued by the High Court for considering the representation of the respondent on the basis of which a fresh round of proceedings was initiated and ultimately by the impugned order, reinstatement has been granted with full back wages from the year 1990 and consequential benefits", records the order of the Apex Court. The Division Bench of the High Court, in intra-court appeal, had even imposed costs of Rs. 50,000 on the petitioner-Nagar Panchayat for attempting to deprive the respondent-employee of his "rightful claim".
"This is a shocking exercise of judicial power!", remarked Justice Chandrachud.
Justice Shah expressed consternation that the High Court has taken the view that since in 2009, the High Court had directed the present petitioner-Panchayat to consider the respondent employee's representation for reinstatement on the basis of a subsequent report of the Auditor giving him a clean chit, on the rejection of the representation, the employee gets a fresh cause of action to approach the Court. The High Court has expressed the opinion that since these facts were not available in 1991, the dismissal of the earlier petition in 1994 does not make the present petition invalid.
"And the High Court says that fresh cause of action accrues to the employee!", commented Justice Shah, concurring with Justice Chandrachud.
Issuing notice on the SLP, the bench directed that "there shall be a stay of the operation of the impugned judgments and orders of the High Court of Madhya Pradesh dated 20 February 2020 and 1 September 2020".
Proceedings before the HC Single Judge
The Single bench was hearing a 2010 writ petition challenging the order dated 04.06.1990 whereby the services of the petitioner-employee have been terminated and also the order dated 09.02.2010 whereby his representation has been rejected by the respondent-Panchayat.
The bench recorded that the petitioner was initially appointed in the year 1982 as Lower Division Clerk on contingency basis and worked till the order dated 04.06.1990 terminating his services was passed. It was submitted by the petitioner before the Single Bench that at the relevant time the account of the Kymore Nagar Panchayat was audited. As per the report submitted by the Auditor, it was found that the petitioner did not deposit an amount of Rs.6512/- in the account of respondent-Nagar Panchayat, in pursuance to which a show cause notice was issued to him
directing him to deposit the said amount, but even after that he did not deposit the said amount. Consequently, the impugned order dated 04.06.1990 was passed terminating his services. Thereafter, the petitioner filed a writ petition, but the said petition was dismissed without entertaining the same.
Subsequently, it was found by the Deputy Director, Local Fund Audit, Jabalpur that actually the aforesaid amount was misappropriated by one Badri Prasad Garg, who was working as Cashier-cum-Accountant in the respondent-Nagar Panchayat and, therefore, it was directed to recover the said amount from him only. The petitioner thereafter made a representation to the authority requesting them to reinstate him as subsequently one Badri Prasad Garg was found guilty of the charge for which the petitioner was terminated, which representation was pending for consideration. Thereafter, in 2009, the petitioner filed a writ petition before the High Court which was disposed of vide order dated 06.11.2009 directing authority to consider the pending representation of the petitioner, in pursuance to which, the order dated 09.02.2010 was passed by the respondent-authority rejecting the representation of the petitioner.
"The challenge to the said order is made mainly on the ground that once the finding has been given by the Auditor that the said Badri Prasad Garg committed misappropriation of the said amount for which he has already been charged, the petitioner cannot be held guilty for the same and his services cannot be terminated only on the false premise", the Single Judge had noted.
It was stated by the Nagar Panchayat that after the lapse of such a long time, the order of termination cannot be assailed, especially when the 1991 writ petition filed by the petitioner has already been dismissed by the court in 1994 affirming the order dated 04.06.1990. Therefore, it was claimed that the petition be dismissed on the ground of delay and latches.
However, the Single Judge opined that since in the year 2009, the High Court had disposed off the previous writ petition of the petitioner with a direction to the authority to consider the pending representation of the petitioner, therefore, "the petitioner gets a fresh cause of action to approach the Court and, this petition challenging the order of the authority rejecting the representation cannot be dismissed on the ground of delay and latches"
During the course of hearing, the Single Bench called for the record of the 2009 writ petition just to examine whether the petitioner had disclosed the fact of his earlier petition or not. "From perusal of the record of the said writ petition, it is found that the petitioner has made a specific pleading about dismissal of his earlier writ petition (of 1991), therefore, the order passed by this Court in (the 2009 petition) cannot be said to be an order passed by the court without considering the fact of dismissal of earlier writ petition filed by the petitioner and the same gives fresh cause of action to him. Taking note of the fact that petitioner had filed representation on the basis of the report of the Auditor who gave him clean chit, therefore, the dismissal of earlier writ petition does not make the present petition invalid", said the bench.
The Single Judge stated that upon perusal of the facts and grounds raised by the petitioner, it is clear that the order of termination from service is improper because the report of the Auditor regarding misappropriation of the amount is very specific
which exonerates the petitioner from the said charge and held the said Badri Prasad guilty of the said charge.
The Single bench also attached weight to the submission on behalf of the petitioner that the order terminating services of the petitioner is a stigmatic order and the same could not have been passed without enquiry and affording proper opportunity of hearing to the petitioner, even though the petitioner happened to be a contractual employee.
"I am of the opinion that the petitioner has been punished wrongly and his services have been terminated on the wrong premise. In view of the above, the order impugned dated 04.06.1990 and 09.02.2010 are not sustainable in the eyes of law and, therefore, the same are set aside", the bench ruled. The Single Judge further directed the respondents to reinstate the petitioner in service with all consequential benefits and he be also given back wages from the date he was terminated till the date of his reinstatement.
Proceedings in Writ Appeal
The division bench noted that the controversy emanated from the Audit of the year 1982-83 to 1985-86 and the respondent/petitioner, a lower Division Clerk in the contingency paid establishment, was consequently visited with an order on 04.06.1990 terminating his services on the finding that he embezzled the amount. Aggrieved, respondent approached the Director, Urban Administration with a plea of having handed over the entire amount to the then-Accountant and that he has not embezzled any amount. The Director, vide communication dated 15.11.1990, called upon the Chief Municipal Officer, Municipal Council, Kymore to reinstate the respondent. The order, however, was not acted upon. The Respondent thereafter preferred a Writ Petition in the HC in 1991; however, the same was dismissed on 06.01.1994. Later on, an enquiry conducted by the Local Fund Audit in the year 2008 led to discovery of the fact that it was the then Accountant who was accountable to deposit the said Rs.6512/-. These developments and the revelation of the fact that the person responsible for the shortage of Rs.6512/- was the then- Cashier and Accountant led the petitioner to file another Writ Petition in 2009 for quashment of his termination. The Writ Petition was disposed of on 06.11.2009 with direction to decide the representation, "... looking to the fact that the auditor of the respondent found that the amount was to be deposited by the cashier and not by the petitioner".
The division bench noted that by order dated 09.02.2010 the representation was rejected on the ground that earlier petition preferred by the respondent was dismissed and that the order of recovery against the then-accountant is being re-examined on the representation by him.
Aggrieved, the respondent filed the 2010 Writ Petition challenging the order dated 9.2.2010 which was heard by the Single Judge.
"It is pertinent to note from the facts on record that during pendency of the 2010 Writ Petition, President in Council in its meeting held on 03.06.2013 finally held said Shri Badri Prasad Garg responsible for Rs.6512/- and directed its recovery from him and also for action against him", observed the Division Bench.
The bench proceeded to declare that the contention that a petition filed in 1991 by respondent/petitioner against his termination stood dismissed on 6.1.1994, and therefore, he was not entitled for any relief, is "rejected at the outset".
"Evidently, by order dated 6.1.1994, the petition was dismissed at motion hearing stage while disbelieving the petitioner that he handed over the money collected by him to one Shri Garg, which later on being found to be correct, led to a direction in the Writ Petition of 2009 for consideration of the representation in the wake of facts which were not available in the petition of 1991. Therefore, in our considered opinion, when on discovery of facts, it stood established that the respondent/petitioner had not embezzled the amount, the order of termination thus lost its very existence. In this fact-situation, the order in the 1991 writ petition, in our considered opinion, was not an embargo for testing the correctness of termination order dt. 4.6.1990", the division bench asserted.
The bench also did not take kindly to the contention on behalf of the appellant Nagar Panchayat that the Single Judge had glossed over the fact that the certificate, on the basis whereof the Local Audit Fund had issued the letter to the Appellant in December, 2008 to initiate action against the then-accountant, was a forged document.
"It appears that to overreach the order of reinstatement with back-wages, the Appellant Municipal Council cooked up the story of forgery and fabrication of document. This act of the Appellant is unpardonable as the same is contrary to their own action by effecting recovery from said Shri Badri Prasad Garg, the then Accountant and also punishing him for his dereliction. Evidently, said Shri Garg did not question the recovery and punishment before any Court of law", said the division bench.
The bench concluded that from these facts, the plea of respondent/petitioner of being made a scapegoat by falsely implicating him for the act which he did not commit, stood substantiated.
"In view whereof, this Appeal deserves to be dismissed with costs for the reason that on an unsubstantiated allegation as to the certificate dated 25.7.1986 that it is a fabricated and forged document, raised for the first time in Appeal, an attempt is made by the Municipal Council to deprive the respondent of his rightful claim. Therefore, we quantify the cost at Rs.50,000/- (Rupees Fifty Thousand) to be deposited with the High Court Legal Services Committee to be utilized for providing artificial limbs to poor and downtrodden, through Artificial Limbs Centre, Netaji Subhash Chandra Bose, Medical College, Jabalpur", directed the bench.