UNION OF INDIA Vs. G P SEWALIA

JUDGEMENT

(1.) The petitioner through Union of India through Secretary, Ministry of Home Affairs has challenged the order dated 27th August, 2008 passed in O.A No.2210/2006 titled as Sh.G.P.Sewalia v. Union of India and Ors by the Central Administrative Tribunal, Principal Bench allowing the original application of the respondent and setting aside the charge memo dated 23rd August, 1999 and order dated 22nd August, 2006 passed by the disciplinary authority imposing the penalty of reduction of pay by three stages for a period of one year without cumulative effect.

(2.) We have heard the learned counsel for the parties. The brief facts to comprehend the disputes are that the respondent was functioning as Chairman and Managing Director of Delhi Scheduled Castes Financial and Development Corporation Limited. The respondent was charged and tried departmentally on the allegation that he was not authorized to invest the surplus funds of DSCFDCL in schemes like PMS without guaranteeing a pre determined return and that he made a fluctuating investment for longer term (1 year) for a yield of 16.25% per annum, whereas the State Bank of India had offered a rate of 15.5% per annum and the fluctuating investment had resulted into lesser yield and thereby the respondent committed misconduct by exhibiting lack of devotion to duty and he acted in a manner unbecoming of a member of the service and he acted prejudicially to the interest of DSCFDCL and contravened Rule 3(1) of the All India Service (Conduct) Rules, 1968. The respondent had contested the disciplinary proceedings initiated against him contending inter-alia that he had not overstepped his jurisdiction in making the investment in issue and even his predecessors too had made investment of one year with the Indian Bank in the similar circumstances. The plea was also raised on behalf of respondent that the Board of Directors had been informed of the decision at the earliest and the Board of Directors not only accepted the same but ratified his decision. It was also pointed out that the investment offer was personally brought by the Chief General Manager, Syndicate Bank which was like any other investment earning schemes and the bank also had accepted funds from other Government organizations. The plea that the investment with the State Bank of India at the rate of 16% would have become 18.5% was alleged to be illogical and it was categorically contended that no prejudice has been caused to DSCFDCL on account of any action on the part of the respondent rather on account of his action and sound decision, the organization gained to the tune of Rs.88 lakhs.

(3.) The enquiry officer only gave the finding that the charged officer/respondent had exceeded his powers by investing in Syndicate Bank for a period of one year. The report of the enquiry was referred to Central Vigilance Commission which tendered its advice vide memorandum dated 22nd June, 2001, however, the disciplinary authority issued a disagreement memorandum dated 1st May, 2002 which was replied by the respondent contending inter-alia that the decision to transfer the funds to high yielding PMS deposit was taken by him considering the higher gains therein and following long established precedents. The respondent also relied on Rule 18 (a) of the Delhi State Mineral Development Corporation Ltd. (Delegations of Financial Powers) Rules, which had been adopted by DSCFDCL which empowers the CMD to make one year investments in the interest of the Corporation and it was contended that the RBI circulars/guidelines on which the enquiry officer had relied were never intended to apply to CEOs of the State Government Corporation.