RAMIAH VENKATESAN Vs. UNION OF INDIA & ORS.

JUDGEMENT

(1.) The Writ Petitioner was appointed by the President as Chairman and Managing Director of the Rashtriya Chemicals & Fertilizers Limited, hereinafter referred to as 'the RCF', which is a Government Company within the meaning of Sec. 617 of the Companies Act, 1956, with effect from 26th Aug. 1989, vide letter dated 5th Feb. 1990, Exhibit 'B'. The appointment was subject to the terms and conditions set out in the said letter which emanated from the Department of Fertilizers, Ministry of Agriculture, Government of India, and was addressed to the Company Secretary of the RCF. The terms and conditions, which are material for the purposes of the present case, read as follows:

(2.) On or about 10th Jan. 1989, a Central Purchase Committee, hereinafter referred to as the Code of Civil Procedure consisting inter alia of the Writ Petitioner was set up for purchase of Jute and HDFE bags. The Writ Petitioner was the Convener of the CPC. A note dated 4th May 1990 was received from the Central Bureau of Investigation hereinafter referred to as 'the CBI' containing serious allegations against the members of Code of Civil Procedure which was followed by the filing of First Information Report on 15th May 1990 by the CBI. The Writ Petitioner and two other members of the CPC, namely, K.K.S. Chauhan and S.N Jain, were placed under suspension by the President vide Order dated 11th May 1990 (Exhibit 'C'). The order of suspension specifically mentioned that complaints had been received about irregularity in the purchase of Jute and HDPE bags made through the Code of Civil Procedure and that the suspension was ordered since it was proposed to hold inquiries into the conduct of Writ Petitioner in respect of the said allegations. Upon review of cases of suspension in normal course, the order of suspension in respect of Jain and Chauhan was revoked with the concurrence of the CBI on 1st Oct. 1991. The order placing the Writ Petitioner under suspension, however, was not revoked since, according to the Respondents, he was the Convener of the Code of Civil Procedure and the Letters of Intent were issued by him or on his behalf. Upon a subsequent review, the suspension order in respect of the Writ Petitioner was revoked vide order dated 24th March 1992 (Exhibit 'E'), since it was considered fit and proper to do 'so because the two other persons involved in the case had been reinstated.

(3.) On 29th Jan. 1992, another report was received from the CBI in relation to a different matter, namely, the award of painting contract on behalf of the RCF to M/s. Bawa & Co. The report stated that there was sufficient material for initiating a departmental enquiry for major penalty against the Writ Petitioner and three other officers. There was a specific recommendation that all the four should be placed under suspension. The Writ Petitioner was, therefore, once again placed under suspension vide order dated 19th May 1992, (Exhibit 'G'). The order of suspension referred to complaints received about irregularities in the matter of award of painting contract to M/s. Bawa & Co. and stated that the suspension was ordered since it was proposed to hold enquiries into the conduct of the Writ Petitioner in connection with the said allegation.