FOOD CORPORATION OF INDIA & ORSversusSARAT CHANDRA GOSWAMI

                      [2014) 6 S.C.R. 91

          FOOD CORPORATION OF INDIA & ORS                         A
                              v.
                SARAT CHANDRA GOSWAMI
           (Civil Appeal Nos. 7201-7202 of 2008)
                        MAY 21, 2014
                                                                  8
          [DIPAK MISRA AND N.V. RAMANA, JJ.]

      Food Corporation of India (Staff) Regulations, 1971 -
 Regulation 60(1){b) - Procedure for imposing minor
 penalties - Interpretation of - Held: Where the employees C
 disputes his liability, a full-fledged enquiry is not expected
 to be held as that would frustrate the purpose of interpreting
 the summary procedure for imposing minor penalties -
 However, the discretion conferred under the Regulation
 60(1)(b) if exercised in a arbitrary manner, the employee can D
 challenge the same before the appropriate forum -
 Regulation 60(1)(b) mandates the disciplinary authority to
 form its opinion whether it is necessary to hold an inquiry in
 a particular case or not - Opinion has to be founded on
 certain objective criteria - It must reflect some reason - It can E
 neither be capricious or fanciful but demonstrative of
 application of mind - Thus, it has to be in writing - On facts
 disciplinary authority not complied with Regulation 60(1)(b},
-thus proceedings vitiated - High Court rightly quashed the
 order of punishment and show cause notice - Service Law.
                                                                   F
     Disciplinary proceedings were initiated against the
respondent-District Manager, Food Corporation of India
under Regulation 60 of the F.ood Corporation of India
(Staff) Regulations, 1971, for failure in his duties. The
Chairman-cum-Managing Director carried the preliminary            G
inquiry, issued show cause notice and imposed fine and
censure against the respondent. The respondent filed
writ petition alleging that the disciplinary authority had
not complied with Regulation 60(1)(b) of the Regulations
                             91                                   H
    92      SUPREME COURT REPORTS            [2014] 6 S.C.R.


A   and, thus, the whole proceeding was vitiated. The High
    _Court quashed the order of punishment as well as the
    show cause notice. The Division Bench upheld the order.
    Hence, the instant appeal.

         Dismissing the appeals, the Court
B
       HELD: 1.1. On a perusal of the order passed by the
  Single Judge of the High Court, the Court took note of
  the fact that there was no expression or formation of
  opinion; and that the counsel for the Corporation had
C conceded that there was nothing to show that the
  Chairman-cum-Managing Director who had made the final
  order had recorded any opinion in writing before making
  the final order to the effect there was no need to hold a ·
  regular inquiry. From the principle stated by this Court in
O *A. Prahalada Rao's case it is quite limpid that though in
  all cases where the employees disputes his liability, a full-
  fledged enquiry is not expected to be held as that would
  frustrate the purpose of interpreting the summary
  procedure for imposing minor penalties, yet the discretion
E conferred under the Regulation 60(1)(b) of the Food
  Corporation of India (Staff) Regulations, 1971 if exercised
  in a arbitrary manner, it is open to the employee to
  challenge the same before the appropriate forum. Thev
  Court opined that the Regulation 60(1 )(b) mandates the
F disciplinary authority to form its opinion whether it is
  necessary to hold an inquiry in a particular case or not.
  [Para 9] [97-C-F]

      1.2. Once it is held that there has to be formation of
  opinion and such an opinion is assailable in a legal
G forum, that the said opinion has to be founded on certain
  objective criteria. It must reflect some reason. It can
  neither be capricious or fanciful but demonstrative of
  application of mind. Therefore, it has to be in writing. It
  may be on the file and may not be required to be
H
      FOOD CORPORATION OF INDIA v. SARAT                      93
             CHANDRA GOSWAMI

communicated to the employee but when it is subject to             A
assail and, eventually, subject to judicial review, the
competent authority of the Corporation is required to
satisfy the Court that the opinion was formed on certain
parameters indicating that there was no necessity to hold
an enquiry. Thus, the High Court correctly understood              B
the principle stated in A. Prabhakar Rao and there is no
fault with the same. [Para 10] [97-G-H; 98-A-B]

    *Food Corporation of India, Hyderabad & Ors. v. A.
Praha/ada Rao & Anr (2001) 1 SCC 165:2000 (4) Suppl.               C
SCR 330-Relied on.
                     Case Law Reference :
    (2001) 1 sec 165           Relied on             Para 3
    CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.               D
7201-7202 of 2008.

    From the Judgment and Order dated 11.10.2007 in F.M.A
No. 1187 and C.A .. N. No. 3130 of 2007 of the High Court of
Calcutta.                                                          E
    Dh~rmendra     Kumar Sinha, Abhijeet Chatterjee for the
appellant.

    Soumitra G. Chaudhuri, Abhijit Sengupta for the
respondent.                                                        F

    The Judgment of the Court was delivered by

     DIPAK MISRA, J. 1. The respondent while holding the
post of District Manager in the Food Corporation of India (for     G
short the FCI) was proceeded against in a disciplinary
proceedings as contemplated under Regulation 60 of the Food
Corporation of India (Staff) Regulations, 1971 (for brevity "the
Regulations") on the ground that during the period 15.7.99 to
21.1.02 while the respondent was working at North Lakhimpur
Region, FCI in Assam had not faithfully carried out his duties     H
    94         SUPREME COURT REPORTS            [2014] 6 S.C.R.


A as a consequence of which the Corporation suffered financial
  loss. After the preliminary inquiry, a show cause notice was
  issued calling for a representation and eventually the
  punishment for recovery of a sum of rupees five lakhs and
  censure was passed against the respondent.
B
       2. The aforesaid order of punishment constrained the
  respondent to approach the High Court in Writ Petition
  No.16812(w) of 2006. Before the writ court the singular
  contention that was highlighted was that the disciplinary
  authority had not complied with Regulatior:i 60(1)(b) of the'
C Regulations and, therefore, the whole proceeding was vitiated.
  The learned Single Judge appreciating the facts and adverting
  to the submissions raised at the Bar came to hold that the
  disciplinary authority, the Chairman-cum-Managing Director,
  had not formed any opinion either to hold a regular inquiry or
D not as contemplated under Regulati~n 58 for imposing the
  major penalty and, accordingly, he quashed the order of
  punishment as well as the show cause notice.

      3. Being dissatisfied, the Corporation preferred
E F.M.A.No.1187 of 2007 and the Division Bench placing reliance
  on the decision of this Court in Food Corporation of India,
  Hyderabad & Ors. v. A. Praha/ada Rao & Anr. 1 concurred with
  the view e~pressed by the learned Single Judge and
  consequently dismissed the appeal.
F        4. We have heard Mr. Dharmedra Kumar Sinha learned
    counsel for the appellants and Mr. Soumitra G. Chaudhuri
    learned counsel for the respondent.

       5. The controversy, as it seems to us, centres around
                •
G interpretation of Regulation 60 and hence, we think it,
  appropriate to reP.roduce the said Regulation. It reads as
  follows:

         "(60) Procedure for imposing minor penalties:
H   1.   (2001) 1 sec 1es.
 FOOD CORPORATION OF INDIA v. SARAT                         95
 CHANDRA GOSWAMI [DIPAK MISRA , J.]
(1) Subject to the provisions of Sub-regulation (3) of            A
Regulation 59, no order imposing on an employee any of
the penalties specified in clauses (i) to (iv) of Regulation
54 shall be made except after:

(a) informing the employee in writing of the proposal to take
                                                                  B
action against him and of the imputation of misconduct or
misbehaviour on which it is proposed to be taken, and
giving him a reasonable opportunity of making such
representation as he may wish to make against the
proposal;
                                                                  c
(b) holding an inquiry in the manner laid down in sub-
regulation (3) to (23) of the Regulation 58, in every case
in which the disciplinary authority is of the opinion that such
inquiry is necessary;
                                                                  D
(c) taking the representation, if any, submitted by the
employee under clause (a) and the record of inquiry, if any,
held under clause (b) inti consideration;

(d) recording a finding on each imputation of misconduct
or misbehaviour.                   ·                              E

(2) Notwithstanding anything contained in clause (b) of Sub-
Regulation (1, if in a case it is proposed, after considering
the representation, if any, made by the employee under
clause (a) of the Sub-regulation, to .withhold increment of       F
pay and such withholding of increments is likely to affect
adversely the amount of retirement benefits payable to the
employees or to withhold increments of a pay for a period
exceeding 3 years or to withhold increment of pay with
cumulative effect for any period,m an inquiry shall be held       G
in the manner laid down in Sub-regulation (3) to (23) of
Regulation 58 before making any order imposing on the
employee any such penalty."

6. The interpretation of the said Regulation engaged the
                                                                  H
         96       SUPREME COURT REPORTS                  [2014] 6 S.C.R.


     A   attention of this Court in A. Prahalada Rao (supra). A two-
         Judge Bench, adverting to the anatomy of the Regulation and
         le.king into consideration the submissions advanced with regard
         to the abuse of the Regulation, came to hold as follows:

              " In our view, on the basis of the allegation that Food
     B
              Corporation of India is misusing its power of imposing
              minor penalties, the Regulation cannot be interpreted
              contrary to its language. Regulation 60(1)(b) mandates the
              disciplinary authority to form its opinion whether it is
              necessary to hold inquiry in a particular case or not. But
     c        that would not mean that in all cases where an employee
              disputes his liability, a full-fledged inquiry should be held.
              Otherwise, the entire purpose of incorporating summary
              procedure for imposing minor penalties would be
              frustrated. If the discretion given under Regulation 60(1 )(b)
     D        is misused or is exercised in an arbitrary manner it is open
              to the employee to challenge the same before the
              appropriate forum. It is for the disciplinary authority to
              decide whether regular departmental enquiry as
              contemplated under Regulation 58 for imposing major
     E        penalty should be followed of not. This discretion cannot
              be curtailed by interpretation, which is contrary to the
              language used. Further, Regulation 60(2) itself provides
              that in a case if it is proposed to withhold increments of
              pay and such withholding of increments is likely to affect
-~   F        adversely the amount of retirement benefits payable to an
              employee and in such other case as mentioned therein,
              the disciplinary authority shall hold inquiry in the manner
              laid down in Regulation 58 before making any order
              imposing any such penalty."
     G
              7. It is submitted by Mr, Chatterjee that the High Court has
         erroneously understood the ratio and ruled that an opinion has
         to be formed in writing. It is his further submission that when
         the reasons are manifest from the preliminary inquiry and from

     H
      FOOD CORPORATION OF !NOIA v. SARAT                         97
      CHANDRA GOSWAMI [DIPAK MISRA , J.]
the show cause it was· erroneous on the part of the High Court         A
to emphasise on the formation of opinion.

     8. Per contra, Mr. Chaudhary heavily relied on the authority
in A Prabhakar Rao (supra) and urged that the discretion
vested in the disciplinary authority und~r the Regulations casts       B
an obligation on it to form an opinion· and formation of such
opinion has to be in writing.

      9. On a perusal of the order passed by the learned Single
Judge, we find that he has taken note of the fact that there was
no expression or formation of opinion. He has further recorded         C
that the learned counsel for the Corporation had conceded that
there was nothing to show that the Chairman-cum-Managing
Director who had made the final order had recorded any
opinion in writing before making the final order to the effect
there was no need to hold a regular inquiry. From the principle        D
stated by this Court in A. Prahalada Rao's case it is quite
limpid that though in all cases where the employees disputes
his liability, a full-fledged enquiry is not expected to be held as
that would frustrate the purpose of interpreting the summary
procedure for imposing minor penalties, yet the discretion             E
conferred under the Regulation 1960 (1 )(b), if exercised in a
arbitrary manner, it is open to the employee to challenge the
same before the appropriate forum. The Court had further
opined that the Regulation 60(1 )(b) mandates the disciplinary
authority to form its opinion whether it is necessary to hold an       F
inquiry in a particular case or not.

       10. Once it is held 1hat there has to be formation of opinion
and such an opinion is assailable in a legal forum, we are of
the view that the said opinion has to be founded on certain
objective criteria. It must reflect some reason. It can neither be     G
capricious or fanciful but demonstrative of application of mind.
Therefore, it has to be in writing. It may be on the file and may
not be required to be communicated to the employee but when
it is subject to assail and, eventually, subject to judicial review,
the competent authority of the Corporation is required to satisfy      H
    98           SUPREME COURT REPORTS            [2014] 6 S.C.R.


A   the Court that the opinion was formed on certain parameters
    indicating that there was no necessity to hold an enquiry. Thus,
    the High Court has correctly understood the principle stated in
    A. Prabhakar Rao (supra) and we do not find any fault with the
    same.
B
         11. In the result, we do not perceive any merit in these
    appeals and the same stand dismissed with no order as to
    costs.

    Nidhi Jain                                     Appeals dismissed.