TMI Blog2007 (5) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... s stated that on 14.9.1994 the respondent was caught red handed by C.I.D./Crime Branch of Goa Police while demanding illegal gratification of ₹ 20,000/- from one Shri Chennaiah, a cleaning labour contractor employed by the appellant. He was placed under suspension by an order dated 15.9.1994 in contemplation of the disciplinary proceedings. On 15.12.1994, 13 counts of charges were leveled against the respondent namely (i) demanding and collecting illegal gratification, (ii) accepting bribe of illegal gratification for recruitment in Petitioner company, (iii) withholding authorised payments for extorting money or bribe, (iv) financial loss caused to the company by misleading the Management by intentionally furnishing wrong advice; (v) misuse of contract employee; (vi) violation of company's policy on recruitment; (vii) creating of new posts and converting security assistants as Personnel Administration Assistants without sanction of the appropriate authority; (viii) attempt to extort money from contractors; (ix) prejudicing the company and its contractors by influencing a wage agreement; (x)(a) financial irregularities, improprieties and fraud and non accounting of company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place of 'Board' and CMD as Appellate Authority in place of 'Board' for imposing major penalties in the cases of officers (upto and inclusive of Managers). In regard to grades above Deputy General Manager, CMD was designated as the Disciplinary Authority and the Board was the Appellate as well as Reviewing Authority. We extract below the relevant portion of the Schedule to the CDA Rules before and after amendment: Note : for the purpose of this Schedule, 'Board' means a Committee of Directors appointed by the Board of Directors.... 5. The Inquiry Officer completed the inquiry and submitted its report on 19.9.1996 holding that the charges No. (i), (ii), (v), (vi). (vii), (x)(a), (x)(c), (xi), (xii) and (xiii) were proved against the respondent and charges (iii), (iv), (viii) and (ix) were withdrawn by the Management and further holding that charge (x)(b) was not proved. A Show Cause Notice dated 5.10.1996 was issued to the respondent as to why the Inquiry Report and findings should not be accepted. After examining the reply dated 31.10.1996 to the show cause notice the respondent was dismissed from service by an order dated 21.01.1997 passed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court was of the view that since the date of enforcement of amended Rules were not stated in the amendment Rules as provided under Rule 41, it cannot be said that the amendment to the CDA Rules came into force from 08. 01.1996. The High Court held: The question, however, is whether the Rules could be said to have been amended and come into force. As already noted earlier, Rule 41 specifically and expressly provides for amendment in the Rules. Under the said provision, the Board could amend, modify or add the Rules, but such amendment would take effect from the date stated therein . In other words, the Rules would get amended and such amendment would be effective from the date mentioned in such amendment. So far as the amendment is concerned, nothing is stated in the amendment. Exh.R-4 recites: Amendments to Goa Shipyard Officers' Conduct, Discipline and Appeal Rules, 1979 . It also states that those amendments would come into force from 8th January, 1996. Such a communications (CMD/34/96), in our opinion, however, cannot be said to be amendment in the Rules covered by Rule 41 of the Rules. Obviously, therefore, when the amendments were made in the Rules, no provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board of Directors on 28.9.1995 as item No. A-15 but the same was deferred. It was again considered at the Board meeting held on 2.12.1995 as item No. A-10 and it was decided to send the agenda (containing the draft of the amendment to the CDA Rules) by circulation to Directors for their approval. Accordingly the circular resolution was circulated and approved by the six Directors (Members of Board of Directors) on 15.12.1995, 5.1.1996, 5.1.1996, 8.1.1996, 12.1.1996 and 1.2.1996. As the majority approved it by 8.1.1996, it was given effect from 8.1.1996. The approved circular Resolution No. 13/1995 was again placed before the Board of Directors on 21-3-1996 for ratification as item No. A-10 and the Board of Directors duly ratified the Circular Board Resolution No. 13 of 1995 amending the CDA Rules. 10. Counsel for the appellant has also invited our attention to the resolution of Board of Directors held on 18.3.1998, which further ratified and classified that the Circular Board Resolution No. 13 of 1995 dated 15.12.1995 came into effect on 08.01.1996 on which date the same was approved by the majority of directors as required under Section 289 of the Act. The said resolution is e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t others, that the amendments to 1979 Rules have not come into effect since no date is specified in the amendments resolution. 39. CMD brought out to the notice of the Board that the Board at its meeting held on 28.11.1997, had noted the report of the Appellate Authority appointed by the Board confirming the decision of Disciplinary Authority of dismissing Maj. Babu Thomas from the services of the Company w.e.f. 21.01.1976 for serious and grave misconduct committed by him under the CDA Rules. After detailed discussion, the Board, therefore, desired to clarify the position by passing the following resolution: RESOLVED THAT the Circular Board Resolution No. 13 of 1995 dated 15.12.1995 amending the Goa Shipyard Officers' Conduct, Disciplines and Appeal Rules, 1979 shall take effect from the date the same has been approved by the majority of the Directors of the Company, in terms of Section 289 of the Companies Act, 1956. 11. From the facts as adumbrated above it clearly emerges that having regard to Board's resolution dated 18.3.1998, it should be taken that the amendment of CDA Rules by Circular Resolution No. 13/1995, itself provided that it would take effect from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tedly ratified by the Board of Directors on 20th February 1991, and the Board of Directors unquestionably had the power to terminate the services of the respondent. On the basis of the authorities noted, it must follow that since the order of the Managing Director had been ratified by the Board of Directors such ratification related back to the date of the order and validated it. We, therefore, reject the contention that the order of dismissal passed by CMD is invalid for want of authority. 12. Mr. Rao, learned senior counsel for the respondent, referred to the decision of this Court in the case of State of Goa v. Babu Thomas 2005CriLJ4379 , in which one of us was a Member of the Bench (Sema,J) particularly the observation made in paragraphs 4,8 and 9 of the judgment. In our view, the judgment rendered in the aforesaid case relating to sanction for prosecution under Section 19 of Prevention of Corruption Act, 1988 would be of no assistance to decide the issue on hand. 13. Mr. Rao next referred to the amended CDA rules wherein it has been provided that for all officers up to and inclusive of Manager, the Disciplinary Authority who can impose major penalties is the General M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imination against the employee concerned. In our view, this decision would be of no help to the respondent's case on facts. As already noticed in the present case, the respondent in fact, had availed the remedy of appeal and filed the appeal before the Board of Directors. That apart, the decision in Surjit Ghosh (supra) has been distinguished by this Court in Balbir Chand v. Food Corporation of India Ltd. (1997)2LLJ879SC . It was pointed out as under: The learned Counsel for the petitioner has raised the contention that since the petitioner was required to be dismissed by the disciplinary authority, namely, Zonal Manager, who alone is competent to remove him, the order of dismissal passed by the Managing Director is bad in law. In support thereof, he placed reliance on a judgment of this Court in Surjit Ghosh v. Chairman and Managing Director, United Commercial Bank (1995)IILLJ68SC . It is an admitted position that as a joint enquiry was conducted against all the delinquent officials, the highest in the hierarchy of competent authority who could take disciplinary action against the delinquents was none other than the Managing Director of the Corporation. In normal circum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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