Ram Sewak Rana vs. The State Of Jharkhand Thr Its Chief Secretary

Held

The Court held that the impugned order withholding 10% of the petitioner's pension for ten years was unsustainable and suffered from total non-application of mind. On the first issue, the Court found that a crucial ingredient of Rule 43(b) – pecuniary loss to the State exchequer – was non-existent in the present case, as multiple inquiry reports, including one revisited, concluded that no loss was caused. The Court noted that the alleged mistake was a technical one, and re-assessment orders were appealable. On the second issue, the Court found that the disciplinary authority did not follow the settled procedure. It failed to record tentative reasons for disagreeing with the inquiry officer's findings and provide the petitioner an opportunity to represent against such disagreement, as mandated by principles of natural justice and the precedent in Punjab National Bank & Ors. Vs. Kunj Bihari Misra. Furthermore, the second show cause notice introduced new charges and a significantly higher loss amount (Rs. 14,50,459.18) compared to the original memo of charge (Rs. 3,45,198.85), without a proper inquiry into these new allegations in the petitioner's presence. The Court also referenced Md. Fakhruddin Vrs. the State Of Bihar & Ors., stating that pension withholding requires a definite finding of grave misconduct or pecuniary loss without affording an opportunity of hearing. The Court quashed the impugned order and directed the refund of any recovered amount.

Facts

The petitioner, Ram Sewak Rana, a former Deputy Commissioner in the Commercial Taxes Department, Jharkhand, challenged a notification withholding 10% of his pension for ten years. The action was taken under Rule 43(b) of the Jharkhand Pension Rules, based on allegations of wrongly determining tax for the financial year 2006-07, allowing claims for Input Tax Credit without mandatory JVAT-402 forms, allegedly causing a loss of Rs. 3,45,198.85 to the government. A departmental proceeding was initiated, but the inquiry officer's report dated 06.06.2014 found no loss to the exchequer, terming the issue a technical mistake. Despite this, the disciplinary authority directed a revisit, and subsequent reports also indicated no loss. A two-men departmental committee later reported a loss of Rs. 14,50,459.18 due to different assessment methods for similar claims. A second show cause notice was issued based on this, leading to the impugned order.

Key Issues

1. Whether the impugned order withholding 10% of the petitioner's pension for ten years under Rule 43(b) of the Jharkhand Pension Rules is sustainable when departmental inquiries consistently found no pecuniary loss to the government exchequer, and the alleged misconduct was considered a technical mistake? 2. Whether the disciplinary authority could impose a penalty based on findings of a committee and a second show cause notice that introduced new charges and amounts significantly different from the original memo of charge, without adequately addressing the inquiry officer's findings and adhering to principles of natural justice? Petitioner's arguments: The petitioner argued that Rule 43(b) requires grave misconduct or pecuniary loss, neither of which was proven. He emphasized that multiple inquiry reports found no loss. He also contended that the disciplinary authority failed to provide reasons for differing with the inquiry officer's findings and that the second show cause notice introduced new charges beyond the original memo of charge, violating procedural fairness and principles of natural justice, citing Punjab National Bank & Ors. Vs. Kunj Bihari Misra. Respondents' arguments: The respondents argued that the initial inquiry report was not in the right perspective and that the disciplinary authority directed a revisit. They also contended that a committee's report revealed a significant loss to the exchequer due to the petitioner's different assessment methods, justifying the penalty.