Loss recovery, dismissal from service not double jeopardy: HC

Saurabh Malik

Tribune News Service

Chandigarh, December 16

In a significant judgment that will change the way delinquent officials of the government are dealt with, the Punjab and Haryana High Court has ruled that the state and its functionaries can recover losses caused to it, while imposing major punishment such as dismissal from service. A three-Judge Bench of the court made it clear that the imposition of major punishment and ordering recovery would not amount to double jeopardy.

The Bench of Chief Justice Ravi Shanker Jha, first puisne Justice Rajiv Sharma and Justice Deepak Sibal was constituted to decide whether more than one penalty could be imposed on a food corporation employee for “one and the same misconduct” under the Food Corporation of India (Staff) Regulations, 1971.

The question arose after penalty of compulsory retirement from the services of the Food Corporation of India along with recovery of Rs 2.5 lakh was ordered in case of an assistant found guilty of misappropriating stock dishonestly in collusion with the millers. The amount was to be recovered from his retirement benefits. In case the benefits were inadequate, the amount was to be recovered through forfeiture of gratuity under Section 4(6) of the Payment of Gratuity Act, 1972. It was argued on the employee’s behalf that the impugned order of punishment and recovery amounted to imposition of double punishment — one major and another minor — upon the respondent-employee.

Appearing for the FCI, senior advocate Rajesh Garg placed reliance on the Supreme Court decision in the case of “Commissioner of Rural Development and others Vs AS Jagannathan” before submitting that two punishments could be imposed under the FCI Regulation.

After hearing the arguments and going through a plethora of judgments, the Bench held imposition of penalty of compulsory retirement and recovery of the loss caused to the corporation, following misappropriation and dishonesty in collusion with the millers, was permissible.

Expanding the scope of the question of law placed before it, the Bench added: “We are also of the considered opinion that any loss caused to the state on account of misappropriation, collusion, fraud etc. by an employee can even otherwise be recovered from him by the state or its functionalities or authorities as they are the custodian of public property and owe a duty to safeguard it and recover it from persons who have misappropriated the same, whether under Section 4(6) of the Payment of Gratuity Act, any other provision of law.”

The Bench added that public interest and sovereign duty demanded that ill-gotten gains or loss on account of misappropriation was made good by the wrongdoer as held by the Supreme Court in the case of “Biswanath Battacharya versus the Union Government”.