CENTRAL
ADMINISTRATIVE TRIBUNAL
BOMBAY
BENCH, MUMBAI.
O.A.NO.
583/2011 & O.A. NO. 584/2011
With
Misc.
Petitions No.13 & 14/2012
Dated
this Wednesday,
the
7th
day of March, 2012.
CORAM:
HON'BLE
SHRI JOG SINGH, MEMBER (J)
HON'BLE
SMT. LEENA MEHENDALE, MEMBER (A)
Shri
Raj G.Kuwatkar,
Working
as Appraising Officer &
Residing
at Mohan Paradise, Wayle Nagar,
Kalyan
(West) 421301. ... Applicant
in
O.A.No.583/2011
Sanjeev
M. Patil, residing at
610,
Koyna B Wing,
Shantivan,
Borivali (East)
Mumbai
400 066 and working as
Tax
Assistant at New Custom House,
Ballard
Estate, Mumbai 400 001. ..Applicant
in
O.A.No.584/2011
(Applicant
by Shri G.K. Masand, Sr. Advocate with
Shri
A.A.Manwani, Advocate)
vs.
1.
Union of India through
the
Secretary, Ministry of Finance
Department
of Revenue, North Block
New
Delhi 110001.
2.
Commissioner of Customs (General)
New
Custom House,
Ballard
Estate, Mumbai 400 001.
(Respondents No.1
&
2 common in both
the
O.As.)
3.
Addl. Commissioner of Customs (Gen.)
in
the office of the Commissioner of
Customs
(General), New Custom House
Ballard
Estate,
Mumbai.
400 001. ... Respondents
in
O.A.No.584/2011
only.
(Respondents
by Shri V.S.Masurkar, Advocate)
O
R D E R
Per:
Smt. Leena Mehendale, Member (A):
These
O.A. No. 583/2011 and 584/2011 are both filed on 09.08.2011 under
Section 19 of the Administrative Tribunal's Act, 1985.
2.
The matter appears to be very simple on the surface but like an
iceberg only 1/10th
are above the surface and 9/10th
are below the water. Seen in isolation, it
is a matter of delay in giving charge-sheet but seen against a larger
canvas, it would appear that the people of India have lost and might
continue to lose crores of rupees in bogus claims of DEPB scrips due
to negligence if not facilitation by a number of custom officials at
various levels.
3.
Present OAs are preceded by 16 other OAs which arose in the same
Department of Customs for a similar event namely allowing fraudulent
and bogus claims of Duty Draw Back against exported goods. In that
event, it was alleged that during the period from January, 1995 to
October, 1997 in all 300 bogus duty drawbacks totaling Rs.
50,14,80,668/- were issued in favour of three firms, namely, (i)
M/s. Om Traders, (ii) M/s. Tropical Exotics and (iii) M/s. Prime
Agricom on continuous basis and was claimed to have been received by
Mr. Naval Kishor Bangard and his wife Smt. Sangeeta Bangard by
submitting the forged export documents to various Custom officials of
Duty Drawback Section at Sahar Air Cargo either in collusion or close
association with them. The DGFT detected that the parties and the
claims were both bogus. On enquiry, the CBI had recommended
prosecution against three custom officers, major penalty against 30
officials and minor penalty against 12 officials (in all 45
officials).
4.
It was unfortunate that the fraud was detected not by the senior
officials of Customs Department but by the office of DGFT (Director
General of Foreign Trade) which comes under a separate ministry and
it is pertinent to note that the office of DGFT being outside the
Department of Custom, they take nearly two years or more to detect
such fraudulent claims. The Department of Customs would be in
position to detect such frauds within a few days if they are more
vigilant but it appears that they did not have a proper system of
supervision by senior officials. From the details of that event it
would appear that proper supervision was never a strong point for the
respondent Custom Department and the matter was approached with
casualness. Bogus claims were detected only when the DGFT and CBI
pointed out the bogus claims, where after the department pursued
various steps needed for the charge-sheet. It would also appear that
the charge-sheets were delayed to the extent of vitiating them. The
charge-sheets were issued individually on 21.04.2005. Three
charge-sheets were immediately challenged before this Tribunal in OA
No. 382-383-384 of 2005 on the ground of delay as the event had
occurred in 1995. Two more OAs namely, 216/2006 and 217/2006 were
also filed. In the first set, OAs were allowed by a single order
dated 26.06.2006 and in the second set OAs were allowed by a single
order dated 12.10.2006. The
Respondent Department challenged these decisions in Writ Petition No.
1717, 1697, 1699, 1784 & 1871 of 2007 and the same were dismissed
by a common order dated 04.02.2008. The SLP filed by the dept. to the
Hon'ble Supreme Court was also dismissed.
5.
Thereafter,
the department proceeded in 2009 to appoint Inquiry Officer in
remaining cases. 10 OAs were filed namely 153-158/2009, 161-162/2009,
428/2009 and 444/2009 on the ground of delay in appointing Inquiry
Officer. All of them were disposed of by a single order dated
03.02.2010, allowing
the request to quash the charge-sheet. A
16th
OA Of that series was OA No. 41/2011 which was also filed for the
same reasons of delay in appointing Inquiry Officer, but was
dismissed on 19.08.2011 on the ground of delay in filing the OA
against the charge sheet of 21.04.2005. The tribunal order was
challenged in Writ Petition No. 8382/2011 dated 07.12.2011 and the
High Court has remanded back the case to this Bench 'for
being decided on
its own merit'.
6.
This history of charge-sheets comes later. However, after the
detection of that fraud in 1997, the Respondent Department of
Customs issued some revised instructions by way of Standing Order No.
7382 dated 04.08.1998 which directed the custom officials at various
stations to exercise caution to avoid recurrence of forgery and
directed them to follow a certain improved methodology for
claim-documentation and verification. Despite so, the present two
applicants in O.A. 583 & 584/2011, who were working as UDC &
LDC respectively at the office of New Customs House, Mumbai in the
year 1998 have once again come under a scanner that they failed to
avoid a similar fraud thus causing a wrongful loss to Government
Exchequer to the extent of Rs. 1,64,05,957/- and Rs. 80,40,641/-
respectively.
The
present OAs have to be seen in this backdrop. They
also necessitate certain directions to be given in public interest to
CVC, DGFT, CBI, and Custom dept. for ensuring speedier detection and
these are given at a later paragraph of this order.
7.
The present two applicants were working as UDC (Upper Division
Clerk) and LDC respectively in the year 1998 at the office of New
Custom House, Mumbai and were assigned the duty of verification of
DEPB (Duty Entitlement Pass Book) of firms/exporters having names
with first letter of N to Z (& A to M). Hereinafter, we will
refer to the matrix of O.A. 583/2011 only.
8.
It is his case that in the year 2002 Dy. DGFT Enforcement, Mumbai
noticed that in 1998 some non-existing firms had obtained DEPB Scrips
by submitting forged export documents. A complaint was therefore
lodged by the Dy. DGFT (Enf) Mumbai with the Economic Offences Wing
of the CBI which was registered as RC/4/E/2002 Mum and RC/5/E/2002
Mum. During its investigation of the above 2 cases the CBI noticed
that proprietors of non-existing firms M/s. Ritlene Exports, M/s.
Vaibhav Sales and M/s. TVS Exports had submitted forged documents for
obtaining DEPB Scrips aggregating credit value of Rs. 1,64,05,957/-
which had allegedly caused wrongful loss to that extent the
Government Exchequer. The CBI had recorded the statements of
concerned personnel, including the Applicant who was the concerned
UDC at that time, the Appraiser and Assistant Commissioner of Group
VII. They all denied having verified the said DEPB scrips belonging
to the Accused firms. The Applicant claims that Customs Department
made its own Investigations and came to the conclusion that the
Applicant had not done verification of DEPB scrips nor had he made
the entries in the Punching Register/Verification Register but that
these were made by some other unknown persons.
9.
The applicant claims that
the above enquiries were made against DEPB scrips awarded in the year
1998 after which there was no further action in pursuance of the
matter. He was promoted in the year 2005 with retrospective effect
from 2004 as Examining Officer, and the promotion was later on made
effective from 6.12.2002. In the year 2008 he received yet another
promotion for the post of Appraising Officer where he continues till
date. Thus, in the eyes of the department, he was innocent till the
date of charge-sheet.
10.
Under these
circumstances he has received a charge-sheet on 27.12.2010, Annexure
A.1 which has a Single Article of Charge, which reads as follows:
Article
of Charge: 1:
"
Shri Raj Kuwatkar,
UDC (Now Appraising Officer), being aware of the facts that he was
required to make DEPB Scrips entry showing the particualrs of DEPB
No. and the amount of credit given against the individual shipping
bills in the punching register and verification register while
allotting verification numbers to DEPB Scrips submitted by the
exporters or their representative as per the alphabets allotted to
him, he however, allowed other unauthorised person to make various
entries of DEPB scrips of non existing firms viz. M/s. Ritlene
Exports, Vaibhav Sales and Tvs Exports. He failed to restrict
outsider to make entries in the official records of Customs under his
control, thereby contravened the provisions of para 4.1 of the
Standing Order No. 7300 dated 07.05.1997 and para 2 of the Standing
Order No. 7382 dated 04.08.1998 which has caused loss to Government
exchequer.
Thus,
by the above acts of commission and omission, Shri Raj Kuwatkar, UDC
(Now Appraising Officer) committed gross misconduct, exhibited lack
of integrity, failed to maintain devotion to duty as well as acted in
a manner unbecoming of a Government Servant, thereby contravening
Rule 3 (1) (i) (ii) (iii) of the CCS (Conduct) Rules, 1964."
11.
In the Statement of Imputation the Department has listed 16 DEPB
scrips, pertaining to the three firms, all originating between the
period 11.6.1998 to 23.11.1998 (5 months) aggregating to a total
credit value of Rs.1,64,05,957/-. The same Statement of Imputation
also gives the details of Standing Order No. 7300 dated 07.05.1997
and Standing Order No. 7382 dated 04.08.1998 which both would
clarify the exact method to be followed by the UDC while issuing DEPB
scrips. It, therefore, imputes that registers to be maintained by
the applicant as part of his official duty was misused by somebody
due to his own negligence of duty. Further Standing Order
No. 7382 expresses concern about past similar cases of DEPB having
been obtained on the basis of fraudulent documents and hence asks the
officers to exercise caution to avoid recurrence of forgery. Despite
so, the applicant has shown lack of integrity, lack of devotion to
duty and acting in a manner unbecoming of a Government Servant.
12.
The
applicant, after receiving the impugned charge Memo dated 27.12.2010,
denied the charge by his letter dated 23.1.2011 and also requested
the Disciplinary Authority by another representation dated 23.1.2011
to withdraw the Charge-Memo on the ground of inordinate delay. He
pointed out that his case was similar to a number of cases on the
question of delay in issuing charge sheet, in which various courts
including the Apex Court have held that delay in initiation of
Departmental Enquiry by more than 10 years without any convincing
explanation would be prejudicial to the person concerned and hence
the Departmental Enquiry was quashed. His representation is seen at
Annexure A.5. which was not answered and he preferred O.A. No.
336/2011 which was disposed of by this Tribunal, by order dated
29.4.2011 (Annexure A.2) directing the respondents to consider the
representation and take an appropriate decision within six weeks.
13.
Accordingly, the respondents have passed speaking order on
01.06.2011 as seen at Annexure A-4. They have given various stages
through which the investigation has passed, thus, coming to the
conclusion that the delay was neither abnormal nor unjustified. The
applicant has, therefore, impugned both Annexure I (Charge sheet) and
Annexure A-4 (detailed reply of the respondents answering the
representation of the applicant).
14.
At this stage a brief description of the methodology of duty draw
back concession is pertinent. It is mentioned in the Statement of
Imputation of Charges and the reply statement. The DEPB which is
issued to the exporter by the Licencing Authority on post-export
basis, is verified by the Pass Book Section with respect to (i) DEPB,
(ii) copies of the Shipping Bills presented by the party and (iii)
the ledgers maintained for this purpose. The verifications are in
particular carried out in respect of description of goods, FOB value,
etc. After the verification the DEPB book has to be endorsed with a
stamp stating "verified by Customs" and signed in full with
dated signature of the nodal Assistant Commissioner. The particulars
of the DEPB No. and the amount of credit given against individual
Shipping Bill shall be mentioned in the ledger and the nodal
Assistant Commissioner of Customs shall put the endorsement
"verified" in the ledger and sign in full below the
endorsement. Thereafter, the DEPB shall be registered.
15.
The relevant documents are then sent to DGFT who has a chance to
locate the fraud only after about one to two years of time has
elapsed. It is, however easily possible for the Customs officials to
locate the fraud. As seen from the statement of imputation of
charges, without the verification and the allotment of Verification
Number to the DEPB scrips as per Verification/Punching Register/, the
DEPB scrips cannot be utilised for importing/exporting goods as the
debits are made by Debit clerk against the concerned SI. No. and the
verification No. in the Debit Register.
16.
It would thus appear that Punching
of the DEPB scrips, when done fraudulently by an outsider will be
noticed immediately by the concerned UDC who handles the Register.
Entering of non-authentic DEPB scrips not only gives a huge duty draw
back benefit to the concerned firm but also, at a later date, becomes
a prima facie proof of its existence and can be utilized for more
serious crimes including huge financial fraud on the country or even
terrorism.
17. Coming
back to the present OA, the applicant in his representation to the
Department dated 23.01.2011 has relied on the judgments:
(a) in
the case of State
of M.P. Vs. Bani Singh, AIR 1990 SC 1308
and (b) in the case of Sate
of Andhra Pradesh Vs. N. Radhakrishnan (1998) 4 SCC 154
decided by the Hon'ble Apex Court; and (c) in the case of P.V.
Mahadevan Vs. M.D., Tamil Nadu Housing Board,
Civil Appeal No. 4901 of 2005 decided by Supreme Court on
08.08.2005.
18. The
learned counsel for respondents argued that in the latest OA No.
41/2011 of the earlier instance, this Bench took a view different
from the view taken in allowing 3rd
set of 10 OAs No 153-158/2009, 161-162/2009, 428/2009 and 444/2009.
These 10 OAs were allowed and the charge sheet were
quashed but in the latest OA
41/211 the charge sheet was upheld and the OA was dismissed on the
ground of delay between date of charge sheet (21.4.2005) and filing
of OA in 2011. Similarly effect of the decision of earlier 5 Writ
Petition No.1717/2007 etc. was of upholding the quashing of charge
sheet. But in the latest Writ Petition No. 8382/2011 decided on
07.12.2011, the Hon'ble High Court has not found it fit to give
complete relief to the original applicant but has remanded back the
OA to be decided on merits.
19. A. The
learned counsel for respondents argued that the respondents have
complied with the
orders of this Hon'ble Tribunal dated 29.04.2011
in OA No 336/2011 and passed a speaking order which has been
conveyed to applicant. Therefore, now unless and until the
Disciplinary Proceedings are over, and all departmental remedies
are exhausted, the applicant has no cause of action to approach this
Hon'ble Tribunal. The Administrative Tribunal Act, 1985 clearly
stipulates that only when all the departmental proceedings are over
he can raise grievance before the Hon'ble Tribunal, and hence on this
ground itself the present OA is required to be dismissed as
premature.
B.
Department received the investigation report and related documents
from CBI, Mumbai in year
2006/07, hence there is no inordinate or unjustified delay.
C. There
are guidelines of Central Vigilance Commission that when a premier
agency like CBI is investigating the case, there should not be any
parallel investigation by the department. Any disciplinary
proceeding should be initiated only after receiving the investigation
report, specifying the role played by the Govt. Servant.
D. On
the basis of forged documents, 03 firms had obtained 16 DEPB scrips
of aggregated credit value of Rs. 1,64,05,957/- which has caused
wrongful loss of equal amount to the Government Exhequer.
E. Applicant
during subject period under charge-sheet was assigned the duty of
verification of DEPB Scripts and maintaining the registers. Though
applicant denied having made any such entry in the Register, it is
equally true that the Register which he was maintaining in his
section as a part of his official duty was misused by someone else
due to his negligence towards his duties resulting in huge loss of
Govt. Revenue. Applicant allowed outsider to make entries in the
said Register thereby damaging the protective mechanism of the Deptt.
and making the whole system vulnerable to fraud.
[We
also observe that the applicant was in a position to immediately
notice that entries were not made by him, so he could have
immediately raised the issue with supervisery officers but has not
done so].
F. DEPB
fraud for which applicant has been charge-sheeted took place during
1998 and was brought to light by DGFT in year 2002. Thereafter, CBI
investigated the case and submitted its detail investigation report
in 2006/07 specifying applicant's role in the fraud, and then, after
following official formalities charge-sheet was issued to applicant
in December, 2010. In-between, applicant got his due promotions in
year 2005 and 2008, making it necessary to seek more permissions from
higher-ups for the Departmental Enquiry.
G. Also
it is expected that when a premier agency like CBI is investigating
the case, there need not be parallel investigation by the department.
H. The
fact that he was given promotion shows that there was no bias against
him.
20.
The respondents have cited many judgments to stress that every
Departmental Enquiry need not be quashed on the ground of delay
alone. They have particularly cited a Division Bench judgement of the
Delhi High Court delivered on 29.10.2003
in LPA No. 39/1999 in the case of DDA
vs. D.P Banbah & Anr.
wherein the High Court has, in great details,
examined the pros and cons in a chargesheet issued with an apparent
delay and have compared two possibilities as below:
|
Pros
|
Cons
|
|
Unless the
statutory rules prescribe a period of limitation for initiating
disciplinary proceedings, there is no period of limitation for
initiating the disciplinary proceedings.
|
Since delay in
initiating disciplinary proceedings or concluding the same are
likely to cause prejudice to the charged employee, courts would
be entitled to intervene and grant appropriate relief where an
action is brought.
|
|
If bonafide and
reasonable explanation for delay is brought on record by the
disciplinary authority,in the absence of any special equity, the
court would not intervene in the matter.
|
Balancing all the
factors, it has to be considered whether prejudice to the defence
on account of delay is made out and the delay is fatal, in the
sense, that the delinquent is unable to effectively defend
himself on account of delay.
|
|
The Court would
ordinarily lean against preventing trial of the delinquent who is
facing grave charges on the mere ground of delay. Quashing would
not be ordered solely because of lapse of time between the date
of commission of the offence and the date of service of the
charge-sheet unless of course if the right of defence is found to
be denied as a consequences of delay.
It is for the
delinquent officer to show the prejudice caused or deprivation of
fair trial because of the delay.
|
|
21. Thus,
finally we have to be guided by two opposing claims.
(a) On
the one hand is the claim of the two applicants that the event of
passing duty draw back to the extent of nearly Rs. 2 crores has take
place in 1998, apparent fraud has been detected in 2002 by DGFT
(another Ministry of the Govt), the C.B.I. Enquiry has been conducted
and reported to the respondent Department in 2007 but the chargesheet
has been given in 2010. Such a delay jeopardises their defence and a
prejudice is caused to them and that the delay would deny a fair
trial to them.
(b) On
the other hand, we have the issue of public money worth nearly Rs.2
crores being taken away by bogus exportes by submitting fraudulent
document and possibility of such documetns being used in future for
more grievious crimes, the possibility of other fraudulent companies
being emboldened and the possibility of Custom Employees in charge of
duty draw back operations also being emboldended. Even at the cost
of repetition it is worth mentioning that out of the 16 cases
referred to in earlier paras, which emanated from earlier incident,
the CBI had recommended criminal offences against three officials,
major penalty proceedings against 30 officials and minor penalty
proceedings 12 officials. The event had occurred between 1995 to 1997
and chargesheet was served in 2005. Only 5 employes had approached
this Tribunal immediately and obtained the relief in terms of
quashing of the chargesheet on the ground of delay. Thereafter it
took the Department another four years to appoint Enquiry Officer and
Presenting Officer in other 10 cases. Thus, another group of 10
employees could seek quashing of the chargesheet on the ground that
the Respondent Department had taken four years to appoint Enquiry
Officer and this delay was unjustified. It is also pertinently
pointed out by the Learned Counsel for the respondent that in those
earlier matters, the Disciplinary Authority was of the view that no
Departmental Enquiry was necessary and there was a protracted
correspondence between Senior level officers of the Respondent
Department and the CBI, before the decision to issue chargesheet was
final taken.
(c) In
the present OA the factors that would weigh against the two
applicants are that the Department had tried to inculcate certain
caution and certain discipline by way of their Standing Order
S.R.No. 7382 dated 4.8.1998 which inter
alia
stipulates that:
Standing
Order No. 7382 DATED 04.8.1998 stipulates, interalia, that "Recently
some cases of DEPB having been obtained on the basis of forged
documents have been noticed. It has been noticed that some DEPBs
were obtained on the basis of forged E.P. copies of the Shipping
Bills, B/Ls etc. presented to the licensing authority. In order to
prevent similar occurrence in future it has been decided that DEPB
verification would be carried out with reference to the EGM. After
verification of EGM in the said matter a perforated stamp similar to
the perforated stamp put by the Cash Department at the time of
payment of duty would be affixed by the concerned verified officer".
Hence
the statement of imputation emphasizes that;
"in
view of the above two Standing Orders, it is clear that, without the
verification and the Verification Number allotted to the DEPB scrips
as per Verification/Punching Register/ the DEPB scips cannot be
utilised for importing goods as the debits are made by Debit against
the concerned Sl.No. Of the verification No. in the Debit Register."
(d) The
second factor that would weigh is that the fraud amount and
therefore, the consequent loss to the Govt. Exchequer is as huge as
nearly Rs. 2 crores. The applicant of OA 584/211 has pointed to one
earlier and similar incident of bogus claim passed by him where
department had taken prompt action and he was given some minor
penalty and hence claims that here too, the department should have
taken quick action if he was guilty. However, in view of the fact
that the instant matter was under CBI investigation, we feel it right
to let the Departmental Enquiry decide the issue.
22.
At this juncture, we find it necessary, as foremost preventive
step for future, to issue following instructions to the Central
Vigilance Commission (CVC), DGFT, the CBI and suitable
representatives of Ministry of Finance not below the rank of
Additional Secretary to Govt. Of India that they shall meet under the
Chairmanship of the CVC, for as many meeting as would be needed and
appoint a small group of Officers of the CBI, DGFT and the
Commissioner of Customs to conduct a study on how the duty drawback
scrips are issued to the Exporters, how data entry is done in the
computers, at what frequency they are sent to the DGFT, what are the
documents which enable the DGFT to locate that the firms are bogus
and non- existing, what kind of additional documentation is needed at
the level of Customs Department so that at their level itself they
are in a better position to locate such bogus companies etc. It is
also very necessary that supervision by the Senior Customs Officers
are carried out periodically of all the work done upto the level of
Appraising Officers and an appropriate monitoring system is developed
that would allow the Senior Customs Officers to detect the negligence
or connivance at the level of Appraisers. We would expect a report to
be filed before us in that regard by the CVC within next six months.
23.
In view of the above, we consider it just and fair that the
Departmental enquiry should proceed. It would however be necessary
for the respondents to complete the said enquiry within four months.
24.
Both the O.As. are, therefore, dismissed. No
Interim Relief was granted on M.P.No.13 & 14/2012 dated 4.1.2012.
The same also stand dismissed.
No order as to costs.
(Smt.
Leena Mehendale) ( Jog Singh)
Member
(A) Member (J)
sj*/dp
