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Employee Accused Of Embezzlement Must Be Kept Away From Establishment Till Enquiry Is Completed: Kerala High Court

Hannah M Varghese
8 July 2022 8:30 AM GMT
Employee Accused Of Embezzlement Must Be Kept Away From Establishment Till Enquiry Is Completed: Kerala High Court
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The Court added that if these accusations were baseless or genuine was a matter of enquiry.

The Kerala High Court on Thursday held that an employee at the helm of affairs, accused of embezzling money, cannot be reinstated during the pendency of the enquiry and thereby refused to recall the order of suspension.A Division Bench of Justice P.B. Suresh Kumar and Justice C.S Sudha added that whether these accusations were baseless or genuine was a matter of enquiry and for that reason,...

The Kerala High Court on Thursday held that an employee at the helm of affairs, accused of embezzling money, cannot be reinstated during the pendency of the enquiry and thereby refused to recall the order of suspension.

A Division Bench of Justice P.B. Suresh Kumar and Justice C.S Sudha added that whether these accusations were baseless or genuine was a matter of enquiry and for that reason, the disciplinary proceedings had to continue uninterrupted without the court's interference.

"Ordinarily when there is an accusation of defalcation of monies, the delinquent employee must be kept away from the establishment till the charges are finally disposed of. Whether the charges are baseless, malicious or vindictive and are framed only to keep the individual concerned out of the employment is a different matter. But even in such a case, no conclusion can be arrived at without examining the entire records in question and hence it is always advisable to allow disciplinary proceedings to continue unhindered."

The Court added that the power of suspension is a power that is available to the appointing authority, which can be exercised wherever it is necessary to do so.

"An order of suspension is primarily an administrative order, but it cannot be passed without proper application of mind. It is usually resorted to when the charge against the delinquent employee is serious enough to justify his discontinuance in the post held by him. An order of suspension is usually issued essentially in public interest. In the case of offences of lesser gravity, the delinquent employee can be kept away from the post even by transfer."

The first respondent herein was an Instrumentation Engineer at the University of Calicut. The allegation was that he misappropriated over ₹30 lakhs with the active connivance of the contractor in the matter of a contract relating to the local area network. On the basis of a recommendation and report to initiate disciplinary proceedings, he was placed under suspension.

The respondent moved the Single Judge to quash the recommendation and the report alleging that they were legally unsustainable. This was allowed and the University was directed to reinstate him back into service. Aggrieved by this order, the University moved the Division Bench with an appeal. 

Standing Counsel P.C.Sasidharan appeared for the appellant University, Senior Advocate Geoge Poonthottam for the petitioner and Government Pleader V. Vinita appeared for the others.

The appellant submitted that the respondent was occupying a post of which there is only one in the entire University. Therefore, it was argued that it was not possible to transfer him pending the inquiry. He was also the Controlling Authority and the Head of the Department of Instrumentation Engineering.

It was also submitted that he has been suspended for serious misconduct and hence his reinstatement would affect the functioning of the University; that it would convey a wrong signal to the employees and would affect the morale of the employees as well.

However, the first respondent submitted that he has been made the scapegoat when it is actually the members of the Purchase Committee who were responsible for the financial loss to the University. Producing certain documents, he argued that he had no role at all other than rendering technical assistance in the issuance and acceptance of the tender for the work in question.

The Bench found that the Apex Court had laid down in several cases the principles to be kept in mind while keeping an officer under suspension, such as whether an employee should or should not continue in the office during the period of enquiry is a matter to be assessed by the authority concerned.

Similarly, it has been established that it will not be an administrative routine or an automatic order to suspend an employee. It should be on consideration of the gravity of the alleged misconduct or the nature of the allegations imputed to the delinquent employee. The Court or the Tribunal must consider each case on its own facts and no general law can be laid down in that behalf. 

The Court added that suspension must be a step-in aid to the ultimate result of the investigation and that the authority should keep in mind the public interest of the impact of the delinquent's continuance in the office while facing departmental inquiry.

"In other words, it is to prevent the delinquent employee from availing further opportunity to perpetrate the alleged misconduct or to remove the impression among the members of service that dereliction of duty would pay fruits and the offending employee could get away even pending inquiry without any impediment or to prevent the delinquent officer from scuttling the inquiry or investigation or to win over the witnesses or the delinquent having the opportunity in office to impede the progress of the investigation or inquiry."

Upon examining the circumstances, the Court found that it would be advisable that the respondent be kept out of the mischief's range. In case he is exonerated, he would be entitled to get all the benefits from the date of the order of suspension.

"When a person like the petitioner who is at the helm of affairs, is alleged to be involved in financial misconduct, the authority has to keep in mind the public interest of the impact of the delinquent's continuance in office while facing departmental inquiry. In the instant case, we are of the view that the fourth respondent was justified in keeping the petitioner under suspension, pending enquiry."

Therefore, the Bench found no reason to interfere with the recommendation and report or the suspension order.

As such, the appeal was allowed. The concerned authority was directed to complete the disciplinary proceedings within two months, failing which the petitioner shall stand reinstated unless the delay was caused due to the petitioner seeking adjournments. 

Since it was found that alternate remedies were available to the petitioner, which were not resorted to, the Court clarified that this order does not prevent him m pursuing the remedies available to him under the Statute.

Case Title: University of Calicut v. Mohamed Sajid T & Ors.

Citation: 2022 LiveLaw (Ker) 336

Click Here To Read/Download The Order

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