Full Judgment Text & Judicial Ruling

2008 P L C (C

2008 P L C (C.S.) 96

[Federal Service Tribunal]

Before Abdul Hafiz Mirza and Rashid Mahmood Ansari, Members

ABDUL MAJEED BHATTI and another

Versus

FEDERATION OF PAKISTAN through Secretary, Establishment Government of Pakistan and 2 others

Appeals Nos.609(R) and 503(R) of 1998, decided on 25th April, 2007.

(a) Government Servants (Efficiency and Discipline) Rules, 1973---

----Rr. 4(1(b)(iv), 5 & 6---Service Tribunals Act (LXX of 1973), S.4---Dismissal' from service---Appeal---Appellants were dismissed from service after issuing them show-cause notice and holding inquiry against them on allegation that they had committed gross negligence, concerning embezzlement causing loss of Rs.10.43 million (approximately) to the public exchequer---Conduct of both appellants was such as to leave no doubt that they were fully involved in the case and they could not feign innocence---Appellants during departmental inquiry defended themselves only by denying the charges and cross-examining the witnesses who appeared on behalf of the respondents---Appellants did not produce any evidence of their own or any witness in their support; they were nobody to vouch for themselves---Question of quantum of punishment was also important in the case---Both appellants had been awarded the punishment of dismissal from service---One who was working in a senior position, enjoyed greater authority and correspondingly greater opportunity to manipulate the outcome---Nine allegations were levelled against said appellant out of which six were proved; on the other hand eight allegations were levelled against the appellant, out of which only three were proved and he was working in a junior position and was acting under the guidance and supervision of the senior appellant---Even if the junior one had an axe of his own to grind, he was not in a position to manipulate things in such a manner as to affect the outcome in a significant manner on its own---Role of junior appellant was secondary, whereas role of senior one was of primary importance---To treat both of them at par and to award the same punishment to both of them, would not be in the interest of justice---Penalty of dismissal from service imposed on senior appellant was maintained, whereas penalty of dismissal from service imposed on the junior was reduced to compulsory retirement from service; he would be entitled to the consequential benefit as per rules.

1988 PLC (C.S.) 451 ref.

(b) Government Servants (Efficiency and Discipline) Rules, 1973---

----Rr. 5 & 6---Inquiry procedure---Ends of justice would be met, if the material or evidence which came to light consequent to the preliminary inquiries was made use of during the regular inquiry subject to the condition that accused was given full opportunity to put up his defence in regard to such material or evidence.

Abdul Rasim Bhatti and Raja M. Asghar Khan for Appellants.

Muhammad Aslam Uns for Respondents along with Anwar Mughal, Manager (Legal), as Departmental Representatives.

Date of hearing: 4th January, 2007.

JUDGMENT

RASHID MAHMOOD ANSARI (MEMBER).--- This judgment will dispose of the captioned appeals as both involve similar questions of law and facts.

2. Briefly stated, the facts of the case, are that the cause of grievance of both the appellants is that they have been dismissed from service vide two separate orders, both dated 18-2-1998 on account of irregularities arising from a project of upgradation/improvement of precision casting facilities established in the Machine Gun Factory, (hereinafter referred to as the MG Factory) of the Pakistan Ordnance Factory, Wah (hereinafter referred to as POF). Around 1988, a need was felt for improvement in precision casting facilities; and the then General Manager, MG Factory approached Messrs Saunders of USA (a firm whose plants had been installed in private sector in Lahore) for advice. The firm advised that by adding a few of their machines to the existing facilities in POF and by using the specified raw materials, the required improvement could be achieved. No further action was taken in the matter. However, in November, 1990 Mr. A. Majeed Bhatti, who, in the meanwhile, had been posted as G.M., MG Factory (hereinafter referred to as appellant No.1) submitted a feasibility study in November, 1991 to the Member Production Coordination (hereinafter referred to as MPC), POF Board for improving the precision casting facilities. Still, there was no progress. However, in December, 1990 Chairman, POF Board raised the question of improvement of precision casting facilities in a number of meetings i.e. 42nd Production Conference dated 9-12-1990, 42nd Production Coordination Conference dated 23-12-1990 and 43rd Production Coordination conference dated 30-12-1990. In follow-up, a study dated 12-1-1991 was submitted by appellant No.1 for approval of Chairman of the POF Board through MD (Weapons) and MPC. This study was based on the 1988 offer of Messrs Saunders which was already available in the office record of the respondent-Organization. The proposal was approved by the Chairman on the same day and the tender enquiries (hereinafter referred to as TEs) were issued on 20-1-1991 to 12 firms (less Messrs Saunders whose plant was recommended for procurement) TEs were opened on 20-2-1991. Only four firms had quoted, out of which, three were US based (i.e. Messrs Focus, Messrs AM Pak and Messrs Future Tech) and had quoted Saunder's plant and one was a British firm (Messrs Maymar) which had quoted its own plant. MPC (Mr. M. Afzal) observed vide his minutes dated 12-3-1991 that the TEs had been issued on the basis of specifications of machines of a particular firm and therefore, in order to ensure better competition in international market, he ordered retendering based on general specifications. Accordingly revised TEs based on general specification (by removing the manufacturer's model numbers etc.); were issued to 14 firms (including Messrs Saunders) on 2-4-1991 and again the same four firms quoted. The three US firms had quoted the Saunders plant and were recommended for pre-qualification whereas the offer of the British firm was rejected. The technical CST was approved on 29-5-1991 by Mr. A. Qadeer who, after the retirement of Mr. M. Afzal, had taken over as MPC. Their commercial offers were opened on 4-6-1991. Resultantly the proposal dated 25-6-1991 for purchase of the plant at the total cost of US$ 765,277.70 (equivalent to Rs.1,82,49,806.90) from Messrs Focus System International, USA was approved by the Acting Chairman of POF Board on. 27-6-1991. After getting one per cent discount on the cost of the plant in accordance with the observations of the Finance Department, the Financial Adviser concurred in the proposal on 28-7-1991 at the total cost of US $758,852.74 (Equivalent to Rs.18,096,588.95). The contract was thus, placed on Messrs Focus System International on 30-7-1991.

3. On account of reports of gross irregularities and preplanned manipulation allegedly committed in the execution of this contract, the new Chairman POF Board visited the Plant in early 1993 and got the matter looked into by the FIU (Field Investigation Unit). Two in-house inquiries were also conducted by Ashraf Rajput MD (Weapons) and by Mr. A. Abidi, Director Industrial and Commercial Relations (DICR). Subsequently, Mr. Pir Muhammad Qureshi, Principal TTI also conducted a formal departmental inquiry. Consequently, it was decided to charge-sheet the following two officers:--

(i) Mr. Abdul Majeed Bhatti, GM(GM, MG Factory); appellant No. 1.

(ii) Mr. Saifullah Khalid, Manager (the then Assistant Manager, MG Factory), hereinafter referred to as appellant No.2.

4. Secretary, Defence Production Division (Authorized Officer) charge-sheeted the above-mentioned officers for inefficiency and misconduct in terms of the Government Servants (Efficiency and Discipline) Rules, 1973 alleging that both the officers had committed gross irregularities in the procurement of the Precision Casting Plant against Contract No.4302/001/Capt/21/PUR MG Factory dated 30-7-1991 resulting in loss of Rs.10.43 millions (approx) to the public exchequer. Brig. Khalid Ullah, OSD-I, DP. Division was appointed Inquiry Officer but before he could complete the inquiry he retired from service. Subsequently, Brig. Syed Ghaffar, Director ARDE was appointed the Inquiry Officer vide DP Division letter, dated 21-4-1997. The new Inquiry Officer completed the inquiry and submitted his report, dated 30-8-1997 (hereinafter referred to as the Departmental .Inquiry Report).

5. The statement of allegations appended to the charge-sheet dated 1-10-1995 issued to Mr. Saifullah Khalid, contained eight allegations, out of which on the basis of the Departmental Inquiry Report, three allegations were proved against him. A show-cause notice was served upon him. He was given the personal hearing on 18-11-1997 by the Authorized Officer. Eventually the major penalty of dismissal from service was imposed upon appellant No.2 (Mr. Saifullah Khalid) vide impugned Daily Order Part-II No.256/2, dated 18-2-1998. The appellant preferred a departmental appeal dated 9-3-1998 which remained un-responded. He filed Appeal No.503(R) of 1998 in this Tribunal on 27-6-1998.

6. Nine allegations were listed in the statement of allegations along with the charge-sheet dated 1-10-1995 issued to appellant No.1 (Mr. Majeed Bhatti), out of which six were proved according to the departmental inquiry report. The show-cause notice, dated 9-9-1997 was issued to him by Secretary, Defence Production Division along with a -copy of the inquiry report: He submitted his reply dated 30-10-1997' to the show-cause notice and denied the charges. The personal hearing was given to him on 18-11-1997. However, the major penalty of dismissal from service was imposed upon him vide daily Order Part-II No.256/1, dated 18-2-1998. The appellant submitted departmental appeal dated 14-3-1998, which remained un-responded. He filed Appeal No.609(R) of 1998 in this Tribunal on 13-7-1998.

7. The statement of allegations issued to Mr. Majeed Bhatti, the then General Manager, MG Factory reads as under:--

Statement of allegations against Mr. Abdul Majeed Bhatti

(1) Purchase Proposal was initiated by you without meeting the requirements of Appendix "A" of Standing Orders, 1988 (Part-III), which is a prerequisite for the provisioning action of any capital purchase.

(2) You prepared specifications of the plant by listing all the plant items and materials with proprietary model numbers which were earlier quoted by Messrs Saunders in 1988. Thus, you manipulated to ensure that only the plant of Messrs Saunders could be purchased. This was also violation of Ex.M.P.C. Mr. Muhammad Afzal's instructions on the case to prepare general specification to have better competition in the international market.

(3) Tender Enquiries were issued by you to 12 firms. Most of these 12 firms were later proved to be trading houses and did not deal with the Precision casting except Messrs Saunders who quoted for the plant in 1988 at much lower rates; while specifications of their plant were adopted in to for purchase of new plant.

(4) You wilfully concealed the fact that items of Sr. No.4 of the Contract were old, outdated and used ones. Certain drawings reveal manufacture data of Melting Furnace as far back as 1964-65.

(5) As per practice in vogue for the purchase of a Plant, price negotiating team is constituted for price negotiation with the firm, but in this case no action was taken by you even though Mr. Jaffer of Messrs Focus was available in Pakistan twice and visited POFs on each occasion.

(6) You concealed the offer received from Messrs Saunders in 1988, the price quoted at that time was four times lower than the price of 1991. Thus, you deprived senior officers from the basis of price negotiations for .getting substantial reduction in it.

(7) As a Member of Technical Scrutiny Committee, you recommended purchase of an outdated plant which could neither meet the purposes for which it was purchased, nor could be fully commissioned even three years after its receipt in POFs.

(8) You manoeuvred a fake competition of paper/bogus firms, unfounded in USA, with the connivance of a local supplier of Lala Rukh, Wah Cantt. to award purchase order/supply contract to a particular firm. For this purpose, printing of letter heads of firms, rubber stamps affixed on the papers were arranged locally, even signatures of office-bearer of firm were forged, and prepared all offers in a counterfeit manner in the premises of the local supplier. Your this act of forgery indicates your ulterior motive to squander public money through fishy deal.

(9) You wilfully avcided the laid down procedures and cheated seniors with guilty intention, accruing revenue loss to public exchequer to the tune of Rs.10.43 million approximately.

(Sd.) (Mazhar Rafi) Secretary, DP Division (Authorized Officer)

8. According to the departmental inquiry report, allegations Nos.1, 2, 3, 4, 5 and 9 were proved against Mr. Majeed Bhatti, whereas allegations Nos.6, 7 and 8 were not proved.

9. The statement of allegations issued to the Saifullah Khalid the then Assistant Manager, Precision Casting Plant, MG Factory reacts as under: --

Statement of allegations against Mr. Saifullah Khalid, Manager, POF Gadwal

(1) You prepared specifications of the plant by listing all the plant times and materials with proprietary model numbers which were earlier quoted by Messrs Saunders in 1988. Thus, you manipulated to ensure that only the plant of Messrs Saunders could be purchased. This was also violation of Ex-M.P.C. Mr. Muhammad Afzal's instructions on the case to prepare general specifications to have a better competition in the international market.

(2) Tender enquiries were issued by you to 12 firms. Most of these 12 firms were later proved to be trading houses and did not deal with the Precision Casting except Messrs Saunders who quoted for the plant in 1988 at much lower rates; while specifications of their plait were adopted in toto for purchase of new plant.

(3) You removed the detailed description of the plant quoted by Messrs Maymar, who is an original manufacturer of investment Casting Plant and was also the lowest bidder. This was done by you to ensure its disqualifications on technical grounds.

(4) You knew that the price of the plant offered in 1991 was four times higher than the price offered in 1983 by Messrs Saunders, and concealed this information from the higher authorities with the exception of your General Manager, which deprived them from getting the price reduced after negotiation with the firm.

(5) You recommended in C.S.T. the purchase of all outdated plant which could neither meet the purposes for which it was purchased nor could be fully commissioned even three years after its receipt in POFs.

(6) As incharge of installation of the newly-purchased plant, you deliberately delayed the installation to ensure that the guarantee period lapses.

(7) You manoeuvred a fake competition of paper/bogus firms unfounded in USA, with the connivance of a local supplier of Lala Rukh, Wah Cantt. to award purchase order/supply contract to a particular firm. For this purpose, printing of letter heads of firms, Rubber stamps affixed on the papers were arranged locally, even signatures of office-bearer of firms were forged, and prepared all offers in a counterfeit manner in the premises of the local supplier. Your this act of forgery indicates your ulterior motive to squander public money through fishy deal.

(8) You wilfully avoided the laid down procedures and cheated your senior with guilty intention, accruing revenue loss to public exchequer to the tune of Rs.10.43 million approximately.

(Sd.) (Mazhar Rafi), Secretary to the Government of Pakistan (Authorised Officer).

10. According to the departmental inquiry report, five allegations i.e. allegations Nos.2, 3, 4, 5 and 7 were not proved against appellant No.2 whereas three allegations i.e. allegations Nos.1, 7 and 8 Were proved.

11. Raja Asghar Khan, Advocate argued on behalf of appellant No.1 (Mr. Majeed Bhatti). The learned counsel stated that appellant No.1 had joined the POF on 29-11-1965 and he was dismissed vide order dated 18-2-1998. He reached the age of superannuation on 2-6-2003. The learned counsel submitted that the Inquiry Officer (Mr. Pir Muhammad Qureshi) of the fact-finding inquiry appeared as a witness in the departmental inquiry and cited the evidence taken during the fact-finding inquiry but it was in contravention of the ruling of this Tribunal in the case reported as 1988 PLC (C.S.) 451 in which it was held that the statement recorded on evidence taken before initiation of regular inquiry could not be taken into consideration; that a number of offers were associated in the execution of the contract in question but no action was taken against anyone else except appellants Nos. 1 and 2 which showed mala fides and discrimination on the part of respondents; and that the DR's statement was recorded during the departmental inquiry without oath and the appellants were also not given an opportunity to cross-examine him which was unlawful. Referring to the allegations which according to the departmental inquiry report. were proved, the learned counsel made the following submissions: --

(a) Allegation No.1 pertained to the violation of POF's Standing Order No.88 and not preparing the case on the basis of its Appendix "A", but the fact of the matter was that the proposal was approved by the then MPC and the Chairman POF Board and they did not ask for the project proposal to be presented in the format for Appendix "A";

(b) allegation No.2 related to manipulation of plant specifications in violation of the then MPC's instructions dated 12-3-1991 whereby the latter had ordered that retendering be done on the basis of the general specifications. He had not approved any particular specifications. In any case subsequently retendering was done on the basis of revised specifications;

(c) allegation No.3 pertained to issuance of TEs to trading houses which was not involved in the manufacture of the requisite plant. Appellant No.1 had taken approval of the then MD (Weapons), MPC and the Chairman of Board before issuing TCs.

(d) allegation No.4 referred-to wilfully concealing the state of the plant, especially its controlling unit which was old. Appellant No.1 had not personally examined and was not aware of the state of the imported plant since the Case Opening Report had been prepared by the Planning Department.

(e) allegation No.5 regarding non-holding of prices negotiations, but it was so since the superiors of appellant No.1 had not asked him to hold price negotiations with the firms which had submitted commercial offers

(f) allegation No.9 regarding wilful avoidance of the laid down procedure resulting in a loss of approximately Rs.10.43 millions to the public exchequer. The plant was still functioning and cannot be treated as a loss to the POF.

12. Mr. A. Rahim Bhatti, Advocate argued on behalf of appellant No.2 (Mr. Saifullah Khalid) who had joined the POF on 16-6-1982 and at the time of execution of the contract in question was the Assistant 1VIanager, Precision Casting Plant, MG Factory. At the outset the learned counsel referred to the Court order, dated 26-6-2004 regarding the legal issues pertaining to this case. Being part-heard case it was placed before the same Bench on 22-9-2004 which decided vide order of date, that the case shall be heard on facts also. Having been fixed for hearing before a new Bench now, the learned counsel stated that he would make submissions afresh on the questions of facts and law. As regards the background of the disciplinary proceedings, the learned counsel stated that the respondents had got three preliminary inquiries conducted in regard to the alleged irregularities. The first preliminary inquiry was conducted in September, 1991 by Mr. Ashraf Rajput, Director (Weapons) the second by Mr. M.A. Abidi (DICR) on 23-4-1993 and the third, which was a fact-finding inquiry, by Mr. Pir Muhammad Qureshi on 4-8-1993. Even the Field Investigation Unit had investigated the matter vide report, dated 15-5-1993. According to the learned counsel, it is significant that when the first preliminary inquiry was held in September, 1991 by Mr. Ashraf Rajput, the plant had not yet arrived since even though the contact had been signed on 30-7-1991, the LC was actually opened on 3-10-1991. The learned counsel therefore, contended that if the POF Management had suspected any foulplay, the contract could still have been called off and the LC should not have been opened. He further submitted that out of the eight allegations against appellant No.2, the departmental inquiry report exonerated him from five allegations i.e. allegations Nos.2, 3, 4, 5 and 6, whereas he was held guilty on account of allegations Nos.1, 7 and 8. The learned counsel " made the following submission in regard to the said three allegations:

(a) Allegation No.1 relates to manipulation of specifications of the machinery and violation of the then MPC's orders, dated 12-3-1991 for the preparation of general specifications. The learned counsel maintained that appellant No.2 (Mr. Saifullah Khalid) was only an Assistant Manager at the time and was not directly concerned with the preparation of specifications for the plant. According to him appellant No.2, in fact; was not aware of the MPC's orders dated 12-3-1991 wherein he had directed that general specifications be prepared for retendering. According to the learned counsel, the DR had stated in the course of the inquiry as indicated at page 155 of the departmental inquiry report that the GM (Mr. Majeed Bhatti) had shelved the said orders of the MPC which were not even mentioned in his report dated 12-1-1991 and thus he had master-minded the purchase of the whole plant instead of only three items. The learned counsel contended that the said orders of MPC had not reached down to the appellant. The learned counsel further reiterated that appellant No:2 had not prepared specifications and referred to pages 34-38 of the Departmental Inquiry Report which contains the note dated 12-1-1991 of the General Manager (Mr. Majeed Bhatti) in which the proposal for improving the precision casting plant had been initiated and it also included the details and specifications of the, machinery.

(b) allegation No.7 related to the arrangement of the alleged fake competition, forgery and preparation of offers in a counterfeit manner with the connivance of a local supplier. The learned counsel contended that there was no job description of appellant No.2 as Assistant Manager and he actually acted according to the instruction of the G.M. and Manager. He also contended that this allegation is deemed to have been proved on the basis of testimony of Raja Tahir Hussain who was the local agent of Messrs Focus but he acted malafidely since he had been ousted from this contract and had not received his commission. The learned counsel maintained that due to the mala fide and malice of Raja Tahir Hussain, his testimony cannot be given any weight. He also referred to the fact that Raja Tahir Hussain's firm, Raja & Company, was of dubious reputation and was eventually blacklisted by the respondents-Organization vide letter dated 26-7-1993.

(c) allegation No.8 related to violation of procedures resulting in loss of approximately Rs.10.43 millions to the public exchequer. The learned counsel stated that the plant of Precision Casting was still functioning. As regards the amount of the supposed loss incurred by the respondent-Organization, the learned counsel referred to page 28 of the Departmental Inquiry Report wherein it is stated that due to non-availability of actual prices of the machines received in 1991, the exact loss cannot be worked out. The learned counsel therefore, contended that if any loss was suffered by the respondent-Organization, the same cannot be quantified. He stated that the appellant vide his Note No.5816/02/PROD-H/MG-Y,' dated 24-8-1992 had in fact pointed out the problems which were being faced in regard to the operation of the imported plant which proved his bona fide.

13. The respondents in their parawise comments have vehemently opposed the captioned appeals. The learned counsel for the respondents submitted that the plant had been procured at an inflated cost compared to the prices quoted by Messrs Saunders in May, 1983. Referring to the comparison of the 1988 and 1991 prices given at pages 90-91 of the Departmental Inquiry Report, he stated that the net cost of the various items was $ 149,146 in terms of the 1988 prices, which was raised four times to the level of $ 587,702 in 1991. He contended that appellant No.2 (Mr. Saifullah Khalid) had prepared the so-called general…

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