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Petitioner: MUHAMMAD RAFIQUE VS Respondent: SECRETARY, ESTABLISHMENT DIVISION, RAWALPINDI
Court Name: Federal Service Tribunal Judge(s): Sir Abdul Rashid, Muhammad Irshad Khan Title: MUHAMMAD RAFIQUE vs SECRETARY, ESTABLISHMENT DIVISION, RAWALPINDI Case No.: Appeal No, 121(R) of 1984 (old No, 23/L of 1981) Date of Judgment:1984-09-23 Reported As: 1985 PLC (C.S.) 172 Result: Appeal accepted
JUDGMENT
JUDGMENT ' ABDUR RASHID (MEMBER).-- The facts leading to this appeal are that a criminal case F.I.R. No, 26,, dated 7-6-1976, which became known as the "Wheat Scandal Case", was registered by the F.I.A. Against certain officials of the Punjab Food Department and the Pakistan Railways. The said officials had allegedly committed criminal breach of trust and misappropriation of money. Among others, the name of the appellant (Muhammad Rafique) was sent up for prosecution in a Court of law. However, the Government refused permission and ruled that short of prosecution any other action may be taken against him. It was, therefore, on the basis of the F.I.A. Investigation, that the appellant was served charge-sheet, dated 22-6-1977, which is reproduced :- "No, 9/12/77-C.II. ' Rawalpindi, the 22nd June, 1977. "CHARGE-SHEET" ' Whereas you, Mr. Muhammad Rafiq while posted as Secretary, Food Department, Government of Punjab have committed the following irregularities:- (i) You illegally sanctioned the extension of contract of Karwan Trading Company for the 2nd term vide Order No, B . A .111(21)/73, dated 10-3-1973. (ii) You allowed road transportation of Food stocks on 7-2-1972 in violation of the rules on the subject. (iii) You sanctioned on 20-1-1973 ex post facto expenditure to the tune of Rs,14,72,771.23 in road transportation. (iv) You reportedly, through Mr. R.A. Zakir, on phone informed accused contractors vide their letter, dated 22-9-1973 that their rates at par with Railway Freight had been sanctioned. (v) You gave ex post facto sanction on 22-12-1972 for Rs,2,42,537.06.
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2. Whereas the above irregularities on your part constitute inefficiency and misconduct in terms of Government Servants (Efficiency and Discipline) Rules, 1973. 3. And whereas it has been decided to hold and inquiry against you under the said rules. 4. And whereas the competent authority is of the opinion that the aforesaid charges, if established, would call for a major penalty specified in rule 4 of the Rules ibid. 5. And whereas Mr. Muhammad Nawaz, Additional Secretary (Inquiries), Establishment Division, Islamabad is appointed Inquiry Officer under Rule 5 read with Rule 6 of the Rules ibid to conduct proceedings of the inquiry into the aforesaid charges. 6. Now, therefore, you Mr. Muhammad Rafiq are required under sub-rule (ii) of rule 6 of Rules ibid to put in your written defence to Mr. Muhammad Nawaz within 14 days of the receipt of this charge- sheet and also to state whether your desire to be heard in person. 7. A statement of allegations explaining the charges is also enclosed. (Sd.) (VAQAR AHMAD), "Secretary ' Mr. Muhammad Rafiq, Officer on Special Duty, Establishment Division, Rawalpindi." "STATEMENT OF ALLEGATIONS ' Messrs Pir Humayun Shah and Muhammad Riaz of Karwan Trading Co. Rawalpindi, in collusion with officers of the Food Department of the Punjab Goveroment got their contract for local handling and cartage of foodgrains extended twice. According to the F.I.A., who investigated the case, these extensions were irregular and the rates at which road transportation of food btocks was allowed, were higher than Railway freight rate. These irregularities were allegedly made possible by ftivouritism on the part of Mr. Muhammad Rafiq, the then Secretary, Food Department, Government of the Punjab. His action ultimately resulted in a huge wrongful loss to the Government with corresponding wrongful gain to the contractors, who were granted a monopoly when their contract was so extended by him. 2. Mr. Muhammad Rafiq has committed the following irregularities:- (i) He illegally sanctioned the extension of contract of Karwan Trading Co. For the 2nd term vide Order No,A.B.III(21)/73, dated 10-3-1973. (ii) He allowed road transportation of Food stocks on 7-2-1972 in violation of the rules on the subject. (iii) He sanctioned on 20-1-1973 ex post facto expenditure to the tune of Rs,14,72,771.23 in road transportation. (iv) He reportedly, through Mr. R.A. Zakir, phone informed accused contractors vide their letter, dated 22-9-1973 that their rates at par with Railway Freight had been sanctioned. (v) He gave ex post facto sanction on 22-12-1972 for Rs,2,42,537.06. 3. Mr. Muhammad Rafiq was served with a questionnaire by the F.I.A. Based on the irregularities explained above. From his reply and the comments of the F.I.A. Thereon, it has ' en observed that he has denied the allegation mentioned at (iv) in para. 2 above and for the rest of the allegations he had generally taken the plea that the actions taken by him were in good faith. He has also stated that the initials appended in the office notings appear to be not in his hand. The above actions on his part tantamount to inefficiency and misconduct as defined in the Government Servants (Efficiency and Discipline) Rules, 1973." ' The appellant, vide his 13-page letter, dated 13-3-1978, denied the charges. 3. As a result of the inquiry and the ensuing disciplinary proceedings, the appellant was removed from service vide the Notification No,9/12/77-C-II(A), dated 9-4-1979. His review petition, dated 7-5- 1979, was rejected vide the Establishment Division 0.M., dated 27-1-1981. Thereafter he came up in appeal before the Tribunal on 28.-2-1981. The appeal, which was admitted for regular hearing on 7- 10-1981 at Lahore and numbered as Appeal No,23(L)/81, was, transferred to Islamabad vide
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Tribunal's order, dated 22-2-1984 and renumbered as Appeal No, 121(R)/84. It was heard on 22-7- 1984 and is being disposed of by this order. 5. We, now, advert to the inquiry report with reference to charges (i), (ii) and (v) on the basis of which the appellant has been punished. As to charge (i), statements of eleven prosecution witnesses were recorded. P.W.1 (Nazar Muhammad, retired Rationing Controller, Rawalpindi) deposed that when Messrs Karwan Trading Company's contract was due to expire on 30-6-1973, the contractor applied for further, extension for five years on the previous terms and conditions. The case was processed and the Government agreed to the contract for a further period of three years vide Memo. No,AB-II1(21)/72, dated 10-3-1973. The witness confirmed that the Karwan Trading Company had been working as cartage/handling contractors since 19-8-1966 and that the contract of the said firm was extended by the Food Secretaries, Punjab from time to time. He also confirmed that the ex post facto sanctions for payments already made were not an unusual feature in the Food Department. The witness stated that the extension of contracts may be advantageous in certain cases. He did not say that the extension of a contract was against the rules or was illegal. 6. P.W.2- Muhammad Riaz was a senior clerk of the office of R.C., Rawalpindi. He confirmed the following factual position: (a) The Government sanction for three years extension of contract from 1-7-1973 to 30-6-1976 in respect of Messrs Karwan Trading Company was received vide letter No,AP-III/21, dated 10-3-1973. (b) The ex post facto Government sanctions were received for payment of Rs,2,42,537.60 and Rs,14,72,771.30 vide letters No,AB-lll/ 21/72, dated 23-12-1972 and AB-111(21)-48/70.P.1., dated 25-1- 1973, respectively. (c) 75$ of the amount of Rs,2,42,537.60 and Rs,14,72,771.30 had already been paid. The balance of 25$ was left to be paid to the contractor by the time the ex post facto sanctions to this effect were received. ' The P.W. Thought that the extension of the contract was irregular because the tenders had not been called but he could not quote any rule to support his contension. He also conceded that since the contract had been extended on the old terms there was no loss to the State. 7. P.W.3, Haji Ikramul Haq had worked as accountant in the office of the R.C. From 1962 to November, 1972 and when he deposed in this case, he was Food Inspector, Murree. He confirmed that 75% of the payment as at paras. 6(b) and (c) above had already been made to the contractor before the Government sanction was received and that this was not unusual. 8. P.W.4, Fazal Ahmad, Assistant Accounts Officer, Directorate of Food Punjab, deposed that the case of Messrs Karwan Trading Company was recommended by the Budget and Accounts Officer for three years extension and it was agreed to by the Secretary Food. The cases relating to the ex post facto sanction of the expenditure of Rs,2,42,537.60 and Rs,14,72,771.23 were processed by the Deputy Director and the Budget and Accounts Officer and the Secretary Food was requested to accord approval which he did. The witness confirmed that Messrs Karwan Trading Company had been allowed extensions of their contracts in the post. He thought that such extensions were not in order but he could not quote any rule, to support his viewpoint. When the witness was confronted with the fact that at page 9 of file No,A/B-III121)-21/72 is an annexure to the policy letter, dated 31-3- 1972 regarding tenders, whereunder the Government could sanction contract for a period upto three years then all that the witness could say was that the said letter was not within his knowledge and also that its existence was not pointed out to him by his staff. The witness, when asked to confirm whether or not Mr. Lqbal Masud as Food Secretary, had extended the same contract for three years from 1970-1973, expressed his inability to do so even though file No,AB.I1I(21)-43/70 (Exh. 7) did say so.
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9. P.W,5, Soloman, an Assistant in the office of the Deputy Director, Lahore, stated that Mr. Iqbal Masud had, as Food Secretary, extended the contract of Messrs Karwan Trading Company for three years from 1970 to 1973. He also confirmed that there have been a number of such other sanctions in which the Regional Office was involved. The witness felt that the three years extension allowed to Messrs Karwan Trading Company was not in order in view of Notification No,FD/Acctt-A and A/11- 14/71, dated 1-6-1974 (Amendment) but when asked to quote any regulation or standing instruction he could not do so. 10. P.W.6, Syed Ibrahim (Assistant/Senior Auditor), office of the Food Department, confirmed that due to satisfactory performance, the extension of Messrs Karwan Trading was recommended for three years 1973-76 at previous rates by the Deputy Director. The witness quoted the extension of previous contract by Mr. Lqbal Masud, when he was the Food Secretary in 1970. The witness confirmed that there had been abnormal increase in the rates and in some cases the increase was as much as 105% over the previous rates. The witness denied that he had recommended the extension of contract. 11. P.W.7, Muhammad Ashraf Qureshi, who was Regional Audit Officer Food, Lahore from 1969 to 1973, expressed the opinion that as per rules the tenders could be accepted for five years but the extension therefor was not allowed. However, he could not quote any specific prohibitory rule. 12. P.W.8, Muhammad Ayub Shah (Deputy Director, F.I.A.), who conducted the inquiry against the appellant) said that to the best of his knowledge the contracts could be granted by inviting tenders for one year or more but there was no provision for extension except upto a period of 90 days for change over. He further stated that the contract was extended for three years 1973-76 at the old rates of 1968-69. However, just after seventeen days of the extension, the contractor regretted his inability to work at the old rules. It was Ch. Muhammad Akram, Food Secretary, who increased the rates by 65%. According to the witness, the appellant (Muhammad Rafiq) in his capacity as Food Secretary accorded ex post facto sanctions of Rs,2,42,537.60 and Rs,14,72,771.23, without going into details. If the appellant had done so, he would have discovered that the contractor who had moved the stocks by road was paid at the railway freight rates including incidentals which he had not performed and thus the Government was put to a loss to the tune of Rs,2,79,694. The witness confirmed that though the extension of the contract was not regular such a sanction had been allowed previously (in 1970) by Mr. Lqbal Masud as Food Secretary. Mr. Lqbal Masud had been asked to explain his conduct. However, the fact that the extension had been allowed at the old rates, the public exchequer had sustained no loss. The witness conceded that the appellant (Muhammad Rafiq), too, had extended the contract at the same old rates and hence no loss had been suffered (except to the extent of Rs,2,79,699 already mentioned). 13. P.W.9, Manzoor Ahmad Farooqi, Superintendent, Accounts Branch, Food Department, Lahore when asked to provide the break-down of Rs,2,79,694 alleged to have been suffered as a wrongful loss (as brought out by P.W.8), expressed his inability to do so and put up the excuses that he had worked out the details but they were with the F.I.A. The said P.W. Was not even aware as to which Secretary had sanctioned the amounts resulting in the alleged loss and the period during which the transportation was carried out. 14. P.W.10, Ihsan Siddiqui, Superintendent of office of the Deputy Director, Lahore Region, like P.W.9, failed to explain how the loss of Rs,2,79,694 had been worked out. All that he said was that the break-up of the figures was available with the F.I.A. 15. P.W.11, Manzoor Hussain Malik, formerly District Audit Officer, said that his audit report, dated 5-3- 1973 contained details as to the loss sustained by the State. Despite insistence that tenders ought to have been invited, he conceded that in case rates were to be increased, the fresh tenders should have been invited meaning thereby that if the old rates were available and were advantageous, the fresh tenders need not have been invited.
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16. We, now, advert to the defence side. The appellant furnished a list of fiteen defence witnesses. Of this list, summonses were sent to seven persons whose evidence, according to the Inquiry Officer, was considered relevant to the charge-sheet. The reason which led the Inquiry Officer to censor the lit of defence witnesses, to quote his own words, was that: "since the evidence in this case was mainly based on documents it was....Felt unnecessary....If all the defence witnesses most of whom were apparently not connected with this case were summoned Only those witnesses....After taking into consideration the record sent by the F.I.A. Were summoned and in fact only 3 out of 7 appeared." 17. The first defence witness Mr. M.A.K. Chaudhry, former Director-General, F.I.A. Denied that the case against Messrs Karwan Trading Company was either politically motivated or that the progress of the said case had to be reported to the then Prime Minister's Secretariat. To a number of other questions his answers were that the files on the subject should be referred to. Mr. Ghafir A. Pirzada former Rationing Controller and Mr. R.A. Zakir former Budget and Accounts Officer, Government of Punjab, Food Department were the other two defence witnesses. They were themselves involved in the wheat scandal case. There was not much to go by what they had to say. Their evidence was not given any credence by the Inquiry Officer. 18. The appellant had particularly desired the attendance of Messrs Iqbal Masud and S.M.A. Kazmi, who had been Food Secretaries in the past. The summons sent to Mr. Iqbal Masud evoked no response and Mr. S.M.A. Kazmi excused his inability due to a previous engagement. The Inquiry Officer accepted the situation with enquanimity even though rule 7 (E.& D.) Rules, 1973 conferred upon him the powers of a civil Court, whereunder he could enforce the attendance of Messrs Iqbal Masud and S.M.A. Kazmi. However, this attitude of the Inquiry Officer was, obviously, in keeping with his desire to remain confined to the enquiry sent to him by the F.I.A. 19. The record bears testimony to the fact that Mr. Lqbal Masud a former Food Secretary, had been served a questionnaire containing ten questions and he had filed his replies thereto on 5-10-1976. Similarly Ch. Muhammad Akram, who had been Food Secretary, Punjab from 21-2-1975 to 3-9-1976, had answered 40 questions and these were filed on 17-9-1976. The questionnaires to the said two officers were issued by the F.I.A. In connection with the "wheat scandal case." The answers to the said questionnaires by two of the said former Food Secretaries were neither made available to the appellant, despite his request, nor were they made use of by the Inquiry Officer in considering the defence of the appellant. We shall deal with this written evidence of Messrs Iqbal Masud and Ch. Muhammad Akram at its appropriate place. 20. The prosecution and the defence evidence leads us to the following conclusions: (a) The entire prosecution case is based on the investigation of P.W.8 (Muhammad Ayub Shah, Deputy Director, F.I.A.), whom the Inquiry Officer has termed as the Principal Witness. It is apparent that the evidentiary value of the prosecution case falls woefully short of the policy and decision making level at which the appellant was sitting. None of the witnesses, by virtue of their low levels, could project themselves to that governmental stature to which the appellant belonged. Perhaps, due to this reason, the Inquiry Officer has not relied on the evidence of P.W.3 and 9 while formulating his findings. This serious shortcoming which worked to the grave disadvantage of the appellant could have been overcome if the Inquiry Officer had adduced the evidence of someone equal to or higher than the stature of the appellant to come forward and make statements and such officers could only have been the previous Food Secretaries as well as the Finance Secretaries and nothing less. (b) Despite making confident but vague statements to the effect that the extension of Messrs Karwan Trading Company contract for three years 1973-76, by the appellant had been irregular, not a single witness has been able to quote any rule to prove his contention and when confronted with the fact that the extension had been allowed at the old rates which were favourable, they
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agreed that the action of the appellant was in the interest of the Government. The P.W.8 (Muhammad Ayub Shah, Deputy Director, F.I.A.), around whom the entire enquiry has been built up and who has been excessively relied upon by the Inquiry Officer, has this to say: The extension of the contract was NOT regular. However, he has not been able to quote any specific rule to this effect especially when such an extension for three years had been allowed previously by Mr. Iqbal Masud as Food Secretary in the year 1970. Mr. Lqbal Masud had been issued a questionnaire. His reply had not been found satisfactory. But the fact that the extension by Mr. Lqbal Masud had been allowed at the old rates, the Government had sustained no loss. The P.W.8 conceded that the extension of contract 1973-76, had been allowed by the appellant at the old rates (following the precedent of Mr. Iqbal Masud) and no loss had been suffered by the State. However, by some obscure logic, the witness also said that a favour had been shown to the contractor (by the appellant) by circumventing the procedure laid down for sanction of the contracts but there is no elaboration to this part of his statement which goes against his earlier averment that the extension of the contract was at the old rates and thus favourable to the Government. The Principal Witness is, therefore, not sure of his own ground. Only 17 days after the extension by the appellant, the contractor got his rates increased by 65% during the period of Ch. Muhammad Akram, Food Secretary. Even though the enhancement of the rates had been allowed by Ch. Muhammad Akram, the fact that it was the appellant, who had extended the contract, a lever had been, thereby, made available to the contractor to bargain with the Food Department for enhanced rates. (To our surprise, the appellant is being blamed for what Ch. Muhammad Akram did). (c) It is instructive to highlight that the appellant had been held guilty of overpayment of the sum of Rs,2,79,694 on the basis of the evidence of P .Ws.9 and 1.0. When the said P.Ws. Were asked (by the Inquiry Officer) to give the break-up of the said loss, all that they could say was that the break- up was available with the F.I. A . Meaning thereby that the figures ought to be available with the P.W.8. But the P.W.8 in his statement which had preceded the statements of P. Ws.9 and 10 had stated confidently when asked (Q.No1.26) by the appellant:- "Q.26: What is the break-up of Rs,'2,79,694.00 which you have alleged to be the loss caused to Government by any order? Ans. This figure was calculated by Mr. Farooqi and Mr. Siddiqui the auditors. They will give the entire break-up." ' Surprisingly Messrs Farooqi and Siddiqui (P.Ws. 9 and 10) could not give any break-up. How the alleged figure of the loss of Rs,2,79,694 was arrived at, we do not know". 21. The review petition of the appellant was rejected because of the (C.B.R.) U.O. No,D.285(r)/75, dated 17-11-1980. It would be useful to reproduce the relevant portions of the said U.O. It read: "12.......................................................... 13. The first charge relates to the illegal extension of contract for 3 years from 1-7-1973 to 30-6-1976 on the expiry of the contract (for 3 years from 1-7-1970 to 30-6-1973) of Messrs Karwan Trading Company. In para. 6 of Appendix V of the General Rules and Principles relating to contracts, it has been laid down that whenever practicable and advantageous, contracts should be placed only after tenders have been openly invited and in case where the lowest tender is not accepted reasons should be recorded.' ' The orders of extension of the contract were issued on 6-3-1973 i,e, four months before the date of expiry of the running contract. There was ample time for inviting fresh tenders and accepting the lowest one. There was no shortage of time for calling the tenders. The petitioner failed to follow the General Rules and Principles relating to contracts. Prima facie there was breach of rules inasmuch as it was irregular on the part of the petitioner to have extended the contract. 14. The charges (iii) and (v) relate to two ex post facto sanctions whereunder, though the stocks of wheat were actually transported by road, the incidentals were allowed on the basis of
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transportation by rail. The incidentals on rail transportation being higher than those admissible by road, the petitioner as Head of the Department should have checked this and allowed only such charges as were actually incurred by the transporter on road transportation. It has been stated that even by allowing incidentals on the basis of rail transportation, the entire expenditure was 2% lower than what it would have been had the stocks been transported by rail. The point however, is that if incidentals by road were allowed, as were actually due, the entire expenditure would have been still lower and the Government would have saved that much expense. In this connection it is pointed out that whereas there is a so-called saving of Rs,70,198 (Rs,62,420 + Rs,7,778 - vide page 6/N), in the manner in which payment has been made to the contractor, there would have been a further saving of Rs,2,19,694 (vide pages 60 and 62 extracts from statements of P.Ws. 9 and 10 placed below) if the payment was made according to the actual mode of transport, i,e, by road (transportation charges plus the road incidentals). The Government was, therefore, worse off because the payment was not made according to the actual mode of transport." 22. We feel that the Finance Division did not have full facts of the background of this case. If such had been the case, they would have observed that Mr. Iqbal Masud the then Food Secretary had sanctioned the extension of Messrs Karwan Trading Company for a period of three years on their application, dated 11-11-1969. The approval to this extension was accorded on 5-3-1970 nearly four months before the contract was due to expire on 30-.6-1970. It would be as well as to quote the relevant parts of reply of Mr. Lqbal Masud, which he furnished to question 9 (of the F.I.A. Questionnaire): "I had approved the proposal in the public interest after taking into consideration all the factors ' In reply to question 3 Mr. Iqbal Masud had this to say: It is not a fact that the Punjab Financial Rules Vol. II, or any other Government Rules (to my knowledge and belief) require calling of tenders annually for granting of contracts for cartage of wheat from railway stations to the…
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