' 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 A irregularities arising from a project of up gradation/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 (hereinafteer 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,l.
(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 hint 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 unresponded. 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 unresponded. 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 avoided 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 plant 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 POP.
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 Manager, 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 sirice even though the contract 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-II/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 specifications which were actually based on the specifications of the plant components and materials with proprietary model numbers, earlier quoted by Messrs Saunders in 1988. The learned counsel stated that appellant No,2 (Mr. Saifullah Khalid) was actively involved in this deal with Mr. Majeed Bhatti (appellant No,1) from the very beginning when the proposal for upgrading the precision casting plant was initiated. .Referring to the note dated 19-5- 1991 of Mr. Saifullah Khalid regarding his visit to Lahore for the purpose of seeing the plant of Messrs PEL Precision Engineering Limited, Lahore which had been supplied by Messrs Saunders, he reiterated that general specifications were prepared by Mr. Saifullah Khalid which bear his signatures and are placed at t pages 59-61 of the Departmental Inquiry Report. He also referred to the ' Note dated 19-6-1991 of appellant No,2 (Mr. Saifullah Khalid) placed at page 117 of the inquiry report wherein he had mentioned that for upgradation of precision casting, general specifications for the plant, machinery and equipment were prepared and the raw material to run the plant was also included in the contract and suggested that the procurement of material should be reduced from one year to six months i,e, 50%. The learned counsel opined that it reconfirms the role of Mr. Saifullah Khalid in the preparation of general specifications leading to the procurement of the plant.
14. As regards the role of appellant No,1 (Mr. Majeed Bhatti, GM) it was contended by the learned counsel for the respondents that he piloted the proposal for upgradation/improvement of the precision casting facilities in the Machine Gun Factory as can be borne out from his Note dated 12- 1-1991 placed at pages 34-38 of the Departmental Inquiry Report wherein he had inter alia stated that the Machine Gun Factory on acquiring the improved technology of precision casting would be able to take-up the work load of other factories i,e, Research and Development, Weapons Factory, POF Sanjwal and POF Gadwal, which at the time were getting their precision casting work done from the outside agencies and this would save approximately Rs,20 million annually. The learned counsel also referred to the Note dated 7-3-1991 of Majeed Bhatti, placed at pages 46-47 of the Departmental Inquiry Report wherein he had put up the proposal for approval of technically pre- qualified firms, whereupon the then MPC vide his minutes dated 12-3-1991 had stated that the proposal was based on specifications of models of machines of particular firm and not based on general specifications and therefore, he had ordered that general specifications be prepared and retendered. According to the learned counsel most of the 14 firms which were subsequently issued TEs., dated 2-4-1991 as listed at pages 118-120 of the Departmental Inquiry Report were fictitious and same did not even deal in the machinery and equipment like Messrs Red Choice Limited (England) which produced antiques and furniture fitting and Messrs Atlantic Gulf International, Singapore, which did trading only. He stated that Messrs Saunders were also invited to bid but they did not respond which is rather intriguing.
The learned counsel stated that the total value of the contract was initially Rs,15.76 millions but even at such a high price, the machinery supplied by Messrs Focus International (USA) was old and outdated. Referring to the summary of the Evaluation Report placed at pages 380-382 of the Departmental Inquiry Report, the learned counsel stated that the plant has been only partially commissioned, subject to satisfactory working of its different units and the requirements of the Machine Gun Factory.
15. The learned counsel for the respondents also submitted that in cases of embezzlement and irregularities involving Government funds, E action without any leniency is required to be taken. In this regard he referred to this Tribunal's judgment, dated 29-8-1998 in Appeal No,860(R) of 1997 and No,149(R) of 1998 wherein the penalty of removal from service imposed on two employees of the Controller of Military Accounts (Rawalpindi Command) in a case of embezzlement of funds was not interfered with.
16. In rebuttal Mr. A. Rehman Bhatti, learned counsel for (appellant No,2) Mr. Saifullah Khalid stated that the artiount of the supposed loss is not definitive and it cannot be said with certainty that the respondent-Organization had actually suffered loss to the tune of Rs,10.43 million. He also pleaded that putting the entire blame on two persons was not fair and referred to the preliminary report dated 27-4-1993 of Mr. M.A. Abidi (DICR) wherein in para.11 he had stated that it was estimated that a rip-off of at least Rs,5.3 million had been committed with the knowledge of AWM/MG Factory, WM/MG Factory, GM/MG Factory, MD/Weapons, MPC and others. According to him Mr. Saifullah Khalid made scapegoat whereas a number of senior officials were involved in this scam. He maintained that Mr. Saifullah Khalid was a capable officer which is confirmed by the fact that he was promoted to the post of Manager, even though an inquiry was being held and it meant that the management of the POF had duly recognized his unblemished record of service.
17. We have heard the learned counsel for both the appellants and the respondents. We have also carefully perused the record.
18. The need for improving the precision casting facilities in the MG Factory of POF was being felt since mid 1980s. Messrs Saunders (USA) were a well-reputed firm in this field and had earlier supplied a plant to a private sector firm in Lahore (i,e, Messrs PEL). Therefore, POF got in touch with Messrs Saunders and obtained specifications of the requisite machinery and equipment. However, there was not much progress till appellant No,1 (Mr. Majeed Bhatti) Was posted as GM Machine Gun Factory. He reinitiated the case and submitted a feasibility study to the POF Board in November, 1990. Incidentally the Chairman POF Board, in a number of meetings in December, 1990 also pressed for preparing a complete plan for modernizing/improving the existing casting facilities.
Accordingly appellant No,1 (Mr. Majeed Bhatti) again put up a study on 12-1-1991 which was in fact based on the 1988 offer of Messrs Saunders. Tender Enquiries (TEs) were issued and the three firms (Messrs Focus, Messrs AMPAK and Messrs Future Tech) quoting Saunder's plants were recommended for technical pre-qualifications. Mr. M. Afzal, the then MPC did not agree and ordered retendering based on general specifications to ensure better competitions in the international market. Mr. Saifullah Khalid, AWM, accompanied by AFM, Precision Casting Plant, visited Lahore to see the PEL Plant so as to prepare general specifications. Thereafter, the specifications prepared earlier, were modified and the TEs dated 2-4-1991 were issued to 14 firms including Messrs Saunders but on:y seven firms responded, out of which the same three US firms quoted the Saunder's Plant whereas the fourth, a British firm, as previously, quoted its own plant.
The offer of the British firm was rejected. All the three US firms were recommended, as previously for technical prequalification and Mr. A. Qadeer the new incumbent of the post of MPC approved the proposal on 29-5-1991 and also signed the Technical CST. The commercial offers were opened on 4-6-1991. Eventually the offer of Messrs FOCUS International (USA) was approved by the Acting Chairman POF Board on 27-6-1991. The contract with Messrs FOCUS was signed on 30-7-1991. The plant arrived during January-June, 1992, and commenced operation, though only partially.
19. The case of appellant No,1 (Mr. Majeed Bhatti) is that the proposal for improving/upgrading the precision casting plant in the MG Factory had been carried out in accordance with the orders of the then Chairman POF Board, which he gave in December, 1990. Appellant No,1 denied by-passing the standing procedure and maintained that he did not submit the proposal in the format given in Appendix "A" of POF's Standing Order No,88 since the then MPC, and the Chairman POF Board had not asked him that the project proposal be presented as per Appendix "A". He denied manipulation of the plant specifications and maintained that in accordance with the instructions of the then MPC the specifications had been revised before retendering. He also pleaded that he had taken approval of MD (Weapons), MPC and Chairman POF Board before issuing TEs to the various firms.
He denied having concealed the fact that the plant which eventually came was old since the case opening report had been prepared by the Planning Department and not by him. He also contended that the price negotiations had not been held before the award of the contract since his superiors had not asked him to do so. He also questioned the exactness of the amount of loss purported to have been incurred by the POF i,e, Rs,10.43 millions because the plant was actually in operation.
20. The case of appellant No,2 (Mr. Saifullah Khalid) is that, being an Assistant Manager, he was not involved in the decision making process. There was no job description of an Assistant Manager and he only acted according to the instructions of his superiors. He denied having been involved in the preparation of specifications for the Precision Casting Plant. Moreover he also claimed ignorance of the then MPC's orders, dated 12-3-1991 regarding the need for the preparation of general specifications on the ground that the said orders had been shelved by the GM (Mr. Majeed Bhatti) and the same had not reached down to him. He contended that the specifications had been prepared by the General Manager (Mr. Majeed Bhatti) whereas after the arrival of the plant, appellant No,2 (Mr. Saifullah Khalid) claims to have informed his superiors about the state of the plant. He also denied his alleged complicity with Raja Tahir Hussain of Raja & Company (local agent) who on account of his dubious reputation had been black-listed by the respondent- Organization and therefore, his testimony, coloured by mala fide and malice, could not be relied upon.
21. The learned counsel for appellant No,1 (Mr. Majeed Bhatti) had raised objection in regard to the reappearance of Mr. Pir Muhammad Qureshi as a witness during the departmental inquiry, since had himself earlier carried out a fact.Finding inquiry. This objection is not valid in view of para.20(f) of the Departmental Inquiry Report that the statement of Mr. Pir Muhammad Qureshi and references .From his inquiry report have not been considered due to objections by Mr. Saifullah Khalid. As regards the objection that the DR was not allowed to be cross-examined, there is weight in the contention of the respondents that the DR had merely made a narration of charges against the two appellants which had already been responded to by the appellants. We wonder whether the ruling in the case reported as 1988 PLC (C.S.) 451 can be stretched to mean that all that transpired during the preliminary inquires cannot be considered therein; the regular or departmental inquiry. The ends of justice would be met if the material or evidence which came to light consequent to the preliminary inquiries is made use of during the regular inquiry subject to the condition that the accused is given full opportunity to put up his defence in regard to such material or evidence. Another IF objection that was raised by the learned counsel for appellant No,1 is that a number of officers were involved in the execution of the contract but no action was taken against anyone else except the two appellants which amounted to discrimination on the part of respondents. On the basis of the testimony of the witnesses produced by the respondents during the departmental inquiry, it is evident that three employees of POF, namely Mr. Saifullah Khalid, Mr. Majeed Bhatti and Mr. Shahid Rafiq AWM were actively involved in this scam. However, Mr. Shahid Rafiq already stands dismissed from service on account of some other charges. Another person involved was the local agent of Messrs FOCUS (Mr. Tahir Hussain Raja), whose firm was blacklisted by the respondents vide order, dated 26-7-1993. It is significant that during the departmental inquiry, the witnesses who had appeared before the Inquiry Officer had not incriminated other employees of POF except Mr. Shahid Rafiq, Mr. Majeed Bhatti and Mr. Saifullah Khalid and therefore, the competent authority relied on the findings of the inquiry report. We therefore, do not find any weight in the contention of the learned counsel for appellant No,1 that the two appellants were treated with discrimination.
22. The learned counsel for appellant No,2 had contended that a preliminary inquiry had been conducted by Mr. Ashraf Rajput, Director (Weapons) in September, 1991 and if the respondents had suspected any foul play, the LC should not have been opened on 3-10-1991. It is significant that the scandalous nature of this scam came to light much later, especially after the appointment of the new Chairman POF Board in 1992. It was the new Chairman who got the matter looked into by Mr. M.A. Abidi, DICR who submitted his report on 23-4-1993 and then by the Field Investigation Unit (FIU) which submitted its report on 15-5-1993. Subsequently, a fact-finding inquiry was .Also conducted by Mr. Pir Muhammad Qureshi who submitted his report on 4-8-1993. It was after these preliminary inquiries had been conducted that the new Chairman POF Board decided to have a full-fledged inquiry instituted. It is therefore, obvious why no pre-emptive action could be set into motion before the arrival of the plant.
23. The basic question is whether some foulplay was actually involved in the purchase of the plant in question. The case of the respondents is that this project was plagued with foul play from the word go. In fact Mr. M.A. Abidi, (DICR), contended in his testimony before the Inquiry Officer that in the first place a new plant was not needed and Messrs Saunders had advised in 1998 that a couple of items could be added to the existing plant and with the use of some new raw material; the desired result of upgrading the operation of precision casting plan at a minimal cost of $ 54,735 could have been achieved. Mr. Abidi mentioned that a new Chairman POF Board who took over in late 1992, visited the plant in early 1993 and asked Mr. Abidi to hold an in-house inquiry. Mr. Abidi found out that the plant had not even been fully commissioned. According to Mr. Abidi, a conspiracy had been hatched to import a complete plant between Mr. Khalid Jaffer (owner of Messrs FOCUS), Mr. Shahid Rafiq, Mr. Saifullah Khalid and Mr. A.M. Bhatti. Incidentally three US firms which had been short-listed (i,e, Messrs FOCUS, Messrs AMPAK and Messrs Future Tech) were only paper companies and could not be contracted during the inquiry by fax or telephone. Mr. Abidi's testimony was corroborated by other witnesses. It was revealed during the testimony of the witnesses produced by the respondents that the plant had been imported at an inflated price whereas a similar plant imported by PEL in 1986 from Messrs Saunders had cost much less. Mr. Khawar Nawaz, GM. (Production) had held the acting charge of MD (Weapons) for a few days in May, 1991 and he stated in his testimony before the Inquiry Officer that on the 29th May, 1991. Mr. Saifullah Khalid hand-carried to him the file of technical prequalification, got it signed by him, took it to the then MPC (Mr. Abdul Qadeer), brought it back and then took it to the GM, MG Factory (Mr. A.
Majeed Bhatti). He stated that the case was being handled with such speed as if "heavens were falling". The testimony of Mr. Tahir Hussain Raja (owner of Raja & Company) Wah Cantt. Was also quite revealing. He explained the modus operandi of the people involved in this deal. According to him all the three firms (i,e, Messrs Focus, Messrs AMPAK and Messrs Future Tech) were owned by Pakistanis i,e, Messrs FOCUS by Mr. Khalid Jaffer, Messrs Future Tech by Mr. Pervaiz Alam, a friend of Mr. Shahid Rafiq an employee of POF, and Messrs MPAK by a brother of Mr. Shahid Rafiq. He stated that the quotations submitted on behalf of the afore-mentioned three firms were in fact typed at the residence of Mr. Shahid Rafiq in the presence of Mr. Saifullah Khalid and Mr. Tahir Hussain Raja.
He also stated that the letter-head pads, rubber stamps etc. Used in these documents were also available with them and signatures were also forged. It is significant that the laboratory tests arranged by the Management of POF proved that the rubber stamps used by Messrs FOCUS and by Messrs Future Tech affixed on various letter-head were identical and exactly the same as those which were available and obtained from the local agent Mr. Tahir Hussain Raja. In our opinion the award of the contract lacked transparency and the manipulation of the whole process was too evident to be denied.
24. A question arises as to extent of the involvement of the two appellants in this scam. It is noteworthy that the specifications which were prepared initially and even after their revision, were tailor-made for the import of the plant of Messrs Saunders. These specifications were made under the supervision of Mr. Majeed Bhatti by his subordinate staff particularly Mr. Saifullah Khalid, Mr. M.
Afzal who was MPC at the time did not approve the initial specification which bore even the names and model numbers of the machines of Messrs Saunders. The specifications were, therefore, revised by removing the model numbers etc. But still they were made in a manner that only Messrs Saunder's plant could be imported. After the retirement of Mr. M. Afzal as MPC approval of these specifications was rushed through. The British firm's offer which had quoted its own plant was rejected in May, 1991 Mr. Ashraf Rajput, MD (Weapons) was away for a course in NIPA and Mr. Khawar Nawaz, GM (Production) was holding the acting charge of MD (Weapons) for a few days.
Mr. Saifullah Khalid personally hand-carried the file for approval of GM Acting MD (Weapons) and MPC. The undue interest of Mr. Saifullah Khalid cannot be unnoticed. The approved specifications were then issued to fourteen trading houses, the list of which had been prepared by Mr. Majeed Bhatti. In fact it was stated by Mr. M.A. Abidi that Mr. Majeed Bhatti master-minded the import of a whole plant whereas the desired result of improving precision casting could have been achieved at a much lower cost by adding a couple of items to the existing plant and by changing the use of some raw material. It is also significant that once the plant was imported. Mr. Majeed Bhatti chose to take the back seat and did not bother to even inspect the plant for which he had worked so hard. Mr. Ashraf Rajput, MD (Weapons) maintained in his testimony during the Departmental Inquiry that it was the duty of Mr. Majeed Bhatti (GM, MG Factory) to carry out inspection of the plant and machinery which had arrived since as per contract he was the consignee. Mr. Majeed Bhatti took, the plea that it was the responsibility of the GM, Planning Department to prepare the case opening report. But it is indeed surprising that despite being the consignee of the plant, he did not care to examine the plant, in the import of which he had played a major role. The conduct of both Mr. Majeed Bhatti and Mr. Saifullah Khalid was such as to leave no doubt that they were fully involved in this scam. They cannot feign innocence.
25. We are also struck by the fact that during the Departmental Inquiry, the two appellants defended themselves only by denying the charges and cross-examining the witnesses who appeared on behalf of the respondents. It is indeed intriguing that they did not produce any evidence of their own or any witness in their support. It is a pointer to the fact that they had nobody to vouch for them.
26. The question of quantum of punishment is also important. Both Mr. Majeed Bhatti and Mr. Saifullah Khalid have been awarded the punishment of dismissal from service. The question is whether the quantum of punishment should be the same for both of them. Mr. Majeed Bhatti was working in a senior position as GM, MG Factory. He enjoyed greater authority and correspondingly greater opportunity to manipulate the outcome. Moreover, nine allegations were levelled against him, out of which six were proved. On the other hand eight allegations were levelled against Mr. Saifullah Khalid, out of which only three were proved. Furthermore Mr. Saifullah Khalid was working in a junior position and was acting under the guidance and supervision of Mr. Majeed Bhatti. Even if Mr. Saifullah Khalid had an axe 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 his own. In fact his role was secondary, whereas the role of Mr. Majeed Bhatti was of primary importance. We are, therefore, of the considered opinion that to treat them at par and to award the same punishment to both of them would not be in the interest of justice.
27. In view of the foregoing, the captioned appeals are disposed of in the following terms:--
(i) It is not considered necessary to interfere with the impugned Daily Order Part-II No,25/1, dated 18-2-1998 whereby the penalty of dismissal of service had been imposed on Mr. Abdul Majeed Bhatti and therefore, Appeal No,609(R) of 1998 is dismissed.
(ii) Appeal No,503(R) of 1998 is partially accepted and the impugned Daily Order Part-II No,256/2, dated 18-2-1998 is modified to the extent that the penalty of dismissal from service imposed on Mr. Saifullah Khalid is reduced to compulsory retirement from service with effect from the same date.
He would be entitled to the consequential benefits as per rules.
28. No order as to costs.
29. Parties be informed accordingly.