ZAFFAR HUSSAIN MIRZA, J.--This appeal by leave of this Court is directed against the order of the Federal Service Tribunal, dated 6th August, 1986, whereby the appeal filed by the appellant under section 4 of the Service Tribunal Act, 1973, was dismissed.
2. The appellant at the material time was an officer of grade 20 belonging to All Pakistan Unified Group on 21st March, 1978, while he was serving as Secretary, Food, Government of Sind, he was placed under suspension on the charges of misconduct. A charge-sheet was served on him on 7th April, 1981, by the Authorised Officer, the Establishment Secretary, which contained three charges as follows: -
(i) that while posted as Managing Director Sind Industrial Trading Estates Ltd., Karachi, you obtained Rs.50,000 as illegal gratification in 1975, from Muhammad Siddique Khan. Chairman, United Carpets Ltd., Karachi, in order to allot him a plot in the SITE area;
(ii) that you have built bungalow (D/s, Street No.8-B, KDA Scheme No. l (Karachi) worth over Rs.10 lakhs, which is disproportionate to the known sources of your income as public servant;
(iii) that you, by abusing your official position as MD, SITE, managed to get huge amount of Rs.1,00,000 as interest free loan from the SITE, Karachi."
3. Mr. Aminul Haq, Secretary, National Assembly Secretariat was appointed Inquiry Officer under the Government Servants (Efficiency and Discipline) Rules, 1973 (hereinafter referred to as the Rules), to hold an inquiry into the allegation made against the appellant. The appellant in his reply repudiated the allegations as false and maintained that he was innocent. Upon the conclusion of the inquiry, the Inquiry Officer exonerated the appellant of charges No. (i) and (iii) but found him guilty of charge No. (ii). The defence of the appellant in respect of this charge was:-
(i) that he never claimed that he had met the full cost of building the house from his resources, part of the cost of the house was financed from a private loan of Rs.4.5 lakhs, obtained from Mr. Kachelo.
(ii) that he sold his car, utilised sale proceeds from his father's property, in addition to Rs.1.00 lakhs loan obtained from the SITE and a Rs.4.5 lakhs loan from Mr. Kachelo for building the house, costing about 8 -- lakhs."
4. On receiving the report and scrutinizing the same in the light of the inquiry record, the Establishment Secretary as Authorised Officer disagreed with the finding recorded by the Inquiry Officer on charge No. (ii) and summed up his observation as under:
(a) The Inquiry Officer has accepted the valuation of the house at Rs.8.44 lakhs.
(b) The Inquiry Officer has also accepted the following finding:-
(i) Sale of garden by a relative.Rs.30,000
(ii) Sale of plot by fatherRs.1,99,000
(iii) Sale of carRs.65 , 000
(iv) Loan from SITERs.1,00,000 TotalRs.3,94,000
(c) This leaves a difference of Rs.4.5 lakhs which, according to the accused officer, was secured as a friendly loan from one Mr. Rafiq Ahmad Kachelo, a Zamindar of Hyderabad. The accused officer had produced the following documents/evidence, in support of his claim before the Inquiry officer:-
(i) Certificate, dated 7-6-1976, from Mr. Kachelo for having advanced a loan of Rs.4.5 lakhs to the accused officer's sons through him without any interest and repayable within 3 years of release;
(ii) House loan agreement on Rs.5 stamp paper, dated 7-6-1976, signed by the sons and wife of the accused officer, but not by Mr. Kachelo;
(iii) Receipt, dated 7-6-1976, for Rs.2.5 lakhs, signed by the sons of the accused officer;
(iv) Receipt, dated 12-10-1977, from Mr. Kachelo for Rs.50,000 as towards loan, signed by Mr. Kachelo;
(v) Receipt, dated 12-8-1978, from Mr. Kachelo for Rs.1,50,000 as towards loan for building house No. D-5, Street No.8-B, KDA I, Karachi, signed by Mr. Kachelo.
(vi) Oral statement, made on oath by Dr. Irshad Ahmad Moriani, Professor of Liaqat Medical College, Hyderabad, before the Inquiry Officer, deposing to the fact of loan which, according to his testimony, took place in his presence and was affirmed before him by Mr. Kachelo.
(d) The fact of loan is, however, denied by Mr. Kachelo in the statement, which he made before the Inquiry Officer. He, however, admits to having signed the documents at c (i) c(iv) and c(v), but states that he had done so at the request of the accused officer and in order to oblige him.
The final recommendation of the Authorised Officer may also be reproduced in his own words:- "Keeping in view the position explained in the preceding paragraphs, none of the three charges stands conclusively proved against the accused officer. Establishment Division is, therefore, of the view that since the accused officer has been under suspension for about 3J years, and no charge has been conclusively proved against him, he may be exonerated of the charges and reinstated in service with immediate effect. After his reinstatement he may be retired under section 13(ii) of the Civil Servants Act, 1973, as already approved by the President."
5. This report was then placed before the President by the C.O.S. To the President, in the following terms:- "The inquiry report reveals that Mr. Maqsood Ahmad Sheikh's dealings in his official capacity have not been aboveboard. The charge of accepting illegal gratification of Rs.50,000 has not been proved because of the non-availability of main witnesses. The benefit of doubt therefore goes to him. The Inquiry Officer has held him guilty on the second charge. I tend to agree with these findings. Prudence demanded that the officer should not have accepted an interest-free loan of Rs. l lac even of the SITE Board had approved it. As a Chief Executive he should have known the implications of getting such a benefit for himself.
The accused officer shall be completing 28 years service in February 1982, He may be compulsorily retired from service."
Pursuant to these proceedings orders were issued imposing on the appellant the major penatly of compulsory retirement from service vide Cabinet Secretariat, Establishment Division, Government of Pakistan, Notification dated 9th February, 1982 which may be reproduced in extenso as under: NOTIFICATION No. 9/25/78-C.II(A) /D. I:--Consequent upon disciplinary action taken under Government Servants (Efficiency & Discipline) Rules 1973, against Mr. Maqsood Ahmad Sheikh, former Secretary, Food, Government of Sind/Managing Director, SITE, Karachi (an APUG officer of grade 20), now OSD (under suspension), Establishment Division on the charge of misconduct, and his having been found guilty thereof, the President has been pleased to impose on him the major penalty of compulsory retirement from service with immediate effect.
Sd/ Abdul Haye.
Deputy Secretary."
6. Being aggrieved by the aforesaid order of compulsory retirement from service the appellant preferred a review petition to the President of Pakistan, but having failed to receive a reply thereto within the statutory period, filed appeal before the Service Tribunal which was dismissed by judgment dated 6th August, 1986. It is pertinent to mention that in spite of the fact that the Inquiry Officer exonerated the appellant on two charges and the Authorised Officer did not agree with the findings in respect of the third charge, the Service Tribunal on its own re-examined the record and found him guilty of all the three charges, summing up their conclusions as under: "In our considered opinion to sum up, apart from charge (ii) having been conclusively proved even in respect of charges (i) and (iii) there is enough evidence to show that the conduct of the officer left must to be desired and was "conduct unbecoming of an officer and a gentleman."
7. Being aggrieved the appellant challenged the judgment of the Service Tribunal in this Court by a petition for leave to appeal and leave was granted to consider the following contentions:-
(i) That the Service Tribunal has erred in construing the rules to hold that even when the Authorised Officer, on receipt of the report of the Inquiry Officer, records his findings that the charge has not been proved he could forward the case to the authority for imposing penalty to the accused officer;
(ii) That the Service Tribunal did not correctly apply the principles laid down by this Court in the case of Mir Muhammad v.
Government of NWFP (PLD 1981 SC 176), which in no uncertain terms laid down that the copy of the inquiry report should be furnished to the accused official as an implicit requirement of the rules;
(iii) That the appellant having been held guilty by the Inquiry Officer only in respect of one charge, the Tribunal went far. Beyond and exceeded its jurisdiction to decide the appeal on its own independent findings that the appellant was guilty of all three charges."
8. At the hearing of the appeal the aforesaid three contentions were pressed on behalf of the appellant. It was pointed out to us that as observed by the Tribunal in its order the record revealed that while the appellant's case was being processed for issuing a charge-sheet against him, a decision was taken for retiring him under section 13(11) of the Civil Servants Act, 1973. But the decision to retire him, was held in abeyance and the appellant was proceeded against under the rules. On perusal of the report of the Authorised Officer we found an anomaly, as it appears to us from the concluding paragraph of the report that none of the charges were conclusively proved against the appellant and therefore, it was said that he was entitled to be exonerated of the charges and be "reinstated" in service with immediate effect. At the same time the Authorised Officer recommended that after his reinstatement the appellant may be retired under section 13(ii) of the Civil Servants Act, 1973, as already approved by the President. In the context of the final recommendation of the Establishment Secretary, the note of C.O.S. That "the accused officer shall be completing 28 years of service in February, 1982," gives an indication as though action under section 13(ii) of the Civil Servants Act to retire the appellant on completion of 25 years of service qualifying for pension was approved. It was not clear from the record therefore whether the appellant was merely retired from service under section 13(ii) of the Civil Servants Act or was compulsorily retired by way of penalty. We, therefore, called upon the learned Deputy Attorney General to clarify the position from the Government point of view.
9. Learned Deputy Attorney General has filed a statement stating the case of the Government reaffirming the position of the record as mentioned in the earlier part of this judgment. It is stated that the Authorised Officer found that the evidence on charge No. (ii) was insufficient to justify maintaining the said charge against the accused officer and reported to the authority to exonerate him of all the charges recommending the reinstatement of the appellant. The statement further says "the competent authority did not agree to the proposal of the Authorised Officer and ordered compulsory retirement of Mr. Maqsood Ahmad Shaikh". In this written statement the summary submitted by the C.O.S. To the President has been reproduced in extenso as mentioned in para. 5 hereinabove and it is stated that on this summary the President was pleased to approve the recommendation of the C.O.S. Contained in the last paragraph. According to this statement "the C.O.S. As well as the competent authority took the disciplinary proceedings to their logical end by approving that he (appellant) should be compulsorily retired from service which is a major penalty under the Government Servants (Efficiency and Discipline) Rules, 1973, as mentioned in rule 4(b)(li) of the Government Servants (Efficiency and Discipline) Rules, 1973."
10. In view of the categorial stand taken by the Government in the aforesaid manner, now the question is whether the disciplinary proceedings taken against the appellant suffered from any illegality vitiating the final order imposing major penalty of compulsory retirement on him. Before adverting to the contentions of the parties, we may here point out certain important features of the case appearing from the record, the substance of which has already been narrated. According to the record the Authorised Officer gave a personal hearing to the appellant. It has been urged on behalf of the appellant that this was not sufficient to satisfy the requirement of the rules and it was necessary to furnish the appellant with a copy of the inquiry report. Reliance in this behalf was placed on Mir Muhammad v. NWFP Government through Chief Secretary (PLD 1981 SC 176), in which rules 5 and 6 of the NWFP Government Servants (Efficiency and Discipline) Rules, 1973, were interpreted. Sub-rule (1)(iv) of rule 5 of the Government Servants (Efficiency and Discipline) Rules 1973, applicable in the present case which is in pari materia with sub-rule of the same number in the NWFP Government Servants (Efficiency and Discipline) Rules, reads as under: - "On receipt of the report of the Inquiry Officer or Inquiry Committee or, where no such officer or Committee is appointed, on receipt of the explanation of the accused, if any, the authorised Officer shall determine whether a charge has been proved. If it is proposed to impose a minor penalty, he shall pass orders accordingly. If it is proposed to impose a major penalty, he shall forward the case to the authority alongwith the charge and statement of allegation served on the accused, the explanation of the accused, the finding of the Inquiry Officer or Inquiry Committee, if appointed, and his own recommedations regarding the penalty to be imposed. The authority shall pass such orders as it may deem proper."
"It will be seen that in a case where it is proposed to impose a major penalty as a result of a formal inquiry, the Authority is required before passing order to take into consideration the following:
(a) The charge and statement of allegations served on the accused;
(b) the explanation of the accused;
(c) the finding of the Inquiry Officer or Inquiry Committee; and
(d) the recommendations of the authorised officer regarding the penalty to be imposed.
The explanation of the accused referred to in sub-rule (iv) of rule 5 cannot mean the preliminary denial or admission of the accused official in terms of clause(b) of sub-rule(1) of rule as at that time all the circumstances and evidence to be marshalled against him during the course of the inquiry are not within his knowledge; and he would acquire knowledge thereof only when the evidence has been led and the Inquiry Officer of Committee has formulated its findings. A proper explanation of the accused officer in such a case can only be furnished if he is supplied a copy of the inquiry report so as to offer his comments in regard to the findings recorded therein, and the action proposed to be taken against him on their basis.
11. There is another aspect of this case which requires to be noticed. The bare reading of sub-rule(1)
(iv) of rule 5 shows that the authorised officer can forward the case to the authority alongwith the charge and statement of allegations served on the accused, the explanation of the accused and the findings of the Inquiry Officer or Inquiry Committee alongwith his own recommendations regarding the penalty to be imposed only if he formulates an opinion and proposes a major penalty. The rule is silent and no procedure is provided requiring the authorised officer to forward the requisite papers to the authority if he is of the opinion that no penalty be imposed. This position has been explained in the case of Mir Muhammad (supra) where it is observed that on a proper construction of rules 5 and 6 read together, it is a statutory requirement that if the formal inquiry is held, then the authorised officer should, after he has tentatively decided upon the action he proposes to recommend to the Authority, give an opportunity to the accused officer to explain against the proposed action before sending his recommendation to the authority. If therefore, he does not propose any action the question of his recommending a penalty does not arise. Further there would be no question of the explanation of the accused officer if the Inquiry Officer exonerates him of certain charges. In such a case even if a copy of the report is given to him, he would at best be able to explain in regard to the charges of which he has been found guilty. In this context it may be pointed out that the note of the C .O. S. Gives an impression that adverse inference was drawn against the accused officer relating to the interest free loan of Rs.1,00,000 taken by the accused officer from the. SITE Board which was the subject---matter of charge No.
(iii) of which the appellant was exonerated, therefore, he could not have had second opportunity to show cause against the proposed action based upon a finding of guilty in regard to the said charge.
12. So far as the third contention is concerned we are of the opinion that the Service Tribunal could not reopen the charges of which the appellant was found not guilty and base the order of compulsory retirement on its own conclusions, when there was nothing on the record to show that the order proceeded upon the basis of all the three charges. Consequently, the authority, while imposing the penalty did not have the explanation of the accused officer in relation to the tentative opinion expressed by the C.O.S. As regards charge No. (iii). In view of all these legal infirmities we are of the opinion that the procedure adopted was in derogation of the mandatory requirements of the rules and the ultimate order passed on the basis of such inquiry is, therefore, invalid. The Service Tribunal has blessed the impugned order before it by invoking the aid of rule 6-A of the rules which empowers the authority "to call for the record of 1 any case pending before or disposed of by the authorised officer and pass such an order in relation thereto as it may deem fit". This view appears to us to be erroneous. There is nothing on the record to even remotely suggest that the impugned order was passed in exercise of this power. Be that as it may if a case disposed of by the authorised officer is intended to be reviewed by the authority in exercise of powers under rule 6-A, no order adverse to the interest of the accused officer can be passed without affording him an opportunity of hearing. The rule of natural justice, as is well established, is to be read into of provisions of law authorizing a statutory functionary to pass orders in relation to rights of citizens. 1t is not the case of the Government that action was taken under the aforesaid rule after notice to the appellant. The Service Tribunal should therefore have allowed the appeal and set aside the order of compulsory retirement passed against the appellant, leaving it open to the relevant authorities to proceed against him in accordance with law.
13. In the result the appeal is allowed in the above terms with no order as to costs.