Lokinder Dutt Sharma Vs Board of
Directors Himachal Pradesh Horticulture Produce Marketing and Processing
Corporation Ltd.
CWPOA No. 138 of 2019 Reserved on:
13.03.2020 Date of decision: 18.03.2020.
Coram: Hon’ble Mr. Justice Tarlok Singh Chauhan,
Judge. Hon’ble Mr. Justice Anoop Chitkara, Judge.
For the Petitioner: Mr. Ramesh
Kaundal, Advocate.
For the Respondents: Mr. P.D.
Nanda, Advocate.
Tarlok Singh Chauhan, Judge
The seminal issue that arises for
consideration in this writ petition is whether after the retirement of an employee
the departmental proceedings in absence of any provision in the byelaws could
have been initiated and whether such power and authority could have been
exercised on the basis of the amended byelaws which admittedly had been amended
after the petitioner already retired from service.
2. However, before answering the said
questions, certain admitted facts need to be noticed.
3. The petitioner was working with
the respondentCorporation and retired from the post of Deputy General Manager on
31.3.2014. After about four months of the retirement of the petitioner, he was served
with chargememo, which led to initiation of the departmental enquiry and the
same finally culminated into imposition of recovery of Rs.2,46,139/.
4. It is not in dispute that as
per the Byelaws that were in force at the time of the retirement of the petitioner
known as the ‘Himachal Pradesh Horticultural Produce Marketing and Processing Corporation,
Ltd., Employees Service ByeLaws”, there was no provision for conducting
departmental enquiry against the petitioner and it is only vide amendment carried
out in the byelaws pursuant to the Board of Directors meeting of the
respondentCorporation held on 29.9.2014 that an amendment was carried out in the
byelaws, which reads as under:
Chapter -VI Existing Provision Chapter-VI Amended
Provision CONDUCT, DISCIPLINE AND APPEALS CONDUCT, DISCIPLINE AND APPEALS 6.17(1).
Without prejudice to the provision of other regulation an employee who commits
a breach of the regulations of the Corporation or who displays negligence in
efficiency or indolence, or who knowingly does anything detrimental to the
interest of prestige of the Corporation or in conflict with its instructions,
or who commits a breach of discipline or is guilty of any other act of
misconduct or misbehaviour, shall be liable to the following penalties:
Minor Penalties:
(i) Censure:
(ii) Withholding of his promotion;
(iii) Recovery from his pay of
the whole or part of any peculiarly loss caused by him to the Corporation or
negligence or breach of order:
(iv) Withholding of increments
6.17(1). Without prejudice to the
provision of other regulation an employee who commits a breach of the regulations
of the Corporation or who displays negligence in efficiency or indolence, or
who knowingly does anything detrimental to the interest of prestige of the
Corporation or in conflict with its instructions, or who commits a breach of
discipline or is guilty of any other act of misconduct or misbehaviour, shall
be liable to the following penalties:
Minor Penalties:
(v) Censure:
(vi) Withholding of his promotion;
(vii) Recovery from his pay of
the whole or part of any peculiarly loss caused by him to the Corporation by
negligence or breach of order:
(viii) Withholding of increments Provided
further that the departmental proceedings/vigilance inquiry pending against the
retired employees or who commits a breach of regulations of the corporation,
displays negligence in efficiency or indolence who knowingly does anything
detrimental to the interest or prestige of the Corporation during the past four
years from the date of retirement and any act of omission and commission
committed are detected within a period of two years after retirement which
cause financial loss to the corporation, the departmental proceedings against
such employees shall be initiated and financial loss so caused to the Corporation,
if proved, shall be recovered from their retirement dues i.e. leave encashment,
gratuity or any other arrears”.
5. In what circumstances, an
enquiry can be ordered against a retired employee, has been a subject matter of
various decisions of the Hon’ble Supreme Court and the same have been referred
to in detail in Anant R. Kulkarni vs. Y.P. Education Society and others (2013)
6 SCC 515, wherein it was observed as under:
Enquiry against a retired employee:
“18. This Court in NOIDA
Entrepreneurs Association v. NOIDA & Ors., AIR 2011 SC 2112, examined the
issue, and held that the competence of an authority to hold an enquiry against an
employee who has retired, depends upon the statutory rules which govern the terms
and conditions of his service, and while deciding the said case, reliance was
placed on various earlier judgments of this Court including B.J. Shelat v.
State of Gujarat & Ors., AIR 1978 SC 1109; Ramesh Chandra Sharma v. Punjab
National Bank & Anr., (2007) 9 SCC 15; and UCO Bank & Anr. v. Rajinder
Lal Capoor, AIR 2008 SC 1831.
19. In State of Assam & Ors.
v. Padma Ram Borah, AIR 1965 SC 473, a Constitution Bench of this Court held that
it is not possible for the employer to continue with the enquiry after the delinquent
employee stands retired. The Court observed:
(AIR p. 475, para 7)
“7. ….According to the earlier
order of the State Government itself, the service of the respondent had come to
an end on March 31, 1961. The State Government could not by unilateral action
create a fresh contract of service to take effect from April 1, 1961. If the State
Government wished to continue the service of the respondent for a further period,
the State Government should have issued a notification before March 31, 1961.” (Emphasis
supplied) While deciding the said issue, the Court placed reliance on the judgment
in R.T. Rangachari v. Secretary of State for India in Council, AIR 1937 PC 27.
20. In State of Punjab v. Khemi
Ram, (1969) 3 SCC 28, this court observed:
(SCC p.32, para 12)
“12. There can be no doubt that if
disciplinary action is sought to be taken against a government servant it must be
done before he retires as provided by the said rule. If a disciplinary enquiry
cannot be concluded before the date of such retirement, the course open to the Government
is to pass an order of suspension and refuse to permit the concerned public servant
to retire and retain him in service till such enquiry is completed and a final order
is passed therein.” 21. In Kirti Bhusan Singh v. State of Bihar & Ors., (1986)
3 SCC 675, this Court held as under:
(SCC pp. 67879, para 6)
“6. …. We are of the view that in
the absence of such a provision which entitled the State Government to revoke
an order of retirement on medical grounds which had become effective and final,
the order dated October 5, 1963 passed by the State Government revoking the order
of retirement should be held as having been passed without the authority of law
and is liable to be set aside. It, therefore, follows that the order of dismissal
passed thereafter was also a nullity.”
22. In Bhagirathi Jena v. Board
of Directors, O.S.F.C.& Ors., (1999) 3 SCC 666, this Court observed:
(SCC pp. 66869, para 7)
“7. ...There is also no provision
for conducting a disciplinary enquiry after retirement of the appellant and nor
any provision stating that in case misconduct is established, a deduction could
be made from retiral benefits. Once the appellant had retired from service on 3061995,
there was no authority vested in the Corporation for continuing the departmental
enquiry even for the purpose of imposing any reduction in the retiral benefits payable
to the appellant. In the absence of such an authority, it must be held that the
enquiry had lapsed and the appellant was entitled to full retiral benefits on
retirement.”
23. In U.P. State Sugar
Corporation Ltd. & Ors. v. Kamal Swaroop Tondon, (2008) 2 SCC 41, this
Court dealt with a case wherein statutory corporation had initiated proceedings
for recovery of the financial loss from an employee after his retirement from
service.
This Court approved such a course
observing that in the case of retirement, master and servant relationship
continue for grant of retrial benefits. The proceedings for recovery of financial
loss from an employee is permissible even after his retirement and the same can
also be recovered from the retrial benefits of the said employee.
24. Thus, it is evident from the above,
that the relevant rules governing the service conditions of an employee are the
determining factors as to whether and in what manner the domestic enquiry can
be held against an employee who stood retired after reaching the age of
superannuation. Generally, if the enquiry has been initiated while the
delinquent employee was in service, it would continue even after his
retirement, but nature of punishment would change. The punishment of
dismissal/removal from service would not be imposed.”
6. It would be noticed that the Hon’ble
Supreme Court in Anant R. Kulkarni’s case (supra) had relied upon its earlier judgment
in Kamal Swaroop Tondon’s case (supra) to hold that the recovery of the
financial loss from an employee is permissible even after his retirement and
the same can also be recovered from the retiral benefits of the said employee.
7. However, when a similar issue came
up subsequently before the Hon’ble Supreme Court in Dev Prakash Tewari vs. Uttar
Pradesh Cooperative Institutional Service Board, Lucknow and others (2014) 7
SCC 260, the decision in U.P.Coop. Federation Ltd. vs. L.P.Rai (2007) 7 SCC 81
was held to be laying down no ratio as the earlier decision of the Hon’ble Supreme
Court in Bhagirathi Jena’s case (supra) had not been brought to the notice of
the Court deciding the U.P. Coop. Federation case.
This would be evidently clear
from the discussion made in paras 5 to 8 of the judgment, which reads as under:
“5. We have carefully considered the rival submissions.
The facts are not in dispute. The High Court while quashing the earlier disciplinary
proceedings on the ground of violation of principles of natural justice in its order
dated 10.1.2006 granted liberty to initiate the fresh inquiry in accordance with
the Regulations. The appellant who was reinstated in service on 26.4.2006 and
fresh disciplinary proceeding was initiated on 7.7.2006 and while that was
pending, the appellant attained the age of superannuation and retired on
31.3.2009. There is no provision in the Uttar Pradesh Cooperative Societies Employees’
Service Regulations, 1975, for initiation or continuation of disciplinary
proceeding after retirement of the appellant nor is there any provision stating
that in case misconduct is established a deduction could be made from his
retiral benefits.
6. An occasion came before this
Court to consider the continuance of disciplinary inquiry in similar circumstance
in Bhagirathi Jena’s case (supra) and it was laid down as follows:
(SCC pp. 66869, paras 57)
“5. Learned Senior Counsel for
the respondents also relied upon Clause (3) (c) of Regulation44 of the Orissa State
Financial Corporation Staff Regulations, 1975. It reads thus :
"44.(3)(c) When the employee who has been
dismissed, removed or suspended is reinstated, the Board shall consider and
make a specific order :
(i) Regarding the pay and allowances
to be paid to the employee for the period of his absence from duty, and (ii)
Whether or not the said period shall be treated as a period on duty."
6. It will be noticed from the abovesaid
regulations that no specific provision was made for deducting any amount from the
provident fund consequent to any misconduct determined in the departmental enquiry
nor was any provision made for continuance of the departmental enquiry after
superannuation.
7. In view of the absence of such
a provision in the abovesaid regulations, it must be held that the Corporation
had no legal authority to make any reduction in the retiral benefits of the appellant.
There is also no provision for conducting a disciplinary enquiry after
retirement of the appellant and nor any provision stating that in case misconduct
is established, a deduction could be made from retiral benefits.
Once the appellant had retired
from service on 30.6.95 there was no authority vested in the Corporation for continuing
the departmental enquiry even for the purpose of imposing any reduction in the
retiral benefits payable to the appellant. In the absence of such an authority,
it must be held that the enquiry had lapsed and the appellant was entitled to
full retiral benefits on retirement.
“7. In the subsequent decision of
this Court in U.P. Coop. Federation case (supra) on facts, the disciplinary proceeding
against employee was quashed by the High Court since no opportunity of hearing
was given to him in the inquiry and the management in its appeal before this
Court sought for grant of liberty to hold a fresh inquiry and this Court held that
charges levelled against the employee were not minor in nature, and therefore,
it would not be proper to foreclose the right of the employer to hold a fresh
inquiry only on the ground that the employee has since retired from the service
and accordingly granted the liberty sought for by the management. While dealing
with the above case, the earlier decision in Bhagirathi Jena’s case (supra) was
not brought to the notice of this Court and no contention was raised pertaining
to the provisions under which the disciplinary proceeding was initiated and as
such no ratio came to be laid down. In our view the said decision cannot help
the respondents herein.
8. Once the appellant had retired
from service on 31.3.2009, there was no authority vested with the respondents
for continuing the disciplinary proceeding even for the purpose of imposing any
reduction in the retiral benefits payable to the appellant. In the absence of
such an authority it must be held that the enquiry had lapsed and the appellant
was entitled to get full retiral benefits.”
8. Thus, what can now be taken to
be settled is that once the petitioner had retired from service on attaining
the age of superannuation on 31.3.2014, then in absence of any rule, there was
no authority vested with the respondents for initiating disciplinary
proceedings even for the purpose of imposing any reduction in the retiral
benefits payable to the petitioner.
9. Now, coming to the further
question as to whether the respondents by amending the byelaws, that too, after
the petitioner had retired from service on attaining the age of superannuation could
ordered disciplinary inquiry, the answer to the same is clearly in negative.
For it is more than settled that if disciplinary action is sought to be taken against
an employee, it must be done before he retires as has authoritatively been held
by the Constitution Bench of the Hon’ble Supreme Court in Padma Ram Borah’s
case (supra) and thereafter reiterated in Kirti Bhusan Singh’s and Bhagirathi
Jena’s cases (supra).
10. Once there was no provision in
the existing byelaws for initiating disciplinary enquiry after the retirement of
the petitioner and the petitioner had retired from service on 31.3.2014 on
attaining the age of superannuation, then there was no authority vested with the
respondents for initiating disciplinary enquiry, that too, on the basis of the amended
Rules, which under no circumstance could have been made applicable to the case
of the petitioner because the order of retirement had attained finality and the
same could not have been reopened.
11. In case the respondents
wanted to initiate any disciplinary enquiry, the same essentially had to be
initiated when the petitioner was in service and in case the same was to be
continued even after the retirement of the petitioner on attaining the age of superannuation,
in that event, the petitioner while in service was required to be placed under suspension
and thereafter without permitting him to retire, he had to be retained in service
till such enquiry was completed and final order passed thereon in terms of the judgment
of the Hon’ble Supreme Court in Khimi Ram’s case (supra).
12. Once the petitioner ceased to
be in the service of the respondentsCorporation, continuation of disciplinary proceedings
was not permissible unless there was a specific provision to this effect in the
relevant rules. (Refer: State Bank of India vs. A.N. Gupta and others (1997) 8 SCC
60.
13. In view of the exposition of
law laid down by the Hon’ble Supreme Court in the judgments, referred to above,
it can safely be concluded that the services of an employee would be governed
by the rules applicable in the department in which he was in the employment. The
relevant rules applicable governing the service conditions of an employee would
be determinative to the authorities to initiate or to continue with the
departmental enquiry against the employee who stood retired after attaining the
age of superannuation. If the rules permit to initiate or to continue with the departmental
enquiry even after attaining the age of superannuation and in the manner as prescribed,
it would be initiated and continued otherwise it would not be permissible.
14. Thus, what can be gathered
from the aforesaid discussion is that the departmental enquiry initiated
against the petitioner after the retirement of the petitioner is totally illegal
and without any authority of law. Even the order of recovery passed on such
enquiry, is also illegal.
15. Consequently, we find merit
in this petition and the same is accordingly allowed. The departmental proceedings
initiated against the petitioner including the penalty order passed by the
Appellate Authority based upon the appeal preferred by the petitioner against
the penalty, are quashed and setaside as being one without any jurisdiction or
authority. The respondents are directed to release the entire amount of leave
encashment withheld by them within a period of three months from today, failing
which, they shall be liable to pay an interest at the rate of 9% per annum from
the date when the same was due till the date of actual payment.
16. The petition is disposed of
in the aforesaid terms, so also the pending application(s), if any, leaving the
parties to bear their own costs.
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