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2007 DAILYLAW 2705 (DEL)

S. P. S. RANA v. NATIONAL SEEDS CORPORATION

2007-10-22

Hima Kohli

body2007
HIMA KOHLI, J. ( 1 ) RULE. ( 2 ) WITH the consent of the parties, this case has been heard and disposed of finally. ( 3 ) THE present writ petition is filed by the petitioner, an employee of the respondent, National Seeds Corporation (hereinafter referred to as 'the respondent Corporation') praying inter alia for declaring the continuation of the disciplinary proceedings against him after ordering his superannuation on 30th January, 2004, as illegal and beyond the competence of the respondent Corporation and for restraining the respondent Corporation from proceeding in respect of two charge sheets, both dated 7th April, 2003 proposing imposition of minor penalty and for major penalty respectively, as also for consequential relief of directions to the respondent Corporation to release the terminal benefits of the petitioner on account of gratuity, leave encashment, arrears of pay etc. amounting to rs. 5,50,000/-approximately. ( 4 ) THE facts of the case lie in a narrow compass. The petitioner was appointed by the respondent Corporation as a Seed Production Assistant on 26th December, 1966. On 8th March, 2002, the petitioner was placed under suspension in anticipation of disciplinary proceedings. On 7th April, 2003, the petitioner was served with two charge sheets, one issued under Rule 33 of the National Seeds Corporation Conduct, Discipline and Appeal Rules, 1992 (for short 'the Conduct Rules') proposing proceedings for minor penalty, and the other under Rule 31 of the Conduct Rules proposing proceedings for imposing major penalty. An Enquiry Officer was appointed and the enquiry proceedings were being held as per the Conduct Rules, when in the meantime, an Office Order dated 30th January, 2004 was issued by the respondent Corporation, relieving the petitioner from service with effect from the afternoon of 30th January, 2004, but "without prejudice to the right of the Corporation to take such action as deemed fit in regard to the terminal benefits due to Shri Rana (the petitioner) as a result of departmental proceeding already pending against him". ( 5 ) AGGRIEVED by the aforementioned Office Order, the petitioner filed a writ petition, being WP (C) No. 5479/2004 challenging the disciplinary 1 proceedings on the ground that the Conduct Rules did not permit continuation of the enquiry against an employee after his superannuation. ( 5 ) AGGRIEVED by the aforementioned Office Order, the petitioner filed a writ petition, being WP (C) No. 5479/2004 challenging the disciplinary 1 proceedings on the ground that the Conduct Rules did not permit continuation of the enquiry against an employee after his superannuation. However, the respondent Corporation placed on record the amended conduct Rules wherein Rule 46 was incorporated on the basis of an amendment to the Conduct Rules. In these circumstances, the petitioner sought liberty to withdraw the said writ petition which was granted to him, while reserving his right to file a substantive petition challenging the vires of sub-rule (ii) of Rule 46 of the Conduct Rules, as also raising other issues. Thereafter, the petitioner filed the present writ petition on 18th May, 2004 challenging the legality of the disciplinary proceedings. ( 6 ) COUNSEL for the petitioner submitted that the petitioner had been superannuated on 30th January, 2004 and his terminal dues to the tune of rs. 11,70,237/- had already been released to him and in view of the fact that the petitioner had been permitted to superannuate, the statutory relationship between him and the respondent Corporation ceased to exist. He stated that it was no longer open to the respondent Corporation to have continued with the disciplinary proceedings against the petitioner or withhold his terminal dues payable towards gratuity, leave encashment, arrears of pay, revision etc. as Rule 46 of the Conduct Rules does not contemplate continuing with disciplinary proceedings in the absence of a relationship of an employer and employee between the parties. ( 7 ) IT was further contended on behalf of the petitioner that the disciplinary proceedings in respect of minor penalty proceedings as contemplated in one of the charge sheets was contrary to the provision of section 4 (6) of the Payment of Gratuity Act, 1972 (hereinafter referred to as 'the Act') and also contrary to Rule 33 read with Rule 46 (ii) of the Conduct rules. It was urged that the charge sheet for proposing major penalty proceedings was also beyond the power of the respondent Corporation under rule 31 of the Conduct Rules and thus it was not open to the respondent corporation to withhold the gratuity, leave encashment and other terminal dues of the petitioner in the absence of any authority under the Conduct rules which permit such non payment. In support of the aforesaid arguments, counsel for the petitioner relied on the following judgments: (i) State of Punjab v. Khemi Ram, AIR 1970 SC 214 . (ii) Bhagirathi Jena v. Board of Directors, O. S. F. C. and Ors. , (1999) 3 SCC 666 . (iii) Capt. M. Pulanthony v. Bharat Gold Mines Ltd. and Anr. , (1999) 3 SCC 679 . (iv) Dunlop India Limited v. Union of India and Ors. , (106) 2003 dlt 135 : 2003 (71) DRJ 175 ( 8 ) PER contra, counsel for the respondent Corporation submitted that rule 46 of the Conduct Rules allows continuation of disciplinary proceedings even on retirement of an employee. He argued that penalties provided under rule 29 can be imposed on an employee and in exercise of the powers vested in the competent authority, an order dated 12th October, 2004 was passed against the petitioner in respect of one charge sheet proposing imposition of minor penalty, for making recoveries from the dues payable to him. It was submitted that as regards major penalties, the enquiry proceedings were completed and the petitioner was found guilty of all the charges, but because of an interim order dated 28th January, 2005 passed in the present case, the consequential orders could not be passed against the petitioner in respect of both the charge sheets. He further submitted that the petitioner sought to avoid the enquiry proceedings which were initiated by the respondent Corporation by failing to attend any of the hearings, except for two hearings held on 23rd September and 22nd October, 2003, under one pretext or the other and in the meanwhile, the petitioner attained superannuation. ( 9 ) IT was emphasized on behalf of the respondent Corporation that the superannuation of the petitioner was allowed without prejudice to the rights of the respondent Corporation to take action as deemed fit in regard to the terminal benefits due to the petitioner as a result of the departmental proceedings pending against him. He argued that the question of punishment to be imposed on the petitioner would arise only when the enquiry concludes and in view of the stay operating in favour of the petitioner in terms of the order dated 28th January, 2005, the aforesaid issue is premature. He argued that the question of punishment to be imposed on the petitioner would arise only when the enquiry concludes and in view of the stay operating in favour of the petitioner in terms of the order dated 28th January, 2005, the aforesaid issue is premature. It was also pointed out that despite having reserved his right to challenge the vires of Rule 46 of the Conduct Rules as recorded in the order dated 21st April, 2004 passed in WP (C) No. 5479/2004, the petitioner has not challenged the vires of the Conduct Rules. Lastly, it was submitted that the respondent Corporation was well within its right to withhold the gratuity, leave encashment etc. of the petitioner and that the provisions made under Section 4 (6) of the Act entitle the respondent Corporation to withhold the payment of gratuity to the petitioner for ordering recovery of any pecuniary loss caused to the respondent Corporation in the disciplinary proceedings pending against him. In support of the aforesaid arguments advanced by the counsel for the respondent Corporation, he relied on the following judgments: (i) D. V. Kapoor v. Union of India and Ors. , (1990) 4 SCC 314 . (ii) State of Rajasthan v. B. K. Meena and Ors. , (1996) 6 SCC 417 . (iii) Bhagirathi Jena v. Board of Directors, O. S. F. C. and Ors. , (1999) 3 SCC 666 . ( 10 ) I have heard the counsels for the parties and considered the arguments addressed by both the sides in the light of the relevant Rules and the position of law. ( 11 ) FOR better appreciation of the case, it is necessary to refer to Rule 46 of the Conduct Rules which is reproduced hereinbelow: "46. Disciplinary provision for retired Employees: (i) Disciplinary proceedings, if instituted, while the employee was in service whether before his retirement or during his reemployment, shall after the final retirement of the employee be deemed to be proceedings and shall be continued and concluded by the authority by which it was commenced in the same manner as if the employee had continued in service. (ii) During the pendency of the Disciplinary proceedings, the disciplinary authority may withhold payment of gratuity, for ordering the recovery from gratuity of the whole or part of any pecuniary loss caused to the company if the employee is found in a disciplinary proceeding or a judicial proceeding to have been guilty of offences/misconduct as mentioned in Sub section (6) of section 4 of the Payment of Gratuity Act 1972 or to have caused pecuniary loss to the company by misconduct or negligence, during his service including service rendered on deputation or on reemployment after retirement. However the provisions of section 7 (3) and Section 7 (3a) of the Payment of Gratuity Act, 1972 should be kept in view in the event of delayed payment, in case the employee is fully exonerated. " ( 12 ) RULE 29 of the Conduct Rules enumerates the penalties that may be imposed on an employee and states as below: "29. Penalties the following penalties may be imposed on an employee, as hereinaf-ter provided, for misconduct committed by him or for any other good and sufficient reasons. (A) (a) Censure. (b) Withholding of his promotion. (c) Recovery from his pay of the whole or part of any pecuniary loss caused by him to the Corporation by negligence or breach of orders. (d) Reduction to a lower stage in the time scale of pay for a period not exceeding three years without cumulative effect. (e) Withholding of increments of pay without cumulative effect. (c) Recovery from his pay of the whole or part of any pecuniary loss caused by him to the Corporation by negligence or breach of orders. (d) Reduction to a lower stage in the time scale of pay for a period not exceeding three years without cumulative effect. (e) Withholding of increments of pay without cumulative effect. (B) Major Penalties (a) Reduction to a lower stage in the time scale of pay for a specified period, with further directions as to whether or not the employee will earn increments of pay during the period the such reduction (0 (d)xxx" and whether on the expiry of such period of reduction will or will not have the effect of postponing the future increments of his pay; (b) Reduction to a lower time scale of pay, grade, post or service which shall ordinarily be a bar to the promotion of the employee to the time-scale of pay, grade, post or Service from which he was reduced, with or; without further directions regarding conditions of restoration to the grade or post or service from which the employee was reduced and his seniority and pay on such restoration to that grade, post or service; (c) Compulsory retirement; (d) Removal from service which shall or ordinarily be a disqualification for future employment under the Corporation. ( 13 ) IT is no longer res integra that if the Conduct Rules provide that the departmental proceedings, if instituted, while a Government servant was in service whether before his retirement or during his re-employment, shall even after the final retirement of the employee be deemed to be proceedings under the rules and shall be continued and concluded by the authority by which they were commenced in the same manner as if the Government servant had continued in service. As held by the Supreme Court in the case of D. V. Kapoor (supra), merely because the appellant therein was allowed to retire, the Government was not lacking jurisdiction or power to continue the proceedings already initiated, and that the same could be taken to its logical conclusion, as provided in Rule 9 (2) of the Civil Services Pension rules, 1972, subject matter of consideration therein and the disciplinary proceedings initiated under the said Rules were deemed to be proceedings under the Rules to be continued and concluded by the authorities by which the proceedings had been commenced in the same manner as if the government servant had continued in service. ( 14 ) THE purpose of introducing Rule 46 in the Conduct Rules is to provide for safeguards so as to ensure that there is no undue harassment to an employee after retirement. A limitation has been imposed on the power of the respondent Corporation to prevent initiation of fresh proceedings after retirement of an employee, where no such proceedings were initiated before such a retirement. Such a limitation has been placed on the respondent corporation so as to prevent any misuse of power. However, where disciplinary proceedings have already been instituted and are pending at the time of superannuation of an employee, there is no question of causing any harassment in such a case. Rule 46 of the Conduct Rules itself contemplates that disciplinary proceedings, if already instituted, can be continued even after the retirement of an employee. ( 15 ) THE plea raised on behalf of the petitioner to the effect that once the respondent Corporation issued the Office Order dated 30th January, 2004 relieving the petitioner from, its service on attaining the age of superannuation, then it Could not continue disciplinary proceedings against the petitioner, is devoid of merits. The fine distinction sought to be drawn by the counsel for the petitioner between "retirement" and "final retirement" by arguing that since the petitioner was permitted to superannuate, the disciplinary proceedings even if instituted, could not be continued and ought to lapse as the petitioner was not re-employed by the respondent corporation and thus there was no question of his "final retirement", is unacceptable and amounts to splitting hair. Rule 46 of the Conduct Rules permits continuation of such disciplinary proceedings. Rule 46 of the Conduct Rules permits continuation of such disciplinary proceedings. It cannot be said that the statutory relationship between the petitioner and the respondent corporation ceased to exist upon issuance of such a letter, more so when the petitioner was placed under suspension in March 2002 and two charge sheets were issued to him in April 2003, much before his retirement. ( 16 ) THE argument advanced on behalf of the petitioner that the respondent Corporation did not reserve its right to continue with the disciplinary proceedings and that if the respondent Corporation had the intention to continue with the disciplinary proceedings against the petitioner, then it should have either specifically passed orders deferring the retirement of the petitioner or continued his suspension order, is also unacceptable. The court cannot import the requirement of such a condition which is not contained, or rather, omitted in the Conduct Rules. Such an assumption would be against the principles of casus omissus pro omisso habendus est. If the court accepts the submission made on behalf of the petitioner that it was incumbent upon the respondent Corporation to reserve such a right by passing an order to the said effect before continuing with the disciplinary proceedings, then the same shall amount to introducing a condition in the Conduct Rules which it does not provide for. ( 17 ) RELIANCE placed by the counsel for the petitioner on the judgment in the case of State of Punjab (supra), to state that the only course open to the respondent Corporation was to pass an order of suspension and refuse to permit the petitioner to retire and retain him in service till Such enquiry is completed and a final order passed therein, is misconceived as the observations made to the said effect by the Supreme Court in the aforesaid case were peculiar to the facts of the said case wherein the court was examining Rule 3. 26 (d) of the Punjab Civil Services Rules which provided that a Government servant under suspension on a charge of misconduct shall not be permitted to retire on his reaching the age of compulsory retirement, but should be retained in service until the enquiry into the charge was completed and a final order passed thereon. In the present case, rule 46 of the Conduct Rules does not contemplate any such an action. In the present case, rule 46 of the Conduct Rules does not contemplate any such an action. ( 18 ) THE judgment in the case of Dunlop India (supra) is also not applicable to the facts of the present case. In the aforesaid case, a Single judge of this court held that since the services of the respondent workman therein had not been terminated (his resignation having been accepted by the management therein) and termination is the sine qua non for the applicability of Section 4 (6), the said clause could not apply in the facts of that case. In the present case, Rule 46 (ii) of the Conduct Rules permits the disciplinary Authority to withhold the payment of gratuity for ordering recovery from the same for any pecuniary loss caused to the respondent corporation if the employee is found to be guilty in the course of disciplinary proceedings or judicial proceedings. Sub-clause (ii) of Rule 46 makes a specific mention of sub-section (6) of Section 4 of the Act while providing for withholding payment of gratuity. In view of the interim order dated 28th january, 2005, consequential orders have not been passed by the respondent corporation against the petitioner, in respect of both the charge sheets. Thus, the petitioner cannot be heard to state that the provision of Section 4 (6) of the Act could not be pressed into service by the respondent corporation as the petitioner had been permitted to superannuate. This plea is demolished in the light of the specific provision made in the Conduct Rules for withholding payment of gratuity during the pendency of the disciplinary proceedings by the respondent Corporation, as contemplated under sub-section (6) of Section 4 of the Act. ( 19 ) RELIANCE placed by the counsel for the petitioner on the judgment of bhagirathi Jena (supra) is also misplaced. Instead, the aforesaid judgment, also relied upon by the counsel for the respondent Corporation, fortifies the stand of the respondent Corporation that only in the absence of a provision in the relevant Regulations can it be held that the employer had no legal authority to make any reduction in the retiral benefits of an employee. Instead, the aforesaid judgment, also relied upon by the counsel for the respondent Corporation, fortifies the stand of the respondent Corporation that only in the absence of a provision in the relevant Regulations can it be held that the employer had no legal authority to make any reduction in the retiral benefits of an employee. In the aforesaid case, the court found that there was no provision for conducting a disciplinary enquiry after retirement of the appellant therein and nor was there any provision stating that in case misconduct is established, a deduction could be made from the retiral benefits of the employee and hence it was held that the respondent Corporation therein had no authority for continuing the departmental enquiry even for the purpose of imposing any reduction in the retiral benefits payable to the appellant therein and that the enquiry had lapsed in the absence of such an authority. Conversely, in the present case, Rule 46 of the Conduct Rules makes a provision for continuation of the disciplinary proceedings if instituted while the employee was in service even after his retirement and for withholding payment of gratuity, for ordering recovery thereof, if necessary. ( 20 ) THE plea raised by the counsel for the petitioner that an attempt on the part of the respondent Corporation to continue with the disciplinary proceedings even after the superannuation of the petitioner shall cause him injustice as after his superannuation, there was no provision for the respondent Corporation to pay the petitioner any subsistence allowance, is held to be without any substance for the reason that the disciplinary proceedings have already concluded. While orders have been passed in respect of one charge sheet where minor penalty proceedings were contemplated, consequential orders could not be passed in respect of the other charge sheet where major penalty proceedings were contemplated, in view of the interim order dated 28th January, 2005 operating in favour of the petitioner. In the present case, it is all the more necessary that the disciplinary proceedings be permitted to be concluded by directing the disciplinary Authority to pass an order one way or the other on both the charge sheets and in case the petitioner is aggrieved by the orders, permit him to seek his remedies as may be available to him in law. In fact, it is more in the interest of the petitioner that the proceedings be concluded as expeditiously as possible as delay ultimately works against him. ( 21 ) IN view of the aforesaid position, the writ petition fails and the same is dismissed. The interim order dated 28th January, 2005 stands vacated. Needless to state that any observations made hereinabove are not a reflection on the merits of the case of either of the parties as this court has confined itself only to the issue of the right of the respondent Corporation to continue the disciplinary proceedings against the petitioner after his superannuation in the light of the Conduct Rules. There shall be no orders as to costs.