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Judgment
Chapter -VI Existing Provision,Chapter-VI Amended Provision
CONDUCT, DISCIPLINE AND
APPEALS","CONDUCT, DISCIPLINE AND
APPEALS
6.17(1).   Without   prejudice  Â
to   the provision   of  Â
other   regulation   an employeew ho
commits a breach of the regulations of theÂ
Corporation or who displays negligenceÂ
in efficiency   or indolence,  or Â
who  knowingly  does anythingÂ
detrimental to the interest of prestige Â
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 Â
to  the following penalties:
Minor Penalties:
(i)Â Â Â Â Â Â Â Censure:
(ii)Â Â Â Â Â Â Withholding of his promotion;
(iii)     Recovery from his payÂ
of the whole or part of any peculiarly loss Â
caused  by  him  to  the
Corporation or negligence or breach of
order:
(iv)     Withholding of increments","6.17(1).   Without   prejudice  Â
to   the provision   of  Â
other   regulation   an employeew ho
commits a breach of the regulations of theÂ
Corporation or who displays negligenceÂ
in efficiency   or indolence,  or Â
who  knowingly  does anythingÂ
detrimental to the interest of prestige Â
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 Â
to  the following penalties:
Minor Penalties:
(v)Â Â Â Â Â Â Censure:
(vi)Â Â Â Â Â Withholding of his promotion;
(vii)    Recovery from his pay ofÂ
the whole or part of any peculiarly loss Â
caused  by  him  to  the
Corporation by negligence  or breacho f
order:
(viii)Â Â Â Withholding of increments ProvidedÂ
further that the departmental
proceedings/vigilance inquiry pending againstÂ
the retired employees or who commits a
breach of regulations of the corporation,  Â
displays   negligence   in efficiency or
indolence who knowingly does Â
anything      detrimental  to  the
interest or prestige of the C orporation
during the past four years from the date ofÂ
retirement and any act of omission
and     commission    Â
committed     are detected w ithin aÂ
period of two years after retirementÂ
which cause financial loss    Â
to     the    Â
corporation,     the departmentalÂ
proceedings against such employees  Â
shall   be   initiated   and
financial   loss   so  Â
caused   to   the Corporation,  Â
if   proved,   shall  Âb e
recovered from their retirement dues
i.e. leave encashment, gratuity or any
other arrearsâ€.
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.",
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.â€",
(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.",
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.â€,
In Kirti Bhusan Singh v. State of Bihar & Ors., (1986) 3 SCC 675, this Court held as under: (SCC pp. 678Â79, 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.â€,
In Bhagirathi Jena v. Board of Directors, O.S.F.C. & Ors., (1999) 3 SCC 666, this Court observed: (SCC pp. 668Â69, 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 30Â6Â1995, 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.â€",
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.,
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.â€,
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.,
However, when a similar issue came up subsequently before the Hon’ble Supreme Court in Dev Prakash  Tewari  vs.  Uttar  Pradesh Â",
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.,
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. 668Â69, paras 5Â7)",
“ 5. Learned Senior Counsel for the respondents also relied upon Clause (3) (c) of RegulationÂ44 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 :Â",
(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.""",
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.,
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. “",
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.,
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.â€,
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.,
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).,
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.,
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).,
Once the petitioner ceased to be in the service of the respondentsÂCorporation, 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.,
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.",
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.",
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 setÂaside 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.,
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.",