Union of India and Another vs C.P. Singh

R.V Raveendran, C.J.

Respondent is working as Assistant Signal and Telecommunication Engineer in the Office of the Chief Project Manager, Railway Electrification, Ranchi. He was issued a charge memorandum dated 24.12.1992 alleging the following misconduct:

Shri C.P. Singh while working as ASTE/RE/Bhopal during the year 1989 committed misconduct/irregularities in as much as that he showed negligence in working and accepted a list of released B & T materials including seventy four number of rail posts (74 Nos.) under his clear acknowledgement on 19.7.1989 prepared and submitted to him by Shri O.P. Pal Si/Grade II without ensuring their proper description and specification and without ensuring the physical presence of 74 numbers rail posts at site.

The above failure on the part of Shri o C.P. Singh led to the disappearance of 74 nos. of rail posts from the site of Nishatpura Yard resulting into enormous loss to the Railways.

Shri C.P. Singh vide his statement dated 24.4.1990 in answer to question 2 admitted to have received the above mentioned list on 19.7.1989 from Shri Pal showing 100% check under instructions of the then Dy. CSTE/RE/Bhopal Shri Mewa Lal. His argument that the list prepared by Shri O.P. Pal and received by him on 19.7.1989 should not be termed as a charge of materials given to him but simply should be treated as a mere statement of items of stores for filling the M.B. is not tenable as he was given the listed materials including 74 nos. rail posts and requested by Shri O.P. Pal to check up their physical presence at site but Shri Singh did not pay any heed and look it in a very casual manner.

The charge memo also stated that in view of the inaction on the part of the respondent, fifty per cent of the cost of 74 rail posts will be recovered from him and remaining fifty per cent would be recovered from O.P. Pal, Si/Grade II.

The respondent filed his objections dated 25.1.1993 (Annexure. B) and 15.3.1993 (Annexure. C), denying any misconduct on his part. The relevant portion of his objection is extracted below:

List of released materials (rail posts) prepared by Shri Pal. SI for the purpose of records: Undoubtedly. Shri Pal, SI prepared a list as such and shown to me but it is clarified that no entries of the work done (in this case, the released materials) can be recorded from the list in a document like the measurement book and therefore, I evidently neither checked the materials at site nor entered the materials for the purpose of record on my checking since I was ASTE (Designs) attached solely to CSTE (P)''s office only and my duties and responsibilities purely involved in supervision of the office works of the Drawing Office only. Evidently therefore, I was not in charge of execution of any field works at NSZ yard during the period,

It is further pointed out that in this context, the list dated 10.7.1989 submitted by Shri Pal, SI and acknowledged by me on 19.7.1989 is indicative only of the signalling works executed and NOT a list of materials taken over by me from Shri Pal at site (NSZ) of the materials so released by the contractor.

The disciplinary authority by an order made on 8.9.1993 held the respondent guilty of the charge after considering the representations given by the respondent in reply to the charge memo, but without holding any enquiry, on the following reasoning:

The charges against you is proved as you have acknowledged the list of released material submitted by Shri Pal, S.I. You should have verified/ensured verification of the availability of various items of materials as mentioned in the list. Your inaction and lack of devotion to duty resulted in heavy loss to Railways. You are therefore held guilty and following punishment is awarded to you.

As a consequence, the Disciplinary Authority imposed the following punishment on the respondent:

(A) Half of the cost of released 74 posts be recovered from the respondent as per the cost to be assessed.

(B)Next increment be withheld for a period of one year without cumulative effect.

Subsequently, by order dated 4.10.1993, the cost of material was determined as Rs. 1,51,050/- and 50% thereof, namely Rs. 75,525/-, was ordered to be recovered from the respondent.

Aggrieved by the order imposing punishment, the respondent filed an appeal on 22.10.1993. The appellate authority by order dated 30/31 May, 1994 rejected the appeal and confirmed the punishment. The orders of the disciplinary authority and the appellate authority were challenged by the respondent in O.A. No. 391/1994 before the Central Administrative Tribunal, Jabalpur Bench. The Tribunal allowed the said application by order dated 6.7.2001. The Tribunal held that as no enquiry was held and as there was no evidence to establish the charge, the punishment could not be sustained. It quashed the charge-sheet, the order of the Disciplinary Authority and the order of the Appellate Authority and directed refund of any amount recovered from the respondent within three months.

Feeling aggrieved, the employer (Railway Administration) have filed this writ petition. The petitioners contend that the respondent had acknowledged having received the list dated 19.7.1989 from O.P. Pal; that as the list submitted by O.P. Pal mentioned that 74 Rail Posts were released, the respondent ought to have verified their physical availability; and that as the respondent failed to do so, the disciplinary authority was entitled to proceed on the basis of the material on record and hold that the charge against the respondent was proved. It was alternatively contended that there was no need to hold an enquiry as Rule 11 of the Railway Servants (Discipline &. Appeal) Rules, 1968 (Rules for short) made it clear that for the purposes of imposing minor punishment, there was need to hold an enquiry, only if the Disciplinary Authority was of the opinion that such enquiry was necessary. It is submitted that in case, the Disciplinary Authority found no need to hold an enquiry and, therefore, there was no enquiry.

On the contentions raised, the following points arise for consideration:

(i) Whether there was admission of guilt in regard to the charge, or admission of the necessary facts to infer guilt in regard to charge of negligence against the respondent.

(ii) Whether an inquiry can be dispensed with, in all cases where the penalty proposed is recovery of pecuniary loss caused by negligence or breach of orders categorised as a ''minor penalty''?

(iii) Whether in this case, the disciplinary authority was justified in imposing the penalty (of recovery of Rs. 75,525/-) without any enquiry?

Re: Point No.(i)

A contract for dismantling certain structures was entrusted to Kalindee Rail Nirman (Engineers) Ltd. (Contractor for short) by the Railway Administration. Item No. (17) of the said work read as follows:

Releasing of Rail Posts of overhead alignment fitting and wires, bringing down the post to the ground and taking them to station indicated by the Engineer''s representative.

One O.P. Pal, Si/Grade II was the Engineer''s representative. When O.P. Pal was being transferred, Dy CSTE/RE/Bhopal directed the said O.P. Pal to prepare a list of works executed by the said Contractor and hand it over to the respondent indicating whether he (O.P. Pal) had exercised 100% check of the work executed by the Controllor. In pursuance of it, O.P. Pal prepared a list dated 10.7.1989 in regard to the items of work carried out by the contractor, last of which reads as under:

Item No. 17: ''Releasing of rail post of.........representative

From NSZ Yard: 74 Nos.

Below the enumeration of the items of work, O.P. Pal stated: "100% check has been done by me for all above items" and signed the statement. In the left hand bottom of the said list, the respondent affixed his initials and the date (19.7.1989), in confirmation of the fact that O.P. Pal had handed over the said list to him on 19.7.1989.

Subsequently, it was noticed that 74 rail posts, which ought to have been stacked behind NSZ Marshalling Cabin, were not found there. When enquired, 0. P. Pal gave two versions. In one version, he stated that 74 rail posts received from the Contractor were stacked behind the NSZ Marshalling Cabin. In another version given at a different point of time, he stated that he had not received the rail posts dismantled by the Contractor. In that context, the respondent was also questioned. The respondent made the following statement on 24.4.1990:

As per the instructions of Sri M. Lal, Dy. CSTE (Sig), R.E. Bhopal, Sri O.P. Pal prepared a list of work executed by M/s Kalindi Rail Nirman for recording in the measurement book since he had been transferred from BPL Project and it was decided by Sri M. Lal, Dy. CSTE (Sig.) that Sri O.P. Pal will prepare such statement showing 100% check for all the items and will hand lover to the applicant. So he prepared a statement of works executed by M/s Kalindi at NSZ Yard.

The respondent further stated that he acknowledged the receipt of ''works executed'' statement from O.P, Pal, for recording in the Measurement Book and that O.P. Pal did not hand over to him the released rail posts of NSZ Yard.

No complaint was lodged by the Railway Administration about the theft or loss of the missing said 74 rail posts. No action was taken against the Contractor. More than three years after the incident, a charge memo was issued to the respondent alleging that his failure to ensure whether the 74 posts were physically available at site, when O.P. Pal handed over the list prepared by him, amounted to negligence. This charge was categorically denied by the respondent by his objections dated 25.1.1993 contending that:

(a) It was not his duty or responsibility to check and confirm whether the materials mentioned in the list by O.P. Pal were actually available at the site. He therefore did not physically verify whether the 74 posts were at site.

(b) His duties and responsibilities related to the supervision of the office work in the drawing office and he was not in charge of execution of any field work of NSZ Yard.

(c) He had received a list dated 10.7.1989 prepared by O.P. Pal, on 19.7.1989 only for the purpose of recording the work done in the measurement book as O.P. Pal was being transferred from Bhopal Project and O.P. Pal alone was responsible to verify whether the 74 posts were at site.

It was thus clear that there was no admission of any part of the charge by the respondent. On the other hand there was a categorical denial of (a) any responsibility requiring him to verify the physical presence of rail posts; and (b) any negligence in carrying out his responsibility. As there were no admissions of any factual position, negligence on the part of the respondent could not have been inferred by the Disciplinary Authority without any evidence to prove that it was the respondent''s responsibility to take custody of, the material from O.P. Pal and that O.P. Pal had in fact handed over charge of the material to the respondent.

Re : Point No (ii):

Part-Ill of the Railway Servants (Discipline & Appeal) Rules 1968 deals with penalties and Disciplinary Authorise. Rule 6 enumerates the penalties that may be imposed on a Railway servant. The penalties described as ''minor penalties'' are (i) Censure; (ii) withholding of promotion for a specified period; (iii) Recovery from the pay of the Railway servant of the whole or part of any pecuniary loss caused by him to Government or Railway Administration by negligence or breach of orders;; (iii-a) withholding of the privilege of passes or privilege ticket orders or both; and (iv) withholding of increments of pay for, a specified period.

Rule 6 also enumerates major penalties, that is (v) reduction to the lower stage in the time scale of pay for a specific period; (vi) reduction to a lower time scale of pay, grade, post or service; (vii) compulsory retirement; (viii) removal from service; and (ix) dismissal from service.

Rule 9 prescribes the procedure for imposing major penalties by holding an inquiry as detailed in sub-rules (6) to (25).

Rule 11 deals with procedure for imposing minor penalties. Sub-Rule (1) of Rule 11 provides that no order imposing a minor penalty on a Railway servant shall be made except after:

(a) informing the Railway servant in writing of the proposal to take action against him and of the imputations of misconduct or misbehaviour on which it is proposed to be taken, and giving him a reasonable opportunity of making such representation as he may wish to make against the proposal;

(b) holding an enquiry in the manner laid down in sub-rules (6) to (25) of Rule 9, in every case in which the Disciplinary Authority is of the opinion that such enquiry is necessary;

(c) taking the representation, if any, submitted by the Railway servant under Clause (a) and the record of enquiry, if any, held under Clause (b) into consideration;

(d) recording a finding on each imputation of misconduct or behaviour; and

(e) consulting the Commission where such consultation is necessary.

Sub-rule (2) of Rule 11 provides that notwithstanding anything contained in Clause (b) of sub-rule (1), if in a case, it is proposed, after considering the representation, if any, made by the Railway servant under clause (a) of sub-rule (i) to withhold increments of pay and such withholding of increments is likely to affect adversely the amount of pension or special contribution to provident fund payable to the Railway servant or to withhold increments of pay for a period exceeding three years or to withhold increments of pay with cumulative effect for any period, an inquiry shall be held in the manner laid down in sub-rules (6) to (25) of Rule 9, before making any order imposing on the Railway servant, any such penalty.

We find similar provision virtually in every set of Rules dealing with discipline and conduct. Reference may be made to the identical provisions contained in Rule 16 (1) (b) of the Central Civil Services (Classification, Control & Appeal) Rules, 1965 and Rule 16 (1) (b) of the M.P. Civil Service (Classification, Control & Appeal) Rules, 1966. The Rules raises the following questions:

What is the true effect of the Rule providing that no order imposing a ''minor penalty'' shall be made except after holding an inquiry in the manner laid down for imposing major penalties, in every case in which the disciplinary authority is of the opinion that such enquiry is necessary? Whether the Rule gives unbridled power to the Disciplinary Authority to dispense with an enquiry in all cases of minor penalties? Whether the Disciplinary Authority should assign reasons for dispensing with an enquiry? Whether the decision of the Disciplinary Authority dispensing with an enquiry is open to judicial review? Whether the Disciplinary Authority has no discretion to dispence with an enquiry where the employee denies the charges and disputes the liability?

To find an answer, we may refer to the decisions which have considered some of these questions.

In C.R. Warrier vs. State of Kerala (1983 [1] SLR 608), the Kerala High Court considered the question whether holding of an inquiry under Kerala CCA Rules was necessary before imposing a minor penalty. It held that where the charge levelled against the employee could be established only after a detailed enquiry, the procedure prescribed for imposing a major penalty ought to have been followed, even if what was imposed was a minor penalty.

In V. Srinivasa Rao Vs. State of Karnataka, , a Division Bench of the Karnataka High Court considered Rule 12 of the Karnataka Civil Service (CCA) Rules, 1957, dealing with the procedure for imposing minor penalties. Rule 12 (1) (b) required that no order imposing a minor penalty shall be made except after holding an inquiry in the manner laid down in sub-rules (3) to (23) of Rule 11, in every case in which the Disciplinary Authority is of the opinion that such inquiry is necessary. In that case, a show cause notice was issued to the employee charging him with loss/shortage of articles entrusted to his custody and proposing to recover the loss of Rs. 19,538/- from his pay. After considering his reply denying the charge, an order was made without enquiry, imposing the penalty of recovery of the loss. When it was challenged, a learned single Judge held that as what was imposed was only a minor penalty, issue of a show cause notice and consideration of reply was sufficient compliance with Rule 12 and an enquiry was not necessary. Reversing the said decision, the Division Bench held:

.................We are also of the view that even in cases where a minor penalty is proposed to be imposed against a civil servant, if the nature of the charge or charges levelled against him are such that a finding of guilt could be recorded only after holding a regular inquiry in which oral and documentary evidence in support of the charge/s should be recorded and the delinquent should be given an opportunity of cross-examining the witnesses or explaining the documents, the holding of an inquiry as provided in Rule 12(1) (b) becomes mandatory and the disciplinary authority is bound to form an opinion that that holding of an inquiry is necessary and to hold the inquiry.

(emphasis supplied)

In G. Sundaram Vs. General Manager Disciplinary Authority, Canara Bank and Others, , learned single Judge of the Karnataka High Court, considering the scope of a rule in pari materia, that is Rule 8 (2) of the Canara Bank Employees (Discipline & Appeal) Regulations 1976, held:

.... I hasten to add that there can be no manner of doubt that where a minor punishment is imposed the procedure for holding an enquiry need not be followed unless otherwise desired by the disciplinary authority. But surely it does not mean that the enquiry is wholly barred or that it is entirely subject to the pleasure of the disciplinary authority. Sub-clause (2) provides that if disciplinary authority is satisfied if an enquiry is necessary, then he will follow the procedure prescribed for imposing a major penalty as laid down in regulation 6. The expression ''satisfied such an enquiry is necessary'' clearly suggests that the disciplinary authority must apply its mind to the facts and circumstances of the case as disclosed by the delinquent officer and give his reasoned finding whether an enquiry is necessary or not. The duty to give satisfactory reasons for coming to a decision is a duty of importance which cannot be lawfully disregarded....In the instant case the disciplinary authority while framing the impugned order does not even say that a case of this nature does not require any enquiry much less summary enquiry. In the absence of such a finding either in the note or order sheet maintained by the disciplinary authority or in the order itself, the order imposing penalty would be invalid. More so in the present case as the delinquent officer employee in his reply to the charge memo requests the disciplinary authority to hold an impartial enquiry, if he is not satisfied with the explanation offered by him. There is no express provision in the regulation for the disciplinary authority either to accede or reject the demand of the delinquent but when such a request is made by the delinquent officer it is for the disciplinary authority to consider the same and pass appropriate orders. This unwritten duty is fundamental to a just decision by any authority which decides a controversial issue affecting the rights of the parties....

(emphasis supplied)

In O.K. Bhardwaj v. Union of India and others, 2001 (9) SCC 180 , the Supreme Court rejected the contention that it was not essential to hold an enquiry or give a hearing to the employee before imposing a minor penalty. It held:

Even in the case of a minor penalty, an opportunity has to be given to the delinquent employee to have his say or to file his explanation with respect of the charges against him. Moreover, if the charges are factual and if they are denied by the delinquent employee, an enquiry should also be called for. This is the minimum requirement of the principle of natural justice and the said requirement cannot be dispensed with.

(emphasis supplied)

The matter was however looked at a different perspective in Food Corporation of India vs. A. Prahalada Rao (AIR 2001 S.C. 51 : 2001 (1) SCC 165). In that case, the Supreme Court considered Regulation 60 of the FCI (Staff) Regulations, 1971, which prescribed the procedure for imposing minor penalties, similar to Regulation Rule 11 of the Railway Servants (Discipline & Appeal) Rules, 1968 with which we are concerned. In that case, the order of the Disciplinary Authority, imposing penalty of recovery of Rs. 7,356/- from the pay of the employee on the ground of dereliction of duties causing loss to the Corporation, was passed without holding any inquiry even though the employee had denied the charge. The Division Bench of the Andhra Pradesh High Court held that where the employee disputes that any loss is caused to the employer either by negligence or breach of order, and if so, how much pecuniary loss has been incurred, it was necessary that an inquiry should be conducted as otherwise it would be impossible to arrive at a correct finding as to whether the employee caused any loss by his negligence or breach of order and if so the quantum of loss. Feeling aggrieved, the FCI filed an appeal contending that the High Court had virtually added a proviso to Regulation 60 by holding that when the employee disputes his liability, it is incumbent upon the disciplinary authority to conduct a detailed inquiry as provided for major punishment, and that was impermissible. On the other hand, the Employees Union contended that the employer, under the guise of imposing minor penalty, was dispensing with holding of regular departmental enquiry in cases where charges cannot be proved. It was further contended that there was a large scale misuse of power under Regulation 60 providing for dispensing with regular inquiry. Considering the said contentions and interpreting Regulation 60, the Supreme Court has held as follows :

In our view, on the basis of the allegation that Food Corporation of India is misusing its power of imposing minor penalties, the Regulation cannot be interpreted contrary to its language. Regulation 60(1)(b) mandates the disciplinary authority to form its opinion whether it is necessary to hold inquiry in a particular case or not. But that would not mean that in all cases where an employee disputes his liability, a full-fledged inquiry should be held. Otherwise, the entire purpose of incorporating summary procedure for imposing minor penalties would be frustrated. If the discretion given under Regulation 60 (1) (b) is misused or is exercised in an arbitrary manner, it is open to the employee to challenge the same before the appropriate forum. It is for the disciplinary authority to decide whether regular departmental enquiry as contemplated under Regulation 58 for imposing major penalty should be followed or not. This discretion cannot be curtailed by interpretation which is contrary to the language used. Further, Regulation 60 (2) itself provides that in a case if it is proposed to withhold increment of pay and such withholding of increments is likely to affect adversely the amount of retirement benefits payable to an employee and in such other cases as mentioned therein, the disciplinary authority shall hold inquiry in the manner laid down in Regulation 58 before making any order imposing any such penalty. Hence, it is apparent that the High Court erroneously interpreted the Regulation by holding that once the employee denies the charge, it is incumbent upon the authority to conduct inquiry contemplated for imposing major penalty. It also erred in holding that where an employee denies that loss is caused to the Corporation either by his negligence or breach of order, such inquiry should be held. It is settled law that Court''s power of judicial review in such cases is limited and court can interfere where the authority held the inquiry proceedings in a manner inconsistent with the rules of natural justice or in violation of statutory rules prescribing the mode of inquiry and imposing punishment or where the conclusion or finding reached by the disciplinary authority is based on no evidence or is such that no reasonable person would have ever reached. As per the Regulation, holding of regular departmental enquiry is a discretionary power of the disciplinary authority which is to be exercised by considering the facts of each case and if it is misused or used arbitrarily, it would be subject to judicial review.

(emphasis supplied)

The position as can be gathered from the Rules and the aforesaid decisions can be summarised thus:

(i) In a summary inquiry, a show cause notice is issued informing the employee about the proposal to take disciplinary action against him and of the imputations of misconduct or misbehaviour on which such action is proposed to be taken. The employee is given an opportunity of making a representation against the proposal. The Disciplinary Authority considers the records and the representation and records of findings on each of the imputations of misconduct.

(ii) In a regular inquiry, the Disciplinary Authority draws up the articles of charge and it is served on the employee with a statement of imputation of misconduct, list of witnesses and list of documents relied on by the Department. The Disciplinary Authority calls upon the employee to submit his defence in writing. On considering the defence; the Disciplinary Authority considers the same and decides whether the inquiry should be proceeded with, or the charges are to be dropped. If he decides to proceed with the enquiry, normally an Inquiring Authority is appointed unless he decides to hold the inquiry himself. A Presenting Officer is appointed to present the case. The employee is permitted to take the assistance of a co-employee or others as provided in the rules. An inquiry is held where the evidence is recorded in the presence of the employee. The employee is permitted to inspect the documents relied upon by the employer. The employee is also permitted to call for other documents in the possession of the Management which are in his favour. The delinquent employee is given an opportunity to rebut the evidence of the management by cross-examining the management witnesses and by producing his evidence both documentary and oral. Arguments-written and/or oral-are received/heard. The delinquent employee is given full opportunity to put forth his case. Therefore, the Inquiring Authority submits his report. The copy of the report is furnished to the employee and his representation is received. Thereafter the Disciplinary Authority considers all the material and passes appropriate orders. The detailed procedure for such inquiries is contained in sub-rules (6) to (25) of Rule 9 of the Railway Servants (Discipline & Appeal) Rules, 1968 corresponding to sub-rules (3) to (23) of Rule 14 of the Central Civil Services (CCA) Rules, 1965 and M.P. Civil Services (CCA) Rules, 1966.

(iii) The normal rule, except where the employee admits guilt, is to hold a regular inquiry. But where the penalty proposed is a ''minor penalty'', then the Rules give the Disciplinary Authority a discretion to dispense with a regular inquiry for reasons to be recorded by him, and hold only a summary enquiry.

(iv) Though the Rules contemplate imposing a minor penalty without holding a regular enquiry, where the Disciplinary Authority is of the opinion that such enquiry is not necessary, such decision not to hold an enquiry can be only for valid reasons, recorded in writing. Dispensation with a regular enquiry where minor penalty is proposed, should be in cases which do not in the very nature of things require an enquiry, for example, (a) cases of unauthorised absence where absence is admitted but some explanation is given for the absence; (b) non-compliance with or breach of lawful orders of official superiors where such breach is admitted but it is contended that it is not wilful breach; (c) where the nature of charge is so simple that it can easily be inferred from undisputed or admitted documents; or (d) where it is not practicable to hold a regular enquiry.

(v) But, even where the penalty proposed is categorised as minor penalty, if the penalty involves withholding increments of pay which is likely to affect adversely the amount of pension (or special contribution to provident fund payable to the employee), or withholding increments of pay for a period exceeding three year or withholding increments of pay with cumulative effect for any period, then it is incumbent upon the disciplinary authority to hold a regular inquiry.

(vi) Position before decision in FCI: Where the charges are factual and the charges are denied by the employee or when the employee requests for an inquiry or an opportunity to put forth the case, the discretion of the Disciplinary Authority is virtually taken away and it is imperative to hold a regular inquiry.

Position after decision in FCI: Where the Rules give a discretion to the Disciplinary Authority to either hold a summary enquiry or regular enquiry, it is not possible to say that the Disciplinary Authority should direct only a regular enquiry, when an employee denies the charge or requests for an inquiry. Even in such cases, the Disciplinary Authority has the discretion to decide, for reasons to be recorded, whether a regular enquiry should be held or not. If he decides not to hold a regular enquiry and proceeds to decide the matter summarily, the employee can always challenge the minor punishment imposed, on the ground that the decision not to hold a regular enquiry was an arbitrary decision. In that event, the Court or Tribunal will in exercise of power of judicial review, examine whether the decision of the Disciplinary Authority not to hold an enquiry was arbitrary. If the Court/Tribunal holds that the decision was arbitrary, then such decision not to hold an enquiry and the consequential imposition of punishment will be quashed. If the Court/ Tribunal holds that the decision was not arbitrary, then the imposition of minor penalty will stand.

It is also possible to read the decisions in Bharadwaj and FCI harmoniously, if Bharadwaj is read as stating a general principle, without reference to any specific rules, that it is incumbent upon the Disciplinary Authority to hold a regular enquiry, even for imposing a minor penalty, if the charge is factual and the charge is denied by the employee. On the other hand, the decision in FCI holding that the Disciplinary Authority has the discretion to dispense with a regular enquiry, even where the charge is factual and the employee denies the charge, is with reference to the specific provisions of a Rule vesting such discretion.

There is yet another aspect which requires to be noticed. Where the penalty to be imposed though termed as minor, is likely to materially affect the employee either financially or career-wise then it is not possible to dispense with a regular enquiry. In fact, this is evident from sub-rule (2) of Rule-11 which says that where the penalty to be imposed, though termed as minor penalty, involves withholding of increments which is likely to affect adversely the amount of pension or special contribution to provident fund, or withholding of increments of pay for a period exceeding three years or withholding of increments of pay with cumulative effect, then an enquiry as contemplated under Rule-9 (6) to (25) is a must. Thus, categorization of penalties into ''major'' and ''minor'' penalties, by itself may not really be determinative of the question whether a regular enquiry is required or not.

While ''censure'' and withholding of increments of pay for specified period may conveniently be termed as minor punishments, we feel very uncomfortable with ''recovery of pecuniary loss, for negligence or breach of orders'' without stipulating a ceiling, being considered as a ''minor penalty''. Recovering small amounts, as reimbursement of loss caused to the employer by way of negligence or breach of orders from the pay of the employee can be a minor penalty. But can recovery of huge amounts running into thousands and lakhs, by way of loss sustained on account of negligence or breach of orders, be called as a minor penalty ? For example, in this case, recovery sought to be made from the petitioner is Rs. 75,525/- determined as being 50% of the total value of 74 rail posts. Theoretically, what would be the position if the loss was 740 or 7400 rail posts? Does it mean that recovery of Rs. 7.5 lakhs or Rs. 75 lakhs can be ordered from the government servant, still terming it as a minor penalty, without holding any enquiry ? It is time that the State and authorities take a second look as what is termed as ''minor penalty'' with reference to recovery of losses. The recovery of pecuniary loss on account of negligence or breach of order though termed as a minor penalty may have disastrous consequences, affecting the livelihood of the employee, if the amount sought to be recovered is huge.

In the absence of any ceiling as to the pecuniary loss that can be recovered by treating it as minor penalty, it is necessary to find out whether there is any indication of the limit of amount that can be recovered without enquiry, by applying the procedure for imposition of minor penalties. We get some indication of the pecuniary limit in Rule-11 (2) which provides that if the minor penalty involves withholding of increments of pay for a period exceeding three years then a regular enquiry is necessary. Thus, we can safely assume that the pecuniary loss proposed to be recovered exceeds the monetary equivalent of increments for a period of three years, then a regular enquiry has to be held.

The fastening of pecuniary liability on the basis of negligence or breach of orders, involves decision on four relevant aspects:

(a) What was the duty of the employee?

(b) Whether there was any negligence or breach of order on the part of the employee while performing such duties?

(c) Whether the negligence or breach of order has resulted in any financial loss to the employer?

(d) What is the quantum of pecuniary loss and whether the pecuniary loss claimed include any remote damage and whether the employer has taken steps to mitigate the loss?

These are not matters that could be decided without evidence, and without giving an opportunity to the employee to let in evidence. Therefore, where the charge of negligence or breach of lawful order is denied, a regular enquiry is absolutely necessary before fastening financial liability on the employee, by way of punishment of recovery of pecuniary loss from the employees. However, having regard to the decision in FCI, regular inquiry can be dispensed with, for valid reasons, if the amount to be recovered is small (which in the absence of a specific provision, does not exceed the equivalent of three years increment at the time of imposition of penalty). Any attempt to fasten any higher monetary liability on an employee without a regular enquiry, by terming it as a minor penalty, would be a travesty of justice.

Re: Point (iii)

We find that in the objections dated 25.3.1993 and 15.3.1993, the respondent has clearly denied the charge. He had denied having taken over the charge of 74 released rail posts or having checked the material at site or having entered the material for the purpose of record. He also pointed out that as he was ASTE (Designs) attached to CSTE (P)''s Office and his duties and responsibilities were related to supervision of the work of the Drawing Office only and he was not in charge of execution of any field works at NSZ Yard during the period.

Having regard to the nature of the charge and the explanation and the quantum of pecuniary loss proposed to be recovered, we are of the view that the disciplinary authority could not have dispensed with a regular enquiry. The decision of the Disciplinary Authority is arbitrary. The result is no regular enquiry was held. Respondent was not given any opportunity to put forth his evidence, though he denied any negligence, The respondent was made liable for a huge sum.

Even according to the charge memo, the Department wanted to recover 50 per cent of the amount from the respondent and 50 per cent from O.P. Pal. The Tribunal has found that O.P. Pal has been let off with a censure and the order for proposed recovery of 50% of the value of the Rail posts was withdrawn. As rightly observed by the Tribunal, if O.P. Pal could be let off with only a censure, it is not understandable as to how the respondent can be imposed the penalty of recovery of a huge from his pay. Be that as it may.

We find that the Tribunal has set out the facts and contentions exhaustively. But strangely, there is no consideration of any of the contentions urged or issues arising for decision. The only reason assigned for the decision of the Tribunal is in the following sentence; "We are of the view that this is a case of no evidence." The reasoning is wholly insufficient. The order therefore requires interference.

In view of the above, we allow this petition in part and substitute the following order in place of the order of the Tribunal:

(i) O.A. No. 391 of 1994 is allowed and the orders of the Disciplinary Authority and Appellate Authority are quashed.

(ii) The decision of the Disciplinary Authority to dispense with the enquiry is declared to be arbitrary.

(iii) The amount if any recovered from the pay of the respondent, in pursuance of order imposing punishment, shall be refunded to the respondent with 12% interest from the respective dates of recovery to date of payment, within three months.

This order will not come in the way of the Disciplinary Authority holding a regular enquiry into the charge against the respondent, if it still wants to do so.