Leave granted.
These appeals are directed against the judgment and order dated 14.02.2006
passed by a Division Bench of the High Court of Judicature of Andhra Pradesh
whereby and whereunder the letters patent appeal filed against the judgment and
order dated 14.7.2005 passed by the learned Single Judge of the High Court passed in
Writ Petition No. 799/2007 was affirmed.
Respondents herein were employees of the appellant-Corporation. They
reached the age of superannuation some time in 2000. A departmental proceeding was
initiated against the respondents in the year 1999 alleging some financial irregularities
on their part committed in the year 1992-93. Certain amount was sought to be
recovered from them which the appellant allegedly suffered by reason of the
misconduct committed by them shortly before their superannuation.
One of the question which had been raised before the High Court and found
favour with by both the learned Single Judge as also the Division Bench of the High
Court, was that no disciplinary proceeding could have been initiated against the
respondents and/or continue the same after their retirement. The High Court in
support of the aforementioned finding relied upon a decision of this Court in
Bhagirathi Jena vs. Board of Directors, O.S.F.C., 1999 (3) SCC 666. The High Court in
its order referred to a Circular dated 29.8.1998 which reads as under:
“Sub:- G.C.C. Service Rules – Amendment of Service Rules of
G.C.C. for adoption of Andhra Pradesh Civil Service Code and
Andhra Pradesh Fundamental Rules – Reg.
Ref: Board Resolution No. 74/98-99 dated 11.8.1998
The Board in its resolution No. 7498-99 have resolved to
amend the GCC Service Rules for adoption of Andhra Pradesh
Civil Service Code rules and Andhra Pradesh Fundamental Rules
where ever the G.C.C. service rules are silent.
All the Unit Officers of G.C.C. are requested to include
this para in service rules of GCC in Chapter I Part-A as Rule 7.
The M.D. shall have power to adopt rules under 'Andhra
Pradesh Civil Service Ruels' and Andhra Pradesh Fundamental
Rules to its employees whenever the GCC Service Rules of
employees are silent.
Receipt of the circular should be acknowledged.”
Interpreting the words “The M.D. shall have power to adopt rules”, it
was opined by the High Court that as no such order adopting the said rules by
the Managing Director of the Corporation was brought on record, continuation
of the disciplinary proceedings against the respondents was bad in law.
Before this Court, however, the Corporation seeks to take a different
stand. According to it, the power to adopt the Government Rules vests in the
Board of Directors and the Managing Director was merely to apply the same.
By an affidavit affirmed by one K.S.V.R.N. Sarma, Legal Executive/Junior
Manager (Legal) of the Corporation filed on 10th July, 2009 which has been
brought to our notice that in fact the Board of Directors had adopted Rule 7 of
Part-A, Chapter I of the G.C.C. Service Rules by resolution dated 11.8.1998, in
terms whereof the aforementioned circular dated 29.8.1998 has been issued. It
was furthermore contended before the High Court:
“I say and submit that the respondent herein who is in the cadre of
General Manager has committed certain grave irregularities,
misappropriation of huge Corporation funds, committed criminal
breach of trust while working as Senior Accounts Officer (Comp.)
incharge of the subject of industries during 1991-92. The petitioner
Corporation after conduct of enquiry issued him provisional
conclusion orders on 28.4.2000 stating that since he is due to retire
on 30.4.2000, he will be allowed to retire on the day without any
retirement benefits till all the pending cases are finalized and to
recover the losses sustained to the tune of Rs. 2,38,855/-. The
respondent did not choose to file his explanation to the said
provisional conclusion orders. Thus after affording him the
opportunity, final orders are passed on 3.7.2000 confirming the
provisional conclusion orders. The employees of Corporation
besides the respondent herein are well aware of the said Board
resolution and have not challenged the same in any legal forum so
far. The respondent without filing the statutory appeal before the
Board, filed the WP 25073 of 2000 which is allowed on 12.4.2001 by
the Hon'ble High Court of Andhra Pradesh holding that the
disciplinary proceedings cannot be maintained subsequent to the
retirement of the respondent employees.”
Mr. Jaideep Gupta, learned senior counsel appearing on behalf of the
appellant would raise a two-fold submission before us.
Firstly, having regard to the bye-laws of the appellant Corporation, the
powers to fix the strength of the establishment and to frame subsidiary
regulations for recruitment, service conditions and disciplinary control of the
employees, were vested in the Board of Directors, and only in terms of the said
powers the following resolution was passed:
“Subject No. 74:
To seek approval of the Board to amend ' the GCC Service
Rules' for adoption of 'AP Civil Service Code' and 'A.P.
Fundamental Rules' wherever the GCC Service Rules are silent.
Resolution No. 74/98-99
Approved.”
Secondly, in any event, one of the meanings of the word “adopt”, being
to 'follow', the Managing Director was merely to follow the rules which are
adopted by the aforementioned resolution of the Board of Directors and he did
not have any independent power to adopt or accept the same.
Mr. Ranjan Mukherjee, learned counsel appearing on behalf of the
respondents, on the other hand, would contend that the respondents having
retired some time in 2000, this Court may not exercise its discretionary
jurisdiction under Article 136 of the Constitution in the above terms. It is not in
dispute that before the High Court what was produced was only the Circular
dated 29.8.1998. Neither the bye-laws nor the resolution purported to have been
adopted by the Board of Directors were brought to the notice of the High Court.
The documents whereupon reliance is now sought to be placed, along with the
affidavit affirmed by Shri Sarma, in our opinion, are additional documents
which can be admitted by this Court only in terms of Order 41 Rule 27 of the
Code of Civil Procedure ('CPC'). There was absolutely no reason as to why the
authorities of the appellant did not bring the same to the notice of the High
Court; they being within the power and possession of the Corporation.
We, therefore, are of the opinion that it is not a fit case where this Court
should exercise its jurisdiction under Order 41 Rule 27 of the CPC or the
provisions akin thereto, keeping in view the fact that the parameters laid down
therein are not satisfied.
So far as the second contention raised by Mr. Gupta is concerned, we
are of the opinion that the manner in which the word “adopt” has been used in
the circular letter dated 29.8.1998, does not lead to the conclusion that the same
has been used in the sense of following the rules as the word “adopt” has been
preceded by the words “shall have power to”. There cannot be any doubt or
dispute that an employer can initiate a departmental proceedings and/or
continue the same only in terms of the rules framed by it. It is also a well
settled law that the disciplinary proceedings are initiated only when a charge-
sheet is issued. See: Union of India vs.
This Court in UCO Bank & Anr. vs. Rajinder Lal Capoor, 2007 (6)
SCC 694, has held as under:
“21. The aforementioned Regulation, however, could be invoked
only when the disciplinary proceedings had clearly been initiated
prior to the respondent's ceasing to be in service. The terminologies
used therein are of seminal importance. Only when a disciplinary
proceeding has been initiated against an officer of the bank despite
his attaining the age of superannuation, can the disciplinary
proceeding be allowed on the basis of the legal fiction created
thereunder i.e. continue 'as if he was in service'. Thus, only when a
valid departmental proceeding is initiated by reason of the legal
fiction raised in terms of the said provision, the delinquent officer
would be deemed to be in service although he has reached his age
of superannuation. The departmental proceedings, it is trite law, is
not initiated merely by issuance of a show-cause notice. It is
initiated only when a charge-sheet is issued (See Union of India vs.
K.V. Jankiraman, 1991 (4) SCC 109. This aspect of the matter has
also been considered by this Court recently in Goal India Ltd. v.
Saroj Kumar Mishra, 2007 (9) SCC 625, wherein it was held that
date of application of mind on the allegations levelled against an
officer by the competent authority as a result whereof a charge-
sheet is issued would be the date on which the disciplinary
proceedings are said to have been initiated and not prior thereto.
Pendency of a preliminary enquiry, therefore, by itself cannot be a
ground for invoking Clause 20 of the Regulations.”
(See also Ramesh Chandra Sharma v. Punjab National Bank and Anr., 2007 (9)
SCC 15 and 2008 (8) SCC 4).
In absence of any rules, therefore, a disciplinary proceeding against a
retired employee should not have been continued. The judgment of the High
Court, in our opinion, cannot be said to be faulty. We, however, keeping in view
the subsequent documents brought before us by the appellant, would observe
that, in future, in any other case or before any other authority, the Corporation
would be at liberty to place all the relevant documents and to that effect the
question of law raised by the appellant herein shall remain open.
The appeals are dismissed with the aforementioned observations and
direction. However, in the facts and circumstances of this case, there shall be no
order as to costs.
(S.B. SINHA)