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Service matter = U.P. Power Corporation Ltd. and another … Appellants Versus Virendra Lal (Dead) through L.Rs. …Respondents= published in judis.nic.in/supremecourt/filename=40846

Since the penalty was imposed by Board itself which is an appellant authority, it’s orders are not correct as per the regulations of Electricity Act as the employee was deprived of his appeal right    ; =

whereby the  Division

Bench has affirmed the judgment dated 23.9.2010 passed by the  State  Public

Service Tribunal, Lucknow, (for short “the tribunal”) in claim petition  No.

683 of 2000 wherein the tribunal had set aside the  order  dated  12.10.1999

passed by the U.P. State Electricity Board (UPSEB)  imposing  punishment  of

deduction of 10% amount of  pension  payable  to  the  original  respondent,

Virendra Lal, predecessor-in-interest of the respondents  herein,  the  U.P.

Power Corporation Ltd. (for short “the Corporation)  and  its  functionaries

have preferred this appeal by special leave. =

In the case at hand, there is no denial of  the  fact  that  the  UPSEB  has

   passed the order  for  deduction  of  10%  pension  from  the  delinquent

   employee.  

Under the Regulations which we  have  reproduced  herein before

   there is a stipulation that an appeal or representation, as the case  may

   be, from the  order  of  the  Chairman  shall  lie  to  the  UPSEB.   

The

   Regulation clearly provides that in case of  an  Assistant  Engineer  the

   Chairman is the competent authority to pass the order of punishment  and,

   therefore, by virtue of the order passed by the UPSEB  remedy  of  appeal

   was denied to the delinquent employee.  

Under  these  circumstances,  the

   view expressed by the High Court has to  be  regarded  as  flawless  and,

   accordingly, we concur with the same.

 

22. Consequently, the  appeal,  being  devoid  of  merit,  stands  dismissed

   without any order as to costs.

IN THE SUPREME COURT OF INDIA

English: The supreme court of india. Taken abo...

English: The supreme court of india. Taken about 170 m from the main building outside the perimeter wall (Photo credit: Wikipedia)

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.8949 OF 2013
(Arising out of S.L.P. (C) No. 20605 of 2011)
U.P. Power Corporation Ltd. and another … Appellants

Versus

Virendra Lal (Dead) through L.Rs. …Respondents

J U D G M E N T
Dipak Misra, J.
Leave granted.

2. Calling in question the legal acceptability of the order dated
11.2.2011 passed by the High Court of Judicature at Allahabad, Lucknow
Bench, Lucknow, in Writ Petition (S/B) No. 211 of 2011 whereby the Division
Bench has affirmed the judgment dated 23.9.2010 passed by the State Public
Service Tribunal, Lucknow, (for short “the tribunal”) in claim petition No.
683 of 2000 wherein the tribunal had set aside the order dated 12.10.1999
passed by the U.P. State Electricity Board (UPSEB) imposing punishment of
deduction of 10% amount of pension payable to the original respondent,
Virendra Lal, predecessor-in-interest of the respondents herein, the U.P.
Power Corporation Ltd. (for short “the Corporation) and its functionaries
have preferred this appeal by special leave.

3. The expose’ of facts are that late Virendra Lal was posted as Assistant
Engineer in Electricity Distribution Division, Sultanpur in the year 1984
and at that time he had released electricity to one consumer, namely,
M/s. Arif Cement Industries, Jagdishpur, beyond the approved estimate as
a consequence of which wrongful loss was caused to UPSEB. After the
authorities of the UPSEB came to know about the same, the matter was
forwarded to the inquiry committee on 27.9.1994 for initiation of a
disciplinary proceeding on the basis of which on 23.2.1998, the inquiry
committee framed charges against him and called for an explanation. The
delinquent employee filed his reply on 16.4.1998 and thereafter the
inquiry committee commenced the enquiry. On 30.6.1998, late Virendra Lal
stood superannuated. On 28.1.1999 the inquiry report was served on him
and he was granted opportunity to submit a representation pertaining to
the inquiry report. On 21.3.1999 he filed his representation and
considering the submissions put forth in the representation on 12.10.1999
the UPSEB passed the order of punishment as has been stated hereinbefore.
The said order was communicated to late Virendra Lal by the Joint
Secretary of the UPSEB.

4. Grieved by the aforesaid order, Virendra Lal preferred claim petition
No. 683 of 2000 before the tribunal contending, inter alia, that there is
no statutory provision in the UPSEB for recovery from the pension of a
retired officer; that the power to deal with the report of the inquiry
committee vests in the Chairman of the UPSEB in regulation 6(4) of U.P.
State Electricity Board (Officers and Servants) (Conditions of Service)
Regulations, 1975 (for short “the Regulations”) but as the punishment had
been imposed by the UPSEB he had been deprived of the right of appeal;
that other officers with similar allegations had been exonerated but he
alone was proceeded which was discriminatory in nature; and that the
manner in which the proceeding was conducted was violative of the
principles of natural justice and had caused serious prejudice to him.
The stand and stance put forth by him was opposed by the UPSEB.

5. The tribunal adverting to the application of certain Rules, violation of
principles of natural justice, the delay in commencement of the
departmental proceeding and the prejudice caused to the delinquent
employee set aside the order dated 12.10.1999 and directed to release the
deducted amount of pension to the applicant therein with simple interest
@ 8 per cent per annum from the date the amount was due to the date of
the actual payment and further directed for release of the pension
forthwith.

6. Being dissatisfied with the aforesaid order the Corporation preferred a
writ petition before the High Court and the Division Bench disposed of
the same by passing the following order
“During the course of argument, it has been admitted by the
petitioners’ counsel that under Rules, Chairman is the disciplinary
authority who is competent to pass the order. Justification has been
given by the petitioners’ counsel that since the claimant respondent
is a retired person, power was exercised by the Board. Even if an
employee is retired, the power should be exercised by the same
authority who has been conferred power to work as disciplinary
authority under rules. Power cannot be usurped by the higher
authority in violation of the service rules. Accordingly, the
impugned order passed by the tribunal does not seem to suffer from any
impropriety or illegality.”

7. We have heard Mr. Shiv Kumar Tripathi, learned counsel for the
appellants. Despite service of notice on the legal heirs of the original
respondent, there has been no appearance.

8. Criticizing the order passed by the High Court it is submitted by Mr.
Tripathi that the High Court has fallen into error by opining that even
in respect of a retired employee the power should be exercised by the
same authority who had been conferred power to act as the disciplinary
authority under the Regulations. It is urged by him that if the higher
authority initiates the disciplinary proceeding and imposes the
punishment and no prejudice is caused the order of punishment cannot be
annulled on that score. It is further canvassed by him that as the High
Court has only addressed to a singular issue and arrived at the
conclusion, the matter deserves to be remitted to the High Court for
adjudication on other issues.

9. It is not in dispute that the disciplinary proceeding was initiated
against the original respondent while he was in service and thereafter
the proceeding continued and, eventually, the Board passed the order of
punishment. Learned counsel for the appellants has drawn our attention
to the Regulations. Regulation 6 deals with constitution of Committee to
enquire into cases. Sub-regulation (4) of the said Regulation reads as
follows: –
“(4) The Chairman shall in relation to Officers and servants upto the
rank of Superintending Engineer deal with the report and
recommendations of the Inquiry Committee in accordance with the
relevant regulations and pass final orders. In the case of Officers
above the rank of Superintending Engineer, the Chairman shall place
the report of the Inquiry Committee along with its recommendations, if
any, before the Board, who shall pass final orders.”

10. On a perusal of the aforequoted sub-regulation it is quite vivid that
the Chairman has been empowered to deal with the report and
recommendations of the Inquiry Committee in accordance with the relevant
Regulations and pass final orders in respect of officers upto the rank of
Superintending Engineer. The delinquent employee, Late Virendra Lal,
retired from service as an Assistant Engineer which rank is lower than
the Superintending Engineer. Hence, the Chairman was authorized to pass
the order of punishment. As the factual matrix would reveal the order of
punishment was passed on 12.10.1999 and the Board had passed that order.
The said order reads as follows: –
“The Board has asked to Shri Lal to file his representation
within 14 days providing him a copy of enquiry report received from
enquiry committee vide letter No. 490-Shija-05d/SEB-99-7(38)-05D/96.
Shri Lal has submitted his representation on 21.3.1999 and it has been
found after examination thereof that Shri Virendra Lal could not
clarify in his representation as to why he has installed a sub-station
deviating from approved estimate. The recommendation by Enquiry
Committee that Shri Lal is guilty of providing wrongful gain to
consumer and wrongful loss to Board is proper and appropriate.

Therefore Shri Virendra Lal (77031) then Assistant Engineer
(presently retired) has been found the guilty of misconduct and
charges levelled against him, so the order hereby is passed to deduct
10% amount of the pension payable to him for 5 years with due
compliance of the CCA Rules.

By the order of the Board
Sd/-
S.P. Singh
Joint Secretary
11.10.1999”

11. At this stage, it is appropriate to refer to sub-regulation (5) of
Regulation 6 which reads as follows: –
“(5) An appeal or representation, as the case may be, from the orders
of the Chairman passed under sub-regulation (4) shall lie to the
Board.”

12. Thus, if an order is passed by the Chairman, an appeal or
representation, as the case may be, lies to the Board. In any case it is
subject to challenge in the hierarchical system of the UPSEB. Learned
counsel has commended us to the decision in State of Uttar Pradesh v.
Brahm Datt Sharma and another[1]. The said decision only supports the
proposition that if a disciplinary proceeding against an employee of the
Government is initiated in respect of a misconduct committed by him and
if he retires from service on attaining the age of superannuation before
completion of the disciplinary proceedings and charges are of serious
nature, then it is open to the Government to take proceedings against the
Government servant in accordance with the rules for the reduction of
pension and gratuity.

13. In Takhatray Shivadattray Mankad v. State of Gujarat[2], the appellant
therein was compulsorily retired on January 12, 1962 in one of the
departmental proceedings. Two other proceedings were instituted in the
year 1963 and that is earlier to his attaining the age of superannuation
on January 14, 1964. These departmental proceedings were dropped on the
ground that they had been rendered infructuous. Thereafter, the
proceedings were revived and, eventually, certain punishment was imposed
pertaining to determination of his pension. The learned Judges dealing
with the said submission opined thus: –
“The learned counsel for the appellant strenuously contended that
after the disciplinary inquiries had been dropped on the ground that
they had become infructuous, the government was not right and
justified in reducing the pension and gratuity on the same charges
which were the subject matter of the enquiries. This argument of the
learned counsel, in our opinion, does not merit consideration because
the charges against the appellant were not made use of for awarding
any punishment after his retirement from service but only for
determining the quantum of the appellant’s pension in accordance with
the rules relating to the payment of pension and gratuity.”

To arrive at the said conclusion the Court relied upon the principles
stated in Brahm Datt Sharma (supra).

14. In the case at hand, we may note with profit that though the tribunal
has recorded that there is no provision for continuance of such a
proceeding, yet the said issue need not be addressed to as we are only
concerned with the controversy, as has emerged in this appeal, whether
the UPSEB could have imposed the punishment accepting the recommendations
of the Inquiry Committee.

15. In this context, we may fruitfully refer to the authority in Surjit
Ghosh v. Chairman & Managing Director, United Commercial Bank and
others[3]. In the said case, the disciplinary proceeding was initiated
against the delinquent employee by the Deputy General Manager of United
Commercial Bank, the respondent therein. The disciplinary authority at
the relevant time was the Divisional Manager/Assistant General Manager
(Personnel) and an appeal against their order lay to the Deputy General
Manager or any other officer of the same rank. Against the order of the
Deputy General Manager a review lay to the General Manager. In this
backdrop a contention was raised that the appellant was deprived of an
opportunity to prefer an appeal provided under the Regulations and the
same goes to the root of the dismissal order. The said contention was
combatted by the employer contending, inter alia, that when the Deputy
General Manager is higher in rank than the disciplinary authority and the
order of punishment has been passed by the higher authority, no prejudice
has been caused to the employee. A further contention was raised that in
the facts and circumstances of the case it should be held that when the
order of punishment is passed by higher authority, no appeal is available
under the Regulations as it is not necessary to provide for the same.
Repelling the said argument the Court opined that it is true that when an
authority higher than the disciplinary authority itself imposes the
punishment, the order of punishment suffers from no illegality when no
appeal is provided to such authority. However, when an appeal is
provided to the higher authority concerned against the order of the
disciplinary authority or of a lower authority and the higher authority
passes an order of punishment, the employee concerned is deprived of the
remedy of appeal which is a substantive right given to him by the
Rules/Regulations. Thereafter, the learned Judges proceeded to state
thus:
“The higher or appellate authority may choose to exercise the power of
the disciplinary authority in some cases while not doing so in other
cases. In such cases, the right of the employee depends upon the
choice of the higher/appellate authority which patently results in
discrimination between an employee and employee. Surely, such a
situation cannot savour of legality. Hence we are of the view that
the contention advanced on behalf of the respondent-Bank that when an
appellate authority chooses to exercise the power of disciplinary
authority, it should be held that there is no right of appeal provided
under the Regulations cannot be accepted.”

16. In Balbir Chand v. Food Corporation of India Ltd. and others[4] the
Court adverted to the relevant rule position and came to hold that in
normal circumstances the Managing Director being the appellate authority
should not have passed the order of punishment so as to enable the
delinquent employee to avail right of appeal. The Court observed that it
is a well-settled legal position that an authority lower than the
appointing authority cannot take any decision in the matter of
disciplinary action, but there is no prohibition in law that the higher
authority should not take decision or impose the penalty as the primary
authority in the matter of disciplinary action. On that basis, it cannot
be said that there will be discrimination violating Article 14 of the
Constitution or causing material prejudice. It is relevant to state here
that the decision in Surjit Ghosh (supra) was pressed into service but
the same was distinguished stating that in the said judgment under the
Rules officer lower in hierarchy was the disciplinary authority but the
appellate authority had passed the order removing the officer from
service and thereby, the remedy of appeal provided under the Rules was
denied. In those circumstances, this Court opined that it caused
prejudice to the delinquent as he would have otherwise availed of the
appellate remedy and his right pertaining to his case being considered by
an appellate authority on question of fact was not available. But it
cannot be laid as a rule of law that in all circumstances the higher
authority should consider and decide the case imposing penalty as a
primary authority under the Rules. Be it noted, in the said case a right
of second appeal/revision was provided to the Board and, in fact, an
appeal was preferred to the Board. Regard being had to the said fact
situation, this was Court declined to interfere.

17. Thus, from the aforesaid it is quite clear that in Balbir Chand (supra)
though the Court approved the principles laid down in Surjit Ghosh
(supra), yet distinguished the same keeping in view the rule position.
Be it noted, the Court made a distinction between the non-availability of
the appellate remedy in entirety and availability of a remedy or a
revision with the higher authority and preservation and non-extinction of
the said right.

18. In Electronics Corporation of India v. G. Muralidhar[5] the order of
termination was not passed by the disciplinary authority but by the
appellate authority and on that score the High Court had quashed the
order of termination and directed reinstatement with back wages. After
adverting to the facts of the case the learned Judges declined to accept
the submission of the appellant therein that the judgment rendered in
Surjit Ghosh case (supra) should be limited to the facts of that case.
The Court further took note of the fact that there was no general
provision which conferred a power of review or revision on the Board
against an order passed by the Chairman-cum-Managing Director who had
passed the order of dismissal and, therefore, even if the Board may be a
higher authority to the Chairman-cum-Managing Director to hold that an
appeal would lie against an order of termination passed by the CMD would
tantamount to a fresh legislation since there is no general provision
which confers a power of review or revision on the Board against any
order passed by the CMD. Being of this view, the Court on the foundation
of the ratio laid down in Surjit Ghosh (supra) ruled that the order of
punishment was vitiated.

19. In this regard reference to the principles laid down in A. Sudhakar v.
Postmaster General, Hyderabad and another[6] is fruitful. We may aptly
quote a passage from the same: –
“18. It is now trite that an authority higher than the appointing
authority would also be the designated authority for the purpose of
Article 311 of the Constitution. Even the Appellate Authority can
impose a punishment subject, of course, to the condition that by
reason thereof the delinquent officer should not be deprived of a
right of appeal in view of the fact that the right of appeal is a
statutory right. However, if such right of appeal is not embellished,
an authority higher than the appointing authority may also act as a
disciplinary authority.”

20. In S. Loganathan v. Union of India and others[7], a two-Judge Bench
placed reliance on the decisions rendered in Surjit Ghosh (supra) and
Electronics Corporation of India (supra) and, eventually, opined that as
the appellant’s right to appeal had not been affected by the authority
passing the order, the punishment imposed could not be said to be
vitiated in law.

21. From the aforesaid enunciation of law it is graphically clear that a
higher authority may pass an order imposing a punishment and the same
would withstand scrutiny if the right of appeal is not taken away. That
apart, if the appellate authority passes an order as the primary
authority and there is provision for further appeal or revision or review
it cannot be said that the said order suffers from any illegality. In
the case at hand, there is no denial of the fact that the UPSEB has
passed the order for deduction of 10% pension from the delinquent
employee. Under the Regulations which we have reproduced hereinbefore
there is a stipulation that an appeal or representation, as the case may
be, from the order of the Chairman shall lie to the UPSEB. The
Regulation clearly provides that in case of an Assistant Engineer the
Chairman is the competent authority to pass the order of punishment and,
therefore, by virtue of the order passed by the UPSEB remedy of appeal
was denied to the delinquent employee. Under these circumstances, the
view expressed by the High Court has to be regarded as flawless and,
accordingly, we concur with the same.

22. Consequently, the appeal, being devoid of merit, stands dismissed
without any order as to costs.
……………………….J.
[Anil R. Dave]
……………………….J.
[Dipak Misra]
New Delhi;
October 03, 2013.
———————–
[1] (1987) 2 SCC 179
[2] 1989 Supp (2) SCC 110
[3] (1995) 2 SCC 474
[4] (1997) 3 SCC 371
[5] (2001) 10 SCC 43
[6] (2006) 4 SCC 348
[7] (2012) 1 SCC 293

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