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Saturday, October 5, 2013

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

                        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  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.


                                                                ……………………….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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