CHAIRMAN-CUM-MANAGING DIRECTOR, MAHANADI COALFIELDS LIMITED v. SRI RABINDRANATH CHOUBEY

22Copy pinpoint22. The three Judge Bench of this Court in State of Maharashtra Vs. M.H. Mazumdar3 taking note of the pari materia rule 188 and 189 of the Bombay Civil Services Conduct, Discipline and Appeal Rules and relying on earlier precedents held in paragraph 5 as under:- D “5. The aforesaid two rules empower Government to reduce or withdraw a pension. Rule 189 contemplates withholding or withdrawing of a pension or any part of it if the pensioner is found guilty of grave misconduct while he was in service or after the completion of his service. Grant of pension and its continuance to E a government servant depend upon the good conduct of the government servant. Rendering satisfactory service maintaining good conduct is a necessary condition for the grant and continuance of pension. Rule 189 expressly confers power on the Government to withhold or withdraw any part of the pension payable to a government servant for misconduct which he may F have committed while in service. This rule further provides that before any order reducing or withdrawing any part of the pension is made by the competent authority the pensioner must be given opportunity of defence in accordance with the procedure specified in Note I to Rule 33 of the Bombay Civil Services Conduct, G Discipline and Appeal Rules. The State Government’s power to reduce or withhold pension by taking proceedings against a government servant even after his retirement is expressly preserved by the aforesaid rules. The validity of the rules was not challenged either before the High Court or before this Court. In 3 H 1988(2) SCC 52

CHAIRMAN-CUM-MANAGING DIRECTOR, MAHANADI COALFIELDS 85 LTD. v. SRI RABINDRANATH CHOUBEY [RASTOGI, J.]

23Copy pinpoint23. It is supported by the judgment of this Court in the recent judgment in UCO Bank & Ors. Vs. Rajendra Shankar Shukla4 wherein it was held as under:- “Under the circumstances, we have no hesitation in dismissing the appeal filed by the Bank also on the ground that the punishment of dismissal could not have been imposed on Shukla after his superannuation.” (Emphasis supplied)

24Copy pinpoint24. The exposition of law is further supported in UCO Bank and E Ors. Vs. Prabhakar Sadashiv Karvade5 as under:- “The sum and substance of these Regulations is that even though a departmental inquiry instituted against an officer employee before his retirement can continue even after his retirement, none of the substantive penalties specified in Regulation 4 of 1979 Regulations, F which include dismissal from service, can be imposed on an officer employee after his retirement on attaining the age of superannuation. Therefore, we have no hesitation to hold that order dated 12.10.2004 passed by the disciplinary authority dismissing the respondent from service, who had superannuated on 31.12.1993 was ex facie illegal and without jurisdiction and the High Court G did not commit any error by setting aside the same.” (Emphasis supplied)

4 2018(14) SCC 92 5 2018(14) SCC 98 H

86 SUPREME COURT REPORTS [2020] 8 S.C.R.

25Copy pinpoint25. The two Judge Bench of this Court in UCO Bank and Ors. Vs. Rajinder Lal Capoor6 on which the reliance has been placed by the respondent employee was a case where the explanation was called for by the delinquent employee in reference to the alleged misconduct which he had committed in discharge of his official duties but charge- sheet was indubitably issued after he stood retired from service. The B question which arose for consideration was as to whether mere explanation which was called for from the delinquent would be considered to be the initiation of the disciplinary proceedings or it can be said to be initiated only when the charge-sheet is issued in terms of Regulation 20(3)(iii) of the UCO Bank Officer Employees Service Regulations, C 1979 and this Court after examining the scheme of Rules, 1979 held that domestic inquiry can be said to be initiated only when the charge-sheet is issued to the delinquent and since the charge-sheet was issued after retirement from service this Court held that the disciplinary proceedings initiated against the delinquent became vitiated in law and consequently set aside the disciplinary proceedings initiated against the retired personnel. D

26Copy pinpoint26. The judgment in Ram Lal Bhaskar and Anr. (supra) on which reliance was placed to refer the matter may not be of any assistance in the instant facts of the case for the reason that it was a case where a substantial question raised before this Court for consideration was as to whether the High Court was justified in reappreciating with the finding of the disciplinary authority which was supported by a cogent evidence while inflicting penalty of dismissal from service within its limited scope of judicial review under Article 226 of the Constitution. At this stage, a passing reference was made by learned counsel for the delinquent employee that as he stood retired from service pending disciplinary enquiry, there could not be an order of dismissal from service. This Court taking note of Rule 19(3) of the State Bank of India Officers Service Rules, 1992, in para 9 of the judgment observed that in case the disciplinary proceedings were initiated against an officer before he ceased to be in service, the disciplinary authority vest at its discretion to continue and conclude the disciplinary proceedings in the manner as if the officer continues to be in service but what nature of substantive penalty could be inflicted upon the retired delinquent employee remain unanswered. In the instant case, the specific question has been raised for determination as to whether dismissal or any other substantive penalties provided under Rule 27 of the scheme of Rules, 1978 could be open to be inflicted to the H 6 2007(6) SCC 694

CHAIRMAN-CUM-MANAGING DIRECTOR, MAHANADI COALFIELDS 87 LTD. v. SRI RABINDRANATH CHOUBEY [RASTOGI, J.]

delinquent employee after he stood retired from service which was primarily not considered by this Court in Ram Lal Bhaskar and Anr. referred to supra.

27Copy pinpoint27. Taking note of the exposition of law which has been noticed and of the scheme of Rules, 1978, which indubitably has a binding force and are not a subject matter under challenge and are neither in derogation nor in contravention to the scheme of Payment of Gratuity Act, 1972. I have no hesitation in holding that the substantive penalties provided under the schedule of penalties referred to under Rule 27 could be inflicted on a delinquent employee while he is in service but in case where the delinquent employee stood retired or superannuated from service pending disciplinary inquiry, at least either of the substantive penalties provided under Rule 27 are not available to the disciplinary authority to be inflicted with retrospective effect but at the same time punishment of forfeiture of gratuity if held guilty for misconduct or negligence to the extent damage or pecuniary loss has been caused to the employer can be inflicted upon the delinquent in terms of Rule 34.3 of Rules 1978 read with sub-section D (6) of Section 4 of the Act, 1972 and in case the delinquent employee stands exonerated he became entitled for gratuity for the delay in payment in terms of Sections 7(3) and 7(3A) of Act, 1972 and as a matter of caution, it should not be pre-supposed that where the disciplinary inquiry remain pending and could not be concluded while the delinquent employee was in service in due course of time, he shall be held guilty and punished under the scheme of Rules, 1978.

28Copy pinpoint28. To sum up, my conclusion to the question is as under:- Que. 1-Whether it is permissible in law for the employer to withhold the payment of gratuity even after the employee has attained his superannuation from service because of the pendency of disciplinary proceedings against him? Ans. I am in agreement with the view expressed by brother Justice Shah that in view of Rule 34.3 of the Rules, 1978, the employer has a right to withhold gratuity during pendency of the disciplinary proceedings. G Que. 2- Whether the penalty of dismissal could be imposed after the employee stood retired from service? Ans. In my considered view, after conclusion of the disciplinary inquiry, if held guilty, indeed a penalty can be inflicted upon an employee/ delinquent who stood retired from service and what should be the nature H

88 SUPREME COURT REPORTS [2020] 8 S.C.R.

A of penalty is always depend on the relevant scheme of Rules and on the facts and circumstances of each case, but either of the substantive penalties specified under Rule 27 of the Rules, 1978 including dismissal from service are not open to be inflicted on conclusion of the disciplinary proceedings and the punishment of forfeiture of gratuity commensurate with the nature of guilt may be inflicted upon a delinquent employee provided under Rule 34.3 of Rules, 1978 read with sub-section (6) of Section 4 of the Act, 1972.

29Copy pinpoint29. To conclude, the impugned judgment of the High Court dated th 17 July, 2013 is not sustainable and deserves to be set aside and the disciplinary authority may proceed and conclude the pending disciplinary proceedings expeditiously and take a final decision in accordance with the scheme of Rules, 1978 read with sub-section (6) of Section 4 of the Payment of Gratuity Act, 1972.

30Copy pinpoint30. The appeal is accordingly disposed of. D Devika Gujral Appeal disposed of.