ORDER
L. Narasimha Reddy, J.
1. The petitioner was initially appointed as Economic Analyst in the Rural Electrification Corporation Limited, New Delhi, 1st respondent (hereinafter referred to as 'the Corporation'), in the year 1978. Thereafter he was promoted as Assistant Director in the year 1981 and further promoted as Deputy Director in June, l986.
2. In June 1996, a Director was appointed on contract basis for a period of two years. During that time, through orders dated 4-1-1996, he kept the petitioner in additional charge of administration and general services. This assignment involved supervision of general administration and personnel matters. The petitioner was also made member of the Purchasing Committee and number of purchases of various items had to be made; Furnishing materials, such as, sofa and curtain clothes were few such items.
3. In 1996, the Audit report revealed shortage of certain materials. The petitioner was issued a Memo dated 23-9-1997 by the Deputy Chief (Personnel) of the Corporation, requiring him to given certain clarifications in the matter relating to purchase of sofa and curtain clothes. He submitted a detailed explanation dated 23-11-1997. In his explanation, the petitioner denied certain allegations made against him and ultimately asked the Corporation to undertake a detailed enquiry.
4. Disciplinary Authority, designated under the Rural Electrification Corporation Limited (Conduct, Discipline and Appeal) Rules (hereinafter referred to as 'the Rules'), decided to hold enquiry against the petitioner, and appointed an Enquiry Officer as contemplated under Rule 25 of the Rules, through order dated 27-1-1998. A Presenting Officer was also appointed through order dated 29-1-1998. Thereafter, the matter did not proceed further. However, the petitioner was issued proceedings dated 29-6-1998, where under punishment of withholding of two increments with cumulative effect was imposed upon him.
5. Aggrieved by the order dated 29-6-1998, the petitioner preferred an appeal to the appellate authority. The appeal was disposed of through order dated 14-10-1998 affirming the order of punishment in all respects except that stoppage of increments was modified to be one without cumulative effect. The petitioner challenges the order of disciplinary authority dated 29-6-1998 and that of the appellate authority dated 14-10-1998 in this writ petition on several grounds.
6. The petitioner urges that once a disciplinary authority has decided to hold an enquiry, and an Enquiry Officer was appointed, it was not open to the respondents to give up the proceedings half way through and to impose minor penalty while holding him guilty of misconduct. It is also contended that neither the disciplinary authority nor the appellate authority have furnished any reasons in support of their findings and the same is not sustainable in law. Another submission is that the stoppage of increments with cumulative effect is a major penalty and it could have been imposed only after holding departmental enquiry.
7. In the counter-affidavit, certain facts, which are matter of record, have not been disputed. It is sated that the punishment of withholding of two increments with cumulative effect was imposed on the basis of preliminary investigation as well as the reply submitted by the petitioner. It is also the case of the respondents that the entire matter relating to purchases has been enquired into and various officials involved therein were meted out with different punishments, corresponding to the roles played by them in the matter. They have refuted the allegation of the petitioner that the disciplinary as well as the appellate authority have not applied their minds to the facts of the case.
8. Sri C. Kodanda Ram, learned Counsel for the petitioner, submits that the punishment of withholding of two increments is a major penalty and, as such, could have been imposed only after holding a fullfledged disciplinary enquiry. For this proposition, he relies upon the judgment of the Supreme Court in Kulwant Singh Gill v. State of Punjab, 1991 Supp. (1) SCC 504. His second submission is that even if what was imposed upon the petitioner is to be treated as minor penalty, the respondents did not give any show cause notice as contemplated under the Rules. According to him, in Memo dated 23-9-1997 issued to the petitioner, the respondents have only sought for certain clarifications from the petitioner and the same cannot be treated as a show-cause notice. It is also his case that once the disciplinary proceedings have been initiated for imposition of a major penalty, it was not open to them to give up the same half way through, and impose a minor penalty while accusing the petitioner of a misconduct of serious nature. His last submission is that neither the disciplinary authority nor the appellate authority have applied their minds and not a single reason, worth its name, was assigned by them in support of their conclusion.
9. Sri S. Ravi, learned Counsel for the respondents, submits that inasmuch as withholding of increments with or without cumulative effect was included in the list of minor penalties under Rule 23 of the Rules, the judgment of the Supreme Court in Kulwant Singh Gill case (supra) has no application to the facts of this case. He contends that though disciplinary proceedings were initiated, at one stage, the respondents have decided not to proceed with the same and imposition of a minor penalty, strictly in accordance with the relevant Rules, cannot be said to have caused any prejudice to the petitioner. As regards furnishing of reasons, the learned Counsel submits that by their very nature, the proceedings were summary, and having regard to the triviality of the punishment imposed against the petitioner, no reasons were needed to be furnished.
10. Before proceeding further, the contention of the petitioner that withholding of increments with cumulative effect is a major penalty, needs to be dealt with.
11. The learned Counsel for the petitioner submits that the stoppage of two increments with cumulative effect has to be treated as a major penalty cannot be accepted. The decision relied upon by him in Kulwant Singh Gill case (supra) dealt with a case where the Service Rules classified the penalty of withholding of increments as minor one. Reduction of time scale for a specified period (which is the result of withholding of two increments with cumulative effect) was classified as major penalty. In the present case, Rule 23 of the Rules classifies the penalty of withholding of increments 'with or without' cumulative effect as a minor penalty. Therefore, the judgment of the Supreme Court in Kulwant Singh Gill case (supra) has no application to the facts of this case.
12. Up to the stage of issuance of Memo dated 23-9-1997, there is no controversy and all the facts are borne out by record. The service conditions of the employees of the Corporation are governed by the Rules. We are concerned only with the disciplinary aspect of the Rules.
13. Rule 23 of the Rules classifies the punishments that may be imposed on the employees of the Corporation in to minor and major penalties. The procedure for imposition of major penalties is provided for under Rule 25, whereas the one for imposition of minor penalties is provided for under Rule 27. Rule 27 of the Rules reads as under:
27. Procedure for imposing minor penalties:--(1) Where it is proposed to impose any of minor penalties specified in Clauses (a) to (d) of Rule 23, the employee shall be informed in writing of the imputations of misconduct or misbehaviour against him and given an opportunity to submit his written statement of defence within a specified period not exceeding 15 days. The defence statement, if any, submitted by the employee shall be taken into consideration by the disciplinary authority before passing orders.
(2) The record of the proceedings shall
include:--
(i) a copy of the statement of imputations of misconduct or misbehaviour delivered to the employee;
(ii) his defence statement if any; and
(iii) the orders of the disciplinary authority together with the reasons therefor.'
Imposition of minor penalty is contemplated even in the cases where disciplinary proceedings were initiated under Rule 25 of the Rules, which is meant for major penalties. That would depend on the outcome of the enquiry. The same is contemplated under Sub-rule (3) of Rule 26, which reads as under:
'26(3) If the disciplinary authority having regard to its findings on all or any of the articles of charge is of the opinion that any of the penalties specified in Rule 23 should be imposed on the employee, it shall, not withstanding anything contained in Rule 27, make an order imposing such penalty.'
From the scheme of Rules, it is evident that the disciplinary authority may initiate departmental enquiry under Rule 25, which is meant for major penalties. Depending on the outcome of the enquiry, the following three contingencies can be contemplated:
(a) dropping of the proceedings as a whole, if the charges levelled against the employee are not proved;
(b) imposition of major penalty, if the charges are held proved; and
(c) imposition of minor penalty, if what is held proved against the employee is not so grave in nature;
14. If, however, at the threshold itself, the disciplinary authority feels that the entire imputation against the employee is trivial in nature, steps can be taken to impose minor penalty without the necessity of appointing any Enquiry Officer. However, the disciplinary authority is required to inform the employee in writing 'of the imputations of misconduct or misbehaviour' before imposition of such penalty. In view of the fact that the authority had chosen to institute enquiry under Rule 25 for imposition of major penalties, it needs to be seen as to whether it is permissible in law, for such an authority to give up the proceedings half way through and switch over to the procedure under Rule 27 for imposition of minor penalty.
15. In Memo dated 23-9-1997 issued to the petitioner, the Deputy Chief (Personnel), has referred to certain purchases made on several dates between 3-1-1996 and 19-1-1996 from various agencies. Certain discrepancies were pointed out. Thereafter, the petitioner was required as under:--
'You are advised to confirm the total quantity of curtain cloth and sofa cloth that has been purchased and taken by you in stock book register and the value of the same.
The above lapses have resulted in wilful financial loss of Rs. 37,960/- and Rs. 3,484/-approximately in connection with purchase of curtain/sofa clothes. You are, therefore, advised to submit your clarification point-wise within 7 (seven) days from the receipt of this memorandum.'
From a reading of the same, it is evident that the authority, who issued the Memo, wanted some more information as to the total quantity of sofa and curtain cloth purchased and taken on book register. In addition to that, the petitioner was required to clarify point-wise. It was in response to this Memorandum, that the petitioner had submitted his clarification/confirmation furnishing all the details as were required. At the end, he has denied any complicity on his part and in fact requested that a detailed enquiry be conducted to unravel the mystery of missing sofa and curtain cloth, particularly, purchases made on certain dates.
16. On perusal of the clarification, the disciplinary authority decided to conduct an enquiry under Rule 25 of the Rules. An Enquiry Officer was appointed through proceedings dated 27-1-1998, and Presenting officer was appointed through proceedings dated 29-1-1998. Charges were to be framed and the enquiry was meant to progress further. However, the impugned order dated 29-6-1998 came to be issued abruptly. In these proceedings, there is no reference to the enquiry instituted under Rule 25, nor the reasons for not proceeding therewith. The order is said to have been passed in exercise of power under Rule 24 read with Rule 23 of the Rules and penalty of stoppage of two increments with cumulative effect was imposed. It was further observed that the grant of increments after expiry of the period will be considered only after his work and conduct are found satisfactory. Before imposing this punishment, the disciplinary authority recorded the following findings:
'Whereas a Memorandum No. REC/Vig./ ii( 132)796/234 dated 23-9-1997 was issued to Shri G. Jawaharlal, D.D. (Eco) towaras charges of misconduct levelled against him.
And Whereas the Disciplinary Authority, having carefully gone through the reply submitted by Shri G. Jawaharlal, D.D.(Eco.) vide his letter dated 29-10-1997 and after considering the circumstances of the case and explanation submitted by him, has come to the conclusion that Shri G. Jawaharlal is guilty of the charges levelled against him'
17. The disciplinary authority found the petitioner guilty of charges levelled against him. It has to be understood that the charges were levelled against him under Memo dated 23-9-1997. No other document is referred to. A reading of Memo dated 23-9-1997 discloses that after referring to certain instances of purchases, the Deputy Chief (Personnel) wanted the petitioner to give certain confirmation of facts and also to furnish certain clarifications. If the officer who issued the Memo was not clear about the relevant facts and in fact wanted the petitioner to confirm and clarify certain aspects, it is just unimaginable to conclude that the Memo contained any charges not a single charge was framed nor any imputation was made against the petitioner. The very fact that enquiry under Rule 25 was initiated after receiving necessary information from the petitioner, indicates that the disciplinary authority wanted the charges to be framed on the basis of certain further clarifications and findings be recorded by the Enquiry Officer after conducting a detailed enquiry. Therefore, the very reference to 'charges' and holding the petitioner guilty of the same was totally impermissible in law and incompatible with the facts.
18. Further, once the respondents have chosen to initiate proceedings under Rule 25, it was not permissible for them to switch over to the procedure under Rule 27. It cannot be said that the respondents intended action under Rule 27 when the Memo dated 23-9-1997 was issued. Had it been so, they would have straight away issued a Memorandum of 'imputations of misconduct or misbehaviour'. The Memo dated 23-9-1997 cannot be treated as the Memorandum of imputations of misconduct and misbehaviour; as contemplated under Rule 27. The reason is that neither such expressions are found in that Memo nor summary of the same fits into the purport of that expression.
19. This view of the Court becomes more fortified for another reason. Even where proceedings under Rule 25 are initiated, imposition of minor penalty was permissible. The result is that once the authority chooses to adopt the course of action contemplated under Rule 25 of the Rules for imposition of major penalty, such proceedings should terminate in dropping of the proceedings, imposition of major or minor penalty, depending on the outcome of the enquiry. If the disciplinary authority abandons the departmental enquiry initiated by it under Rule 25, it has to furnish reasons. In the absence of the same, an inference deserves to be drawn to the effect that, if carried forward, the proceedings would have ended up in favour of the employee. Therefore, it is not permissible to give up the enquiry in between and impose a minor penalty. It was already found that the respondents did not follow the procedure contemplated under Rule 27 of the Rules.
20. The other submission is about furnishing of reasons by the disciplinary authority as well as the appellate authority. Even if it is to be assumed that the Memo dated 23-9-1997 is to be treated as 'Memorandum of Imputations of misconduct and misbehaviour, and the explanation given by the petitioner as 'the written statement', contemplated under Rule 27 of the Rules, the disciplinary authority was under obligation to furnish reasons in support of its conclusion. The Rules have exempted only holding of a detailed disciplinary enquiry, for imposition of minor penalty. That does not mean that the very process of reasoning is dispensed with.
21. The difference as regards the procedure for inflicting major or minor penalties is subtle. The disciplinary authority will have the benefit of the report of the enquiry under Rule 25 in case of major penalties. In case of minor penalties he does not have such benefit. In cases where enquiry is held, the basis of holding the employee guilty of misconduct can be gathered from the report. However, where no such enquiry is held, one has to look to the order of disciplinary authority to find the basis. In a sense, the burden upon the disciplinary authority is more in case of proceedings under Rule 27 because he does not have the assistance of any agency. Therefore, the findings in proceedings under Rule 27 are required to be arrived at on the basis of discussion and reasons. The disciplinary authority cannot be permitted to brush aside the entire explanation submitted by the employee and arrive at his own conclusion whimsically without stating reasons. Such a procedure is foreign to the very concept of imposition of penalty.
22. There is another reason why such a requirement is mandatory. In a given case, the penalty imposed may be minor in nature, but the imputations may have very serious and far-reaching consequences. If the procedure adopted by the respondents is permitted, the employee can be held guilty of very serious misconduct, even amounting to moral turpitude. By resorting to the summary and cryptic procedure, the employer may hold the employee guilty of serious misconduct and dereliction without conducting an enquiry by cleverly imposing a minor penalty. The penalty imposed may be minor. But, the damage to the employee will be phenomenal, on account of imputations against him. The imputation would be more harmful than the punishment.
23. The Kerala High Court in C.R. Worrier v. State of Kerala, 1982 (3) SLR 374, discussed this aspect at length and took the view that the findings against the employee even where a minor penalty is imposed should be supported by reasons. To the same effect is the Judgment of the Supreme Court in R.P. Bhatt v. Union of India, 1985 (3) SLR 745. Hence, the impugned order, in so far as it does not contain any reasons in support of the findings as to misconduct against the petitioner, cannot be sustained in law.
24. The order of the appellate authority is in no way different. When the petitioner had pleaded so many aspects of law and facts in support of his contention it was obligatory on the part of the appellate authority to apply its mind and arrive at its own conclusion. The fact that it had modified the penalty to be one without cumulative effect is no solace. The order of the appellate authority also suffers from the same defect of being bereft of reasons.
25. The impugned orders are accordingly set aside and the writ petition is allowed. In the circumstances of the case, there shall be no order as to costs.