ORDER
E. Padmanabhan, J.
1. The petitioner, a senior citizen, has prayed for the issue of a writ of certiorarified mandamus to call for the records relating to the proceedings of the 3rd respondent in Ref. No. A1/207-BM/96 dated 13.7.96, quash the same and consequently direct the respondents to grant all monetary and other service benefits treating the petitioner as having retired peacefully on reaching the age of superannuation.
2. Heard Mr. V. Ramasubramanian, learned counsel appearing for the writ petitioner and Mr. M. Vijayan, learned counsel appearing for M/s. King and Patridge for respondents 1, 2 and 3.
3. The petitioner after putting in 33 years of service, claims that he has retired on 31.8.95 from Hindustan Photo Films Manufacturing Company (hereinafter called as HPF for brevity), a Government of India Undertaking. The petitioner was working as Chief Manager in HPF. The management of HPF framed charges on 12.3.94 under Rule 25 (3) of The HPF Officers Conduct Discipline and Appeal Rules, 1977 (hereinafter referred to as Officers Discipline Rules for brevity). In the charge memo the petitioner has been charge-sheeted for the misconduct of:-
'i) Fraud and dishonesty in connection with the business or property of the company (Rule 5.1) ;
ii) Acting in a manner prejudicial to the interest of the company (Rule 5.5) ;
iii) Abutment of any act which amounts to misconduct (Rule 5.21) ;
iv) Violation of general rule 4.1 (iii).'
4. The said charges of misconduct were framed based on the following imputations :-
'a) During your tenure as Manager/Senior Manager of Conversion Department, you have diverted various finished products unaccounted, as per enclosure, to be passed out of the Company without gate passes. This act on your part, during the above said period, constitutes misconduct as per Rule 5.1.
b) Since the value of the finished products referred to in the enclosure, so diverted by you unaccounted and which were passed out of the factory without gate passes, has caused a direct loss to the Company, your conduct during the above said period, constitutes misconduct as per Rule 5.5.
c) Your diversion of the unaccounted finished products as per enclosure, which were passed out of the factory without gate passes, at the instance of senior officers of the Company, constitutes misconduct on your part as per Rule 5.21.
d) Since the finished products referred to in the enclosure have not been subjected to excise duty, salestax, etc., both the Central and State Governments have been deprived of their revenue, which amounts to causing loss to the Government.'
5. The petitioner submitted his explanation denying the imputations and contending that all the allegations and imputations against him are false, besides contending that he had acted in obedience to the instructions of superiors and to the best of his knowledge.
6. The respondents constituted an enquiry committee initially consisting of two members, but subsequently Mr. V. Ramaswamy, Retd. GM (Employee Relations), HMT, as the enquiry officer. The enquiry officer was appointed on 29.11.94. The enquiry officer conducted the enquiry in all in eight sittings. The management was represented by Mr. H.B. Raman, who was the Presenting Officer, while the writ petitioner had the assistance of a colleague of his. The management examined three witnesses. The delinquent employee was allowed to inspect the documents as well as take out copies of documents. The enquiry was completed on 23.6.95.
7. The charges were framed on 12.3.94; explanation was submitted on 21.3.94; the enquiry officer submitted a report on 24.7.95; a show cause notice was issued on 17.8.94 by the management stating that the management accepts the findings of the enquiry officer and propose to impose the punishment of dismissal from c of the company under the Discipline and Appeal Rules. Along with the said notice, the enquiry report was communicated to the petitioner. On 4.11.94, the petitioner submitted his objections with respect to the findings of the enquiry officer and the proposed punishment of dismissal. The petitioner raised number of legal objections in his explanation, but the management not being convinced and not satisfied with the explanation submitted, imposed the punishment of dismissal from service retrospectively with effect from 31.8.95 by order dated 1.2.96.
8. Being aggrieved by the dismissal, the petitioner preferred an appeal before the Board of Directors of the respondent company on 14.3.96. The Board of Directors by communication dated 13.7.96, by a summary order, without reference to the various contentions advanced or set out in the appeal petition, ordered that there was no need for changing the decision of the Disciplinary Authority as has been resolved by the Board on 30.5.96. Challenging the punishment of dismissal imposed by the Disciplinary Authority, namely, the Chairman, as affirmed by the Board of Directors, the present writ petition has been filed.
9. Mr. V. Ramasubramanian, learned counsel appearing for the writ petitioner contended that the petitioner had reached the age of superannuation on 31.8.95 and in the absence of any order extending his services beyond 31.8.95, the jural relationship of employer and employee gets snatched and, therefore, the respondents cannot inflict the punishment of dismissal from service with retrospective effect. Nextly, it is contended that in terms of the Discipline and Appeal Rules, the domestic enquiry in respect of the charges framed under the regulations should be by an officer of the respondent company and not by an outsider. In other words, no outsider could be appointed as an enquiry officer and enquiry by such an outside officer being contrary to the discipline rules, the entire enquiry is vitiated. Nextly, it is contended that assuming for the purpose of arguments the enquiry is in order, the findings of the enquiry officer is perverse, in that the petitioner has not been found guilty of charges framed against him, but guilty of some other charge or misconduct which is an illegality. It was also contended that the no list of witnesses has been appended to the charge memo and this is contrary to Rule 25 (3) of the Discipline and Appeal Rules and, hence vitiated. It is also contended that the Board, which just disposed of the appeal has not considered the appeal as prescribed under Rule 32 (2) of The Discipline and appeal Rules, but on the other hand, without assigning any reason and without passing a speaking order, rejected the appeal as no interference is called for. This order of the first respondent appellate authority is illegal and liable to be quashed on this short ground.
10. Per contra, Mr. Vijayan, learned counsel appearing for the respondent management contended that even after retirement there could be initiation of disciplinary proceedings and, therefore, the respondents are well founded in imposing the punishment of dismissal even after the retiring date. It is further pointed out by Mr. Vijayan that the findings of the enquiry officer are not perverse. The appointment of outsider as an enquiry officer is not illegal and this Court will decline to interfere with the proceedings unless prejudice is established and substantial compliance of the rule is sufficient. Mr. Vijayan further contended that the appellate authority being a Board, it could pass a resolution and accordingly the resolution has been intimated and, therefore, there is nothing illegal in the order passed by the Board, while exercising powers of appellate authority under the Discipline and Appeal Rules.
11. The following points arise for consideration in this writ petition :-
'A) Whether the failure to set out the list of witnesses and documents in the charge memo vitiates the enquiry proceedings ?
B) Whether the proceedings could be continued against the petitioner after 31.8.95 on which date the petitioner attained the age of superannuation in the absence of any order extending the service of the petitioner ?
C) Whether the jural relationship of employer and employee continued beyond 31.8.95 so as to enable the respondents to impose the punishment of dismissal on 1.2.96 with retrospective effect from 31.8.95 ?
D) Whether the conduct of domestic enquiry proceedings by appointing an outsider is valid and such report could be the basis of imposition of punishment of dismissal ?
E) Whether the summary disposal of the appeal by the appellate authority is illegal and liable to be interfered ?
F) Whether the findings of the enquiry officer is perverse and vitiated by non-application of mind ?
G) Whether holding the petitioner guilty of misconduct other than the misconduct for which he has been charge-sheeted vitiates the enquiry officer's report ?
H) To what relief, if any, the petitioner is entitled to ?'
12. Mr. Vijayan, learned counsel for the respondents heavily relied upon the pronouncement of the Apex Court in STATE BANK OF PATIALA VS. S.K. SHARMA reported in and in particular para 33 of the judgment where their Lordships of the Supreme Court, after analysing the entire case law, enunciated the principles regarding disciplinary proceedings with respect to the applicability of principles of natural justice and the scope of judicial review under Article 226, besides it is pointed out that such requirements could be waived by the person concerned. The Apex Court laid down that an order passed imposing the penalty on an employee consequent upon a disciplinary/departmental enquiry in violation of the rules/regulations/statutory provisions governing such enquiries should not be set aside automatically and the Court should enquire whether:-
'a) The provisions violated is of a substantive nature ; and
b) Whether it is procedural in character.'
In that context, the Apex Court held thus :-
'33. We may summarise the principles emerging from the above discussion. (These are by no means intended to be exhaustive and are evolved keeping in view the context of disciplinary enquiries and orders of punishment imposed by an employer upon the employee):
(1) An order passed imposing a punishment on an employee consequent upon a disciplinary/departmental enquiry in violation of the rules/regulations/statutory provisions governing such enquiries should not be set aside automatically. The Court or the Tribunal should enquire whether (a) the provision violated is of a substantive nature or (b) whether it is procedural in character.
(2) A substantive provision has normally to be complied with as explained hereinbefore and the theory of substantial compliance or the test of prejudice would not be applicable in such a case.
(3) In the case of violation of a procedural provision, the position is this: procedural provisions are generally meant for affording a reasonable and adequate opportunity to the delinquent officer/employee. They are, generally speaking, conceived in his interest. Violation of any and every procedural provision cannot be said to automatically vitiate the enquiry held or order passed. Except cases falling under - 'no notice', 'no opportunity' and 'no hearing' categories, the complaint of violation of procedural provision should be examined from the point of view of prejudice, viz., whether such violation has prejudiced the delinquent officer/employee in defending himself properly and effectively. If it is found that he has been so prejudiced, appropriate orders have to be made to repair and remedy the prejudice including setting aside the enquiry and/or the order of punishment. If no prejudice is established to have resulted therefrom, it is obvious, no interference is called for. In this connection, it may be remembered that there may be certain procedural provisions which are of a fundamental character, whose violation is by itself proof of prejudice. The Court may not insist on proof of prejudice in such cases. As explained in the body of the judgment, take a case where there is a provision expressly providing that after the evidence of the employer/government is over, the employee shall be given an opportunity to lead defence in his evidence, and in a given case, the enquiry officer does not give that opportunity in spite of the delinquent officer/employee asking for it. The prejudice is self-evident. No proof of prejudice as such need be called for in such a case. To repeat, the test is one of prejudice, i.e., whether the person has received a fair hearing considering all things. Now, this very aspect can also be looked at from the point of view of directory and mandatory provisions, if one is so inclined. The principle stated under (4) herein below is only another way of looking at the same aspect as is dealt with herein and not a different or distinct principle.
(4)(a) In the case of a procedural provision which is not of a mandatory character, the complaint of violation has to be examined from the standpoint of substantial compliance. Be that as it may, the order passed in violation of such a provision can be set aside only where such violation has occasioned prejudice to the delinquent employee.
(b) In the case of violation of a procedural provision, which is of a mandatory character, it has to be ascertained whether the provision is conceived in the interest of the person proceeded against or in public interest. If it is found to be the former, then it must be seen whether the delinquent officer has waived the said requirement, either expressly or by his conduct. If he is found to have waived it, then the order of punishment cannot be set aside on the ground of the said violation. If, on the other hand, it is found that the delinquent officer/employee has not waived it or that the provision could not be waived by him, then the Court or Tribunal should make appropriate directions (include the setting aside of the order of punishment), keeping in mind the approach adopted by the Constitution Bench in B. Karunakar18. The ultimate test is always the same, viz., test of prejudice or the test of fair hearing, as it may be called.
(5) Where the enquiry is not governed by any rules/regulations/ statutory provisions and the only obligation is to observe the principles of natural justice - or, for that matter, wherever such principles are held to be implied by the very nature and impact of the order/action - the Court or the Tribunal should make a distinction between a total violation of natural justice (rule of audi alteram partem) and violation of a facet of the said rule, as explained in the body of the judgment. In other words, a distinction must be made between 'no opportunity' and no adequate opportunity, i.e., between 'no notice'/'no hearing' and 'no fair hearing'. (a) In the case of former, the order passed would undoubtedly be invalid (one may call it 'void' or a nullity if one chooses to). In such cases, normally, liberty will be reserved for the Authority to take proceedings afresh according to law, i.e., in accordance with the said rule (audi alteram partem). (b) But in the latter case, the effect of violation (of a facet of the rule of audi alteram partem) has to be examined from the standpoint of prejudice; in other words, what the Court or Tribunal has to see is whether in the totality of the circumstances, the delinquent officer/employee did or did not have a fair hearing and the orders to be made shall depend upon the answer to the said query. [It is made clear that this principle ( No. 5) does not apply in the case of rule against bias, the test in which behalf are laid down elsewhere.]
(6) While applying the rule of audi alteram partem (the primary principle of natural justice) the Court/Tribunal/Authority must always bear in mind the ultimate and overriding objective underlying the said rule, viz., to ensure a fair hearing and to ensure that there is no failure of justice. It is this objective which should guide them in applying the rule to varying situations that arise before them.
(7) There may be situations where the interests of State or public interest may call for a curtailing of the rule of audi alteram partem. In such situations, the Court may have to balance public/State interest with the requirement of natural justice and arrive at an appropriate decision.'
13. Placing reliance on this pronouncement, Mr. Vijayan in respect of the first contention contended that the petitioner has not established prejudice nor he has objected to the examination of the witnesses, but he had taken part in the examination of witnesses without any demur whatsoever. Rule 25.3 is not mandatory and assuming it to be mandatory also, the violation of the said rule cannot be a ground to interfere with the official orders passed by the respondents. Mr. Vijayan is well founded in his submissions in this respect as the petitioner could have objected to the examination of witnesses or he would have sought for postponing of examination of the witnesses, but he has readily taken part. It is only a procedure, which would have enabled the petitioner to effectively cross-examine the management's witnesses. On this score, this Court will not be justified in interfering with the disciplinary proceedings as has been held by the Apex Court in STATE BANK OF PATIALA'S case in the absence of any plea or proof of prejudice. The procedure adopted is a substantial compliance and the petitioner is admitted to have waived his objection in this respect, if any. Hence, Point 'A' is answered against the writ petitioner and in favour of the respondent management.
14. Taking up the next two points, which could be considered together as they are inter-related or they are interconnected. The learned counsel for the petitioner contended that on and after the date of retirement, namely, 31.8.95, the jural relationship of employer and employee stands severed and, therefore, the respondents have no authority or jurisdiction to impose the punishment of dismissal even in terms of the Discipline and Appeal Rules. In this respect, Mr. Ramasubramanian, learned counsel appearing for the writ petitioner relied upon the Division Bench judgment of this Court in SOMASUNDARAM VS. DIRECTOR GENERAL OF POLICE & OTHERS reported in 1997 WLR 120. The learned counsel contended that in the present case no order has been passed retaining the petitioner in service or not permitting him to retire on his reaching the age of superannuation. Mr. Ramasubramanian, learned counsel further pointed out that in respect of these charges the petitioner has not been placed under suspension and he was not suspended. Investigation by Central Bureau of Investigation was in progress in respect of some other incident. Yet, it is pointed out that on the petitioner reaching the age of superannuation, even that suspension had come to an end and he was allowed to retire. It is contended that the respondent has no authority or jurisdiction to continue the disciplinary proceedings or impose the punishment of dismissal on and after 31.8.95.
15. Per contra, Mr. Vijayan, learned counsel for the respondents referred to Rule 35.5 and contended that it shall be competent for the appointing authority to continue any disciplinary proceedings, which may be instituted against any officer before his date of superannuation even after his date of retirement. Placing reliance on sub-rule (5) of Rule 35, Mr. Vijayan advanced such a contention. Rule 35.5 reads thus :-
'Notwithstanding anything contained in these rules, it shall be competent to the appointing authority to continue any disciplinary proceedings, which may be instituted against any Officer/Section Officer/Sales Officer before his date of superannuation, even after his date of retirement. In such an event, it shall also be competent to the appointing authority to withhold any payment of the retirement benefits to the Officer/Section Officer/Sales Officer concerned.'
16. Even accepting that there could be initiation or continuation of the disciplinary proceedings in terms of Rule, 35.5, the Disciplinary Authority, may if at all, as a result of such proceedings initiated after retirement or continue after retirement is competent to impose the punishment of withholding payment of retirement benefits to the officer and not any other punishment. Therefore, it is clear that even accepting the contention advanced by Mr. Vijayan, by the continuation of the proceedings after retirement, the punishment, if any, that could be imposed is withholding of any payment of retirement benefits to the officer and any other punishment such as dismissal or removal could be passed nor the rule contemplates imposition of such punishment, which is contemplated under Rule 23, be it a minor penalty or a major penalty.
17. A Division Bench of this Court relied upon by Mr. Ramasubramanian, while following the pronouncement in STATE OF PUNJAB VS. KHEMI RAM reported in and while affirming the single Judge judgment in SUBRAMANIAM VS. STATE OF TAMIL NADU reported in 1998 2 MLJ 418 held thus :-
'9) On the State Government filing a Letter Patent appeal against the said order, a Division Bench of that High Court followed its earlier judgment in Dr Pratap Singh v. State of Punjab, which had held that an order passed under Rule 3.26(d) took effect from the day it was served on the concerned Government servant, and upheld the order of the learned Single Judge in the following terms:
'In the present case the fact remains that the respondent was not in a position to know and could not possibly have submitted to or carried out the orders which had been made before 4th August, 1958 and that also without any fault on his part, with the result that the decision of the learned Single Judge must be upheld.' In this view, the Division Bench dismissed the State's appeal.
10) It appears that the respondent had, besides the said contention, raised three more contentions summarised by the Division Bench in the penultimate paragraph of its judgment. These three contentions were left undecided in view of the Division Bench deciding the appeal on the first contention.
11) The question for determination thus is whether the said order of suspension admittedly made before the date of the respondent's retirement as required by the said Rule 3.26(d) did not take effect by reason only that it was received by the respondent after the said date of retirement and whether he must, therefore, be held to have retired on August 4, 1958 rendering the enquiry and the ultimate order of dismissal invalid.'
18. In the present case, excepting Rule 35.5 Mr. Vijayan could not lay his hands on any other provision, which would enable the respondent to continue the disciplinary proceedings after the termination of jural relationship of employer and employee by the petitioner reaching the age of superannuation. Rule 20 which provides for suspension also will not save the situation. There is no provision in the rules which provides or enables the respondents to retain or keep the petitioner in service beyond the period of suspension nor an order not to permit him to retire has been passed at any point of time. Therefore, it is being rightly contended by the counsel for the petitioner that the proceedings impugned is without jurisdiction and liable to be quashed.
19. In a recent pronouncement of the Apex Court an identical question was examined by the Apex Court in STATE BANK OF INDIA VS. A.N. GUPTA reported in . The Supreme Court after overruling the pronouncement of the Andhra Pradesh High Court reported in and that of the Bombay High Court in A.K.KULKARNI VS. STATE BANK OF INDIA, the Apex Court held that on attaining the age of superannuation, retirement is automatic as per the service rules and no further order or proceeding is required in this respect and, therefore, proceedings under the garb of disciplinary proceeding cannot be permitted after an employee is ceased to be in service of the Bank. In this context, the Apex Court held thus :-
'15) Retirement on superannuation is automatic as per Rule 26 of the Service Rules. No further action on the part of the Executive Committee of the Central Board of the Bank would be required in such a case and Rule 11 will not be applicable.
16) Right to receive pension is a right to property under Rule 7 of the Pension Rules when it says that no employee shall have any right of property in the pension fund beyond the amount of his contribution to the pension section of the fund with interest accrued thereon. That being so Rule 11 cannot be interpreted to mean that claim to pension of an employee on superannuation can be defeated by the Bank by merely withholding sanction of retirement. For about 8 years when these two matters were pending in the Delhi High Court the Bank did not take any decision in terms of Rule 11 to sanction retirement of the respondents. The Bank never communicated to the respondents that it had withheld sanction to their retirement or did not approve their service. It is only during the course of proceedings in the High Court that the Bank came up with the plea that it wanted to have the allegations against the respondents enquired into. To us the language of Rule 11 appears quite explicit. No sanction is required from the Bank to leave the service on reaching the age of superannuation as provided in Rule 26 of the Service Rules applicable to Assistants. Rule 26 of the Service Rules clearly mandates the retirement of an employee on his attaining the age of superannuation and there cannot be two opinions on that. We, therefore, hold that Rule 11 has no application in the case of the respondents who retired on attaining the age of superannuation. We cannot agree with the plea of the Bank that sanctioning of retirement must be understood as sanctioning of service which in terms must be understood as approval of service. Proceeding in the garb of disciplinary proceedings cannot be permitted after an employee has ceased to be in the service of the Bank as Service Rules do not provide for continuation of disciplinary proceedings after the date of superannuation. Sanction of the Bank is required only if the retirement of an employee is by any other method except superannuation. We do not think that the decision of the Andhra Pradesh High Court in T. Narasiah v. State Bank of India1 and that of the Bombay High Court in J.K. Kulkarni v. State Bank of India have laid down good law.'
20. The employee of HPF Manufacturing Company are governed by a gratuity scheme. No rule or other provision has been referred to by Mr. Vijayan to point out that superannuation of the petitioner could be stopped or he could be retained in service beyond the date of superannuation. In the circumstances, while following the pronouncement of the Division Bench and the Apex Court in STATE BANK OF INDIA VS. A.N. GUPTA it follows automatically that the respondents cannot continue the disciplinary proceedings nor they could impose the punishment of dismissal and the action is without jurisdiction. As already pointed out, punishment, if any, even assuming that proceedings could be initiated after superannuation, could be only withholding a portion of the terminal benefits and no dismissal or removal or other major penalty could be imposed. Hence, Points 'B' and 'C' are answered in favour of the writ petitioner and against the respondents. Consequently, the order of dismissal passed is quashed.
21. Taking up the fourth point, Mr. Ramasubramaniam pointed out that in terms of the disciplinary rules, Rule 24 prescribed the Disciplinary Authority. Rule 26 prescribes the procedure for imposing major penalties. Sub-rule (2) of Rule 25 enables the Disciplinary Authority either to hold an enquiry into the truth or any imputations of any of the misconduct against an officer either by itself enquiring or appointing an enquiring officer to enquiry into the truth thereof. A note has been appended to the said sub-rule(2). Rule 25 (2) with the note reads thus :-
'NOTE : The Inquiring Officer may either be a Company official or any other Public Servant.'
22. On a reading of the rule it is clear the enquiry could be conducted by the Disciplinary Authority himself or an enquiry officer appointed to enquire into the truth of the imputations. The note appended to sub-rule (2) of Rule 25 mandates that enquiring officer may be either be a company official, which means an employee of HPF ., or any other public servant. Therefore, when the Disciplinary Authority decides to appoint an enquiry officer, he has to appoint either a company official, who is sufficiently high placed with reference to the delinquent official or in the alternative the Disciplinary Authority could appoint any other public servant. In other words, it is contended by the petitioner that excepting a company official or a public servant, no one else could be appointed as enquiry officer. This is the scope and purport of the rule. The Rules contemplate that :-
'i) The enquiry could be conducted by the Disciplinary Authority ;
ii) A company official may be appointed as enquiry officer ;
iii) A public servant could be appointed as enquiry officer.'
This means, according to Mr. Ramasubramanian, no other person shall be appointed as enquiry officer and such appointment, if any, is being in violation of the rules, the entire proceedings, suffers with illegality.
23. However, this contention of Mr. Ramasubramanian, learned counsel for the petitioner overlooks the latter amendment introduced to the said rules. It is brought to the notice of the Court that the said rule, which was in force till 22.4.94 was amended and the amended of Rule 25 (2) reads thus :-
'An enquiring officer may be a company official or a serving/retired Government Official or a serving/retired Official of any Central Public Sector Undertaking.'
In the present case, the enquiry officer appointed by the management was the retired General Manager of HMT Ltd., Bangalore, a retired official of Central Public Sector Undertaking. Such appoint is in accordance with the amended Rule 25 (2). Hence, the contention has to necessarily fail.
24. In the present case, Mr. V. Ramaswamy, retired General Manager, HMT, Bangalore, was appointed as the enquiry officer. On the date when he was appointed he was no longer in service, but he was a retired employee of HMT Ltd., a Central Public Sector Undertaking. The rule mandates that enquiry officer shall not be an outsider, but a public servant, though an outsider, could be appointed as enquiry officer. Mr. V. Ramaswamy, who was in the service of HMT Ltd., and who had already retired long prior to the formulation of the charges is competent to be appointed as enquiry officer in terms of amended Rule 25 (2). Therefore, the appointment of enquiry officer being in accordance with Rule 25 (2). Hence, the contention of the petitioner that there is illegality in the appointment of enquiry officer cannot be sustained.
25. In this respect, attention of this Court is drawn to the following pronouncements. In CENTRAL BANK OF INDIA VS. C. BERNARD reported in , the Apex Court, while holding that a disciplinary authority cannot be a non-official, but an enquiry officer could even be a non-official held thus :-
'7. True it is that the respondent did not attribute any bias or mala fides to the Enquiry Officer nor did he complain that he was in any manner prejudiced on account of the said Enquiry Officer conducting the domestic enquiry but that will not cure the defect as to his competence. Where punishment is imposed by a person who has no authority to do so the very foundation on which the edifice is built collapses and with and it falls the entire edifice. It is a case more or less akin to a case tried by a court lacking in inherent jurisdiction. We are, therefore, of the opinion that absence of bias, prejudice or mala fides, is of no consequence so far as the question of competence is concerned. The two cases which were cited at the bar (i) Delhi Cloth and General Mills Co. Ltd. v. Labour Court, Tis Hazari and (ii) Saran Motors also have no application to the special facts and circumstances of this case.'
26. In THANJAVUR TEXTILES LTD., VS. B.PURUSHOTHAMAN reported in , the Apex Court held thus:-
'6) Learned counsel for the respondent, Shri S. Ravindra Bhat, however, contended that having regard to the language of the standing order in this case, the Manager was not permitted to appoint an advocate as an enquiry officer. Learned counsel also contended that in that event, the advocate could only record the evidence and could not have given any findings on the merits as to the misconduct of the workmen. Reliance was placed on the observations of this Court in Workmen v. Buckingham and Carnatic Mills2. Our attention was also drawn by the learned counsel on both the sides to the decisions of this Court in Dalmia Dadri Cement Ltd. v. Murari Lal Bikaneria and to Central Bank of India v. C. Bernard.
7) The relevant portion of the standing order in sub-clause (c) of clause 62 reads as follows:
'The Manager may himself or through some other responsible officer make such enquiry and the workman shall present himself at the time and date fixed for such enquiry.' 8) There was considerable debate before us in regard to the meaning of the words employed in the above sub-clause (c) of clause 62. The words 'other responsible officer' referred to in this case could only be an officer of the Company subordinate to the Manager and not an outsider, according to Shri S. Ravindra Bhat, learned counsel for the respondents and hence the advocate could not have been appointed as an enquiry officer nor could he give findings on the merits of the misconduct.
9) The learned Senior Counsel for the appellant, however, referred to the cases referred to above and submitted before us that even going by the language of the above clause and to the observations in the above said judgments, it was permissible for the Manager to appoint an advocate as an enquiry officer. On the other hand, learned counsel for the respondent-workmen contended that the language of the clause in the standing order in this case was different from the language employed in the standing orders in the decided cases. In the present case, the standing order contemplated an enquiry to be conducted only by a responsible officer of the Company, subordinate to the Manager.'
27. In INDIAN TELEPHONE INDUSTRIES LTD. VS. DEVI SHANKAR KUMAR SHUKLA reported in , the Apex Court held thus :-
'2. The only question for decision is whether the appointment of a person who was not in the employment, i.e., an outsider as the Enquiry Officer is contrary to the requirement of Standing Order 16(2)(b) so as to vitiate the domestic inquiry. The learned Single Judge as well as the Division Bench of the High Court have both answered this question in the affirmative. Hence, this appeal by special leave.
3. Standing Order 16(2)(b) is as under:
'16. Procedure for Punishment -
(1) * * * (2) For major punishments listed in para 15.2 before disciplinary action amounting to postponement of annual increment for more than three months or reduction in the grade or reversion or demotion to a lower grade or dismissal is taken, action on the following lines will be taken by the Manager:
(a) * * * (b) On receipt of the explanation of the employee or on expiry of the time-limit whichever is earlier or under special circumstances at the time of issuing the charge-sheet, the Manager shall appoint an Enquiry Officer or constitute an Enquiry Committee consisting of one or more than one person, other than from the Security Department....'
4. It is clear from the above provision in the Standing Order that the requirement is to appoint an Enquiry Officer who is not from the Security Department. There is no other prohibition about choice of the person to be appointed Enquiry Officer in the above provision. The reason for excluding a person belonging to the Security Department is obvious. Such a person who is in the Security Department may have some interest in the successful conclusion of the domestic inquiry against the delinquent employee. His exclusion, therefore, is to eliminate the likelihood of any bias. Such a provision cannot be construed to mean that a person who is not even an employee in any other department and being an outsider having no interest in the outcome of the domestic inquiry is also to be excluded. The view taken by the High Court is, therefore, untenable.'
28. In the present case, on a consideration of the rule and in the light of the three pronouncements of the Apex Court, if there is no bar then the employer could appoint a third party as an enquiry officer. But if there is a restriction, then the appointment of enquiry officer should be in conformity with the restriction. In the present case, even if the disciplinary authority after framing charges decided to appoint an enquiry officer, such enquiry officer could be a retired employee of a Public Sector Undertaking as well. In the light of the amended Rule 25 (2), the contention advanced by the petitioner fails and the point 'D' is answered in favour of the respondent and against the petitioner.
29. Taking up the next point, the appellate authority, in this case the Board of Directors rejected the appeal summarily and passed the order, which reads thus :-
'The Board of Directors of the company at their meeting held on 30.5.96 considered your appeal dated 14.3.96 and feel that there was no need for changing the decision of the Disciplinary Authority.'
30. In the present case, Rule 32 of the rules provides for an appeal as against the orders of the Disciplinary Authority to the Appellate Authority specified in the schedule. Sub-rule (2) of Rule 32 reads thus :-
'The appellate authority shall consider whether the findings are justified or whether the penalty is excessive or inadequate and pass appropriate orders within three months from the date of the appeal. The appellate authority may pass order confirming, enhancing, reducing or setting aside the penalty, or remitting the case to the authority, which imposed the penalty or to any other authority with such direction as it may deem fit in the circumstances of the case.'
Proviso to Rule 32 (2) enables the appellate authority to enhance the punishment after following the procedure. From a reading of the rule, it is clear that it is obligatory on the part of the appellate authority to consider the appeal, whether the findings are justified or whether the penalty is excessive or inadequate and take into consideration every aspect as an appellate authority.
31. In the present case, the petitioner has filed an appeal raising number of contentions and the appeal petition itself runs to 12 pages. One of the contentions being question of jurisdiction to initiate proceedings, illegal appointment of enquiry officer and with respect to the merits of the charges and the alleged misconduct. None of the contentions have been considered or entered the mind of the appellate authority. It is true that the Board is the Appellate Authority. That does not mean it need not pass a speaking order nor it could merely dispose of the appeal in a summary fashion by writing one line. In this respect this Court finds that the appellate authority has not disposed of the appeal in the manner required and as contemplated by the rules and the manner of disposal of the appeal would show that the appellate authority has not discharged the application by considering the proceedings of the enquiry as well as the grounds raised in the appeal.
32. In this respect, the decision of the Apex Court in R.P. BHAT VS. UNION OF INDIA reported in is being relied upon. In this respect, the Apex Court held thus :-
'4) The word 'consider' in Rule 27(2) implies 'due application of mind'. It is clear upon the terms of Rule 27(2) that the appellate authority is required to consider (1) whether the procedure laid down in the Rules has been complied with; and if not, whether such non-compliance has resulted in violation of any provisions of the Constitution or in failure of justice; (2) whether the findings of the disciplinary authority are warranted by the evidence on record; and (3) whether the penalty imposed is adequate; and thereafter pass orders confirming, enhancing etc. the penalty, or may remit back the case to the authority which imposed the same. Rule 27(2) casts a duty on the appellate authority to consider the relevant factors set forth in clauses (a), (b) and (c) thereof.
5) There is no indication in the impugned order that the Director General was satisfied as to whether the procedure laid down in the Rules had been complied with; and if not, whether such non-compliance had resulted in violation of any of the provisions of the Constitution or in failure of justice. We regret to find that the Director General has also not given any finding on the crucial question as to whether the findings of the disciplinary authority were warranted by the evidence on record. It seems that he only applied his mind to the requirement of clause (c) of Rule 27(2), viz. whether the penalty imposed was adequate or justified in the facts and circumstances of the present case. There being non-compliance with the requirements. of Rule 27(2) of the Rules, the impugned order passed by the Director General is liable to be set aside.'
Identical view has also been taken in A.L. KALRA VS. PROJECT & EQUIPMENT CORPORATION OF INDIA LTD., reported in . Following the same, this Court holds that the impugned order passed by the appellate authority is vitiated and illegal as the said authority has not acted as prescribed by the rule. Hence, Point 'E' is answered against the respondents and in favour of the petitioner.
33. The conclusion on the above points are more than sufficient to decide this writ petition. However, as contentions were advanced on merits of the charges, the same has to be considered.
34. The last of the contentions advanced by Mr. Ramasubramanian being that the findings of the enquiry officer is perverse, arbitrary and findings, on assumptions, the petitioner is found guilty of imputations other than those imputations, which form the basis of the charge. In APPAREL EXPORT PROMOTION COUNCIL VS. A.K. CHOPRA reported in , the scope of judicial review and interference in respect of the departmental enquiry and disciplinary proceedings was considered and the Apex Court held thus :-
'16. The High Court appears to have overlooked the settled position that in departmental proceedings, the disciplinary authority is the sole judge of facts and in case an appeal is presented to the appellate authority, the appellate authority has also the power/and jurisdiction to reappreciate the evidence and come to its own conclusion, on facts, being the sole fact-finding authorities. Once findings of fact, based on appreciation of evidence are recorded, the High Court in writ jurisdiction may not normally interfere with those factual findings unless it finds that the recorded findings were based either on no evidence or that the findings were wholly perverse and/or legally untenable. The adequacy or inadequacy of the evidence is not permitted to be canvassed before the High Court. Since the High Court does not sit as an appellate authority over the factual findings recorded during departmental proceedings, while exercising the power of judicial review, the High Court cannot, normally speaking, substitute its own conclusion, with regard to the guilt of the delinquent, for that of the departmental authorities. Even insofar as imposition of penalty or punishment is concerned, unless the punishment or penalty imposed by the disciplinary or the departmental appellate authority, is either impermissible or such that it shocks the conscience of the High Court, it should not normally substitute its own opinion and impose some other punishment or penalty. Both the learned Single Judge and the Division Bench of the High Court, it appears, ignored the well-settled principle that even though judicial review of administrative action must remain flexible and its dimension not closed, yet the court, in exercise of the power of judicial review, is not concerned with the correctness of the findings of fact on the basis of which the orders are made so long as those findings are reasonably supported by evidence and have been arrived at through proceedings which cannot be faulted with for procedural illegalities or irregularities which vitiate the process by which the decision was arrived at. Judicial review, it must be remembered, is directed not against the decision, but is confined to the examination of the decision-making process. Lord Hailsham in Chief Constable of the North Wales Police v. Evans1 observed:
'The purpose of judicial review is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according fair treatment, reaches, on a matter which it is authorized or enjoined by law to decide for itself, a conclusion which is correct in the eyes of the court.' 17) Judicial review, not being an appeal from a decision, but a review of the manner in which the decision was arrived at, the court, while exercising the power of judicial review, must remain conscious of the fact that if the decision has been arrived at by the administrative authority after following the principles established by law and the rules of natural justice and the individual has received a fair treatment to meet the case against him, the court cannot substitute its judgment for that of the administrative authority on a matter which fell squarely within the sphere of jurisdiction of that authority.
* * * * * * * 19) After a detailed review of the law on the subject, this Court, while dealing with the jurisdiction of the High Court or Tribunal to interfere with the disciplinary matters and punishment in Union of India v. Parma Nanda opined: (SCC p.189, para 27) '27. We must unequivocally state that the jurisdiction of the Tribunal to interfere with the disciplinary matters or punishment cannot be equated with an appellate jurisdiction. The Tribunal cannot interfere with the findings of the enquiry officer or competent authority where they are not arbitrary or utterly perverse. It is appropriate to remember that the power to impose penalty on a delinquent officer is conferred on the competent authority either by an Act of legislature or rules made under the proviso to Article 309 of the Constitution. If there has been an enquiry consistent with the rules and in accordance with principles of natural justice, what punishment would meet the ends of justice is a matter exclusively within the jurisdiction of the competent authority. If the penalty can lawfully be imposed and is imposed on the proved misconduct, the Tribunal has no power to substitute its own discretion for that of the authority.'
35. While administering caution for itself, this Court has to examine this contention since the scope of judicial review in respect of such matters are circumscribed and limited and this Court is not exercising powers of appellate authority, but it is a judicial review.
36. In the present case, on the very findings of the enquiry officer, it is rather hard to sustain the conclusion. In this context the enquiry officer has viewed thus :-
'7.22 To be fair to him, he may not have been dishonest suo moto. But events show that he participated in a dishonest deviation/manipulation or has been the accomplice who carried forward/promoted the dishonesty in the name of obeying superiors.
7.23 It is certainly true that it is not a function of the Production Department to issue gate pass. It is also equally true that Production Department does know there its products go and in what form. They may not handle the actual despatch though. Here again we come to reprocessing/recartoning. What was the material inside the recartoned box Were they strictly only reprocessed materials The defendant comes up with the answer that at times fresh production was given as replacement and on some other times value replacements. On these be called reprocessed material? Could he not have pointed out to higher authorities this dichotomy? Does he not know that the latter two categories are as amenable to taxes and duties as any other finished product and cannot be simple cartoned in the name of reprocessed material?
* * * * 7.27 I agree with the defendant's contention that he is not to be hauled up for any loss on account of excise duty and sales tax. Indeed his contentions about sales tax in his brief are in effect acceptable although he should have clearly indicated the nature of the products that had been recartoned to avoid any possible loss on excise duty. I would still give him the benefit of doubt since he was apparently acting under instructions of his superiors even if by simply misleading himself as to his own responsibility.
7.28 I also agree that he was not the ultimate authority to have sent out the material without gate pass. Technically he is absolved of it but the fact that he sent the materials without delivery notes, making them unaccounted makes him a party to that extent. There are some extenuating circumstances in his favour also :-
(i) For all the charges made against him, his contention that he was only obeying his superiors has been upheld to in certain extent by the charge sheet itself which says that he did it at the instance of senior officers. This dilutes the charge of dishonesty.
(ii) He was no doubt instrumental in sending the materials without delivery notes to the BC paper area but further checks could have been devised by the company unless it was a total management policy top down to send the different materials only in that manner. There was little evidence to conclude like that.
(iii) The money that could have been a loss to the company - most of it has apparently been recovered and as can be seen from Defence Exhibit 5. The loss to the company has been obviated. Ex post facto this would be a favour in favour of the defendant.'
Having recorded such findings, the disciplinary authority has in its final analysis held that the delinquent is guilty of dishonesty in connection with the business or property of the company, guilty of attempt at abutment, which amounts to misconduct and Rule 4.1 (3) of the Discipline and Appeal Rules. In respect of the 2nd charge, the enquiry authority has exonerated the delinquent official.
37. A perusal of the imputations and the charges framed would show that what was proceeded against the petitioner are for a different set of imputations. On this ground also this Court holds that there is not only non-application of mind, but also the conclusions of the enquiry officer cannot be sustained. Further, it may not be essential to answer this point since the substantial points have been answered in favour of the writ petitioner and against the respondents.
38. In the light of the above discussions, the points are answered as hereunder :-
'i) Point 'A' is answered in favour of the respondent and against the petitioner and this Court holds that the said contention deserves to be rejected ;
ii) Points 'B' and 'C' are answered in favour of the petitioner and against the respondents ;
iii) Point 'D' is answered in favour of the respondents and against the petitioner ;
iv) Point 'E' is answered in favour of the petitioner and against the respondents ;
v) Points 'F' and 'G' are answered in favour of the petitioner and against the respondents.'
39. In the result, this writ petition is allowed. The impugned proceedings of the respondents are quashed and there will be a direction to the respondents to consequently treat the petitioner as if he stands superannuated on 31.8.95 and the respondents are directed to pay all the terminal benefits payable on such retirement within twelve weeks from the date of communication of this order. Parties shall bear their respective costs.