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2015 SCC OnLine CAT 1222
Central Administrative Tribunal

Principal Bench, New Delhi
(BEFORE A.K. BHARDWAJ, MEMBER (J) AND V.N. GAUR, MEMBER (A))
A.K.S. Rathore Ex-Zonal General Manager National Small

Industries Corporation Limited R/o A-128, Sector-21, Noida-
201301, U.P … Applicant;
(By Advocate: Shri Amit Khemka with Shri Rishi Sehgal)
Versus
1. Union of India Through Secretary Ministry of Micro, Small &
Medium Enterprises (MSME) (Hereinafter referred to as M/o
MSME for brevity), Udyog Bhawan, New Delhi.
2. National Small Industries Corporation Limited (Hereinafter
referred to as NSIC for brevity) Though Chairman-cum-
Managing Director (A Government of India Enterprise) NSIC
Bhawan, Okhla Industrial Estate, Phase-III, New Delhi-110020
… Respondents.
(By Advocate: Shri I.S. Alag, Shri J.S. Lamba, Shri Rajesh Kumar and Shri Ahmed
Shehooz)
O.A. No. 3186/2012
Decided on February 2, 2015, [Order Reserved on: 22.01.2015]
ORDER
A.K. BHARDWAJ, MEMBER (J):— The applicant has filed the present OA under
Section 19 of the AT Act, 1985 praying therein:—
a) quash the order dated 19.07.2012, suspension order dated 02.03.2006, charge
sheet dated 27.12.2006 and the inquiry report dated 18.11.2010, being unjust,
illegal and being violative of principles of Natural Justice and Constitution of
India, and
b) direct the Respondents to reinstate the Applicant will full back
wages/remunerations/dues and all other service benefits including seniority and
promotion, and
c) that the present Application may be allowed along with the award of exemplary
costs in favour of the Appellants.
d) Any other order that this Hon'ble Tribunal may be deem fit and proper in the
facts and circumstances of the case and in the interest of justice in favour of the
Applicant and against the Respondents.
2. Mr. Amit Khemka, learned counsel for the applicant saliently contended:—
i) The Disciplinary Authority of the applicant was Chairman-cum-Managing Director
(CMD), thus the order of punishment passed by the Board of Directors (BOD) is
in disregard of the law declared by the Hon'ble Supreme Court in Chairman A.P.
State Electricity Board v. M. Kurmi Naidu, [(2006) 8 SCC 62] and in Surjit Ghosh
v. Chairman & Managing Director, United Commercial Bank, [(1995) 2 SCC 474].
ii) The order of penalty is non-speaking inasmuch as the BOD did not apply its mind
while passing the Resolution dated 04.11.2011.
iii) The Agenda as well as the Minutes of the meeting of BOD which form the basis
of order dated 19.07.2012 were never made available to the applicant.
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iv) Before giving its advice, the CVC did not even evaluate whether any vigilance
angle was clearly involved in the matter.
v) Initially the Respondent No. 2 had disagreed with the report of the Enquiry
Officer and referred the matter to CVC, but subsequently the same report was
acted upon.
vi) Before arriving at its conclusion, the Enquiry Officer did not consider the written
brief dated 20.09.2010 submitted by the applicant.
vii) The representation made by the applicant against the report of the Enquiry
officer was not taken into account by the BOD before imposing the penalty.
viii) When the applicant had raised several grounds in OA No. 1886/2012 and the
Respondent No. 2 was well aware of such grounds, the BOD before passing the
order of penalty did not take them into the account.
ix) Several representations made by the applicant before the impugned order was
passed have not been taken into account by the respondents.
x) The Charge Sheet issued to the applicant had been vetted by CBI, thus the same
was vitiated for the simple reason that it was not the independent decision of the
Disciplinary Authority to charge sheet the applicant.
xi) The first stage advice from CVC was obtained without calling for the stand of the
applicant in the matter and he was never apprised of the fact of obtaining the
advice.
xii) The charges against the applicant were quite nebulous.
xiii) Most of the documentary evidence adduced during the enquiry proceedings was
not authenticated by the concerned officers/officials.
xiv) There was no evidence to prove the charges against the applicant. The
applicant did not commit any misconduct.
xv) The charges against the applicant are stale and the proceedings instituted after
long delay are liable to be set aside on this ground alone.
xvi) The applicant was not supplied the relevant documents and the assistance of
defence helper, thus the principle of natural justice was violated.
3. Relying upon the (i) Narinder Mohan Arya v. United India Insurance Co. Ltd.,
(2006) 4 SCC 713, (ii) Roop Singh Negi v. Punjab National Bank, (2009) 2 SCC 570,
(iii) S.N. Mukherjee v. Union of India, (1990) 4 SCC 594 : AIR 1990 SC 1984, (iv) Raj
Kumar Mehrotra v. State of Bihar, (2005) 12 SCC 256, (v) K. Tata Babu v. The Board
of Management, District, 1996 (1) ALT 704, (vi) A.L. Kalara v. The Project &
Equipment Corporation of India Ltd., 1984 SCR (3) 646, (vii) R. Balakrishna v. Food
Corporation of India, (W.P. No. 20896/2003), (viii) Badrinath v. Govt. of Tamil Nadu,
(2000) 8 SCC 395 : AIR 2000 SC 3243, (ix) Union of India v. Gyan Chand Chattar,
2009 (8) SCALE 575, (x) State Bank of India v. D.C. Aggarwal, (1993) 1 SCC 13 : AIR
1993 SC 1197, (xi) V. Vellaswamy v. Inspector General of Police, (1981) 4 SCC 247 :
AIR 1982 SC 82, the learned counsel tried to further espouse:—
i) While exercising the power of judicial review, the Court has to see that sufficient
material have been brought on record to sustain the findings.
ii) The documentary evidence should be adduced in the manner, the same is
required to be adduced as per procedure.
iii) The administrative action must be supported by reasons.
iv) Sufficient reasons should be recorded for holding the charge as proved and the
same should not be held as proved on ipsi dixit of the Enquiry Officer or the
Disciplinary Authority.
v) The enquiries must be conducted bonafide and care must be taken to see that
the same may not become empty formality.
vi) If an officer is a witness of any of the evidence, which is the subject matter of
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the enquiry then in all fairness he should not be the Enquiry Officer.
vii) Though it may not be necessary to call for the representation of the concerned
employee on the 1st stage advice of the CVC but the delinquent should get an
opportunity to represent against the proposal of initiation of departmental
proceedings against him.
viii) When the Disciplinary Authority disagreed with the enquiry report, he should
have given an opportunity of hearing to the concerned employee.
ix) If the decision of an authority is under challenge before superior authority,
pending decision of such superior authority, any decision taken by the lower
authority would be nullity.
x) The refusal to disburse certain amount would not constitute any misconduct.
xi) The order of penalty based upon such material, which is not supplied to the
charged officer would be vitiated.
4. On the other hand Mr. Alag, learned counsel for Respondent No. 2 espoused:—
i) It is not correct that the Disciplinary Authority in the case of the applicant is not
the BOD. Vide communication dated 16.01.2012, the applicant was informed
that upon the recommendation of the BOD being the Disciplinary Authority, the
CVC had advised imposition of major penalty. Since on the recommendation of
the BOD, CVC examined the matter and gave its opinion, it cannot be said that
the BOD is not the Disciplinary Authority for the applicant. Further, in his
representation dated 20.01.2012, the applicant requested that the BOD is his
Disciplinary Authority. In view of the orders passed by this Tribunal in TA No.
1451/2009 and OA No. 1886/2012, the present OA is barred by res-judicata.
ii) The CVC had advised the NSIC to act as per C.D. Rules, thus the action taken by
the BOD is in consonance with the advice of CVC.
iii) The Minutes of the BOD have been placed on record by the applicant himself and
only after perusing the agenda and due deliberation, the BOD recommended
imposition of major penalty upon the applicant.
iv) In terms of Rule-16 of the National Small Industries Corporation (Control &
Appeal) Rules, 1968, the remedy available to applicant to prefer an appeal is not
vanished as the review preferred under Rule-23 can be dealt with as an appeal
only.
v) Once the applicant had commented upon the CVC advice, it does not lie in his
mouth that he was not aware of CVC advice.
vi) The enquiry was initiated after the report of the CBI and the time consumed in
conclusion of the enquiry proceedings is fully explainable. Further, the applicant,
who had approached this Tribunal against the Charge Sheet and enquiry
proceedings was himself responsible for the delay.
vii) In view of the judgment of Hon'ble Supreme Court in the case of Balbir Chand
v. Food Corporation of India Ltd., (1997) 3 SCC 371, the order of penalty cannot
be said to be vitiated even if it is passed by the authority superior to the
Disciplinary Authority and further in view of the judgment of Hon'ble High Court
of Judicature at Bombay in National Small Industries Corporation v. Uttamkumar
(Writ Petition No. 1739/2013), even when the penalty was found vitiated on
technical ground, the authority should be given opportunity to pass fresh order.
The relief prayed should not be granted.
5. We have heard the counsel for the parties and perused the record.
6. In terms of Order No. 3/58/SIC/VIG/2006 dated 02.03.2006 in the wake of
criminal proceedings against him as well as contemplation of disciplinary proceedings,
the applicant, herein, who was working as General Manager, NSIC Ltd., Zonal Office
(North-II), New Delhi was placed under suspension. He received the order under
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protest. Vide OM No. 3/58/SIC/VIG/2006 dated 27.12.2006, the applicant was

charged with the misconduct of:—
i) failure to use his delegated powers with regard to treating all the three associate
units namely M/s Morgan Tectronics Pvt. Ltd. (MTPL), M/s Pragya Overseas (P)
Ltd. (POPL) and M/s Shaloo Exports as a single account for the purpose of fixing
their limit as well as for sanction of funds under RMA Scheme, as required under
the guidelines/instructions of Corporation issued vide letter dated 11.05.1994;
ii) showing undue favours to the aforementioned units by repeatedly sanctioning
the funds for raw material assistance to them under the RMA Scheme of the
Corporation on the basis of Proforma invoices of little known firms without
obtaining any evidence of the actual delivery of the raw material against the said
Proforma invoices in utter disregard to the aforementioned guidelines;
iii) showing undue favours to M/s. MTPL and M/s. POPL by sanctioning of funds and
allowing the payment of same through cheques favouring Punjab & Sind Bank
a/c M/s. MTPL and Punjab & Sind Bank A/c M/s. POPL respectively for making
payments to the bank for retiring the documents covering imported raw material
under the RMA Scheme without insisting upon the party for having imported the
raw material and received of the same in the factory;
iv) showing undue favours to M/s MTPL by sanctioning the funds for RMA despite of
knowledge of bouncing of their cheques covering the interest charges, service
charges and repayments against loans, without keeping the financial interests of
the Corporation in mind;
v) showing undue favours to M/s MTPL and M/s POPL by sanctioning amounts under
RMA Scheme in excess of the value of securities available with the MSIC Ltd;
7. The salient allegation against the applicant was violation of the Scheme dated
11.05.1994. For easy reference the covering letter of the Scheme is reproduced below:
—
As per the deliberations held in the Annual Review Conference held on 29th & 30th
April, 1994, the Scheme of NSIC Financial Services is being launched at following
Centres:—
1) Head Office Delhi
2) Regional Office Bombay
3) Regional Office Ahmedabad
4) Regional Office, Bangalore
5) Branch office Goa
A copy of the Scheme containing details of each activity covered under the
Financial Services with the norms of eligibility, the procedure for granting
assistance, the rates of interest and service charges, delegation of powers, the
norms for securities and other relates issues is enclosed for your perusal to
enable you to have complete understanding of the same.
The specimen of Application Form to be used for seeking Financial Assistance by
the units and the Appraisal Note to be prepared by NSIC before sanction of the
facility are also enclosed with the Scheme. Please go through the scheme
carefully and in case of any doubt or clarifications, the same be informed to us. A
short orientation programme is also intended to be organized shortly with a view
to familiarise all the concerned Officers about the details of the Scheme.
Proposals under the Financial Services will be dealt with and considered
strictly in terms of the guidelines contained in the enclosed scheme.
Kindly acknowledge receipt.
8. The Enquiry Officer found the aforementioned charges-I & IV as not established
and Charges-II & III as established except to the extent specified in para-20 of the
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report and Charge-V as established subject to modification conceded by PW-5 in Para-

31 of the report. The findings of the report read thus:—
35. Findings:
Articles-I-The circulars at Exb. M1 and M2 are not shown to have been extended
to Regional Office Noida and so the charge that instructions therein were
disregarded cannot be upheld. The assistance was given to the units under the
other scheme against LC/BG. The charge does not sustain accordingly.
Article-I & III-Do not sustain except to the extent specified in para 20.
Article-IV-is not established.
Article-V-is established subject to modification conceded by PW5 in para 31.
(A.K. Garde)
Inquiring Authority.
9. After making the copy of the enquiry report available to the applicant, the BOD
passed the order dated 11.07.2005 imposing the penalty of compulsorily retirement
upon him. In the wake of the said order, the applicant could withdraw the OA No.
1886/2012 with liberty to file fresh OA impugning the order of compulsorily
retirement. Thus, he filed the present OA.
10. The first and foremost argument put forth by the learned counsel for the
applicant is that the order of penalty being passed by the Appellate Authority is ex-
facie violative of principles of natural justice, as in the wake, the right of the applicant
to prefer an appeal was vitiated. At the same time, Mr. I.S. Alag also raised a
preliminary submission that the OA is barred by res judicata. In TA No. 1451/2009,
the applicant had questioned his reversion to the post of General Manager and the
order of suspension dated 02.03.2006. During the hearing, the learned counsel for the
applicant did not press the argument regarding the suspension and the only issue
considered by the Tribunal pertained to the rejection of the applicant by the DPC for
promotion. Para-1 of the order dated 25.03.2010 read thus:—
The applicant (presently under suspension) was promoted as Chief General Manager
(CGM) in the National Small Industries Corporation Ltd (NSIC), the Respondent
herein, on ad hoc basis on 6.09.2001. Meeting of the Departmental Promotion
Committee (DPC) was held on 7.07.2003 for selection of CGM on regular basis. The
Applicant was not found fit for promotion by the DPC and he was reverted to the
post of General Manager (GM) by order dated 2.09.2003. Another DPC, which met
on 10.12.2005, also overlooked the Applicant for promotion to the post of CGM. The
Applicant was placed under suspension by order dated 2.03.2006 in contemplation
of criminal and disciplinary proceeding against the Applicant. The Applicant had
approached the Honourable Delhi High Court challenging his reversion to the post of
GM from the post of CGM by order dated 2.09.2003 and the order of suspension
dated 2.03.2006. The Writ Petition was transferred to this Tribunal by the
Honourable Delhi High Court. The learned counsel for the Applicant has not pressed
the argument regarding the Applicant's suspension. We are, therefore, considering
only the aspects relating to the rejection of the Applicant by the DPC for promotion
by considering him unfit on the basis of the gradings in the ACRs.
11. Further the OA No. 1886/2012 filed by him was withdrawn by the applicant
with liberty to file a fresh OA. The order dated 24.07.2012, passed in the OA, read
thus:—
Shri Rishi Sehgal holding brief for Sh. Amit Khemka, learned counsel for applicant
says that since the enquiry has already been completed and in the absence of any
stay order, he has been compulsorily retired, he intends to withdraw this OA. As far
as this request is concerned, there is no objection from the other side.
2. In view of the above, this OA stands dismissed having been withdrawn. On the
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request of learned counsel for applicant, it is however made clear that the applicant
may file a fresh OA impugning the order retiring him compulsorily, if he is so
advised.
12. As far as the challenge to suspension order put forth by the applicant in the
present OA is concerned since the applicant had raised the issue in TA No. 1451/2009
and had preferred not to press the same in the absence of their being liberty to
challenge the suspension order in fresh proceedings, the prayer to quash the
suspension order made in the present proceedings would be barred by res judicata. In
this regard we may place reliance upon the judgment of Hon'ble Supreme Court in
Sarguja Transport Service v. State Transport Appellate Tribunal, M.P. Gwalior, (1987)
1 SCC 5 wherein it has been held thus:—
8. The question for our consideration is whether it would or would not advance the
cause of justice if the principle underlying R. 1 of O. XXIII of the Code is adopted in
respect of writ petitions filed under Art. 226/227 of the Constitution also. It is
common knowledge that very often after a writ petition is heard for some time
when the petitioner or his counsel finds that the Court is not likely to pass an order
admitting the petition, request is made by the petitioner or by his counsel, to
permit the petitioner to withdraw from the writ petition without seeking permission
to institute a fresh writ petition. A Court which is unwilling to admit the petition
would not ordinarily grant liberty to file a fresh petition while it may just agree to
permit the withdrawal of the petition. It is plain that when once a writ petition filed
in a High Court is withdrawn by the petitioner himself he is precluded from filing an
appeal against the order passed in the writ petition because he cannot be
considered as a party aggrieved by the order passed by the High Court. He may as
stated in Daryao v. State of U.P., (1962) SCR 574: (AIR 1961 SC 1457) in a case
involving the question of enforcement of fundamental rights file a petition before
the Supreme Court under Art. 32 of the Constitution because in such a case there
has been no decision on the merits by the High Court. The relevant observation of
this Court in Daryao's case (supra) is to be found at page 593 and it is as follows:
“If the petition is dismissed as withdrawn it cannot be a bar to a subsequent
petition under Art. 32, because in such a case there has been no decision on the
merits by the Court. We wish to make it clear that the conclusions thus reached
by us are confined only to the point of res judicata which has been argued as a
preliminary issue in these writ petitions and no other.”
9. The point for consideration is whether a petitioner after withdrawing a writ
petition filed by him in the High Court under Art. 226 of the Constitution of India
without the permission to institute a fresh petition can file a fresh writ petition in
the High Court under that Article. On this point the decision in Daryao's case
(supra) is of no assistance. But we are of the view that the principle underlying R. 1
of O. XXIII of the Code should be extended in the interests of administration of
justice to cases of withdrawal of writ petition also, not on the ground of res judicata
but on the ground of public policy as explained above. It would also discourage the
litigant from indulging in bench-hunting tactics. In any event there is no justifiable
reason in such a case to permit a petitioner to invoke the extraordinary jurisdiction
of the High Court under Art. 226 of the Constitution once again. While the
withdrawal of a writ petition filed in High Court without permission to file a fresh
writ petition may not bar other remedies like a suit or a petition under Art. 32 of the
Constitution since such withdrawal does not amount to res judicata, the remedy
under Art. 226 of the Constitution should be deemed to have been abandoned by
the petitioner in respect of the cause of action relied on in the writ petition when he
withdraws it without such permission. In the instant case the High Court was right
in holding that a fresh writ petition was not maintainable before it in respect of the
same subject-matter since the earlier writ petition had been withdrawn without
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permission to file a fresh petition. We, however, make it clear that whatever we
have stated in this order may not be considered as being applicable to a writ
petition involving the personal liberty of an individual in which the petitioner prays
for the issue of a writ in the nature of habeas corpus or seeks to enforce the
fundamental right guaranteed under Art. 21 of the Constitution since such a case
stand on a different footing altogether. We, however, leave this question open.
13. Nevertheless as well as the challenge to the Charge Sheet, Enquiry Report and
the Penalty Order is concerned, the same was not the issue involved in TA No.
1451/2009 and in OA No. 1886/2012, wherein the applicant was given liberty to file a
fresh OA impugning the order of penalty. Thus, the applicant is at liberty to question
the penalty order on all available grounds including those of wary in issuance of charge
sheet and enquiry proceedings. Thus, when the challenge to order of suspension is
rejected as barred by res judicata, the plea in this regard raised by the learned counsel
for the applicant regarding the challenge to the charge sheet, enquiry report and
penalty order is rejected.
14. As has been noticed hereinabove, the salient plea put forth by the counsel for
the applicant is that the BOD was his Appellate Authority, thus the order passed by
the Disciplinary Authority is vitiated. We find from Circular No. SIC/Pers. 1/10(10)/08
dated 03.10.2008 that up to the level of General Manager, i.e., the post held by the
applicant at the time of issuance of Charge-Sheet, the CMD was the Disciplinary
Authority and the appeal was maintainable before BOD. For easy reference, the
Circular is reproduced below:—
CIRCULAR
It has been decided with the approval of Competent Authority to amend/add
following clauses to existing NSIC Control & Appeal Rules, 1968 with immediate
effect:
Amendment/Addition in Rule 6(1) & Rule 6(2)
Subject Matter
Designation
Authorities to exercise powers (Also to read with Note 1&2 below)
Authority Competent to issue Charge Sheet and to appoint Inquiry Officer to
conduct enquiries
Authority Competent to impose Minor Penalty
Authority competent to impose Major Penalty
a) Other than compulsory/Retirement/Removal/Dismissal from service
b) For Compulsory Retirement/Removal/Dismissal from service Upto the level of
D.O. & equivalent
Upto the level of Chief Manager
Upto the level of General Manager
Upto the level of D.O. & equivalent
Upto the level of D.O. and equivalent
Head of Branch/NTSEC for officials posted under their control.
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-ZGM/Incharge of Zone
-Head of NTSC
-Head of Deptt. not below the rank of DGM at Head Office
For officials posted under their control
Functional Director
-Head of NTSC
Functional Director
-Head of NTSC
Functional Director
-Head of NTSC
Functional Director
C.M.D.
NOTE: 1. Authority Competent means officer who should be atleast two steps above
the Charged Officer.
2. The cases involving Major Penalty of Compulsory Retirement/Removal/Dismissal
from service, will be referred to Appointing Authority, in case the authorities
specified above are not Appointing Authority.
Amendment/Addition in Rules 4(1) relating to Suspension
Level of Officers
Authority Competent to issue Suspension Order
Upto the level of D.G.M.
-Head of NTSC
Functional Director
Amendment/Addition in Rule 18 Appellate Authorities
The next higher authority to the Disciplinary Authorities would act as Appellate
Authority as specified below
Subject matter
Extent of power delegated
Appellate Authority
Appellate Authority (Also to read with Note below)
Appellate Authority in the matter of other than Compulsory
Retirement/Removal/Dismissal from service
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-Head of NTSC
Functional Director
C.M.D.
--------
--------
--------
---------
Appellate Authority in the matter of Compulsory Retirement/Removal/Dismissal
from service
Upto the level of Chief Manager/Chief Manager (A/cs)
-----------
------------
-----------
Functional Director
C.M.D.
Board of Directors
NOTE:** Provided that the authorities mentioned above are one level above the
appointing authorities.
15. Merely because the advice of CVC was obtained by the BOD, it cannot be held
that the Board became the Disciplinary Authority for the applicant. Further in the
representation dated 20.01.2012 made by the applicant with reference to CVO's letter
No. 3/58/SIC/VIG/2006 dated 16.01.2012, he specifically espoused that the
Disciplinary Authority for the cadre of General Manager is the CMD of NSIC. Para-11 of
the representation read thus:—
11. In view of the fact that the Disciplinary Authority & Appointment Authority for
the cadre of GM is the CMD of NSIC. What has entrusted the CMD for passing on the
responsibility to the BOD particularly for deciding the disciplinary action as major
penalty against the undersigned GM when till now all the actions in matters of
undersigned were being taken by the CMD only.
16. Merely because the review preferred by the Appellate Authority could be
decided as appeal, it cannot be held that the imposition of penalty by the Appellate
Authority has not caused any prejudice to applicant, as the disposal of appeal by a
different and superior authority and the disposal of review by the same authority
which passed the order under review cannot be placed on identical footings. When in
disposal of appeal by the superior authority not only the mind of a different body or
authority is applied but the scope of fair and open examination of the order under
appeal is much broader, the scope of review of an order by the same authority may be
by applying the yardsticks as applicable to appeal would still be very limited. It may
be one of the arguments that once it is the Appellate Authority, which has to finally
examine the correctness of the order of the Disciplinary Authority, even if the penalty
order was passed by the Appellate Authority, no prejudice can be said to be caused to
the charged official, the same may not be acceptable for the simple reason that the
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Disciplinary Authority which is in better position to appreciate the work and conduct of
an employee subject to its direct disciplinary control may take apt decision regarding
imposition of the penalty. The Appellate Authority, which is comparatively distant from
the day to day work and affair of the charged officer may not be so equipped to take
decision regarding imposition of penalty as the Disciplinary Authority having direct
control over the work and conduct is equipped. Besides once the law provides for an
opportunity to an employee to test the order of Disciplinary Authority before the
Appellate Authority, such remedy cannot be taken away by imposition of penalty by
the Appellate Authority.
17. In Surjit Ghosh v. Chairman & Managing Director, United Commercial Bank,
(1995) 2 SCC 474, the Hon'ble Supreme Court ruled that when the authority higher
than the Disciplinary Authority imposes the punishment, the order of punishment
suffers from no illegality when no appeal is provided, but when an appeal is provided
to the higher authority concerned against the order of 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 and in such circumstances the penalty order has to be
held as suffering from an inherent defect. The relevant extract of the judgment is
reproduced below:—
6. The respondent-Bank in its submission contended that although it is true that
the Deputy General Manager had acted as the disciplinary authority when he was in
fact named under the Regulations as an appellate authority, no prejudice is caused
to the appellant because the Deputy General Manager is higher in rank than the
disciplinary authority, viz., the Divisional Manager/AGM [Personnel]. According to
the Bank, it should be held that when the order of punishment is passed by a
higher authority, no appeal is available under the Regulations as it is not necessary
to provide for the same. It was also contended that there is no right to appeal
unless it is provided under the Rules or Regulations. Although the argument looks
attractive at first sight, its weakness lies in the fact that it tries to place the
Rules/Regulations which provide no appeal on par with the Rules/Regulations where
appeal is provided. 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. An employee cannot be
deprived of his substantive right. What is further, when there is a provision of
appeal against the order of the disciplinary authority and when the appellate or the
higher authority against whose order there is no appeal, exercises the powers of the
disciplinary authority in a given case, it results in discrimination against the
employee concerned. This is particularly so when there are no guidelines in the
Rules/Regulations as to when the higher authority or the appellate authority should
exercise the powers of the disciplinary authority 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 favour 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.
7. The result, therefore, is that the present order of dismissal suffers from an
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inherent defect and has to be set aside.

18. As far as the judgment of the Hon'ble Supreme Court in Balbir Chand (supra)
relied upon by the learned counsel for the applicant is concerned, in the said case also
the Hon'ble Supreme Court ruled that when a penalty order is passed by the Appellate
Authority, the same has to be held vitiated but if the authority which passed the order
is only superior to the Disciplinary Authority or Appellate Authority, no infirmity can be
found in the order. Thus, the view taken in the case of Balbir Chand (supra) is in no
manner different from the one taken in Surjit Ghosh (supra). For easy reference Para-3
of the judgment in the case of Balbir Chand (supra) is reproduced below:—
3. The learned counsel for the petitioner has raised the contention that since the
petitioner was required to be dismissed by the disciplinary authority, namely, Zonal
Manager, who alone is competent to remove him, the order of dismissal passed by
the Managing Director is bad in law. In support thereof, he placed reliance on a
judgment of this Court in Surjit Ghosh v. Chairman & Managing Director, United
Commercial Bank, (1995) 2 SCC 474 : AIR 1995 SC 1053. It is an admitted
position that as a joint enquiry was conducted against all the delinquent officials,
the highest in the hierarchy of competent authority who could take disciplinary
action against the delinquents was none other than the Managing Director of the
Corporation. In normal circumstances where the Managing Director being the
appellate authority should not pass the order of punishment so as to enable the
delinquent employee to avail of right of appeal. It is now 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.
In the judgment relied on by the counsel, it would appear that in the Rules, officer
lower in hierarchy was the disciplinary authority but the appellate authority had
passed the order removing the officer from service. Thereby, appellate remedy
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 to consider his case 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. In this case, a right of second
appeal/revision also was provided to the Board. In fact, appeal was preferred to the
Board. The Board elaborately considered the matter through the Chairman. It is not
violative of Article 14 of the Constitution.
19. In the present case admittedly the penalty order has been passed by the
Appellate Authority and the applicant is deprived of his substantive right to prefer the
appeal. Thus, the same is liable to be quashed and set aside and the matter needs to
be remitted back to the Disciplinary Authority. Since the penalty order is not found
sustainable on the ground of being passed by the Appellate Authority, we deem it
appropriate to not examine the other grounds taken by the applicant.
20. In view of the judgment of Hon'ble High Court of Judicature at Bombay passed
in W.P. No. 1739/2013 (supra) since the order of penalty cannot be found sustainable
only on technical ground, the applicant cannot be held entitled to any consequential
benefits. For easy reference Para-5, 6 & 7 of the order is reproduced below:—
5. As we have noted above, the Central Administrative Tribunal in the impugned
judgment has found that the Disciplinary Authority has not agreed with the findings
of the Enquiry Officer. The Disciplinary Authority has right to differ with the Enquiry
Officer, but then it has to record its reasons therefor and a show cause notice is
-----------------------------------------------------------------------------------------------------------------------------------------------------------
required to be served on the delinquent and he is needed to be given an

opportunity. Thereafter only, the Disciplinary Authority can find out correctness of
the findings recorded by the Enquiry Officer and relevance of those findings qua the
charges as levelled. The afore-said procedure is not followed in the instant matter.
6. It is settled law that merely because the enquiry is found to be vitiated, relief
cannot be given in all cases. The enquiry needs to be started again from the stage
at which the defect crept in. Here we find that the defect has cropped up at the
stage of consideration of Enquiry Report by the Disciplinary Authority. Hence, we
direct the Disciplinary Authority to serve proper show cause notice upon the present
respondent calling upon him to submit his explanation on its views about the
findings recorded by the Enquiry Officer and after giving him an opportunity to
submit his explanation on the same, to proceed further in accordance with law.
7. The show cause notice, accordingly, shall be served upon the respondent within a
period of six weeks from today. The respondent shall submit his reply to it within a
further period of three weeks. The Disciplinary Authority shall, thereafter, pass
appropriate final orders within a further period of three weeks. If the orders of
punishment of compulsory retirement are again passed, the said order shall relate
back to the date on which the original order of punishment has been passed i.e.
7.9.2007. In other words, the doctrine of relation back shall come into force in that
event.
21. Thus, the order of penalty of compulsory retirement imposed upon the applicant
is quashed. The matter is remitted back to the Disciplinary Authority, i.e., CMD and
NISC to take appropriate decision after due application of mind. If the applicant so
chooses to do so, it will be open to him to put forth all the grounds available to him
before the Disciplinary Authority by way of written submissions within one week. Such
written submissions, if any made by the applicant to the Disciplinary Authority would
be examined by it while taking the final decision. The treatment of intervening period
would abide by the decision required to be taken by the Disciplinary Authority. In view
of the aforementioned order passed by the High Court, in the event, the order of
imposition of penalty of compulsory retirement is again passed by the Disciplinary
Authority, the same would relate back to the date of the order of punishment under
challenge. No costs.
———
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SCC Online Web Edition, © 2022 EBC Publishing Pvt. Ltd.

Page 1 Thursday, December 15, 2022

2015 SCC OnLine CAT 1222

Central Administrative Tribunal

A.K.S. Rathore Ex-Zonal General Manager National Small

protest. Vide OM No. 3/58/SIC/VIG/2006 dated 27.12.2006, the applicant was

report and Charge-V as established subject to modification conceded by PW-5 in Para-

Upto the level of D.O. & equivalent

inherent defect and has to be set aside.

required to be served on the delinquent and he is needed to be given an

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