Unless Specifically Provided In Statue, Employer Cannot Initiate/Continue Disciplinary Proceedings Against Retired Employee: Allahabad High Court

The Allahabad High Court has held that unless it has been specifically vested with the jurisdiction under a statue, a disciplinary authority of the employer cannot initiate or continue pending disciplinary proceedings against an employee after his superannuation.

“Some regulations invest employer with powers to initiate proceedings against their employees post retirement up to a certain period of time, of course, with permission of some higher authority. It is, thus, only by dint of statute that the employer can enjoy extended disciplinary jurisdiction over his retired employee; not otherwise,” held Justice J.J. Munir.

The Court relied on the decision of the Supreme Court in Dev Prakash Tewari v. Uttar Pradesh Cooperative Institutional Service Board, Lucknow and others, where the initial order of the disciplinary authority was quashed by the Court and fresh inquiry was directed. During the fresh proceedings, the employee had superannuated. The Supreme Court had held that no disciplinary proceedings could continue against the retired employee as there was no jurisdiction vested in the authorities to continue such proceedings post retirement of the employee.

Factual Background

Petitioner was a Senior Warehouse Superintendent with the U.P. State Warehousing Corporation. In 2005, disciplinary proceedings were initiated against him on 5 charges. Petitioner submitted a reply denying all charges. In the inquiry report, the petitioner was found guilty of all charges. Petitioner retired on attaining the age of superannuation on 31st July, 2009, however, no final orders were passed in the pending disciplinary proceedings.

In May, 2010, order was passed by the Managing Director of the Corporation holding the total loss occasioned to the Corporation on account of misfeasance charged against the petitioner and three other employees in the sum of Rs.25,21,171.38. Petitioner was held liable to pay Rs.12,60,586.19 from his post retirement benefits and other assets. It was also directed that other dues, the sum of money payable to petitioner for four increments earned between 1st March, 2006 to 1st March, 2009, would be adjusted.

Petitioner filed an appeal before the Board of Directors of the Corporation against the order of the Disciplinary Authority on grounds that the authority had no jurisdiction to pass an order against a retired employee. Since petitioner was not informed about the status of the appeal for a period of 9 years, he approached the writ court seeking quashing of the orders.

High Court Verdict

The Court observed that the petitioner's appeal was kept pending for almost 9 years before rejecting it. Since the appeal was rejected the Court proceeded to decide the case on its merits.

However, it was observed that “Departmental remedies are meant to be remedies of convenience; not inconvenience or a trap for the indefinite postponement of determination of an employee's rights.”

The primary issue before the Court was whether pending disciplinary proceedings can be continued against a retired employee and whether any order can be passed punishing such employee.

The Court held that according to the general principle, once the employer-employee relationship ends on employees retirement, the jurisdiction of the disciplinary authority also ends. Employer ceases to have any authority over the employee upon his superannuation.

The Court further held that relationship between employer-employee in government establishments, like the respondent-Corporation are generally governed by statutory rules and not by contracts. In case of the petitioner, his service was governed by the Regulations framed by the Corporation in exercise of powers under Section 42 of the Warehousing Corporations Act, 1962.

“ If these Service Rules were to provide in terms akin to Regulation 351-A of the Civil Service Regulations, which permit the employer to hold/ continue pending disciplinary proceedings, after the employee's retirement and impose penalties, it would have been a different matter. A provision of that kind in the Regulations would then, by fiction of law, extend the employer's disciplinary jurisdiction over a retired employee, against whom proceedings were initiated prior to his retirement.”

The Court held that disciplinary inquiry can be extended post retirement of employee only if provided in the statute governing his service conditions.

The Court referred to Rishi Pal Singh v. State of U.P. and another wherein the Allahabad High Court had held that “no provision has been pointed out to be available under the U.P. State Warehousing Corporation Staff Regulation, 1961, that may permit the Corporation to proceed to hold disciplinary proceedings and impose any penalty on its employees governed by the aforesaid Regulations under the same after retirement. There is no such provision pari materia with Regulation 351-A of the Civil Services Regulation.”

Relying on the decision of Supreme Court in Dev Prakash Tewari v. Uttar Pradesh Cooperative Institutional Service Board, Lucknow and others, the Court held there is no provision in the Regulations framed by the Corporation which enable such disciplinary action after retirement of the employee.

Accordingly, the order of the Managing Director imposing punishment and the subsequent order rejection of petitioner's appeal were quashed.

Case Title: Mahendra Nath Sharma vs. State of U.P. and others 2024 LiveLaw (AB) 65 [WRIT - A No. - 4338 of 2019]

Case citation: 2024 LiveLaw (AB) 65

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