Undue Leniency In Disciplinary Proceedings Compromises Discipline In Public Service: Kerala HC Upholds Dismissal Of Employee For Misappropriation

Considering the facts of the case, the Division Bench of Justice A.Muhamed Mustaque and Justice P. Krishna Kumar stated that the punishment of dismissal from service was proportionate to the offences committed by the petitioner for misappropriation of money by manipulating sales records in the Kerala State Beverages Corporation (KSBC).

“While disciplinary actions seriously affect the individual rights of the employee, if undue leniency is shown, it would compromise the essential discipline required in the public service and ultimately undermine the very administrative system. The governing principles in disciplinary actions aim to strike a balance between two key objectives: affording the employees a fair opportunity to defend their innocence and ensuring that justice is served to the employer as well for maintaining discipline within the public service and the administrative systems.”

The petitioner, an Assistant Grade II in the Kerala Public Service Commission was imposed with punishment of dismissal from service for misappropriation of money by falsifying sales records during his deputation in the Kerala State Beverages Corporation.

A criminal case was also registered against the Petitioner under Sections 409 (criminal breach of trust by public servant), 468 (forgery for cheating) and 471 (using as genuine a forged document) of the IPC.

The petitioner submitted that disciplinary action was vitiated for an error of law and violates principles of natural justice. It was stated that the memo of charges was vague and imprecise with bald allegations.

The petitioner alleged that an enquiry officer was appointed even before considering his reply to the charge memo. It was alleged that the entire disciplinary proceedings were over in a single day by flouting all mandatory procedural requirements. It was further alleged that the disciplinary authority accepted the enquiry report without hearing the petitioner. He alleged that the disciplinary proceedings were completed in a hasty manner without giving him an opportunity to defend himself.

Relying upon the Apex Court decision in State Bank of Patiala and Others v. S.K.Sharma (1996) and a catena of other decisions, the Court stated that punishment imposed upon an employee after disciplinary enquiry should not be set aside lightly for every violation of natural justice or statutory rules. It stated that the Tribunal or Court must assess whether a substantial statutory rule was not complied with while carrying out a disciplinary enquiry to cause prejudice.

In the facts of the case, the Court noted that the charge memo provided reasonable details regarding misappropriation. The Court stated that even in criminal cases, Higher Courts would not normally interfere with lower court findings when a trial was conducted without framing a charge or due to errors or omissions in charge framing unless there is a failure of justice.

Court added, “How the judicial proceedings of a criminal court are saved from mere error or irregularity (except in cases where it resulted in failure of justice or prejudice to the accused), the disciplinary actions are also unassailable for mere error or irregularities, unless it resulted in prejudice/failure of justice to the delinquent.”

The Court further observed that none of the allegations raised by the petitioner has caused any prejudice to him, and was in compliance with the decision in State Bank of Patiala (supra).

Further, the Court by relying upon the Managing Director, ECIL v. B.Karunakar (1993), stated that Courts or Tribunal must not mechanically set order of punishment on the ground that the copy of the report of the enquiry officer was not given to the employee for affording him an opportunity of hearing. It further stated that if providing such an opportunity would not have changed the ultimate finding and punishment, it should not impact the disciplinary proceedings.

The court clarified thus, “If the disciplinary authority, rather than providing the opportunity to respond before accepting the enquiry officer's findings, proceeds directly to issue a show-cause notice on the proposed punishment after serving a copy of the inquiry report, and subsequently imposes a punishment, the procedure is irregular. However, the Court or Tribunal should not set aside the punishment solely on this ground. Instead, it should examine whether the irregular procedure actually caused prejudice to the employee, considering the specific facts and circumstances of the case. “

The Court further stated that Courts or Tribunals must assess whether substantive or procedural resulted in disciplinary actions. It stated that substantive provisions require compliance, whereas, procedural violations have to be examined to determine whether they prejudiced the employee's ability to defend himself. The court added that an order of disciplinary authority can be set aside if prejudice is found.

However, the Court emphasised that an employee must receive a fair hearing.

Court stated “The ultimate test is whether the employee received a fair hearing. A fair hearing necessitates that the accused be informed of the charges and supporting allegations, giving him a chance to deny guilt and establish innocence. He must also be permitted to defend himself by cross-examining opposing witnesses and presenting his own testimony or witnesses.”

The Court also stated that at the conclusion of the enquiry, the disciplinary authority must provide copy of the enquiry report if the authority and the inquiry officer are not the same, before imposing punishment upon him.

In the facts of the case, the Court noted that the Petitioner's reply against the findings in the enquiry report was considered and that punishment was imposed only after that.

The Court further noted that the KSBC found that the Petitioner has caused manipulations in registers and huge shortfall in the stocks. It stated that both the inquiry authority and disciplinary authority found that the petitioner was guilty.

As such, the Court dismissed the original petition.

Counsel for Petitioner: Advocates A.Jayasankar, Manu Govind

Counsel for Respondent: Standing Counsel P C Sasidharan

Case Title: P N Saji v Kerala Public Service Commission

Case No: OP(KAT) NO. 439 OF 2020

Citation: 2025 LiveLaw (Ker) 69

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