2011 (4) TMI 1216 - SC - Indian Laws

Supreme Court sets aside bias findings, orders fresh disciplinary proceedings within six months.

The Supreme Court allowed the appeal, setting aside the findings of bias and incompetence of the CMD to initiate disciplinary proceedings. The court ... Quashing of punishment order of dismissal from service as well as the disciplinary proceeding against respondent no.1 (hereinafter called the delinquent), giving liberty to the present appellants to initiate the proceedings afresh, if the disciplinary authority so desired Held that:- The relief sought by the delinquent that the appellants be directed to pay the arrears of back wages from the date of first termination order till date, cannot be entertained and is hereby rejected. In case the appellants choose to hold a fresh inquiry, they are bound to reinstate the delinquent and, in case, he is put under suspension, he shall be entitled for subsistence allowance till the conclusion of the enquiry. All other entitlements would be determined by the disciplinary authority as explained hereinabove after the conclusion of the enquiry. With these observations, the appeal stands disposed of. Issues Involved:1. Competence to initiate disciplinary proceedings.2. Compliance with court orders in disciplinary proceedings.3. Validity of ex-parte proceedings.4. Allegations of bias and malice in disciplinary actions.5. Entitlement to back wages and reinstatement.Issue-wise Detailed Analysis:1. Competence to Initiate Disciplinary Proceedings:The primary issue was whether the CMD of Eastern Coalfields Limited (ECL) was competent to initiate disciplinary proceedings against the delinquent, an officer in E-2 grade. The statutory rules, specifically Coal India Executives' Conduct Discipline and Appeal Rules, 1978, were examined. Rule 28.3 and the Schedule under Rule 27 indicated that while the CMD, CIL, was the only authority to impose major penalties, the CMD of the concerned subsidiary company, such as ECL, could initiate disciplinary proceedings. The court concluded that the High Court erred in holding that the CMD, ECL, was not competent to initiate the proceedings.2. Compliance with Court Orders in Disciplinary Proceedings:The High Court had previously quashed the dismissal order and allowed for de-novo proceedings. The court clarified that de-novo proceedings required the issuance of a fresh charge sheet, which was not done in this case. The purported revival of proceedings by the CMD, ECL, was deemed insufficient as it lacked a proper and positive order from the disciplinary authority. The court emphasized that the initiation of fresh proceedings without a new charge sheet was impermissible.3. Validity of Ex-parte Proceedings:The delinquent did not participate in the inquiry or respond to the second show-cause notice. The court held that the notices sent by registered post carried a presumption of receipt under Section 27 of the General Clauses Act, 1897, and Section 114 Illustration (f) of the Evidence Act, 1872. The ex-parte proceedings were justified as the delinquent failed to appear despite notice. The court criticized the delinquent for adopting a belligerent attitude and prolonging the litigation on technical grounds.4. Allegations of Bias and Malice in Disciplinary Actions:The High Court had found that the disciplinary authority acted with a pre-determined mind to punish the delinquent. However, the Supreme Court found no material evidence to substantiate the allegations of bias or malice. The court reiterated that allegations of mala fides require strong and convincing evidence, which was lacking in this case. The finding of bias by the High Court was set aside as it was based on no evidence.5. Entitlement to Back Wages and Reinstatement:The delinquent sought reinstatement and payment of arrears of salary. The court held that the principle of 'no work - no pay' applied, especially since the delinquent was gainfully employed during the period in question. The court ruled that the question of back wages should be determined by the disciplinary authority after the conclusion of a fresh inquiry. The court directed that if a fresh inquiry was initiated, the delinquent should be reinstated and could be put under suspension, entitling him to subsistence allowance as per service rules.Conclusion:The appeal was allowed to the extent that the findings of the High Court regarding malice and the incompetence of CMD, ECL, to initiate proceedings were set aside. The appellants were given the liberty to initiate fresh disciplinary proceedings by issuing a new charge sheet and concluding the inquiry within six months. The delinquent's request for back wages was rejected, and any entitlements were to be determined after the fresh inquiry.