Disciplinary power and de novo enquiry rules require fresh initiation; mala fides need evidence, and back wages are not automatic.

Where service rules allocate disciplinary power by grade and posting, the CMD of a subsidiary company may be competent to initiate proceedings against an executive, even if major penalties rest elsewhere. A de novo enquiry wipes out the earlier charge-sheet and requires fresh, valid initiation by the competent authority; revival on the old charge-sheet is invalid. Allegations of mala fides must rest on specific pleadings and cogent material, and a bare assertion of bias is insufficient. Back wages do not automatically follow setting aside of dismissal and depend on the facts and the outcome of the fresh enquiry, so immediate payment was rejected.

---

---

Issues: (i) whether the disciplinary proceedings could be initiated by the CMD of the subsidiary company under the applicable service rules; (ii) whether, after the earlier order directing a de novo enquiry, a fresh charge-sheet and proper initiation of proceedings were necessary; (iii) whether the finding of mala fides and predetermination against the disciplinary authority was justified; and (iv) whether back wages could be granted when the dismissal was set aside and fresh enquiry was permitted.

Issue (i): whether the disciplinary proceedings could be initiated by the CMD of the subsidiary company under the applicable service rules.

Analysis: The service rules governing executives in the company structure allocated disciplinary powers by grade and posting. For officers of the relevant grade posted in a subsidiary company, the CMD of the subsidiary company was empowered to initiate proceedings, while major penalties could ultimately be imposed by the CMD of the parent company. The Court also applied the settled principle that service conditions are governed by the law in force at the time of decision-making and that statutory service rules may operate retrospectively where legally permissible.

Conclusion: The CMD of the subsidiary company was competent to initiate the disciplinary proceedings, and the contrary finding was unsustainable.

Issue (ii): whether, after the earlier order directing a de novo enquiry, a fresh charge-sheet and proper initiation of proceedings were necessary.

Analysis: A de novo enquiry means that the earlier proceedings, including the earlier charge-sheet, stand obliterated. Disciplinary proceedings commence only upon issuance of a charge-sheet, and where the earlier foundation has been quashed, subsequent steps cannot revive the matter without a fresh and valid initiation. The Court further held that the purported revival note was merely placed by an officer and signed routinely, without a proper positive decision by the disciplinary authority.

Conclusion: Fresh initiation by the competent authority was required, and the revival of proceedings on the earlier charge-sheet was invalid.

Issue (iii): whether the finding of mala fides and predetermination against the disciplinary authority was justified.

Analysis: Allegations of mala fides require specific pleadings and cogent supporting material; mere assertions or conjecture are insufficient. The record did not disclose acceptable material to support a conclusion that the proceedings were initiated with a pre-determined mind to punish the delinquent. The finding of bias therefore lacked evidentiary foundation.

Conclusion: The finding of mala fides and predetermination was set aside as perverse and unsupported by evidence.

Issue (iv): whether back wages could be granted when the dismissal was set aside and fresh enquiry was permitted.

Analysis: Back wages do not follow automatically from reinstatement or from the setting aside of punishment on technical grounds. Their grant depends on the facts, equities, and the result of the fresh enquiry, and the employee may be reinstated pending such enquiry with entitlement, if any, to subsistence allowance as per the service rules.

Conclusion: The claim for immediate back wages was rejected.

Final Conclusion: The appeal succeeded only to the limited extent of correcting the legal errors on competence and mala fides, while preserving the employer's right to proceed afresh by a valid charge-sheet and leaving monetary entitlements to be determined after the fresh enquiry.

Ratio Decidendi: When earlier disciplinary proceedings are quashed and a de novo enquiry is directed, the prior charge-sheet cannot be treated as the basis of a valid fresh enquiry, and allegations of mala fides in disciplinary action must be supported by specific material; otherwise, they cannot justify invalidation of the proceedings.

---