Retrospective ratification and effective rule amendment validated a dismissal order despite initial lack of authority.

The amendment to the disciplinary service rules was treated as effective from the date approved by circulation under the Companies Act, because the governing rule required the amendment to operate from the date stated in it and that requirement was met. The Court also held that, even if the dismissal order was initially unauthorized, a competent authority could ratify it and the ratification would relate back to validate the original act. The employee was not deprived of appellate remedy, as an appeal was filed and decided by the Board. The dismissal order was therefore not invalid for want of authority, and the High Court erred in setting it aside on that preliminary ground.

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Issues: Whether the amendment to the service rules had come into force so as to confer authority on the Chairman-cum-Managing Director to pass the dismissal order, and whether the subsequent ratification by the Board validated the order.

Analysis: The amendment to the disciplinary rules was approved by circulation under Section 289 of the Companies Act, 1956 and was intended to operate from the date on which it was approved by the majority of directors. Rule 41 required amendments to take effect from the date stated therein, and that requirement was satisfied. The Court further held that even if the initial act were treated as unauthorized, a competent authority could ratify it, and ratification would relate back to the date of the original act and validate it. The respondent was also not deprived of appellate remedy, as an appeal was in fact filed and decided by the Board.

Conclusion: The dismissal order was not invalid for want of authority, and the High Court erred in setting it aside on the preliminary ground.

Ratio Decidendi: An act done by an authority lacking initial competence can be retrospectively validated by ratification of the competent authority, and where the governing rule stipulates an effective date stated in the amendment, approval by circulation under the Companies Act can satisfy that requirement.

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