Supreme Court Converts Dismissal to Voluntary Retirement in Rathin Ghosh vs. West Bengal State Electricity Distribution Company Ltd. (29 July 2019)

Date of the Judgment: 29 July 2019
Citation: [Not Available in Source]
Judges: Ashok Bhushan, J., Navin Sinha, J.
Can a disciplinary proceeding result in the dismissal of an employee for a minor lapse, especially when the employee has a long and unblemished service record? The Supreme Court addressed this question in a case where an employee was dismissed for allegedly accepting hospitality from a vendor. The court ultimately converted the dismissal to voluntary retirement, emphasizing the need for proportionality in disciplinary actions. The judgment was delivered by a two-judge bench comprising Justice Ashok Bhushan and Justice Navin Sinha, with Justice Ashok Bhushan authoring the opinion.

Case Background

The appellant, Rathin Ghosh, was employed as a Graduate Engineer (Training) in the West Bengal State Electricity Board in 1985, which later became the West Bengal State Electricity Distribution Company Ltd. (WBSEDCL). Over the years, he was promoted to Superintending Engineer. In 2007, he was involved in drafting specifications for single-phase static meters. A tender was issued for the purchase of 20 lakh meters, which was later cancelled. A fresh tender was issued on January 9, 2008, for 10 lakh meters. Nineteen bids were received, and sample meters were sent for evaluation. On March 13, 2008, a team including the appellant tested the meters, and four bidders, including M/s. Secure Meters, were found technically qualified. On March 31, 2008, the price bids were opened, and M/s. Secure Meters was declared the successful bidder, albeit at the highest rate. On April 16, 2008, the appellant informed his superior about attending a conference in Delhi. He attended the IEEMA Conference on April 17, 2008. The air tickets for his travel were booked through Globe Travel Agents, who were also the travel agents of M/s. Secure Meters. On April 18, 2008, Globe Travel Agency raised an invoice to M/s. Secure Meters for the appellant’s ticket. On April 28, 2008, the appellant paid Rs. 12,350 to M/s. Secure Meters for the ticket. On April 29, 2008, the company suspended the appellant and initiated disciplinary proceedings for alleged misconduct.

Timeline

Course of Proceedings

The appellant filed a writ petition before the High Court of Judicature at Calcutta challenging his dismissal. A learned Single Judge allowed the writ petition on June 29, 2015, setting aside the dismissal order and directing reinstatement with back wages. The respondent company appealed to the Division Bench of the Calcutta High Court, which allowed the appeal on September 20, 2017, and set aside the Single Judge’s order. The appellant then appealed to the Supreme Court of India.

Legal Framework

The disciplinary proceedings against the appellant were initiated under Regulations 61 and 63 of the West Bengal State Electricity Board Employees’ Service Regulations. Regulation 61 deals with acts of misconduct. Regulation 62 lists the punishments that can be imposed for misconduct, which include:

• Censure
• Withholding of increment or promotion
• Suspension
• Reduction to a lower post or time-scale
• Recovery from pay
• Removal from service
• Dismissal from service

The West Bengal State Electricity Board Employees’ (Death-Cum-Retirement Benefit) Regulations, 1985, specifically Regulation 11A, deals with the withholding of pension. Regulation 11A(2) states that pension can be withheld if a pensioner is found guilty of grave misconduct or negligence in a departmental or judicial proceeding.

Regulation 6(i) of the same regulations defines “Pension” as including gratuity, except when the term pension is used in contradistinction to gratuity.

Arguments

Appellant’s Submissions:

• The appellant had an unblemished service record of 22 years.
• Regarding the charge of attending the IEEMA presentation, he had informed his superior officer and his casual leave was approved.
• The appellant was not part of the core committee that made decisions on the tender.
• He did not receive any benefit from M/s. Secure Meters, and he paid for his air tickets.
• The punishment of dismissal was disproportionate to the charges.
• The disciplinary authority lacked jurisdiction to impose punishments like permanent withholding of pension and forfeiture of gratuity under the applicable service regulations.

Respondent’s Submissions:

• The charges against the appellant were proven in the inquiry.
• The appellant had official dealings with M/s. Secure Meters and should not have accepted any hospitality.
• The company had lost confidence in the appellant, and reinstatement was not warranted.
• The Division Bench of the Calcutta High Court correctly upheld the dismissal order.

Innovativeness of the argument: The appellant’s argument that the disciplinary authority lacked the jurisdiction to impose the punishment of permanent withholding of pension and forfeiture of gratuity was particularly innovative, as it challenged the very basis of the punishment.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issues addressed by the Court were:

1. Whether the charges against the appellant were proven.
2. Whether the punishment of dismissal was proportionate to the charges.
3. Whether the disciplinary authority had the jurisdiction to impose the punishment of permanent withholding of pension and forfeiture of gratuity.
4. Whether the resignation of the appellant can be treated as voluntary retirement.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Supreme Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• B.C. Chaturvedi vs. Union of India and others, (1995) 6 SCC 749: The Supreme Court relied on this case to reiterate the parameters of judicial review in disciplinary proceedings. The Court emphasized that while disciplinary authorities have the power to impose punishment, the High Court or the Supreme Court can interfere if the punishment shocks the conscience of the court.
• Regulation 61 of WBSEB Employees’ Service Regulations: The court explained that this regulation deals with acts of misconduct. The court noted that the charges against the appellant did not fall under the category of grave misconduct.
• Regulation 62 of WBSEB Employees’ Service Regulations: The court explained that this regulation lists the punishments that can be imposed for misconduct. The court observed that the punishments imposed on the appellant were not under this regulation.
• Regulation 11A of West Bengal State Electricity Board Employees’(Death-Cum-Retirement Benefit) Regulations, 1985: The court explained that this regulation deals with the withholding of pension. The court held that this regulation was not applicable as the appellant was not a pensioner, and the proceedings were not initiated under these regulations.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Disproportionality of Punishment: The Court found that the punishment of dismissal was excessively harsh given the nature of the charges against the appellant. The Court emphasized that the punishment should be proportionate to the misconduct.
• Lack of Evidence: The Court noted that there was no concrete evidence to prove that the appellant had accepted any undue benefit or hospitality from M/s. Secure Meters. The Court also noted that the appellant had paid for his air tickets.
• Jurisdictional Error: The Court found that the disciplinary authority had committed a jurisdictional error by imposing punishments (permanent withholding of pension and forfeiture of gratuity) that were not provided for under the relevant service regulations.
• Unblemished Service Record: The appellant’s 22 years of unblemished service was also a significant factor that weighed in favor of the appellant.
• Ends of Justice: The Court sought to balance the interests of the employer and the employee and decided to treat the resignation as voluntary retirement to provide a fair resolution.

Fact:Law Ratio Explanation: The “Fact” percentage represents the consideration of the factual aspects of the case, such as the appellant’s actions, the evidence presented, and the circumstances surrounding the charges. The “Law” percentage represents the legal considerations, such as the interpretation of the service regulations and the principles of natural justice and proportionality.

Logical Reasoning

The Supreme Court considered alternative interpretations of the charges and the applicable regulations. The Court rejected the interpretation that the appellant’s actions constituted grave misconduct warranting dismissal. The Court also rejected the interpretation that the disciplinary authority had the power to withhold pension and gratuity under the applicable service regulations. The Court reached its final decision by considering the facts, the applicable laws, and the principles of natural justice and proportionality.

The decision was that the dismissal order was set aside, and the appellant’s resignation was treated as voluntary retirement. The Court directed that the appellant be granted all benefits that would have accrued to him on the date of his resignation.

The Supreme Court’s decision was unanimous, with both judges concurring on the outcome and reasoning. There were no dissenting opinions.

The Supreme Court’s decision in this case emphasizes the importance of proportionality in disciplinary actions and the need for disciplinary authorities to act within the bounds of their jurisdiction. It also highlights the importance of considering an employee’s past service record when deciding on disciplinary actions.

The potential implications for future cases are that disciplinary authorities must ensure that punishments are proportionate to the misconduct and that they must act within their jurisdiction. The case also reinforces the principle that minor lapses should not result in extreme punishments, especially when an employee has a long and unblemished service record.

The case did not introduce any new doctrines or legal principles. It applied existing principles of proportionality and jurisdictional limits in the context of disciplinary proceedings.

The court quoted the following from the judgment:

• “The charges which were held to be proved were not any such charges on which punishment of dismissal could have been imposed.”
• “Inquiry Officer was not right in his conclusion that getting ticket booked through the Travel Agent by M/s. Secure Meters is equivalent to borrowing money by the appellant from M/s. Secure Meters.”
• “The scheme of the Regulation indicates that the power to withhold the pension has to be exercised when proceedings are drawn under Regulations, 1985.”

Key Takeaways

• Disciplinary actions must be proportionate to the misconduct.
• Disciplinary authorities must act within the bounds of their jurisdiction.
• Minor lapses should not result in extreme punishments, especially for employees with long and unblemished service records.
• Courts can interfere with disciplinary actions if the punishment shocks the conscience of the court.
• Resignation can be treated as voluntary retirement to provide a fair resolution.

The judgment has a significant impact on disciplinary proceedings, particularly in cases where the punishment is disproportionate to the misconduct. It also emphasizes the need for disciplinary authorities to adhere to the applicable rules and regulations. The judgment reinforces the principle that courts can intervene in cases where there is a clear violation of natural justice and proportionality.

Directions

The Supreme Court directed that the resignation letter of the appellant dated 13.05.2008 be treated as voluntary retirement. The respondents were directed to treat the appellant as voluntarily retired on that date and to compute all benefits accruing to the appellant including gratuity and pension as admissible on that date. The respondents were further directed to compute the entire benefits of the appellant and make the payment within a period of two months from the date of the order. In the event, the payment is not made within two months of this order, such payment shall carry interest at the rate of 6% per annum.

Development of Law

The ratio decidendi of the case is that disciplinary actions must be proportionate to the misconduct, and disciplinary authorities must act within their jurisdiction. This case reinforces the principle that minor lapses should not result in extreme punishments, especially when an employee has a long and unblemished service record. There is no change in the previous position of law, but the application of the principles of proportionality and jurisdictional limits in the context of disciplinary proceedings was reinforced.

Conclusion

In conclusion, the Supreme Court allowed the appeal, setting aside the dismissal order and converting it to voluntary retirement. The court emphasized the need for proportionality in disciplinary actions and adherence to the applicable service regulations. The decision underscores the importance of fairness and justice in disciplinary proceedings and the role of the judiciary in protecting employees from disproportionate punishments.