H. L. GULATIversusUNION OF INDIAAND OTHERS

                        [2015] 5 S.C.R. 722


A                          H. L. GULATI
                                 v.
                 UNION OF INDIAAND OTHERS

              (Civil Appeal Nos. 8224-8225 of 2011)
B
                       FEBRUARY 26, 2015

                [JAGDISH SINGH KHEHAR AND
                   SHIVA KIRTI SINGH, JJ.]
c
         Service law: Pension - Withholding or withdrawing of -
    Allegation that appellant holding charge of post of Senior
    Accounts Officer authorised fraudulent claims resulting in
    unauthorized release of Rs. 42. 24 lacs - Criminal
D   proceedings also initiated - Enquiry officer submitted his
    report - Meanwhile appellant retired - Punishing authority
    punished the appellant ulr.9 of CCS (Pension) Rules, 1972
    and withheld 50% of appellant's pension permanently and
    also withheld 50% of gratuity - As regards criminal
E   proceedings, appellant was found not guilty - Appellant
    moved CAT against the order of punishing authority - CAT
    held that enquiry report did not record any finding of grave
    misconduct and therefore punishment inflicted was not
    sustainable - On writ petition by respondent-VO/, order of
F   CAT set aside - Plea of appellant before this Court was that
    the enquiry officer ought to have recorded the finding of
    grave misconduct or grave negligence whereupon punishing
    authority could have invoked r. 9 to inflict an appropriate
    punishment upon him - Held: In enquiry report, appellant-
G   delinquent was discharged of charges of ill motive - Enquiry
    report only found him negligent - Appellant was also
    discharged from criminal prosecution - He may have been
    negligent in discharge of his duties but he cannot said to
H   be guilty of grave misconduct - Punishing authority held
                               722
            H. L. GULATI v. UNION OF INDIA                  723


appellant guilty of grave misconduct - However delinquency A
established was of .negligence and not misconduct -
Therefore finding that appellant was guilty of grave
misconduct cannot be accepted - In the absence of
conclusion of grave negligence, punishment order set aside
- Jurisdiction under Article 142 of the Constitution of India, B
exercised to inflict an appropriate punishment upon the
appellant - Punishment of withholding 50% of gratuity
maintained - Withholding of 50% of pension sustained till
the end of the current month, and release of 100% of the
appellant's pension ordered w.e.f. 01.03.2015 - CCS C
(Pension) Rules, 1972 - r.9.

     CCS (Pension) Rules, 1972: r.9 - Invoking r.9 for
withholding or withdrawing pension - Held: The enquiry
officer's responsibility is limited to the determination of D
innocence or guilt of a delinquent employee, with reference
to charges levelled against him - It is on the establishment
of the charges that the punishing authority record a finding,
whether the conclusions lead to the further inference, that
the delinquent has committed acts of "grave misconduct" or E
"grave negligence" - It is on such determination by the
punishing authority that r.9 of the 1972 Rules can be
invoked, in case the delinquent employee in the meantime,
has retired on attaining the age of superannuation - Service F
law.

    Disposing of the appeals, the Court

     HELD: 1. The responsibility vested on an enquiry
officer is limited to the determination of the innocence G
or guilt of a delinquent employee, with reference to
charges levelled against him. It is on the establishment
of the charges (if any), that the punishing authority will
record a finding, whether the conclusions lead to the
further inference, that the delinquent has committed H
724       SUPREME COURT REPORTS              [2015] 5 S.C.R.


A acts of "grave misconduct" or "grave negligence". It is
  on such determination by the punishing authority that
  Rule 9 of the 1972 Rules can be invoked, in case the
  delinquent employee has, in the meantime, retired on
  attaining the age of superannuation. It is not a matter
B of dispute that when the punishment was inflicted upon
  the appellant, the appellant had already retired from
  service having superannuated. Therefore, there was no
  error on part of punishing authority in invoking rule 9
C of the 1972 rules. [Para 14] [737-F-H; 738-A-B]

       2. What was sought to be proved against the
  appellant was negligence in the discharge of his duties
  as Senior Accounts Officer, which resulted in the
   unauthorised payment of 36 fraudulent claims, and
D thereby, the unauthorised dispersal of approximately
   Rs.42.24 lakhs. Additionally, the charge of ill-motive was
  levelled against the appellant in Article IV of the memo
  of charges. But insofar as Article IV of the memo of
  charges is concerned, the appellant was found
E innocent thereof by the Enquiry Officer. The
  submissions sought to be put forward was, that it had
  come to be established, that there was no ill- motive at
  the hands of the appellant, insofar as his involvement
F in the release of payments of the 36 fraudulent claims
  was concerned. Additionally, it was contended for the
  appellant, that even in the course of the criminal
  prosecution, initiated against the appellant, his
  complicity in the fraud was not proved, nor was it found
G that there was any intentional culpability of the
  appellant, insofar as the release of the fraudulent claims
  are concerned. It is not possible to accept that the
  appellant was blameworthy/guilty of any "grave
  misconduct" because the enquiry report only found that
H the appellant was negligent in the discharge of his
            H. L. GULATI v. UNION OF INDIA               725


 duties. Insofar as Artivle IV of the memo of charges is A
concerned, he was accused of complicity with the
alleged suppliers, and also, responsible for having failed
to maintain absolute integrity. But then, Article IV of the
charge memo was held to be not proved in the Enquiry
Report. Equally important is the fact, that the appellant B
was discharged from the criminal prosecution initiated
against him with reference to the same sequence of
facts. The appellant may have been negligent in the
discharge of his duties, but it is not possible to
conclude, that the appellant was guilty of "grave C
misconduct". Having so concluded, it emerges that the
findings against the appellant could certainly not have
been of "grave misconduct". [Paras 16, 17 and 18) [738-
F-H; 739-A-B, 0-H; 740-A)
                                                            D
     3. It was open to the punishing authority to have
passed the punishment order, in terms of the mandate
contained in Rule 9 of the 1972 Rules. The punishing
authority could have passed such an order after
arriving at the conclusion that the appellant/delinquent E
was either guilty of "grave negligence" or of "grave
misconduct". The punishing authority recorded, while
passing the punishment order, that the appellant was
found to have committed acts of "grave misconduct".
However, the delinquency established against appellant F
was of negligence, and not of misconduct. Therefore,
the finding recorded in the impugned order that the
appellant had committed acts of "grave misconduct"
cannot be accepted. The above conclusion, in the G
impugned order being unacceptable, is hereby set
aside. In the absence of the conclusion of "grave
negligence", the punishment order is liable to be set
aside, and is accordingly set aside. [para 20) [740-F-H;
741-A-B)                                                    H
726         SUPREME COURT REPORTS                 [2015] 5 S.C.R.


A      4. Since the delinquency relates to the years 1992
   to 1994, it would not be in the fitness of the matter, to
   require the punishing authority to reconsider a lesser
   punishment. Therefore, jurisdiction under Article 142 of
   the Constitution of India, is exercised to inflict an
 B appropriate punishment upon the appellant. Keeping in
   mind the delinquency proved and established against
   the appellant in the enquiry report which was accepted
   by the punishing authority, ends of justice would be
   met if the punishment of withholding 50% of his gratuity
 C is maintained/sustained. Insofar as the permanent
   withholding of 50% of the appellant's pension is
   concerned, it would be just and appropriate to sustain
   the same till the end of the current month, and to order
   the release of 100% of the appellant's pension with
 0
   effect from 01.03.2015. [para 21] [741-C-F]

         CIVIL APPELLATE JURISDICTION: Civil Appeal No.
      8224-8225 of 2011.

 E        From the Judgment and Order dated 31.08.2010 and
      26.11.2010 respectively of the High Court of Delhi at New
      Delhi in WPC No. 13664 of 2009 and RP No. 428 of 2010.

          Dr. M. P. Raju, E. J. Varghese (for M. T. George) for the
 F    appellant.

          K. Radhakrishnan, Sadhana Sandhu, Rekha Pandey (for
      Anil Katiyar) for the respondents.

          The Judgment of the Court was delivered by
 G
        JAGDISH SINGH KHEHAR, J. 1. The appellant was
   holding charge of the post of Senior Accounts Officer, in the
   office of the Controller of Defence Accounts, during the period
   1992 to 1994, when it was discovered that 36 fraudulent
 H claims came to be authorized by him, resulting in the
             H. L. GULATI v. UNION OF INDIA                       727
             [JAGDISH SINGH KHEHAR, J.]

unauthorised release of an approximate amount of Rs.42.24 A
lakhs.

     2. The investigative process, indicated the involvement
of large number of officers, including Lt. Col. Pakki Rama
Shankar Rao. This led to the registration of a first information B
report bearing No.RC AC 11998A0002 dated 20.05.1998 at
police station CBl/SPE/ACU(I) District New Delhi. Eventually,
a charge sheet bearing No.2 dated 6.9.1999 came to be filed,
wherein the appellant was arrayed as accused no.1.
                                                                   c
      3. Simultaneously, with the initiation of criminal
proceedings, the authorities issued a charge memo dated
7.7.1998 to the appellant, wherein he was accused of four
articles of charge. The articles of charge levelled against the
appellant are being extracted hereunder:                           o
     "Article I

    That the said Shri H.L.Gulati, SAO while functioning as
    Sr.Accounts Officer-in-Charge 'M' Section during the
  , period 16.10.92 to 15.10.94 in the Office of CDA               E
    (HQRS.), New Delhi, failed to discharge his duties
    effectively as provided for in Appendix 1 to Defence
    Accounts Department Office Manual Part I, which led to
    authorization of payment against 36 fraudulent claims as       F
    listed in Encl.I. to the tune of Rs.42.24 lakhs
    approximately. Thus the said H.L.Gulati, SAO failed to
    maintain devotion to duty, conducted himself in a
    manner unbecoming of a Govt. servant and failed to
    take all possible steps to ensure the integrity and            G
    devotion to duty of all Govt. servants for the time being
    under his control and authority, thereby violating the
    provisions of Rule 3(1 )(ii), 3(1 )(iii) and 3(2)(i) of CCS
    (Conduct) Rules, 1964.
    Article II                                                     H
728   SUPREME COURT REPORTS                     [2015] 5 S.C.R.



A     That during the aforesaid period and while functioning
      in the aforesaid office the said H.L.Gulati, SAO failed
      to detect that (1) fraudulent claims had been floated
      against fake sanctions purported to have been issued
      by Ministry of Defence/DGOS, (ii) the contingent bills
 B    had not been preferred by the officers of DGOS
      authorized to do so and (iii) appropriate procurement
      procedure relevant to the value of stores procured had
      not been followed. Thus the said H.L.Gulati, SAO, failed
      to maintain devotion to duty, conducted himself in a
 c    manner unbecoming of a Govt. servant and failed in the
      performance of his official duties in the exercise of
      powers conferred on him, thereby violating the
      provisions of Rule 3(1 )(ii), 3(1 )(iii) and 3(2)(ii) of CCS
      (Conduct) Rules, 1964.
 D
      Article Ill

      That during the aforesaid period and while functioning
      in the aforesaid office the said H.L.Gulati, SAO
 E    authorized the payments of the 36 fraudulent claims to
      the tune of Rs.42.24 lakhs approximately, as officer-in-
      charge 'M' Section although the expenditure as per the
      fake sanctions was debitable to the Revenue Head
      "Ordnance stores and did not fall within the purview of
 F    'M' Section as per Chapter VIII of OM Part XII and even
      without getting the local purchase bills noted in Accounts
      Section as required vide para 437 OM Part II Vol. I.
      Thus the said H.L.Gulati, SAO failed to maintain devotion
      to duty, conducted himself in a manner unbecoming of
 G    a Govt. servant and failed to take all possible steps to
      ensure integrity and devotion to duty of all Govt. servants
      for the time being under his control and authority, thereby
      violating the provisions of Rule 33(1 )(ii), 3(1 )(iii) and
      3(2)(i) of .ccs (Conduct) Rules, 1964.
 H
             H. L. GULATI v. UNION OF INDIA                      729
             [JAGDISH SINGH KHEHAR, J.]

      Article IV                                                  A

     That the said Shri H.L.Gulati, SAO while functioning as
     Sr.Accounts Officer-in-Charge 'M' Section during the
     period 16.10.92 to 15.10.94 in the Office of CDS (Hqrs),
     New Delhi, passed 36 fraudulent claims amounting to B
     Rs.42.24 lakhs approximately. Though the concerned
     bills related to Store Section, these were processed
     and passed for payment in the 'M' Section and without
     following the prescribed procedures. The above act of
     Shri H.L.Gulati resulted in fraudulent payment to the tune C
     of Rs.42.24 lakhs approximately to the alleged suppliers
     and caused pecuniary loss to the Govt. The above act
     indicates complicity with the alleged suppliers and also
     exhibits failure on the part of Shri Gulati to maintain
     absolute integrity.                                        D

     Thus the said H.L.Gulati, SAO failed to maintain absolute
     integrity and conducted in a manner unbecoming of a
     Govt. servant thereby violating the provisions of Rule
     3(1)(i) and (iii) of CCS (Conduct) Rules, 1964."             E

    4. The appellant preferred a reply to the aforesaid charge
memo on 4.9.1998. Finding the reply filed by the appellant
as unsatisfactory, the punishing authority decided to hold a
regular departmental enquiry, which came to be ordered            F
against the appellant on 9.10.1998.

     5. Having allowed an opportunity to the Presenting
Officer, as also, to the appellant-delinquent to lead evidence,
the Enquiry Officer submitted his report on 18.7.2002. The G
aforesaid report came to be served upon the appellant
through a communication dated 5.2.2004. The appellant
preferred a representation contesting the findings recorded
by the Enquiry Officer on 7.3.2004. Finding the reply
submitted by the appellant unacceptable, the punishing H
730         SUPREME COURT REPORTS                   [2015] 5 S.C.R.


A     authority by an order dated 30.11.2005, punished the
      appellant under Rule 9 of the CCS(Pension) Rules, 1972
      (hereinafter referred to as the '1972 Rules'). Rule 9 afore-
      mentioned is being extracted hereunder:

 B         "9.Right of President to withhold or withdraw pension

           (1") The President reserves to himself the right of
           withholding a pension or gratuity, or both, either in full
           or in part, or withdrawing a pension in full or in part,
 c         whether permanently or for a specified period, and of
           ordering recovery from a pension or gratuity of the
           whole or part of any pecuniary loss caused to the
           Government, if, in any departmental or judicial
           proceedings, the pensioner is found guilty of grave
 o         misconduct or negligence during the period of service,
           including service rendered upon re-employment after
           retirement :

           Provided that the Union Public Service Commission
 E         shall be consulted before any final orders are passed :

           Provided further that where a part of pension is withheld
           or withdrawn the amount of such pensions shall not be
           reduced below the amount of rupees three hundred and
           seventy-five per mensem.
 F
           2(a)     The departmental proceedings referred to in
           sub-rule (1), if instituted while the Government servant
           was in service whether before his retirement or during
           his re-employment, shall, after the final retirement of the
 G         Government servant, be deemed to be proceedings
           under this rule and shall be continued and concluded by
           the authority by which they were commenced in the
           same manner as if the Government servant had
           continued in service:
 H
       H. L. GULATI v. UNION OF INDIA                       731
       [JAGDISH SINGH KHEHAR, J.]

Provided that where the departmental proceedings are A
instituted by an authority subordinate to the President,
that authority shall submit a report recording its findings
to the President.

(B) The departmental proceedings, if not instituted while    B
the Government servant was in service, whether before
his retirement, or during his re-employment, -

(i)shall not be instituted save with the sanction of the
President,                                                   c
(ii)shall not be in respect of any event which took place
more than four years before such institution, and

(iii) shall be conducted by such authority and in such
place as the President may direct and in accordance          D
with the procedure applicable to departmental
proceedings in which an order of dismissal from service
could be made in relation to the Government servant
during his service.
                                                             E
(3) Deleted

(4) In the case of Government servant who has retired
on attaining the age of superannuation or otherwise and
against whom any departmental or judicial proceedings        F
are instituted or where departmental proceedings are
continued under sub-rule (2), a provisional pension as
provided in shall be sanctioned.

(5) Where the President decides not to withhold or G
withdraw pension but orders recovery of pecuniary loss
from pension, the recovery shall not ordinarily be made
at a rate exceeding one-third of the pension admissible
on the date of retirement of a Government servant.
                                                             H
732       SUPREME COURT REPORTS                    [2015] 5 S.C.R.


A         (6) For the purpose of this rule, -

        (a) departmental proceedings shall be deemed to be
        instituted on the date on which the statement of charges
        is issued to the Government servant or pensioner, or if the
B       Government servant has been placed under suspension
        from an earlier date, on such date ; and

        (b) judicial proceedings shall be deemed to be instituted

        (i) in the case of criminal proceedings, on the date on
c       which the complaint or report of a police officer, of which
        the Magistrate takes cognizance, is made, and

        (ii) in the case of civil proceedings, on the date the plaint
        is presented in the court."
D
       The aforesaid Rule came to be invoked on account of the
  fact that the appellant had attained the age of retirement, and
  had superannuated from service with effect from 30.06.2002.
  While invoking Rule 9 of the 1972 Rules, the punishing
E authority ordered the withholding of 50% of the appellant's
  pension permanently, and also, the withholding of 50% of the
  appellant's gratuity.

        6. Dissatisfied with the punishment order dated
 F 30.11.2005, the appellant preferred a review petition on
   4.7.2006. Submissions advanced by the appellant in the
   review petition were considered by the punishing authority,
   whereupon, by an order dated 1.8.2007 the review petition
   came to be rejected.
G
        7. Whilst the criminal proceedings were pending
   consideration, the aforesaid departmental proceedings
   attained finality. Insofar as the criminal proceedings are
   concerned, it is sufficient to notice, that the Special Judge,
 H Delhi, while adjudicating upon the controversy vide his order
   dated 8.7.2005, found the appellant not guilty of any criminal
             H. L. GULATI v. UNION OF INDIA                    733
             [JAGDISH SINGH KHEHAR, J.]

accountability. The trial Court, in the criminal case, arrived at A
the conclusion, that the complicity of the appellant in the fraud,
was not substantiated, nor was there any intentional culpability
proved. Accordingly, the appellant came to be discharged
from the criminal case.
                                                                   B
      8. Aggrieved by the punishment order dated 30.11.2005,
and the rejection of the review petition vide order dated
1.8.2007, the appellant approached the Central Administrative
Tribunal, Principal Bench, Delhi (hereinafter referred to as the
'Administrative Tribunal') by filing Original Application No. C
 1675 of 2008. The Administrative Tribunal vide its order dated
 13.4.2009 arrived at the conclusion, that the enquiry report
submitted by the Enquiry Officer on 18.7.2002, did not record
any finding of grave misconduct. In the above view of the
matter, the Administrative Tribunal, while interpreting Rule 9 D
 of the 1972 Rules, held that the punishment inflicted upon the
 appellant on 30.11.2005 (as also the review order passed
 against the appellant on 1.8.2007) were not sustainable.

      9. The order passed by the Administrative Tribunal on E
13.4.2009, came to be assailed by the Union of India, before
the High Court of Delhi (hereinafter referred to as the 'High
Court') through Writ Petition(C) No.13664 of 2009. The High
Court accepted the writ petition, and set aside the order
passed by the Administrative Tribunal on 31.8.2010. The F
appellant before this Court, also preferred review petition
No.428 of 201 O before the High Court. The said review
petition was, however, rejected by an order dated 26.11.2010.

    10. The orders passed by the Delhi High Court on G
31.08.2010 and 26.11.2010, were assailed by the appellant
by preferring Special Leave Petition(C) Nos.3365-3366 of
2011. Leave in the matters came to be granted on
23.09.2011. It is therefore, that the instant appeals have
matured for consideration, at our hands.                   H
734          SUPREME COURT REPORTS                   [2015] 5 S.C.R.


 A      11. Before venturing to determine the culpability of the
   appellant insofar as the articles of charge, that came to be
   levelled against him, it would be imperative for us to examine _
   the determination of the Enquiry Officer, in his report dated
   18.7.2002, on each of the articles of charge. We shall
 B accordingly, summarily deal with the findings recorded by the
   Enquiry Officer hereunder:

            i) Insofar as Article I oflhe charge memo dated 7.7.1998
       is concerned, the Enquiry Officer arrived at the conclusion, that
 C    the responsibility of the Senior Accounts Officer in respect of
      the verification of the specimen signature was not only to be ·
      his own verification, but he was also to ensure that where
      verification was done, it would be so indicated, in the voucher.
      As per the determination of the Enquiry Officer, the aforesaid
 D    obligation would imply that the Senior Accounts Officer, was
      not only to record an endorsement on the voucher, he would
      also have to ensure that the auditors and the Assistant
      Accounts Officer also record such endorsements on vouchers,
      when they dealt with the issue of specimen verification. A
 E    categoric finding was recorded by the Enquiry Officer to the
      effect, that the bills which authorized the payment of the 36
      fraudulent claims, did not show any such endorsements, and
      therefore concluded, that the appellant had failed to put his
 F    own endorsement, and had also failed to ensure
      endorsements by the auditors/Assistant Accounts Officer,
      about verification of the specimen signature on the bills,
      leaving a doubt whether the auditors/AAOs had verified the
      specimen signature. Having so recorded, the Enquiry Officer
G     accepted that Article I of the charge with reference to the
      appellant ( who was working in the 'M' section during the
      period 16.10.1992 to 15.10.1994 in the office of CDA(HQ),
      New Delhi) to the extent, that had failed to discharge his duties
      effectively as provided for in Appendix 1 to OM Pt.1. The
-H    Enquiry Officer accordingly inferred, that authorization of the
             H. L. GULATI v, UNION OF INDIA                    735
             [JAGDISH SINGH KHEHAR, J.]

payment of the 36 fraudulent claims, to the tune of Rs.42.24    A
lakhs, stood marginally proved.

    ii) Insofar as Article II of the memo of charge dated
7.7.1998 is concerned, the Enquiry Officer arrived at the
conclusion, that the appellant had failed to detect, that the B
fraudulent claims had been floated against fake sanctions
purported to have been issued by the r·Jlinistry of Defence,
was correct. As such the Enquiry Officer accepted, that the
charge stood proved. On Article II, the Enquiry Officer
recorded the following conclusion:                            C

     "1) fraudulent claims have been floated against fake
     sanctions purported to have been issued by Min. of
     Defence partially proved.
                                                                D
     2) the contingent bills have not been preferred by
     officers of DGOS authorized to do so is not proved.

     3) The appropriate procurement procedure relevant to
     the value of stores procured has not been followed is
     proved."                                                   E

      iii)lnsofar as Article Ill of the charge memo dated
7. 7 .1998 is concerned, it was alleged against the appellant,
that the bills which were routed through the accounts section
for noting, bore the endorsement of the accounts section, to F
the effect that the bills had been noted in the accounts section.
However, on the basis of exhibits P/1/1 to P/1/36, the Enquiry
Officer arrived at the conclusion, that no such endorsements
were there on these bills. According to the finding recorded
by the Enquiry Officer, although these bills were required to G
be routed through the accounts section for noting, they had
not been so routed. Based on paragraph 154 of Chapter 13
of Defence Account Code, which lists items which are under
locally controlled heads, according to which, payment of stores H
736          SUPREME COURT REPORTS                     [2015] 5 S.C.R.


A      and miscellaneous claims would come under the purview of
       locally controlled heads, i.e., heads susceptible to control
       against against budget provision by the various
       administrative and executive authorities subordinate to the
       Government of India, and para 437 OM Pt. II Vol. I
B      (Miscellaneous Section) which provided that bills in respect
       of charges which were debitable to locally controlled heads,
      would have to be sent to the accounts section before payment,
      for obtaining a certificate regarding the availability of funds,
      and further para 514 of Chapter VII Stores Contract Section
C     of OM Pt.II Vol.I which provides that bills relating to locally
      controlled heads or centrally controlled heads for which
      specific allotment existed, thP. bill!': h~d to be forwarded to the
      accounts section, for noting and furnishing a certificate of
      availability of funds. Hence, whether or not the bills were
0
      processed in 'M' section or Stores Contract Section,
      according to the Enquiry Officer, the bills were required to be
      sent to the accounts section, for obtaining a certificate
      regarding the availability of funds as according to Para 47(a)
E     of Defence Audit Code. One of the main objectives of audit
      of expenditure was to ensure, that there is a provision of funds
      for the expenditure duly authorized by the competent authority.
      On perusal of the bills, the Enquiry Officer found, that there
      were no endorsements thereon, of the accounts section.
F     Therefore, the Enquiry Officer arrived at the conclusion, that
      the second part of Article Ill of the charge memo, that the bills
      were passed without even getting the bills noted in accounts
      section, stood substantiated against the appellant. Having so
      concluded, the Enquiry Officer held that Article Ill of the memo
G     of charge dated 7.7.1998 to be partially proved.

      iv) Insofar as Article IV of the charge memo dated
  7.7.1998 is concerned, the Enquiry Officer arrived at the
  conclusion, that the same was not proved against the
H appellant.
             H. L. GULATI v. UNION OF INDIA                   737
             [JAGDISH SINGH KHEHAR, J.]

     12. The punishing authority accepted the findings A
recorded by the Enquiry Officer. Thereupon, a copy of the
enquiry report was served upon the appellant. The appellant
submitted a representation in response thereto, on 7.3.2004.
The punishment order dated 30.11.2005 was passed after the
Punishing Authority considered the reply filed by the appellant. B
The said punishment order was reiterated, upon the disposal
of the review petition filed by the appellant, vide order dated
1.8.2007.

     13. The first contention advanced by the learned counsel C
for the appellant was premised on the interpretation of Rule
9 of the 1972 Rules in the same fashion as the same had
been interpreted by the Administrative Tribunal. In sum and
substance, the contention of the learned counsel for the
appellant was, that it was the Enquiry Officer who ought to D
have recorded a finding of "grave misconduct" or "grave
negligence", whereupon the punishing authority could have
invoked Rule 9 of the 1972 Rules, to inflict an appropriate
punishment upon the appellant.
                                                                E
     14. Having perused Rule 9 of the 1972 Rules, it is not
possible for us to accept the first contention advanced by the
learned counsel for the appellant. The responsibility vested
on an enquiry officer is limited to the determination of the
innocence or guilt of a delinquent employee, with reference F
to charges levelled against him. It is on the establishment of
the charges (if any), that the punishing authority will record a
finding, whether the conclusions lead to the further inference,
that the delinquent has committed acts of "grave misconduct"
or "grave negligence". It is on such determination by the G
punishing authority that Rule 9 of the 1972 Rules can be
invoked, in case the delinquent employee has, in the
meantime, retired on attaining the age of superannuation. It
is not a matter of dispute that when the punishment was H
738         SUPREME COURT REPORTS                  [2015] 5 S.C.R.


A     inflicted upon the appellant by an order dated 30.11.2005, the
      appellant had already retired from service having
      superannuated on 30.06.2002. We therefore find no merit in
      the first contention advanced at the hands of the learned
      counsel for the appellant.
B
          15. The only other contention advanced at the hands of
  the appellant was, that the Enquiry Officer had recorded
  findings on the first three articles, that the charges against the
  appellant were partly/marginally proved. Having invited our
C attention to the conclusion drawn by the Enquiry Officer,
  learned counsel for the appellant, also drew, our attention to
  the impugned punishment order dated 30.11.2005/1.8.2007,
  and contended, that the findings recorded by the Enquiry
  Officer were fully endorsed by the punishing authority. Based
D on the aforesaid, it was the vehement submission of the
  learned counsel for the appellant, that the Enquiry Officer
  cannot be stated to have recorded any conclusion, which
  would lead to the inference that the appellant was guilty of
  "grave misconduct".
E
          16. The details of the findings recorded by the Enquiry
  Officer have been noticed by us hereinabove. VVe find merit
  in the instant contention of the learned counsel for the
  appellant. What was sought to be proved against the
F appellant was negligence in the discharge of his duties as
  Senior Accounts Officer, which resulted in the unauthorised
  payment of 36 fraudulent claims, and thereby, the
  unauthorised dispersal of approximately Rs.42.24 lakhs.
  Additionally, it was sought to be emphasised by the learned
G counsel for the appellant, that the charge of ill-motive was
  levelled against the appellant in Article IV of the memo of
  charges dated 7.7.1998. But insofar as Article IV of the memo
  of charges is concerned, the appellant was found innocent
H thereof by the Enquiry Officer. The submissions sought to
             H. L. GULATI v. UNION OF INDIA                   739
             [JAGDISH SINGH KHEHAR, J.]

be put forward was, that it had come to be established, that A
there was no ill-motive at the hands of the appellant, insofar
as his involvement in the release of payments of the 36
fraudulent claims is concerned. Additionally, it was the
contention of the learned counsel for the appellant, that even
in the course of the criminal prosecution, initiated against the B
appellant, his complicity in the fraud was not proved, nor was
it found that there was any intentional culpability of the
appellant, insofar as the release of the fraudulent claims are
concerned. In the above view of the matter, it was the assertion
of the learned counsel for the appellant, that there was no C
express ill-intention at the hands of the appellant. In other
words, the issue substantiated against the appellant was of
 mere negligence.

     17. We affirm the aforesaid submission advanced at the D
hands of the appellant, inasmuch as, it is not possible for us
to accept, that the appellant was blameworthy/guilty of any
"grave misconduct" because the enquiry report dated
18.7.2002 only found that the appellant was negligent in the
discharge of his duties. Insofar as Artivle IV of the memo of E
charges dated 7. 7 .1998 is concerned, he was accused of
complicity with the alleged suppliers, and also, responsible
for having failed to maintain absolute integrity. But then, Article
IV of the charge memo was held to be not proved in the F
Enquiry Report dated 18.7.2002. Equally important is the
fact, that the appellant was <lischarged from the criminal
prosecution initiated against him with reference to the same
sequence of facts. We are accordingly satisfied to conclude,
that the appellant may have been negligent in the discharge G
of his duties, but it is not possible to conclude, that the
appellant was guilty of "grave misconduct".

    18. Having so concluded, it emerges that the findings
against the appellant could certainly not have been of "grave    H
740        SUPREME COURT REPORTS                 [2015] 5 S.C.R.


A misconduct". Be that as it may, the punishing authority, while
  passing the impugned punishment order dated 30.11.2005
  recorded the following conclusion:
       "9. AND WHEREAS, the President in the light of the
       above observation and findings and after taking into
B
       account all relevant aspects as contained in record of
       the case, is satisfied that the charges which were
       established against Shri H.L. Gulati. SAO(Retd.)
       constitutes a grave misconduct. Therefore, the President
c      considers that ends of justice would be met if 50% of
       the pension admissible to Shri H.L. Gulati, SAO (Retd.)
       is withheld on permanent basis and 50% of gratuity is
       withheld."
                                           (emphasis is ours)
D
        19. Based on the conclusion, which had been recorded
  by the punishing authority in the order dated
  30.11.2005(extracted above), namely, that the delinquency
  levelled against the appellant in the charge memo dated
E 7. 7 .1998 which stood established constituted "grave
  misconduct". A review petition filed by the appellant to assail
  the order of punishment was rejected on 1.8.2007.

       20. We are satisfied, that it was open to the punishing
F authority to have passed the punishment order, in terms of the
  mandate contained in Rule 9 of the 1972 Rules. We are
  further satisfied, that the punishing authority could have
  passed such an order after arriving at the conclusion that the
  appellant/delinquent was either guilty of "grave negligence" or
G of "grave misconduct". The punishing authority recorded,
  while passing the punishment order, that the appellant was
  found to have committed acts of "grave misconduct". Having
  perused the charges proved against the appellant, we have
  already concluded above, that the delinquency established
H
                H. L. GULATI v. UNION OF INDIA                   741
                [JAGDISH SINGH KHEHAR, J.]

against appellant was of negligence, and not of misconduct. A
Therefore, the finding recorded in the impugned order that the
appellant had committed acts of "grave misconduct" cannot
be accepted. The above conclusion, in the impugned order
being unacceptable, is hereby set aside. In the absence of
the conclusion of "grave negligence", the punishment order is B
liable to be set aside, and is accordingly set aside.

       21. Since the delinquency relates to the years 1992 to
1994, it would not be in the fitness of the matter, to require
the punishing authority to reconsider a lesser punishment, in C
view of the conclusion recorded by us hereinabove. We
would therefore exercise our jurisdiction under Article 142 of
the Constitution of India, to inflict an appropriate punishment
upon the appellant. Keeping in mind the delinquency proved
and established against the appellant in the enquiry report D
dated 18.7.2002, which was accepted by the punishing
authority, we are satisfied that ends of justice would be met if
the punishment of withholding 50% of his gratuity is
maintained/sustained. Insofar as the permanent withholding
of 50% of the appellant's pension is concerned, we are of the E
view that it would be just and appropriate to sustain the same
till the end of the current month, and to order the release of
100% of the appellant's pension with effect from 01.03.2015.
Ordered accordingly.
                                                                   F
    The instant appeals stand disposed of in the aforesaid
terms.

Devika Gujral                             Appeals disposed of.
                                                                  G