S. MAHESHversusTHE CHAIRMAN CUM MANAGING DIRECTOR, NEYVELI LIGNITE CORPORATION LTD. NEYVELI TAMIL NADU & ORS.

                        [2018] 13 S.C.R. 577                            577


                           S. MAHESH                                    A
                                 v.
 THE CHAIRMAN CUM MANAGING DIRECTOR, NEYVELI
       LIGNITE CORPORATION LTD. NEYVELI
               TAMIL NADU & ORS.
                                                                        B
                  (Civil Appeal No. 10812 of 2018)
                        OCTOBER 29, 2018
[ABHAY MANOHAR SAPRE AND INDU MALHOTRA, JJ.]
      Service Law: Appointment – Propriety of – On facts,
                                                                        C
appointment of appellant, belonging to backward community as
Engineering Supervisor, declared null and void on account of failure
to produce original caste certificate – Challenge to – Single Judge
of the High Court quashed the said order, however, the Division
Bench upheld the order – On appeal, held: Appellant at the first
available opportunity and before joining the duties had sent a letter   D
on his own to the Corporation that the Revenue Authorities had
declined to issue the original caste certificate to him – Appellant
also requested the Corporation not to treat him as ‘reserved
candidate’ but treat him as ‘general candidate’ – Appellant did not
suppress any information relating to his caste certificate from the
                                                                        E
Corporation – Corporation by asking the appellant to join the duties,
and later promoting him to the next higher grade, condoned the
lapse and Corporation had no right to hold any Departmental
Enquiry in relation to the issue of appellant’s caste certificate –
Assuming that the Corporation could still probe the issue, the
Corporation having held a Departmental Enquiry and imposing             F
the punishment on the appellant of reduction of his rank for a period
of 2 years with cumulative effect, the issue of caste certificate
attained finality – Furthermore, assuming that the higher authority
had the power to enhance the punishment, it could be exercised
within 30 days from the date of the order of punishment – However,
                                                                        G
the punishment order declaring the appellant’s appointment as null
and void was passed after 13 years from the date of passing of the
original punishment order – Thus, the entire action of the
Corporation is arbitrary, unreasonable, and not sustainable in law
and order passed by Division Bench set aside.
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                                577
578            SUPREME COURT REPORTS                      [2018] 13 S.C.R.


A           Allowing the appeal, the Court
            HELD: 1.1 Appellant at the first available opportunity and
      before joining the duties had sent a letter on his own to the
      Corporation informing therein that it was not possible for him to
      produce the original caste certificate because the Revenue
B     Authorities had declined to issue the original caste certificate to
      him. Not only that, the appellant further on his own requested
      the Corporation not to treat him as “reserved candidate” but treat
      him as “general candidate”. In this way, the appellant, did not
      suppress any information relating to his caste certificate from
      the Corporation. The Corporation, in these circumstances, had
C     three options; first, not to appoint the appellant which the
      Corporation did not opt; second, to grant some more time to
      produce the caste certificate or any other material to prove the
      appellant’s caste which again the Corporation did not opt and the
      third, to condone the lapse in filing the caste certificate and
D     proceed to consider the appellant’s case treating him as a
      candidate belonging to the general category for selection purpose
      which the Corporation opted. The Corporation by their express
      conduct having followed the third option and condoned the lapse
      by asking the appellant to join the duties, which the appellant
      did, and later further promoting him to the next higher grade,
E     the issue relating to caste certificate lost its significance. Thus,
      the Corporation, had no right to hold any Departmental Enquiry
      in relation to the issue of appellant’s caste certificate because
      they condoned the issue of caste certificate by allowing the
      appellant to join the duties and later by promoting him to the
F     next higher grade. [Para 27-31][584-C-H]
            1.2 Assuming, however, that the Corporation could still
      probe the issue in relation to the appellant’s caste certificate after
      allowing him to join, the Corporation having held a Departmental
      Enquiry and imposing the punishment on the appellant of
G     “reduction of his rank to a lower stage by two stages in his time
      scale for a period of 2 years with cumulative effect”, the issue of
      caste certificate attained finality in all respect. The Corporation
      had thereafter no power to raise the issue of caste certificate
      again in any form against the appellant. In other words, the issue
      of caste certificate did not survive for any more consideration
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  S. MAHESH v. THE CHAIRMAN CUM MANAGING DIRECTOR,                   579
               NEYVELI LIGNITE CORPN. LTD.

between the parties inasmuch as it was not a live issue between      A
the parties. [Para 32, 33] [525-A-C]
      1.3 Assuming that the higher authority had the power to
enhance the punishment imposed on the appellant by taking
recourse to powers under Rule 30, such power, could be exercised
by the authorities within 30 days from the date of the order of      B
punishment. [Para 34] [585-C-D]
      1.4 The punishment order was passed on 30.08.1997
whereas the higher authority exercised his power under Rule 30
on 07.07.2010 by which the punishment order dated 30.08.1997
was cancelled and was substituted by an order declaring the          C
appellant’s appointment as null and void. This order was passed
beyond a period of 30 days as provided in Rule 30 (3). In other
words, the higher authority could pass the order under Rule 30
for revoking the original order of punishment dated 30.08.1997
as being bad and substituting it with another order declaring the
appellant’s appointment as null and void within 30 days from the     D
date of punishment order i.e, it could be passed on or before
30.09.1997 but not beyond this date. Since the order was passed
almost after 13 years from the date of passing of the original
punishment order, and hence on the face, it was bad in law.
[Para 35, 37] [585-E, G]                                             E
      1.5 The entire action of the Corporation starting from
issuance of second charge memo dated 11.08.1995 and ending
by passing the order dated 07.07.2010 is arbitrary, unreasonable,
and mala fide exercise of the powers by the Corporation against
the appellant and hence the same is not sustainable in law. In any   F
event, the order dated 07.07.2010 which is subject matter of this
appeal is wholly arbitrary, unreasonable and is not legally
sustainable. [Paras 25, 26] [584-A-B]
      1.6 The Single Judge, rightly set aside the order impugned
in the writ petition whereas the Division Bench was not right in     G
setting aside the order of the Single Judge. Therefore, the
reasoning and the conclusion of the Division Bench cannot be
concurred with but are inclined to concur with the reasoning and
the conclusion arrived at by the Single Judge. The order passed
by the Division Bench is set aside and the order passed by the
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580            SUPREME COURT REPORTS                          [2018] 13 S.C.R.


A     Single Judge (Writ Court) is restored. As a consequence, order
      dated 07.07.2010 passed by the Director (Power) of the
      Corporation which set aside the order of punishment dated
      30.08.1997 and in its place substituted the order by declaring
      the appellant’s appointment void ab initio is hereby quashed. [Paras
      39, 40 and 41][586-B-C]
B
            CIVIL APPELLATE JURISDICTION : Civil Appeal No. 10812
      of 2018.
            From the Judgment and Order dated 05.03.2018 of the High
      Court of Judicature at Madras in W.A. No. 273 of 2017.
C           Ms. V. Mohana,Sr. Adv., P. R. Kovilan, Mrs. Geetha Kovilan,
      Ms. Jubli Momalia, Ms. Kashvi, C. M. Patel , Advs. for the Appellant.
            Anil Nag, Adv. for the Respondent.
            The Judgment of the Court was delivered by
D           ABHAY MANOHAR SAPRE, J. 1. Leave granted.
             2. This appeal is filed against the final judgment and order dated
      05.03.2018 passed by the High Court of Judicature at Madras in W.A.
      No. 273 of 2017 whereby the Division Bench of the High Court set
      aside the order dated 07.11.2016 passed by the learned Single Judge in
E     W.P. No. 15312/2010 and allowed the writ appeal filed by the respondent
      herein.
            3. The controversy involved in the appeal is short. However, few
      relevant facts herein below need mention to appreciate the controversy.
             4. The appellant (employee) was the writ petitioner whereas the
F     respondent herein (employer) was the respondent in the writ petition
      filed by the appellant in the High Court of Madras against the respondent
      out of which this appeal arises.
             5. The respondent herein is the Government Company known as
      Neyveli Lignite Corporation Ltd. It is mainly engaged in the business of
G     manufacture and sale of minerals (lignite). It has an office and business
      activity in South Arcot (Tamil Nadu).
             6. The respondent (hereinafter referred to as “the Corporation”)
      being a fully owned Government Company is a “State” within the meaning
      of Article 12 of the Constitution of India and is thus amenable to the writ
H     jurisdiction under Article 226/227 of the Constitution of India.
  S. MAHESH v. THE CHAIRMAN CUM MANAGING DIRECTOR,                             581
 NEYVELI LIGNITE CORPN. LTD. [ABHAY MANOHAR SAPRE, J.]

        7. Pursuant to advertisement issued by the Corporation for the         A
appointment of “Diploma Engineer Trainee Grade II (Electrical)”, the
appellant was one of the candidates who applied for the said post. The
appellant was interviewed by the Corporation and selected for the said
post. The Corporation on 28.01.1988 accordingly issued an appointment
letter to the appellant. (Annexure-P-1).
                                                                               B
        8. In terms of the appointment letter, the appellant was initially
appointed on probation for a period of two years as Trainee and on its
successful completion, was to be appointed on regular basis as
Engineering Supervisor (Electrical) on probation for a period of one year
and then to be absorbed as a regular employee. The appellant was also
required to execute Bond for a particular period.                              C
        9. At the time of the interview and the appointment, the appellant
had produced photocopy of his Scheduled Caste Certificate to the
Corporation and had sought time to produce its original. The Corporation
granted the indulgence to the appellant for producing his original
Scheduled Caste Certificate.                                                   D
        10. The appellant on 03.03.1988, however, sent a letter (Annexure
R-3) to the Corporation informing them that he belongs
a community known as “ Konda Reddi” which is a backward (SC)
community. He said that he had approached the concerned Revenue
Authorities for obtaining caste certificate in the prescribed form so as to    E
enable him to submit it to the Corporation but the Revenue Authorities
informed him that the Department has stopped issuing any such
certificate. The appellant, therefore, expressed his inability to produce
the original Scheduled Caste Certificate and requested the Corporation
to treat him as a candidate belonging to the “General Category” instead
of “Reserved Category” in selection process.                                   F
        11. The Corporation, on receipt of the aforesaid letter, issued a
posting order no. 1416/P&A/VI-2/88-3 dated 02.05.1988 to the appellant
and asked him to report for duty. The appellant was also allotted quarter
in general category as a part of his service condition. The appellant
accordingly joined his duty on 02.05.1988.                                     G
        12. It was almost after four years of his joining i.e on 24.05.1993,
the Corporation served a memo to the appellant stating therein that
appellant had submitted false community certificate at the time of joining
and therefore why disciplinary action be not taken against him for filing
such certificate.
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582             SUPREME COURT REPORTS                            [2018] 13 S.C.R.


A            13. It is not in dispute that the Corporation though issued this
      memo to the appellant but did not pursue the matter. On the other hand,
      the appellant was promoted to the rank of Junior Engineer Grade I with
      effect from 01.06.1993 vide order dated 16.12.1993. The appellant
      accordingly started working on the promotional post.
B           14. On 11.08.1995, the Corporation issued second memo to the
      appellant reiterating the same charge for which the first memo was
      issued. The appellant filed his reply and reiterated his stand which he
      had taken in his letter dated 03.03.1988.
             15. The Corporation then conducted a Departmental Enquiry and
C     recorded the statements of the Corporation’s officials wherein the officials
      admitted that the appellant had sent a letter dated 03.03.1988 expressing
      therein his inability to produce the original caste certificate and further
      requesting the Corporation to treat him as general candidate instead of
      reserved candidate. They also admitted that the appellant’s request was
      accepted by DGM/P&A.
D
            16. Despite this, the Corporation concluded in the enquiry that the
      charge leveled against the appellant has been proved. The appellant
      was accordingly awarded a punishment of “reduction of rank to a
      lower stage by two stages in his time scale for a period of 2 years
      with cumulative effect”. The Corporation also ordered that henceforth
E     the appellant be considered as general category candidate and that he
      would not be allowed to avail any benefits which are extended to the
      reserved category candidates. The appellant felt aggrieved and filed
      Departmental Appeal. It was, however, dismissed.
             17. After three years i.e. on 20.09.2000, the Corporation for the
F     third time issued a memo again asking the appellant to produce his
      community certificate in original for its verification. The appellant replied
      to the said memo reiterating his earlier stand saying that he had already
      informed vide his letter dated 03.03.1988 and in the enquiry proceedings
      to the Corporation that it was not possible to produce the original certificate
G     for the reasons mentioned therein. The appellant further said that he
      never took any benefit of reserved candidate in the service because his
      request to treat him as general candidate was accepted by the
      Corporation.


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  S. MAHESH v. THE CHAIRMAN CUM MANAGING DIRECTOR,                                583
 NEYVELI LIGNITE CORPN. LTD. [ABHAY MANOHAR SAPRE, J.]

       18. The Corporation did not stop here and lodged an FIR against            A
the appellant on 30.07.2001 in PS Neyveli Town (Crime No.219) for
filing false caste certificate. On 04.11.2003, the Police Authorities
submitted a report that there was no case made out against the appellant
in the FIR. On 15.07.2008, the Magistrate in RC No.56/2008, on perusal
of the FIR and final report of the Police Authorities, closed the case
                                                                                  B
against the appellant.
      19. After two years, the Corporation again renewed their efforts
and this time, its director invoked the powers under Rule 30 of the NLC
Employees (Control and Appeal) Rules (hereinafter referred to as “the
Rules”) and by order dated 07.07.2010 substituted the punishment
imposed on the appellant vide order dated 30.8.1997 to that of declaring          C
appellant’s appointment to be null and void.
      20. The appellant, felt aggrieved, filed writ petition (W.P. No.1512/
2010) in the Madras High Court questioning therein the legality and
correctness of the order dated 07.07.2010. The Corporation contested
the writ petition.                                                                D

      21. By order dated 07.11.2016, the learned Single Judge allowed
the appellant’s writ petition and quashed the order dated 07.07.2010.
Feeling aggrieved of the order passed by the learned Single Judge, the
Corporation filed intra court appeal before the Division Bench.
                                                                                  E
       22. By impugned order, the Division Bench allowed the
Corporation’s appeal, and while setting aside the order passed by the
learned Single Judge, dismissed the appellant’s writ petition and upheld
the order dated 07.07.2010 by which the appellant’s appointment was
held as null and void. It is against this order, the writ petitioner (appellant
herein) felt aggrieved and filed the present special leave to appeal in this      F
Court.
     23. Heard Ms. V. Mohana, learned counsel for the appellant and
Mr. Anil Nag, learned counsel for the respondent(s).
       24. Having heard the learned counsel for the parties and on perusal
                                                                                  G
of the written submissions filed by the parties, we are constrained to
allow the appeal and while setting aside of the impugned order, allow the
appellant’s writ petition and restore the order of the Single Judge.


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584             SUPREME COURT REPORTS                             [2018] 13 S.C.R.


A            25. In our considered opinion, the entire action of the Corporation
      starting from issuance of second charge memo dated 11.08.1995 and
      ending by passing the order dated 07.07.2010 is arbitrary, unreasonable,
      and mala fide exercise of the powers by the Corporation against the
      appellant and hence the same is not sustainable in law.
B           26. In any event, the order dated 07.07.2010 which is subject
      matter of this appeal and with which we are really concerned in this
      appeal is wholly arbitrary, unreasonable and is not legally sustainable.
      This we say for following reasons.
             27. First, the appellant at the first available opportunity and before
C     joining the duties had sent a letter on 03.03.1988 of his own to the
      Corporation informing therein that it was not possible for him to produce
      the original caste certificate because the Revenue Authorities had declined
      to issue the original caste certificate to him.
            28. Not only that, the appellant further on his own requested the
D     Corporation not to treat him as “reserved candidate” but treat him as
      “general candidate”. In this way, the appellant, in our opinion, did not
      suppress any information relating to his caste certificate from the
      Corporation.
             29. Second, the Corporation, in these circumstances, had three
E     options; first, not to appoint the appellant which the Corporation did not
      opt; Second, to grant some more time to produce the caste certificate or
      any other material to prove the appellant’s caste which again the
      Corporation did not opt and the third, to condone the lapse in filing the
      caste certificate and proceed to consider the appellant’s case treating
      him as a candidate belonging to the general category for selection purpose
F     which the Corporation opted.
             30. Third, the Corporation by their express conduct having followed
      the third option and condoned the lapse by asking the appellant to join
      the duties, which the appellant did, and later further promoting him to the
      next higher grade, the issue relating to caste certificate lost its significance.
G
             31. Fourth, in the light of afore-mentioned reasons, the Corporation,
      in our opinion, had no right to hold any Departmental Enquiry in relation
      to the issue of appellant’s caste certificate because they condoned the
      issue of caste certificate by allowing the appellant to join the duties and
      later by promoting him to the next higher grade.
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  S. MAHESH v. THE CHAIRMAN CUM MANAGING DIRECTOR,                              585
 NEYVELI LIGNITE CORPN. LTD. [ABHAY MANOHAR SAPRE, J.]

        32. Assuming, however, that the Corporation could still probe the       A
issue in relation to the appellant’s caste certificate after allowing him to
join, the Corporation having held a Departmental Enquiry and imposing
the punishment on the appellant of “reduction of his rank to a lower
stage by two stages in his time scale for a period of 2 years with
cumulative effect” by order dated 30.08.1997, the issue of caste
                                                                                B
certificate attained finality in all respect.
       33. The Corporation had thereafter no power to raise the issue of
caste certificate again in any form against the appellant. In other words,
the issue of caste certificate did not survive for any more consideration
between the parties inasmuch as it was not a live issue between the
parties.                                                                        C

       34. Fifth, assuming that the higher authority had the power to
enhance the punishment imposed on the appellant by taking recourse to
powers under Rule 30, such power, in our view, could be exercised by
the authorities within 30 days from the date of the order of punishment.
                                                                                D
       35. In this case, the punishment order was passed on 30.08.1997
whereas the higher authority exercised his power under Rule 30 on
07.07.2010 by which the punishment order dated 30.08.1997 was
cancelled and was substituted by an order declaring the appellant’s
appointment as null and void. This order was passed beyond a period of
30 days as provided in Rule 30 (3) which in clear terms provides that           E
“no order enhancing the punishment under this rule shall be made
after a period of 90 days from the date on which the original order
of punishment was served on the employee charged “.
       36. In other words, the higher authority could pass the order under
Rule 30 for revoking the original order of punishment dated 30.08.1997          F
as being bad and substituting it with another order declaring the appellant’s
appointment as null and void within 90 days from the date of punishment
order i.e, it could be passed on or before 30.09.1997 but not beyond this
date.
       37. Since in this case, the order was passed almost after 13 years       G
from the date of passing of the original punishment order, and hence on
the face, it was bad in law.
       38. In the light of afore-mentioned reasons, we are of the opinion
that in whatever way the question is examined, the entire action of the
                                                                                H
586                SUPREME COURT REPORTS                       [2018] 13 S.C.R.


A     Corporation and in particular the order dated 07.07.2010 which is subject
      matter of this appeal is found to be wholly arbitrary, unreasonable and,
      therefore, it is held legally unsustainable.
             39. The Single Judge, therefore, rightly set aside the order
      impugned in the writ petition whereas the Division Bench was not right
B     in setting aside the order of the Single Judge.
             40. We cannot, therefore, agree with the reasoning and the
      conclusion of the Division Bench but are inclined to concur with the
      reasoning and the conclusion arrived at by the learned Single Judge in
      addition to our own reasoning given above.
C            41. In view of the foregoing discussion, the appeal succeeds and
      is hereby allowed. The impugned order passed by the Division Bench is
      set aside and the order passed by the Single Judge (Writ Court) is restored.
            42. As a consequence, order dated 07.07.2010 passed by the
      Director (Power) of the Corporation which set aside the order of
D     punishment dated 30.08.1997 and in its place substituted the order by
      declaring the appellant’s appointment void ab initio is hereby quashed.

      Nidhi Jain                                                    Appeal allowed.


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