U.P. POWER CORPORATION LTD. AND ANOTHERversusVIRENDRA LAL (DEAD) THROUGH L.RS.

                        [2013] 11 S.C.R. 314


A      U.P. POWER CORPORATION LTD. AND ANOTHER
                                v.
            VIRENDRA LAL (DEAD) THROUGH L.RS.
                 (Civil Appeal No.8949 of 2013)
                         OCTOBER 3, 2013
B
             [ANIL R. DAVE AND DIPAK MISRA, JJ.]
                                                                I

       Service Law - Misconduct - Punishment - Imposition of,
  by higher/ appellate authority - Justification - Held: A higher
C authority may pass order imposing punishment, if the right of
  appeal is not taken away - If the appellate authority passes
  order as the primary authority and there is provision for further
  appeal or revision or review, it cannot be said that the said
  order suffers from any illegality - In the case at hand, the
D Chairman was the competent authority to pass order of
  punishment against the delinquent employee, while appeal/
  representation from the order of the Chairman lay before the
  UPSEB - However, by virtue of the order of punishment
  having been passed by the UPSEB itself, remedy of appeal
E was denied to the delinquent employee and consequently, the
  Tribunal and the High Court were justified in setting aside the
  order of UPSEB - U.P. State Electricity Board (Officers and
  Servants) (Conditions of Service) Regulations, 1975 -
  Regulation 6.
F      'V', the predecessor-in-interest of the respondents,
  was an Assistant Engineer in the U.P. State Electricity
  Board (UPSEB). He had released electricity to one
  consumer beyond the approved estimate as a
  consequence of which wrongful loss was caused to
G UPSEB. Disciplinary proceedings were initiated against
  'V'. The inquiry committee commenced enquiry.
  Meanwhile 'V' stood superannuated, but the proceedings
  continued and, eventually, the inquiry report was served

H                                314
U.P. POWER CORPORATION LTD. v. VIRENDRA LAL 315
           (DEAD) THROUGH L.RS.
on 'V'. Considering the submissions put forth by 'V' in his    A
representation, the UPSEB held him guilty of misconduct
and ordered deduction of 10% amount of the pension
payable to him.

    'V' preferred petition before the State Public Service
                                                               B
Tribunal contending, inter alia, that the power to deal with
the report of the inquiry committee vested in the
Chairman of the UPSEB under regulation 6(4) of U.P.
State Electricity Board (Officers and Servants)
(Conditions of Service) Regulations, 1975 but in his case      C
as the punishment had been imposed by the UPSEB, he
had been deprived of the right of appeal. The order
passed by UPSEB was set aside by the Tribunal. The
judgment of the Tribunal was affirmed by the High Court,
and therefore the present appeal.
                                                               D
    Dismissing the appeal, the Court

    HELD: 1. Regulation 6 of the U.P. State Electricity
Board (Officers and Servants) (Conditions of Service)
Regulations, 1975 deals with constitution of Committee         E
to enquire into cases. Sub-regulation (4) of the said
Regulation empowers the Chairman to deal with the
report and recommendations of the Inquiry Committee in
accordance with the relevant Regulations and pass final
orders in respect of officers upto the rank of
Superintending Engineer. 'V' retired from service as an        F
Assistant Engineer which rank is lower than the
Superintending Engineer. Hence, the Chairman was
authorized to pass the order of punishment. Sub-
regulation (5) of Regulation 6 makes it clear that if an
order is passed by the Chairman, an appeal or                  G
representation, as the case may be, lies to the Board. In
any case it is subject to challenge in the hierarchical
system of the UPSEB. [Paras 9, 10, 11 and 12) [320-C, F-
G; 321-F-G]
                                                               H
    316    SUPREME COURT REPORTS                [2013] 11 S.C.R.


A      2. A higher authority may pass an order imposing a
  punishment and the same would withstand scrutiny if the
  right of appeal is not taken away. That apart, if the
  appellate authority passes an order as the primary
  authority and there is provision for further appeal or
B revision or review it cannot be said that the said order
  suffers from any illegality. In the case at hand, there is no
  denial of the fact that the UPSEB passed the order for
  deduction of 10% pension from the delinquent employee.
  Under the Regulations, there is a stipulation that an
c appeal or representation, as the case may be, from the
  order of the Chairman shall lie to the UPSEB. The
  Regulation clearly provides that in case of an Assistant
  Engineer the Chairman is the competent authority to pass
  the order of punishment and, therefore, by virtue of the
  order passed by the UPSEB, remedy of appeal was
0
  denied to the delinquent employe·e. Under these
  circumstances, the view expressed by the High Court has
  to be regarded as flawless. [Para 21) [326-G; 327-A-C]
      Surjit Ghosh v. Chairman & Managing Director, United
E Commercial Bank and others (1995) 2 SCC 474; Electronics
  Corporation of India v. G,- Muralidhar (2001) 10 SCC 43; A.
  Sudhakar v. Postmaster General, Hyderabad and another
  (2006) 4 SCC 348: 2006 (3) SCR 373 and S. Loganathan v.
  Union of India and others (2012) 1 sec 293: 2011 (14) SCR
F 1081 - relied on.
       State of Uttar Pradesh v. Brahm Datt Sharma and
  another (1987) 2 SCC 179: 1987 (2) SCR 444; Takhatray
  Shivadaftray Mankad v. State of Gujarat 1989 Supp (2) SCC
  110: 1989 (3) SCR 214 and Balbir Chand v. Food
G Corporation of India Ltd. and others (1997) 3 SCC 371: 1996
  (10) Suppl. SCR 156- referred to.
                        Case Law Reference:
     1987 (2) SCR 444             referred to         Para 12
H    1989 (3) SCR 214             referred to         Para 13
U.P. POWER CORPORATION LTD. v. VIRENDRA LAL317
           (DEAD) THROUGH L.RS.
  (1995) 2 sec 474                relied on           Para 15        A

  1996 (10) Suppl. SCR 156 referred to                Para 16
  (2001) 1o sec 43                relied on           Para 18
  2006 (3) SCR 373                relied on           Para 19
                                                                     B
  2011 (14) SCR 1081              relied on           Para 20

    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
8949 of 2013.

     From the Judgment & Order dated 11.02.2011 of the High C
Court of Judicature at Allahabad, Lucknow Bench in Writ
Petition (SIB) No.211 of 2011.

    Shiv Kumar Tripathi, V.N. Raghupathy for the Appellants.
                                                                     D
    The Judgment of the Court was delivered by

    DIPAK MISRA, J. 1. Leave granted.

     2. Calling in question the legal acceptability of the order
dated 11.2.2011 passed by the High Court of Judicature at E
Allahabad, Lucknow Bench, Lucknow, in Writ Petition (SIB) No.
211 of 2011 whereby the Division Bench has affirmed the
judgment dated 23.9.2010 passed by the State Public Service
Tribunal, Lucknow, (for short "the tribunal") in claim petition No.
683 of 2000 wherein the tribunal had set aside the order dated F
12.10.1999 passed by the U.P. State Electricity Board
(UPSEB) imposing punishment of deduction of 10% amount of
pension payable to the original respondent, Virendra Lal,
predecessor-in-interest of the respondents herein, the U.P.
Power Corporation Ltd. (for short "the Corporation) and its G
functionaries have preferred this appeal by special leave.

     3. The expose' of facts are that late Virendra Lal was
posted as Assistant Engineer in Electricity Distribution Division,
Sultanpur in the year 1984 and at that time he ha~ released
                                                                     H
    318      SUPREME COURT REPORTS                  [2013] 11 S.C.R.

A   electricity to one consumer, namely, Mis. Arif Cement Industries,
    Jagdishpur, beyond the approved estimate as a consequence
    of which wrongful loss was caused to UPSEB. After the
    authorities of the UPSEB came to know about the same, the
    matter was forwarded to the inquiry committee on 27.9.1994
B   for initiation of a disciplinary proceeding on the basis of which
    on 23.2.1998, the inquiry committee framed charges against
    him and called for an explanation. The delinquent employee filed
    his reply on 16.4.1998 and thereafter the inquiry committee
    commenced the enquiry. On 30.6.1998, late Virendra Lal stood
c   superannuated. On 28.1.1999 the inquiry report was served on
    him and he was granted opportunity to submit a representation
    pertaining to the inquiry report. On 21.3.1999 he filed his
    representation and considering the submissions put forth in the
    representation on 12.10.1999 the UPSEB passed the order of
    punishment as has been stated hereinbefore. The said order
0
    was communicated to late Virendra Lal by the Joint Secretary
    of the UPSEB.

         4. Grieved by the aforesaid order, Virendra Lal preferred
    claim petition No. 683 of 2000 before the tribunal contending,
E   inter alia, that there is no statutory provision in the UPSEB for
    recovery from the pension of a retired officer; that the power to
    deal with the report of the inquiry committee vests in the
    Chairman of the UPSEB in regulation 6(4) of U.P. State
    Electricity Board (Officers and Servants) (Conditions of Service)
F   Regulations, 1975 (for short "the Regulations") but as the
    punishment had been imposed by the UPSEB he had been
    deprived of the right of appeal; that other officers with similar
    allegations had been exonerated but he alone was proceeded
    which was discriminatory in nature; and that the manner in which
G   the proceeding was conducted was violative of the principles
    of natural justice and had caused serious prejudice to him. The
    stand and stance put forth by him was opposed by the UPSEB.

         5. The tribunal adverting to the application of certain Rules,
    violation of principles of natural justice, the delay in
H
U.P. POWER CORPORATION LTD. v. VIRENDRA LAL 319
     (DEAD) THROUGH L.RS. [DIPAK MISRA, J.]
commencement of the departmental proceeding and the A
prejudice caused to the delinquent employee set aside the
order dated 12.10.1999 and directed to release the deducted
amount of pension to the applicant therein with simple interest
@ 8 per cent per annum from the date the amount was due to
the date of the actual payment and further directed for release B
of the pension forthwith.

     6. Being dissatisfied with the aforesaid order the
Corporation preferred a writ petition before the High Court and
the Division Bench disposed of the same by passing the C
following order

     "During the course of argument, it has been admitted by
     the petitioners' counsel that under Rules, Chairman is the
     disciplinary authority who is competent to pass the order.
     Justification has been given by the petitioners' counsel that D
     since the claimant respondent is a retired person, power
     was exercised by the Board. Even if an employee is
     retired, the power should be exercised by the same
     authority who has been conferred power to work as
     disciplinary authority under rules. Power cannot be usurped E
     by the higher authority in violation of the service rules.
     Accordingly, the impugned order passed by the tribunal
     does not seem to suffer from any impropriety or illegality."

      7. We have heard Mr. Shiv Kumar Tripathi, learned counsel
for the appellants. Despite service of notice on the legal heirs    F
of the original respondent, there has been no appearance.

     8. Criticizing the order passed by the High Court it is
submitted by Mr. Tripathi that the High Court has fallen into error
by opining that even in respect of a retired employee the power G
should be exercised by the same authority who had been
conferred power to act as the disciplinary authority under the
Regulations. It is urged by him that if the higher authority initiates
the disciplinary proceeding and imposes the punishment and
no prejudice is caused the order of punishment cannot be H
    320      SUPREME COURT REPORTS                 [2013] 11 S.C.R.

A   annulleq on that score. It is further canvassed by him that as
    the High Court has only addressed to a singular issue and
    arrived at the conclusion, the matter deserves to be remitted
    to the High Court for adjudication on other issues.

B         9. It is not in dispute that the disciplinary proceeding was
    initiated against the original respondent while he was in service
    and thereafter the proceeding continued and, eventually, the
    Board passed the order of punishment. Learned counsel for
    the appellants has drawn our attention to the Regulations.
    Regulation 6 deals with constitution of Committee to enquire
c   into cases. Sub-regulation (4) of the said Regulation reads as
    follows: -

          "(4) The Chairman shall in relation to Officers and servants
          upto the rank of Superintending Engineer deal with the
D         report and recommendations of the Inquiry Committee in
          accordance with the relevant regulations and pass final
          orders. In the case of Officers above the rank of
          Superintending Engineer, the Chairman shall place the
          report of the Inquiry Committee along with its
E         recommendations, if any, before the Board, who shall
          pass final orders."

          10. On a perusal of the aforequoted sub-regulation it is
    quite vivid that the Chairman has been empowered to deal with
    the report and recommendations of the Inquiry Committee in
F   accordance with the relevant Regulations and pass final orders
    in respect of officers upto the rank of Superintending Engineer.
    The delinquent employee, Late Virendra Lal, retired from
    service as an Assistant Engineer which rank is lower than the
    Superintending Engineer. Hence, the Chairman was authorized
G   to pass the order of punishment. As the factual matrix would
    reveal the order of punishment was passed on 12.10.1999 and
    the Board had passed that order. The said order reads as
    follows: -                                     ·

H               "The Board has asked to Shri Lal to file his
U.P. POWER CORPORATION LTD. v. VIRENDRA LAL321
     (DEAD) THROUGH L.RS. [DIPAK MISRA, J.]
      representation within 14 days providing him a copy of A
      enquiry report received from enquiry committee vide letter
      No. 490-Shija-05d/SEB-99-7(38)-05D/96. Shri Lal has
      submitted his representation on 21.3.1999 and it has been
      found after examination thereof that Shri Virendra Lal could
      not clarify in his representation as to why he has installed B
      a sub-station deviating from approved estimate. The
      recommendation by Enquiry Committee that Shri Lal is
      guilty of providing wrongful gain to consumer and wrongful
      loss to Board is proper and appropriate.

            Therefore Shri Virendra Lal (77031) then Assistant C
      Engineer (presently retired) has been found the guilty of
      misconduct and charges levelled against him, so the order
      hereby is passed to deduct 10% amount of the pension
      payable to him for 5 years with due compliance of the CCA
      Rules.                                                    D

                                       By the order of the Board
                                                               Sd/-
                                                       S.P. Singh
                                                   Joint Secretary     E
                                                      11 .10. 1999"
     11. At this stage, it is appropriate to refer to sub-regulation
(5) of Regulation 6 which reads as follows: -

      "(5) An appeal or representation, as the case may be, from       F
      the orders of the Chairman passed under sub-regulation
      (4) shall lie to the Board."

     12. Thus, if an order is passed by the Chairman, an appeal
or representation, as the case may be, lies to the Board. In any G
case it is subject to challenge in the hierarchical system of the
UPSEB. Learned counsel has commended us to the decision
in State of Uttar Pradesh v. Brahm Datt Sharma and another1 •
The said decision only supports the proposition that if a
1.   (1987) 2 sec 179.                                                 H
    322       SUPREME COURT REPORTS                 [2013] 11 S.C.R.


A   disciplinary proceeding against an employee of the Government
    is initiated in respect of a misconduct committed by him and if
    he retires from service on attaining the age of superannuation
    before completion of the disciplinary proceedings and charges
    are of serious nature, then it is open to the Government to take
B   proceedings against the Government servant in accordance
    with the rules for the reduction of pension and gratuity.

          13. In Takhatray Shivadattray Mankad v. State of Gujarat, 2
    the appellant therein was compulsorily retired on January 12,
c   1962 in one of the departmental proceedings. Two other
    proceedings were instituted in the year 1963 and that is earlier
    to his attaining the age of superannuation on January 14, 1964.
    These departmental proceedings were dropped on the ground
    that they had been rendered infructuous. Thereafter, the
    proceedings were revived 1and, eventually, certain punishment
0
    was imposed pertaining to determination of his pension. The
    learned Judges dealing with the said submission opined thus:-

          "The learned counsel for the appellant strenuously
          contended that after the disciplinary inquiries had been
E         dropped on the ground that they had become infructuous,
          the government was not right and justified in reducing the
          pension and gratuity on the same charges which were the
          subject matter of the enquiries. This argument of the
          learned counsel, in our opinion, does not merit
F         consideration because the charges against the appellant
          were not made use of for awarding any punishment after
          his retirement from service but only for determining the
          quantum of the appellant's pension in accordance with the
          rules relating to the payment of pension and gratuity."
G
         To arrive at the said conclusion the Court relied upon the
    principles stated in Brahm Datt Sharma (supra).

          14. In the case at hand, we may note with profit that though

H   2.   1989 Supp (2) sec 110.
U.P. POWER CORPORATION LTD. v. VIRENDRA LAL 323
     (DEAD) THROUGH L.RS. [DIPAK MISRA, J.]
 the tribunal has recorded that there is no provision for            A
 continuance of such a proceeding, yet the said issue need not
 be addressed to as we are only concerned with the controversy,
 as has emerged in this appeal, whether the UPSEB could have
 imposed the punishment accepting the recommendations of
 the Inquiry Committee.                                              B

       15. In this context, we may fruitfully refer to the authority in
  Surjit Ghosh v. Chairman & Managing Director, United
  Commercial Bank and others. 3 In the said case, the
  disciplinary proceeding was initiated against the delinquent C
  employee by the Deputy General Manager of United
  Commercial Bank, the respondent therein. The disciplinary
  authority at the relevant time was the Divisional Manager/
  Assistant General Manager (Personnel) and an appeal against
  their order lay to the Deputy General Manager or any other
  officer of the same rank. Against the order of the Deputy D
  General Manager a review lay to the General Manager. In this
  backdrop a contention was raised that the appellant was
  deprived of an opportunity to prefer an appeal provided under
  the Regulations and the same goes to the root of the dismissal
. order. The said contention was combatted by the employer E
  contending, inter alia, that when the Deputy General Manager
  is higher in rank than the disciplinary authority and the order of
  punishment has been- passed by the higher authority, no
  prejudice has been caused to the employee. A further
  contention was raised that in the facts and circumstances of F
  the case it should ~e held that when the order of punishment is
  passed by higher authority, no appeal is available under the
  Regulations as it is not necessary to provide for the same.
  Repelling the said argument the Court opined that it is true that
  when an authority higher than the disciplinary authority itself G
  imposes the punishment, the order of punishment suffers from
  no illegality when no appeal is provided to such authority.
  However, when an appeal is provided to the higher authority
 concerned against the order of the disciplinary authority or of
3.   (1995) 2 sec 474.                                               H
    324       SUPREME COURT REPORTS                 [2013] 11 S.C.R.


A   a lower authority and the higher authority passes an order of
    punishment, the employee concerned is deprived of the remedy
    of appeal which is a substantive right given to him by the Rules/
    Regulations. Thereafter, the learned Judges proceeded to state
    thus:
B
          "The higher or appellate authority may choose to exercise
          the power of the disciplinary authority in some cases while
          not doing so in other cases. In such cases, the right of the
          employee depends upon the choice of the higher/appellate
          authority which patently results in discrimination between
c         an employee and employee. Surely, such a situation
          cannot savour of legality. Hence we are of the view that
          the contention advanced on behalf of the respondent-Bank
          that when an appellate authority chooses ~o exercise the
          power of disciplinary authority, it should be held that there
D         is no right of appeal provided under the Regulations
          cannot be accepted."

          16. In Balbir Chand v. Food Corporation of India Ltd. and
    others" the Court adverted to the relevant rule position and
E   came to hold that in normal circumstances the Managing
    Director being the appellate authority should not have passed
    the order of punishment so as to enable the delinquent
    employee to avail right of appeal. The Court observed that it
    is a well-settled legal position that an authority lower than the
F   appointing authority cannot take any decision in the matter of
    disciplinary action, but there is no prohibition in law that the
    higher authority should not take decision or impose the penalty
    as the primary authority in the matter of disciplinary action. On
    that basis, it cannot be said that there will be discr;mination
G   violating Article 14 of .the Constitution or causing material
    prejudice. It is relevant to state here that the decision in Surjit
    Ghosh (supra) was pressed into service but the same was
    distinguished stating that in the said judgment under the Rules
    officer lower in hierarchy was the disciplinary authority but the
H   4.   (1997) 3 sec 371.
U.P. POWER CORPORATION LTD. v. VIRENDRA LAL 325
     (DEAD) THROUGH L.RS. [DIPAK MISRA, J.]
appellate authority had passed the order removing the officer          A
from service and thereby, the remedy of appeal provided under
the Rules was denied. In those circumstances, this Court opined
that it caused prejudice to the delinquent as he would have
otherwise availed of the appellate remedy and his right
pertaining to his case being considered by an appellate                B
authority on question of fact was not available. But it cannot be
laid as a rule of law that in all circumstances the higher authority
should consider and decide the case imposing penalty as a
primary authority under the Rules. Be it noted, in the said case
a right of second appeal/revision was provided to the Board            c
and, in fact, an appeal was preferred to the Board. Regard
being had to the said fact situation, this was Court declined to
interfere.

     17. Thus, from the aforesaid it is quite clear that in Ba/bir
Chand (supra) though the Court approved the principles laid            D
down in Surjit Ghosh (supra), yet distinguished the same
keeping in view the rule position. Be it noted, the Court made
a distinction between the non-availability of the appellate
remedy in entirety and availability of a remedy or a revision with
the higher authority and preservation and non-extinction of the        E
said right.

      18. In Electronics Corporation of India v. G. Muralidhar°
the order of termination was not passed by the disciplinary
authority but by the appellate authority and on that score the         F
High Court had quashed the order of termination and directed
reinstatement with back wages. After adverting to the facts of
the case the learned Judges declined to accept the submission
of the appellant therein that the judgment rendered in Surjit
Ghosh case (supra) should be limited to the facts of that case.        G
The Court further took note of the fact that there was no general
provision which conferred a power of review or revision on the
Board against an order passed by the Chairman-cum-
Managing Director who had passed the order of dismissal and,
5.   (2001) 10 sec 43.                                                 H
    326       SUPREME COURT REPORTS                    [2013] 11 S.C.R.


A therefore, even if the Board may be a higher authority to the
  Chairman-cum-Managing Director to hold that an appeal would
  lie against an order of termination passed by the CMD would
  tantamount to a fresh legislation since there is no general
  provision which confers a power of review or revision on the
B Board against any order passed by the CMD. Being of this
  view, the Court on the foundation of the ratio laid down in Surjit
  Ghosh (supra) ruled that the order of punishment was vitiated.

        19. In this regard reference to the principles laid down in
  A. Sudhakar v. Postmaster General, Hyderabad and another
C is fruitful. We may aptly quote a passage from the same: -

          "18. It is now trite that an authority higher than the appointing
          authority would also be the designated authority for the
          purpose of Article 311 of the Constitution. Even the
D         Appellate Authority can impose a punishment subject, of
          course, to the condition that by reason thereof the
          delinquent officer should not be deprived of a right of
          appeal in view of the fact that the right of appeal is a
          statutory right. However, if such right of appeal is not
E         embellished, an authority higher than the appointing
          authority may also act as a disciplinary authority."

         20. In S. Loganathan v. Union of India and others, 7 a t\..vo-
    Judge Bench placed reliance on the decisions rendered in
    Surjit Ghosh (supra) and Electronics Corporation of India
F   (supra) and, eventually, opined that as the appellant's right to
    appeal had not been affected by the authority passing the order,
    the punishment imposed could not be said to be vitiated in law.

       21. From the aforesaid enunciation of law it is graphically
G clear that a higher authority may pass an order imposing a
  punishment and the same would withstand scrutiny if the right
  of appeal is not taken away. That apart, if the appellate authority
  passes an order as the primary authority and there is provision
  6. c2006) 4 sec 348.
H 7. c2012) 1 sec 293.
U.P. POWER CORPORATION LTD. v. VIRENDRA LAL 327
     (DEAD) THROUGH L.RS. [DIPAK MISRA, J.]
for further appeal or revision or review it cannot be said that    A
the said order suffers from any illegality. In the case at hand,
there is no denial of the fact that the UPSE8 has passed the
order for deduction of 10% pension from the delinquent
employee. Under the Regulations which we have reproduced
hereinbefore there is a stipulation that an appeal or              8
representation, as the case may be, from the order of the
Chairman shall lie to the UPSE8. The Regulation clearly
provides that in case of an Assistant Engineer the Chairman
is the competent authority to pass the order of punishment and,
therefore, by virtue of the order passed by the UPSEB remedy       C
of appeal was denied to the delinquent employee. Under these
circumstances, the view expressed by the High Court has to
be regarded as flawless and, accordingly, we concur with the
same.

    22. Consequently, the appeal, being devoid of merit,           D
stands dismissed without any order as to costs.

8.8.B.                                     Appeal dismissed.