Page 1

Reportable  

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.8949 OF 2013 (Arising out of S.L.P. (C) No. 20605 of 2011)

U.P. Power Corporation Ltd. and another ...  Appellants

Versus

Virendra Lal (Dead) through L.Rs.      ...Respondents  

J U D G M E N T

Dipak Misra, J.

Leave granted.

2. Calling in question the legal acceptability of the order  

dated 11.2.2011 passed by the High Court of Judicature at  

Allahabad, Lucknow Bench, Lucknow, in Writ Petition (S/B)  

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

Page 2

2

claim petition No. 683 of 2000 wherein the tribunal had  

set aside the order dated 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  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  

had released electricity to one consumer, namely, M/s.  

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 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

Page 3

3

thereafter  the  inquiry  committee  commenced  the  

enquiry.   On  30.6.1998,  late  Virendra  Lal  stood  

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 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,  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)  

Regulations, 1975 (for short “the Regulations”) but as  

the  punishment  had been imposed by  the  UPSEB  he

Page 4

4

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 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 commencement of the departmental proceeding and  

the 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  

of the pension forthwith.

6. Being  dissatisfied  with  the  aforesaid  order  the  

Corporation  preferred  a  writ  petition  before  the  High

Page 5

5

Court and the Division Bench disposed of the same by  

passing the 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 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  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 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 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

Page 6

6

disciplinary  proceeding  and  imposes  the  punishment  

and  no  prejudice  is  caused  the  order  of  punishment  

cannot  be  annulled  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.

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 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  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  recommendations,  if  any,  before  the  Board,  who  shall  pass  final  orders.”

Page 7

7

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  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  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: -

“The Board has asked to Shri Lal to file his  representation within 14 days providing him a  copy  of  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 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.

Page 8

8

Therefore  Shri  Virendra  Lal  (77031)  then  Assistant 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.

By the order of the Board Sd/-

S.P. Singh Joint Secretary 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  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 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  

disciplinary  proceeding  against  an  employee  of  the  

Government  is  initiated  in  respect  of  a  misconduct  

1 (1987) 2 SCC 179

Page 9

9

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  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  

Gujarat2,  the  appellant  therein  was  compulsorily  

retired on January 12, 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 and, eventually, certain  

punishment 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  

2 1989 Supp (2) SCC 110

Page 10

10

disciplinary inquiries had been 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  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.”

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  the  tribunal  has  recorded  that  there  is  no  

provision for 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.

15. In  this  context,  we  may  fruitfully  refer  to  the  

authority in  Surjit Ghosh v.  Chairman & Managing

Page 11

11

Director, United Commercial Bank and others3.  In  

the said case, the disciplinary proceeding was initiated  

against the delinquent 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 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 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 the case it should be held that when  3 (1995) 2 SCC 474

Page 12

12

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  

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  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:

“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 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  to  exercise  the  power  of

Page 13

13

disciplinary  authority,  it  should  be  held  that  there is no right of appeal provided under the  Regulations cannot be accepted.”

16. In  Balbir  Chand  v.  Food  Corporation  of  India  

Ltd. and others4 the Court adverted to the relevant  

rule  position  and  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 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 discrimination 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  

4 (1997) 3 SCC 371

Page 14

14

the Rules officer lower in hierarchy was the disciplinary  

authority  but  the  appellate  authority  had  passed  the  

order  removing  the  officer  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  

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 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  

Balbir Chand (supra) though the Court approved the  

principles  laid  down  in  Surjit  Ghosh (supra),  yet  

distinguished  the  same  keeping  in  view  the  rule

Page 15

15

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 said right.

18. In  Electronics  Corporation  of  India  v.  G.  

Muralidhar5 the order of termination was not passed  

by  the  disciplinary  authority  but  by  the  appellate  

authority and on that score the 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.  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,  therefore, even if  the Board may be a  

5 (2001) 10 SCC 43

Page 16

16

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 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  another6 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  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  embellished,  an  authority  higher  than the appointing authority  may also act as a disciplinary authority.”

6 (2006) 4 SCC 348

Page 17

17

20. In S. Loganathan v. Union of India and others7,  

a  two-Judge  Bench  placed  reliance  on  the  decisions  

rendered  in  Surjit  Ghosh (supra)  and  Electronics  

Corporation of India (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  

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  for  further  

appeal or 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 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  

7 (2012) 1 SCC 293

Page 18

18

an 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  

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,  

stands dismissed without any order as to costs.

……………………….J. [Anil R. Dave]

……………………….J. [Dipak Misra]

New Delhi; October 03, 2013.