Service Jurisprudence for HR Professionals Dr. J. K. Verma M.Sc., Ph.D., M.B.M., B.L. Advocate, Patna High Court

1. Service Jurisprudence for HR Professionals Dr. J. K. Verma M.Sc., Ph.D., M.B.M., B.L. Advocate, Patna High Court

2. Service JurisprudenceIntroduction Jurisprudence : Service jurisprudence; corporate jurisprudence; industrial jurisprudence Service (employment) – Elements – Kinds Recruitment – rules and requirements in different services Leave, Lien Determination of employment Discipline – need and ways and means to infuse, maintain and enforce. Disciplinary or departmental proceeding – Departmental or domestic enquiry – in different employments like Government, PSU, and industrial Punishment Natural justice Judicial Review Labour laws – courts’ interpretations

3. Service or Employment • Employer-employee relationship or master-servant relationship : started as personal service. (Roman Law – the servant had no right). An employer is a person or body who: a) Owns or manages an establishment and in case of manager is responsible to the owner for the supervision and control of the industrial establishment; b) Employs persons (pays wages); c) Exercises Supervision and control of employees. An employee is: A person who is employed to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward. The essential requirement is ‘to work for wages at monthly rate’. A servant acts under the direct control and supervision of his master, and is bound to conform to all reasonable orders given to him in the course of his work. Government servant/ workman: retirement age [FR 56(a)/(b)]

4. Contract for service or contract of service. In ‘contract for service’, the master dictates what is to be done and not the mode or manner of doing it. Such contract does not result in master-servant relationship. In ‘contract of service’ the master not only requires what is to be done but also how it is to be done. This cannot be done unless the service is closely watched and constant guidance and control is exercised. Such contracts generally result in employer-employee relationship. Cassidy v. Ministry of Health, (1951) 1 All ER 574 There must be an offer and an acceptance. Sultan Sadik v. Sanjay Raj Subba, (2004) 2 SCC 377. Statutory provisions/ Contract Act. In the peculiar case of Gottumukkala Appala Narasimha Raju v. National Insurance Co. Ltd. (2007) 13 SCC 446 in the matter of compensation under Workmen’s Compensation Act, 1923, a person died in an accident while driving tractor belonging to his wife. Compensation was claimed from the insurer company on the ground that the deceased driver was an employee of the owner, his wife. Although the Commissioner under the Act awarded compensation from the insurer, the High Court set it aside. The Supreme Court, in absence of any documentary evidence to establish master-servant relationship, rejected the appeal.

5. Ingredients of employer-employee relationship were laid down by the House of Lords 6 decades before in Short v. J.W. Henderson Ltd. (1946) 174 Law Times 417 (see Union Public Service Commission v. Girish Jayanti Lal Vaghela. (2006) 2 SCC 482: AIR 2006 SC 1165). These are: (a) the master’s power of selection of his servant; (b) the master’s responsibility of payment of wages or other remuneration; (c) the master’s right of suspension or dismissal; and (d) the master’s right to control the method of doing the work. There is no dispute regarding the first three ingredients. Questions have arisen however with respect to scope and ambit of the power of control and supervision. In determining the relationship of employer and employee, no doubt, “control” is one of the important tests but is not to be taken as the sole test. The real test should be whether the person was fully integrated into the employer’s concern or remained apart from and independent of it. The other factors which may be relevant are — who has the power to select and dismiss, to pay remuneration, deduct insurance contributions, organise the work, supply tools and materials and what are the “mutual obligations” between them. Ram Singh v. Union Territory, Chandigarh. (2004) 1 SCC 126

6. If the provisions of the contract as a whole are inconsistent with its being a contract of service, it will be some other kind of contract and the person doing the work will not be a servant. Three ingredients, therefore are: (i) employer — one who employs i.e. engages the services of other persons; (ii) employee — one who works for another for hire; and (iii) contract of employment — control and supervision of the employer. Workmen of Nilgiri Coop. Mkt. Society Ltd. v. State of T.N. (2004) 3 SCC 514 S. 2(9)(ii), Employees’ State Insurance Act, 1948 – When the employee is put to work under the eye and gaze of the principal employer, or his agent, where he can be watched secretly, accidentally, or occasionally, while the work is in progress, so as to scrutinize the quality thereof and to detect faults therein, as also put to timely remedial measures by directions given, finally leading to the satisfactory completion and acceptance of the work, that would be supervision. It is the consistency of vigil. C.E.S.C. Ltd. v. Subhash Chandra Bose, (1992) 1 SCC 441

7. Kinds of employment – Government or public governed by statutory rules; Industrial governed by Labour Laws; and Private governed purely by contract. A government servant is a person who holds a civil post under the Union or State Government. It may be noted however that under sub-rule (iii) a person in the service of a local or other authority whose services are temporarily placed at the disposal of the Central Government also gets the status of a government servant. UPSC v. Girija Jayantilal Vaghela, (2006) 2 SCC 482 In public employment, master-servant relationship is severed by removal, termination or dismissal. In industrial employment on the pother hand, the order (of dismissal or discharge) remains in an inchoate state till the employer obtains order of approval from the Tribunal u/s 33(2)(b) of the I.D. Act, 1947. T.N. State Transport Corpn. v. Neethivilangan, Kumbakonam (2001) 9 SCC 99 • Rule governing service conditions in different employments – Articles 309 and 310 of the Constitution of India; Service Rules made under Proviso to Article 309, Standing Orders certified under Industrial Employment (Standing Orders) Act, 1946

8. 309. Subject to the provisions of this Constitution, Acts of the appropriate Legislature may regulate the recruitment, and conditions of service of persons appointed, to public services and posts in connection with the affairs of the Union or of any State: Provided that it shall be competent for the President or such person as he may direct in the case of services and posts in connection with the affairs of the Union, and for the Governor of a State or such person as he may direct in the case of services and posts in connection with the affairs of the State, to make rules regulating the recruitment, and the conditions of service of persons appointed, to such services and posts until provision in that behalf is made by or under an Act of the appropriate Legislature under this article, and any rules so made shall have effect subject to the provisions of any such Act. • In the English system the pleasure doctrine was prevalent in regard to government service. The legacy continues. Article 310 of the Constitution of India provides that person shall continue in government service till the pleasure of the President or the Governor, as the case may be. Article 310 reads:

9. 310. (1) Except as expressly provided by this Constitution, every person who is a member of a defence service or of a civil service of the Union or of an all-India service or holds any post connected with defence or any civil post under the Union holds office during the pleasure of the President, and every person who is a member of a civil service of a State or holds any civil post under a State holds office during the pleasure of the Governor of the State.* The appointment letters or the offers of appointment normally begin with “President / Governor (as the case may be) is pleased to appoint….” The Supreme Court held in State of Bihar v. Abdul Majid. AIR 1954 SC 245 that this pleasure was subject to restrictions imposed by the statutes (Rules framed u/Art. 309 and provisions of Article 311). Relevance of Article 310. Pleasure of the President or the Governor is not his personal one, it is that of the Council of Ministers. Status and rights of employees under service rules: The employee has a right to serve till the age of retirement unless terminated/removed or dismissed in accordance with the rules and procedures. The employee has the protection of Article 311 of the Constitution of India against arbitrary/ biased/ mala fide/ prejudiced removal/termination/dismissal or reduction in rank.

10. The employee can directly approach a High Court under its writ jurisdiction (under Article 226 of the Constitution) against arbitrary/ illegal/ unjustified dismissal/removal/termination or reduction in rank. Under Labour Laws: Protection of Standing Orders/ I.D. Act, 1947 against arbitrary termination/discharge/retrenchment/unfair labour practice. • Workman : Whether an employee is a workman or not is to be decided not on the basis of the grades in which they are placed but on the basis of their duties, responsibilities and powers (Mukand Ltd. v. Mukand Staff & Officers' Assn., (2004) 10 SCC 460) It would not be correct to contend that merely because the employee had not been performing any managerial or supervisory duties, ipso facto he would be a workman. Sonepat Co-operative Sugar Mills Ltd. v. Ajit Singh, (2005) 3 SCC 232 A professional can never be termed as a workman under any law. Muir Mills Unit of N. T. C. (U. P.) Ltd. v. Swayam Prakash Srivastava, AIR 2007 SC 519 : (2007) 1 SCC 491 • Principal Employer; immediate employer. An independent contractor is entirely independent of any control or interference and merely undertakes to produce a specified result, employing his own means to produce that result. An agent is not subject to the direct control and supervision of the principal. (see Superintendent of Post Offices v. P.K. Rajamma, (1977) 3 SCC 94 : 1977 SCC (L&S) 374)

11. The employees of the intermediate employer are not employees of the principal employer. The employer governed by labour laws is obliged to follow the labour welfare obligations caste on him by labour legislations based on Articles 38, 39, 42, 43 and 43-A of the Constitution. These provisions are: • 38. (1) The State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life. (2) The State shall, in particular, strive to minimize the inequalities in income, and endeavour to eliminate inequalities in status, facilities and opportunities, not only amongst individuals but also amongst groups of people residing in different areas or engaged in different vocations. • 39. The State shall, in particular, direct its policy towards securing— (a) that the citizens, men and women equally, have the right to an adequate means of livelihood; (b) that the ownership and control of the material resources of the community are so distributed as best to subserve the common good; (c) that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment;

12. (d) that there is equal pay for equal work for both men and women; • 42. The State shall make provision for securing just and humane conditions of work and for maternity relief. • 43. The State shall endeavour to secure, by suitable legislation or economic organisation or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities and, in particular, the State shall endeavour to promote cottage industries on an individual or co-operative basis in rural areas. • 43A. The State shall take steps, by suitable legislation or in any other way, to secure the participation of workers in the management of undertakings, establishments or other organisations engaged in any industry. In order to avoid complying with these obligations many employers in public as well as private sector apply myriad devices. One such device is ostensibly outsourcing the labour force through an intermediate contractor. It was held that ‘the presence of intermediate contractors with whom alone the workers have immediate or direct relationship ex contractu is of no consequence and the Management is the real employer and not the immediate contractor. Hussainbhai, Calicut v. Alath Factory Thezhilali Union, Kozhikode, (1978) 4 SCC 257

13. Where the Bank had constituted a committee of the staff to run the canteen which was responsible only for day-to-day running thereof, it was held that the Bank could not be absolved of its responsibility as the employer of the canteen employees. Indian Overseas Bank v. I.O.B. Staff Canteen Workers' Union, (2000) 4 SCC 245; Steel Authority of India Ltd. v. National Union Waterfront Workers.: (2001) 7 SCC 1 : 2001 SCC (L&S) 1121 The contract labour are indeed the employees of the principal employer where : (i) contract labour is engaged in or in connection with the work of an establishment and employment of contract labour is prohibited; (ii) the contract was found to be a sham and nominal, rather a camouflage, in which case the contract labour working in the establishment of the principal employer were held, in fact and in reality, the employees of the principal employer himself; and (iii) in discharge of a statutory obligation of maintaining a canteen in an establishment the principal employer availed the services of a contractor – the contract labour would indeed be the employees of the principal employer.

14. Recruitment • Constitutional guarantee of equality before law – Articles 14 and 16 of the Constitution in Government employment – Requirement of acting fairly and impartially • Constitution of India • Article 14. The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India. • Article 16. (1) There shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State. (2) No citizen shall, on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them, be ineligible for, or discriminated against in respect of, any employment or office under the State. (3) Nothing in this article shall prevent Parliament from making any law prescribing, in regard to a class or classes of employment or appointment to an office under the Government of, or any local or other authority within, a State or Union territory, any requirement as to residence within that State or Union territory prior to such employment or appointment. (4) Nothing in this article shall prevent the State from making any provision for the reservation of appointments or posts in favour of any backward class of citizens which, in the opinion of the State, is not adequately represented in the services under the State.

15. (4A) Nothing in this article shall prevent the State from making any provision for reservation in matters of promotion, with consequential seniority, to any class or classes of posts in the services under the State in favour of the Scheduled Castes and the Scheduled Tribes which, in the opinion of the State, are not adequately represented in the services under the State. (4B) Nothing in this article shall prevent the State from considering any unfilled vacancies of a year which are reserved for being filled up in that year in accordance with any provision for reservation made under clause (4) or clause (4A) as a separate class of vacancies to be filled up in any succeeding year or years and such class of vacancies shall not be considered together with the vacancies of the year in which they are being filled up for determining the ceiling of fifty per cent. reservation on total number of vacancies of that year. (5) Nothing in this article shall affect the operation of any law which provides that the incumbent of an office in connection with the affairs of any religious or denominational institution or any member of the governing body thereof shall be a person professing a particular religion or belonging to a particular denomination. Articles 14 and 16 are also known as equality provisions. Equality is one aspect of Natural justice, the other being Equity. It is often said that where there is no legal provision, equity prevails. Compliance with principles of Natural Justice is hallmark of government service, particularly departmental enquiry.

16. Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 Does not apply to Agricultural labour, domestic labour, less than 3 months tenure, unskilled work, promotional posts, surplus staff, vacancies to be filled through competitive exams., or on recommendations by UPSC or PSC, and vacancy with wages less than `60. Returns • Recruitment rules – different cadres/levels; skilled/unskilled; professional/general – promotions and • Recruitment to a career and fixed tenure recruitments • Illegal appointment and irregular appointment • Regularisation • Compassionate appointment • Ad hoc appointment • Daily wagers – Organized and unorganized sector

17. Determination of employment • Retirement or superannuation • Pre-mature retirement – at the instance of employee : Voluntary retirement, resignation at the instance of the employer : termination, compulsory retirement, Voluntary retirement schemes CENTRAL CIVIL SERVICES (TEMPORARY SERVICE) RULES, 1965 • 5. Termination of temporary service. (1) (a) The services of a temporary Government servant shall be liable to termination at any time by a notice in writing given either by the Government servant to the appointing authority or by the appointing authority to the Government servant; (b) the period of such notice shall be one month. Provided that the services of any such Government servant may be terminated forthwith and on such termination, the Government servant shall be entitled to claim a sum equivalent to the amount of his pay plus allowances for the period of the notice at the same rates at which he was drawing them immediately before the termination of his services, or as the case may be, for the period by which such notice falls short of one month.

18. 6. Termination of temporary service on account of physical unfitness. Notwithstanding anything contained in rule 5, the services of a temporary Government servant may be terminated at any time without notice on his being declared physically unfit for continuance in service by an authority who would have been competent to declare him as permanently incapacitated for service had his appointment been permanent. • By way of punishment : Termination, removal, dismissal, compulsory retirement • Dismissal, removal, termination and compulsory retirement puts an end to the relationship of employer and employee; but in case of suspension, reduction in rank or reversion, the relationship of employer and employee continues. Public Services Tribunal Bar Assn. v. State of U.P., (2003) 4 SCC 104 Similarly, the master and servant relationship is not severed on retirement. It continues even thereafter for grant of retiral benefits. U.P. State Sugar Corpn. Ltd. v. Kamal Swaroop Tondon, (2008) 2 SCC 41

19. Discipline • Definition and need Efficiency of the administration of the Industrial undertakings is very vital and relevant consideration. Production must continue, services must be maintained and run. Efficacy of the services can be ensured only if manned by disciplined employees or workers. Discipline, decency and order will have to be maintained. Employees should have sense of participation and involvement and necessarily sense of security. Delhi Transport Corpn. v. D.T.C. Mazdoor Congress, 1991 Supp (1) SCC 600 For smooth functioning, every employer depends upon a disciplined employees’ force. Indian Rly. Construction Co. Ltd. v. Ajay Kumar, (2003) 4 SCC 579 Earlier only the interest of the workmen was sought to be protected with the avowed object of fast industrial growth of the country. Because of this discipline at the workplace/industrial undertakings received a setback. The current trend of the Supreme Court is that in view of the change in economic policy of the country, it may not now be proper to allow the employees to break the discipline with impunity. Hombe Gowda Edn. Trust v. State of Karnataka (2006) 1 SCC 430

20. Departmental Proceeding • Article 21 of the Constitution reads as under: 21. No person shall be deprived of his life or personal liberty except according to procedure established by law. It was held that right to life does not only mean animal existence, it includes means of livelihood. It implies that dismissing and employee arbitrarily or without following the rules and procedures amounts to depriving him of his livelihood in violation of the procedure established by law. Such actions would be unconstitutional and cannot be sustained. Such procedure must be fair, just and reasonable. Olga Tellis v. Bombay Municipal Corpn. (1985) 3 SCC 545 • Articles 309 and 311 provide the framework for and require framing of rules defining conduct and misconduct; and for procedure to be followed in departmental enquiries in case of misconduct; and imposing punishments proportionate to the misconduct.

21. Scope : State – Article 12 Constitution of India • 12. In this Part, unless the context otherwise requires, “the State’’ includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India. The State is required to act fairly and reasonably. The employees of the State are Government or civil servants. Therefore all service rules and government actions must conform to Articles 14, 16, 309 and 311 and the relevant procedures must conform to principles of natural justice. • The State, as defined in Article 12, is thus comprehended to include bodies created for the purpose of promoting the educational and economic interests of the people. The Courts have expanded the scope of the expression ‘State’ within the meaning of Article 12 to include Public Sector undertakings/ Enterprises and other organisations. The criteria for an organisation to be deemed to State are (Pradeep Kumar Biswas v. Indian Institute of Chemical Biology, (2002) 5 SCC 111) :

22. (1) Where the entire share capital of the corporation is held by Government. • (2) Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation. • (3) Whether the corporation enjoys monopoly status which is State-conferred or State-protected. • (4) Existence of deep and pervasive State control. • (5) Whether the functions of the corporation are of public importance and closely related to governmental functions. • (6) If a department of Government is transferred to a corporation. Departmental Proceeding – why? Departmental proceeding is needed to maintain discipline in the service and efficiency of public service. Hindustan Petroleum Corpn. Ltd. v. Sarvesh Berry, (2005) 10 SCC 471 If an act or omission of an employee reflects upon his character, reputation, integrity or devotion to duty or is an unbecoming act, certainly the employer can take action against him. Indian Rly. Construction Co. Ltd. v. Ajay Kumar, (2003) 4 SCC 79. • There is no distinction between ‘departmental proceeding’ and ‘disciplinary proceeding’. Punjab National Bank v. M.L. Kalra, (2008) 3 SCC 494 • Departmental Proceeding starts with a departmental enquiry and culminates with punishment or exoneration of the employee charged.

23. EXTRACTS FROM CCS (CONDUCT) RULES, 1964 • 3. General (1) Every Government servant shall at all times-- (i) maintain absolute integrity; (ii) maintain devotion to duty; and (iii) do nothing which is unbecoming of a Government servant. • 3A. Promptness and Courtesy No Government servant shall (a) in the performance of his official duties, act in a discourteous manner; (b) in his official dealings with the public or otherwise adopt dilatory tactics or willfully cause delays in disposal of the work assigned to him. • 3B. Observance of Government's policies Every Government servant shall, at all times- (i) act in accordance with the Government's policies regarding age of marriage, preservation of environment, protection of wildlife and cultural heritage; (ii) observe the Government's policies regarding prevention of crime against women. • 3C. Prohibition of sexual harassment of working women (1) No Government servant shall indulge in any act of sexual harassment of any women at her work place. (2) Every Government servant who is incharge of a work place shall take appropriate steps to prevent sexual harassment to any woman at such work place.

24. 4. Employment of near relatives of Govt. servants in companies or firms • 5. Taking part in politics and elections • 6. Joining of associations by Government servants No Government servant shall join or continue to be a member of, an association the objects or activities of which are prejudicial to the interests of the sovereignty and integrity of India, or public order or morality. • 7. Demonstration and strikes • 8. Connection with press or other media • 9. Criticism of Government • 10. Evidence before Committee or any other authority • 11. Communication of Official Information • 12. Subscriptions No Government servant shall, except with the previous sanction of the Government or of the prescribed authority, ask for or accept contributions to, or otherwise associate himself with the raising of, any funds or other collections in cash or in kind in pursuance of any object whatsoever.

25. 13. Gifts (1) Save as provided in these rules, no Government servant shall accept, or permit any member of his family or any other person acting on his behalf to accept, any gift. • 13-A. Dowry • 14. Public demonstrations in honour of Government servants • 15. Private trade or employment • 16. Investment, lending and borrowing • 17. Insolvency and habitual indebtedness • 18. Movable, immovable and valuable property • 18-A. Restrictions in relation to acquisition and disposal of immovable property outside India and transactions with foreigners, etc. • 19. Vindication of acts and character of Government servant • 20. Canvassing of non-official or other outside influence No Government servant shall bring or attempt to bring any political or other outside influence to bear upon any superior authority to further his interests in respect of matters pertaining to his service under Government.

26. 21. Restriction regarding marriage (1) No Government servant shall enter into, or contract, a marriage with a person having a spouse living; and (2) No Government servant having a spouse living, shall enter into, or contract, a marriage with any person: Provided that the Central Government may permit a Government servant to enter into, or contract, any such marriage as is referred to in clause (1) or clause (2), if it is satisfied that - (a) such marriage is permissible under the personal law applicable to such Government servant and the other party to the marriage; and (b) there are other grounds for so doing. (3) A Government servant who has married or marries a person other than of Indian nationality shall forthwith intimate the fact to the Government. • 22. Consumption of intoxicating drinks and drugs • 22-A. Prohibition regarding employment of children below 14 years of age.

27. Constitution of India – Article 311 • 311. (1) No person who is a member of a civil service of the Union or an all-India service or a civil service of a State or holds a civil post under the Union or a State shall be dismissed or removed by an authority subordinate to that by which he was appointed. (2) No such person as aforesaid shall be dismissed or removed or reduced in rank except after an inquiry in which he has been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges. Provided that where it is proposed after such inquiry, to impose upon him any such penalty, such penalty may be imposed on the basis of the evidence adduced during such inquiry and it shall not be necessary to give such person any opportunity of making representation on the penalty proposed: Provided further that this clause shall not apply— (a) where a person is dismissed or removed or reduced in rank on the ground of conduct which has led to his conviction on a criminal charge; or (b) where the authority empowered to dismiss or remove a person or to reduce him in rank is satisfied that for some reason, to be recorded by that authority in writing, it is not reasonably practicable to hold such inquiry; or (c) where the President or the Governor, as the case may be, is satisfied that in the interest of the security of the State it is not expedient to hold such inquiry.

28. (3) If, in respect of any such person as aforesaid, a question arises whether it is reasonably practicable to hold such inquiry as is referred to in clause (2), the decision thereon of the authority empowered to dismiss or remove such person or to reduce him in rank shall be final. Simply put, the proceeding is initiated by appointment of Inquiry officer and the presenting officer (the disciplinary, appellate, reviewing and accepting authorities are normally prescribed in service rules); issue of charge sheet, followed by depositions and evidences of the prosecution and the defence, submission of enquiry report, consideration thereof and imposition of punishment by the disciplinary authority. The employee has a right to appeal and review and on being unsuccessful, to approach the Administrative Tribunal and the Court of law. • Departmental proceedings are initiated if information about an employee’s corruption, malpractice or misconduct comes to the notice of the disciplinary authority. The Vigilance Manual enumerates 11 sources :

29. (a) Complaints received from employees of the organisation or from the public; (b) Departmental inspection reports and stock verification surveys; (c) Scrutiny of annual property statements; (d) Scrutiny of transactions reported under the Conduct Rules; (e) Reports of irregularities in accounts detected in the routine audit of accounts; e.g. tampering with records, over-payments, misappropriation of money or materials etc.; (f) Audit reports on Government accounts and on the accounts of public undertakings and other corporate bodies etc.; (g) Reports of Parliamentary Committees like the Estimates Committee, Public Accounts Committee and the Committee on Public Undertakings; (h) Proceedings of two Houses of Parliament; (i) Complaints and allegations appearing in the press etc.; (j) Source information, if received verbally from an identifiable source, to be reduced in writing; and (k) Intelligence gathered by agencies like CBI, local bodies etc.

30. Preliminary enquiry When an allegation of misconduct or corrupt practices is brought to notice or becomes known during course of routine working, a preliminary enquiry is held to decide whether the fact(s) prima facie constitute misdemeanour for which major punishment can be imposed. If it is so, departmental enquiry is ordered. If the facts warrant only minor punishment, a show cause or explanation is asked for and departmental enquiry is dispensed with, being not necessary. • Suo motu : (b) to (f) : internal sources. • Anonymous complaint not cognizable. • Pseudonymous complaint : before taking cognizance of such complaints the Chief Vigilance Officer of the department or organisation concerned should obtain specific orders from the Head of the Department. A copy of all such complaints shall first be made available to the officer concerned for his comments, and only thereafter further action should be taken. Precaution should be taken to take into custody all relevant documents. ITAT v. V.K. Agarwal, (1999) 1 SCC 16 • By far the most common source is a complaint by an employee or anybody as mentioned in (a) above.

31. In case of a signed complaint the disciplinary authority may straightway proceed to initiate preliminary enquiry to ascertain whether a prima facie case is made out against the official or not. • Minor penalties (i) Censure; (ii) Withholding of promotion; (iii) Recovery of pay – pecuniary loss to the Govt.; (iii)(a) Reduction to a lower stage in the time scale of pay by one stage for period not exceeding three years without cumulative effect, not affecting pension; (iv) Withholding of increment – without cumulative effect. • Major penalties (v) Reduction in time scale of pay with ….. Increment; (vi) Reduction in time scale of pay … promotion, seniority; (vii) Compulsory retirement; (viii) Removal from service; (ix) Dismissal; In minor penalty it is not necessary to follow detailed and lengthy procedure laid down for imposition of major penalties. There is charge and its denial. The proceedings can be instituted by issuing notice. U.P. State Sugar Corpn. Ltd. v. Kamal Swaroop Tondon, (2008) 2 SCC 41 Even in a case where the procedure for imposition of a major penalty is followed, having regard to the facts and circumstances of a case, minor penalty can be imposed.

32. An amalgam of minor and major penalties in the same order is not permissible. Union of India v. S.C. Parashar, (2006) 3 SCC 167 The procedural requirements of a departmental enquiry (A. Sudhakar v. Postmaster General, (2006) 4 SCC 348) are: (i) opportunity to the officer concerned to deny his guilt and establish his innocence which means he must be told that what the charges against him are and the allegations on which such charges are based; (ii) he must be given a reasonable opportunity to cross-examine the witnesses produced against him and examine himself or other witnesses on his behalf; and (iii) he must be given opportunity to show cause that the proposed punishment would not be proper punishment to inflict which means that the tentative determination of the competent authority to inflict one of the three punishments must be communicated to him. Strict rules of evidence do not apply to departmental enquiry. Naresh Govind Vaze v. Govt. of Maharashtra, (2008) 1 SCC 514 penalty can be imposed on the delinquent officer on a finding recorded on the basis of “preponderance of probability”. Mazdoor Sangh v. Usha Breco Ltd., (2008) 5 SCC 554 Section 58 of the Evidence Act, 1872 (charges having been admitted are not required to be proved) is applicable to departmental enquiries. V.S.P. v. Goparaju Sri Prabhakara Hari Babu, (2008) 5 SCC 569 Before initiating the proceeding, the delinquent may be suspended with or without transfer. He shall be entitled to subsistence allowance – Non-coopn.

33. Procedures for conducting departmental enquiries (Rule-14, CCS (CCA) Rules, 1965) • Departmental proceeding is taken to be initiated with issue of charge sheet. However where the employee is suspended in contemplation of departmental proceeding, issue of charge sheet will not be the precondition. i) Issue of charge-sheet by the Disciplinary Authority to the delinquent comprising the following and asking him to file his written statement and if he wishes to be heard in person – a) imputation of misconduct giving all relevant facts b) Articles of charges c) list of documents, witnesses by which charges are proposed to be sustained. ii) If the written statement is not acceptable, D.A. to record reasons for his opinion and order enquiry by appointing Inquiry Officer and Presenting Officer. As far as possible the D.A. should make the enquiry himself. Immediate superior of the delinquent should not be made I.O. I.O. should be senior in rank than the delinquent. Delinquent may challenge appointment of a particular I.O. on ground of bias – stay of the proceedings.

34. iii) I.O. to intimate the delinquent of the time, date and place of enquiry as also whether he wants to inspect or have copy of any document and to give list of documents and witnesses in his defence. Continued non-appearance of delinquent will result in ex parte enquiry. iv) The enquiry being domestic, the delinquent is supposed to plead his case himself. However he may take assistance of any other employee or even a retired govt. servant (limitation of 7 cases) or an employee under suspension’ but not by Union representative or a legal practitioner. Kalindi v. Tata Locomotive & Engg. Co. Ltd., (1960) 3 SCR 407 : AIR 1960 SC 914 v) At the outset the I.O. shall ask the delinquent if he pleads guilty or wants the enquiry. In case of pleading guilty, it shall be recorded and authenticated by the delinquent, P.O. and the I.O. vi) If the delinquent demands certain documents the I.O. shall cause them to be supplied. Documents, if irrelevant, may be denied after recording reasons. Prejudice. vii) First the P.O. shall present the department's case supported by documents, statements and wiriness. viii) After the department’s case if closed the delinquent shall present his case in similar manner. ix) The P.O. and the delinquent may cross-examine each other’s witnesses.

35. x) The deliberations shall be recorded daily and signed by the I.O., P.O. and the delinquent. xi) Inquiry report to be drawn on conclusion of the enquiry and to contain : a) Case of the department, b) Case of the delinquent, c) Assessment of evidence in respect of each article of charge. d) Finding on each Article of charge. xii) The report along with the written statement of the delinquent, oral and/or documentary evidence to be forwarded to the D.A. Action on Enquiry report xiii) D.A., if not satisfied (reasons to be recorded) may remit the matter to I.O. for further enquiry. xiv) D.A. shall send the Enquiry report to the delinquent for his submission. (Done generally if not agreeing with the findings of exoneration – reasons to be recorded. Not required if no prejudice to the delinquent.) xv) Imposition of penalty after considering the delinquent’s submissions.

36. The order should be speaking one – well reasoned. The enquiry and the punishment cannot travel beyond the charges. Even if all charges are not proved, punishment can be imposed on the basis of even one charge proved – but proportionate to the gravity of the charge proved. • Past bad record, if not part of the charges, cannot be considered for imposing penalty. • Disciplinary proceedings, if not concluded, should be closed on death of the delinquent. • Dismissal cannot be ordered with retrospective effect. • Common proceeding – in case of more than one charged persons. • Continuance of criminal and departmental proceedings simultaneously or desirability of staying departmental proceedings if both proceedings are based on same facts and evidence was considered by the Supreme Court in Capt. M. Paul Anthony v. Bharat Gold Mines Ltd., (1999) 3 SCC 679 : AIR 1999 SC 1416 (see also State Bank of India v. R.B. Sharma, (2004) 7 SCC 27 : AIR 2004 SC 4144). The circumstances and fact situations whereupon departmental proceeding may be stayed in view of criminal proceeding are : (i) Departmental proceedings and proceedings in a criminal case can proceed simultaneously as there is no bar in their being conducted simultaneously, though separately.

37. (ii) If the departmental proceedings and the criminal case are based on identical and similar set of facts and the charge in the criminal case against the delinquent employee is of a grave nature involving complicated questions of law and fact, it would be desirable to stay the departmental proceedings till the conclusion of the criminal case. This is so because the criminal cases take a longer time and if the defence evidence is disclosed in departmental proceeding it may prejudice the employee in the criminal proceeding. (iv) … due regard has to be given to the fact that the departmental proceedings cannot be unduly delayed. (v) If the criminal case does not proceed or its disposal is being unduly delayed, the departmental proceedings, even if they were stayed on account of the pendency of the criminal case, can be resumed and proceeded with so as to conclude them at an early date, so that if the employee is found not guilty his honour may be vindicated and in case he is found guilty, the administration may get rid of him at the earliest. • Inordinate delay in issuing the charge memo, or initiating the departmental enquiry, vitiates the entire proceeding. U.P. SRTC v. Mitthu Singh, (2006) 7 SCC 180

38. In a case the disciplinary proceeding was initiated five years after the appellant handed over charge, and he did not have any documents in his possession at the time of enquiry. The enquiry officer thereafter took seven years to complete the enquiry. The Appellate Authority also took seven years in disposing the appeal. The enquiry was held into the allegations which did not form part of the charge-sheet. The bias of the enquiry officer, though raised by the delinquent, was not gone into. Therefore the enquiry and punishment based thereupon was held to be vitiated and invalid. M.V. Bijlani v. Union of India, (2006) 5 SCC 88

39. Charge sheet • Departmental enquiry is a consequence of the decision to initiate departmental proceeding and charge-sheet is pre-condition to departmental enquiry. • Competent authority – Disciplinary authority : For punishment : appointing authority or superior authority. A. Sudhakar v. Post Master General, (2006) 4 SCC 348. For issuing charge sheet : even lower than appointing authority, if authorised. However punishment can only be imposed by the appointing authority or higher. State of U.P. v. Chadrapal Singh, (2003) 4 SCC 670. Validity of charge sheet has to be challenged before the I.O. and not before the High Court. In case of deputation, borrowing organisation can issue charge sheet and even pass suspension orders. If head of the office is designated as disciplinary authority, the designation of the person working as such is immaterial. If normally a G.M. is head of the office, but at relevant time the A.G.M. is posted as head of the office, he will be the competent authority. Himachal RTC v. Kewal Krishan, (1997) 9 SCC 19.

40. Precondition – Normally charge sheet is issued after show cause notice is issued and the reply is not found satisfactory. Departmental proceeding commences with issue of charge sheet. UCO Bank v. Rajinder Lal Capoor, (2008) 5 SCC 257 : AIR 2008 SC 1831 But it is not mandatory in all circumstances. Charge sheet can be issued directly even without a show cause. Firestone Tyre and Rubber Co. Ltd. v. Workman, AIR 1968 SC 236. When the proceeding was initiated by suspension, service of charge sheet is not precondition, State of M.P. v. L. P. Tiwari, (1994) 4 SCC 468 • Clarity – The charges should be specific, definite and giving details of the incident which formed the basis of charges. No enquiry can be sustained on vague charges. Union of India v. Gyan Chand Chattar, (2009) 12 SCC 78 However, vagueness will not be fatal if not causing prejudice to the delinquent. State of A.P. v. Chemalapati Ganeswara Rao, AIR 1963 SC 150 It is desirable to give specific name of the misconduct. [‘strike’ instead of ‘stopping work in concert’ and ‘disobedience’ instead of ‘disregard or non-performance of orders’) • Form – There is no specific form of charge sheet. It may even be a simple letter. But the show cause cannot be treated as charge sheet. National Aviation Co. of India Ltd. v. S.M.K. Khan, (2009) 5 SCC 732. However, it is the content and not the form that matters. State Bank of Bikaner and Jaipur v. Prabhu Dayal Grover, (1995) 6 SCC 279. • Contents – Should contain all facts making up the charge(s). Birichh Bhuian v. State of Bihar, AIR 1963 SC 1120.

41. Each incident is separate charge. Date and time of the incident should be mentioned. Chittaranjan Das v.State of W.B., AIR 1963 SC 1696. While mentioning time care should be taken to add ‘about’. However there are exceptions. State of U.P. v. Mohd. Sharif, (1982) 2 SCC 376. Content of an explanation submitted by the delinquent in reply to show cause can be made a charge. Food Corporation of India v. J. Jambulkar, (1998) 9 SCC 440. Charge once enquired into cannot be made subject matter of another enquiry. This will amount to double jeopardy (contravention of Article 20(2)). Union of India v. Kunisetty Satyanarayana, (2006) 12 SCC 28. Omission to mention section or rule is not fatal. Indian Drugs & Pharmaceuticals Ltd. v. R.K.Shewaramani, (2005) 6 SCC 76. If the charge is based on offending language then the actual words used should be mentioned. However in case of many persons charged together, it may not be practicable. Balram Khanna v. Moti Ram, (1971) 3 SCC 399. In case of ‘habitual’ misconduct, the word habitual should be mentioned. Laxmi Devi Sugar Mills Ltd. v. Nand Kishore Singh, AIR 1957 SC 7.

42. The charge sheet should be in a language easily comprehensible by the delinquent. Charge sheet in normal official language is not fatal if not prejudicial to the delinquent. Harikishan v. State of Maharashtra, AIR 1962 SC 911. Use of abbreviations such as ‘etc.’ should be avoided. The language of the charge sheet should not show pre-determined mind. Powari Tea Estate v. Barkataki, (1965) 2 LLJ 102 (SC). In case of disobedience, name and designation of the concerned superior officer should be given. In case of theft, details of the stolen property should be given. In case of misappropriation, the amount should be given. Incase of ‘deception’ the manner of committing the misconduct should also be mentioned. It is not necessary to mention the penalty proposed in the charge sheet; but if a penalty is mentioned, more severe penalty cannot be imposed. Even if the penalty was mentioned in the charge sheet, second show cause on quantum of penalty on the basis of the enquiry report has to be issued. Khem Chand v. Union of India, AIR1958 SC 300. • Amendment of charge – Disciplinary authority is competent and not the IO

43. Time to reply charge – Reasonable time should be given. Local or outstation. • Service of charge sheet – There is difference between ‘issue’ of charge-sheet by its dispatch and the actual ‘service’ of charge-sheet. Delhi Development Authority v. H.C. Khurana, (1993) 3 SCC 196 Personal service – “There is, however, danger of false reports of service. It is required to be adequately guarded.” Salem Advocate Bar Assocn. v. Union of India, (2005) 6 SCC 344 By post – presumptions. Certificate of posting Registered post – If not returned unserved, there is presumption of service. If returned with endorsement ‘refused’ : presumption of service. If returned with endorsement ‘left’ or ‘addressee not found’ : no service. This is commonly used to avoid service. In that case ‘substituted service’ by publication in newspaper is resorted to. Substituted service – Publication in newspaper – There were two local daily newspapers widely circulated. High Court directed substituted service of summons by publishing in one of the newspapers. However publication in the other newspaper was held to be immaterial. Basant Singh v. Roman Catholic Mission, (2002) 7 SCC 531

44. Courier E-mail Appointment of I.O. – appointment of Enquiry Officer comes into play only after the explanation is filed to the charge sheet and decision is to be taken by the Disciplinary Authority to conduct further enquiry. In a case where the Enquiry Officer was straightaway appointed and he had himself framed the charges the enquiry was held to be contrary to the rules and hence vitiated. V. Padmanabham v. Govt. of A. P., AIR 2009 SC2416 Functions and powers of I.O. – The enquiry officer has no authority to propose the quantum of punishment. Maharashtra State Seeds Corpn. Ltd. v. Hariprasad Drupadrao Jadhao, (2006) 3 SCC 690. A departmental proceeding being a quasi-judicial proceeding, the enquiry officer has a duty to arrive at a finding upon taking into consideration the materials brought on record by the parties. Roop Singh Negi v. Punjab National Bank, (2009) 2 SCC 570 Enquiry officer is bound to consider the evidence of all witnesses examined by the delinquent. Union of India v. K.A. Kittu, (2001) 1 SCC 65

45. The charge against a delinquent should not be deemed to be proved by weakness of the defence. Minor discrepancies in the evidence should be ignored. Damodar v. State of Rajasthan, (2004) 12 SCC 336 The enquiry officer need not decide what should be the appropriate penalty When the enquiry officer recorded in his report that the officer has no right to continue in the government service and he has to be dismissed from service with immediate effect, it was held that it was an infirmity of the report and that he exceeded his limits. State of Uttaranchal v. Kharak Singh, (2008) 8 SCC 236 Enquiry officer should not give a finding outside the scope of the charge When the employee was proceeded against for not properly maintaining the stock register but was enquired and penalized for misutilisation or misappropriation of the stock, the proceeding was held to be vitiated. M.V. Bijlani v. Union of India, (2006) 5 SCC 88 • Appeal : • Order against which no appeal lies – i) Made by the President ii) Order of interlocutory nature iii) Order of I.O. made during the course of enquiry

46. Orders against which appeal lies – i) Suspension ii) Penalty iii) Enhancement of penalty iv) Order imposing financial loss v) Order affecting career of the delinquent vi) Reversion vii) Reducing/withholding pension viii) Determination of subsistence allowance/ pay etc. during suspension Appeal to be filed within 45 days of the order. Appeal to be individual.

47. Natural Justice Principles of natural justice are those rules which have been laid down by the courts as being the minimum protection of the rights of the individual against the arbitrary procedure that may be adopted by a judicial, quasi-judicial and administrative authority while making an order affecting those rights. The classic exposition of Sir Edward Coke of natural justice requires to “vocate, interrogate and adjudicate”.Natural justice supplies the omissions of a formulated law. Canara Bank v. V.K. Awasthy, (2005) 6 SCC 321. The Supreme Court, in Syndicate Bank v. General Secy. Syndicate Bank Staff Assn., (2000) 5 SCC 65 cautioned that undue reliance on the principles of natural justice may lead to miscarriage of justice. In a case where doctrine of necessity is applicable compliance with the principles of natural justice would be excluded. State of U.P. v. Sheo Shanker Lal Srivastava, (2006) 3 SCC 276 The principles of natural justice are an integral part of the guarantee of equality assured by Article 14. Therefore any law made or action taken by an employer must be fair, just and reasonable. D.K. Yadav v. J.M.A. Industries Ltd., (1993) 3 SCC 259

48. It is also now well settled that principles of natural justice and duty to act in a just, fair and reasonable manner have to be read in the Certified Standing Orders which have statutory force. Syndicate Bank v. General Secy. Syndicate Bank Staff Assn., (2000) 5 SCC 65 Basically there are 2 principles of natural justice : (i) no one shall be a judge in his own cause (nemo judex in causa sua or nemo debet esse judex propria causa); and (ii) no one shall be condemned unheard (audi alteram partem or hear the other side). • The first principle consists of the rule against bias or interest and is based on three maxims: (i) No man shall be a judge in his own cause; (ii) Justice should not only be done, but manifestly and undoubtedly be seen to be done; and (iii) Judges, like Caesar's wife should be above suspicion. The Judge should be impartial and neutral and must be free from bias. If the Judge is subject to bias in favour of or against either party to the dispute or is in a position that a bias can be assumed, he is disqualified to act as a Judge, and the proceedings will be vitiated. Bias – quasi-judicial enquiries must be held in good faith, without bias and not arbitrarily or unreasonably. Dev Dutt v. Union of India, (2008) 8 SCC 725

49. Bias means ‘a predisposition of mind to decide for or against one party without proper regard to the true merits of the dispute’. Secretary to Govt. Transport Deptt. V. Munnuswamy Mudaliar, 1988 Supp SCC 651: AIR 1988 SC 2232. see also Kumaon Mandal Vikas Nigam Ltd. v. Girija Shankar Pant, (2001) 1 SCC 182: AIR 2001 SC 24 To constitute ‘bias’ there must be reasonable apprehension of that predisposition and the reasonable apprehension must be based on cogent materials. Larsen and Toubro Ltd. v. Fertilizer and Chemicals Travancore Ltd., (2008) 1 SCC 252 : AIR 2008 SC 465 It is not only the actual bias but also the real likelihood of bias that is material. J. Mohapatra & Co. v. State of Orissa, (1984) 4 SCC 103: AIR 1984 SC 1572. Pecuniary bias – Any pecuniary interest in the subject matter, however small, disqualifies person from adjudicating. [Halsbury’s Laws of England, (4th Edn., Vol. I. See also Manak Lal v. Prem Chand, AIR 1957 SC 425: 1957 SCR 575; Visakapatanam Coop. Motor Transport Ltd. v. G. Bangaruaju, AIR 1953 Mad 709.] Personal bias – Factors like relationship, friendship, business association, personal grudge enmity, grievance or professional rivalry etc. may give rise to personal bias. Kumaon Mandal Vikas Nigam Ltd. v. Girija Shankar Pant, (2001) 1 SCC 182: AIR 201 SC 24 P.D. Dinakaran’s case.

50. Official bias – official bias, departmental bias, policy bias or bias as to subject matter may arise when a judge or an adjudicator has a general interest in the subject matter of lis. Departmental enquiries are generally conducted by officers of the employer and it cannot be presumed that such officer would be biased in favour of the management. South Indian Cashew Factories Workers' Union v. Kerala State Cashew Development Corpn. Ltd., (2006) 5 SCC 201; Biecco Lawrie Limited v. State of West Bengal, (2009) 2 SCC (L&S) 729 When the examination-in-chief of the department’s witness was conducted by the enquiry officer himself and the questions posed by him were leading questions;  the enquiry was held to be vitiated. Moni Shankar v. Union of India, (2008) 3 SCC 484 Mala fides – The allegations of mala fide are to be substantiated beyond doubt. M.V. Thimmaiah v. UPSC, (2008) 2 SCC 119 Malice – Malice in the legal sense imports (1) the absence of all elements of justification, excuse or recognized mitigation, and (2) the presence of either (a) an actual intent to cause the particular harm which is produced or harm of the same general nature, or (b) the wanton and willful doing of an act with awareness of a plain and strong likelihood that such harm may result. West Bengal State Electricity Board v. Dilip Kumar Ray, (2007) 14 SCC 568