SRI JAYANTA MAHANTA vs MSME on 1 October 2026

ORDER

PER: SANJIV KUMAR, MEMBER (A): This O.A. has been filed by the applicant under Section 19 of the Administrative Tribunals Act, 1985 seeking the following reliefs: “8.1 To quash and set aside the impugned appellate order dated 18.08.2022 [Annexure- A/1] with all consequential benefits.

8.2 To quash and set aside the impugned order imposing penalty dated 28.12.2021 [Annexure- A/2] issued by the disciplinary authority with all consequential benefits.

8.3 To direct the respondents to release all the retirement benefits of the applicant like pension, Gratuity, Leave Encashment benefits, Composite Transfer Grant, Travelling allowance, transport allowance, amount of Group Saving Link Insurance (GSLI), Performance Related Pay (PRP) etc. forthwith with all other consequential benefits.

8.4 Cost of the application.

8.5 To pass any such order/orders as Your Lordships may deem fit and proper.”

2. The facts of the case are that the applicant was the Zonal Head of North East Zone of National Small Industries Corporation (in short NSIC) which comprises of State of Assam, Meghalaya, Nagaland, Manipur, Tripura, Mizoram, Arunachal Pradesh & Sikkim. Additionally he was give charge

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of East Zone comprising of 4 (four) States i.e. West Bengal, Bihar, Jharkhand and Odisha. While he was holding the above mentioned positions, the respondents issued memorandum of charge dated 31.12.2018 drawing up 6 (six) articles of charge against the applicant (Annexure-A/3). The allegations leveled in the Articles of Charge were basically towards purported supervisory lapse of applicant in holding the high post of Zonal Head. Applicant submitted his written statement of defence dated 30.01.2019 categorically denying the allegations (Annexure-A/4). He submitted application seeking the copies of documents to substantiate his defence on 16.05.2019 (Annexure-A/6). However, the respondents refused to furnish the documents citing some flimsy reasons vide communication dated 23.07.2019 (Annexure-A/16). Due to this, the applicant was constrained to approach this Tribunal by filling O.A. No. 264/2019 which was disposed of by order dated 24.07.2020 directing the respondents to furnish all the documents sought for by the applicant (Annexure-A/17). However, despite above direction, the respondents failed to furnish the documents. In the meantime, the applicant retired from service on attaining

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the age of Superannuation on 30.06.2020. The respondents continued with the departmental inquiry after retirement of applicant and the Inquiry Officer submitted his report dated 17.12.2020 holding Charge No. I & II to be proved and Charge No. III, IV, V and VI to be partly proved (Annexure- A/19). The applicant submitted his reply on 30.03.2021 against the report of the Inquiry Officer contending that the conclusion derived by the inquiry officer was absolutely perverse because the documents relied on to draw up the charges were forged and manipulated documents furnished by the Branch Office (Annexure-A/21). However, the Disciplinary Authority relying on the sketchy report of the Inquiry Officer issued the impugned order dated 28.12.2021 imposing major penalty of dismissal from service upon the applicant retrospectively w.e.f. the date of superannuation i.e. 30.06.2020 with further direction of forfeiture of retiral dues (i.e. .Gratuity and Encashment of leave) (Annexure-A/2). The applicant preferred appeal before the Appellate Authority on 05.02.2022 (Annexure-A/22) which was rejected by the Appellate Authority on 18.08.2022 (Annexure-A/1).

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3. As per the applicant, the entire departmental inquiry incurably vitiated for gross violation of the principles of natural justice because relevant documents sought for by the applicant were not furnished to him. The Inquiry Officer failed to prove the contents of the relied upon documents by examining the author of the documents which infringed the valuable right of cross examination of the applicant. Further, the penalty of dismissal from service imposed upon the applicant with retrospective effect is grossly illegal in the backdrop of the fact that there was no continuation of service of the applicant after his retirement. The inquiry officer, disciplinary authority as well as the appellate authority failed to take into consideration the repeated contention of the applicant that the foundation of the allegations leveled against the applicant was based on forged/manipulated accounts statement submitted by the Branch and the penalty imposed upon the applicant is grossly disproportionate.

4. Respondent Nos. 2 to 5 have filed their written statement wherein they stated as follows:

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That a complaint was lodged with the CBI on 20.02.2017. That charge sheet was served upon the applicant on 31.12.2018, thereby initiating disciplinary proceedings with six articles of charge as follows:

Charge I - Violation of delegation of powers by not clubbing financial limits sanctioned to sister concerns, resulting in proposals sanctioned beyond authority.

Charge II - Approval of enhancement/renewal of credit limits despite outstanding dues exceeding bank guarantees, without mandatory appraisal.

Charge III - Failure to monitor overdue positions, allowing dues to exceed BGs, rendering investments unsecured.

Charge IV - Sanctioning proposals without proper evaluation or inspections, exposing company funds to risk.

Charge V - Neglecting annual reviews of financial limits, violating procedural requirements.

Charge VI - Overlooking irregularities in high- value transactions (roundfigure entries, excess payments), indicating lapses in monitoring.

That the applicant retired on 30.06.2020 upon attaining the age of superannuation, while the proceedings were pending.

That the inquiry proceedings concluded on 10.11.2020, and the Inquiry Officer submitted his report on 17.12.2020 by holding that Charges I and II were fully proved and

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Charges III-VI were partly proved establishing negligence and lapses.. Based on the findings, the Disciplinary Authority imposed the penalty of dismissal from service (effective from 30.06.2020) and forfeiture of retiral dues by order dated 28.12.2021.

5. The respondents have also cited the following case rulings and submitted that disciplinary proceedings can continue after retirement under service regulations and gratuity can be forfeited. In the Case of Ramesh Chandra Sharma vs. Punjab National Bank & Anr. 2007 9 SCC 15 Supreme Court upheld dismissal post- superannuation, holding that disciplinary proceedings can continue after retirement under service regulations.

In the Case of Secretary, Forest Department & Ors vs. Abdur Rasul Chowdhury reported in 2009 7 SCC 305 - Supreme Court held that departmental proceedings initiated during service can continue post-retirement; delay is not fatal if satisfactorily explained.

In the case of Western Coal Fields Ltd. Vs. Manohar Govinda Fulzele (2025 Live Law SC

216) - The Supreme Court categorically held that under Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972, gratuity can be forfeited wholly or partially if an employee is terminated for misconduct constituting an offence involving moral turpitude, without requiring a criminal conviction.

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6. We have heard Sri H.K. Das, Sr. Advocate assisted by Sri N.K. Sharma, learned counsel for the applicant, Sri A. Chakraborty, learned Addl. CGSC for respondent No. 1 and Sri P.J. Barman, learned counsel for the respondent Nos. 2-5.

7. Learned Sr. Advocate for the applicant has contended that both the Inquiry Officer as well as Disciplinary Authority failed to take into consideration the fact that the relied upon documents were not proved by the authors of the said documents, rendering the documents to be irrelevant evidence in the eye of law. The disciplinary authority also failed to appreciate that no major penalty of dismissal from service could have been imposed upon an employee, who had already retired from service.

8. Per contra, learned counsel for the respondent Nos. 2 to 5 has pleaded that a complaint had been lodged with CBI, ACB, Guwahati on 20.02.2017. The CBI had submitted its Preliminary Inquiry Registration Report on 26.09.2017 and registered an FIR on 09.01.2018 in RC.1(A)/2018-GWH, wherein the names of 4 suspected accused officials of NSIC Guwahati including the name of the applicant, the then Zonal Head,

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NSIC Ltd. North East Zone, Guwahati. The CBI investigation in the case is going on. With regard to initiation of disciplinary proceedings after retirement, learned counsel for the respondents has placed The National Small Industries Corporation Ltd. Control & Appeal Rules, 1968 wherein Rule 30(A)(ii), it says that – Disciplinary proceedings, if instituted while the employee was in service whether before his/her retirement or during his/her re-employment, shall, after the final retirement of the employee, be deemed to be proceeding and shall be continued and concluded by the authority by which it was commenced in the same manner as if the employee had continued in service’.

9. We have carefully perused the written argument filed by the learned Sr. Advocate for the applicant wherein it is stated that penalty imposed upon the applicant is disproportionate as the applicant had merely approved the proposal on the recommendation of the Committees. For an act or omission to be misconduct, it has to be willful in nature and by no stretch it can be projected as misconduct. The Disciplinary Authority not only failed to come to a finding that

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the applicant was guilty of an unlawful act in relation to discharge of his duties in service. They had also failed to prove that it was willful in character. Therefore, a negligence simpliciter would not be misconduct. In this regard, Sr. Advocate has referred the case of Inspector Prem Chand Vs. Govt. of NCT of Delhi and Ors., reported in (2007) 4 SCC 566. He has also placed reliance the case of General Manager Personnel, Syndicate Bank and Others Vs. B.S.N. Prasad, reported in (2025) 3 SCC 601 & Union of India and Ors. Vs. J. Ahmed, reported in (1979) 2 SCC 286.

10. We have also gone through the records and submissions of both parties.

11. In the present case, while the applicant was working as Zonal Head (North East), had violated the delegation of powers by not clubbing limits sanctioned to associate/sister concerns of the group under Raw Matter Assistance Scheme; sanctioned enhancement and annual renewal of limits wherein the outstanding dues were exceeding the BG value; and failed to supervise/monitor the overdues position through RMA software. As per the respondents, all these perfunctory

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and callous approach in sanctioning the RMA proposals has ultimately exposed the investment of the Company at greater risk and unsecured outstanding amounting to Rs. 504.74 lakh as on 31.03.2021 due to fake bank guarantees. Therefore, departmental proceeding had been initiated against the applicant vide Memorandum dated 31.12.2018 with 6 Articles of Charges. In the meantime, the applicant retired from service on attaining the age of superannuation on 30.06.2020. Thereafter, the respondent authorities continued with the departmental inquiry and after inquiry, the Inquiry Officer submitted his report on 17.12.2020 holding Charge No. I & II to be proved and Charge No. III, IV, V and VI to be partly proved. On the basis of the said inquiry report, the Disciplinary Authority vide order dated 28.12.2021 imposed major penalty of “Dismissal from service with effect from the date of his superannuation i.e. 30.06.2020 and forfeiture of his retiral dues (i.e. Gratuity and Encashment of Leave) (Annexure-A/2) which was also confirmed by the Appellate Authority vide detailed Speaking Order dated 18.08.2022 (Annexure-A/1). Besides, CBI case under FIR RC

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1(A)/2018-GWH against the applicant along with 4 suspected accused officials of NSIC Guwahati is going on. 11.1 We have to apply the standards set out at para 10 above and examine whether the inquiry was vitiated by denial of documents as stated by the applicant. 11.2 With regard to the allegation of non-furnishing of relevant documents, the respondents submit that the Inquiry Officer had allowed the additional documents requisitioned by the applicant and the concerned departments had supplied the documents available with them. The further requests made by the applicant were also considered, and only such documents as were found irrelevant were declined. It is further submitted that, pursuant to the order dated 24.07.2020 passed by this Tribunal, the applicant was permitted to inspect the documents mentioned in Annexure- III to the charge memorandum. After inspection, the applicant admitted the genuineness of the documents, which were taken on record and marked as Exhibits ME-I to ME-VI. Thus, no prejudice was caused to the applicant in the conduct of the inquiry.

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11.3 As regards the challenge to the appointment of the Inquiry Officer on the ground that he was not a serving public servant, the respondents submit that the disciplinary proceedings were initiated in the year 2018 under Rule 8 of the NSIC Control & Appeal Rules, 1968. The said Rule empowered the Disciplinary Authority either to conduct the inquiry itself or to appoint an authority for the purpose. Reliance has also been placed on the CVC Office Order No. 34/7/2003 dated 01.08.2003, which permitted PSUs and other organisations to maintain a panel of retired officers from within or outside the organisation for appointment as Inquiry Officers. It is, therefore, contended that the appointment of the Inquiry Officer in the present case was permissible under the applicable rules and CVC guidelines. 11.4 The respondents further submit that the NSIC Employees Conduct, Discipline and Appeal (CDA) Rules, 2019 were subsequently introduced with effect from 01.09.2019. Under Rule 25(2) thereof, the Disciplinary Authority was empowered to appoint a public servant as the Inquiry Officer. The said provision was subsequently amended with the approval of the Board of Directors in its 537th meeting held on 28.10.2021,

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whereby appointment of a public servant or retired public servant as Inquiry Officer was expressly permitted. On these grounds, the respondents contend that the disciplinary inquiry was conducted in accordance with the applicable rules and that the applicant suffered no prejudice either on account of non-supply of documents or the appointment of the Inquiry Officer. 11.5 It is therefore, clear from the facts placed on record that the requisite documents were supplied to the applicant.

12. We now examine whether the penalty of dismissal could be imposed on an employee already retired? 12.1 Rule 30 (A) (ii) of NSIC Control and Appeal Rules, 1968 permits continuation of proceedings instituted before retirement. After the conclusion of disciplinary proceedings action was taken by the Disciplinary Authority and upheld by Appellate Authority and appears to be in accordance with law.

13. Since, the disciplinary proceedings were initiated for a major penalty as per applicable rules, the Disciplinary Authority can impose any of the major penalty provided in the CDA rules which it considered as commensuration to the

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gravity of proved charges. The penalty may be even dismissal form service which has the effect of forfeiting retiral benefits like gratuity and leave encashment. The contention of the applicant that amount of Rs. 504.74 lakh as on 31.03.2021 is not the loss caused rather it is an unsecured outstanding, it is stated that in two cases there is an unsecured outstanding of Rs. 504.74 lakh as on 31.3.2021due to receipt of fake bank guarantees (100% provision has been made).

14. The issue regarding whether the penalty is disproportionate to the alleged offence for supervisory lapses when the other officers who were proceeded with departmental proceedings were settled with minor penalties. The applicant has contended that no financial loss was caused to corporation and in these circumstances the penalty appears to be harsh and disproportionate to the offfence. Respondents have stated that due to fake bank guarantees 100% provision has been made for unsecured outstanding of Rs. 504.74 lakhs as on 31.03.2020.

15. In the matters relating to Disciplinary proceeding, , the law has been laid down in the case of Union of India and

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Others vs. P. Gunasekaran, reported in (2015) 2 SCC 610 wherein the Hon'ble Apex Court has laid down as under:

"12. Despite the well-settled position, it is painfully disturbing to note that the High Court has acted as an appellate authority in the disciplinary proceedings, reappreciating even the evidence before the enquiry officer. The finding on Charge I was accepted by the disciplinary authority and was also endorsed by the Central Administrative Tribunal. In disciplinary proceedings, the High Court is not and cannot act as a second court of first appeal. The High Court, in exercise of its powers under Articles of the Constitution of India, shall not venture into reappreciation of the evidence. The High Court can only see whether:

(a) the enquiry is held by a competent authority;

(b) the enquiry is held according to the procedure prescribed in that behalf;

(c) there is violation of the principles of natural justice in conducting the proceedings; (d) the authorities have disabled themselves from reaching a fair conclusion by some considerations extraneous to the evidence and merits of the case; (e) the authorities have allowed themselves to be influenced by irrelevant or extraneous considerations; (f) the conclusion, on the very face of it, is so wholly arbitrary and capricious that no reasonable person could ever have arrived at such conclusion; (g) the disciplinary authority had erroneously failed to admit the admissible and material evidence;

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(h) the disciplinary authority had erroneously admitted inadmissible evidence which influenced the finding;

(i) the finding of fact is based on no evidence.

13. Under Articles 226/227 of the Constitution of India, the High Court shall not:

(i) reappreciate the evidence;

(ii) interfere with the conclusions in the enquiry, in case the same has been conducted in accordance with law;

(iii) go into the adequacy of the evidence;

(iv) go into the reliability of the evidence;

(v) interfere, if there be some legal evidence on which findings can be based.

(vi) correct the error of fact however grave it may appear to be;

(vii) go into the proportionality of punishment unless it shocks its conscience.”

16. Keeping in view of the above, and having considered the judgment of the Hon'ble Supreme Court in Union of India and Others vs. P. Gunasekaran, (2015) 2 SCC 610 discussed above, we are of the considered opinion that the impugned orders of the Disciplinary/Appellate Authority do not warrant interference, as the applicant has failed to make out a case in his favour. Accordingly, the O.A. is dismissed being devoid of merit.

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17. Pending M.A., if any, stands disposed of. No order as to costs.

(SANJIV KUMAR)

(RAJINDER SINGH DOGRA)

MEMBER (A)

MEMBER (J)

PB

Digitally signed by PRASANNA BASUMATARY PRASANNA BASUMATARY