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IN THE SUPREME COURT OF INDIA

CIVIL  APPELLATE JURISDICTION

CIVIL  APPEAL NO. 4766     OF 2009 [Arising out of SLP(C) No. 13946/2006]

  GIRIJAN CO-OP. CORPORATION LTD., A.P. ... APPELLANT(S)

:VERSUS:

  K. SATYANARAYANA RAO ... RESPONDENT(S)

WITH

CIVIL  APPEAL NO. 4767    OF 2009 [Arising out of SLP(C) No. 15717/2006]

CIVIL  APPEAL NO. 4769    OF 2009 [Arising out of SLP(C) No. 15500/2006]

CIVIL  APPEAL NO. 4770    OF 2009 [Arising out of SLP(C) No. 15772/2006]

CIVIL  APPEAL NO. 4771   OF 2009 [Arising out of SLP(C) No. 699/2008]

O R D E R

Leave granted.

These appeals are directed against the judgment and order dated 14.02.2006  

passed  by  a  Division  Bench  of  the  High  Court  of  Judicature  of  Andhra  Pradesh  

whereby  and  whereunder  the  letters  patent  appeal  filed  against  the  judgment  and  

order dated 14.7.2005 passed by the learned Single Judge of the High Court passed in

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Writ Petition No. 799/2007 was affirmed.

Respondents  herein  were  employees  of  the  appellant-Corporation.   They  

reached the age of superannuation some time in 2000. A departmental proceeding was  

initiated against the respondents in the year 1999 alleging some financial irregularities  

on  their  part  committed  in  the  year  1992-93.   Certain  amount  was  sought  to  be  

recovered  from  them  which  the  appellant  allegedly  suffered  by  reason  of  the  

misconduct committed by them shortly before their superannuation.      

One of the question which had been raised before the High Court and found  

favour with by both the learned Single Judge as also the Division Bench of the High  

Court,  was  that  no  disciplinary  proceeding  could  have  been  initiated  against  the  

respondents  and/or  continue  the  same after  their   retirement.   The  High  Court  in  

support  of  the  aforementioned  finding  relied  upon  a  decision  of  this  Court  in  

Bhagirathi Jena vs. Board of Directors, O.S.F.C., 1999 (3) SCC 666.  The High Court in  

its order referred to a Circular dated 29.8.1998 which reads as under:

“Sub:-  G.C.C.  Service  Rules  –  Amendment of  Service  Rules  of  G.C.C. for adoption of Andhra Pradesh Civil  Service Code and  Andhra Pradesh Fundamental Rules – Reg. Ref: Board Resolution No. 74/98-99 dated 11.8.1998

The Board in its resolution No. 7498-99 have resolved to  amend the GCC Service Rules for adoption of Andhra Pradesh  Civil Service Code rules and Andhra Pradesh Fundamental Rules  where ever the G.C.C. service rules are silent.  

All the Unit Officers of G.C.C. are requested to include  this para in service rules of GCC in Chapter I Part-A as Rule 7.  

7. ADOPTION OF GOVT. RULES.

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The M.D. shall have power to adopt rules under 'Andhra  Pradesh Civil Service Ruels' and Andhra Pradesh Fundamental  Rules  to  its  employees  whenever  the  GCC  Service  Rules  of  employees are silent.  

Receipt of the circular should be acknowledged.”    

Interpreting the words “The M.D. shall have power to adopt rules”, it  

was opined by the High Court that as no such order adopting the said rules by  

the Managing Director of the Corporation was brought on record, continuation  

of the disciplinary proceedings against the respondents was bad in law.  

Before this Court, however, the Corporation seeks to take a different  

stand. According to it,  the power to adopt the Government Rules vests in the  

Board of Directors and the Managing Director was merely to apply  the same.  

By  an  affidavit  affirmed  by  one  K.S.V.R.N.  Sarma,  Legal  Executive/Junior  

Manager (Legal)  of  the  Corporation  filed  on 10th July,  2009 which has  been  

brought to our notice that in fact the Board of Directors had adopted Rule 7 of  

Part-A, Chapter I  of the G.C.C. Service Rules by resolution dated 11.8.1998, in  

terms whereof the aforementioned circular dated 29.8.1998 has been issued. It  

was furthermore contended before the High Court:  

“I say and submit that the respondent herein who is in the cadre of  General  Manager  has  committed  certain  grave  irregularities,  misappropriation of huge Corporation funds, committed criminal  breach of trust while working as Senior Accounts Officer (Comp.)  incharge of the subject of industries during 1991-92. The petitioner  Corporation  after  conduct  of  enquiry  issued  him  provisional  conclusion orders on 28.4.2000 stating that since he is due to retire  on 30.4.2000, he will be allowed to retire on the day without any  retirement  benefits  till  all  the pending cases are finalized and to  recover  the  losses  sustained  to  the  tune  of  Rs.  2,38,855/-.  The  respondent  did  not  choose  to  file  his  explanation  to  the  said

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provisional  conclusion  orders.  Thus  after  affording  him  the  opportunity,  final  orders  are  passed  on  3.7.2000  confirming  the  provisional  conclusion  orders.  The  employees  of  Corporation  besides  the  respondent  herein  are  well  aware of  the  said  Board  resolution and have not challenged the same in any legal forum so  far. The respondent without filing the statutory appeal before the  Board, filed the WP 25073 of 2000 which is allowed on 12.4.2001 by  the  Hon'ble  High  Court  of  Andhra  Pradesh  holding  that  the  disciplinary proceedings cannot be maintained subsequent  to  the  retirement of the respondent employees.”

Mr. Jaideep Gupta, learned senior counsel appearing on behalf of the  

appellant would raise a two-fold submission before us.  

Firstly, having regard to the bye-laws of the appellant Corporation, the  

powers  to  fix  the  strength  of  the  establishment  and  to  frame  subsidiary  

regulations for recruitment,  service conditions  and disciplinary control  of  the  

employees, were vested in the Board of Directors, and only in terms of the said  

powers the following resolution was passed:       

“Subject No. 74:  To  seek  approval  of  the  Board  to  amend  '  the  GCC  Service  Rules'  for  adoption  of  'AP  Civil  Service  Code'   and  'A.P.  Fundamental Rules' wherever the GCC Service Rules are silent. Resolution No. 74/98-99

Approved.”

Secondly, in any event, one of the meanings of the word “adopt”, being  

to  'follow',  the  Managing  Director  was merely  to  follow the  rules  which  are  

adopted by the aforementioned resolution of the Board of Directors and he did  

not have any independent power to adopt or accept the same.  

Mr.  Ranjan  Mukherjee,  learned  counsel  appearing  on  behalf  of  the  

respondents,  on  the  other  hand,  would  contend  that  the  respondents  having

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retired  some  time  in  2000,  this  Court  may  not  exercise  its  discretionary  

jurisdiction under Article 136 of the Constitution in the above terms.   It is not in  

dispute that before the High Court what was produced was only the Circular  

dated 29.8.1998.  Neither the bye-laws nor the resolution purported to have been  

adopted by the Board of Directors were brought to the notice of the High Court.  

The documents whereupon reliance is now sought to be placed, along with the  

affidavit  affirmed  by  Shri  Sarma,  in  our  opinion,  are  additional  documents  

which can be admitted by this Court only in terms of Order 41 Rule 27 of the  

Code of Civil Procedure ('CPC'). There was absolutely no reason as to why the  

authorities  of  the appellant  did not  bring the same to the notice of  the High  

Court; they being within the power and possession of the Corporation.   

We, therefore, are of the opinion that it is not a fit case where this Court  

should  exercise  its  jurisdiction  under  Order  41  Rule  27  of  the  CPC  or  the  

provisions akin thereto, keeping in view the fact that the parameters laid down  

therein are not satisfied.   

So far as the second contention raised by Mr. Gupta is concerned, we  

are of the opinion that the manner in which the word “adopt” has been used in  

the circular letter dated 29.8.1998, does not lead to the conclusion  that the same  

has been used in the sense of following the rules as the word “adopt” has been  

preceded by the words “shall have power to”.  There cannot be any doubt or  

dispute  that  an  employer  can  initiate  a  departmental  proceedings  and/or  

continue the same only in terms of the     rules framed by it. It is also a well

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settled law that the disciplinary proceedings are initiated only when a charge-

sheet is issued.  See: Union of India vs.  

This Court in  UCO Bank & Anr. vs.  Rajinder Lal Capoor, 2007 (6)  

SCC 694, has held as under:

“21.  The aforementioned Regulation,  however,  could be invoked  

only when the disciplinary proceedings had clearly been initiated  prior to the respondent's ceasing to be in service. The terminologies  

used therein are of seminal importance. Only when a disciplinary  proceeding has been initiated against an officer of the bank despite  

his  attaining  the  age  of  superannuation,  can  the  disciplinary  proceeding  be  allowed  on  the  basis  of  the  legal  fiction  created  

thereunder i.e. continue 'as if he was in service'. Thus, only when a  valid departmental  proceeding is  initiated by reason of  the legal  

fiction raised in terms of the said provision, the delinquent officer  would be deemed to be in service although he has reached his age  

of superannuation. The departmental proceedings, it is trite law, is  not  initiated  merely  by  issuance  of  a  show-cause  notice.  It  is  

initiated only when a charge-sheet is issued (See Union of India vs.  K.V. Jankiraman, 1991 (4) SCC 109. This aspect of the matter has  

also been considered by this Court recently in Goal India Ltd. v.  Saroj Kumar Mishra, 2007 (9) SCC 625, wherein it was held that  

date of application of mind on the allegations levelled against an  officer by the competent authority as a result whereof a charge-

sheet  is  issued  would  be  the  date  on  which  the  disciplinary  proceedings are said to have been initiated and not prior thereto.  

Pendency of a preliminary enquiry, therefore, by itself cannot be a  ground for invoking Clause 20 of the Regulations.”  

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(See also Ramesh Chandra Sharma v. Punjab National Bank and Anr., 2007 (9)  

SCC 15 and 2008 (8) SCC 4).  

In absence of any rules, therefore, a disciplinary proceeding against a  

retired employee  should not  have been continued.  The judgment of  the High  

Court, in our opinion, cannot be said to be faulty. We, however, keeping in view  

the subsequent documents brought before us by the appellant,  would observe  

that, in future, in any other case or before any other authority, the Corporation  

would be at liberty to place all  the relevant documents and to that effect  the  

question of law raised by the appellant herein shall remain open.   

The appeals  are dismissed with the aforementioned observations and  

direction.  However, in the facts and circumstances of this case, there shall be no  

order as to costs.  

........................J (S.B. SINHA)

........................J   (DEEPAK VERMA) NEW DELHI, JULY 24, 2009.