Holding

The Supreme Court held that dismissal was not wholly disproportionate to the misconduct proved and that the High Court erred in treating the vague clause as a bar to punishment, thereby allowing the appeal.

Summary

The respondent, a senior sales officer of Bharat Petroleum Ltd., was charged with eight instances of financial irregularities and dismissed from service under the Conduct, Discipline and Appeal Rules. He challenged the dismissal, arguing that some charges were vague and that the punishment was disproportionate. The Kerala High Court had remitted the matter to the appellate authority, directing that dismissal not be imposed, on the ground that clause 4 of Part II of the Rules was vague and violated Article 14. The Supreme Court held that the respondent was charged under multiple clauses, not merely the vague clause, and that the quantum of punishment was not wholly disproportionate to the misconduct proved. It further ruled that judicial review of the quantum of punishment is limited and should not be exercised routinely. Consequently, the Court set aside the High Court's order and allowed the appeal, remitting the case back to the appellate authority for fresh determination of penalty, excluding dismissal or removal.

Issues considered

The propriety of imposing dismissal as punishment for the misconduct alleged under the Conduct, Discipline and Appeal Rules.
Whether the presence of vague or indefinite charges under clause 4 of Part II of the Rules bars the imposition of any penalty, including dismissal.
Whether the quantum of punishment is disproportionate to the charges proved, warranting interference by the court.
The extent of judicial review permissible in disciplinary matters concerning the quantum of punishment.
Whether the finding of guilt stands despite the contention that two of the eight charges were not proved.

Subjects

misconductdisciplinary proceedingsdismissalproportionalityjudicial reviewservice lawConduct Discipline and Appeal RulesArticle 14vague penal provisionquantum of punishment

Judgment

r
CHAIRMAN & M.D., BHARAT PET. CORPN. LTD. AND ORS. A
V.

T.K. RAJU

FEBRUARY 24, 2006

[S.B. SINHA AND P.P. NAOLEKAR, JJ.] B

SERVICE LAW:

Conduct, Discipline and Appeal Rules for the Management Staff ofBharat C
Petroleum Ltd.-Rules 4 and 22 of Part II read with Clauses 4, 6, 20, 22, 31
and 37 of Rule A ofPart Ill-Dismissal from service-On complaint offinancial
irregularities-Writ Petition-Remission of the matter by Single Judge ofHigh
Court to appellate authority for imposing appropriate punishment as
punishment was disproportionate to the charges-Division Bench holding that
some of the charges being vague no punishment could be imposed on that D
basis-However, upholding the guilt of the delinquent remitting the matter to
appellate authority for imposing proportionate punishment-On appeal, held:
Quantum ofpunishment was not disproportionate-The charge was not framed
in terms of the Rules alone. which were held to be vague.
E
Judicial Review-Scope of-Jn matters of quantum ofpunishment-Held:
scope ofjudicial review is limited in such matters-Court does not interfere
in such cases in a routine manner.

Words and Phrases :
F
~ 'Misconduct '-Meaning of

Respondent was a Sales Officer with the appellants. The office of the
appellants received complaints against the respondent alleging financial
. irregularities on the part of the respondent. Charges were framed against
the respondent in terms of Rules 4 and 22 of Part II read with Clauses 4, G
6, 20, 22, 31 and 37of Rule A Part Ill of the Conduct, Discipline and
Appeal Rules for the Management Staff, Disciplinary proceedings were
'1 · initiated and he was found guilty. Punishment of dismissal from service
was imposed. The statutory appeal of the respondent was dismissed. In
.· .. Writ Petition, Single Judge of the High Court held that the quantum of H
519
520 SUPREME COURT REPORTS [2006] 2 S.C.R.

A punishment was disproportionate to the charges of misconduct and hence ;
remitted the matter to appellate authority for imposing appropriate
punishment. Cross appeals to the Division Bench of High Court were
disposed of holding that in the light of the legal principle that when a penal
provision is vague, it devices the equal protection of law guaranteed under
Article 14 of the constitution; by placing reliance on Clause 4 of Part II
B
of the Rules, the impugned order was held to be vitiated. However, it
confirmed the finding of the guilt and remitted the matter to the appellate
authority to take decision to impose penalty except the penalty of dismissal
or removal from service.

c In appeal to this court appellants contended that High Court
committed a factual error in coming to the conclusion that order of
dismissal was passed in terms of Rule 4 of the Rul1es.

Respondent contended that extreme punishment of dismissal was not
justified in view of the fact that two of the eight charges were not proved.
D
Allowing the appeal, the Court

HELD: l. The respondent admittedly was not only charged under
clause (4) of Part Ill of the Rules , he was also charged for various other
misconducts enumerated in different clauses of Pa rt II thereof. The High
E Court, therefore, was not justified in proceeding with the matter on the
premise that some of the charges against the Respondent had been framerl
only in terms of clause (4) of Part II of the Rules and that since some of
the charges were vague and indefinite, punishment could have been
imposed on the basis thereof. It cannot be said: that the quantum of
F punishment was wholly disproportionate to the charges levelled against
the Respondent. [526-D-El
t
Mis. Glaxo Laboratories (L) Ltd. v. Presiding Officer, Labour Court,
Meerut and Ors., AIR (1984) SC 1361 and A.L. Katra v. The Project and
Equipment Corporation of India Ltd., AIR (1984) SC 1361, distinguished.
G
State of Punjab and Ors. v. Ram Singh Ex Constable, (19921 4 SCC
54; Kartar Singh v. State of Punjab, (19941 3 SCC 569; Probodh Kumar
Bhowmick v. University ofCalcutta and Ors., (1994) 2 C.L.J. 456; Tara Chand ~

v. Union of India and Ors., CWP 5552 /2000 disposed of on 27th August, '('

H 2002 by Delhi High Court; Secretary to Govemmem and Ors. v. A.C.J. Britto,
CHAIRMAN & M.D .. BHARAT PET. CORPN. LTD. v. T.K. RAJU [SINHA, J.] 521
(1997( 3 SCC 387 and Noratanmal Chouraria v. MR. Murli and Anr., (2004( A
5 sec 689, referred to.

Papachristou v. City of Jacksonville, 405 US 156, referred to.

Advanced Law Lexicon, 3rd Edition by P. Ramanatha Aiyur, referred
to. B
2. It is also not correct that two of the eight charges have not been
found to be proved. The charges levelled against the respondent must be
.....
considered on a holistic basis. By reason of such an action, the respondent
had put the Company in embarrassment. It might have lost its image. It
received complaints from the Federation. There was reason for the c
appellant to believe that by such an action on the part of the respondent
the appellant's image has been tarnished. In any event, neither the Single
Judge nor the Division Bench came to any finding that none of the charges
_had been proved. (528-C-D]

3. Interference with the quantum of punishment should not be done D
in a routine manner. The power of judicial review in such matters is
-~
'
limited. (528-E]

V. Ramana v. A.P.SRTC and Ors., [2005] 7 SCC 338 and State of
Rajasthan and Anr. v. Mohammed Ayub Naz, (2006) I SCALE 79, referred
E
to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8548 of2003.

From the Final Judgment and Order dated 21.12.2001 of the Kerala
High Court in Writ Appeal No. 794 of 2001.. F
-~
T.R. Andhyarujina, Sameer Parekh and P.H. Parekh (for Mis. P.H.
Parekh & Co.) for the Appellant.

M.N. Krishnamani, N.M. Verghese, Ms. Tessy Paul and S.R. Setia for
the Respondent.
G
The Judgment of the Court was delivered by
;
·1 S.B. SINHA, J. The Respondent was a Senior Sales Officer (LPG) in
the Sales Department at Bombay Office of the Appellants. The Chief Divisional
Manager of the Cochin Divisional Office under whom the Respondent had
H
522 SUPREME COURT REPORTS (2006] 2 S.C.R.

A been working received complaints from All India LPG Distributors Federation
(Kerala Circle) alleging financial irregularities on the part of the Respondent. f

Allegedly, the Respondent collected diverse amounts from the distributors
purported to be by way of 'Short Term Hand Loans'. The same had not been
repaid to some of them. On or about 27. 7.1992, a charge memo was served
upon the Respondent alleging :
B
"That in November 1991 you had taken the loan of Rs. 5000/- from
M/s. Rose Flames, Cochin and the said amount was repaid by you
only after a period of five months i.e. only after show cause notice
Ref. C. PERS. STF dated December 10, 1991 was served on you by
COM, Cochin Divisional Office. At that time you had also taken one
c DPR (Differential Pressure Regulator) from the aforesaid Distributor
which has not been returned or replaced by you.

You had taken a loan of Rs. 1,000/- from Jyothi Gas, Tripunithura
and the said amount was returned only after a period of about 2
weeks. You had also taken a DPR (Differential Pressure Regulator)
D
from this Distributor which was returned. only in February 1992 after '
a period of more than an year. You had taken a loan of Rs. 10,000
in July 1991 from Mis. Krishna Gas, Emakulam which amount has
...
not been returned by you. Furthermore, you have also solicited further
loan from this distributor.
E
You had also taken a loan of Rs. 1,000/-from Mis. Cherukara Gas
Agencies, Alleppey during July 1991 which was returned by you
after a period of 30 days. You had demanded a loan of Rs. 10,000/
-from Mis. Seena Gas who had subsequently given you Rs. 5,000/-
on September 7, 1991 which has not b1~en returned by you till date.
F
You had taken a loan of Rs. 10,000/- from Mis. Maria Flames for
finalising a house site which has not been returned till now. On
assuming charge as LPG Sales Officer in the month of April 1991,
you had demanded Rs. 5000/- again from this distributor. When the
distributor explained his difficulties you had demanded at least Rs.
G 2000/- which was not paid by the distributor. On 6.11.91 on your
visit to the distributor for an inspection, you demanded an LPG stove

,, .
which was given to you on credit which amount has also not been
settled by you.

You had taken articles and availed services worth Rs. 2487/- from
H
\r
CHAIRMAN & M.D .. BHARAT PET. CORPN. LTD. 1·. T.K. RAJU [SINHA, J] 523

our dealer Mis. K.P. Varghese & Sons on credit. This amount has A
lI also not been settled by you so far. You had taken supplies of petrol
·on credit from Mis. K.K. Abraham, Emakulam during the period
April 1990 and a sum of Rs. 2329.90 due for the supplies has not yet
been paid."

A disciplinary proceedings was initiated against the Respondent. He B
was found guilty therein. The said charges were levelled against him purported
to be in terms of Rules 4 and 22 of Part II read with Clauses 4, 6, 20, 22,
31 and 37 of Rule A in Part III of the Conduct, Discipline and Appeal Rules
-.\
for the Management Staff (for short "the Rules").

The Management in the said departmental enquiry examined Mr.
c
Jayaraman, Secretary of the Federation. Other distributors being eight in
number were also examined. The said witnesses were also cross-examined by
the Respondent. An enquiry report was submitted before the disciplinary.
authority and the latter by an order dated 5.12.1994 imposed a punishment
of dismissal of services upon the Respondent. He preferred a statutory appeal D
thereagainst before the Chairman and the Managing Director of the Appellant-
Corporation who was the designated appellate ~uthority. The said appeal was
--1
... dismissed by the appellate authority by an order dated 6.6.1995 stating:

"Having come to the conclusion that charges were duly proved and
established against Sri Raju, as above, I feel I have considered the E
question of punishment. I feel that any one of eight charges, if proved,
against Sri Raju, would warrant the punishment of dismissal from
service, considering the position held by him as well as the nature of
the misconduct involved. I have already mentioned about the
admissions relating to charges 7 and 8. Taking all this into account, F
I feel that in the interests of the Corporation, it is not proper to retain
..,,
--t a person like Sri Raju who is guilty of such misconducts proved
against him in the service of the Corporation.

In the aboye circumstances, I conclude that the various submissions,
averments made by Sri T.K. Raju in his Appeal dated 9.3.1995 do not G
provide any ground meriting review of the order passed by the Director
(Marketing).

~ Considering the grave nature of acts of misconducts proved against
'f
Sri T.K. Raju, I hold that the order of dismissal of Sri T.K. Raju from
Corporation's services, passed by the Director (Marketing) on 5.12.94 H
1
'
524 SUPREME:. COURT REPORTS (2006] 2 S.C.R.

A is proper, just and equitable, and 1 do not, therefore, wish to interfere
with the said Order." (

A writ petition, questioning the legality and validity of the said orders
was filed by the Respondent in the High Court of Kerala at Ernakulam which
was marked as Original Petition No. 15479 o: 1995. Although the learned
B Single Judge held that the principles of natural justice had been complied
with and there was no violation of the Rules, he was of the opinion that
quantum of punishment is disproportionate to the charges of misconduct
levelled against him and as such remitted the matter back to the appellate
)'-.
authority for imposing appropriate punishment. The Appellants as also the
c Respondent preferred appeals thereagainst. By a common judgment dated
21st December, 2001, the Division Bench disposed of both the appeals. The
Division Bench relying on or on the basis of decisions of this Court in Mis.
Glaxo laboratories (L) Ltd. v. Presiding Officer, labour Court, Meerut and
Ors., AIR (1984) SC 1361, A.L. Kalra v. The Project and Equipment
Corporation of India Ltd., AIR (1984) SC 1361, Papachristou v. City of
D Jacksonville, 405 US 156 and Kartar Singh v. State of Punjab, (1994] 3 SCC
569, opined:

"8. We find that those charges include the violation of Clause 4 Part I'-
JI apart from other charges and the punishment order also relies on
the saidclause to impose the penalty of dismissal from service. It is
E a fairly settled principle of law that when a penal provision is vague,
it denies the equal protection of laws guaranteed under Article 14. In
the light of the above legal principles, the reliance placed on Clause
4 of Part II of the Classification, Control and Appeal Rules for the
Management Staff, the impugned order is vitiated.
F
9. When a disciplinary authority takes a decision regarding the guilt
of a delinquent employee, it is taking the decision objectively on the ,.
basis of the materials before it. So even if irrelevant considerations
have also been looked into for formmg the conclusion of guilt, the
Court judicially reviewing the action can consider whether the
G remaining ground would have been sufficient for entering the finding
of guilt. So, even if the irrelevant considerations are excluded, still
according to us, the finding of guilt of the writ petitioner will remain"

Having said so, it agreed with the opinion of the learned Single Judge ,, ~

and directed :
H
r
\

CHAIRMAN & M.D., BHARAT PET. CORPN. LTD. v. T.K. RAJU [SINHA, J] 525
"I I. Now it is for the appellate authority to take a decision as to what A
must be the penalty which should be imposed on the delinquent
employee. The learned single Judge has suggested a penalty that may
be appropriate on the facts of the ca~e. Going through the judgment,
we feel that the learned Judge only wanted the imposition of a penalty
commensurate with the misconduct proved other than a penalty
resulting in loss of job to him. We feel that the exercise of discretion B
made by the learned single Judge that the penalty should be something
other than dismissal or removal from service cannot be said to be
perverse warranting interference at our hands. We notice that the writ
petitioner is a member of the scheduled caste. There is no allegation
that he has taken the loans etc. for giving undue pecuniary advantage C
to the dealers concerned. Nor is there any allegation that they have
gained any advantage by succumbing to the demands made by the
writ petitioner. Therefore, we affirm the discretion exercised by the
learned single Judge subject to the modifications and clarifications
mentioned, above. Therefore, we remit the matter for fresh decision
by the appellate authority in the light of the observations contained D
hereinabove. The authority will be free to take any decision regarding
penalty to be imposed on the writ petitioner except the penalty of
dismissal or removal from service. The said authority shall take a
decision within two months from the date of receipt of a copy of this
judgment." E
Mr. T.R, Andhyarujina, learned senior counsel appearing on behalf of
the Appellant inter alia contended1that the High Court committed a factual
error in coming to the conclusion that the order of dismissal was passed in
terms of Rule 4 of the Rules. It was urged that the decisions of this Court in
Katra, (supra) and Glaxo, (supra) are not applicable to the facts of this case. F
Mr. M.N. Krishnamani, learned senior counsel appearing on behalf of
the Respondent, on the other hand, urged that having regard to the fact that
the Respondent has not caused any financial loss to the company nor has
defrauded the company to any extent, the punishment imposed upon him
must be held to be harsh. It was further submitted that charges 2 and 6 cannot G
be said to have been proved and in that view of the matter the extreme
punishment of dismissal from service is not commensurate with the charges
levelled against the Respondent. It was argued that as several other
punishments could be imposed upon the Appellant which come within the
purview of major penalty; there was no reason as to why extreme punishment H
526 SUPREME COURT REPORTS [2006] 2 S.C.R.

A of dismissal of services was imposed upon the Respondent by the disciplinary
authority. f
The Respondent was a Sales Officer. In 1990. it is stated, there were
extreme shortages of LPG gas cylinders. He, in his official capacity, was
dealing with the LPG Distributors. In terms of Clause 4 of Part II of the
B Rules, it was expected of an officer of the Corporation not to do anything
which could be unbecoming of its Management Staff. Clause 22 of Part II of
the Rules categorically debars an employee from raising any loan in the
following terms:

"No Management Staff of the Corporation shall, save in the ordinary
c course of business with a bank, the Life Insurance Corporation or a
firm of standing, borrow money from or lend money to or otherwise
place himself under pecuniary obligation to any person with whom
he has or is likely to have official dealings or permit any such
borrowing, lending or pecuniary obligation in his name or for his
D benefit or for the benefit of any member of his family."

The Respondent admittedly was not only charged under clause (4) of
Part Ill of the Rules, he was also charged for various other misconducts
enumerated in different clauses of Part II thereof. The High Court, therefore,
was not justified in proceeding with the matter on the premise that some of
E the charges against the Respondent had been framed only in terms of clause
(4) of Part II of the Rules.

In Kalra, (supra), the misconduct alleged 2.gainst the delinquent was
trivial. Report against him was found to be on ipse dixit. It was held that Rule
4( I)(i) did not specify that its violation will constitute misconduct. It was
F opined that the delinquent did not commit any misconduct by violating
'Advance Rules'. In that situation, it was observed. that "how did the question
of integrity arises passes our comprehension". It was held:

"To sum up the order of removal passed by the disciplinary authority
is illegal and invalid for the reasons: (i) that the action is thoroughly
G arbitrary and is violative of Article 14, (ii) that the alleged misconduct
does not constitute misconduct within tbe 1975 Rules, (iii) that the
inquiry officer himself found that punishment was already imposed
for the alleged misconduct by withholding the salary and the appellant
could not be exposed to double jeopardy, and (iv) that the findings
H of the inquiry officer are unsupported by reasons and the order of the
r
CHAIRMAN & M.D .. BHARAT PET. CORPN. LTD. 1•. T.K. RAJU [SINHA. J] 527
disciplinary authority as well as the Appellate Authority suffer from A
the same vice. Therefore, the order of removal from service as well
as the appellate order are quashed and set aside."

Glaxo, (supra) was also rendered in the fact situation obtaining therein.

It is not in dispute that misconduct is a generic term. B
In State of Punjab and Ors. v. Ram Singh Ex. Constable, [1992) 4 SCC
54 it was stated: -

"Misconduct has been defined in Black's Law Dictionary, Sixth
Edition at page 999 thus: C
"A transgression of some established and definite rule of action, a
forbidden act, a dereliction from duty, unlawful behavior, wilful in
character, improper or wrong behavior, its synonyms are misdemeanor,
misdeed, misbehavior, delinquency, impropriety, mismanagement,
offense, but not negligence or carelessness." D
Misconduct in office has been defined as:

"Any unlawful behavior by a public officer in relation to the duties
of his office, wilful in character. Term embraces acts which the office ·
holder had no right to perform, acts performed improperly, and failure E
to act in the face of an affirmative duty to act."

Jn P. Ramanatha Aiyar's Advanced Law Lexicon, 3rd edition, at page
3026, the term 'Misconduct' has been defined as under:

"The term misconduct implies a wrongful intention and not a mere
F
error of judgment. Misconduct is not necessarily the same thing as
conduct involving moral turpitude. The word misconduct is a relative
term, and has to be construed with reference to the subject-matter and
the context wherein the term occurs, having regard to the scope of the
Act or statute which is being construed. Misconduct literally means
wrong conduct or improper conduct." G
More than one occasion, different courts have taken pains to expldn
that Katra, (supra) does not lay down any inflexible rule. (See Probodh
Kumar Bhowmick v. University of Calcutta & Ors., (1994) 2 C.L.J. 456, Tara
Chand v. Union of India and Ors., CWP 5552 12000 disposed of on 27th
H
1I

528 SUPREME COURT REPORTS 12006I 2 S.C.R.
r
A August, 2002 (Delhi High Court), Secretary to Government and Ors. v. A.C.J.
Britto, [ 1997] 3 SCC 387 and Noratanmal Chouraria v. M.R. Murli and Anr.,
(2004] s sec 689.

In the aforementioned situation, the High Court in our opinion committed
a manifest error in relying upon Kalra (supra) and Glaxo (supra), as we have
B noticed ~ereinbefore, that the Respondent was not charged in terms of the
Rules alone. He was charged for violation of Sl!Veral other clauses of the
Rules. The High Court, therefore, was not correct in coming to the conclusion
that as some of the charges were vague and inde:fin ite, thus, no punishment
could have been imposed on the basis thereof.
c We also do not agree with the submission of Mr. Krishnamani that two
of the eight charges have not been found to be proved. The charges levelled
against the Respondent must be considered on a holistic basis. By reason of
such an action, the Respondent had put the company in embarrassment. It
might have lost its image. It received complaints from the Federation. There
D was reason for the Appellant to believe that by such an action on the part of
the Respondent the Appellant's image has been tarnished. Jn any event, neither
the learned Single Judge nor the Division Ben•:h came to any finding that
..
none of the charges had been proved.

The power of judicial review in such matters is limited. This Court
E times without number had laid down that interference with the quantum of
punishment should not be done in a routine manner. [See V. Ramana v.
A.P.SRTC and Ors., [2005] 7 SCC 338, and State of Rajasthan & Anr. v.
Mohammed Ayub Naz, (2006) I SCALE 79]. ~

Having regard to the facts and circumstances of this case, we are of the
F opinion that it cannot be said that the quantum of punishment was wholly
disproportionate to the charges levelled against the Respondent.

The High Court, therefore, committed an error in passing the impugned
judgment which is set aside accordingly. The appeal is allowed. No costs.
G K.K.T. Appeal allowed.

.. ~