Holding

The Regional Director can validly initiate disciplinary proceedings, and Rule 16(2) and Regulations 12(2) and 13(1) are valid insofar as they confer independent statutory powers on the Director General, while any delegation of powers under Section 94‑A is invalid.

Summary

The case concerned disciplinary proceedings against two employees of the Employees' State Insurance Corporation (ESIC). The Regional Director of Karnataka initiated proceedings, and the Director General later imposed a penalty. The respondents challenged the memoranda initiating the proceedings and the Director General’s orders, arguing that the Regional Director lacked authority and that Rule 16(2) of the Employees' State Insurance (Central) Rules, 1950 and Regulations 12 and 13 of the ESIC (Staff and Conditions of Service) Regulations, 1959, impermissibly delegated powers in violation of Section 94‑A of the ESIC Act. The Supreme Court held that a superior authority such as the Regional Director may initiate disciplinary proceedings even without specific delegation, and that Rule 16(2) and Regulations 12(2) and 13(1) confer independent statutory powers on the Director General, not prohibited sub‑delegation. However, any delegation of powers that stem from Section 94‑A is invalid. Consequently, the Tribunal’s striking down of those provisions was set aside, the Director General’s orders of 1974 and 1981 were upheld, and the memoranda initiating the proceedings were deemed valid. The respondents’ applications were dismissed.

Issues considered

The Regional Director’s competence to initiate disciplinary proceedings without explicit delegation.
Whether Rule 16(2) of the Employees' State Insurance (Central) Rules, 1950 and Regulations 12(2) and 13(1) of the ESIC Regulations, 1959 constitute impermissible sub‑delegation of powers under Section 94‑A of the ESIC Act.
The validity of the Director General’s orders delegating disciplinary powers (1974, 1981).
The effect of the Standing Committee resolution dated 24 May 1968 on the Director General’s delegation powers.

Legislation cited

Employees' State Insurance (Central) Rules, 1950s. Rule 16
Employees' State Insurance Corporation Act, 1948s. 16, s. 17, s. 94-A, s. 95, s. 97
Employees' State Insurance Corporation (Staff and Conditions of Service) Regulations, 1959s. Regulation 12, s. Regulation 13

Subjects

Employees' State Insurancedisciplinary proceedingsdelegation of powerssub‑delegationRule 16(2)Regulation 12Regulation 13Section 94-Aadministrative law

Judgment

A DIRECTOR GENERAL, ES! AND ANR.
v.
T. ABDUL RAZAK ETC.

JULY 8, 1996
B
fS.C. AGARWAL AND G.T. NANA VAT!, JJ.J

Employees' State Insurance C01poration Act, 1941!-Sections 16, 17,
94A-Employees' State Insurance (Central) Rules, 195(}-Ru/e 16-
C Employee's State Insurance Cmporation (Staff and Conditions of Service)
Regulation, 1959-Regulations 12 & IJ-Disciplinary Autlwlities----Powen·
and duties of Director General-It is not necessa1y that the autholity co1n-
11ctent to i111pose penalty nntst initiate disciplinal)' proceedings-Proceedings
can be initiated by any supC1ior authmity who can be held to be the controlling
authority who may be an officer subordinate to the appointing authmity-
D ReJpondent en1ployed as Insurance Alanager Gr.11/ln.spector lvith En117/oyees'
State Insurance Co1poration-lnitiation of disciplinary proceedings against
hinz by Regional Director-Legal-Power confe1Ted on Director General under
a ntlc or a regulation-Statuto1y power-It cannot be regarded as delegation
of powers and functions of the C01poration or the Standing Commi.rtee u/s
E 94A.

The respondent was employed as Insurance Manager Gr.II/Inspector
with the Employees State Insurance Corporatioa. Disciplinary proceedings
were initiated against him by the Regional Director of Karnataka Region
on the basis of Memorandum dated 20.10.1983 and after holding an enquiry
F an order was passed by the Director General imposing the penalty of
reduction in rank to the post of Head Clerk/Manager Gr. III for a .Period
of one year. The respondent filed an application before the Tribunal assail-
ing the order. On the basis of another Memorandum dated 23.1.1985.
disciplinary proceedings were started against the respondent by the
G Regional Director of Karnataka Region which were challenged by filing a
writ petition. The respondent challenged the Memorandum and the com-
petence of the Regional Director to initiate the disciplinary proceedings.
The Tribunal struck domi Rule 16(2) of the Employees' State Insurance
(Central) Ruleo, 1950, in its enti1rety, the words 'or the authority specified
in this behalf by a general or special order of the Director General' in
H Regulation 12 (2) and the words 'or any other authority expowered by him ~·

80
DIRECTOR GENERAL, ES! v. TA RAZAK 81

by general or special order may' in Regulation 13(1) of the Employees' State A
Insurance Corporation (Stall and Condition of Service) Regulation, 1959.
The Tribunal also quashed the memoranda dated 20.10.1983, 21.1.85 and
18/25.7.1986 regarding initiation of disciplinary proceedings against both
the respondents as well as the order of punishment passed by the Director
General. The Tribunal held that there was delegation of power of the
Corporation to Director General and it was not permissible in law for the
B
Director General to further delegate the said powers to the Regional Direc-
tor. These appeals had been filed against the order of the Tribunal.

Disposing of the appeals, this Court

HELD : 1.1. It is not necessary that the authority competent to
c
impose the penalty must initiate the disciplinary proceedings and that the
proceedings can be initiated by any superior authority who can be held to
be the controlling authority who may be an otlicer subordinate to the
appointing authority. In the instant case, the Regional Director, being the
officer in charge of the region, \\'as the controlling authority in respect of D
the respondents appointed as Insurance Manager Gr. !I/Inspector with the
Corporation. He could institute disciplinary proceedings against the
respondents even in the absence of specific conferment of a pO\\!er in that
regard. The memoranda dated October 20, 1983, January 21, 1985 and July
18/25, 1986 regarding initiation of disciplinary proceedings against the
E
respondents by the Regional .Director, therefore, did not suffer from any
legal infirmity. (91-G-H, 92-A-B]

1.2. A statutory power must be exercised only by the body or officer
in whom it has been confided, unless sub-delegation of the pol-ver is
authorised by express words or necessary implication. The Tribunal had, F
rightly held that Section 94-A of the Employees' State Insurance Corpora-
tion Act does not specifically provide that an otlicer or authority subor-
dinate to the Corporation to whom the power has been delegated by the
Corporation can, in his turn, authorise any other officer to exercise that
power or function. (92-G)
G
1.3. A rule or regulation n1ade in exercise of a po,yer conferred by a
statute being in the nature of subordinate legislation is statutory in
character while a resolution of a Corporation or a Standing Committee is
purely adn1inistrative in nature. Therefore, the power conferred on the
Director General under a rul~ or a regulation is in the nature of a statutory H
82 SUPREME COURT REPORTS [1996] SUPP. 3 S.C.R.

A power that has been conferred independently on the Director General. It
cannot be regarded as delegation of powers and functions of the Coq1ora-
....
tion or the standing Committee under Section 94-A of the Act. Section 94-A
speaks of "powers and functions which may be exercised or performed by
the Coqrnration or the Standing Committee''. The said powers and func-
tions are other than the powers that are conferred independently on the
B
Director General under the R.ules or the Regulations. Regulations 12 and
13 must be construed as conferring independent powers on the Director
General and it cannot be said to be the powers and functions of the
Corporation or the Standing Committee that have been delegated to the
Director General by the Corporation or the Standing Committee under
C Section 94-A. Regulation 12(2) which empowers the Director General to
specify by general or special order the authority which can also act as a
disciplinary authority and Regulation 13(1) which authorises the Diredor
General to empower by general or special order any other authority to
institute disciplinary proceedings against an en1ployee, cannot be regarded
D as empowering further delegation by the Director General of powers
delegated to him. The Tribunal \vas, therefore, in error in striking down
the words "or any other authority specified in this behalf by a general or
special order of the Director General" in Regulation 12(2) and the words
"or any other authority empowered by him by general or special or~er miay"
in Regulation 13(1) on the view that they permit further delegation by the
E Director General of the powers delegated to him which is impermissil>le.
The offending words in Regulations 12(2) an~ 13(1) must be treated as
valid conferment of power on the Director General to delegate his powers
under the said Regulations. The orders dated May 1ll, 1974 and April 9,
1981 were passed by the Director General in exercise of the powers coan-
F ferred on him under Regulation 12(2). By the said orders the Director
General delegated the powers to im1rnse minor penalties specified in
clauses (i) to (iv) of Regulation 11 in respect of certain categories of
employees and the oflicers specified in the said orders. Since the offending
part of Regulation 12(2) has been found to be valid the said orders dated
May 10, 1974 and April 9, 1981 must be held to have been validly issued
G in exercise of the power of delegation conferred on the Director General
under Regulation 12(2). Under the Rule 16(2) the Director General has
been empowered to delegate any of his powers or duties under the Rulles
or the Regulations or under any resolution of the Corporation or the
Standing Com1nittee, as the case 1nay be, to any person subordinate to
H him. For the purpose of such delegation it is necessary for the Director
•
DIRECTORGENERAL,ES!v. TA.RAZAK. 83

General to obtain the approval of the Standing Committee. Resolution of A
the Standing Committee dated May 24, 1968 accords such approval to the
Director General. The power of delegation under Rule 16(2) can be divided
into two parts; one relating to delegation of the powers or duties under the
Rules or the Regulations and the other relating to the powers and duties
under any resolution of the corporation or the Standing Committee. · B
Insofar as the powers or duties under the Rules or the Regulations are
concerned, the conferment on the Director General the powers to delegate
the same is not violative of the principle of sub·delegation because the said
power and duties are in the nature of independent statutory powers
conferred on the Director General under the Rules or the Regulations. No
infirmity can, therefore, be found either in Rule 16(2) or in the resolution C
of the Standing Committee dated May 24, 1968 empowering the Director
General to delegate any of his powers or duties under the Rules or the
Regulations. The position is, however, ditl'erent in respect of the powers
and duties conferred on the Director General under any resolution of the
Corporation or the Standing Committee. The conferment of such powers D
or duties under a resolution of the Corporation nr the Standing Committee
could be by way of delegation of the powers of the Corporation or the
Standing Committee under the powers of the Corporation or the Standing
Committee under Section 94·A of the Act and empowering the Director
General to further delegate the said powers or duties would amount to
sub-delegation of a power delegated to him which is impermissible. Rule E
16(2) and the resolution of the Standing Committee dated May 24, 1968,
to the extent they empower the Director General to further delegate the
powers or duties delegated to him by the Corporation or the Standing
Committee under a resolution referable to Section 94-A, have to be held
to be invalid. [93-B-H, 94-A-H, 95-A·B] F

State of Madhya Pradesh v. Shardul Singh, [1970] 1 SCC 108; P.V.
Srinivasa Sasoy v. Comptroller & Auditor General [1993] 1 SCC 419;
Inspector General of Police & Anr., v. Thavasiappan, [1996] 2 SCC 145; 17ze
Barium Chemicals Ltd. and A1zr. v. 1he Company Law Board and Others,
[1966] Supp. SCR 311, at p. 330 and Sahni Silk Mills (P) Ltd. and Anr. v. G
Employees' State Insurance Co1poration, [1994] 5 SCC 346, at pp. 350-351,
relied on.

Halsbury's Laws of England, 4th Edn. Vol. 1 para 32 p. 34; Craies on
Statute Law, 7th Edn. p. 316 referred to. H
84 SUPREME COURT REPORTS [1996] SUPP. 3 S.C.R.

A CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3952 of
1988 Etc.

From the .Judgment and Order dated 4.11.93 and 19.9.94 of the
Central Administrative Tribunal, Ahmedabad in O.A. No. 116/90 and R.A.
B No. 8 of 1994.

M. Chandrasekharan, Additional Solicitor General, V.J. Francis, P.l.
Jose and Amlan Ghose for the Appellants.

The Judgment of the Court was delivered by
c S.C. AGRAWAL, J. CIVIL APPEALS NOS. 3952/1988, 3953/1988
AND 1913/1989.

These appeals directed against the judgment of the Central Ad-
ministrative Tribunal, Bangalore Bench (hereinafter referred to as 'the
D Tribunal') dated January 29, 1988 raise a common question relating to the
validity of Rule 16(2) of the Employees' State Insurance (Central) Rules,
1950 (hereinafter referred to as 'the Rules') and Regulations 12(2) and
13(1) of the Employees' State Insurance Corporation (Staff and Condition
of Service) Regulatiom, 1959 (hereinafter referred to as 'the Regulations').
E
The Employees' State Insurance Corpnration (for short 'the
Corporation') is a statutory corporation established under the provisions
of the Employees' State Insurance Corporation Act, 1948 (hereinafter
referred to as 'the Act'). Under Section 16 of the Act the Director General
F of the Employee's State Insurance Corporation (for Short 'the Director
General') is the Chief Executive Officer of the Corporation and is one of
the principal officers. Section 17 of the Act makes provisions with regard
to staff other than the Principal Officers. In sub-section (2) of Section 17
it is provided that the Corporation shall, with the approval of the Central
Government, make regulations regarding the method of recruitment, pay
G and allowances, discipline, superannuation benefits and other conditions of
service of the members of its staff. Section 94-A, wherein provision ha:;
been made for delegation of powers, provides that the Corporation, and
subject to the regulations made by the Corporation in this behalf, the
Standing Committee may direct tliat all or any of the powers and function:;
H which may be exercised by the Corporation or the Standing Committee, a:;
DIRECTORGENERAL,ES!v. T.A.RAZAK[S.C.AGRAWAL,J.] 85

the case may be, may, in relation to such matters and subject to such A
conditions, if any, as may be specified, be al>o exercisal by any officer or
authority subordinate to the Corporation. Sub-section (1) of Section 95 of
the Act empowers the Central Government to make rules not inconsistent
with the Act for the purpose of giving effect to the provisions thereof.
Under clause (d) of Sub-section (2) of Section 95 such rules may provide B
for the powers and duties of the principal officers and the conditions of
their service. Sub-section (1) of Section 97 empowers the Corporation to
make regulations not inconsistent with the Act and the rules made there-
under for the administration of the affairs of the Corporation and for
carrying into effect the provisions of the Act. Under clause (xxi) of sub-
section (2) of Section 97 such regulations may provide for the method of
c
recruitment, pay and allowances, discipline, superannuation benefits and
other conditions of service of officers and servants of the Corporation
other than the principal officer.

The Rules have been framed by the Central Government in exercise D
of the powers conferred by Section 95 of the Act. Rule 16 relating lo the
powers and duties of the Director General is as under :

"Rule 16. Powers and duties of the Director General. - (1) The
powers and duties of the Director General shall be -
E
(i) to act as the Chief Executive officer of the Corporation;

(ii) to co-ordinate, supervise and control the work of the other
Principal Officers;

(iii) to convene, under the orders of the Chairman, meetings p
of the Corporation, the Standing Committee and the Medical
Benefit Council in accordance with the Act and the Rules and to
implement the decisions reached at the meetings;

(iv) to enter into contracts on behalf of Corporation in accord-
ance with the Act or the Rules or Regulations made thereunder, G
or the general or special instructions of the Corporation or the
Standing Committee;

(v) to furnish all returns and documents required by the Act
or the Rules to the Central Government and to correspond with
the Central Government and the State Governments upon all H
86 SUPREME COURT REPORTS [1996] SUPP. 3 S.C.R.

A matters concerning the Corporation;

(vi) to undertake such other duties and to exercise such other
powers as may from time to time be entrusted or delegated to him.

(2) The Director General n,Jy, with the approval of the Standing
B Committee, by general or special order, delegate any of his powers
or duties under the Rules or the Regulations or under any resolu-
tion of the Corporation of the Standing Committee, as the case
may be, to any person subordinate to him. The exercise or dis-
charge of any of the powers or duties so delegated shall be
subjected to such restrictions, lin1itations and conditions, if any, as
c the Director General may, with the approval of the Standing
Committee impose."

The Regulations have been made by the Corporation in exercise of
powers conferred by sub-section(!) of Section 97 read with clause (xxi) of
D sub-section (2) and sub-section (2-A) of the said Section and sub-section
(2) of Section 17 of the Act. The Regulations apply to every whole-time
employee of the Corporation other than the principal officers appointed
under Section 16 of the Act. The Regulations contain provisions regarding
appointment, probation, termination of service, pay, leave, provident fund,
age of retirement, pensjonary benefits, control and discipline, suspension,
E penalties, etc. Regulation 12 which relates to disciplinary authorities
provides as follow~ :

"Regulation 12. Disciplinary Authorities - (1) The Director
General may impose any of the penalties specified in regulation
F 11 on any employee.

(2) Without prejudice to the provisions of sub- regulation (1) but
subject to the provisions of sub-regulation (3), any of the penalties
specified in regulation 11 may be imposed on any employee by the
appointing authority or the authority specified in this behalf by a
G general or special order of the Director General.

(3) Notwithstanding anything contained in this regulation, no
penalty specified in clauses (v) to (ix) of regulation be imposed by
any authority subordinate to the appointing authority.

H Explanation - Where an employee holding a post of any class, is
D!RECTORGENERAL,ES!v. TARAZAK[S.C.AGRAWAJ~J.] 87

promoted, whether on probation or temporarily to the post of the A
next higher clause, he shall be deemed for the purpose of this
regulation to hold the post of such higher class."

Regulation 13 which makes provision for the authority who can
institute disciplinary proceedings reads as under :
B
"Regulation 13. Authority to Institute Proceedings - (1) The Direc-
tor General or any other authority empowered by him by general
or special order may :

(a) institute disciplinary proceeding against any employee;
c
(b) direct a disciplinary authority lo Institute disciplinary proceed-
ing against any employee on whom that disciplinary authority is
competent to impose under these regulations any of the penalties
specified in regulation 11.
D
(2) A disciplinary authority competent under these regulations to
impose any of the penalties specified in clauses (i) to (iv) of
regulation 11 may institute disciplinary proceedings against any
employee for the imposition of any of the penalties specified in
clauses (v) to (ix) of regulation 11 notwithstanding that such
Jisciplinary authority is not competent under these regulations to E
impose any of the latter penalties."

In view of the powers conferred under Regulation 12(2), the Director
General made an order dated May 10, 1974 in the following terms :

"OFFICE ORDER NO 181 OF 1974 F

In exercise of the powers conferred by Regulation No. 12(2) of the
Employee's State Insurance Corporation (Staff and Conditions of
Service) Regulations, 1959, the Director General hereby delegates
powers to the Officers specified in Schedule-I to impose minor G
penalties specified in clause (i) to (iv) of Regulation 11 in respect
of employees specified in Schedule-II on condition that the powers
shall be exercisable in respect of the employees in their respective
reb>ions/officers.

This office order supersedes all previous order on the subject H
88 SUPREME COURT REPORTS [1996] SUPP. 3 S.C.R.

A without prejudice to any action taken or proceedings initiated in
exercise of the powers conferred by the said orders.

SCHEDULE-I

1. Regional Directors.
B
2. Director (Mediclli), Delhi.

3. Administrative Officer, establishment Branch (II) at Head-
quarters Officer.

C SCHEDULE-II

1. Head Clerks, Assistants/Managers Grade-III, Personal Assis-
tants.

2. Insurance Inspectors/Audit Inspectors/Manager Grade-II".
D
The said order was modified by order dated April 9, 1981 which
reads as under :

"Office Order

E In exercise of the powers conferred by Regulation No. 12(2) of the
Employees' State Insurance Corporation (Staff and Conditions of
Service) Regulation, 1959, the undersigned hereby delegates
powers to the Regional Directors/Director (Medical) Delhi/Ad-
ministrative Officer-II to impose any of the penalties specified in
clauses (i) to (ix) of Regulation 11 ibid on class Ill (excluding
F Insurance Inspectors/Managers Grade-Il/Audit Inspectors and
Personal Assistants) and class IV employees, in their respective
regions/officers. In cases of Insurance inspectors/Managers Grade-
IT/Audit Inspectors and Personal Assistants, the powers already
delegated by the Director general vide office order No. 181of1974
dated 10.5.1974 to all Regional Directors/Directors (Medical)
G
Delhi/Administrative Officer II to impose only minor penalties as
specified in clauses (i) to (iv) of Regulation 11 ibid shall be
exercisable by them. The powers delegated by the Director
General vide office order No. 181 of 1974 dated 10.5.1974 circu-
lated under No. 16(1)-2173-EI will thus stand modified to the extent
H above.
DIRECroR GENERAL, ESI v. TA Ri\ZAK [S.C. AGRAWAL, J.J 89

It is circulated that Director General will continue to be lhe A
disciplinary authority in respect of Head Clerks/Assistants/
Manager Grade III, whose appointments have been made by
him/or whose appointments have been made before l.12.1980 i.e.
prior to the issue of this office Memorandum No. 7(3)-1/74 E T(B)
dated 15.11.1980 to impose major penalties specified in clauses (v)
B
to (ix) of Regulation 11 ibid.

This order modified all previous orders on the subject without
prejudice to any action taken or proceedings initiated in exercise
of the powers conferred by the said orders."
c
The Standing Committee had earlier passed a resolution dated May
24, 1968 in the following terms :

"Resolved that notwithstanding any restrictions imposed earlier,
the Director General may delegate any of his powers under the D
Rules, or the Regulations or under any resolution of the Corpora-
tion and the Standing Committee, as the case may be, to any officer
subordinate to him, subject to such restrictions, limitations and
conditions, if any, as the Director general may impose from time
to time. 11
E
T. Abdul Razak (respondent in Civil Appeals Nos. 3952 of 1988 and
3953 of 1988) was employed as Insurance Manager Gr. II/Inspector with
the Corporation. Disciplinary proceedings were initialed against him by the
Regional Director of Karnataka Region on the basis of Memorandum
dated October 20, 1983. In the said proceedings after holding an enquiry F
an order was passed by the Director General on March 6, 1987 imposing
the penally uf reduction in rank to the post of Head Clerk/Manager Gr.
III for the period of one year. The said respondent filed an application
(Application No. 473 of 1987) before the Tribunal assailing the said order.
Disciplinary proceedings were started against the said respondent by the
Regional Director of Karnataka Region on the basis of another Memoran- G
dum dated January 23, 1985. A writ petition was filed by the said respon-
dent in the Karnataka High Court challenging the said memorandum and
the competence of the Regional Director to initiate the disciplinary
proceedings. The said writ petition was subsequently transferred to the
Tribunal and was registered as Application No. 1678 of 1986. H
90 SUPREME COURT REPORTS [1996] SUPP.3 S.C.R.

A P.K. Philip (respondent in Civil Appeal No. 1913 of 1989) was
employed as Manager Gr. II. Disciplinary proceedings were initiated
against him by the Regional Director on the basis of memorandum dated
July 18/25, 1986. The said respondent filed an application (Application No.
474 of 1987) before the Tribunal challenging the very initiation of said
B proceedings against him by the Regional Director.

All the three petitions, namely, Application No. 1678 of 1986 and
Application No. 473 of 1987 filed by T. Abdul Razak and Application No.
474 of 1987 filed by P.K. Philip have been disposed of by the Tribunal by
the impugned judgment dated Janu,i;.y 29, 1988 whereby the Tribunal has
G struck down Rule 16(2) of the Rules in its entirety, the words "or the
authority specified in this behalf by a general or special order or the
Director General" in Regulation 12(2) and the words "or any other
authority empowered by him by general or special order may" in Regula-
tion 13(1) of the Regulations. The resolution of the Standing Committee
of the Corporation dated May 24, 1968 as well as orders dated May 10,
D 1974 and April 9, 1981 passed by the Director General have also been
quashed. The Tribunal has also quashed the memoranda dated October
20, 1983, January 21, 1985 and July 18/25, 1986 regarding initiation of
disciplinary proceedings against both the respondents by the Regional
Director of Karnataka Region as well as the order of punishment dated
E March 6, 1987 passed by the Dir'ector General against the respondent, T.
Abdul Razak.

The Tribunal has held that there was delegation of the powers of the
Corporation to the Director General and it was not permissible in law for
the Director General to further delegate the said powers to the Regional
F Director. Jn taking the said view the Tribunal has proceeded on the basis
that the powers of the Corporation have been delegated to the Director
General under Section 94-A of the Act and since 94-A does not make
provision for further delegation by Director General of the Power so
delegated the resolution of the Standing Committee dated May 24, 1968
as well as Rule 16(2) and Regulations 12(2) and 13(1) by empowering the
G Director General to specify any other person to exercise the said powers
permit sub-delegation by the delegate of the powers delegated to him
which is not permissible in view of the well known principle delegatus 11011
potest delegare. The Tribunal has placed reliance on the decision of the
Karnataka High Court in The Employees State btsura11ce Co1poratio11,
H Bangalore v. Sltoba Engineers,. Bangalore & Oi:<, (1982) 44 FLR 100, con-
D!RECTORGENERAL,ES!v. T.A.RAZAK[S.C.AGRAWAL,J.] 91

struing the provisions of Section 94-A of the Act. A

At the outset, it may be staled that in tbe applications that were filed
by the respondents the Challenge was mainly lo the memoranda dated
October 20, 1983, January 21,1985 and July 18/25, 1986 regarding initiation
of disciplinary proceedings by the Regional Director and the order dated B
March 6, 1987 passed by the Director General imposing the penalty of
reduction in rank on respondent, T. Abdul Razak. The order dated March
6, 1987 was passed by the Director General himself who was the discipli-
nary authority and it is not open to challenge on the ground of delegation
of powers by the Director General. The validity of the said order was
challenged on the basis that the Regional Director was not competent to c
initiate the disciplinary proceedings in which the order was passed. The
Tribunal was, therefore, primarily concerned with the validity of three
memoranda referred to above regarding initiation of disciplinary proceed-
ings by the Regional Director. In this context, it may be mentioned that no
order of the Director General delegating his powers Regulation 13(1) had D
been placed before the Tribunal. The two orders of the Director General
dated May 10, 1974 and July 18, 1981, which were under challenge, had
been passed under Regulation 12(2) whereby the Director General had
delegated the power to impose minor penalties specified in clauses (i) to
(iv) of Regulation 11. in respect of certain categories of employees specified
therein on the officers specified therein. Therefore, in so far as the validity E
of the memoranda regarding initiation of disciplinary proceedings against
the respondents is concerned the question regarding delegation of powers
by the Director General did not arise for consideration and the Tribunal
was not required to deal with the question regarding validity of Rule 16(2),
Regulations 12(2) and 13(1), the resolution of the Standing Committee F
dated May 24, 1968 and the orders of the Director General dated May 10,
1974 and April 9, 1981. With regard to initiation of disciplinary proceedings
by the Regional Director, we find that the legal position is well settled that
it is not necessary that the authority competent to impose the penalty must
initiate the disciplinary proceedings and that the proceedings can be in- G
itiated by any superior authority who can be held to be the controlling
authority who may be an officer subordinate to the appointing authority,
(See : State of Madhya Pradesh v. Shardul Singh, [1970] 1 SCC 108; P.V.
Slinivasa Sastry v. Comptroller & Auditor General, [1993] 1 SCC 419 and
Inspector General of Police & Am-. v. Thavasiappan, [1996] 2 SCC 145). The
Regional Director, being the officer in charge of the region, was the H
92 SUPREME COURT REPORTS [1996] SUPP. 3 S.C.R.

A .controlling authority in respect of the respondents. He could institute the
disciplinary proceedings against the respondents even in the absence of
specific conferment of the power in that regard. The memoranda dated
October 20, 1983, January 21, 1985 and July 18/25, 1986 regarding initiation
of disciplinary proceedings against the respondents by the Regional Dircc-
B tor, therefore, do not suffer from any legal infirmil y and the applications
filed by the respondents before the Tribunal are liable to be dismissed. But
since the Tribunal has pronounced upon the validity of Rule 16(2), Regula-
tions 12(2) and 13(1), the resolution of the Standing Committee dated May
24, 1968 and orders" dated May 1974 and April 9, 1981 passed by the
Director General it becomes necessary to examine the correctness of the
C decision of the Tribunal in that regard.

The law is well settled that in accordance with the maxim delegalus
non potest delegare, a statutory power must be exercised only by the body
or officer in whom it has been confided, unless sub-delegation of the power
is authorised by express words or necessary implication. (See : Halsbwy's
D Laws of England, 4th Edn. Vol. 1para32 p. 34; Craies on Statute Law, 7th
Edn. p. 316; The Bmium Chemicals Ltd. and Anr. v. T7ie Company Law
Board and Othc1', [1966] Supp. SCR 311, at p. 330 and Sa/Jlli Silk Mills (P)
Ltd. and Anr. v. Employees' State Insurance Co1poration, [1994] 5 SCC 346,
at pp. 350-351.
E
In Salllli Silk Mills (P) Ltd. and Anr. v. T7ie Employees' Slate In-
surance C01poration, (supra) this Court has approved the decision of the
Karnataka High Court in The Employees' State Insurance Cmporation,
Bangalore v. Shoba Enginecn·, Bangalore and Ors., (supra). It has been held
that Parliament while introducing Section 94-A in the Act only conceived
F direct delegation by Corporation to different officers or authorities subor-
dinate lo the Corporation and there is no scope for such delegate to
sub-delegate that power, by authorising any other officer to exercise or
perform the powers so delegated. The Tribunal has, therefore, rightly held
that Section 94-A does not specifically provide that an officer oir authority
G subordinate to the Corporation to whom the power has been delegated by
the Corporation can, in his turn, authorise any other officer to exercise that
power or function. But the question that arises is whether Rule 16(2) of
the Rules and Regulations 12(2) and 13(1) of the Regulations relate to
exercise of powers or functions of the Corporation or the Standing Com-
mittee delegated Lo the Director General by the Corporation or the Stand-
H ing Committee under Section 94-A of the Act. In order to answer this
DIRECTORGENERAL,ES!v. TA.RAZAK[S.C.AGRAWAL,J.] 93

question, it is necessary to make a distinction between a power conferred A
on the Director General under a rule made in exercise of rule making
power under Section 95 or under a regulation made in exercise of power
to make regulations under Sections 97(2)(xxi) and 17(2) of the Act and a
power or function of the Corporation or the Standing Committee which is
delegated to the Director general under Section 94-A. A rule or a regula-
B
tion made in exercise of a power conferred by a statute being in the nature
of subordinate legislation is statutory in character while a resolution of a
Corporation or a standing Committee is purely administrative in nature.
Therefore, the power conferred on the Director General under a rule or
a regulation is in the nature of a statutory power that has been conferred
independently on the Director General. It cannot be regarded as delega- c
tion of powers and functions of the corporation or the standing committee
under Section 94-A of the Act. Section 94-A speaks of "powers and
functions which may be exercised or performed by the Corporation or the
Standing Committee". The said powers and functions arc other than the
powers that are conferred independently on the Director General under D
the Rules or the Regulations.

On that view of the matter Regulations 12 and 13 must be construed
as conferring independent powers on the Director General and it cannot
be said to be the powers and functions of the Corporation or the Standing
Committee that have been delegated to the Director General by the E
Corporation or the Standing Committee under Section 94-A, Regulation
12(2) which empowers the Director General to Specify by General or
special order the aut.hority which can also act as a disciplinary authority
and Regulation 13(1) which authorises the Director General to empower
by general or special order any other authority to institute disciplinary
F
proceedings against an employee, cannot be regarded as empowering
further delegation by the Director General of powers delegated to him.
The Tribunal was, therefore, in error in striking down the words "or any
other authority specified in this behalf by a general or special order of the
Director General" in Regulation 12(2) and the words "or any other
authority empowered by him by general or special order may'' in Regula- G
tion 13(1) on the view that they permit further delegation by the Director
General of the powers delegated to him which is impermissible. The
decision of the Tribunal in this regard cannot be upheld and the offending
words in Regulations 12(2) and 13(1) must be treated as a valid conferment
of power on the Director General to delegate his powers under the said H
..~
94 SUPREME COURT REPORTS [1996] SUPP. 3 S.C.R.
< .•
A Regulations. The orders dated May 10, 1974 and April 9. 1981 were passed
by the Director General in exercise of the powers conferred on him under
Regulation 12(2). By the said orders the Director General delegated the
powers to impose minor penalties specified in clauses (i) to (iv) of Regula-
tion 11 in respect of certain categories of employees and the officers
B specified in the said orders. Since the offending part of Regulation 12(2)
has been found to be valid the said orders dated .May 10, 1974 and April
9, 1981 must be held to have been validly issued in exercise of the power
of delegation conferred on the Director General under Regulation 12(2).

Rule 16(2) and the resolution of the Standing Committee dated May
C 24, 1968 go together. Under Rule 16(2) the Director General has been
empowered to delegate any of his powers or duties under the Rules or the
Regulations or under any resolution or the Corporation or the Standing
Committee, as the case may be, to any person subordinate to him. For the
purpose of such delegation it is necessary for the Director General to
D obtain the approval of the Standing Committee. Resolution of the Standing
Committee dated May 24, 1968 accords such approval to the Director
General. The power of delegation under Rule 16(2) can be divided into
two parts; one relating to delegation of the powers or duties under the
Rules or the Regulations and the other relating to the powers and duties
under any resolution of the Corporation or the Standing Committee.
E Insofar as the powers or duties under the Rules or the Regulations are
concerned, the conferment on the Director General the power to delegate
the same is not violative of the principle of sub-delegation as indicated
earlier because the said powers and duties are in the nature of independent
statutory powers conferred on the Director General under the Rules or the
F Regulations. No infirmity can, therefore, be found either in Rule 16(2) or
in the resolution of the Standing Committee dated May 24, 1968 empower-
ing the Director General to delegate any of his powers or duties under the
Rules or the Regulations. The position is, however, different in respect of
the powers and duties conferred on the Director General under any
G resolution of the Corporation or the Standing Committee. The conferment
of such powers or duties under a resolution of the Corporation or the
Standing Committee could be by way of delegation of the powers of the
Corporation or the Standing Committee under Section 94-A of the Act and
empowering the Director General to further delegate the said powers or
duties could amount to sub-delegation of a power delegated to him which
H is impermissible in view of the law laid down in Sahni Silk Mills (supra).
DIRECTOR GENERAL, ES!v. T.ARAZAK[S.C.AGRAWAL,J.] 95

Rule 16(2) and the resolution of the Standing Committee dated May 24, A
1968, to the extent they empower the Director General to further delegate
the powers or duties delegated to him by the Corporation or the Standing
Committee under a resolution referable to. Section 94-A, have to the held
to be invalid.

For ·the reasons aforementioned, the impugned judgment of the B
Tribunal is set aside insofar as it strikes down the ·words "or any other
authority specified in this behalf by a general or special order of the
Director General" in Regulation 12(2) and the words "or any other
authority empowered by him by general or special order may" in Regula-
tion 13(1) of the Regulations and quashes the orders dated May 10, 1974 c
and April 9, 1981 passed by the Director General, the memoranda dated
October 20, 1983, January 21, 1985 and July 18/25, 1986 and the order
dated March 18, 1987. Rule 16(2) and the resolution or the Standing
Committee, to the extent they empower the Director General to delegate
the powers or duties delegated to him under any resolution of the Cor-
poration or the Standing Committee referable to Section 94-A, are invalid D
but the rest of the said Rule and the resolution are valid. As a result, the
applications filed by the respondents before the Tribunal are dismissed.
The appeals are disposed of accordingly. But in the circumstances there is
no order as to costs.
E
SPECIAL LEAVE PETITION (CIVIL) NO. 13126-27 OF 1996
(C.C. NO. 368/1996)

Delay condoned.

The petitioner had moved the Central Administrative Tribunal, Ah- F
medabad Bench for quashing the disciplinary proceedings initiated against
him by the Regional Director and the order of compulsory retirement
passed in those proceedings. The competence of the Regional Director to
initiate the disciplinary proceedings was challenged by the petitioner by
relying on the decision of the Tribunal in the case of T. Abdul Razak, The G
Tribunal has negatived the said contention. Since we have set aside the said
decision of the Tribunal in the case of T. Abdul Razak, we find no merit
in this petition and the same is accordingly dismissed.

R.A. Appeals disposed of and petition dismissed.