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Synopsis

The Supreme Court has on November 19, 2024 said no disciplinary proceeding can be initiated against a delinquent employee or officer if he or she retires from service on attaining the age of superannuation or after the extended period of service.

A bench of Justices Abhay S Oka and Ujjal Bhuyan also said a departmental proceeding is not initiated merely on issuance of a show cause notice, it is initiated only when a chargesheet is issued because that is the date of application of mind on the allegations levelled against an employee by the competent authority. 

A subsisting disciplinary proceeding i.e. one initiated before superannuation of the delinquent officer may be continued post superannuation by creating a legal fiction of continuance of service of the delinquent officer for the purpose of conclusion of the disciplinary proceeding, it explained.

The apex court dismissed an appeal filed by State Bank of India and its officers against a Jharkhand High Court's judgment which set aside penalty of dismissal imposed upon Navin Kumar Sinha on the ground that the disciplinary proceeding was initiated after his superannuation, including the extended period of service. 

The High Court had held such disciplinary proceeding as void ab initio. In the consequential order, it had directed to the appellants to pay the retiral and other dues of the respondent.

The allegations against the employee mostly pertained to sanctioning of loans by him in favour of his relatives in deviation of banking norms and missing of documents related to sanctioning of the loans.

The respondent stated that he had joined service in the appellant bank on June 08, 1973. As per requirement of Rule 19(1) of the Service Rules, appellant bank had extended the service of the respondent on completion of 30 years of service from December 27, 2003 to October 01, 2010. From October 01, 2010, no order, either oral or written, was issued by the appellant bank further extending the service of the respondent. Therefore, the master and servant relationship between SBI and the respondent came to be severed on October 01, 2010.

Disciplinary authority by the show cause notice of March 18, 2011 informed the respondent that departmental (disciplinary) proceeding was being initiated against him on the articles of charges framed. The penalty of dismissal from service on the respondent was imposed upon him on March 18, 2011.

SBI's counsel contended the departmental proceeding against the respondent was initiated before he had retired from service. Therefore, in terms of the Rule 19(3) of the Service Rules, respondent was deemed to have continued in service of the appellant bank for the purpose of such departmental proceeding. 

The respondent's counsel defended the High Court's orders.

The court noted, as per clause (1) of Order 19 of the Service Order, an officer of SBI shall retire from the service of the bank on the happening of three contingencies viz on attaining the age of 58 years; or upon completion of 30 years of service; or completed 30 years of pensionable service, if he is a member of the Pension Fund.

It also recorded Clause (3) of Order 19 makes it clear that in case disciplinary proceeding under the relevant rules of service has been initiated against an officer before he ceases to be in the service of SBI, the disciplinary proceeding may, at the discretion of the Managing Director, be continued after cessation of service and concluded by the authority which had initiated the same as if the officer continues in service. However, such an officer shall be deemed to be in service only for the purpose of continuance and conclusion of such proceeding.

In the case, the bench noted it is evident that charge memo was issued to the respondent on March 18, 2011 after his extension of service was over on October 01, 2010. 

The SBI contended it was the case of the respondent himself before the enquiry officer, disciplinary authority as well as before the appellate authority that he was due to superannuate on October 30, 2012. He also did not plead either before the said authorities or before the High Court that he had ceased to be in service of SBI from October 01, 2010 and therefore the disciplinary proceeding initiated thereafter on March 18, 2011 was void-ab-initio. As such, the High Court was not justified in accepting the challenge of the respondent to the order of penalty on a completely different ground.

"We are afraid we cannot accept such a contention on behalf of the appellants. Where the disciplinary proceeding itself is without jurisdiction, upholding the same on the specious plea that it was not challenged on the ground of lack of jurisdiction would be tantamount to giving imprimatur to a patently illegal proceeding," the bench said.

The court also pointed out attaining 60 years of service (earlier 58 years) is not the sole criterion of superannuation of an officer serving in SBI. As noted, it is one of the three contingencies. If any of the three contingencies are fulfilled, an officer would be superannuated, it said.

The bench also noted the respondent had actually superannuated from service in SBI on December 26, 2003 on completion of 30 years of service but his service was extended prior thereto on August 05, 2003 from December 27, 2003 to October 01, 2010. Post October 01, 2010 there was no further extension of service. 

Disciplinary proceeding against the respondent was not initiated on August 18, 2009 when the first notice to show cause was issued but was initiated only on March 18, 2011 when the disciplinary authority issued the charge memo to the respondent, it said.

"A subsisting disciplinary proceeding i.e. one initiated before superannuation of the delinquent officer may be continued post superannuation by creating a legal fiction of continuance of service of the delinquent officer for the purpose of conclusion of the disciplinary proceeding (in this case as per Rule 19(3) of the Service Rules). But no disciplinary proceeding can be initiated after the delinquent employee or officer retires from service on attaining the age of superannuation or after the extended period of service," it said.

Finding no merit in the appeal, the court dismissed it with a direction to the SBI to release all the service dues of the respondent expeditiously and at any rate not later than six weeks.