Mere Expiry Of Employee's Deputation Period Does Not Divest Disciplinary Authority From Initiating Enquiry For Misconduct: Delhi High Court

The Delhi High Court has observed that merely because the period of deputation of an employee may have come to an end, it would not divest the Disciplinary Authority of the company, Power Finance Corporation Limited (PFCL) in the present matter, from initiating an enquiry.

Justice Yashwant Varma dismissed a petition filed by a man, employed as an Executive Director in the Power Finance Corporation Limited, challenging a chargesheet wherein he was proposed to be proceeded against in disciplinary action in accordance with the provisions made in Rules 28 and 30 of the Power Finance Corporation Limited (Conduct Discipline and Appeal) Rules.

In the alternative, the petitioner had also prayed for quashing of the orders dated 22 and 31 July 2015 and had also questioned the authority of the Enquiry Officer to proceed in the matter in light of a perceived bias and an asserted failure to conduct the enquiry in a fair and impartial manner.

The Court said the fact that the alleged misdemeanor was committed while the petitioner was serving on deputation does not detract from the Commission of misconduct.

"An act of alleged misconduct is a fact which would remain and survive to be tried notwithstanding the deputation having come to an end. Merely because the period of deputation may have come to an end, it would not divest the Disciplinary Authority of PFCL from initiating an enquiry," the Court added.

It said "If the submission of Mr. Gupta (counsel for petitioner) were to be accepted, it would amount to laying down a principle that misconduct when committed during deputation cannot be enquired into once the same comes to an end. The Court finds itself unable to accord a legal imprimatur to the aforenoted submission bearing in mind the serious repercussions that would ensue if the same were accepted."

"This since it would essentially mean that the right of an employer to enquire into an act of alleged misconduct would stand lost forever merely because the authority in the borrowing department had failed to initiate action.

The petitioner had alleged that the manner in which the proceedings were conducted by enquiry officer clearly gave rise to an apprehension of bias and accordingly moved the respondents to change the Enquiry Officer.

The prayer was rejected and turned down by the orders of 22 and 31 July 2015. By the time this petition was taken up for hearing, a new Enquiry Officer had come to be appointed. As a consequence to the above, the Court was to principally consider only the challenge raised to the chargesheet alone.

The allegation was that the petitioner had permitted casual staff to travel on outstation tours without having gotten a transfer / local conveyance / daily allowance policy approved by the competent authority. It was additionally alleged that the petitioner had allowed expenditure and payment of travel related charges claimed by casual staff without having approved or put in place a codified policy with regard to their entitlement to such benefits.

Perusing the Rules in question, the Court was of the view that PFCCL would have been entitled to exercise all powers as otherwise inhering in the Disciplinary Authority of the petitioner during the period while he was still serving in the said organisation.

"Those rules introduce a legal fiction in terms of which the competent authority of the borrowing entity stands conferred with all powers that are otherwise vested in the appointing authority of the lending entity. However Rules 37.1 and 37.2 cannot possibly be read as conferring a power or authority on PFCCL to proceed against the petitioner even after his services stood repatriated to PFCL," it said.

It added "…. the petitioner did not lose or surrender his lien in PFCL. His placement in PFCCL was merely a temporary transfer and placement. Once he came back to the parent organization, the authority which had been temporarily conferred upon the borrowing entity in terms of the legal fiction contained in Rule 37.1 ceased to operate. It was thus the Disciplinary Authority of PFCL alone who could have taken a decision whether the petitioner was liable to be proceeded with departmentally for trial of charges of misconduct."

The Court also rejected the submission that the enquiry proceedings are liable to be interdicted since the relevant records were available with PFCCL.

It was opined that the enquiry proceedings would continue based on the material which was gathered and was in the possession of the respondents.

"The evidence on which the charges are sought to be established have been duly set out in the chargesheet. Ultimately, the onus to prove the charges levelled lies upon the respondents. If there be absence of evidence, they would be unable to prove the charge. However, whether sufficient material or evidence exists to support the charges levelled, is a question which must be left for the Enquiry Officer to consider," the Court said.

It added that there was no justification for the Court to go into the said question especially when that aspect was yet to be considered by the Enquiry Officer.

Accordingly, the plea was dismissed.

Case Title: N.D. TYAGI v. POWER FINANCE CORPORATION LTD. & ORS.

Citation: 2022 LiveLaw (Del) 463

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