M Arul Raj vs M/O LABOUR AND EMPLOYMENT
- Court
- Central Administrative Tribunal
1 OA/310/00047/2025 & MA 715/2025
CENTRAL ADMINISTRATIVE TRIBUNAL
CHENNAI BENCH
OA/310/00047/2025
AND
MA/310/00715/2025
th
Dated this the 15 day of October, Two Thousand Twenty Six
CORAM :
HON'BLE MR. M. SWAMINATHAN, MEMBER (J)
AND
HON'BLE MR. M.L. SRIVASTAVA, MEMBER(A)
M. Arul Raj,
S/o (late) A Murugavel,
No.49/17, II Floor,
Mayor Sivashanmugam Street,
Near Amma Unavagam,
Nungambakkam,
Chennai. .. Applicant
By Advocate M/s. B. Ravi
Vs.
1. Union of India
rep by Secretary,
Department of Labour and Employment,
New Delhi.
2. The Chairman & Disciplinary Authority
ESI Corporation,
Hqrs Office, Panchdeep Bhawan,
CIG Marg, New Delhi.
3. The Employees' State Insurance Corporation,
rep by the Director General,
ESIC Head Quarters' Office,
Panchdeep Bhawan,C.I.G. Marg,
New Delhi.
2 OA/310/00047/2025 & MA 715/2025
4. The Chief Vigilance Officer,
Employees' State Insurance Corporation,
Head Quarters' Office,
Panchdeep Bhawan,C.I.G. Marg,
New Delhi.
5. The Insurance Commissioner (P&A),
Employees' State Insurance Corporation,
Head Quarters' Office,Panchdeep Bhawan,
C.I.G. Marg,New Delhi.
6. The Additional Commissioner & Regional Director,
ESI Corporation (Tamil Nadu Region),
143, Sterling Road,
Nungambakkam,
Chennai. .. Respondents
By Advocate M/s. K. Prabakar
3 OA/310/00047/2025 & MA 715/2025
ORDER
(Pronounced by Hon'ble Mr. M. Swaminathan, Judicial
Member)
The applicant has filed the OA under Section 19 of the
Administrative Tribunals, Act, 1985, seeking the following
relief:
“To call for the records of the 3rd respondent
pertaining to the memorandum of charge
issued by the 3rd respondent made in No.C-
14/13/31/2020-Vig dated 31.08.2020 and
the penalty Order bearing No.C-
14/13/31/2020 Vig/1073 dated 12.12.2024
issued by the 5th Respondent and set aside
the same; and to pass such further or other
orders as this Hon'ble Court may deem fit
and proper”.
2. The facts and circumstances giving rise to the filing of
the OA are as follows:
The applicant was working as Deputy Director (Legal) in
ESIC, Chennai. He had previously served in various
departments and in public service for more than 20 years,
during which he earned a good reputation and rendered
blemishless service. In 2011, while working at the Sub-
Regional Office, ESIC, Tirunelveli, after completing the
requisite training, he discharged the duties of Deputy
4 OA/310/00047/2025 & MA 715/2025
Director and Nodal Officer and was also entrusted with the
additional charge of Recovery Officer, which he performed
effectively. On 23.12.2019, the applicant was issued a Show
Cause Notice alleging certain irregularities noticed during a
Vigilance investigation. The applicant submitted a detailed
reply on 17.01.2020. However, the said reply was not duly
considered and, mechanically and without proper application
of mind, a Major Penalty Charge Memo was issued against
him. The ESI Corporation thereafter appointed an Inquiry
Officer to inquire into the charges. By proceedings dated
22.08.2022, the Inquiry Officer held that Charges 1, 4 to 8
and 10 and 11(a) to 11(n) were not proved; Charge 2 was
partly proved; and only Charges 3 and 9 were proved.
Instead of passing final orders, the then Disciplinary
Authority, by proceedings dated 23.02.2023, disagreed with
the findings of the Inquiry Officer in respect of the charges
held not proved and called upon the applicant to submit his
representation. The applicant submitted his representation,
contending that the alleged misconduct could not be
established on the basis of mere suspicion or surmises and
that the charges were required to be proved by cogent and
5 OA/310/00047/2025 & MA 715/2025
reliable evidence. He further submitted that, having
considered the entire evidence, the Inquiry Officer had
rightly found most of the charges to be not proved. More
than one and a half years elapsed after the applicant
submitted his representation to the Disagreement
Memorandum. Meanwhile, the 6th respondent, by letter
dated 30.10.2023, directed that the applicant be assigned
only non-sensitive duties until further orders, purportedly in
accordance with the directions of the Vigilance Branch,
Headquarters. The applicant was also due for promotion to
the next higher level on the basis of his seniority. A DPC
panel had already been approved, including the applicant's
name; however, his promotion was kept in a sealed cover
solely on account of the pendency of the disciplinary
proceedings. The prolonged inaction on the part of the
Disciplinary Authority has seriously prejudiced the applicant
and deprived him of his legitimate promotional prospects.
Ultimately, after an inordinate delay, the 5th respondent
passed final orders in the departmental enquiry and imposed
a penalty of reduction to a lower stage in the time scale of
pay by three stages for a dperiod of three years with the
6 OA/310/00047/2025 & MA 715/2025
further direction that he will not earn an increment of pay
during the period of such reduction and on the expiry of
such period, the reduction will have the effect of post;on ing
the future increments of his pay, vide Order, dated
12.12.2024. The said penalty order is under challenge in the
present Original Application.
3. The learned counsel for the applicant submitted that
the impugned penalty order dated 12.12.2024 is arbitrary,
without jurisdiction, and legally unsustainable. He
contended that the applicant, while functioning as Recovery
Officer, was exercising quasi-judicial powers and was
entitled to protection under the Judicial Officers Protection
Act, 1850, the Judges Protection Act, 1985, and Section 77
of the IPC. Therefore, no disciplinary proceedings could have
been initiated against him in respect of bona fide acts
performed in his capacity as Recovery Officer. Consequently,
the charge sheet, consequential enquiry proceedings, and
penalty order are liable to be set aside.
7 OA/310/00047/2025 & MA 715/2025
4. It was further submitted that the findings of the
Disciplinary Authority are perverse and disclose complete
non-application of mind. The allegations essentially relate to
the applicant's issuance of proclamation of sale without
ascertaining earlier proceedings, failure to afford the
defaulter an opportunity to show cause, permitting one
Somasundharam to run the mill and ordering sale of 2.5
acres of vacant land, attachment of the business and
appointment of a receiver while functioning as Link Recovery
Officer, and alleged responsibility for loss of machinery
valued at 1.30 crore. According to the learned counsel, ₹
these findings are unsupported by the evidence and do not
establish any misconduct on the part of the applicant.
5. The learned counsel contended that the aforesaid
findings are wholly unsustainable. No auction was ultimately
conducted and, therefore, no prejudice was caused to the
Corporation. The Recovery Officer was duly empowered to
initiate attachment proceedings and appoint a receiver, and
a Link Recovery Officer was competent to take necessary
8 OA/310/00047/2025 & MA 715/2025
action in the interest of the Corporation. Further, the finding
regarding the missing machinery is contrary to the NCLT
proceedings, wherein it was subsequently clarified that the
machinery had been apportioned against the EPFO's claim.
Thus, the alleged misconduct did not survive. The charges
were also vague, repetitive, and vindictive and could not
legally sustain the punishment imposed.
6. It was next submitted that the disciplinary proceedings
themselves are without jurisdiction. The charge sheet was
issued by the 3rd respondent under the ESIC (Staff and
Conditions of Service) Regulations, 1959, whereas the
impugned penalty was imposed by the 2nd respondent under
Regulation 13 of the amended Regulations, 2023. In the
absence of a saving provision permitting continuation of
proceedings initiated under the 1959 Regulations, the
subsequent imposition of penalty under the 2023
Regulations is legally unsustainable. Further, under
Regulation 12 of the 2023 Regulations, the authority
competent to impose a major penalty must possess the
9 OA/310/00047/2025 & MA 715/2025
requisite competence to impose the corresponding minor
penalty. As per Schedule II, Item 57, the Chairman of the
ESIC is competent to impose even a minor penalty on the
applicant. Hence, the charge sheet having been issued by an
incompetent authority, the entire proceedings stand vitiated.
7. The learned counsel further submitted that the
applicant was functioning under the Joint Director, who was
the Head of the Sub-Regional Office, and all material
decisions were taken with the specific approval of the
superior authority. Therefore, the applicant could not be
individually faulted for actions taken in the course of his
official duties, particularly in view of the applicable
statutory/service rules. He also assailed the proceedings on
the ground of inordinate and unexplained delay: the charge
sheet was issued in 2020, whereas the final penalty order
was passed only on 12.12.2024. Such prolonged delay is
contrary to the CVC instructions requiring disciplinary
proceedings to be completed expeditiously and has caused
serious prejudice to the applicant.
10 OA/310/00047/2025 & MA 715/2025
8. It was also submitted that the applicant's service record
has throughout been unblemished and his superior officers
had specifically appreciated his performance and recovery
work, which was duly reflected in his APAR and accepted by
the Reviewing Officer. The applicant had also undergone the
mandatory training for promotion and his name was
included in the DPC panel for promotion to the cadre of
Regional Director (Group-B)/Joint Director. The imposition
of the penalty, after prolonged pendency of the proceedings,
has consequently operated to deprive the applicant of his
legitimate promotional prospects and is alleged to be
actuated by an improper and vindictive motive.
9. Finally, the learned counsel submitted that the
advice/opinion of the Central Vigilance Commission (CVC) is
only recommendatory and cannot by itself constitute the
basis for imposing punishment. Before relying upon such
advice, a copy thereof ought to have been furnished to the
applicant to enable him to submit an effective
representation. Reliance was placed on the judgment of the
11 OA/310/00047/2025 & MA 715/2025
Hon'ble Supreme Court in State Bank of India v. D.C.
Aggarwal & Others (judgment dated 13.10.1992), wherein
non-supply of the CVC material relied upon by the
disciplinary authority was held to violate procedural
safeguards and the principles of fair enquiry. On these
grounds, the learned counsel prayed that the impugned
penalty order and the consequential proceedings be quashed
and the reliefs sought in the Original Application be granted.
10. Learned counsel for the applicant referred to the
following judgments in support of his contentions:
1. Union of India and others Vs. K.K. Dhawan (1993 (2) SCC 56
2. Govt. of A.P. And others Vs. A. Venkata Raidu (2007 (1) SCC 338`
3. S.V. Mothilal Vs. The General Manager & Reviewing Authority, Canara Bank,
Bangalore & others (W.P. (M.D. No.1404 of 2015 (High Court of Madras
Judgment, dated 10.02.2020)
4. Premnarayan Vs. The State of Madhya Pradesh, Principal Secretary, Bhopal
and others(High Court of Madhya Pradesh at Indore Judgment, dated
21.05.2024)
5. Order dated 31,07,2024 Of the Jaipur Bench of this Tribunal in OA No.142 of
2024
6. Kailash Bundela Vs. State of M.P. And others (2024 SCC Online MP 7358)
7. Amresh Shrivastsava Vs. State of Madhya Pradesh and others (2025 SCC
OnLine SC 693)
8. Virendra Kumar Katare Vs. Ganeral Administration Department and others
(High Court of Madhya Pradesh at Indore Judgment dated 04.05.2026 in W.P.
No.189 of 2020)
12 OA/310/00047/2025 & MA 715/2025
11. Per contra, the learned counsel for the respondents
vehemently opposed the submissions of the applicant and
relied upon the reply statement. He submitted that a
complaint regarding serious irregularities and lapses
allegedly committed by the applicant was received from the
Revenue Branch, Headquarters, vide letter dated
25.09.2018. Pursuant thereto, the Disciplinary Authority,
vide letter dated 14.11.2018, constituted an investigation
team, which submitted a report holding the applicant
responsible for the alleged irregularities. Based on the said
report, a Show Cause Notice dated 23.12.2019 was issued to
the applicant, to which he submitted his explanation on
17.01.2020.
12. He further submitted that, thereafter, a Charge
Memorandum, dated 31.08.2020 was issued containing 11
Articles of Charge, with Article XI comprising sub-charges (a)
to (n). A departmental enquiry was conducted and the
Inquiry Officer submitted his report dated 22.08.2022. The
Inquiry Officer held Charges I, IV, V, VI, VII, VIII, X and XI as
13 OA/310/00047/2025 & MA 715/2025
not proved, Charges III and IX as proved, and Charge II as
partly proved. The Disciplinary Authority, however, disagreed
with the findings of the Inquiry Officer in respect of Charge
II, Charge V, Charge XI(a) to (i) and XI(l) to (n), and issued a
Disagreement Memorandum dated 23.02.2023. The
applicant submitted his representation thereto on
23.03.2023. Upon consideration of the entire material,
including the applicant's representation, the Disciplinary
Authority ultimately passed the impugned penalty order
dated 12.12.2024.
13. The learned counsel submitted that the applicant, while
functioning as Recovery Officer, appointed a Receiver to run
a loss-making factory, deputed ESIC officials to oversee its
functioning, and directed maintenance of accounts on behalf
of the employer. According to the respondents, this resulted
in ESIC becoming a de facto occupier of the defaulter's
premises and subsequently led the NCLT to hold ESIC liable
for loss of machinery valued at 1.30 crore, whereas only ₹
about 3 lakh was recovered during the eight months of ₹
14 OA/310/00047/2025 & MA 715/2025
receivership. Though ESIC preferred an appeal before the
NCLAT, the NCLAT, by order dated 23.10.2020, observed
that the missing machinery had subsequently been
apportioned from the EPFO claim pursuant to the NCLT
order dated 21.01.2019. The respondents contended that,
notwithstanding the subsequent apportionment, the
applicant ought not to have exceeded the scope of his
authority beyond attachment of the property for securing
ESIC dues. Hence, the applicant's defence on this aspect was
stated to be devoid of merit.
14. It was further submitted that, while functioning as Link
Recovery Officer at SRO, Tirunelveli, the applicant issued
ESICP-24 dated 08.06.2015 for taking over the business of
the employer in his capacity as Substitute Recovery Officer
and simultaneously issued ESICP-25 appointing Shri S.
Thirumalaiappan as Receiver of the attached business.
However, the office file notings and communications on the
same date were made by the regular Recovery Officer, Shri R.
Thinesh Kumar, to M/s. Lingammal Cot Tex. According to
15 OA/310/00047/2025 & MA 715/2025
the respondents, this establishes that the regular Recovery
Officer was available and on duty on 08.06.2015. Therefore,
the applicant's contention that the attachment of the
business and appointment of the Receiver were validly
undertaken by him in his capacity as Link Recovery Officer
was disputed as incorrect and untenable.
15. The respondents further contended that, under Section
45-H of the ESI Act, 1948 read with Rule 8 of the Second
Schedule to the Income Tax Act, 1961, the applicant, as
Recovery Officer, was required to recover the dues covered by
the relevant recovery certificates and appropriate the realised
proceeds in accordance with the prescribed statutory order.
Instead, according to the respondents, the applicant
proceeded to recover dues allegedly payable to other entities,
including EPFO and TIIC, from the sale proceeds. Such
action was stated to be beyond his statutory authority and
prejudicial to the interests of ESIC. The respondents
therefore contended that the applicant had exercised his
official powers improperly and without following the
prescribed procedure, thereby committing misconduct.
16 OA/310/00047/2025 & MA 715/2025
16. It was also submitted that the applicant, as Recovery
Officer, had issued an order of attachment of immovable
property in Form ESICP-12 dated 28.12.2011. Under Rule
52 of the Second Schedule to the Income Tax Act, 1961 and
paragraphs 7.5 and 7.6 of the ESIC Revenue Recovery
Manual, the prescribed procedure required issuance of a
notice for settling the sale proclamation in Form ESICP-18,
followed by a warrant of sale in Form ESICP-16, before
issuance of the proclamation of sale in Form ESICP-17.
Since the applicant had been divested of the charge of
Recovery Officer with effect from 01.01.2012, the
respondents contended that, upon subsequently assuming
charge, he ought to have verified whether the preceding
Recovery Officer had completed the mandatory steps.
Instead, he directly issued the Proclamation of Sale in Form
ESICP-17, thereby allegedly violating the prescribed
procedure and his statutory obligations.
17. The respondents further submitted that, upon receipt of
a U.O. Note from the authorised officer indicating damages of
17 OA/310/00047/2025 & MA 715/2025
37,44,358/- payable by the employer, the applicant
₹
straightaway included the said amount in the auction notice
without issuing the prescribed ESICP-2 notice. It was also
contended that the applicant had not received the Recovery
Certificate for Damages (D-19) from the Assessing Officer
and had merely received a U.O. Note. According to the
respondents, treating the amount mentioned in the U.O.
Note as recoverable dues without following the prescribed
procedure deprived the defaulter of the opportunity to show
cause against the recovery. Such failure to follow the
prescribed procedure was therefore alleged to constitute
misconduct.
18. The learned counsel submitted that the Disciplinary
Authority had carefully considered the Articles of Charge, the
Inquiry Officer's report, the Disagreement Memorandum, the
applicant's representation, and the entire material available
on record before arriving at its conclusions. Out of the 11
Articles of Charge, five were ultimately held proved and one
was held partly proved. The respondents further submitted
18 OA/310/00047/2025 & MA 715/2025
that Second Stage Advice was sought from the Central
Vigilance Commission (CVC) vide letter dated 24.05.2023,
and the CVC, by Office Memorandum dated 01.07.2024,
advised imposition of a major penalty in agreement with the
recommendation of the Disciplinary Authority. Accordingly,
considering the facts and circumstances of the case and the
CVC advice, the Disciplinary Authority imposed the penalty
of reduction by three stages in the time scale of pay for a
period of three years, with the direction that the applicant
would not earn increments during the period of reduction
and that, on expiry thereof, the reduction would have the
effect of postponing his future increments. The respondents
maintained that the disciplinary proceedings were conducted
in accordance with the applicable rules and procedure and
that no illegality or procedural irregularity was made out. He,
therefore, prayed for dismissal of the Original Application.
19. Finally, the learned counsel contended that the plea
based on the Judicial Officers Protection Act and Judges
(Protection) Act is wholly misconceived. According to him,
19 OA/310/00047/2025 & MA 715/2025
the present proceedings do not arise from judicial or quasi-
judicial order passed by the applicant but from acts of
administrative misconduct, procedural violations and excess
exercise of authority. In this connection, learned counsel for
the respondents referred to the judgment of Hon'ble Apex
Court in the case of Union of India Vs. Ajoy Kumar Patnaik
(1995 (6) SCC 442 for the proposition that protection
available to judicial or quasi-judicial officers is not a blanket
immunty against departmental proceedings arising from
misconduct committed in service.
20. The applicant has filed a Rejoinder to which the
respondents have filed a reply, reiterating the contentions
made in the OA and the reply statement.
21. We have considered the rival submissions made by the
learned counsel on either sides at length, perused the
pleadings and the voluminous documents placed available
on record. We have also carefully gone through the case
laws referred to by the respective learned counsel.
20 OA/310/00047/2025 & MA 715/2025
22. Disciplinary proceedings under major penalty
procedure were initiated against the applicant vide
Memorandum of Charge, dated 31.08.2020 for the 11
Articles of charge framed against him. Our of these only, 5
were proved and the rest were not proved. The details are
furnished below.
Article of
Findings of IO Findings of DA
Charge
I Not Proved Agreed with IO
II Partly Proved Disagreed
III Proved Agreed with IO
IV Not Proved Agreed with IO
V Not Proved Disagreed
VI Not Proved Agreed with IO
VII Not Proved Agreed with IO
VIII Not Proved Agreed with IO
IX Proved Agreed with IO
X Not Proved Agreed with IO
XI (a) to (n) Not Proved Disagreed (a) to (i)
& (l) to (n)
Hence, we would like to discuss only with the Article of
Charges II, III, V, IX & XI and for better understanding, the
gist of the above Articles of Charge are extracted below:
Article II: The allegation in the charge is that
while carrying out the Auction Sale of the
21 OA/310/00047/2025 & MA 715/2025
Immovable Property of M/s. Karpagam Spinner
Private Limited the applicant fixed the Reserve
Price for Auction Sale as Rs.1,78,80,000/- when
the approved valuer had value the land and
Building at Rs.2,35,000/- thus it is alleged the
applicant as undervalued the property to the
extent of Rs.56,20,000/-.
Article III: The applicant had committed
irregularity by assessing the damages to the tune
of RS.37,44,358/- and failed to issue ESI CP-2
Notice demanding damages on receipt of D-19
notice and included the said assessed damages
amount in the auction sale notice. Thus violated
the prescribed procedure under Sec 45 C to 45 I
of the ESI Act and recovery manual.
Article V: The allegation is that the applicant
failed to record any order in the concerned file
regarding the claim of Shri V.T. Somasundaram
as Director of M/s. Karpagam Spinners Private
Limited to run the mill and also permitted to sell
the back portion of the mill measuring 2.5 Acres
without accelerating the credential/ante cents of
the said individual issued a letter dated
05.10.2012 to him and to run the mill.
Article IX: The applicant committed
misconduct in the capacity of Substitute
Recovery Officer to take over the business of the
Employer on 08.06.2015 and also issued order
for the appointment of Shri S. Thirumalaiappan
as receiver of the attached business through Shri
R. Thinesh Kumar the Regular Recovery Officer
was on duty on 08.06.2015 and issued a letter to
M/s. Lingammal Tex on 08.06.2015 in his
capacity as Recovery Officer.
Article XI: The applicant has committed
misconduct, in as much as, he was responsible
for the series of serious lapses and gross
negligence committed in the course of
22 OA/310/00047/2025 & MA 715/2025
attachment of business of M/s Karpagam
Spinneer Pvt. Ltd on the points (a) to (n)- IO not
proved the same but the DA disagreed with
points (a) to (I) and (l) to (m)”
By the aforesaid act, Shri M. Arul Raj has
exhibited lack of integrity, lack of devotion to
duty and a conduct unbecoming of a corporation
employee and thereby, violated Rule 3(1) (i), (ii) &
(iii) of the CCS(Conduct) Rules, 1964 read with
Regulation 23 of ESIC (Staff & Conditions of
Service) Regulations, 1959, as amended.”
23. The applicant was served with a Disagreement
Memorandum of the Disciplinary Authority as well as the
report of the Inquiry Officer to submit his representation
which the applicant has filed on 23.03.2023. On a careful
perusal of the details of the case, the Articles of Charge
framed against the applicant, the report of the Inquiry
Officer and Disagreement Memorandum along with the
representation of the applicant and in consultation with
CVC, the Disciplinary Authority, in terms of the Second
Schedule of ESIC (Staff and Conditions of Service)
Regulations, 2023, has imposed the penalty of of reduction
to a lower stage in the time scale of pay by three stages for a
period of three years with the further direction that he will
23 OA/310/00047/2025 & MA 715/2025
not earn an increment of pay during the period of such
reduction and on the expiry of such period, the reduction
will have the effect of postponing the future increments of
his pay, vide Order, dated 12.12.2024
24. Having considered the rival submissions, the pleadings,
the documents placed on record and the judgments relied
upon by the learned counsel for both parties, we find no
sufficient ground to interfere with the impugned penalty
order dated 12.12.2024.
25. The principal contention of the applicant is that the
acts complained of were performed in the discharge of his
functions as Recovery Officer and that, in the absence of any
dishonest intention or improper motive, errors of judgment
or procedural lapses cannot constitute misconduct. In this
regard, reliance has been placed upon the judgments of the
Hon'ble Supreme Court in Union of India and Others v. K.K.
Dhawan , reported in (1993) 2 SCC 56, and Amresh
Shrivastava v. State of Madhya Pradesh , reported in 2025
INSC 417.
24 OA/310/00047/2025 & MA 715/2025
26. We are unable to accept the applicant's contention that
the nature of his functions, by itself, affords him immunity
from disciplinary proceedings. In Union of India v. K.K.
Dhawan , the Hon'ble Supreme Court has categorically held
that disciplinary action can be initiated against an officer
discharging judicial or quasi-judicial functions where the
circumstances disclose culpability, an improper motive, a
desire to unduly favour a party or other conduct warranting
disciplinary action. Though the exercise of quasi-judicial
powers calls for great caution before initiating disciplinary
proceedings, such caution cannot be construed as an
absolute prohibition against departmental action. The
protection available to an officer in the discharge of official
functions cannot be extended to acts involving a breach of
prescribed procedure, abuse of authority or culpable
negligence merely because such acts were performed in the
course of official duties.
27. In the present case, the allegations are not confined to
the correctness of a judicial or quasi-judicial determination.
25 OA/310/00047/2025 & MA 715/2025
They relate to the alleged failure to follow the prescribed
procedure for recovery of dues, the inclusion of damages in
an auction sale notice without following the requisite
procedure, the fixation of the reserve price of immovable
property, the handling of the business of the defaulter and
the exercise of authority in connection with the appointment
of a Receiver. These allegations concern the manner in which
the applicant exercised his statutory and administrative
responsibilities as Recovery Officer. Therefore, the
applicant's plea that disciplinary proceedings are wholly
barred on account of the quasi-judicial nature of his
functions cannot be sustained.
28. The Inquiry Officer held Articles III and IX as proved
and Article II as partly proved, while the Disciplinary
Authority, after recording its disagreement with the Inquiry
Officer in respect of certain other charges and considering
the applicant's representation dated 23.03.2023, passed the
impugned order. The applicant has not established that the
findings of the Disciplinary Authority are perverse or that the
proceedings are vitiated by any material procedural
26 OA/310/00047/2025 & MA 715/2025
irregularity. The principles laid down in S.V. Mothilal v. The
General Manager, Canara Bank and Amresh Shrivastava v.
State of Madhya Pradesh , 2025 INSC 417, do not confer
absolute immunity from disciplinary action where the
allegations concern culpable negligence or failure to comply
with prescribed duties.
29. The objection regarding non-supply of the Central
Vigilance Commission's advice also does not survive, as the
advice dated 01.07.2024 was furnished to the applicant
along with the penalty order dated 12.12.2024. The
contention regarding delay in the proceedings, though noted,
does not by itself warrant interference in the absence of
established prejudice sufficient to vitiate the proceedings.
The objections concerning the competence of the disciplinary
authorities and the applicability of the ESIC Regulations
must likewise be considered in the light of the applicable
statutory provisions; no conclusion of invalidity can be
drawn merely because different sets of Regulations were
referred to at different stages.
27 OA/310/00047/2025 & MA 715/2025
30. Be that as it may having gone through the APAR track
record of the applicant and with regard to the totality of the
circumstances, including the nature of the misconduct
proved, in the absence of any allegation of misappropriation
or mala fide intention, and considering the APAR of the
applicant which is 'Very Good' and 'Excellent', we are of the
considered view that the extreme penalty of 'reduction to a
lower stage in the time scale of pay by three stages for a
period of three year with the further direction that he will not
earn an increment of pay during the period of such reduction
on the expiry of such period, the reduction will have the
effect of postponing the future increment of his pay' calls for
reconsideration on the touchstone of proportionality. This
Tribunal cannot shut it eyes when the penalty imposed is
shockingly disproportinate.
31. In this regard, we may refer to the judgment, dated
01.11.1995 of the Hon'ble Supreme Court in the case of B.C.
Chaturvedi Vs. Union of India and Ors (1995 (6) SCC 749).
The Hon'ble Apex Court observed as follows:
28 OA/310/00047/2025 & MA 715/2025
“In Rangaswami v. State of Tamil Nadu [AIR 1989 SC
1137], a Bench of three Judges of this Court, while
considering the power to interfere with the order of
punishment, held that this Court. while exercising
the jurisdiction under Article 136 of the
Constitutions, is empowered to alter or interfere with
the penalty; and the Tribunal had no power to
substitute its own discretion for that of the
authority. It would be seen that this Court did not
appear to have intended to lay down that in no case,
the High Court/Tribunal has the power to alter the
penalty imposed by the disciplinary or the appellate
authority. The controversy was again canvassed in
State Bank of India 's case (supra), where the court
elaborately reviewed the case law on the scope of
judicial review and powers of the Tribunal in
disciplinary matters and nature of punishment. On
the facts in that case , since the appellate authority
had not adverted to the relevant facts, it was
remitted to the appellate authority to impose
appropriate punishment”.
32. We also deem it appropriate to refer to the law laid
down by the Hon'ble Apex Court with regard to the quantum
of punishment to be imposed in the case of Naresh Chandra
Bhardwaj Vs. Bank of India (2019 (15) SCC 786, as
under:“19. The principles discussed above can be summed
up and summarized as follows:
“ 19.1. When charge(s) of misconduct is proved in an
enquiry the quantum of punishment to be imposed in a
particular case is essentially the domain of the
departmental authorities.
19.2. The courts cannot assume the function of
disciplinary/departmental authorities and to decide the
29 OA/310/00047/2025 & MA 715/2025
quantum of punishment and nature of penalty to be
awarded, as this function is exclusively within the
jurisdiction of the competent authority.
19.3. Limited judicial review is available to interfere with
the punishment imposed by the disciplinary authority,
only in cases where such penalty is found to be shocking
to the conscience of the court.
19.4. Even in such a case when the punishment is set
aside as shockingly disproportionate to the nature of
charges framed against the delinquent employee, the
appropriate course of action is to remit the matter back
to the disciplinary authority or the appellate authority
with direction to pass appropriate order of penalty. The
court by itself cannot mandate as to what should be the
penalty in such a case.......".
33. In Union of India v. R.K. Sharma [(2001) 9 SCC 592],
the Hon’ble Apex Court explained the observations made in
[ Ranjit Thakur v. Union of India , (1987) 4 SCC 611]
observing that if the charge was ridiculous, the punishment
was harsh or strikingly disproportionate it would warrant
interference. However, the said observations in [ Ranjit
Thakur v. Union of India , (1987) 4 SCC 611] are not to be
taken to mean that a court can, while exercising the power
of judicial review, interfere with the punishment merely
because it considers the punishment to be disproportionate.
It was held that only in extreme cases, which on their face,
show perversity or irrationality, there could be judicial
30 OA/310/00047/2025 & MA 715/2025
review, and courts should not interfere merely on
compassionate grounds. Thus, it is well settled principle of
law that Courts may interfere with the order of punishment
passed by the Disciplinary Authority if the punishment
awarded to any delinquent is found to be shockingly
disproportionate to the charge levelled against him.
34. We would also like to the extract the relevant portion of
the order passed by the Hon’ble Apex Court in the case of
Amresh Shrivastava Vs State of Madhya Pradesh, order
dated 01.04.2025, reported in 2025 INSC 266, which
directly applies to the present case
“15. As regards the first question in K.K. Dhawan case,
reported in (1993) 2 SCC 56, this Court carved out the
following situations where the government is not
precluded from taking disciplinary actions for violation of
the Code of Conduct: -
“(i) Where the officer had acted in a manner as would
reflect on his reputation for integrity or good faith or
devotion to duty;
(ii) If there is prima facie material to show recklessness
or misconduct in the discharge of his duty;
(iii) if he has acted in a manner which is unbecoming of a
Government servant;
(iv) if he had acted negligently or that he omitted the
prescribed conditions which are essential for the exercise
of the statutory powers;
31 OA/310/00047/2025 & MA 715/2025
(v) if he had acted in order to unduly favour a party;
(vi) if he had been actuated by corrupt motive however,
small the bribe may be because Lord Coke said long ago
“though the bribe may be small, yet the fault is great.”
After carving out the above exceptions, this Court
proceeded to further observe that mere technical
violations or the fact that an order is wrong, if not falling
under the above enumerated instances, does not warrant
disciplinary actions. It was further reiterated that each
case depends on its facts, and absolute rules cannot be
postulated. The above instances as referred and
reproduced hereinabove, are thus only a guide and not
meant to be mandatorily adhere to without exception.
16. In the present case, we are of the considered view
that the charges alleged against the Appellant in the
chargesheet fall under the category of a wrongful order,
which does not appear to have been influenced by
extraneous factors or any form of gratification. It
appears that the order has been passed in good faith,
without any indication of dishonesty. Furthermore, the
facts outlined in the Show Cause Notice do not suggest
any such impropriety. The power exercised by the
Appellant in his capacity as a Tehsildar, while passing
the order of Land Settlement Order, cannot be
considered of a nature that would warrant disciplinary
proceedings against him. The decision relied upon by the
Counsel for the Appellant as mentioned above, supports
this view. Consequently, the first question is answered in
favour of the Appellant.”
35. In view of the foregoing discussion, the reasons
recorded hereinabove, and the settled principles governing
judicial review of the quantum of punishment, we are of the
considered view that the penalty imposed upon the applicant
is unduly harsh and disproportionate to the charges levelled
against him, which pertain purely to procedural irregularities
32 OA/310/00047/2025 & MA 715/2025
and in respect of which the applicant had obtained
permission from the competent authorities.
36. In the facts and circumstances of the case, the penalty
imposed upon the applicant is so excessive and
disproportionate as to shock the conscience of the Tribunal.
We are, therefore, inclined to interfere with the impugned
orders to the limited extent of the quantum of punishment.
Accordingly, the matter is remitted to the Disciplinary
Authority for reconsideration of the quantum of punishment
alone, without reopening or disturbing the findings recorded
in the disciplinary proceedings.
37. In the result, the MA No.175/2025 filed by the
applicant for direction stands closed and the present Original
Application is partly allowed and in the following terms:
“(i) The order dated 12.12.2024 passed by the
Disciplinary Authority imposing the major
penalty of ““reduction to a lower stage in the
time scale of pay by three stages for a
33 OA/310/00047/2025 & MA 715/2025
period of three years with the further direction
that he will not earn an increment of pay during
the period of such reduction on the expiry of
such period, the reduction will have the effect of
postponing the future increment of his pay”
upon the applicant is hereby quashed and set
aside.
(ii) The matter is remitted to the competent
Disciplinary Authority for fresh consideration,
strictly confined to the question of the quantum
of punishment to be imposed upon the
applicant. The findings recorded in the
disciplinary proceedings shall not be reopened.
(iii) The Disciplinary Authority shall complete
the aforesaid exercise within a period of two
months from the date of receipt of a certified
copy of this order and communicate the decision
to the applicant forthwith.
(iv) There shall be no order as to costs.”
(M.L. SRIVASTAVA) (M. SWAMINATHAN)
MEMBER(A) MEMBER(J)
15 .10.2026
mas
Digitally signed by M A
SUNDAR
Date: 2026.11.02 16:14:57
+05'30'
M A SUNDAR