Borrowing departments cannot conduct disciplinary inquiries against deputationists after their repatriation.

The petitioner, a Child Development Project Officer in the Government of Arunachal Pradesh, was deputed to the Food Corporation of India (FCI) as Assistant General Manager/Area Manager from 2011.

While serving at FCI’s Banderdewa District Office, she was suspended on 24 May 2016 under Regulation 66(1)(a) of the FCI (Staff) Regulations, 1971, on allegations of causing substantial financial loss to FCI.

A charge memorandum containing four articles of charge was issued on 19 August 2016, but the petitioner was repatriated to her parent department with effect from 21 September 2016.

Thereafter, FCI appointed an Inquiry Officer and Presenting Officer on 24 November 2016 and conducted the inquiry after her repatriation.

The Inquiry Officer submitted a report dated 14 March 2018 holding the charges proved, following which FCI requested the Chief Secretary of Arunachal Pradesh to impose a strict penalty on the petitioner by letter dated 9 January 2019.

Whether FCI could continue or conduct disciplinary proceedings against the petitioner after she had been repatriated to her parent department?

Whether FCI complied with Regulation 65(1) of the FCI (Staff) Regulations, 1971, requiring the borrowing authority to inform the lending authority of the circumstances leading to the suspension and disciplinary proceedings?

Whether the inquiry was vitiated by the Inquiry Officer’s failure to record a specific decision or reasons for proceeding ex parte against the petitioner?

Whether the inquiry report dated 14 March 2018 and the subsequent communication seeking imposition of penalty could be sustained in law?

The Court applied Regulation 66(1)(a) of the FCI (Staff) Regulations, 1971, which authorises the competent authority to suspend an employee where disciplinary proceedings are contemplated or pending.

Regulation 65(1) requires the borrowing authority to forthwith inform the lending authority of the circumstances leading to suspension or commencement of disciplinary proceedings against a deputed employee.

Under Regulation 65(2), the borrowing authority may impose minor penalties after consultation with the lending authority, but where a major penalty is considered appropriate, it must return the employee’s services to the lending authority and transmit the inquiry proceedings for such action as the lending authority considers necessary.

The Court relied on Shiv Parshad Pandey v. CBI, (2003) 11 SCC 508, and B.L. Satyarthi v. State of Madhya Pradesh, 2014 Legal Eagle (MP) 983, for the principle that disciplinary authority over a deputed employee is ordinarily linked to the subsistence of the borrowing department’s employer–employee relationship.

It also applied the principles of natural justice requiring a delinquent employee to receive a fair opportunity of defence and requiring an Inquiry Officer proceeding ex parte to record that due notice was given and that the employee failed to appear without sufficient cause.

Although FCI was competent to suspend the petitioner during her deputation under Regulation 66(1)(a), the suspension order merely alleged responsibility for loss and did not communicate the circumstances leading to the suspension to the lending department as required by Regulation 65(1).

More importantly, the Inquiry Officer and Presenting Officer were appointed only after the petitioner had been repatriated, and the entire inquiry was conducted after the borrowing-department relationship had ended.

Regulation 65 contained no authority permitting FCI to commence and complete such disciplinary proceedings after repatriation; the proper course was to complete the inquiry before repatriation or transmit the matter to the lending authority in accordance with Regulation 65(2)(ii) where a major penalty was contemplated.

Independently, the inquiry was procedurally defective because, although the petitioner had been warned that the proceedings might be conducted ex parte, the Inquiry Officer did not record any formal decision or reasons establishing that she had failed to appear despite due notice and without adequate explanation.

The Inquiry Officer consequently accepted the Presenting Officer’s documents and submissions without the required procedural safeguards, rendering the inquiry report unsustainable.

The inquiry proceedings and the Inquiry Officer’s report dated 14 March 2018 were accordingly set aside.

The Court did not examine the merits of the charges and clarified that the authorities were not barred from proceeding afresh against the petitioner, provided that any fresh action was taken strictly in accordance with law.

The writ petition was disposed of, with parties directed to bear their own costs.