Court may reduce disproportionate punishment to compulsory retirement where specific findings of misappropriation or mala fides are absent.

The respondent, an Assistant Grade-II Officer and Shed In-charge at an FCI godown in Silchar, was charged with causing a shortage of approximately 2,000 quintals of foodgrains between July and September 2010

Following a departmental inquiry where the charges were proved, the Disciplinary Authority imposed the punishment of removal from service and forfeiture of gratuity

The respondent challenged this before a Single Judge of the Gauhati High Court, arguing he had 34 years of unblemished service and that the shortage resulted from collective responsibility rather than individual misappropriation

The Single Judge upheld the finding of guilt but reduced the punishment to compulsory retirement without forfeiture of gratuity

The FCI (Appellants) filed this writ appeal against the reduction of penalty

1. Whether the Court can interfere with the quantum of punishment imposed by a Disciplinary Authority on the grounds of proportionality

2. Whether the punishment of "forfeiture of gratuity" is legally sustainable if not specifically listed as a major penalty under relevant service rules or the Payment of Gratuity Act, 1972

The court applied the "Wednesbury test" of rationality to determine if the administrative decision was illegal, procedurally improper, or so unreasonable that no sensible decision-maker could have reached it

It relied on the principles of proportionality established in Ranjit Thakur v. Union of India & Ors. (1987) and Union of India & Anr. v. G. Ganayutham (1997), which allow judicial interference if a punishment is in "outrageous defiance of logic" or shockingly disproportionate

Furthermore, it noted the constraints imposed by the Payment of Gratuity Act, 1972, and internal FCI circulars requiring specific findings of theft, pilferage, or mala fides before recovery or harsh penalties are imposed for foodgrain shortages

The Court observed that while the inquiry process was procedurally sound, the penalty of removal was disproportionate because there was no specific finding of theft, misappropriation, or mala fides against the respondent

The Court noted that the "inferential guilt" of misappropriation based solely on shortage was insufficient for the harshest penalty, especially considering the respondent's 34 years of clean service

The Bench agreed with the Single Judge that "sending a message" to other employees is not a valid legal justification for an excessive sentence

Since the loss could have been cumulative over a period involving multiple officers (collective responsibility), and the forfeiture of gratuity was not a listed punishment under the rules, the judicial conscience was moved to intervene

The Division Bench dismissed the appeal and upheld the Single Judge’s judgment, declining to remand the matter for a fresh decision on penalty due to the significant efflux of time—16 years since the proceedings began