Disciplinary proceedings: Limitation period can be extended by excluding COVID-19 lockdown when charges form a continuous transaction.

The applicant, Santosh Sharma, superannuated as Chairman-cum-Managing Director of Hindustan Copper Limited (HCL) on December 31, 2019.

Shortly before his retirement, on December 17, 2019, he received a show-cause notice.

Subsequently, on August 18, 2020, a Memorandum of Charges was issued against him, initiating disciplinary proceedings under the HCL Rules, 1979.

The charges alleged irregularities in tender processes, issuance of Single Tender Enquiry, presentation of Board agenda items, and sanction of advances and ad-hoc payments between 2016 and 2018.

Article VII of the charges specifically pertained to the sanction and payment of advances between July and early August 2018.

The applicant challenged these proceedings, arguing they were time-barred under Rule 30(b)(ii) of the HCL Rules, 1979.

The respondents contended that the alleged misconduct was a continuous transaction, and the charges were not time-barred, especially considering the exclusion of the COVID-19 lockdown period from limitation computation as per an OM dated March 30, 2020.

1. Whether the event forming the subject matter of Article VII of the Memorandum of Charges falls within the two-year limitation prescribed under Rule 30(b)(ii) of the HCL Rules, 1979, when the period of lockdown is excluded.

2. Whether the remaining Articles of Charge, pertaining to acts during 2016-2017, are so interconnected with Article VII as to constitute a composite and continuous transaction, thereby not being time-barred.

The court primarily applied Rule 30(b)(ii) of the Hindustan Copper Limited (Conduct, Discipline and Appeal) Rules, 1979, which states that disciplinary proceedings, if not instituted while the employee was in service, "shall not be in respect of any event which took place more than two years before such institution".

The court also referred to the Government of India Office Memorandum dated March 30, 2020, which provides for the exclusion of the lockdown period from the computation of limitation for disciplinary proceedings.

The Tribunal analyzed the core issue of limitation under Rule 30(b)(ii) of the HCL Rules, 1979.

It noted that the Memorandum of Charges was issued on August 18, 2020, and Article VII of the charges related to sanctions in July-August 2018.

While these dates fell slightly beyond the two-year period if calculated strictly on a calendar basis, the respondents relied on the Office Memorandum dated March 30, 2020, to exclude the COVID-19 lockdown period, which commenced on March 24, 2020.

The Tribunal found that, prima facie, excluding the lockdown period would bring Article VII within the limitation period, as a simple computation demonstrated its sufficiency.

Regarding the other charges (2016-2017 events), the Tribunal examined whether they were severable or part of a continuous transaction culminating in the 2018 advances.

It observed that the charges demonstrated a sequence of events—tender discharge, Single Tender Enquiry, Board presentations, and eventual sanction of advances to the same contractor—appearing to form one continuous course of action.

The advances sanctioned in 2018 were alleged to be the culmination of earlier decisions and processes from 2016-2017, suggesting an interconnected chain of acts.

The Tribunal concluded that, in such circumstances, it would not be appropriate to fragment the charges artificially, and limitation could be reasonably reckoned from the last act in the series, thereby allowing the entire series of charges to survive.

The disciplinary proceedings are to resume from the stage they were paused pursuant to the Tribunal's order dated November 1, 2022, and the respondents are directed to conclude them in accordance with law, affording due opportunity to the applicant.

The O.A. and all pending M.A.s were disposed of accordingly, with no order as to costs.