FOOD CORPORATION OF INDIA, HYDERABAD AND ORS. versus A. PRAHALADA RAO AND ANR.

Citation: [2000] SUPP. 4 S.C.R. 330 · Decided: 01-11-2000 · Supreme Court of India · Bench: M.B. SHAH · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
FOOD CORPORATION OF INDIA, HYDERABAD AND ORS. 
v. 
A. PRAHALADA RAO AND ANR. 
NOVEMBER 1, 2000 
B 
[M.B. SHAH AND D.P. MOHAPATRA, JJ.] 
Service law: 
Food Corporation of India (Staff) Regulation, 1971: Regulation 
c 60(/)(b). 
Minor penalty-Awarding of-Detailed enquiry-Holding of-
Necessity-Minor penalty awarded to employee for dereliction of his duties 
resulting in loss to the Corporation-However, no detailed enquiry as provided 
for major penalty was held-Validity-Held: It is not necessary to hold afull-
D fledged enquiry even when employee disputes his liability-It is for the 
disciplinary authority to decide whether. or not to hold a regular departmental 
enquiry-Hence, the High Court erred in holding that it is incumbent upon 
the authority to conduct the enquiry contemplated for imposing major penalty. 
E 
Administrative law: 
Enquiry proceedings-Judicial review-Scope and ambit of-Held: ls 
limited-Court can interfere only where the en9uiry proceedings are 
inconsistent with the rules of natural justice-If the discretionary power of 
holding or not holding an enquiry is misused or used arbitrarily it would 
F be subject to judicial review. 
G 
Respondents filed a writ petition before the High Court challenging 
the order imposing penalty of recovery of a certain sum from their pay on 
the ground of dereliction of their duties, which caused loss to the appellant-
Corporation. 
Single Judge held that once the employee denied the charge, it was 
incumbent upon the authorities to conduct an inquiry by giving an opportunity 
to him and render findings on the charges; otherwise there was every scope 
for the disciplinary authority to misuse the power under Regulation 60 of 
the Food Corporation of India (Staff) Regulation, 1971. The High Court, 
lI 
330 
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F.C.I. v. A. PRAHALADA RAO 
331 
therefore, set aside the order imposing minor penalty as the procedure A 
contemplated for imposing major penalty was not followed. Division Bench 
confirmed the judgment. Hence this appeal. 
Allowing the appeal, the Court 
HELD : I. On the basis of the allegation that the appellant-Food B 
Corporation of India is misusing its power of imposing minor penalties, the 
Food Corporation of India (Staff) Regulation, 1971 cannot be interpreted 
contrary to its language. Regulation 60(1)(b) mandates the disciplinary 
authority to form its opinion whether it is necessary to hold enquiry in a 
particular case or not. But that would not mean that in all cases whue 
employee disputes his liability, a full-fledged enquiry should be held. C 
Otherwise, the entire purpose of incorporating summary procedure for 
imposing minor penalties would be frustrated. If the discretion given under 
Regulation 60(1)(b) is misused or is exercised in an arbitrary manner it is 
open to the employee to challenge the same before the appropriate forum. It 
is for the disciplinary authority to decide whether regular departmental D 
enquiry as contemplated under Regulation 58 for imposing major penalty 
should be followed or not. This discretion cannot be curtailed by interpretation, 
which is contrary to the language used. 1334-F-G, HI 
2. It is settled law that the Court's power of judicial review in such 
cases is limited and Court can interfere where the authority held the enquiry E 
proceedings in a manner inconsistent with the rules of natural justice or in 
violation of statutory rules prescribing the mode of enquiry and imposing 
punishment or where the conclusion or finding reached by the disciplinary 
authority is based on no evidence or is such that no reasonable person would 
have ever reached. As per the Regulation, holding of regular departmental F 
enquiry is a discretionary power of the disciplinary authority which is to be 
exercised by considering the facts of each case and if it is misused or used 
arbitrarily, it would be subject to judicial review. 1335-C-D) 
3. The High Court erroneously interpreted the Regulation by holding 
that once the employee denies the charge, it is incumbent upon the authority G 
to conduct an enquiry contemplated for imposing major penalty. 1335-B) 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6123 of 
2000. 
From the Judgment and Order dated 18.11. 97 of the Andhra Pradesh H 
332 
SUPREME COURT REPORTS [2000) SUPP. 4 S.C.R. 
A High Court in W.A. No. 1300 of 1997. 
R.K. Vinnani for the Appellants. 
In-person for the Respondents. 
B 
The Judgment of the Court was delivered by 
SHAH, J. Leave granted. 
The noti

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