M.P. STATE AGRO INDUSTRIES DEVELOPMENT CORPORATION LTD. ANDANR. versus JAHAN KHAN

Citation: [2007] 9 S.C.R. 715 · Decided: 05-09-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Dismissed

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Judgment (excerpt)

M.P. STA TE AGRO INDUSTRIES DEVELOPMENT CORPORATION LID. 
A 
ANDANR. 
v. 
JAHANKHAN 
SEPTEMBER 5, 2007 
B 
(DR.ARIJITPASAYAT ANDD.K.JAIN,JJ.) 
Service Law: 
Punishment-Maj01: penalty-Monetary loss (o employer due to alleged. C 
dereliction in duty by employee-Composite penalty order consequently 
passed by disciplinary authority directing recovery of monetary loss from 
employee and stoppage of his three increments with cumulative effect-Held: 
Jn context of the Service Regulations, the penalty imposed was a major 
penalty, envisaging a regular enquiry before punishment-Since no such D 
procedure followed, High Court justified in holding the penalty imposed as 
illegal and without jurisdiction-M.P. State Agro Industries Development 
Corporaiion limited Service (Recruitment and Selection) Regulations, 1976. 
Punishment-Imposition of. by disciplinary authority-Judicial 
Review-Scope of 
E 
Constitution of India, 1950-Articles 226 and 227-Writjurisdiction-
Exercise of. when alternative remedy available-Scope of-Discussed 
Constitution of India, 1950-Articles 226-Penalty order appealable 
in terms of the Service Regulations-Writ petition-Maintainability of-Held: F 
Maintainable, since the penalty order was per se illegal being violative of 
the principles of natural justice-M.P. State Agro Industries Development 
Corporation Limited Service (Recruitment and Selection) Regulations, 1976-
Administrative Law-Principles of natural justice. 
Respondent caused monetary loss to his employer, Appellant- G 
Corporation, by alleged dereliction in duty. The Managing Director of 
Appellant-corporation, in his capacity as the disciplinary authority, imposed 
penalty in form of recovery of amount equivalent to the monetary loss from 
Respondent as also stoppage of his three increments with cumulative effect. 
715 
H 
716 
SUPREME COURT REPORTS 
[2007) 9 S.C.R. 
A 
Respondent filed writ petition before High Court challenging the order 
passed by the disciplinary authority. High Court held that the penalty of 
stoppage of increments with cumulative effect was a major penalty, which could 
not be imposed without holding a regular departmental enquiry and 
accordingly set aside the order of the disciplinary authority. 
B 
In appeals before this Court, it was contended by the Appellant-
Corporation that under M.P. State Agro Industries Development Corporation 
Limited Service (Recruitment and Selection) Regulations of 1976 punishment 
of stoppage of increments with cumulative effect is a minor penalty and, 
therefore, no regular enquiry is contemplated thereunder. It was further 
C contended that an efficacious alternative remedy by way of an appeal being 
available to the Respondent in terms of the aforesaid Regulations, the High 
Court should not have entertained the writ petition. 
Dismissing the appeals, the Court 
D 
HELD:l. The power of punishment to an employee is within the 
discretion of the employer and ordinarily the cou~s do not interfere, unless· 
it is found that either the enquiry, proceedings or punishment is vitiated 
4 
because of non-observance of the relevant Rules and Regulations or principles 
of natural justice or denial of reasonable opportunity to defend etc. or that 
the punishment is totally disproportionate to the proved misconduct of an 
E employee. (Para SJ [720-B] 
Indian Oil Corporation Ltd & Anr. v. Ashok Kumar Arora, [1997] 3 
SCC 72 and La/it Popli v. Canara Bank & Ors., (2003) 3 SCC S83, relied on. 
2.1. A bare reading of the scheme of the M.P. State Agro Industries 
F Development Corporation Limited Service (Recruitment and Selection) 
Regulations of 1976 would show that there is a clear demarcation of quantum 
of punishment between the minor lapses, delinquencies and acts of misconduct 
It is evident that having regard to the nature of acts of omission and 
commission, the punishment prescribed for minor lapses, and delinqueneies,. 
G ostensibly not having perpetual effect, have been made non-appealable in 
comparison to the punishments for acts of misconduct, which include recovery 
of whole or a part of pecuniary loss, exceeding Rs.SO/-, caused to.the 
Corporation, withholding of increments for a specific period, termination of 
services, removal etc., which can all be characterized as major punishments. 
Precisely for this reason, all punishments falling in the latter category have 
H been made appealable. The perceptive distinction in two sets of penalties makes 
STATEAGROINDUS.DEVE.CORP.LID.v.JAHA

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