ORDER :

S.B. Sinha, Deepak Verma, JJ.

Leave granted.

These appeals are directed against the judgment and order dated 14.02.2006 passed by a Division Bench of the High Court of Judicature of Andhra Pradesh whereby and whereunder the letters patent appeal filed against the judgment and order dated 14.7.2005 passed by the learned Single Judge of the High Court passed in Writ Petition No. 799/2007 was affirmed.

2. Respondents herein were employees of the appellant-Corporation. They reached the age of superannuation some time in 2000. A departmental proceeding was initiated against the respondents in the year 1999 alleging some financial irregularities on their part committed in the year 1992-93. Certain amount was sought to be recovered from them which the appellant allegedly suffered by reason of the misconduct committed by them shortly before their superannuation.

3. One of the question which had been raised before the High Court and found favour with by both the learned Single Judge as also the Division Bench of the High Court, was that no disciplinary proceeding could have been initiated against the respondents and/or continue the same after their retirement. The High Court in support of the aforementioned finding relied upon a decision of this Court in Bhagirathi Jena v. Board of Directors, O.S.F.C., 1999 (3) SCC 666.

4. The High Court in its order referred to a Circular dated 29.8.1998 which reads as under:

"Sub:- G.C.C. Service Rules - Amendment of Service Rules of G.C.C. for adoption of Andhra Pradesh Civil Service Code and Andhra Pradesh Fundamental Rules - Reg. Ref: Board Resolution No. 74/98-99 dated 11.8.1998

The Board in its resolution No. 7498-99 have resolved to amend the GCC Service Rules for adoption of Andhra Pradesh Civil Service Code rules and Andhra Pradesh Fundamental Rules where ever the G.C.C. service rules are silent. All the Unit Officers of G.C.C. are requested to include this para in service rules of GCC in Chapter I Part-A as Rule 7.

7. Adoption Of Govt. Rules.

The M.D. shall have power to adopt rules under 'Andhra Pradesh Civil Service Ruels' and Andhra Pradesh Fundamental Rules to its employees whenever the GCC Service Rules of employees are silent. Receipt of the circular should be acknowledged."

5. Interpreting the words "The M.D. shall have power to adopt rules", it was opined by the High Court that as no such order adopting the said rules by the Managing Director of the Corporation was brought on record, continuation of the disciplinary proceedings against the respondents was bad in law.

6. Before this Court, however, the Corporation seeks to take a different stand. According to it, the power to adopt the Government Rules vests in the Board of Directors and the Managing Director was merely to apply the same.

7. By an affidavit affirmed by one K.S.V.R.N. Sarma, Legal Executive/Junior Manager (Legal) of the Corporation filed on the 10 July, 2009 which has been brought to our notice that in fact the Board of Directors had adopted Rule 7 of Part-A, Chapter I of the G.C.C. Service Rules by resolution dated 11.8.1998, in terms whereof the aforementioned circular dated 29.8.1998 has been issued.

8. It was furthermore contended before the High Court:

"I say and submit that the respondent herein who is in the cadre of General Manager has committed certain grave irregularities, misappropriation of huge Corporation funds, committed criminal breach of trust while working as Senior Accounts Officer (Comp.) Incharge of the subject of industries during 1991-92. The petitioner Corporation after conduct of enquiry issued him provisional conclusion orders on 28.4.2000 stating that since he is due to retire on 30.4.2000, he will be allowed to retire on the day without any retirement benefits till all the pending cases are finalised and to recover the losses sustained to the tune of Rs. 2,38,855/-. The respondent did not choose to file his explanation to the said provisional conclusion orders. Thus after affording him the opportun