Serious misconduct justifying disciplinary action against a railway servant can occur outside working hours and outside the course of employment if it contravenes the implied conditions of the contract of service, such as faithfulness, trustworthiness, and non-prejudice to the employer's interests.

Headnote:
RAILWAY SERVANTS - DISCIPLINARY ACTION - SERIOUS MISCONDUCT - ACTS OUTSIDE WORKING HOURS - RAILWAY ESTABLISHMENT CODE, RULE 1706 - SUBSIDIARY RULE 4 - INTERPRETATION - SCOPE OF ENQUIRY.
Fact of the Case:

Petitioners, non-gazetted employees of Central Railway, challenged the legality of disciplinary proceedings initiated against them for alleged misconduct as office-bearers of a railway employees' cooperative society. The charges included mismanagement, failure to discharge duties, and non-handing over of cash and accounts. The petitioners contended that the respondent railway authorities lacked jurisdiction to take disciplinary action for acts outside their official duties and that the subsidiary rule authorizing such action was beyond the scope of the General Manager's powers.
Finding of the Court:

The court held that serious misconduct justifying disciplinary action could occur outside working hours and outside the course of employment. The test for misconduct was whether the servant disregarded the essential conditions of the contract of service, including implied conditions of faithfulness, trustworthiness, and non-prejudice to the employer's interests. The court found that the charges against the petitioners, if proven, could amount to serious misconduct under Rule 1706 of the Railway Establishment Code.
Issues: 1. Whether the railway authorities had jurisdiction to take disciplinary action against the petitioners for alleged misconduct as office-bearers of a cooperative society. 2. Whether subsidiary Rule 4, authorizing disciplinary action for misconduct in connection with railway-related institutions, was beyond the scope of the General Manager's powers.
Ratio Decidendi: 1. The court held that Rule 1706 of the Railway Establishment Code, which allowed disciplinary action for serious misconduct, was sufficient authority for the railway authorities to initiate disciplinary proceedings against the petitioners, irrespective of the provisions of subsidiary Rule 4. 2. The court found that subsidiary Rule 4 did not add anything to the powers granted by Rule 1706 and served only to give effect to the main rules. Therefore, the court rejected the contention that subsidiary Rule 4 was beyond the scope of the General Manager's powers.
Final Decision: The court dismissed the petitions of petitioners 1 and 2, holding that the alleged misconduct, if proven, could amount to serious misconduct justifying disciplinary action under Rule 1706. The court also dismissed the petition of petitioner 3, as the denial of his claim to have served as Treasurer for only 12 days required the determination of facts at the disciplinary enquiry.

JUDGMENT - 1. This is a petition under Articles 226 and 227 of the Constitution by the three petitioners who are non-gazetted employees of the Central Railway, foe writs of mandamus, certiorari and other appropriate writs, orders or directions in the matter of disciplinary inquiries which are being held against them, by respondent who is the Divisional Superintendent of the Central Railway at Nagpur. Petitioner No. 1 is also the Honorary President of the Co-operative Society called the Central Railway Employees Consumers Co-operative Society, Limited, Ajni, Nagpur, which will hereinafter be referred to as the Society- Petitioner No. 2 is the Honorary Secretary of the Society. In the petition it is averred that petitioner No. 3 was a member of the Society and worked as a Treasurer only for 12 days from 18-6-56 to 30-6-56 when he was relieved of his charge as Treasurer by one Ramnarayan, that new office-bearers of the Society were elected on 31-8-58, and that the new Committee of the Society sought the assistance of the respondent, namely, the Divisional Superintendent of the Central Railway at Nagpur, for getting proper accounts from the outgoing committee of the Society on the allegation that the outgoing Committee had not handed over cash and accounts to the newly elected Committee. The Assistant Registrar of the Co-operative Societies also complained to the respondent that proper accounts of the Society were not forthcoming. The respondent thereupon ordered the suspension of petitioners Nos. 1 and 2 on 27-2-58. Petitioner No. 3 was not suspended. Charges were framed against all the three petitioners by the respondent on 8-11-58, 8-11-58 and 5-12-58 respectively. The charge against petitioner No. 1 was that while he wag the President of the Society during the period from 1-7-56 to 31-8-58, he failed to discharge his duties and responsibilities as prescribed in the byelaws of the Society, resulting in excess credits being granted to members and the non-recovery of credit dues from members; that he did not check the credit and proper posting of the cash book, stock book and other account books of the Society; that he did not hand over the cash balance as noted in the cash book, to the new Committee which took over charge on 31-8-58. which was tantamount to embezzlement of the funds of the Society; and generally that the President contributed to the general mismanagement of the Society. The charge against petitioner No. 2 was almost in similar terms. The charge against petitioner No. 3 was that he committed serious misconduct while he was a Treasurer of the Society from 1-7-56 to 31-7-58: that he failed to discharge his duties and responsibilities as prescribed in the byelaws of the Society; and that he did not hand over the cash balance to the new Committee which took over charge on 31-8-58.

2. On these charges the respondent started disciplinary enquiry against the three petitioners, and intimated the petitioners that Officers Enquiry would be held at Ajni on 30-1-59. petitioners 1 and 2 wrote to the respondent, objecting to the legality of the proceedings. The respondent rejected these objections by a memorandum dated 27-1-59, After the objections were rejected, the petitioners have approached the High Court for appropriate writs, challenging the order of suspension dated 27-3-5S and the charge sheets filed -against them on 8-11-58 and 5-12-58 as illegal on the grounds that the respondent had no jurisdiction to take any disciplinary action against the petitioners for any act or omission of theirs as members or office-bearers of the Society, that subsidiary rule No. 4, said to have been made under R. 1706 of the Discipline and Appeal Rules (Non-Gazetted) by the General Manager of the Central Railway, on the basis of which the disciplinary action is said to have been taken, had not been made or promulgated by the General Manager, that the action taken by the respondent was outside the scope of subsidiary Rule 4 to Rule 1706 of t

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