2022 Supreme(Del) 996

IN THE HIGH COURT OF DELHI AT NEW DELHI
Yashwant Varma, J.
N.D. Tyagi - Appellant
Versus
Power Finance Corporation Limited & Ors. - Respondents
W.P.(C) 7741 of 2015 and CM Appls. 15189 of 2015, 29403 of 2015, 4218 of 2021, 4628 of 2021, 23761 of 2021
Decided On : 18-05-2022

Headnote:

POWER FINANCE CORPORATION LIMITED (CONDUCT DISCIPLINE AND APPEAL) RULES - [1] - POWER FINANCE CORPORATION CONSULTING LIMITED [2] - POWER FINANCE CORPORATION LIMITED [3] - DEPUTATION - JURISDICTION - DISCIPLINARY PROCEEDINGS - RULES 36.1, 37.1 AND 37.2 - EMPLOYEE ON DEPUTATION - JURISDICTION OF BORROWING AUTHORITY - JURISDICTION OF LENDING AUTHORITY - MAJOR PENALTY - MINOR PENALTY - CONSULTATION - REPATRIATION - LIEN - TEMPORARY CONTRACT OF SERVICE - CHARGESHEET - JURISDICTIONAL ERROR - EVIDENCE - ONUS OF PROOF.

Fact of the Case:

The petitioner, an Executive Director under the respondents, was proposed to be proceeded against in disciplinary proceedings in accordance with the provisions made in Rules 28 and 30 of the Power Finance Corporation Limited (Conduct Discipline and Appeal) Rules [1]. The petitioner had been transferred to the newly formed company as its Chief Executive Officer. On 29 October 2014, a show cause notice came to be issued calling upon the petitioner to explain why disciplinary action be not initiated against him in light of various infractions which had come to be noticed connected with the administration of the affairs of PFCCL during the period when the petitioner was posted as its Chief Executive Officer. The petitioner raised a challenge to the authority of the Enquiry Officer and consequently sought a change of that officer. The respondents refused the prayer for change of the Enquiry Officer and the instant writ petition came to be instituted before this Court. The petitioner conceded that insofar as the alternative prayers are concerned, they would no longer survive in light of the subsequent events and the Enquiry Officer having changed during the pendency of the present writ petition. The chargesheet was assailed by the petitioner principally on the following grounds. Drawing the attention of the Court to the contents of the chargesheet, it was argued that undisputedly the charges pertain to a period when the petitioner was serving in PFCCL on deputation. Mr. Gupta submits that bearing in mind the provisions made in Rules 36 and 37, no authority or jurisdiction would vest in PFCL to try the petitioner or to impose penalties for alleged acts of misconduct committed while the petitioner was posted at PFCCL. Learned Senior Counsel submitted that undisputedly no proceedings for the alleged infractions were ever initiated or undertaken by PFCCL. Mr. Gupta has addressed the aforesaid submissions based on the provisions contained in Rules 36.1, 37.1 and 37.2 which are extracted hereinbelow.

Finding of the Court:

The Court found that the petitioner was correct when he contended that proceedings in respect of alleged acts of misdemeanour committed while he was posted in PFCCL cannot be validly tried by the competent authority in PFCL. The Court also found that the competent authority in PFCCL could have exercised jurisdiction in this regard only while the petitioner was serving in that organization. Rules 37.1 and 37.2 put in place and introduce an impermanent legal fiction which would be deemed to operate only during the tenure of service rendered by the officer in the borrowing entity. However, and as has been held hereinabove, once that temporary period of service comes to an end and the officer reverts to his parent cadre, the authority in the borrowing department ceases to have jurisdiction or authority to proceed against the concerned employee. Upon repatriation, it is the competent authority in the parent body who alone would have the requisite jurisdiction to form an opinion whether the officer or employee is liable to be proceeded against departmentally. That discretion and authority of the competent authority cannot possibly be held to be dependent upon the formation of opinion by an authority of the borrowing department, corporation or company. The Court also found that the submission that the enquiry proceedings are liable to be interdicted since the relevant records are available with PFCCL is also wholly without merit and untenable.

Issues: Whether the competent authority in PFCL can proceed against the petitioner departmentally for alleged acts of misconduct committed while he was posted in PFCCL.

Ratio Decidendi: The Court held that the competent authority in PFCCL could have exercised jurisdiction in this regard only while the petitioner was serving in that organization. Rules 37.1 and 37.2 put in place and introduce an impermanent legal fiction which would be deemed to operate only during the tenure of service rendered by the officer in the borrowing entity. However, and as has been held hereinabove, once that temporary period of service comes to an end and the officer reverts to his parent cadre, the authority in the borrowing department ceases to have jurisdiction or authority to proceed against the concerned employee. Upon repatriation, it is the competent authority in the parent body who alone would have the requisite jurisdiction to form an opinion whether the officer or employee is liable to be proceeded against departmentally. That discretion and authority of the competent authority cannot possibly be held to be dependent upon the formation of opinion by an authority of the borrowing department, corporation or company.

Final Decision: The writ petition was dismissed.