Disciplinary proceedings against retired employees must have legal authority as per statutory rules or provisions, and the absence of such authority renders the proceedings without jurisdiction.

JUDGMENT :

1. By way of present special appeal, the appellants are assailing the validity and correctness of the order dated 26.05.2022 passed by the learned Single Bench whereby the disciplinary proceedings conducted against the respondent (writ petitioner) were declared to be without any authority of law. Further, a direction was issued to disburse the amount of gratuity withheld as a consequence of punishment of ‘dismissal from services’ imposed upon the respondent, with interest payable in terms of Section 7(3A) of the Payment of Gratuity Act, 1972.

2. Briefly stated facts of the case are that the respondent while holding the post of Branch Manager, Jodhpur Central Cooperative Bank Ltd. Bilara (hereinafter referred as ‘appellant-bank’) stood retired from the services w.e.f. 31.07.2004, on attaining the age of superannuation. The Managing Director of the appellant-bank, in contemplation of disciplinary proceedings, exercising powers conferred under Rule 13 of the Rajasthan Civil Services (Classification, Control and Appeal) Rules, 1958 (hereinafter referred to as the ‘CC&A Rules of 1958’) vide order dated 26.07.2004 placed respondent under suspension, just 5 days before his retirement.

3. A charge-sheet dated 18.03.2006 was served upon the respondent under Rule 16 of CC&A Rules of 1958 wherein two charges were levelled against him: firstly, it was alleged that the respondent had acted in violation of orders and instructions of the appellant-bank culminating into embezzlement by way of distribution of loans to about 40 dead persons amounting to Rs. 8,78,071/- secondly, it was alleged that the respondent negligently issued forged passbooks and related documents resulting into irregular payments to agriculturist loanees to the tune of Rs. 34,87,545/-. In the inquiry report dated 03.01.2011, the respondent was found guilty of supervisory negligence qua charge No. 1 while he was exonerated qua charge No. 2. The disciplinary authority on receiving the inquiry report, vide order dated 16.05.2011 inflicted penalty of dismissal from services upon the respondent.

4. A challenge was laid to the dismissal order dated 16.05.2011 before the learned Single Bench on multiple grounds. The learned Single Bench after hearing the parties held that CC&A Rules of 1958 applicable upon the government servants of the State of Rajasthan have been adopted by the appellant-bank to follow the procedure for conducting disciplinary proceedings against its employees. However, there is no provision under CC&A Rules of 1958 which covers disciplinary proceedings against retired employees. The learned Single Bench also found the punishment of dismissal from services imposed upon the respondent for supervisory negligence to be disproportionate to the charges levelled in the charge-sheet dated 18.03.2006. The learned Single Bench vide order dated 26.05.2022, quashed and set aside the impugned order of dismissal dated 16.05.2011 and directed the respondents to release amount of gratuity in favour of the respondent along with interest in terms of the provision of Payment of Gratuity Act, 1972. Aggrieved by the order dated 26.05.2022, present intra court appeal has been filed.

5. Learned counsel for the appellant-bank submitted that the charge-sheet dated 18.03.2006 issued against respondent had culminated into an order being passed proving charge No. 1 regarding embezzlement and misuse of post causing financial loss to the Bank of quantified sum of Rs. 8,78,071/-. Therefore, for an employee working in the Bank, the punishment of dismissal from service cannot be considered disproportionate to the allegations levelled. Counsel further submitted that Section 4(6) of Payment of Gratuity Act, 1972 provides that gratuity of an employee whose services have been terminated for any act, wilful omission or negligence, causing any damages or loss to the employer shall be forfeited to the extent of damage or loss so caused. Counsel argued that in the present case, since the finan