The main legal point established in the judgment is the requirement of consultation with the Union Public Service Commission before passing final orders on withholding or withdrawing pension under Rule 9 of the Central Civil Services (Pension) Rules, 1972.

ORDER :

A.S. Venkatachalamoorthy, J.—The order passed by the Central Administrative Tribunal, Madras Bench in O.A.984 of 1997 is under challenge in this writ petition.

2. The first respondent herein joined as Lower Division Clerk in Employees State Insurance Corporation in the year 1959 and ultimately retired on 28.2.1994 as Manager Grade II. Before his retirement, that was on 4.10.1993, he was issued with a charge memo, which reads as under,

"That Sri.Md.Azmatulla, while functioning as Insurance Inspector, Kodambakkam Inspection Division, Madras, went to conduct Regular Inspection of the records of Sri Swastikas Enterprises, 29/1, Easwaran Koil Street, West Mambalam, Madras -600 033 with code No: 51-36334-57 on 25-10-89.

That Sri Md.Azmatulla then failed to report the existence and continuity in coverage of M/s Sri Swastic Enterprises and its change of name as S.V.M.Enterprises, after proper enquiry but merely reported that whereabouts of the partners could not be ascertained and no inspection could be done.

That Sri Md.Azmatulla, failed to report on the applicability of the Employees' State Insurance Act, 1948 to M/s S.V.M.Enterprises, Code No: 51-36334-57 consequent on its change from M/s Sri Swastick Enterprises, the contribution due etc, but merely reported its non-coverage even after seeing the Attendance Register, Wage Register Petty Cash Book cum Ledger.

That Sri Md.Azmatulla acted in a manner stated above, with the ulterior motive of giving pecuniary benefits to the employer thereby causing loss of revenue to the Corpn.

By his above act, Sri Md.Azmatulla, the then Insurance Inspector had failed to maintain absolute integrity, and devotion to duty and exhibited conduct unbecoming of a Corpn., employee, thereby violating Rule 3 of the C.C.S.(Conduct) Rules, 1964 read with Regulation 23 of ESI Corporation (Staff and Conditions of Service) Regulations, 1959."

3. The first respondent filed explanation denying the charges leveled against him. The Disciplinary Proceeding instituted against the first respondent ultimately resulted in the award of punishment by the Director General, Employees State Insurance Corporation. The punishment awarded was 10% cut of pension with a proportionate cut in dearness allowance for a period of three years. The first respondent filed an appeal to the Chairman, Standing Committee against the order of the Director General. However, the said appeal was dismissed by an order dated 28.6.1997. Being aggrieved by the said order, the first respondent preferred the above writ petition.

4. Being aggrieved by the said order, the first respondent filed O.A.984 of 1997 before the Central Administrative Tribunal, Madras Bench. The Tribunal allowed the said application holding that there was arbitrary and incomplete delegation of powers to the Director General, which is bad in law and that the Director General ought not to have passed the order by himself and should have only forwarded his report to the Standing Committee and which in turn should have exercised its powers after due consultation with the Union Public service Commission. Questioning the correctness of the said order, the Director General of E.S.I. Corporation has preferred the above writ petition.

5. We have heard the arguments advanced by the learned counsel for the petitioners as well as the first respondent.

6. Admittedly the first respondent was issued with the charge memo on 4.10.1993 and on the date of his retirement, i.e., on 28.2.1994, the Disciplinary Proceedings were pending and the said proceedings concluded only on 17.4.1995. The question for consideration is whether the petitioners have followed the proper procedure. Or in other words, the question is whether the Director General is competent to impose punishment having found that the first respondent was guilty of certain charges.

7. Section 17 of the Employees State Insurance Act, 1948 (hereinafter referred to as 'Act') empowers the Corporation to employ staffs and servants as may be nece