Central Administrative Tribunal - Ahmedabad
Arvind T Mahyavanshi vs Central Board Of Excise & Custom on 10 April, 2026
:1: OA No.120/258/2017
CENTRAL ADMINISTRATIVE TRIBUNAL
AHMEDABAD BENCH
O.A. No.258/2017 with MA No.238/2017
CORAM:
Hon'ble Shri Jayesh V Bhairavia, Member (J)
Hon'ble Dr. Hukum Singh Meena, Member (A)
Reserved on : 23.12.2025
Pronounced on: 04.2026
Arvind T. Mahyavanshi
Aged : 49 years (DOB:06.06.1967)
Son of Shri Thakorbhai G. Mahyavanshi
Ahmedabad
Presently serving as Superintendent, Central Excise,
Customs & Service Tax,
Vadodara, Audit-1I, Surat
& Presently residing at No.37,
Parijatnagar Society
Near Shishukunj School,
Jahangirpura,
Surat- 395 005.(Gujarat)
...Applicant
(By Advocate: Mr.M.S.Rao)
Versus
1. Union of India
(To be represented through
its Secretary to the GOI
Department of Revenue,
Ministry of Finance
Government of India,
North Block,
New Delhi - 110 001.)
2. Central Board of Excise & Customs
(Through its Chairman, CBEC,
Department of Revenue,
Ministry of Finance,
Government of India
North Block,
New Delhi - 110 001.
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3. The Director General of Vigilance
Customs & Central Excise
2nd & 3rd Floor, Hotel Samrat
Kautilya Marg,
Chanakyapuri, New Delhi - 110 021.
4. The Commissioner of Central Excise
& Customs Surat-I
O/o. The Commissioner of
Central Excise & Customs,
Surat-I
New Central Excise Building,
Opp. Gandhi Baug, Chowk Bazaar
Surat -395 001.
5. The Commissioner of Central Excise,
Customs & Service Tax, Surat- II
O/o. The Commissioner of Central Excise,
Customs & Service Tax, Surat-II
2nd Floor, New Central Excise Building,
Opp. Gandhi Baug, Chowk Bazaar
Surat -395 001.
6. The Commissioner of Central Excise,
Customs & ServiceTax,
Vadodara Audit-II (Surat)
3rd & 4th Floor, Magnnus Plaza
Beside Atlanta Shopping Centre
Althan- Bhimrad Canal Road,
Althan. Surat- 395 017.
7. The Chief Commissioner,
Central Excise, Customs &
Service Tax, Vadodara
O/o. The Chief Commissioner,
Vadodara Zone
2nd Floor, Central Excise Building,
Race Course Circle
Vadodara -390 007.
....Respondents
(By Advocate : Ms.R.R. Patel)
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ORDER
Per: Hon'ble Shri Jayesh V Bhairavia, Member (J)
MA No.238/2017
Upon consideration of the grounds set forth in MA No.238/2017 seeking condonation of delay in filing the accompanying Original Application, and having regard to the reasons stated therein, this Tribunal is satisfied that sufficient cause has been shown for the delay. Accordingly, MA No.238/2017 is allowed, and the delay in filing the captioned Original Application stands condoned.
OA No.258/2017The applicant has filed the present OA under Section 19 of the Administrative Tribunals Act, 1985 seeking the following reliefs: -
"(A) Your Lordships may be graciously call upon the official respondents herein to place before this Hon 'ble Tribunal the entire original case filels, internal correspondence, etc. giving rise to the issuance of the impugned documents at Annexure A/I to Annexure A/9 hereto;
(B) Upon perusal of the said original files, notings, files internal correspondence etc. in conjunction with the pleadings contained in the Memo of this OA, your Lordship may be graciously pleased to quash and set aside (i) the impugned Charge Memorandum bearing FNo.ll/39(Vig)/ 15/2006 dated 04.04.2008 at Annexure A/l hereto; (ii) ADDENDUM to the aforesaid Charge Memorandum bearing FNo.IIV39(VIG/I5/2006 dated 10.06.2014 at Annexure A/2 hereto, (iii) Inquiry Officer 's Report bearing FNo.Il/39(Vig)/15/2006 dated 31.03.2015 at Annexure A/3 hereto in so far as it seeks to hold the Article of Charge No. l as partially proved, (iv) Disagreement Notice bearing FNo.ll/39(Vig)/15/2006 dated 16.04.2015 at Annexure A/4 hereto (v) Communication bearing No.lI/39(Vig)/15/ 2006/116 dated 09.06.2015 at Annexure A/5 hereto issued by the Disciplinary Authority to DG (Vig), CBEC, New Delhi. (vi) DG(Vig.) CBEC, New Delhi's advice bearing No.V.680/201 l/Pt.II/9874 dated 27.08.2015 at Annexure A/6 hereto, (vii) Penalty Order being Order in Original No.II/39 (Vig)15/2006 dated 14.10.2015 at Annexure A/7 hereto passed by the Disciplinary Authority (viii) Order in Appeal bearing FNo.II/39(Con)70/CCO/2015 dated 15.02.2016 at Annexure A/8 hereto passed by the Appellate Authority and (ix) Revisional Authority's Order bearing F No.C-16012/07/2016-AdV/406 dated 19/20.01.2017 at Annexure A/9 hereto.
(C) Issue appropriate directions to the official respondents herein, in the nature of writ of certiorari to forthwith restore the pay of the applicant herein as it was obtaining prior to the passing of the 2026.04.10 P ANUKUMA 17:26:58+05'30' :4: OA No.120/258/2017 impugned order of penalty dated 14.10.2015 with all consequential benefits accruing to the applicants in consequence of the quashing and setting aside of the impugned documents at Annexure A/1 to Annexure A/9 hereto;
(D) Issue further appropriate direction to the official respondents herein as a consequence of the grant of the aforesaid reliefs, to forthwith regularize the applicant's suspension period between 03.12.2004 and 08.08.2005;
(E) impose on the respondents herein such exemplary cost as may be deemed fit and appropriate by this Hon'ble Tribunal in the interest of justice;
(F) grant such other and further relief/s as may be deemed fit and proper in the peculiar facts and circumstances of the present case."
2. The brief facts of the case is as under: -
2.1 The applicant had joined the services of the Department of Central Excise & Customs as a direct recruit Inspector at Vadodara Commissionerate on 28.04.1994. At the relevant point of time, while serving as Inspector in Division-IV of Surat-1 Commissionerate between February 2003 and June 2004, the applicant, being the only Inspector in the entire Division-IV, had been given the additional charge of Range-1V and Range II for some time.
Subsequently, the applicant came to be granted promotion to the post of Superintendent on 25.06.2004 retrospectively from 23.09.2002, while serving in Division-IV of Surat-1 Commissionerate. By way of his promotion, the applicant was transferred and posted to Surat-I1 Commissionerate. Thereafter, the applicant came to be placed under suspension on 03.12.2004 and the said suspension came to be revoked on 09.08.2005.
2.2 Thereafter, on 04.04.2008, the applicant herein was issued major penalty charge sheet being Charge Memorandum dated 04.04.2008 for his alleged misconduct during the period of his service as Inspector of Central Excise, Division-IV of Surat-1 Commissionerate. Upon his receipt of the aforesaid Charge Memorandum dated 04.04.2008, the applicant had submitted a representation dated 17.04.2008 (Annexure A/10 refer) to the Commissioner, Central Excise & Customs, Surat-1, wherein the applicant herein, apart from denying the charges levelled 2026.04.10 P ANUKUMA 17:26:58+05'30' :5: OA No.120/258/2017 against him, had requested the said authority to kindly grant 60 days' time to him to submit his Written Statement of Defence. Thereafter, the applicant vide his representation dated 26.06.2008 (Annexure- A/l1 refer), requested the aforesaid authority to kindly furnish to him the certified photo copies of the department's relied upon to facilitate his submission of Written Statement of Defence. Instead of furnishing the certified photo copies of the said relied upon documents, the respondents nominating Inquiry Authority as well as the Presenting Officer.
2.3 There was no progress at all in the aforesaid departmental enquiry proceedings and after lapse of six months time, new Inquiry Officer was nominated and conducted preliminary hearing on 27.01.2010 and regular hearing commenced from 15.12.2010. The said regular hearing was concluded on 12.01.2011. The applicant submitted detailed representation dated 14.02.2011 (Annexure A/15 refer). 2.4 The applicant submits that even though enquiry was concluded on 15.12.2010, the Presenting Officer had submitted his brief to IO only on 21.06.2012. In response to said PO's brief, the applicant submitted his defence brief on 22.04.2013 (Annexure A/16 refer). 2.5 Learned counsel for the applicant further submitted that after a lapse of more than a year, the Disciplinary Authority taking undue advantage of the pendency of the disciplinary enquiry proceedings which stood concluded on 15.12.2010, came out with an Addendum to the Charge Memorandum dated 04.04.2008, vide Memorandum bearing F.No.II/39/(Vig.y1 5/2006/140 dated 10.06.2014, whereby the Disciplinary Authority had added a new Article of Charge No. IX and accordingly amended the Statement of Imputation of the Charges in Annexure-11 to the Original Charge Memorandum dated 04.04.2008. On his receipt of the aforesaid Addendum dated 10.06.2014, the applicant herein had submitted his representation to the Inquiry Officer on 07.10.2014 (Annexure A/18 refer) inter alia questioning the propriety, legality and the validity of the Disciplinary Authority's to issue such an Addendum at that stage, involving a delay of more 2026.04.10 P ANUKUMA 17:26:58+05'30' :6: OA No.120/258/2017 than 6 years, and requested the authorities for immediately withdrawal of the said Addendum in the interest of justice. 2.6 It is submitted that the new charge levelled against the applicant by way of Addendum dated 10.06.2014, the Inquiry Officer had held a hearing on 07.10.2014 and the applicant had submitted his additional defence brief dated 03.11.2014 (Annexure A/19 refer) to the Inquiry Officer in pursuance of his receipt of the P.O.'s brief dated 25.10.2014.
2.7 Further, it appears that the Inquiry Officer had submitted his report to the Disciplinary Authority on 31.03.2015 wherein the Inquiry Officer had held that charge levelled in the Article of Charge No. l is 'partially proved' whereas charges levelled in the Articles of Charges Nos.II to IX are not 'proved'. On receipt of the aforesaid Inquiry Report, the Disciplinary Authority had issued a Memorandum of Disagreement dated 16.04.2015 to the applicant wherein the Disciplinary Authority has disagreed with the findings & conclusions of the Inquiry Officer in his report.
2.8 It is submitted that immediately upon his receipt of the aforesaid Memorandum of Disagreement alongwith the Inquiry report, the applicant had submitted his detailed representation dated 21.05.2015 (Annexure A/20 refer) to the Disciplinary Authority. Thereafter, the Disciplinary Authority had referred the applicant's case to the Directorate General of Vigilance, CBE&C, New Delhi vide his letter dated 09.06.2015, for its second stage advice on the proposal of the Disciplinary Authority to impose major penalty on the applicant. The DG (Vig.) vide its communication dated 27.08.2015, concurring with the recommendations of the Disciplinary Authority had advised the imposition of major penalty on the applicant. Thus, the Disciplinary Authority also forwarded a copy of the communication dated 09.06.2015 and its response received vide communication dated 27.08.2015 to the applicant to submit detailed representation, if any. The applicant submitted his representation dated 18.09.2015 (Annexure A/22 refer) to the Disciplinary Authority requesting the 2026.04.10 P ANUKUMA 17:26:58+05'30' :7: OA No.120/258/2017 said authority to kindly exonerate him from the charges contained in the Articles of Charge Nos.I, IV & 1X.
2.9 Learned counsel for the applicant further submits that the Disciplinary Authority vide its Order bearing F.No.II/39(Vig/15/2006 dated 14.10.2015 imposed the penalty of "reduction to a lower stage in the current pay scale of the applicant herein by three stages for a period of one year w.e.f. 1.10.2015 without cumulative effect."
Being aggrieved by the aforesaid order of penalty dated 14.10.2015, the applicant had preferred an appeal dated 23.1 1.2015 (Annexure A/23 refer) to the Appellate Authority praying for the setting aside of the aforesaid order of penalty and for his exoneration from the charges levelled against him. In response to it, the Appellate Authority called the applicant for personal hearing on 21.12.2015 and submitted his representation dated 21.12.2015 (Annexure A/24 refer).
It is submitted that the Appellate Authority vide his Order dated 15.02.2016 was pleased to modify the penalty imposed earlier by two stages for a period of six months only. Being aggrieved by the Appellate Authority order dated 15.02.2016, the applicant herein has preferred a Revision Application dated 04.04.2016 (Annexure A/25 refer) to the President under the relevant rules envisaged in CCS (CCA) Rules, 1965.
2.10 The applicant received communication bearing F.No.11/39(Vig)/15/2006 dated 13.02.2017 (Annexure A/26 refer) from the office of the Commissioner of Central Excise, Customs & Services, Vadodara Audit-II, Surat, alongwith a copy of the Order No.03/2017 dated 19/20.01.2017 issued by the Under Secretary to the Government of India, CBE&C, Department of Revenue, Ministry of Finance, New Delhi, purportedly by Order and in the name of the President of India, where under the applicant's aforesaid Revision Application dated 04.04.2016 came to be rejected by the Revisional Authority. Hence, this OA.
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3. Pursuant to notice issued by this Tribunal, the respondents have filed their reply opposing the claim of the applicant. The applicant has also filed rejoinder refuting the contentions of the reply filed by the respondents.
4. During the course of hearing, learned counsel for the applicant submitted that the entire departmental disciplinary enquiry initiated against the applicant with the issuance of the impugned Charge Memorandum dated 04.04.2008 culminating in the passing of the Order dated 19/20.01.2017 by the Revisional Authority viz. the President of India is beset with the following serious incurable illegalities, irregularities & infirmities thereby vitiating the entire enquiry and the consequential orders passed by the Disciplinary Authority, Appellate Authority and the Revisional Authority as under:-
4.1 Firstly, there is an inordinate delay in issuance of the impugned Charge Memorandum dated 04.04.2008 with regard to certain alleged misconduct pertaining to the year 2003-04. As a matter of fact, the delayed initiation of the departmental disciplinary enquiry after a lapse of more than 4 years has caused serious prejudice to the applicant herein since he could not effectively defend his case before the IO.
4.2 Secondly, even after the initiation of the aforesaid departmental disciplinary enquiry on 04.04.2008, the Enquiry Officer nominated on 31.07.2009 did not commence the regular inquiry proceedings for more than a year till 15.12.2010 and thereafter, the IO having concluded the inquiry on 12.01.2011 and having received the defence brief on 12.01.2011 and subsequently another defence brief 15.06.2012 did not proceed to submit his IO report for a long period of time involving about more than 3 years for the reasons best known to him. Because of the aforesaid failure on the part of the IO to submit his IO report to the Disciplinary Authority within the time stipulated by the CVC in its instructions/guidelines issued to the various Departments of Govt. of India, an opportunity was given to the 2026.04.10 P ANUKUMA 17:26:58+05'30' :9: OA No.120/258/2017 Disciplinary Authority to introduce on 10.06.2014 a new article of charge to the Charge Memorandum dated 04.04.2008, thereby causing serious prejudice to the applicant.
4.3 Thirdly, without giving an opportunity to the applicant to submit his written statement of defence, with regard to the newly added Article of Charge No.lX, the Inquiry Officer had proceeded to go ahead with the holding of the inquiry with regard to the aforesaid newly added Article of Charge No.IX in the proceedings which the Inquiry Officer had already concluded more than 3 years ago on 12.01.2016. Thus, actions resorted to by the Disciplinary Authority and also by the Inquiry Officer is nothing but the flagrant violations of the statutory requirements contained in Rule 14 of the CCS (CCA) Rules, 1965.
It is submitted that the allegations contained in the Article of Charge No.I in the impugned Charge Memorandum dated 04.04.2008 wherein it is stated that the applicant had assisted in processing the alleged fraudulent rebate claims based on alleged forged export documents in a routine manner and out of turn, even though according to the Disciplinary Authority, the said documents, prima facie, reveals gross anomalies and the applicant herein had failed in his primary as well as in his supervisory duties failed to maintain absolute integrity, exhibit lack of devotion to duty and acted in a manner unbecoming of a Government servant inasmuch as the applicant had not taken steps as expected as Inspector to scrutinize the rebate claims before putting up the same to the Deputy/Assistant Commissioner for sanction. 4.4 In response to it, it is submitted that the said Article is utterly Vague as to what is routine and what is special. Firstly, it is to be noted that at the relevant point of time the year 2002-03, the applicant was not holding the post of the Superintendent. He was merely an Inspector and his immediate superior is the Superintendent and his role as an Inspector was only process the file of the rebate claims and get the claim verified from the field formation for procedure and revenue aspects and later on it was sent for verification report and rebate 2026.04.10 P ANUKUMA 17:26:58+05'30' :10: OA No.120/258/2017 claims papers to the sanctioning authority through the Superintendent (Rebate Charge). The said Article No.I is more over totally silent and wholly presumptive in nature on the ground that if the applicant had scrutinized the claims and supporting documents properly, the fraud could have been detected without loss of revenue to the Govt. While the Inquiry Officer had inter alia observed that there were no alert circulars/instructions from any quarter including the CBEC for the scrutiny of the shipping bills and the Central Excise Officers are not trained with regard to the customs documents/procedures followed at the Port nor was there any mechanism in place to verify the genuineness of the shipping bills, the Disciplinary Authority has proceeded to hold the said Article of Charge No.I, as wholly proved, placing reliance on the self-attested copy of the shipping bills and other export documents submitted the exporters/claimants. It is submitted that the principle of "preponderance of probabilities" cannot be stretched too far in regard to this article of charge. Here, it is significant to note that once the claims were duly verified for export goods duty paid character and the Triplicate ARE-1 issued by the Range, there was hardly chance or scope that the Divisional Officer would raise a doubt going by the fact that as per the practice, the applicant had put the verification report to his higher officer. At the cost of repetition, the applicant begs to reiterate that he was satisfied with the content of the rebate claim files containing precisely the claim papers and verification report of the JRO and also the Form- R/Form-C. There is also absolutely nothing on record to prove that the applicant had not made efforts to verify the veracity of the claims and the documents submitted by them within the duty domain assigned to him. The applicant's reliance on the CBEC's Circular No.703/19/203- CX dated 25.03.2003 was not duly appreciated by the respondent authorities even though the same is part of the enquiry documents placed before the Inquiry Officer. Similarly, neither the Inquiry Officer nor the Disciplinary Authority nor the Appellate Authority nor the Revisional Authority has taken into account the instructions 2026.04.10 P ANUKUMA 17:26:58+05'30' :11: OA No.120/258/2017 contained in the Trade Notice No.54/2003, Surat, dated 25.06.2003 issued by the Commissioner, Surat-I even though, the applicant in his defence before the respondent authorities had taken a stand that going by the instructions contained in para (3) of the aforesaid Trade Notice No.54/2003 dated 25.06.2003, the applicant cannot be said to have committed any misconduct in the present case. Therefore, the observations and the conclusions of the Inquiry Officer to the effect that the applicant has lo check the authenticity of the Claimants who were given chaque to the wave of Rs.30 lakhs is totally perverse and contrary to the documents on record and ought to have been rejected by the Disciplinary Authority, Appellate Authority and the Revisional Authority.
4.5 With regard the allegations contained in the Article of Charge No.IV in the impugned Charge Memorandum dated 04.04.2008, it is submitted that the applicant had failed to notice the glaring anomalies in the export documents in question. It is submitted that while the Inquiry Officer had held the said Article of Charge No.II as not proved, the Disciplinary Authority in his Disagreement Note had held the same to be proved.
4.6 It is further submitted that the in regard to the Disciplinary Authority's disagreement in relation to this Article of charge No.IV levelled against the applicant is the fact that even though such a similar article of charge was issued against the Range Superintendent, Range Inspector and the Divisional Superintendent and the said Inquiry Officer has held that the said article of charge has not been proved. No such Disagreement Note has been issued to any of these co- delinquents by their respective Disciplinary Authority. This clearly demonstrates beyond any doubt the totally biased & discriminatory approach of the respondent authority against the applicant, thereby violating the applicant's Fundamental rights guaranteed by the Article 14 and of the Constitution of India.
4.7 Further, the allegations contained in the Article of Charge No.IX in the impugned Charge Memorandum dated 04.04.2008 is concerned, it 2026.04.10 P ANUKUMA 17:26:58+05'30' :12: OA No.120/258/2017 is submitted that the said newly added article in the year 2014 after the issuance of the original charge sheet way back on 04.04.2008 is ex- facie, null & void ab initio without any semblance of explanation forthcoming from the Disciplinary Authority for the delay in adding the same as an additional charge being Article of Change No.IX considering the fact that way back in December, 2008, the applicant's statement under Section 14 of the Central Excise Act, 1944 came to be recorded on 06.12.2003 by the Assistant Commissioner (Preventive) Central Excise & Customs, Surat-1, during the applicant was shown a total 32 number of files related to the firm in question and 17 out of the aforesaid 32 files came to be arrayed as relied upon documents in the present departmental enquiry against the applicant. Thus, the Disciplinary Authority owes an explanation to this Tribunal as to why and how the remaining 18 files (referred to in the Exhibit D to the applicant's reply dated 03.11.2014) were not included in 200s itself. Even though the Inquiry Officer has rightly held the said newly added Article of Charge No.IX as not proved, yet the Disciplinary Authority in malicious exercise of his powers as the Disciplinary Authority has disagreed with the Inquiry Officer's findings & conclusions in this behalf and proceeded to hold the said charge as proved. This alone clearly demonstrates the prejudiced mind on the part of the Disciplinary Authority. The Disciplinary Authority has failed to appreciate that at that relevant point of time in 2002-03, the applicant was an Inspector at the Division Level and not a Superintendent and that being so the aforesaid allegations ought to have been directed against the JRO/ Range Inspector/Rebate Sanctioning Authority. Surprisingly, the aforesaid allegation levelled by way of an addendum against the applicant was never levelled against any of the other co- accused. It is to be noted here that at that point of time neither the Range Officers nor the Divisional Superintendent nor even the Assistant Commissioner has found out the so called discrepancy of stamp as now pointed out by the applicant's Disciplinary Authority by means of an addendum after 6 years of the issuance of the Charge 2026.04.10 P ANUKUMA 17:26:58+05'30' :13: OA No.120/258/2017 Memorandum. It is an indisputable fact that the files in question were later on also subjected to post-audit and were cleared without any observation whatsoever. Further, at one point of time even an Officer of the rank of Additional Commissioner (Preventive) during his inspection of the Divisional Office could not point out the so called spelling mistake in the rubber stamp. For the best known to them, the respondent department and its respective Disciplinary Authority in respect of the aforesaid category of officers (including those associated with the audit) did not take any action against any of them. Another point of discrimination in the present case at the hands of the Disciplinary Authority and the authorities above him is the fact that the case of other Co-delinquents in favour of whom the very same Inquiry Officer had given a clean chit in regard to this particular aspect, yet for the reasons best known to them, the respective Disciplinary Authority have not issued any such disagreement memorandum to any of the said co-delinquents.
4.8 It is submitted that ever since his joining the services of the respondent - Department, his service record has been punctilious and impeccable. At any point of time during his entire service, the applicant has never contravened any of the provisions of the Conduct Rules as also the department's instructions issued with regard to the duties to be performed as an Inspector and Superintendent.
It is further submitted that at the most such an act or omission can be said to be "negligence" and that being so, the Hon'ble Supreme Court of India in its ruling rendered in the case of Dilip Kumar Rabhidas v/s. UOI on 18.06.2004 has held that "mere negligence does not constitute misconduct and no charge-memo can be issued in the absence of misconduct".
In view of the peculiar facts and circumstances of the case, the applicant prays to quash and set aside all the impugned documents at Annexure-A/1 to Annexure-A/9 and grant reliefs as sought for.
5. Per contra, on receipt of the notice issued by this Tribunal, the respondents have filed the reply and denied the claim of the applicant.
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Ms. R.R. Patel, learned counsel for the respondents by referring to the reply filed on behalf of the respondents mainly submitted as under: -
5.1 With regard to the contention of the applicant that there is delay in issuing the charge sheet is concerned, it is submitted that the said ground of the delay in issuing the charge sheet was not taken by the CO before the Disciplinary Authority and it is first time in this OA, the applicant have raised the issue which is as such not tenable in respect to the facts that the inquiry was initiated against more than 42 officers in the year 2004 about fake shipping bills and claims of rebate by the concerned units, after verification of various records and material evidences considerable time has been consumed and subsequently on receipt of the corroborative material and the evidence, the charge memorandum was issued in the year 2008, therefore, the grievance of the applicant about delay in initiation of departmental proceedings is not tenable.
5.2 It is submitted that there is no legal provision stating that Addendum cannot be issued subsequent to the issuance of the Charge Memorandum. The purpose of issuance of addendum arise because glaring negligence of the Charged Officer was noticed at the later stage and leaving the said discrepancy could led to jeopardized the departmental inquiry against the applicant. Moreover, no prejudice has been shown which cause to the applicant by issuing addendum at the later stage. Since the charges mentioned in Article No.IX, which has been levelled upon the applicant has been proved and the addendum had not been issued, there would be serious lapses in the inquiry.
5.3 Further, it is submitted that the applicant while working as Inspector of Central Excise, Division-IV of Surat-I Commissionerate, had processed 89 rebate claims allegedly based on forged export documents involving Rs. 2,66,61,692/-, even though the said documents prima facie revealed gross anomalies. He had failed in his duties, failed to maintain absolute integrity, exhibited lack of devotion to duty and acted in a manner unbecoming of a Government servant, 2026.04.10 P ANUKUMA 17:26:58+05'30' :15: OA No.120/258/2017 inasmuch as he had not taken steps as expected from him as Inspector of Central Excise Division to scrutinize rebate claims before putting up the same before the Superintendent (Refund/Rebate), which in turn were to be further submitted before the Assistant Commissioner for appropriate order. Since the applicant inter alia failed to notice certain points in the rebate claim files, for such failure, the Charge Memorandum issued to him which is just and proper. 5.4 In response to the Charge Memorandum dated 04.04.2008 the applicant vide his letter dated 26.06.2008 denied all the charges levelled against him in the said Charge Memorandum. Upon denial of the charges, the Disciplinary Authority decided to conduct an inquiry in terms of Rule 14 of CCS (CCA) Rules, 1965 against the applicant for which one Shri Nitesh Srivastava, Deputy Commissioner, Central Excise & Customs, Vapi Commissionerate and Shri A.K. Nautiyal, Superintendent, Central Excise & Customs, Daman Commissionerate were appointed as Inquiry Officer and Presenting Officer respectively vide order dated 22.12.2008. However, due to transfer of Shri Nitesh Srivastava, Shri S.K.H. Meshram, the Disciplinary Authority appointed the then Assistant Commissioner, Central Excise & Customs, Vapi was appointed as Inquiry Officer vide order dated 31.07.2009.
5.5 Subsequently, an Addendum bearing F. No. II/39(Vig.)15/2006 dated 10.06.2014 was issued to the applicant. There were in total nine Articles of Charge (eight in the original Charge Memorandum dated 04.04.2008 and one added by Addendum dated 10.06.2014). During the inquiry, the applicant was afforded full opportunity of hearing and the prescribed rules were strictly followed. Upon completion of the inquiry, the Inquiry Officer submitted his report dated 31.03.2015, wherein Article of Charge-I was held as partially proved and all other charges were held as not proved. The Disciplinary Authority tentatively disagreed with the findings of the Inquiry Officer with respect to Articles III, IV, VIII and IX, which had been held as "not proved". Accordingly, a Memorandum of Disagreement dated 2026.04.10 P ANUKUMA 17:26:58+05'30' :16: OA No.120/258/2017 16.04.2015 was issued and forwarded to the applicant along with the Inquiry Report for submission of his representation. The applicant vide letter dated 21.05.2015 submitted his representation denying all charges once again.
5.6 After considering the aforesaid representation and applying its mind, the Disciplinary Authority held that Charges IV and IX were proved and Charge I was already partially proved. The matter was thereafter referred for second stage advice to ADG (Vigilance), DGV, New Delhi vide letter dated 09.06.2015. The ADG (Vigilance), DGV, New Delhi vide letter dated 27.08.2015 advised imposition of major penalty. The said advice was communicated to the applicant vide Memorandum dated 15.09.2015 and the applicant submitted his representation dated 18.09.2015.
After considering the entire material on record, the Disciplinary Authority passed Order-in-Original No. 01/Commissioner/2015-16 dated 14.10.2015, whereby major penalty has been imposed upon the applicant, which reads as under:
I, therefore, in terms of Rule 11(v) of the CCS (CCA) Rules, 1965, as amended, order that there shall be a reduction to a lower stage in the current time scale of pay of Shri A.T. Mahyavanshi, Inspector (now Superintendent), Central Excise, Customs & Service Tax, Vadodara Audit-II (Surat) Commissionerate, by three stages from present pay in the time scale of pay of Rs. 9300-34800/- + Rs. 5400/- (Grade Pay) for a period of one year with effect from 01.10.2015 without cumulative effect. It is further ordered that Shri A.T. Mahyavanshi will not earn annual increments during the period of reduction and that on expiry of the period, the reduction shall not affect future increments.
5.7 It is stated that being aggrieved with the order passed by the DA, the applicant had preferred an appeal dated 23.11.2015 before the Appellate Authority i.e. Chief Commissioner, Central Excise, Customs & Service Tax, Vadodara Zone. The Appellate Authority by considering the grounds raised by the applicant in his appeal passed Order-in-Appeal No. 19/Chief Commr.-Vig/2015 dated 15.02.2016 reduced the penalty from reduction by three stages to reduction by two stages in the time scale of pay of Rs. 9300-34800/- + Rs. 5400/-
2026.04.10 P ANUKUMA 17:26:58+05'30' :17: OA No.120/258/2017 (Grade Pay) for a period of six months with effect from 01.10.2015. It is further directed that the applicant will not earn annual increments during the period of penalty.
Aggrieved by the Order-In-Appeal dated 15.02.2016 passed by the First Appellate Authority, the applicant had filed Revision Application in terms of Rule 29 of CCS (CCA) Rules, 1965., before the Hon'ble President of India, Submitted through - Ministry of State for Finance (Revenue), Department of Revenue, Central Board of Excise & Customs, North Block, New Delhi. The Revision Authority vide his Order No. 03/2017 dated 19/20.01.2017, rejected the Revision Petition filed by the applicant-Inspector (now Superintendent). Therefore, it is submitted that by following the principal of natural justice, the DA, the AA and the RA considered the case of the applicant and there is no lacuna in the decision making process. It is submitted that the IO in his report observed with respect to claim for rebate that "normally the role of Division Office to sent the particular rebate claim for detailed verification by range office and based on the verification report process the claim for sanction". With regard to the submission of applicant that there was no alert circular/instruction for scrutiny of the shipping bills and Central Excise officers are not trained with regard to custom documents/procedure followed at the Port nor there was any mechanism in place to verify the genuiness of the shipping bills and hence the Division/Range Superintendent/Inspector cannot be held accountable for failure to dictate the fabrication/forgery, is concerned, learned counsel for the respondents in this regard, submits that considering the frequency and quantity of rebate claim, there is misconduct of neglect in performance of the duties by the CO as an Inspector. The Officer has to satisfy himself that the claim is correct and proper. However, the CO did not remain alert and process the claim in thereby he remained negligent in his duty.
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5.8 The DA in his finding observed that as a responsible revenue officer, it was expected of the applicant that while verifying and processing the rebate claims, he remained very careful, but acted quite casually and he ought to have taken steps as prudent officer and should have suggested further steps in the file while putting the same before the Superintendent and higher officers for sanction of rebate claims. Therefore, it is submitted that DA has recorded cogent reasons for its finding that had the CO exhibited presence of mind while processing the rebate claim, anomalies as stated in the charge memorandum could have been easily detected and revenue loss could have been averted. It is submitted that the DA and the AA have assigned the reasons for their findings in respect to Charge No. IV & IX i.e., held to be proved against the applicant.
5.9 Since, the grounds raised by the applicant in the present OA, is as such dealt by the AA and the RA and no new grounds have been raised in the present sent OA, therefore, this Tribunal would not indulge into appreciating the evidences. Since, the charges I, IV and IX are partially proved against the applicant, therefore, it is not open for the applicant to interpret his "misconduct" as "negligence". It is submitted that even in cases of negligence charge memorandum can be issued and punishment followed to the same is proved. Therefore, the applicant is not entitled for the relief as prayed for in this OA.
6. Rejoinder has been filed by the applicant whereby he has rebutted the averments made by the respondents in their reply. The applicant submits that as per the statutory rules and the binding guidelines, whole inquiry has to be completed within two years from the incidence whereas in the present case, the department has issued charge memorandum after more than four years and addendum was issued after ten years from the incidences. Thus, the department has not followed CVC guidelines to complete the inquiry proceedings.
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Further, it is reiterated that it is not correct on the part of the respondents to state that even in the case of the negligence, the same can be treated as misconduct and charge memorandum can be issued as in the case of the applicant. In this regard, learned counsel relied upon the judgment rendered by the Hon'ble Supreme Court on 18.06.2004 in case of Dilip Kumar Rabhidas V/s. Union of India wherein it was held that "mere negligence does not constitute misconduct and no charge memo can be issued in the absence of misconduct". Therefore, learned counsel submits that the said dicta is applicable in the present case and impugned orders are thus required to be set aside.
Further, learned counsel for the applicant placed reliance on the judgment passed by Division Bench of the Hon'ble High Court of Bombay in Writ Petition No. 12403 of 2018 (Satyendra Singh Gurjar Vs Union of India & Others) wherein by referring the law laid down by the Hon'ble Apex Court in the case of Inspector Prem Chand Vs Govt. of NCT, Delhi & Ors. reported in (2007) 4 SCC 566 and State of Punjab & Ors. Vs Ram Singh, Ex- Constable (1992) 4 SCC 54, held that "a negligence simplicitor also would not mean to a misconduct".
Further, it has been held in the said judgment that "the Act or omission, which is tainted with ill motive, moral turpitude and improper or unlawful behavior with an element of willfulness therein or any flagrant violation of an express stipulation, squarely fall within mischief of misconduct. Negligence, lapses in performance of duty errors of judgments or innocent mistake on the other hand, stand at the other hand of the spectrum and generally do not constitute misconduct."
Therefore, learned counsel for the applicant, vehemently argued that in the present case, undisputedly, there is no allegation of malpractice or ill motive against the applicant and the allegation about 2026.04.10 P ANUKUMA 17:26:58+05'30' :20: OA No.120/258/2017 alleged negligence on the part of the applicant or act of error of judgment, therefore, the same cannot be said to be "misconduct". Therefore, the impugned orders are not tenable in the eyes of law.
6.1 Learned counsel for the applicant would submit that in the present case, the applicant was initially visited with penalty of reduction to a lower stage in the current time scale of pay by three stage for a period of one year without cumulative effect which stood modified by the Appellate Authority to reduction of pay by two stages in the current time scale of pay for a period of six months without cumulative effect. However, the applicant in comparison to the punishment "Censure" has been awarded to one Shri Amrutlal Chottubhai Patel, Superintendent against whom the charges were levelled in respect to the same transactions and his role was that of Superintendent which is superior in rank to the post of Inspector which was held by the applicant herein. Thus, the applicant came to be met out with a higher punishment which is discriminatory in nature, hence, the impugned orders are bad in law. In this regard, learned counsel by referring the punishment order dated 10.02.2010 passed by the Disciplinary Authority in the case of said Superintendent Mr. Patel would argue that as a matter of fact having regard to the observation made by the Disciplinary Authority in the said order, the applicant herein should have been completely exonerated since he is not the final authority to pass an order.
7. Heard the learned counsel for the parties at length and perused the documents on record.
8. It emerges from the records that the applicant joined the Department of Central Excise & Customs as Inspector on 28.04.1994 and was promoted as Superintendent on 25.06.2004 (retrospectively w.e.f. 23.09.2002). The alleged misconduct pertains to the period 2003- 2004 when the applicant was functioning as Inspector in Division-IV of Surat-I Commissionerate. A major penalty Charge Memorandum 2026.04.10 P ANUKUMA 17:26:58+05'30' :21: OA No.120/258/2017 dated 04.04.2008 was issued to the applicant after a gap of about four years from the alleged incident.
On denial of all the alleged charges [i.e. charges (i) to (ix)] by the applicant, departmental inquiry under Rule 14 of CCS (CCA) Rules, 1965 was initiated, and on conclusion of the said inquiry the Inquiry Officer submitted his inquiry report dated 31.03.2015 holding Article-I as partially proved and remaining charges (i.e. charges no. II to IX) as not proved.
Thereafter, an Addendum dated 10.06.2014 introducing Article of Charge No. IX was issued after nearly six years of issuance of the original charge memorandum and even after conclusion of substantial part of inquiry proceedings. On receipt of inquiry report, the Disciplinary Authority disagreed with the findings of the Inquiry Officer in respect of certain charges and, after following the procedure for giving due opportunity to the CO, the DA, vide order dated 14.10.2015 imposed penalty upon the applicant of reduction in the pay of the applicant to a lower stage in the current pay scale of the applicant herein by three stages for a period of one year w.e.f. 1.10.2015 without cumulative effect. However, as noted herein above, on appeal preferred by the applicant, the Appellate Authority modified the penalty vide order dated 15.02.2016 modified the penalty imposed by the Disciplinary Authority to that of reduction in the pay of the applicant by two stages for a period of six months only. Thereafter revision petition preferred by the applicant was rejected by the Revisional Authority vide order dated 19/20.01.2017. The present Original Application has been filed challenging the entire disciplinary proceedings and consequential orders.
9. Having regard to rival submissions of the parties and factual matrix of the case, the following issues arise for adjudication in this case:
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a) Whether the delay in initiation and conclusion of disciplinary proceedings vitiates the entire inquiry?
b) Whether issuance of Addendum dated 10.06.2014 introducing a new charge at a belated stage is legally sustainable?
c) Whether the findings of guilt recorded by the Disciplinary Authority, in disagreement with the Inquiry Officer, suffer from perversity or violation of principles of natural justice?
d) Whether the alleged acts of the applicant constitute "misconduct" or mere negligence not warranting disciplinary action?
10. With regard to Issue (a) as framed in para 9 above, namely, whether the delay in initiation and conclusion of disciplinary proceedings vitiates the entire inquiry, we observe that it is not in dispute that the alleged misconduct pertains to the period 2003-2004, whereas the Charge Memorandum came to be issued only on 04.04.2008. Further, though the inquiry proceedings were substantially concluded during 2010-2011, the same culminated in the final order only in the year 2015. Thus, there is not only delay in initiation but also considerable delay in conclusion of the disciplinary proceedings 10.1 The Hon'ble Supreme Court in P.V. Mahadevan v. MD, Tamil Nadu Housing Board reported in (2005 6 SCC 636 held that inordinate and unexplained delay in initiating disciplinary proceedings causes serious prejudice to the delinquent employee and vitiates the proceedings. The relevant extract of the aforesaid judgment is reproduced as under:-
"8. Our attention was also drawn to the counter-affidavit filed by the respondent Board in this appeal. Though some explanation was given, the explanation offered is not at all convincing. It is stated in the counter-affidavit for the first time that the irregularity during the year 1990, for which disciplinary action had been initiated against the appellant in the year 2000, came to light in the audit report for the second half of 1994-95.
9. Sections 118 and 119 of the Tamil Nadu State Housing Board Act, 1961 (Tamil Nadu Act 17 of 1961) read thus:
2026.04.10 P ANUKUMA 17:26:58+05'30' :23: OA No.120/258/2017 "118. At the end of every year, the Board shall submit to the Government an abstract of the accounts of its receipts and expenditure for such year.
119. The accounts of the Board shall be examined and audited once in every year by such auditor as the Government may appoint in this behalf."
10. Section 118 specifically provides for submission of the abstracts of the accounts at the end of every year and Section 119 relates to annual audit of accounts. These two statutory provisions have not been complied with at all. In the instant case the transaction took place in the year 1990. The expenditure ought to have been considered in the accounts of the succeeding year. In the instant case the audit report was ultimately released in 1994-95. The explanation offered for the delay in finalising the audit account cannot stand scrutiny in view of the above two provisions of the Tamil Nadu Act 17 of 1961. It is now stated that the appellant has retired from service. There is also no acceptable explanation on the side of the respondent explaining the inordinate delay in initiating departmental disciplinary proceedings. Mr R. Venkataramani, learned Senior Counsel is appearing for the respondent. His submission that the period from the date of commission of the irregularities by the appellant to the date on which it came to the knowledge of the Housing Board cannot be reckoned for the purpose of ascertaining whether there was any delay on the part of the Board in initiating disciplinary proceedings against the appellant has no merit and force. The stand now taken by the respondent in this Court in the counter-affidavit is not convincing and is only an afterthought to give some explanation for the delay."
10.2 The aforesaid judgment in the case of P.V. Mahadevani (supra) was recently considered by the Hon'ble Supreme Court in the case of Amresh Shrivastava vs. State of Madhya Pradesh and Others, reported in 2025 SCC OnLine SC 693, the relevant extract thereof reads as under:-
17. As to the second question, regarding whether delay is a ground for stopping the departmental proceedings at the stage of the chargesheet itself, suffice it to say that this varies from case to case.
However, in the instant case where there is unexplained inordinate delay in initiating departmental proceedings despite the alleged misconduct being within the knowledge of the department, but still no departmental proceedings are initiated, the answer must go in favour of the employee. However, there may be cases where the department was not even aware of such irregularities or the misconduct, which is of such a nature that it is indicative, based on material considerations of factors other than merit, such as extraneous influences and gratifications. In such cases, such a delay, by itself would not be a valid ground to scuttle the initiation of the process of departmental proceedings.
18. Reference in this regard can be made to the decision of this court in State of Madhya Pradesh v. Bani Singh4, wherein the court 2026.04.10 P ANUKUMA 17:26:58+05'30' :24: OA No.120/258/2017 noted that there was no reason to interfere with the quashing as the disciplinary proceedings were initiated after 12 years of delay. A reference should also be made to the decision of this Court inP.V. Mahadevan v. MD, T.N. Housing Board5, where it has been reiterated that continuing the departmental proceedings after an undue delay would be unjust, causing unnecessary mental distress and damaging the reputation of the employee for the mistakes committed by the department in initiating disciplinary proceedings.
19. In view of the above, the present appeal is allowed and the Impugned Judgment dated 30.04.2019 passed by the Division Bench of the High Court is set aside and consequently the order dated 26.04.2017 passed by the learned Single Judge stands restored."
10.3 Further, in Union of India v. Udai Bhan Singh, reported in (2021) 11 SCC 393, the Hon'ble Supreme Court has held that while no straight jacket formula can be laid down, delay becomes fatal where it results in prejudice to the employee or indicates condonation of the alleged lapse. The Court emphasized that each case must be tested on its own facts, particularly, keeping in view whether the delay has impaired the defence of the delinquent. The relevant extract of the same is reproduced as under:-
"18. Now, it is well-settled that the aspect of delay has to be dealt with on the facts of each case. In the decision of this Court in State of M.P. v. Bani Singh [State of M.P. v. Bani Singh, 1990 Supp SCC 738 : 1991 SCC (L&S) 638] , the irregularities, which were the subject-matter of an inquiry related to 1975-1977. Hence, this Court held that it was not reasonable that the Department had taken more than twelve years to initiate a disciplinary proceeding despite being aware of the irregularities. That was a case where there was an unexplained delay in the initiation of disciplinary proceedings. Subsequently, the position of law has been clarified by the decisions of this Court in State of Punjab v. Chaman Lal Goyal [State of Punjab v. Chaman Lal Goyal, (1995) 2 SCC 570 : 1995 SCC (L&S) 541] , State of A.P. v. N. Radhakishan [State of A.P. v. N. Radhakishan, (1998) 4 SCC 154 : 1998 SCC (L&S) 1044] and Forest Deptt. v. Abdur Rasul Chowdhury [Forest Deptt. v. Abdur Rasul Chowdhury, (2009) 7 SCC 305 : (2009) 2 SCC (L&S) 327] . In State of A.P. v. V. AppalaSwamy [State of A.P. v. V. Appala Swamy, (2007) 14 SCC 49 : (2009) 1 SCC (L&S) 440] , this Court after referring to the earlier decisions held thus : (V. Appala Swamy case [State of A.P. v. V. Appala Swamy, (2007) 14 SCC 49 :
(2009) 1 SCC (L&S) 440] , SCC p. 53, para 12) "12. ... So far as the question of delay in concluding the departmental proceedings as against a delinquent officer is concerned, in our opinion, no hard-and-fast rule can be laid down therefor. Each case must be determined on its own facts. The principles upon which a proceeding can be directed to be quashed on the ground of delay are:
2026.04.10 P ANUKUMA 17:26:58+05'30' :25: OA No.120/258/2017 (1) where by reason of the delay, the employer condoned the lapses on the part of the employee;
(2) where the delay caused prejudice to the employee.
Such a case of prejudice, however, is to be made out by the employee before the inquiry officer.
13. This aspect of the matter is now squarely covered by the decisions of this Court in Prohibition & Excise Deptt. v. L. Srinivasan [Prohibition & Excise Deptt. v. L. Srinivasan, (1996) 3 SCC 157 : 1996 SCC (L&S) 686] ; P.D. Agrawal v. SBI [P.D. Agrawal v. SBI, (2006) 8 SCC 776 : (2007) 1 SCC (L&S) 43] ; Registrar of Coop. Societies v. Sachindra Nath Pandey [Registrar of Coop.
Societies v. Sachindra Nath Pandey, (1995) 3 SCC 134 : 1995 SCC (L&S) 648] ."
10.4 Applying the aforesaid principles to the facts of the present case, it is evident that there is a delay of about four years in initiation of the disciplinary proceedings; and there is a delay of more than seven years in conclusion of the proceedings after issuance of the charge memorandum. The explanation offered by the respondents, namely, complexity of investigation and involvement of multiple agencies, may justify some delay in initiation, but does not satisfactorily explain the prolonged and unexplained delay during the course of the inquiry itself, particularly, after the proceedings had substantially concluded. In cases of this nature, involving scrutiny of documents and procedural verification, passage of such a long period inevitably results in fading of memory, non-availability of records, and serious handicap in mounting an effective defence. The prejudice caused to the applicant, therefore, cannot be said to be illusory but is real and substantial.
10.5 In view of the above discussion and in the light of the law laid down by the Hon'ble Supreme Court (supra), we are of the considered opinion that the inordinate and unexplained delay in initiation as well as conclusion of the disciplinary proceedings has vitiated the entire inquiry.
10.6 Accordingly, Issue No. a) is answered in favour of the applicant.
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11. With regard to Issue (b) as framed in para 9 above, namely, whether issuance of Addendum dated 10.06.2014 introducing a new charge at a belated stage is legally sustainable, it is evident from the record that the said Addendum introducing Article of Charge No. IX was issued after a lapse of about six years from the original charge memorandum and, significantly, after substantial completion of the inquiry proceedings.
11.1 It is not in dispute that by the time the Addendum was issued, the inquiry had already progressed substantially and the defence of the applicant had crystallized. The introduction of a fresh charge at such an advanced stage of the proceedings, therefore, assumes critical significance.
11.2 Though there is no absolute prohibition on issuance of an addendum or supplementary charge-sheet, it is well settled that such power must be exercised in a manner consistent with fairness, procedural propriety, and principles of natural justice, and must not result in prejudice to the delinquent employee.
11.3 In State of A.P. v. N. Radhakishan, reported in (1998) 4 SCC 154, the Hon'ble Supreme Court has clearly held that delay in disciplinary proceedings must be examined in the light of prejudice caused to the delinquent employee and that unexplained delay itself gives rise to a presumption of prejudice. The Court further emphasized that disciplinary proceedings must be conducted expeditiously and fairly, and that prolonged or belated actions without justification would vitiate the proceedings. The relevant extract of the said judgment is reproduced as under:-
"19. It is not possible to lay down any predetermined principles applicable to all cases and in all situations where there is delay in concluding the disciplinary proceedings. Whether on that ground the disciplinary proceedings are to be terminated each case has to be examined on the facts and circumstances in that case. The essence of the matter is that the court has to take into consideration all the relevant factors and to balance and weigh them to determine if it is 2026.04.10 P ANUKUMA 17:26:58+05'30' :27: OA No.120/258/2017 in the interest of clean and honest administration that the disciplinary proceedings should be allowed to terminate after delay particularly when the delay is abnormal and there is no explanation for the delay. The delinquent employee has a right that disciplinary proceedings against him are concluded expeditiously and he is not made to undergo mental agony and also monetary loss when these are unnecessarily prolonged without any fault on his part in delaying the proceedings. In considering whether the delay has vitiated the disciplinary proceedings the court has to consider the nature of charge, its complexity and on what account the delay has occurred. If the delay is unexplained prejudice to the delinquent employee is writ large on the face of it. It could also be seen as to how much the disciplinary authority is serious in pursuing the charges against its employee. It is the basic principle of administrative justice that an officer entrusted with a particular job has to perform his duties honestly, efficiently and in accordance with the rules. If he deviates from this path he is to suffer a penalty prescribed. Normally, disciplinary proceedings should be allowed to take their course as per relevant rules but then delay defeats justice. Delay causes prejudice to the charged officer unless it can be shown that he is to blame for the delay or when there is proper explanation for the delay in conducting the disciplinary proceedings. Ultimately, the court is to balance these two diverse considerations.
20. In the present case we find that without any reference to records merely on the report of the Director General, Anti- Corruption Bureau, charges were framed against the respondent and ten others, all in verbatim and without particularising the role played by each of the officers charged. There were four charges against the respondent. With three of them he was not concerned. He offered explanation regarding the fourth charge but the disciplinary authority did not examine the same nor did it choose to appoint any enquiry officer even assuming that action was validly being initiated under the 1991 Rules. There is no explanation whatsoever for delay in concluding the enquiry proceedings all these years. The case depended on records of the Department only and the Director General, Anti-Corruption Bureau had pointed out that no witnesses had been examined before he gave his report. The Enquiry Officers who had been appointed one after the other had just to examine the records to see if the alleged deviations and constructions were illegal and unauthorised and then as to who was responsible for condoning or approving the same against the bye- laws. It is nobody's case that the respondent at any stage tried to obstruct or delay the enquiry proceedings. The Tribunal rightly did not accept the explanations of the State as to why delay occurred. In fact there was hardly any explanation worth consideration. In the circumstances the Tribunal was justified in quashing the charge memo dated 31-7-1995 and directing the State to promote the respondent as per recommendation of the DPC ignoring memos 2026.04.10 P ANUKUMA 17:26:58+05'30' :28: OA No.120/258/2017 dated 27-10-1995 and 1-6-1996. The Tribunal rightly did not quash these two latter memos.
11.4 Applying the aforesaid principles to the facts of the present case, it is evident that the Addendum was issued after an inordinate delay of six years from the original charge memorandum. It was introduced after substantial completion of inquiry proceedings, thereby altering the scope of the inquiry at a belated stage. No satisfactory or plausible explanation has been furnished by the respondents for such delayed introduction of a new charge and the said action has caused manifest prejudice to the applicant, who was required to meet a new and substantive allegation after the inquiry had already progressed considerably. The belated introduction of Article of Charge No. IX, in effect, amounts to reopening and restructuring the disciplinary proceedings, which is impermissible in law, particularly when undertaken to fill lacunae or strengthen a weak case of the department. Such action strikes at the very root of fairness in disciplinary jurisprudence. Further, the timing and manner of issuance of the Addendum indicate lack of due diligence on the part of the Disciplinary Authority and lend credence to the contention of the applicant that the same was issued as an afterthought. The prejudice caused is not merely procedural but substantive, as it directly impacts the applicant's right to effectively defend himself.
11.5 In view of the foregoing analysis, and having regard to the law laid down by the Hon'ble Supreme Court, this Tribunal is of the considered opinion that the issuance of Addendum dated 10.06.2014 introducing Article of Charge No. IX at such a belated stage fails the test of fairness and procedural propriety and is legally unsustainable.
11.6 Accordingly, Issue No. b) is answered in favour of the applicant, holding that the impugned Addendum vitiates the disciplinary proceedings to that extent.
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12. With regard to issue c) as framed in para 9 above, namely, whether the findings of guilt recorded by the Disciplinary Authority, in disagreement with the Inquiry Officer, suffer from perversity or violation of principles of natural justice, it emerges from the record that the Inquiry Officer had exonerated the applicant from most of the article of charges. The Disciplinary Authority, however, disagreed and held certain charges as proved. Though the Disciplinary Authority is empowered to disagree, such disagreement must be based on cogent reasons, and supported by evidence on record, which is missing in this case.
12.1 In Union of India v. Ram Lakhan Sharma, reported in (2018) 7 SCC 670, the Hon'ble Apex Court elaborately noted as under:-
"25. Rules of natural justice have been recognised and developed as principles of administrative law. Natural justice has many facets. All its facets are steps to ensure justice and fair play. This Court in Suresh Koshy George v. University of Kerala [Suresh Koshy George v. University of Kerala, AIR 1969 SC 198] had occasion to consider the principles of natural justice in the context of a case where disciplinary action was taken against a student who was alleged to have adopted malpractice in the examination. In para 7 this Court held that the question whether the requirements of natural justice have been met by the procedure adopted in a given case must depend to a great extent on the facts and circumstances of the case in point, the constitution of the Tribunal and the rules under which it functions. The following was held in paras 7 and 8:
(AIR p. 201) "7. ... The rules of natural justice are not embodied rules. The question whether the requirements of natural justice have been met by the procedure adopted in a given case must depend to a great extent on the facts and circumstances of the case in point, the constitution of the Tribunal and the rules under which it functions.
8. In Russell v. Duke of Norfolk [Russell v. Duke of Norfolk, (1949) 1 All ER 109 (CA)] , Tucker, L.J. observed: (All ER p.
118 D-F) 'There are, in my view, no words which are of universal application to every kind of inquiry and every kind of domestic tribunal. The requirements of natural justice must depend on the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject-matter that is being dealt with, and so forth. Accordingly, I do not derive much assistance from the definitions of natural justice which have been from 2026.04.10 P ANUKUMA 17:26:58+05'30' :30: OA No.120/258/2017 time to time used, but, whatever standard is adopted, one essential is that the person concerned should have a reasonable opportunity of presenting his case.' "
26. A Constitution Bench of this Court has elaborately considered and explained the principles of natural justice in A.K. Kraipak v. Union of India [A.K. Kraipak v. Union of India, (1969) 2 SCC 262 : AIR 1970 SC 150] . This Court held that the aim of the rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. The concept of natural justice has undergone a great deal of change in recent years. Initially recognised as consisting of two principles, that is, no one shall be a judge in his own cause and no decision shall be given against a party without affording him a reasonable hearing, various other facets have been recognised. In para 20 the following has been held:
(SCC p. 272) "20. The aim of the rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. These rules can operate only in areas not covered by any law validly made. In other words they do not supplant the law of the land but supplement it. The concept of natural justice has undergone a great deal of change in recent years. In the past it was thought that it included just two rules, namely, (1) no one shall be a judge in his own case (nemo debet esse judex propria causa), and (2) no decision shall be given against a party without affording him a reasonable hearing (audi alteram partem). Very soon thereafter a third rule was envisaged and, that is, that quasi-judicial enquiries must be held in good faith, without bias and not arbitrarily or unreasonably. ..."
27. In State of U.P. v. Saroj Kumar Sinha [State of U.P. v. Saroj Kumar Sinha, (2010) 2 SCC 772 : (2010) 1 SCC (L&S) 675] , this Court had laid down that Enquiry Officer is a quasi-judicial authority, he has to act as an independent adjudicator and he is not a representative of the department/disciplinary authority/Government. In paras 28 and 30 the following has been held: (SCC p. 782) "28. An Enquiry Officer acting in a quasi-judicial authority is in the position of an independent adjudicator. He is not supposed to be a representative of the department/disciplinary authority/Government. His function is to examine the evidence presented by the Department, even in the absence of the delinquent official to see as to whether the unrebutted evidence is sufficient to hold that the charges are proved. In the present case the aforesaid procedure has not been observed. Since no oral evidence has been examined the documents have not been proved, and could not have been taken into consideration to conclude that the charges have been proved against the respondents.
***
30. When a departmental enquiry is conducted against the government servant it cannot be treated as a casual exercise.
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The enquiry proceedings also cannot be conducted with a closed mind. The Enquiry Officer has to be wholly unbiased. The rules of natural justice are required to be observed to ensure not only that justice is done but is manifestly seen to be done. The object of rules of natural justice is to ensure that a government servant is treated fairly in proceedings which may culminate in imposition of punishment including dismissal/removal from service."
28. When the statutory rule does not contemplate appointment of Presenting Officer whether non-appointment of Presenting Officer ipso facto vitiates the inquiry? We have noticed the statutory provision of Rule 27 which does not indicate that there is any statutory requirement of appointment of Presenting Officer in the disciplinary inquiry. It is thus clear that statutory provision does not mandate appointment of Presenting Officer. When the statutory provision does not require appointment of Presenting Officer whether there can be any circumstances where principles of natural justice can be held to be violated is the broad question which needs to be answered in this case. We have noticed above that the High Court found breach of principles of natural justice in Enquiry Officer acting as the prosecutor against the respondents. The Enquiry Officer who has to be independent and not representative of the disciplinary authority if starts acting in any other capacity and proceeds to act in a manner as if he is interested in eliciting evidence to punish an employee, the principle of bias comes into place.
29. M. Rama Jois, J. of the Karnataka High Court had occasion to consider the above aspect in Bharath Electronics Ltd. v. K. Kasi [Bharath Electronics Ltd. v. K. Kasi, 1986 SCC OnLine Kar 30 : ILR 1987 KAR 366] . In the above case the order of domestic inquiry was challenged before the Labour and Industrial Tribunal. The grounds taken were, that inquiry is vitiated since Presenting Officer was not appointed and further Enquiry Officer played the role of prosecutor. This Court held that there is no legal compulsion that Presenting Officer should be appointed but if the Enquiry Officer plays the role of Presenting Officer, the inquiry would be invalid. The following was held in paras 8 and 9: (SCC OnLine Kar) "8. One other ground on which the domestic inquiry was held invalid was that Presenting Officer was not appointed. This view of the Tribunal is also patently untenable. There is no legal compulsion that Presenting Officer should be appointed. Therefore, the mere fact that the Presenting Officer was not appointed is no ground to set aside the inquiry (see: Gopalakrishna Raju v. State of Karnataka [Gopalakrishna Raju v. State of Karnataka, 1980 SCC OnLine Kar 18 : ILR 1980 KAR 575] ). It is true that in the absence of Presenting Officer if the inquiring authority plays the role of the Presenting Officer, the inquiry would be invalid and this aspect arises out of the next point raised for the petitioner, which I shall consider immediately hereafter.
9. The third ground on which the Industrial Tribunal held that the domestic inquiry was invalid was that the Enquiry Officer had played the role of the Presenting Officer. The relevant part of the findings read:
2026.04.10 P ANUKUMA 17:26:58+05'30' :32: OA No.120/258/2017 'The learned counsel for the workman further contended that the questions put by the enquiry officer to the management's witnesses themselves suggest that he was biased and prejudiced against the workman. There has been no explanation as to why no Presenting Officer was appointed and as to why the enquiry officer took upon himself the burden of putting questions to the management's witnesses. The enquiry proceedings at Ext. A-6 disclose that after the cross- examination of the management's witnesses by the defence, the enquiry officer has further put certain questions by way of explanation, but from their nature an inference arises that they are directed to fill in the lacuna. The learned counsel for the management contended that the enquiry officer has followed the principles of natural justice and that the domestic enquiry is quite valid. I am of the view that the fact that the enquiry officer has himself taken up the role of the Presenting Officer for the management goes to the root of the matter and vitiates the enquiry.' As far as the position in law is concerned, it is common ground that if the inquiring authority plays the role of a prosecutor and cross-examines defence witnesses or puts leading questions to the prosecution witnesses clearly exposing a biased state of mind, the inquiry would be opposed to principles of natural justice. But the question for consideration in this case is: whether the Enquiry Officer did so? It is also settled law that an inquiring authority is entitled to put questions to the witnesses for clarification wherever it becomes necessary and so long the delinquent employee is permitted to cross-examine the witnesses after the inquiring authority questions the witnesses, the inquiry proceedings cannot be impeached as unfair. (See Mulchandani Electrical and Radio Industries Ltd. v. Workmen [Mulchandani Electrical and Radio Industries Ltd. v. Workmen, (1975) 4 SCC 731 : 1975 SCC (L&S) 429] .)"
30. This Court had occasion to observe in Workmen v. Lambabari Tea Estate [Workmen v. Lambabari Tea Estate, (1966) 12 FLR 361 : (1966) 2 LLJ 315 (SC)] , that if the Enquiry Officer did not keep his function as Enquiry Officer but becomes prosecutor, the inquiry is vitiated. The following was observed: (FLR p. 362) "The inquiry which was held by the management on the first charge was presided over by the Manager himself. It was conducted in the presence of the Assistant Manager and two others. The enquiry was not correct in its procedure. The Manager recorded the statements, cross-examined the labourers who were the offenders and made and recorded his own statements on facts and questioned the offending labourers about the truth of his own statements recorded by himself. The Manager did not keep his function as the enquiring officer distinct but became witness, prosecutor and Manager in turns. The record of the enquiry as a result is staccato and unsatisfactory."
31. A Division Bench of the Madhya Pradesh High Court speaking through R.V. Raveendran, C.J. (as he then was) had occasion to 2026.04.10 P ANUKUMA 17:26:58+05'30' :33: OA No.120/258/2017 consider the question of vitiation of the inquiry when the Enquiry Officer starts himself acting as prosecutor in Union of India v. Mohd. Naseem Siddiqui [Union of India v. Mohd. Naseem Siddiqui, ILR 2004 MP 821] . In the above case the Court considered Rule 9(9)(c) of the Railway Servants (Discipline and Appeal) Rules, 1968. The Division Bench while elaborating fundamental principles of natural justice enumerated the seven well- recognised facets in para 7 of the judgment which is to the following effect:
"7. One of the fundamental principles of natural justice is that no man shall be a judge in his own cause. This principle consists of seven well-recognised facets:
(i) The adjudicator shall be impartial and free from bias,
(ii) The adjudicator shall not be the prosecutor,
(iii) The complainant shall not be an adjudicator,
(iv) A witness cannot be the adjudicator,
(v) The adjudicator must not import his personal knowledge of the facts of the case while inquiring into charges,
(vi) The adjudicator shall not decide on the dictates of his superiors or others,
(vii) The adjudicator shall decide the issue with reference to material on record and not reference to extraneous material or on extraneous considerations.
If any one of these fundamental rules is breached, the inquiry will be vitiated."
32. The Division Bench further held that where the Enquiry Officer acts as Presenting Officer, bias can be presumed. Para 9 is as follows:
"9. A domestic inquiry must be held by an unbiased person who is unconnected with the incident so that he can be impartial and objective in deciding the subject-matters of inquiry. He should have an open mind till the inquiry is completed and should neither act with bias nor give an impression of bias. Where the Enquiry Officer acts as the Presenting Officer, bias can be presumed. At all events, it clearly gives an impression of bias. An Enquiry Officer is in position of a judge or adjudicator. The Presenting Officer is in the position of a prosecutor. If the Enquiry Officer acts as a Presenting Officer, then it would amount to Judge acting as the prosecutor. When the Enquiry Officer conducts the examination-in-chief of the prosecution witnesses and leads them through the facts so as to present the case of the disciplinary authority against the employee or cross-examines the delinquent employee or his witnesses to establish the case of the employer/disciplinary authority evidently, the Enquiry Officer cannot be said to have an open mind. The very fact 2026.04.10 P ANUKUMA 17:26:58+05'30' :34: OA No.120/258/2017 that he presents the case of the employer and supports the case of the employer is sufficient to hold that the Enquiry Officer does not have an open mind."
33. The Division Bench after elaborately considering the issue summarised the principles in para 16 which is to the following effect:
"16. We may summarise the principles thus:
(i) The Enquiry Officer, who is in the position of a Judge shall not act as a Presenting Officer, who is in the position of a prosecutor.
(ii) It is not necessary for the disciplinary authority to appoint a Presenting Officer in each and every inquiry.
Non-appointment of a Presenting Officer, by itself will not vitiate the inquiry.
(iii) The Enquiry Officer, with a view to arrive at the truth or to obtain clarifications, can put questions to the prosecution witnesses as also the defence witnesses. In the absence of a Presenting Officer, if the Enquiry Officer puts any questions to the prosecution witnesses to elicit the facts, he should thereafter permit the delinquent employee to cross-examine such witnesses on those clarifications.
(iv) If the Enquiry Officer conducts a regular examination-
in-chief by leading the prosecution witnesses through the prosecution case, or puts leading questions to the departmental witnesses pregnant with answers, or cross- examines the defence witnesses or puts suggestive questions to establish the prosecution case employee, the Enquiry Officer acts as prosecutor thereby vitiating the inquiry.
(v) As absence of a Presenting Officer by itself will not vitiate the inquiry and it is recognised that the Enquiry Officer can put questions to any or all witnesses to elicit the truth, the question whether an Enquiry Officer acted as a Presenting Officer, will have to be decided with reference to the manner in which the evidence is let in and recorded in the inquiry.
Whether an Enquiry Officer has merely acted only as an Enquiry Officer or has also acted as a Presenting Officer depends on the facts of each case. To avoid any allegations of bias and running the risk of inquiry being declared as illegal and vitiated, the present trend appears to be to invariably appoint Presenting Officers, except in simple cases. Be that as it may."
34. We fully endorse the principles as enumerated above, however, the principles have to be carefully applied in fact situation of a particular case. There is no requirement of appointment of Presenting Officer in each and every case, whether statutory rules 2026.04.10 P ANUKUMA 17:26:58+05'30' :35: OA No.120/258/2017 enable the authorities to make an appointment or are silent. When the statutory rules are silent with regard to the applicability of any facet of principles of natural justice the applicability of principles of natural justice which are not specifically excluded in the statutory scheme are not prohibited. When there is no express exclusion of particular principle of natural justice, the said principle shall be applicable in a given case to advance the cause of justice. In this context, reference is made of a case of this Court in Punjab National Bank v. Kunj Behari Misra [Punjab National Bank v. Kunj Behari Misra, (1998) 7 SCC 84 : 1998 SCC (L&S) 1783] . In the above case, this Court had occasion to consider the provisions of the Punjab National Bank Officer Employees' (Discipline and Appeal) Regulations, 1977. Regulation 7 provides for action on the enquiry report. Regulation 7 as extracted in para 10 of the judgment is as follows: (SCC p. 90) "10. ... '7. Action on the enquiry report.--(1) The disciplinary authority, if it is not itself the enquiring authority, may, for reasons to be recorded by it in writing, remit the case to the enquiring authority for fresh or further enquiry and report and the enquiring authority shall thereupon proceed to hold the further enquiry according to the provisions of Regulation 6 as far as may be.
(2) The disciplinary authority shall, if it disagrees with the findings of the enquiring authority on any article of charge, record its reasons for such disagreement and record its own findings on such charge, if the evidence on record is sufficient for the purpose.
(3) If the disciplinary authority, having regard to its findings on all or any of the articles of charge, is of the opinion that any of the penalties specified in Regulation 4 should be imposed on the officer employee, it shall, notwithstanding anything contained in Regulation 8, make an order imposing such penalty.
(4) If the disciplinary authority having regard to its findings on all or any of the articles of charge, is of the opinion that no penalty is called for, it may pass an order exonerating the officer employee concerned.' "
35. The question which was debated before this Court was that since Regulation 7(2) does not contain any provision for giving an opportunity to the delinquent officer to represent before disciplinary authority who reverses the findings which were in favour of the delinquent employee, the rules of natural justice are not applicable. This Court held that principles of natural justice have to be read in Regulation 7(2) even though rule does not specifically require hearing of delinquent officer. In para 19, the following was held:
(SCC p. 97) "19. The result of the aforesaid discussion would be that the principles of natural justice have to be read into Regulation 7(2). As a result thereof, whenever the disciplinary authority disagrees with the enquiry authority on any article of charge, then before it records its own findings on such charge, it must 2026.04.10 P ANUKUMA 17:26:58+05'30' :36: OA No.120/258/2017 record its tentative reasons for such disagreement and give to the delinquent officer an opportunity to represent before it records its findings. The report of the enquiry officer containing its findings will have to be conveyed and the delinquent officer will have an opportunity to persuade the disciplinary authority to accept the favourable conclusion of the enquiry officer. The principles of natural justice, as we have already observed, require the authority which has to take a final decision and can impose a penalty, to give an opportunity to the officer charged of misconduct to file a representation before the disciplinary authority records its findings on the charges framed against the officer."
36. Thus, the question as to whether the Enquiry Officer who is supposed to act independently in an inquiry has acted as prosecutor or not is a question of fact which has to be decided on the facts and proceedings of a particular case. In the present case we have noticed that the High Court had summoned the entire inquiry proceedings and after perusing the proceedings the High Court came to the conclusion that the Enquiry Officer himself led the examination-in- chief of the prosecution witness by putting questions. The High Court further held that the Enquiry Officer acted himself as prosecutor and Judge in the said disciplinary enquiry. The above conclusion of the High Court has already been noticed from paras 9 and 10 of the judgment of the High Court giving rise to Civil Appeal No. 2608 of 2012."
12.2 It is not in dispute that the Inquiry Officer, upon appreciation of oral and documentary evidence, had exonerated the applicant from most of the Articles of Charge. The Disciplinary Authority, however, proceeded to disagree with the said findings and recorded conclusions holding certain charges as proved. While it is trite that the Disciplinary Authority is not bound by the findings of the Inquiry Officer and is competent to differ therefrom, such power is not unbridled and is circumscribed by well-settled principles of natural justice and fair play.
12.3 In this regard, reference may be made to the judgment of the Hon'ble Supreme Court in Punjab National Bank v. Kunj Behari Misra (supra), wherein it has been categorically held that whenever the Disciplinary Authority proposes to disagree with the findings of the Inquiry Officer, it must record tentative reasons for such disagreement and afford an opportunity to the delinquent employee to represent against the same before recording its final findings. The said requirement has been held to be an integral facet of the principles of 2026.04.10 P ANUKUMA 17:26:58+05'30' :37: OA No.120/258/2017 natural justice. Further, in Union of India v. Ram Lakhan Sharma (supra), the Hon'ble Apex Court has elaborately expounded the scope and ambit of principles of natural justice in disciplinary proceedings. It has been held that the Inquiry Officer acts as a quasi-judicial authority and his findings cannot be brushed aside in a casual or arbitrary manner. The Disciplinary Authority, while differing from such findings, must base its conclusions on cogent reasons supported by evidence on record. Any departure from these principles would render the decision vulnerable on the ground of perversity and arbitrariness.
12.4 Applying the aforesaid principles to the facts of the present case, we find that though the Disciplinary Authority has recorded disagreement with the findings of the Inquiry Officer, the same does not appear to be supported by cogent and convincing reasons. The disagreement note, as placed on record, reflects a mere substitution of opinion without demonstrating as to how the findings of the Inquiry Officer are either perverse or contrary to the evidence available on record. There is no indication that the Disciplinary Authority has dealt with the reasoning adopted by the Inquiry Officer or assigned specific grounds for discarding the same.
12.5 It is also not evident from the record that the applicant was afforded a meaningful and effective opportunity to represent against the proposed disagreement before the DA recorded its final findings. Even assuming that a formal opportunity was extended, the manner in which the findings have been recorded indicates that the same was an empty formality, thereby defeating the very purpose of affording such opportunity.
12.6 We further find that the Disciplinary Authority has selectively relied upon certain portions of the material on record while ignoring the evidence which weighed with the Inquiry Officer in exonerating the applicant. Such selective appreciation of evidence, without dealing 2026.04.10 P ANUKUMA 17:26:58+05'30' :38: OA No.120/258/2017 with the reasoning of the Inquiry Officer, amounts to perversity in the decision-making process. It is well settled that a finding is said to be perverse when it is based on no evidence, or when relevant evidence is ignored, or when the conclusion arrived at is such that no reasonable person would have reached.
12.7 The role of the Inquiry Officer, being that of an independent quasi-
judicial authority, cannot be reduced to a mere formality. The findings recorded by the Inquiry Officer, particularly, when favourable to the delinquent employee, are required to be given due weightage and cannot be set aside in a cursory manner. The approach adopted by the Disciplinary Authority in the present case, in our considered view, undermines the very object of holding a fair and impartial inquiry.
12.8 In view of the foregoing discussion, we are of the considered opinion that the disagreement recorded by the Disciplinary Authority suffers from lack of proper reasoning, non-application of mind and violation of principles of natural justice. Consequently, the findings of guilt recorded by the DA, in so far as they are based on such flawed disagreement, cannot be sustained in the eyes of law. Accordingly, Issue (c) is answered in favour of the applicant and against the respondents.
13. With regard to issue d) as framed in para 9 above, namely, whether the alleged acts of the applicant constitute "misconduct" or mere negligence not warranting disciplinary action, we observe that the core allegation against the applicant is failure to detect fraud in rebate claims. The Hon'ble Supreme Court in Union of India v. J. Ahmed (supra) held that: "Mere negligence or error of judgment does not constitute misconduct."
13.1 Similarly, reliance placed by the applicant on Dilip Kumar Rabhidas v. Union of India (supra) it has been held that "mere negligence does 2026.04.10 P ANUKUMA 17:26:58+05'30' :39: OA No.120/258/2017 not constitute misconduct and no charge-memo can be issued in the absence of misconduct.
13.2 It is also profitable to refer the Hon'ble Supreme Court's judgment in Zunjarrao Bhikaji Nagarkar v. Union of India, reported in (1999) 7 SCC 409, the Hon'ble Apex Court observed as under:-
"40. When we talk of negligence in a quasi-judicial adjudication, it is not negligence perceived as carelessness, inadvertence or omission but as culpable negligence. This is how this Court in State of Punjab v. Ex-Constable Ram Singh [(1992) 4 SCC 54 : 1992 SCC (L&S) 793 : (1992) 21 ATC 435] interpreted "misconduct" not coming within the purview of mere error in judgment, carelessness or negligence in performance of duty. In the case of K.K. Dhawan [(1993) 2 SCC 56 : 1993 SCC (L&S) 325 : (1993) 24 ATC 1] the allegation was of conferring undue favour upon the assessees. It was not a case of negligence as such. In Upendra Singh case [(1994) 3 SCC 357 : 1994 SCC (L&S) 768 : (1994) 27 ATC 200] the charge was that he gave illegal and improper directions to the assessing officer in order to unduly favour the assessee. The case of K.S. Swaminathan [(1996) 11 SCC 498] was not where the respondent was acting in any quasi-judicial capacity. This Court said that at the stage of framing of the charge the statement of facts and the charge-sheet supplied are required to be looked into by the court to see whether they support the charge of the alleged misconduct. In M.S. Bindra case [(1998) 7 SCC 310 : 1998 SCC (L&S) 1812] where the appellant was compulsorily retired this Court said that judicial scrutiny of an order imposing premature compulsory retirement is permissible if the order is arbitrary or mala fide or based on no evidence. Again in the case of Madan Mohan Choudhary [(1999) 3 SCC 396 : 1999 SCC (L&S) 700] which was also a case of compulsory retirement this Court said that there should exist material on record to reasonably form an opinion that compulsory retirement of the officer was in public interest. In K.N. Ramamurthy case [(1997) 7 SCC 101 : 1997 SCC (L&S) 1749] it was certainly a case of culpable negligence. One of the charges was that the officer had failed to safeguard government revenue. In Hindustan Steel Ltd. case [(1969) 2 SCC 627 : AIR 1970 SC 253] it was said that where proceedings are quasi-judicial penalty will not ordinarily be imposed unless the party charged had acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation. This Court has said that the penalty will not also be imposed merely because it is lawful so to do. In the present case, it is not that the appellant did not impose penalty because of any negligence on his part but he said it was not a case of imposition of penalty. We are, however, of the view that in a case like this which was being adjudicated upon by the appellant imposition of penalty was imperative. But then, there is nothing wrong or improper on the part of the appellant to form an opinion that imposition of penalty was not mandatory. We have noticed that the Patna High Court while interpreting Section 325 IPC held that imposition of penalty was not mandatory which again we have said is not a correct view to take. A wrong interpretation of law cannot be a ground for misconduct. Of course it is a different matter altogether if it is deliberate and actuated by mala fides.
41. When penalty is not levied, the assessee certainly benefits. But it cannot be said that by not levying the penalty the officer has favoured the assessee or shown undue favour to him. There has to be some basis for the disciplinary authority to reach such a conclusion even prima facie. The record in the present case does not show if the disciplinary authority had any information within its possession from where it could form an opinion that the appellant showed "favour" to the assessee by not imposing the penalty. He may have wrongly exercised his jurisdiction. But that wrong can be corrected in appeal. That cannot always form a basis for initiating disciplinary proceedings against an officer while he is acting as a quasi- judicial authority. It must be kept in mind that being a quasi-judicial authority, he is always subject to judicial supervision in appeal.
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42. Initiation of disciplinary proceedings against an officer cannot take place on information which is vague or indefinite. Suspicion has no role to play in such matter. There must exist reasonable basis for the disciplinary authority to proceed against the delinquent officer. Merely because penalty was not imposed and the Board in the exercise of its power directed filing of appeal against that order in the Appellate Tribunal could not be enough to proceed against the appellant. There is no other instance to show that in similar case the appellant invariably imposed penalty.
43. If every error of law were to constitute a charge of misconduct, it would impinge upon the independent functioning of quasi-judicial officers like the appellant. Since in sum and substance misconduct is sought to be inferred by the appellant having committed an error of law, the charge-sheet on the face of it does not proceed on any legal premise rendering it liable to be quashed. In other words, to maintain any charge-sheet against a quasi-judicial authority something more has to be alleged than a mere mistake of law, e.g., in the nature of some extraneous consideration influencing the quasi-judicial order. Since nothing of the sort is alleged herein the impugned charge-sheet is rendered illegal. The charge-sheet, if sustained, will thus impinge upon the confidence and independent functioning of a quasi-judicial authority. The entire system of administrative adjudication whereunder quasi-judicial powers are conferred on administrative authorities, would fall into disrepute if officers performing such functions are inhibited in performing their functions without fear or favour because of the constant threat of disciplinary proceedings.
44. Considering whole aspects of the matter, we are of the view that it was not a case for initiation of any disciplinary proceedings against the appellant. The charge of misconduct against him was not proper. It has to be quashed."
13.3 We have considered the nature of allegations levelled against the applicant, which essentially pertain to failure to detect fraud in rebate claims while discharging official duties. The question that arises is whether such lapse, assuming it to be correct, would amount to "misconduct" in law or merely negligence not warranting disciplinary action. The Hon'ble Supreme Court in Union of India v. J. Ahmed (supra) has clearly held that mere negligence, error of judgment or inefficiency in performance of duty does not constitute misconduct, unless it is accompanied by culpable elements such as mala fides, recklessness or deliberate disregard of duty. Similarly, in Dilip Kumar Rabhidas v. Union of India (supra), it has been reiterated that in the absence of misconduct, initiation of disciplinary proceedings itself is unsustainable, and mere negligence cannot be elevated to the level of misconduct. Further, in Zunjarrao Bhikaji Nagarkar v. Union of India (supra), the Hon'ble Apex Court has drawn a clear distinction between simple negligence and culpable negligence, holding that only the latter, involving deliberate or mala fide conduct, can attract disciplinary action. The Court has 2026.04.10 P ANUKUMA 17:26:58+05'30' :41: OA No.120/258/2017 categorically observed that a wrong interpretation of law or an erroneous decision, even if it results in benefit to a third party, would not amount to misconduct unless actuated by extraneous considerations. It has also been emphasized that initiation of disciplinary proceedings cannot be based on mere suspicion or hindsight evaluation of decisions taken in discharge of quasi-judicial or administrative functions.
13.4 Applying the aforesaid principles to the present case, we find that the allegations against the applicant do not disclose any element of mala fide intention, deliberate misconduct, or conscious disregard of duty. At best, the allegation pertains to failure to detect irregularities, which may amount to lapse in judgment or inadvertence, but does not meet the threshold of "misconduct" as judicially defined. There is no material on record to suggest that the applicant derived any undue benefit, acted with oblique motive, or was influenced by extraneous considerations.
13.5 It is also pertinent to note that if every error or omission in performance of duty is treated as misconduct, it would have a chilling effect on the independent discharge of official functions, particularly in matters involving assessment, scrutiny or adjudication. As cautioned by the Hon'ble Supreme Court, such an approach would undermine the confidence and independence of officers and is impermissible in law.
13.6 In view of the above discussion, we are of the considered opinion that the alleged acts of the applicant, even if accepted, would at best constitute mere negligence or error of judgment and do not amount to misconduct warranting disciplinary action. Accordingly, Issue d) is answered in favour of the applicant.
14. The conclusion of the above analysis is that the impugned orders suffers from the legal infirmities, as noted hereinabove, as also the 2026.04.10 P ANUKUMA 17:26:58+05'30' :42: OA No.120/258/2017 penalty order is discretionary in nature and violative of provisions of Articles 14 and 16 of the Constitution of India.
15. In the result, for the foregoing reasons, the present OA is allowed in terms of the following directions:-
(i) The prayer made in para 8(B) of the OA is allowed.
Accordingly, the impugned orders are quashed and set aside;
(ii) The applicant is entitled to all consequential benefits in accordance with law and rules on the subject, but without interest thereon.
(iii) The respondents are further directed to regularize the suspension period of the applicant between 03.12.2004 and 08.08.2005 forthwith.
(iv) The respondents are directed to complete the above exercise within a period of six weeks from the date of receipt of a certified copy of this Order.
16. There shall be no order as to costs.
17. MA(s), if any, pending also stand disposed of (Dr. Hukum Singh Meena) (Jayesh V.Bhairavia) Member (A) Member (J) Anu 2026.04.10 P ANUKUMA 17:26:58+05'30'