Delhi High Court
B L Koli vs United India Insurance Company Ltd & Ors on 22 April, 2026
Author: Sanjeev Narula
Bench: Sanjeev Narula
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 15th April, 2026.
Pronounced on: 22nd April, 2026.
Uploaded on: 22nd April, 2026.
+ W.P.(C) 1676/2023
B L KOLI .....Petitioner
Through: Mr. Rajender Gulati, Mr. V.C. Bharti
and Mr. I.P. Singh, Advocates.
versus
UNITED INDIA INSURANCE COMPANY LTD & ORS.
.....Respondents
Through: Mr. Abhishek Kumar Gola, Advocate
for R-1.
+ W.P.(C) 8050/2013 & CM APPLs. 5717/2019, 73344/2025
BABU LAL KOLI .....Petitioner
Through: Mr. Rajender Gulati, Mr. V.C. Bharti
and Mr. I.P. Singh, Advocates.
versus
UNITED INDIA INSURANCE CO. LTD .....Respondent
Through: Mr. Abhishek Kumar Gola, Advocate
for R-1.
CORAM:
HON'BLE MR. JUSTICE SANJEEV NARULA
JUDGMENT
SANJEEV NARULA, J.:
1. These two writ petitions are being disposed of by this common order
because they arise from the same service relationship, concern overlapping
claims to retiral and service benefits, and substantially converge upon the
legal effect of the disciplinary proceedings initiated against the Petitioner
while he was in service and continued after his retirement. The earlier
petition, W.P.(C.) 8050/2013, was directed principally to promotional andSignature Not Verified
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retiral consequences. The later petition, W.P.(C.) 1676/2023, assails the
disciplinary action itself, namely the memorandum of charges dated 2 nd
September, 2009, the inquiry report dated 12th August, 2019, communicated
on 16th September, 2019, the penalty order dated 22nd March, 2021, the
addendum dated 13th May, 2021, and the communication dated 7th June,
2021 declining an appeal under Rule 31 of the General Insurance (Conduct,
Discipline and Appeal) Rules, 1975.1
2. By order dated 29th November, 2024, W.P.(C.) 8050/2013 was
directed to be listed along with W.P.(C.) 1676/2023. For the sake of
completeness, it is noted that an earlier challenge carried in W.P.(C.)
1995/2022 had also been withdrawn on 6th July, 2022 with liberty to file a
fresh petition incorporating a challenge to the communication dated 7 th June,
2021.
3. In this backdrop, it is necessary to delineate the surviving issues. In
W.P.(C.) 8050/2013, the original reliefs comprised promotion to the cadre of
Manager (Scale IV) w.e.f. 26th November, 2008 with consequential benefits,
and release of retiral dues including subsistence allowance for the period
from 3rd November, 2011 to 3rd May, 2013. During the hearing, the claim for
promotion was not pressed. The claim for subsistence allowance also does
not survive, in view of the Respondent’s additional affidavit stating that no
such allowance was payable from 3rd November, 2011 to 11th February,
2013 under Rule 21(3) of the CDA Rules; that entitlement arose from 12 th
February, 2013 (date of bail in the CBI case); and that a sum of INR
90,206/- was computed and paid in May 2013, with no balance remaining.
The payroll record annexed thereto reflects the same under the head “Subsc
1
“CDA Rules”
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Alw”. W.P.(C.) 8050/2013 therefore survives only in a limited and largely
residual sense.
4. The real controversy now lies in W.P.(C.) 1676/2023, which assails
the validity of the disciplinary proceedings and the resultant pensionary
consequences under the General Insurance (Employees’) Pension Scheme,
1995.2
Factual Background
5. The Petitioner served the Respondent Company for many years and
had been posted at different places including Divisional Office No. 17, New
Delhi. The record also shows that he had later been transferred out of Delhi
and, after revocation of suspension, was posted to Delhi Regional Office-II.
He superannuated on 31st August, 2013.
6. The disciplinary proceedings commenced with the memorandum
dated 2nd September, 2009 issued under Rule 25 of the CDA Rules, whereby
six Articles of Charge were framed against the Petitioner in respect of his
tenure at DO-17, New Delhi. The first four articles pertained to motor cover
notes issued by the Petitioner upon receipt of premium, without depositing
the corresponding copies and premium with the office, thereby exposing the
Company to consumer and MACT claims. The fifth and sixth articles related
to the irregular acceptance of break-in insurance without proper pre-
inspection, and the issuance of a policy in the name of a person other than
the registered owner, contrary to established underwriting norms and the
principle of insurable interest. The memorandum concluded by alleging
failure to maintain absolute integrity and devotion to duty and conduct
prejudicial to the interests of the company within Rule 3(1) read with Rules2
“Pension Scheme”
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4(1), 4(5) and 4(9) of the CDA Rules.
7. Shortly after the memorandum, the Petitioner sought the documents
referred to in Annexure III of the memorandum. By letter dated 13th
October, 2009, the Disciplinary Authority declined to furnish those
documents at that stage, citing the explanation to Rule 25(3) of the CDA
Rules, and required the Petitioner to submit his written statement within five
days, failing which the inquiry could proceed ex parte.
8. The Petitioner submitted a written defence. He asserted that pre-
signed motor cover notes were issued as a prevailing business practice to
brokers and authorised agents for procuring business and meeting targets;
that such a practice was followed because brokers and agents were not
themselves authorised to sign the cover notes; and that the misuse, non-
deposit of premium and misappropriation were, in truth, acts of the brokers
and authorised agents. He claimed that he himself had complained against
them and had brought the matter to the notice of senior officers and
authorities. On that basis, he sought to shift responsibility for Articles I to IV
to the broker-agent side and, in respect of Articles V and VI, sought to
explain the processing of the underlying insurance and claims on the basis of
documents available in office records.
9. The record demonstrates that the matter remained pending for years.
The inquiry report later noted a change in the inquiry officer. It records that,
while the original inquiry officer had been appointed in 2009, a retired
officer was subsequently appointed on 4th June, 2015 in place of the earlier
inquiry officer, and a new presenting officer was also appointed thereafter.
10. The Petitioner superannuated on 31st August, 2013. However, the
disciplinary matter was not brought to an end. The Petitioner was paid
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provisional pension till the imposition of penalty by order dated 22nd March,
2021, and the proceedings were continued.
11. The inquiry report dated 12th August, 2019, communicated on 16th
September, 2019, sets out the management case Article-wise, records the
witnesses examined, and notes the Petitioner’s conduct during the
proceedings. It records that the Petitioner failed to appear on multiple dates;
that he cross-examined only one witness, and that too on a single occasion;
and that, despite repeated opportunities, he did not participate in the
proceedings thereafter. The proceedings were consequently closed on 29 th
June, 2018, and no defence brief was submitted by him. The report
ultimately held all six Articles of Charge proved; the Disciplinary Authority
recorded tentative agreement and afforded the Petitioner an opportunity to
submit a representation before further action.
12. The Petitioner submitted a representation dated 1st October, 2019,
attacking the inquiry report as false and factually unsustainable, complaining
that the inquiry officer had ignored the written defence and daily order
sheets, alleging that principal actors had not been properly examined, and
again maintained that the real wrongdoing lay elsewhere. He also relied on
the closure of the CBI case in the Delhi cover-note matter and on judicial
decisions pertaining to continuation of disciplinary proceedings after
retirement and validity of the CDA Rules.
13. The Disciplinary Authority perused the memorandum of charge, the
Petitioner’s reply, the inquiry proceedings, along with the Petitioner’s
representation, and imposed the penalty of “withholding of full pension”
under Rules 42 and 44 of the Pension Scheme read with the CDA Rules. On
13th May, 2021, an addendum was issued, clarifying that the expressionSignature Not Verified
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“withholding of full pension” was to be read as “withholding of full pension
permanently”. Thereafter, by letter dated 7th June, 2021, the Petitioner was
informed that, since the order had been issued under Rules 42 and 44 of the
Pension Scheme and not under Rule 23 of the CDA Rules, no appeal lay
under Rule 31 of the Rules.
14. Aggrieved, the Petitioner has filed this petition, seeking setting aside
of the aforesaid memorandum and orders.
Petitioner’s Case
15. Mr. Rajender Gulati, counsel for the Petitioner, raises the following
grounds of challenge:
15.1. The disciplinary proceedings are void because the memorandum of
charges was issued by a Deputy General Manager even though the
competent disciplinary authority for the Petitioner, being a Deputy Manager,
was the General Manager. The same objection is directed against the final
disciplinary order. It is further contended that the CDA Rules are non-est in
law, having neither been laid before the Parliament nor published in the
Official Gazette. In support of these contentions, reliance is placed on the
decisions of the Supreme Court in Union of India v. B.V. Gopinath3 and
State of Karnataka CBI, ACB Bangalore v. K.T. Uthappa.4
15.2. The disciplinary proceedings could not lawfully continue after the
Petitioner’s retirement; however, the inquiry lingered on for years after his
superannuation. Once the employer could no longer remove or dismiss the
Petitioner from service, it had no authority to proceed further against him.
On this aspect, the Petitioner relies on the judgement of the Supreme Court
3
(2014) 1 SCC 351.
4
Crl. Appeal Nos. 1872-1873/2014, decided on 3rd November, 2015.
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in Dev Prakash Tewari v. UP Cooperative Institutional,5 which proceeds
on the footing that, in the absence of a specific rule, no disciplinary
proceedings can continue after retirement for the purpose of reducing retiral
benefits.
15.3. The punishment order is mechanical and non-speaking, and does not
deal with the Petitioner’s written defence, his later representation against the
inquiry report, or the effect of the CBI closure. The addendum dated 13th
May, 2021, changing the punishment to “withholding of full pension
permanently”, only compounds the illegality.
15.4. The Petitioner presses delay as an independent ground, contending
that the allegations pertain to 2004-2006; the charge-sheet was issued in
September 2009, the inquiry report only in August 2019, and the final order
in March 2021. Such prolonged delay is destructive of fairness, especially
when the proceedings were continued long after retirement and when full
pension was not released in the meantime. Reliance is placed on Prem Nath
Bali v. Registrar, High Court of Delhi,6 to emphasise that disciplinary
proceedings are required to be concluded within a reasonable time and that
long-drawn proceedings can cause serious prejudice to an employee.
15.5. While the proceedings were initiated and carried through under Rule
25 of the CDA Rules, the punishment was ultimately imposed by invoking
Rules 42 and 44 of the Pension Scheme. This shift is impermissible.
15.6. Rule 47 of the Pension Scheme, which provides for continuation of
departmental proceedings after retirement, requires prior consultation with
the Board before passing any final order; however, no such consultation is
5
Civil Appeal Nos. 5848-49/2014, decided on 30th June, 2014.
6
Civil Appeal No. 958/2010, decided on 16 th December, 2015.
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shown on the present record. Reliance is placed on the recent decision of the
Supreme Court in Vijay Kumar v. Central Bank of India,7 to emphasise that
where pension is reduced in exercise of disciplinary or allied powers, prior
consultation with the Board is a valuable mandatory safeguard.
15.7. The Petitioner further contends that the appointment of a retired
government servant as the Inquiry Officer was contrary to Rule 25(2) of the
CDA Rules. It is also alleged that Rule 25(6) was violated, inasmuch as the
Petitioner was denied the assistance of a Defence Assistant and was thereby
deprived of an effective opportunity to present his defence.
15.8. The Petitioner assails the inquiry as factually unfair, alleging denial of
documents at the threshold, non-supply of originals, and failure to examine
the actual actors, while portraying the Petitioner as a scapegoat to shield the
broker/agent and other officials. He emphasises that he had himself lodged
complaints against the broker/agent side. Reliance is also placed on the
closure order dated 22nd February, 2013 of the Special Judge, CBI, noting
absence of sufficient evidence that the premium collected by the agent was
ever handed over to the Petitioner, which undermines the very foundation of
the disciplinary proceedings.
Respondent Company’s Case
16. On the other hand, Mr. Abhishek Kumar Gola, counsel for the
Respondent Company, has advanced the following submissions:
16.1. The challenge on the competence of the Disciplinary Authority rests
on a misunderstanding of nomenclature and cadre equivalence. Although the
Petitioner is described as “Deputy Manager”, he remained a Scale III officer.
Under the old nomenclature, a Scale III officer was designated “Assistant
7
2025 INSC 848.
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Manager”, a Scale IV officer “Deputy Manager”, and a Scale VI officer
“Assistant General Manager”. After redesignation with effect from 21st
December, 2005, these became “Deputy Manager”, “Manager” and “Deputy
General Manager” respectively. On that footing, the Respondent Company
contends that the Deputy General Manager was the competent disciplinary
authority in the Petitioner’s case.
16.2. It is contended that the Petitioner himself prolonged the inquiry by
repeatedly failing to appear and by not carrying his defence to completion.
In this regard, Rule 47 of the Pension Scheme squarely authorised the
continuation of proceedings after retirement. As to the requirement of Board
consultation under Rule 47, it is submitted that the same was inapplicable in
the present case, as the impugned penalty was not one of recovery for
pecuniary loss but of withholding pension for grave misconduct, imposed
under Rules 42 and 44 of the Pension Scheme.
16.3. The Petitioner scarcely contested the inquiry in any meaningful way.
According to the inquiry record, he appeared only sporadically, cross-
examined just one witness in part, did not pursue the same thereafter,
produced no defence evidence, and filed no defence brief. The inquiry,
therefore, moved substantially on unrebutted management evidence and the
Petitioner cannot now convert his own absence into a plea of denial of
opportunity.
16.4. On the question of continuation after retirement, the Respondent relies
on Rule 47 of the Pension Scheme, which deems departmental proceedings
instituted while the employee was in service to continue after retirement as
proceedings under that paragraph. It also relies on Rule 45 relating to
provisional pension and states that continuation of the disciplinary action
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after retirement was expressly contemplated by the Pension Scheme.
16.5. Finally, on the Petitioner’s challenge to the legal status of the CDA
Rules, the Respondent relies on the judgment of the Division Bench of the
Madras High Court in Chairman-cum-Managing Director, United India
Insurance Co. Ltd. v. K. Rajendra Kumar,8 and the order of the Supreme
Court declining interference therewith.
Issues
17. In light of the pleadings, the documents placed on record, and the
submissions advanced, the following issues arise for determination:
(i) Whether the disciplinary proceedings suffer from want of competence
on the ground that the memorandum was issued by a Deputy General
Manager, and whether the final penalty order and addendum also suffer
from the same infirmity.
(ii) Whether the disciplinary proceedings, though instituted while the
Petitioner was in service, lawfully continued after his retirement, and
whether the case is governed by Rules 42 and 44 of the Pension Scheme,
Rule 47 of that Scheme, or a combined reading of those provisions.
(iii) Whether the long delay in conclusion of the disciplinary proceedings,
viewed in the facts of the case and the conduct of parties, is sufficient to
vitiate the inquiry, the findings, or the punishment.
(iv) Whether the inquiry stood vitiated by denial of procedural fairness,
including non-supply of documents, non-consideration of the Petitioner’s
written defence and representation, and the limited nature of the Disciplinary
Authority’s final reasoning.
(v) Whether the Petitioner, having filed an initial written defence but
8
W.A. 484/2020, decided on 1st July, 2022.
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thereafter not meaningfully contesting the inquiry on facts, can still persuade
the Court to reopen the factual findings recorded in the inquiry report.
(vi) Whether the six articles of charge, taken individually or cumulatively,
disclose grave misconduct or negligence during service of a character
sufficient to justify pensionary consequences.
(vii) What is the effect, if any, of the CBI closure order and the materials
emerging from the criminal investigation upon the disciplinary findings
recorded in these proceedings.
(viii) Whether prior consultation with the Board under Rule 47 of the
Pension Scheme was mandatory in the circumstances of the present case
and, if so, whether the absence of material showing such consultation
vitiates the final order or requires a limited remand.
(ix) Whether the communication dated 7th June, 2021 declining an appeal
under Rule 31 of the CDA Rules is legally sustainable.
Analysis and findings
A. Competence of the authority
18. The Petitioner’s first attack is that the memorandum and penalty order
are void because they were issued by a Deputy General Manager, while the
competent disciplinary authority for the Petitioner, being a Deputy Manager,
was the General Manager. That objection would have been attractive only if
the expression “Deputy Manager” as used in relation to the Petitioner
referred to the old Scale IV cadre. However, the record does not permit such
a reading. The Respondent Company has taken a specific plea that the
Petitioner, till his retirement, remained a Scale III officer; that under the old
nomenclature, a Scale III officer was designated “Assistant Manager”; and
that, after redesignation with effect from 21st December, 2005, that
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nomenclature became “Deputy Manager”.
19. The Administrative Instructions dated 27th December, 2005 placed on
record by the Respondent Company indicates that, while the nomenclature
was altered, the underlying scale/category remained distinct. On that
footing, the mere appearance of the words “Deputy Manager” in the
memorandum or in the later orders does not, by itself, establish that the
proceedings were initiated or concluded by an authority lower than the
competent disciplinary authority.
20. The Petitioner has attempted to resist this by contending that there is
no reference to scale in the CDA Rules and that he was in the rank of
Deputy Manager, equivalent to Divisional Manager. However, that answer
does not meet the Respondent’s case as the dispute is not over the drafting
style of the CDA Rules but over the meaning of the rank-description after
redesignation.
21. The reliance placed on B.V. Gopinath does not carry the Petitioner
across this hurdle. The principle that proceedings initiated by an authority
not competent under the governing rules cannot be sustained is
unexceptionable. However, that principle helps only after the foundational
fact is established, namely, that the authority concerned was indeed
incompetent under the applicable service structure. Here, for the reasons
already noted, that foundation is not made out.
22. The challenge to competence must therefore fail. Once the
redesignation structure is taken into account, the premise on which the
Petitioner builds this objection does not hold. Neither the memorandum of
charges nor the disciplinary order can thus be said to be void on that ground.
B. Whether the CDA Rules were non-est for want of gazette publication
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23. The Petitioner’s contention that the CDA Rules are non-est, as they
were neither laid before Parliament nor published in the Gazette, principally
rests on the decision of the Karnataka High Court in K.T. Uthappa and the
subsequent refusal of the Supreme Court to interfere. However, this
submission cannot be accepted in view of the later judgment of the Division
Bench of the Madras High Court in K. Rajendra Kumar, against which the
Supreme Court has also declined to interfere.
24. K.T. Uthappa was, in essence, a criminal proceeding in which the
prosecution failed on multiple grounds, including lack of a valid sanctioning
authority and absence of essential evidentiary links. The Karnataka High
Court was thus concerned with the standard of proof beyond reasonable
doubt and the legality of sanction for prosecution, and not with the general
enforceability of disciplinary action under the CDA Rules. Although the
Supreme Court declined to interfere with that judgment, K. Rajendra
Kumar subsequently clarified that the observation of the Supreme Court
regarding the CDA Rules, even if accepted as a statement of fact, “cannot
be said to be even obiter dicta, much less law”. It was further held that the
observations in K.T. Uthappa concerning non-publication of the CDA Rules
in the Gazette cannot be read as laying down any general proposition
invalidating all disciplinary proceedings under those rules.
25. In view of that judgment, it cannot be held in the present case that the
CDA Rules were non-est and that every disciplinary proceeding under them
necessarily stood vitiated. The Petitioner’s challenge on that ground is,
therefore, rejected.
C. Continuation of proceedings after retirement
26. The Petitioner contends that, after his retirement on 30th August,
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2013, the employer lacked authority to continue the disciplinary proceedings
or to impose any order affecting retiral benefits, placing reliance on Dev
Prakash Tewari, which holds that, in the absence of an enabling provision,
such proceedings cannot continue post-retirement for the purpose of
reducing pension or retiral dues.
27. While that principle is well-recognised, the determinative question is
whether the statutory framework contains an enabling provision. In the
present case, it does. The second proviso to Rule 47 of the Pension Scheme
expressly provides that departmental proceedings instituted during service
shall, after retirement, be deemed to continue under that provision and be
concluded by the competent authority in the same manner as if the employee
had remained in service.
28. In view of this provision, the contention that the proceedings lapsed
upon retirement cannot be sustained. The proceedings herein were initiated
during service by memorandum dated 2nd September, 2009, and, by virtue of
Rule 47, validly continued beyond superannuation. The principle in Dev
Prakash Tewari is therefore inapplicable in the present factual and statutory
context.
D. Objection to the use of Rules 42 and 44
29. The Petitioner contends that, since the proceedings were initiated
under Rule 25 of the CDA Rules, the imposition of punishment under Rules
42 and 44 of the Pension Scheme is impermissible. This contention,
however, overlooks the statutory scheme.
30. Upon superannuation, the employer can no longer impose penalties
such as dismissal or removal. Where misconduct during service is
established in proceedings validly initiated while in service and continued
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thereafter, the field of sanction necessarily shifts to pensionary
consequences. This is precisely what Chapter IX of the Pension Scheme
contemplates. Rule 42 provides for withholding or withdrawal of pension
upon conviction for a serious crime or proof of grave misconduct; Rule 44
mandates adherence to the CDA procedure before passing such orders; and
Rule 47 deals specifically with recovery or withdrawal of pension where, in
departmental or judicial proceedings, the pensioner is found guilty of grave
misconduct or negligence during service, and by its second proviso carries
in-service proceedings beyond retirement. These provisions, read together,
make it clear that recourse to the Pension Scheme is the natural statutory
consequence of retirement intervening before culmination of proceedings.
31. In that sense, the Petitioner is correct only to a limited extent: post-
retirement, the source of authority is not Rule 25 of the CDA Rules. The
proceedings may have originated there, but thereafter continued by virtue of
the provisions of the Pension Scheme.
32. That said, the reference to Rules 42 and 44 in the final order is not
happily expressed. On a proper reading, the present case more appropriately
falls under Rule 47, as it concerns misconduct during service, proceedings
instituted while in service, and their continuation post-retirement by virtue
of the second proviso. However, such infelicity in drafting does not vitiate
jurisdiction. The real question, therefore, is whether, upon treating Rule 47
as the governing provision, its mandatory requirements have been duly
complied with; this aspect is examined in the sections that follow.
E. Delay
33. The allegations of delay pertain to events between 2004 and 2006,
with the Petitioner contending that the span of the departmental proceedings
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is unduly prolonged. Reliance is placed on Prem Nath Bali, where the
Supreme Court emphasised that disciplinary proceedings ought to be
concluded within a reasonable time, preferably within six months and, in
any event, not ordinarily beyond one year.
34. However, Prem Nath Bali does not lay down that delay, by itself,
vitiates the proceedings. The Court therein did not set aside the disciplinary
action on this ground, but granted limited relief concerning the treatment of
the suspension period for computing pensionary relief. The emphasis is on
unreasonable delay causing prejudice. The issue, therefore, is not the
existence of delay, which is evident, but whether it has, in the facts,
impaired the fairness of the process so as to warrant annulment of
proceedings.
35. On the present record, such a conclusion cannot be drawn. While the
Petitioner filed a detailed written defence in 2009 and a representation
against the inquiry report in October 2019, he did not effectively participate
in the inquiry in the intervening period. The record reflects non-appearance
on material dates, partial cross-examination of only one witness, failure to
pursue the same thereafter, closure of proceedings due to non-participation
despite repeated opportunities, and absence of any defence brief. In these
circumstances, the delay cannot be attributed solely to the employer.
36. The Court is therefore not persuaded to hold that the proceedings
must fail solely on delay. The delay, though substantial and unsatisfactory,
does not, in the facts of the case, warrant setting aside of the proceedings.
F. Appointment of retired inquiry officer and defence assistance
37. Two ancillary objections may be dealt with, at this stage. The first
pertains to the appointment of a retired Inquiry Officer. The Petitioner
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contends that Rule 25(2) of the CDA Rules did not permit such an
appointment in the manner adopted. This submission is untenable as Rules
25(2) and 25(4) expressly envisage an inquiry being conducted by a retired
officer or a public servant appointed as the Inquiring Authority. The
objection is, accordingly, rejected.
38. The second objection concerns the refusal to permit Shri Trilok
Chand, Deputy Manager, Oriental Insurance Company, to act as Defence
Assistant in the absence of a no-objection certificate, which the Petitioner
asserts is not mandated by Rule 25(6). This issue, however, did not assume
substantive significance. The core difficulty lies in the Petitioner’s failure to
effectively pursue his defence during the inquiry despite opportunity. In that
backdrop, this objection does not go to the root of the matter so as to vitiate
the proceedings.
G. Whether the punishment order is mechanical and non-speaking
39. The order dated 22nd March, 2021 is undoubtedly brief. It does not
deal separately with each limb of the Petitioner’s reply of 2009 or the
representation dated 1st October, 2019, nor does it undertake an independent
article-wise reappraisal of the evidence. To that extent, the Petitioner is
justified in describing the order as brief.
40. However, brevity does not render an order unreasoned. The
Disciplinary Authority records that it considered the memorandum of
charges, the reply, the inquiry report and proceedings, relevant records, and
the representation, and thereafter concluded that, in view of the proved grave
misconduct, the penalty of withholding full pension was warranted. Where
the authority concurs with the inquiry report, the law does not require a
reiteration of reasons in detail; what is essential is application of mind, not
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duplication.9 One can also not lose sight of the fact that the Petitioner did not
meaningfully contest the inquiry proceedings and his participation remained
minimal. The inquiry report thus rested largely on uncontroverted material.
In this backdrop, the impugned order, though terse, and perhaps more so
than desirable in a matter of this nature, cannot be characterised as devoid of
reasons.
41. The addendum dated 13th May, 2021 elucidates that the “withholding
of full pension” would operate permanently. Notably, Rules 42 and 44 of the
Pension Scheme contemplate the withholding or withdrawal of pension
either for a specified period or permanently. The disciplinary order did not
expressly stipulate such duration; the addendum, therefore, merely clarifies
the extent of the withholding by specifying that it is permanent. It does not
introduce any new element, but only gives precision to the effect of the
original order. Nonetheless, the determinative issue is not the form of
expression, but whether the statutory framework authorised such curtailment
and whether the prescribed conditions were satisfied. That leads directly to
the one point which does require closer scrutiny.
H. Board consultation under Rule 47
42. Here the Petitioner’s contention carries considerable force. Once the
case is properly viewed as one where departmental proceedings were
instituted during service and continued post-retirement by virtue of the
second proviso to Rule 47, the first proviso thereto cannot be disregarded.
That proviso mandates, in clear terms, that the Board of the Corporation or
the Company shall be consulted before any final order is passed. The
language is plainly imperative.
9
Tara Chand Khatri v. MCD, (1977) 1 SCC 472; S.N. Mukherjee v. Union of India, (1990) 4 SCC 594.
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43. The Respondents seek to contend that Rule 47 is confined to recovery
of pecuniary loss, and that the impugned action, being one under Rules 42
and 44 for grave misconduct, falls outside its ambit. A close reading of the
scheme does not support this submission. Rule 47 is not limited to recovery;
it expressly contemplates withholding or withdrawal of pension where, in
departmental or judicial proceedings, the pensioner is found guilty of grave
misconduct or negligence during service.
44. It is apposite, at this stage, to advert to the framework of the Pension
Scheme; the relevant provisions whereof are extracted hereinbelow for ease
of reference:
41. Pension subject to future good conduct – Future good conduct
shall be an implied condition of every grant of pension and its
continuance under this scheme.
42. Withholding or withdrawal of Pension – The competent authority
may by order in writing, withhold or withdraw pension or a part thereof,
whether permanently or for a specified period, if the pensioner is
convicted of a serious crime or is found guilty of grave misconduct:
Provided that where a part of pension is withheld or withdrawn, the
amount of such pension shall not be reduced below the minimum pension
per mensem payable under this scheme.
…xx…xx….xx…xx…
44. Pensioner guilty of grave misconduct – In a case not falling under
paragraph 43 if the Competent Authority considers that the pensioner is
prima facie guilty of grave misconduct, it shall, before passing an order,
follow the procedure specified in the General Insurance (Conduct,
Discipline and Appeal) Rules framed by the Board of the Corporation or
of the Company.
…xx…xx….xx…xx…
47. Recovery of Pecuniary loss caused to the Corporation or a
Company –
(1) The Competent Authority may withhold or withdraw a pension or a
part thereof, whether permanently or for a specified period, and order
recovery from pension of the whole or part of any pecuniary loss caused
to the Corporation or a Company if in any departmental or judicial
proceedings the pensioner is found guilty of grave misconduct or
negligence during the period of his service:
Provided that the Board of the Corporation or a Company shall be
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consulted before any final orders are passed:
Provided further that departmental proceedings, if instituted while the
employee was in service, shall, after the retirement of the employee, be
deemed to be proceedings under this paragraph and shall be continued
and concluded by the authority by which they were commenced in the
same manner as if the employee had continued in service:
Provided also that no departmental or judicial proceedings, if not
initiated while the employee was in service, shall be instituted in respect
of a cause of action which arose or in respect of an event which took
place more than four years before such institution.”
45. Similar provisions exist in other pensionary frameworks. For instance,
Rules 8 and 9 of the CCS (Pension) Rules, 1972, contains analogous
stipulations, including the requirement of consultation with the Union Public
Service Commission before passing final orders curtailing pension, to the
following effect:
“8. Pension subject to future good conduct
(1) (a) Future good conduct shall be an implied condition of every grant
of pension and its continuance under these rules.
(b) The appointing authority may, by order in writing, withhold or
withdraw a pension or a part thereof, whether permanently or for a
specified period, if the pensioner is convicted of a serious crime or is
found guilty of grave misconduct.
…xx…xx….xx…xx…
9. Right of President to withhold or withdraw pension
(1) The President reserves to himself the right of withholding a pension
or gratuity, or both, either in full or in part, or withdrawing a pension in
full or in part, whether permanently or for a specified period, and of
ordering recovery from a pension or gratuity of the whole or part of any
pecuniary loss caused to the Government, if, in any departmental or
judicial proceedings, the pensioner is found guilty of grave misconduct
or negligence during the period of service, including service rendered
upon re-employment after retirement
Provided that the Union Public Service Commission shall be consulted
before any final orders are passed:
Provided further that where a part of pension is withheld or withdrawn
the amount of such pensions shall not be reduced below the amount of
rupees three hundred and seventy-five per mensem.
(2) (a) The departmental proceedings referred to in sub-rule (1), if
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instituted while the Government servant was in service whether before
his retirement or during his re-employment, shall, after the final
retirement of the Government servant, be deemed to be proceedings
under this rule and shall be continued and concluded by the authority by
which they were commenced in the same manner as if the Government
servant had continued in service.”
46. The Pension Scheme is thus broadly aligned with the CCS (Pension)
Rules. Rule 41 embodies the foundational principle that pension is
conditioned upon future good conduct; Rule 42 provides the power to
withhold or withdraw pension upon proof of grave misconduct; and Rule 47
operates as the enabling bridge where misconduct during service is
established in departmental or judicial proceedings, including those
continued after retirement. The Supreme Court, in Union of India v. B.
Dev,10 observed that Rule 8(1)(a) makes the grant and continuance of
pension subject to the Pensioner’s future good conduct, while Rule 9 vests in
the President the authority to withhold or withdraw pension or gratuity,
wholly or in part, upon proof of grave misconduct or negligence in
departmental or judicial proceedings, subject to mandatory consultation with
the UPSC before passing such orders. The power under Rule 8(1)(b),
enabling withholding or withdrawal of pension upon conviction or proof of
misconduct, thus flows from and is conditioned by Rule 8(1)(a), whereas
Rule 9 constitutes a distinct provision governing cases instituted while the
pensioner was in service. This distinction between the two provisions is
material.
47. Read in this light, a similar structural distinction must inform the
interpretation of the present Pension Scheme. Rule 42, like Rule 8 of the
CCS Rules, provides the substantive basis for withholding or withdrawal of
10
(1998) 7 SCC 691.
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pension upon conviction or proof of grave misconduct, flowing from the
overarching condition of future good conduct under Rule 41. Rule 47,
however, is not merely an adjunct but a specific and self-contained provision
governing cases where misconduct during service is established in
departmental or judicial proceedings, including those continued post-
retirement. It is within Rule 47 that the statute expressly engrafts the
requirement of prior consultation with the Board before passing final orders.
Once a case falls within the ambit of Rule 47, as in the present instance,
where proceedings instituted during service are continued after retirement,
the safeguard of mandatory consultation embedded therein, cannot be
bypassed by resort to Rule 42 alone.
48. The recent decision of the Supreme Court in Vijay Kumar though
arising under a different pension regulation, elucidates the governing
principle. The Supreme Court held there that where the statutory scheme
requires prior consultation with the Board before awarding pension less than
full pension, such consultation constitutes a valuable mandatory safeguard;
that the requirement cannot be diluted by a disjoint and independent reading
of different clauses; and that post facto approval is not a substitute for prior
consultation. The Court reiterated that pension is a valuable right, and any
statutory safeguard governing its curtailment must be strictly observed.
49. On the present record, there is no material indicating that such
consultation was undertaken prior to the order dated 22 nd March, 2021 or the
addendum dated 13th May, 2021. The orders are silent on this aspect, and the
counter affidavit does not assert compliance, but proceeds on the footing
that no such requirement arose. For the reasons noted above, that position is
untenable.
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50. This, therefore, constitutes a substantial and unanswered infirmity in
the impugned action. Whether that should lead to outright invalidation of the
pensionary order or to a limited remand for fresh consideration after
compliance is a matter best addressed after the Court turns, in the next part,
to the merits and the gravity of the findings recorded against the Petitioner.
I. Scope of review and the effect of the Petitioner’s conduct in the inquiry
51. Before adverting to the individual Articles of Charge, one aspect of
the record requires reiteration. The Petitioner did file a written defence and
also a representation against the inquiry report; thus, he was not wholly
silent. However, beyond placing his defence on record, as highlighted
above, he did not effectively pursue it during the inquiry. The proceedings
were ultimately closed due to his non-participation.
52. This bears directly on the scope of judicial review. It is well settled
that, where an inquiry is conducted by a competent authority in accordance
with prescribed procedure and principles of natural justice, the writ court
does not reappreciate evidence as an appellate forum. Interference is
warranted only where findings are perverse, unsupported by evidence, or
vitiated by breach of statutory provisions or natural justice; not merely
because another view is possible.11
53. This does not place the disciplinary findings beyond scrutiny, but
confines the review to its proper limits. Had the Petitioner fully contested
the case by effective cross-examination and leading rebuttal evidence, the
review might have assumed a different character. On the present record,
however, the defence remained largely unsubstantiated for want of
11
Union of India v. Subrata Nath, (2024) 20 SCC 402; Union of India v. Managobinda Samantaray, 2022
SCC OnLine SC 284.
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participation, thereby narrowing the permissible scope of interference.
J. Articles I to IV: the cover-note episodes
54. Articles I to IV proceed on a common factual footing: cover-note
books were issued to the Petitioner; specific cover notes therefrom were
issued for certain vehicles; corresponding office copies and premiums were
not deposited; and the Respondent Company was thereby exposed to
consumer or MACT claims. The Petitioner’s answer, in substance, is that
pre-signed cover notes were handed over to brokers and agents as a working
practice, that misuse was committed by Anil Kumar Jain and Vinita Kaul,
and that he himself raised complaints against them.
55. This defence is not wholly implausible. The record also reflects that
the Petitioner did lodge complaints regarding misuse of cover notes,
including proceedings before the Magistrate under Section 156(3) Cr.P.C.
As regards the FIR registered against the Petitioner, the CBI closure report,
accepted on 22nd February, 2013, notes absence of sufficient evidence to
establish that premium collected by the agent had reached the Petitioner in
the manner alleged in the criminal case.
56. That, however, does not conclude the issue. The inquiry did not
proceed on a bare accusation that the Petitioner had personally pocketed
money. The charge was wider and open. The evidence of PW-1, V.P. Kaul,
pointed to the issuance of the relevant cover-note books to the Petitioner and
non-accounting of specific cover notes in office records. As regards Articles
I to III, the report records that consumer claims had arisen, that later policies
had been issued outside the relevant accident period, and that no
corresponding premium deposits were reflected in the Company’s
computerized system. PW-4, T.D. Kajla, corroborated the same and claimed
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that responsibility lay with the officer to whom the cover-note books were
issued. For Article IV, MACT claims arose and the office was unable to
confirm insurance due to absence of the cover note or policy in records.
57. Certain features, such as subsequent issuance of policies for the same
vehicles in Articles I and II and the dishonoured cheque in Article III, do
suggest presence of irregularities in the system, lending some support to the
Petitioner’s contention that responsibility could not automatically be
fastened on him merely because the books had originally been issued
through him. However, the management evidence remained largely
uncontroverted. The inquiry report expressly records the Petitioner’s
absence and lack of effective rebuttal. The Petitioner did not cross-examine
PW-1, and only partially cross-examined PW-4. The allegation against the
brokers thus remained a pleaded explanation, not a defence established
through evidence.
58. Further, the Petitioner failed to substantiate the working practice on
which he relied. While asserting that pre-signed cover notes were handed
over to agents to facilitate business, he did not produce any circular,
instruction, resolution, or approved procedure conferring legitimacy on such
a practice. At best, the plea suggests an informal arrangement. Even if the
same is assumed in the Petitioner’s favour, it may explain the manner of
misuse, but does not exonerate the officer in whose name the cover notes
were issued and who was responsible for their control and accounting.
59. In sum, while Articles I to IV are not free from factual complexity,
the findings cannot be characterised as perverse, so as to warrant
interference.
K. Articles V and VI: underwriting and claims handling
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60. Articles V and VI stand on a firmer footing for the Respondents.
Unlike the earlier articles, they are not premised on alleged misuse of signed
cover notes by brokers or agents, but relate to underwriting and claims-
handling decisions attributed directly to the Petitioner.
61. Article V alleges that a cover note was issued by the Petitioner in a
break-in insurance case without requisite pre-inspection, without obtaining
the mandatory proposal form and additional questionnaire, and with cover
granted from the same day. It is further alleged that the cheque was retained
for two days and that the Petitioner subsequently approved an own-damage
claim of INR 53,799/- despite evident discrepancies. The statement of
imputations elaborates that the pre-inspection report was false, the
supporting survey and bills were doubtful, and the cause of accident did not
align with the photographs, yet the claim was processed and paid for. PW-3,
Sudhir Malhotra, corroborated these irregularities, and the inquiry report
records that the Petitioner did not appear to rebut this evidence.
62. Article VI alleges that the Petitioner accepted insurance on the basis
of a photocopy of the registration certificate reflecting ownership in the
name of Ms. Sudha Kardam, but issued the policy in the name of Mr. Salim,
in a break-in insurance case, again without proper pre-inspection or proposal
material, and thereafter approved a claim of INR 46,331/-. The inquiry
report notes that no oral witness was examined specifically for this charge,
and that reliance was placed on the underwriting docket and documentary
record.
63. While there may be no oral evidence to corroborate the charge under
Article VI, one cannot lose sight of the fact that the Petitioner was aware of
the allegation from the charge memorandum and denied it in his written
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defence, but did not pursue the matter further by leading evidence or
effectively testing the documentary record. In these circumstances, while the
absence of oral evidence somewhat attenuates the charge, it does not render
the finding unsupported.
64. The essential point is that on Articles V and VI, the Petitioner’s
theory of broker misuse carries little weight. The gravamen is not the
issuance of a cover note, but the failure to adhere to underwriting norms in a
break-in case and the subsequent approval of a questionable claim, matters
squarely within internal decision-making. Accordingly, Articles V and VI
materially reinforce the conclusion that the disciplinary findings are neither
baseless nor perverse.
L. Effect of the CBI closure and the criminal-law material
65. The Petitioner has placed considerable reliance on the CBI closure
order, noting that the criminal investigation did not yield sufficient evidence
to establish that premium collected by the agent had reached him in the
manner alleged. It is contended that this undermines the disciplinary case.
66. The submission, however, overstates the effect of the closure order.
Criminal and disciplinary proceedings operate in distinct spheres. While the
former is concerned with establishing guilt beyond reasonable doubt, the
latter examines whether the conduct of the employee, on a preponderance of
probabilities, amounts to misconduct, negligence, or conduct prejudicial to
the employer’s interests. The difference is not a matter of rhetoric. It is a
difference in legal purpose and standard.
67. It is also incorrect to equate absence of proved “wrongful loss” in
criminal law with absence of departmental misconduct. An insurer may
suffer serious prejudice through irregular issuance of cover notes, failure to
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account for premium, exposure to consumer and MACT claims, and
breakdown of internal controls, even where criminal culpability is not
established.
68. This is another reason why reliance on K.T. Uthappa is of limited
assistance to the Petitioner. That case arose from a criminal prosecution in
which the Karnataka High Court found significant gaps in the prosecution
case, including missing records and uncertainty regarding access to systems,
leading to acquittal for failure to meet the criminal standard of proof. Such
reasoning cannot be transposed into service law, where the inquiry proceeds
on a different footing.
M. Whether the findings are perverse
69. Viewed holistically, the Court is unable to hold that the findings of
the inquiry are perverse. The record indicates that the Petitioner did advance
a defence theory which was perhaps not entirely without substance, and
certain aspects of the factual matrix and subsequent office actions are not
free from complexity. It is also true that the final order of punishment could
have been more elaborately reasoned.
70. While these considerations are acknowledged, they do not cross the
threshold of perversity. The management case rested on the charge
memorandum, documentary evidence regarding issuance of cover-note
books, office correspondence, absence of premium in official and
computerized records, testimony of management witnesses, and the
underwriting and claims material. The Petitioner did not effectively contest
this material during the inquiry. Having failed to substantiate his defence
when the opportunity arose, he cannot now invite the writ court to
reconstruct a case that was not pursued at the appropriate stage.
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N. The communication dated 7th June, 2021
71. By communication dated 7th June, 2021, the Petitioner was informed
that his representation dated 28th April, 2021 was not maintainable as an
appeal under Rule 31 of the CDA Rules, since the penalty had been imposed
under Rules 42 and 44 of the Pension Scheme and not under Rule 23 of the
CDA Rules. In substance, this position is correct. The penalty imposed was
not one of the service penalties under Rule 23 of the CDA Rules, but a
pensionary consequence under the Pension Scheme; Rule 31 of the CDA
Rules, therefore, did not provide an appellate remedy against such an order.
72. That, however, does not conclude the matter. The sustainability of this
communication is contingent upon the validity of the underlying disciplinary
order. If the final order is vitiated for non-compliance with Rule 47 of the
Pension Scheme, this communication cannot stand independently.
Conclusion
73. Once the analysis is stripped of side issues, the position is fairly clear.
The Petitioner fails in his challenge to the competence of the Disciplinary
Authority, once the cadre structure and redesignation are properly
appreciated. He also fails in his contention that the CDA Rules are non-est
for want of gazette publication, and in the submission that the inquiry lapsed
upon retirement, in view of the express provision contained in Rule 47 of the
Pension Scheme. The challenge to the disciplinary findings likewise fails, as
no case of perversity, absence of evidence, or grounds warranting
interference in writ jurisdiction is made out, particularly where the defence
now urged was not substantiated during the inquiry.
74. The Petitioner succeeds only on a limited but significant ground.
Once the proceedings stood continued post-retirement under Rule 47 of the
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Pension Scheme, the proviso mandating consultation with the Board prior to
passing final orders could not be disregarded. The present record does not
indicate that such consultation took place, nor do the Respondents assert
compliance; their position is that no such requirement arose. For the reasons
already noted, that contention is untenable.
75. The appropriate relief, therefore, lies neither in dismissing W.P.(C.)
1676/2023 in its entirety nor in annulling the disciplinary proceedings as a
whole. The memorandum of charges, the inquiry proceedings, and the
inquiry findings do not call for interference on the grounds urged by the
Petitioner. The defect lies at the stage of the final pensionary consequence.
In the opinion of the Court, that defect is best addressed by setting aside the
final disciplinary order and remitting the matter to the competent authority
for a fresh decision confined to the question of pensionary consequence,
after compliance with Rule 47 of the Pension Scheme. Such a course
preserves the integrity of the inquiry while ensuring adherence to the
mandatory statutory safeguard.
76. W.P.(C.) 8050/2013 is accordingly disposed of in the following terms:
The relief relating to promotion is recorded as not pressed. The claim
relating to subsistence allowance is treated as having worked itself out in
view of the Respondent Company’s additional affidavit and the supporting
computation/pay material showing payment of INR 90,206/- for the relevant
period after grant of bail, no further surviving monetary dispute on that score
having been pressed before the Court. No further directions are required in
that writ petition.
77. W.P.(C.) 1676/2023 is partly allowed to the limited extent indicated
below:
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(i) The challenge to the memorandum of charges, the conduct of the
inquiry, the appointment of the inquiry officer, the objection to the
competence of the Disciplinary Authority, the challenge founded on delay,
the challenge to continuation of proceedings after retirement, and the
broader attack on the inquiry findings are rejected.
(ii) The order dated 22nd March, 2021 imposing the penalty of
withholding of full pension, together with the addendum dated 13 th May,
2021 clarifying that such withholding was permanent, is set aside on the
limited ground of non-compliance with the first proviso to Rule 47 of the
Pension Scheme, requiring consultation with the Board before final orders
were passed.
(iii) The communication dated 7th June, 2021, being consequential to the
aforesaid order, shall also stand set aside.
(iv) The matter is remitted to the competent authority of the Respondent
Company to take a fresh decision only on the question of pensionary
consequence arising out of the disciplinary proceedings. Such decision shall
be taken after giving the Petitioner an opportunity of hearing or
representation on the proposed pensionary outcome, and after prior
consultation with the Board, as required by Rule 47 of the Pension Scheme.
(v) It is clarified that this remand is limited. The disciplinary proceedings
shall not be reopened from the stage of evidence. The findings recorded in
the inquiry report are not set aside by this judgment. What is reopened is
only the final question as to what pensionary order, if any, is to be passed in
accordance with law, after complying with Rule 47.
(vi) The Respondents shall take the fresh decision within eight weeks
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within that period, the Petitioner shall be entitled to full pension with effect
from the date of his superannuation, subject to any lawful order that may
thereafter be passed if the delay is condoned by a competent court or
otherwise explained in accordance with law. This direction is necessary to
ensure that the safeguard contained in Rule 47 is not rendered illusory by
further administrative drift.
(vii) It is also made clear that the Respondents shall be at liberty, while
taking the fresh decision, to consider the gravity of the misconduct found
proved in the disciplinary proceedings, the nature of the charges, the inquiry
record, the Petitioner’s representation, and any other relevant material
permissible in law. At the same time, the decision shall not proceed on the
footing that Board consultation is a dispensable formality.
78. Before parting, the Court considers it necessary to observe that the
disciplinary proceedings were unduly protracted. While this, in the facts of
the case, does not warrant quashing the inquiry, it has contributed to the
present situation and to the prolonged uncertainty surrounding the
Petitioner’s pensionary rights. The remand directed above shall therefore be
treated as requiring prompt and earnest compliance, and not a fresh cycle of
avoidable delay.
79. Subject to the above directions, both writ petitions stand disposed of.
Pending application(s), if any, are also disposed of.
SANJEEV NARULA, J
APRIL 22, 2026
hc
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By:NITIN KAIN
Signing Date:22.04.2026
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