Delhi High Court
Shiv Shanker Vyas vs Ntpc Limited & Ors on 13 July, 2026
Author: Sanjeev Narula
Bench: Sanjeev Narula
$~4
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 13th July, 2026.
+ W.P.(C) 15500/2024 & CM APPL. 53368/2025
SHIV SHANKER VYAS .....Petitioner
Through: Dr. Vikash Kumar, Advocate.
versus
NTPC LIMITED & ORS. .....Respondents
Through: Mr. Puneet Taneja, Senior Advocate
with Mr. Rajesh Mahendru, Mr. Anil
Kumar, Mr. Manmohan Singh Narula
and Mr. Amit Yadav, Advocates for
NTPC.
CORAM:
HON'BLE MR. JUSTICE SANJEEV NARULA
JUDGMENT
SANJEEV NARULA, J. (Oral):
1. The Petitioner assails the order dated 23rd September, 2022, by which
NTPC Limited imposed upon him the major penalty of removal from
service, without disqualification for future employment under the
Government or a government-controlled corporation. He also assails the
appellate order dated 18th November 2022 and the order dated 27th October
2023 rejecting his review petition. The Petitioner seeks reinstatement with
consequential benefits.
The controversy
2. The proceedings arose from substantial financial transactions between
the Petitioner and Shri Kunal Rai, proprietor of M/s Rife Solutions, anSignature Not Verified
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agency which had business dealings with NTPC. The Petitioner does not
dispute the transactions. His case is that he had advanced money to Kunal
Rai as a friendly loan and that the amounts subsequently credited by Rife
Solutions to the accounts of the Petitioner and his wife represented
repayment. NTPC treated the same receipts as illegal gratification and,
additionally, as prohibited financial dealings under its Conduct, Discipline
and Appeal Rules, 1977.1
3. The real controversy, therefore, is not whether money passed between
the parties, but the legal character that can be attributed to those
transactions. The distinction lies at the heart of the charge. An undisclosed
loan advanced to a person having official dealings with a public-sector
employer may, depending on the circumstances, amount to serious
misconduct. Yet, misconduct and bribery are not synonymous. The mere
existence of a financial transaction, without more, does not justify the
inference that the transaction was a bribe.
Factual background
4. The Petitioner was employed as an executive with NTPC and had
rendered approximately thirteen years of service. At the material time, he
was posted as Manager (Electrical Erection) at NTPC’s Khargone project.
He was subsequently posted at Singrauli and was holding the post of Senior
Manager when the impugned penalty was imposed.
5. On 19th August, 2020, a complaint was lodged against the Petitioner
on the Prime Minister’s Grievance Portal. It alleged, inter alia, that he had
misused his official position to compel vendors to work in partnership with
him and had received substantial amounts as illegal gratification. The
1
“CDA Rules”
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complaint was referred to NTPC Vigilance department.
6. On 25th March, 2021, NTPC referred the matter to the Central Bureau
of Investigation.2 The reference alleged receipt of approximately ₹25 lakh as
illegal gratification in the bank accounts of the Petitioner and his wife, an
abnormal increase in the Petitioner’s bank balance, and collusion with Rife
Solutions and other agencies reflected in financial transactions and
WhatsApp communications.
7. The CBI registered RC No. 0082021A0009 on 23rd June, 2021 under
Section 120-B of the Indian Penal Code and Sections 7 and 8 of the
Prevention of Corruption Act, 1988. Searches were conducted and the bank
accounts, communications and the role of the persons concerned were
investigated.
8. Upon completion of the investigation, the CBI issued a Self-
Contained Note dated 20th January, 2022. It found that the material initially
furnished to NTPC did not disclose the complete course of transactions. The
Petitioner had first transferred money to Kunal Rai, and the banking
narration included the expression “Loan to Kunal”. Vinay Rai, a common
acquaintance, supported the Petitioner’s explanation that he had been
requested to assist Kunal Rai financially. Kunal Rai also admitted during
examination that the Petitioner had advanced money to him. The CBI
concluded that the subsequent inward transactions were towards repayment
of the loan.
9. As regards the WhatsApp communications, the CBI found the
selected messages relied upon against the Petitioner to be ambiguous and
inconclusive. The messages produced by the Petitioner conveyed the
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opposite impression, namely, that he was seeking return of his money. It
found no material establishing that the Petitioner had compelled Kunal Rai
or any other vendor to enter into a partnership. The CBI nevertheless
recorded that the Petitioner had entered into financial dealings with a person
whom he knew to be working indirectly for NTPC, without obtaining
permission or intimating the department. It, therefore, recommended
departmental action for violations of Rules 14 and 16(2) of the CDA Rules.
The charge memorandum
10. On 11th May, 2022, NTPC issued a memorandum proposing a
departmental inquiry against the Petitioner under Rule 25 of the CDA Rules.
The memorandum was accompanied by a statement of the article of charge
in Annexure I and a statement of the imputations in support thereof in
Annexure II. The memorandum was also accompanied by a list of the relied-
upon documents and contemplated a list of witnesses.
11. Annexure I contained one composite article divided into four
constituent limbs. The overarching allegation was that, while serving as
Manager (Electrical Erection) at Khargone, the Petitioner had maintained a
dishonest association with agencies having business dealings with NTPC,
entered into monetary transactions with them, concealed material
information and received illegal gratification during the period 2018-2020.
The four limbs of the charge were:
i. that the Petitioner had dishonestly associated himself with M/s Rife
Solutions, M/s L&T, M/s Shivakriti, M/s PM Engineering and other
agencies engaged in electrical works at Khargone, and had received illegal
gratification from them;
2
“CBI”
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ii. that, through several transactions, approximately ₹16 lakh had been
credited from the bank account of Rife Solutions to the accounts of the
Petitioner and his wife;
iii. that the Petitioner had borrowed ₹10 lakh during 2018-2019 from
Kunal Rai, proprietor of Rife Solutions, an agency having business dealings
with NTPC Khargone; and
iv. that he had failed to report to the competent authority that his wife
was the proprietor of 3A Enterprises, which had obtained GST registration
on 7th July, 2020.
12. Annexure II repeated these allegations and then elaborated the case
sought to be made against the Petitioner. It stated that L&T, Shivakriti and
PM Engineering had been awarded electrical works at Khargone and had
sub-contracted parts of those works to Rife Solutions and that verification by
NTPC Vigilance had disclosed credits aggregating approximately ₹16.80
lakh from Rife Solutions to the accounts of the Petitioner and his wife and
treated the receipts as illegal gratification. The bank transactions were relied
upon to invoke Rule 16(2). The entry in the Petitioner’s annual property
returns describing a loan of ₹10 lakh as having been taken from Kunal Rai
was relied upon to invoke Rule 14. His failure to report his wife’s
proprietorship of 3A Enterprises was alleged to violate Rule 13(2). On this
foundation, NTPC also alleged breaches of Rules 4(1)(i), 4(1)(iii), 5(2), 5(5)
and 5(17) of the CDA Rules.
13. The Petitioner denied the charges. He maintained that Kunal Rai was
a personal acquaintance to whom he had advanced an interest-free loan.
According to him, the entries showing credits from Rife Solutions
represented repayment in instalments. He relied upon the bank statements,
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the transaction narration, the entries made in his annual property returns,
though under an incorrect column, and the blank cheque allegedly furnished
by Kunal Rai as security.
The departmental inquiry
14. An Inquiry Authority was appointed on 2 nd June, 2022. The
preliminary hearing was held on 14th June, 2022 and the regular hearings
concluded on 12th July, 2022.
15. No management witness was examined. The Presenting Officer relied
upon the bank statements, annual property returns, registration records,
purchase order documents, WhatsApp communications and other documents
which were stated to have been admitted or supplied to the Petitioner. The
Petitioner was represented by a defence assistant, produced documentary
material, examined himself and presented defence witnesses.
16. In its report dated 18th August, 2022, the Inquiry Authority found that
the Petitioner’s direct association with M/s L&T, M/s PM Engineering and
M/s Shivakriti, and the allegation that he had received illegal gratification
from those agencies, had not been established. It, however, found his
association with Kunal Rai, proprietor of M/s Rife Solutions, and Rajendra
Malviya, who was looking after the site work of Rife Solutions, to be
established. The first limb of the charge was, accordingly, held proved with
modification, by confining it to the Petitioner’s alleged dishonest association
with Rife Solutions and receipt of illegal gratification from that agency.
17. In arriving at that conclusion, the Inquiry Authority relied, inter alia,
upon the following circumstances:
a. substantial financial transactions from the Petitioner to Kunal Rai and,
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and his wife;
b. transfers made by the Petitioner, as well as from the account of 3A
Enterprises, to Rajendra Malviya, who was arranging manpower and
material for the outdoor signalling and telecommunication work undertaken
by Rife Solutions;
c. a WhatsApp communication which, according to the Inquiry
Authority, had most probably been sent from the Petitioner’s mobile phone
to Ganesh, an accountant of Shivakriti, seeking release of money so that the
wages of Rife Solutions’ labour could be paid;
d. the Petitioner’s admitted payment to M/s HR Projects towards
electrical material required for the work awarded to Kunal Rai, and a
payment of ₹71,429 towards the GST liability of Rife Solutions; and
e. Purchase Order No. 4200047483 dated 16th December, 2017, placed
upon Rife Solutions for the supply of occupancy sensors, which had been
executed and in relation to which the Petitioner had processed the bill for
payment.
18. The Inquiry Authority observed that, on the basis of the evidence
discussed by it, it “may be construed” that the amounts transferred by the
Petitioner from the account of 3A Enterprises to Rajendra Malviya “may be”
for managing the works of M/s Rife Solutions rather than for the purchase of
clothes as claimed in the defence. Proceeding thereafter on a preponderance
of probabilities, it “construed” that the Petitioner was managing the Outdoor
S&T contract awarded by Shivakriti to Rife Solutions through Rajendra
Malviya. It further concluded that the billing amounts received by Rife
Solutions from Shivakriti under that contract had been diverted to the
Petitioner through Kunal Rai. The charge of dishonest association andSignature Not Verified
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receipt of illegal gratification was accordingly held proved, albeit confined
to Rife Solutions.
19. The second imputation, concerning the credits of approximately ₹16
lakh from Rife Solutions, was held proved on the basis of the bank
statements.
20. The third imputation, as framed, was expressly held not proved. The
evidence did not establish that the Petitioner had borrowed ₹10 lakh from
Kunal Rai. On the contrary, the Inquiry Authority found that the Petitioner
had advanced money to Kunal Rai and had not correctly declared the
advance in his annual property return.
21. The fourth imputation was held proved on the Petitioner’s admission
that he had not reported his wife’s proprietorship of 3A Enterprises to
NTPC.
22. A copy of the report was furnished to the Petitioner. He submitted his
response on 12th September, 2022, reiterating that the financial entries
reflected an outgoing loan and its repayment; that no official favour,
pecuniary loss or unjust enrichment had been identified; that the 2017
purchase order had been processed through the prescribed procurement
procedure; and that 3A Enterprises was a short-lived venture which had been
closed in March 2021.
The impugned orders
23. By order dated 23rd September, 2022, the Disciplinary Authority
accepted the Inquiry Report and observed that, under Rule 23, where
demand and acceptance of illegal gratification for performing an official
duty was established, removal or dismissal was applicable. It accordingly
imposed the penalty of removal from service, without disqualification for
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future employment under the Government or a government-controlled
corporation.
24. The Petitioner preferred an appeal dated 10th October, 2022. The
appeal was examined by a committee constituted under Rule 32. The
committee observed that the Petitioner had not produced any new evidence
and had accepted certain lapses. It recommended rejection of the appeal on
the ground that the penalty was commensurate with the gravity of the
charges. The Appellate Authority rejected the appeal on 18th November,
2022.
25. A review petition dated 15th December, 2022 was thereafter placed
before a Committee of Directors and the Board of NTPC. The order dated
27th October, 2023 records that the Board discussed various aspects of the
matter and decided to uphold the management’s decision. It does not
disclose any charge-wise consideration of the grounds urged by the
Petitioner.
Submissions on behalf of the Petitioner, in brief
26. Dr. Vikash Kumar, counsel for the Petitioner, submits that the inquiry
was founded entirely upon documentary material and that NTPC did not
examine Kunal Rai, any representative of Rife Solutions or Shivakriti, or
any officer who could speak to a demand, payment or official favour. The
bank entries establish only transfer of money and not its alleged corrupt
character.
27. It is argued that the Inquiry Authority ignored the complete financial
trail. The Petitioner had first advanced substantial amounts to Kunal Rai and
had recorded “Loan to Kunal” in the banking narration. The CBI had
examined Kunal Rai and Vinay Rai and had concluded that the later
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payments represented repayment. There was, therefore, no evidentiary basis
to treat the same amounts as illegal gratification.
28. Dr. Kumar submits that the 2017 purchase order merely establishes
that the Petitioner had, on an earlier occasion, processed a bill relating to
Rife Solutions. There is no allegation that the purchase order was
improperly issued, that the material was not supplied, that the bill was
falsely certified, or that any subsequent payment was consideration for
processing that bill.
29. It is further contended that the Inquiry Authority travelled beyond the
third imputation by substituting lending for borrowing. The Petitioner also
disputes the application of Rule 14, attempting to distinguish a friendly loan
from lending in the commercial sense. Rule 16(2), it is urged, cannot be
invoked merely because money moved between two persons, absent any
transaction in identifiable movable or immovable property.
30. As regards 3A Enterprises, it is submitted that the firm was registered
for a clothing business during the COVID-19 period, remained unsuccessful
and was closed within a few months. The omission to report it was
inadvertent and caused no prejudice to NTPC.
31. Further, it is urged that the Disciplinary Authority treated removal as
mandatory solely because illegal gratification was held proved. Once that
finding fails, the penalty cannot be sustained on the residual charges. The
appellate and reviewing orders, being unreasoned affirmations, do not cure
the defect.
Submissions on behalf of NTPC, in brief
32. Mr. Puneet Taneja, Senior Counsel for NTPC, submits that the
jurisdiction of this Court is supervisory and not appellate. The Inquiry
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Authority is the primary judge of facts, and the Court cannot reassess the
sufficiency or reliability of evidence merely because another view is
possible.
33. It is argued that no prejudice arose from the absence of management
witnesses since the material documents and bank transactions were
admitted. The financial dealings, the Petitioner’s involvement in
procurement of material, payment of GST, communications for release of
contractors’ payments, transfers to Rajendra Malviya and the earlier
purchase order, when considered cumulatively, established an association
far beyond an ordinary personal friendship.
34. NTPC submits that the CBI’s decision not to prosecute cannot govern
a departmental inquiry, where the standard is preponderance of probabilities.
The Inquiry Authority was entitled to draw its own conclusions from the
material placed before it.
35. It is further submitted that, even upon the Petitioner’s own
explanation, he admittedly lent substantial sums to the proprietor of an
agency having official dealings with NTPC and entered into reciprocal
monetary transactions without prior permission. The conduct independently
attracts Rules 14 and 16(2). The failure to report the wife’s business is also
admitted.
36. On penalty, NTPC relies upon the principle that where some charges
fail but the surviving charges constitute substantial misconduct for which
removal could lawfully be imposed, the Court ought not to speculate
whether the same punishment would have been imposed on the surviving
charges alone.
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Points for determination
37. In the light of the pleadings, the record of the disciplinary proceedings
and the submissions advanced, the following questions arise for
consideration:
i. Whether the material before the Inquiry Authority could reasonably
sustain, on the standard of preponderance of probabilities, the finding that
the amounts received by the Petitioner and his wife from M/s Rife Solutions
constituted illegal gratification;
ii. Whether the findings of misconduct under Rules 13(2), 14 and 16(2)
of the CDA Rules are sustainable and, if so, to what extent the consequential
findings under Rules 4(1)(i), 4(1)(iii), 5(5) and 5(17) can survive;
iii. Whether, in view of Rule 25(19) of the CDA Rules, the Inquiry
Authority was entitled to record a finding that the Petitioner had lent money
to Kunal Rai when the third imputation alleged that he had borrowed money
from him; and
iv. What consequence follows for the penalty of removal if the finding of
illegal gratification is found unsustainable, while some of the other
misconducts remain established.
Scope of judicial review
38. The parameters governing judicial review of disciplinary proceedings
are settled. The Court does not sit in appeal over the conclusions of the
Inquiry Authority. It does not reassess the evidence or substitute its own
view merely because two conclusions are possible. The strict rules of the
Evidence Act do not apply, and material which is logically probative and
possesses a reasonable nexus with the charge may be considered.
39. These limitations do not, however, render disciplinary findings
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immune from scrutiny. The Court may interfere where the finding rests on
no evidence, takes into account material extraneous to the charge, ignores
material which bears directly upon the conclusion, or is so arbitrary or
conjectural that no reasonable decision-maker could have reached it. The
distinction is between reassessing the weight of evidence and examining
whether the conclusion has any rational evidentiary foundation.3
40. It is settled that a charge in a departmental proceeding is required to
be established on the touchstone of preponderance of probabilities, and not
beyond reasonable doubt. However, the fact that departmental proceedings
are governed by a less exacting standard of proof does not dispense with the
requirement of proof itself. Although the technical rules of evidence do not
apply, the material relied upon must be relevant, logically probative and
possess a reasonable nexus with the charge. It must be capable of rendering
the charged version more probable than the competing explanation.
Suspicion may furnish cause for initiating an inquiry; it cannot, however
strong, take the place of proof in recording a finding of misconduct.
41. The standard of preponderance of probabilities does not permit a
chain of speculative assumptions to be treated as proof merely because,
when viewed cumulatively, they appear plausible. A finding may
undoubtedly be founded upon circumstantial evidence, but the foundational
facts must first be established and the inference drawn must reasonably arise
from those facts. Conjecture cannot be placed upon conjecture to bridge
gaps in the evidence. While the sufficiency of evidence ordinarily lies
beyond the scrutiny of the writ court, a conclusion resting on no relevant
3
Union of India v. P. Gunasekaran, (2015) 2 SCC 610; B.C. Chaturvedi v. Union of India (1995) 6 SCC
749; Union of India v. Subrata Nath, (2024) 20 SCC 402.
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material, or upon conjectures and surmises, is vulnerable as perverse. Even
in a domestic inquiry, objectivity, exclusion of extraneous considerations,
fairness and a rational nexus between the material and the charge remain
indispensable.
Documentary evidence and the absence of management witnesses
42. The Petitioner’s broad contention that the inquiry must fail merely
because NTPC did not examine any management witness cannot be
accepted. A departmental proceeding is not governed by the technical rules
of the Evidence Act, and a charge may be established on documentary
material alone. Where the authenticity and contents of the documents are not
disputed, they may be acted upon without formal proof through their
authors, provided they are relevant and logically probative of the charge.
Thus, bank statements may establish the movement of funds; purchase
orders may establish an official transaction; and admitted communications
may be considered according to their tenor and context.
43. The absence of oral evidence, however, assumes significance where
the documents establish one fact, but the employer seeks to attribute to that
fact a further and qualitatively different character. The bank entries prove
that money was transferred. They do not, by themselves, disclose the
purpose for which it was transferred. To characterise the receipts as illegal
gratification, there had to be some material connecting them with an official
act, favour, omission or misuse of position.
44. NTPC was not invariably required to prove an express demand
through direct testimony. The corrupt character of a payment may also be
established by circumstantial evidence. The circumstances relied upon must,
however, form a coherent evidentiary chain and furnish a rational nexus
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between the receipt of money and the exercise, promised exercise or misuse
of official power. It is the existence of that nexus which falls for
examination.
The financial transactions
45. There is no dispute that approximately ₹16.80 lakh was transferred
from the account of Rife Solutions to the accounts of the Petitioner and his
wife. There is equally no dispute that some money had first travelled in the
opposite direction.
46. The Inquiry Authority itself found that the Petitioner had initially
transferred ₹9.50 lakh to Kunal Rai. The CBI, after examining the account
statements and the persons concerned, found that the Petitioner had lent
money to Kunal Rai and that the later inward transactions represented
repayment. It also noticed that Kunal Rai had initially supplied to NTPC
only those portions of the statements which reflected payments made by
him, without disclosing the preceding transfers received from the Petitioner.
47. The Court does not treat the CBI’s conclusion as binding upon the
Disciplinary Authority. A criminal investigation and a departmental
proceeding serve different purposes and apply different standards. NTPC
was entitled to proceed departmentally notwithstanding the CBI’s decision
not to prosecute.
48. Equally, the CBI note cannot be dismissed as irrelevant merely by
invoking the lower standard of departmental proof. It examined the same
banking trail, Kunal Rai, Vinay Rai and other persons and found that a loan
had first been advanced. More importantly, the departmental inquiry itself
accepted the initial outward transfer. The question was, therefore, not
whether the Petitioner had proved an entirely unsupported defence, but
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whether NTPC’s characterisation of the later receipts as gratification was
more probable than the explanation of repayment.
49. The Inquiry Report does not undertake that comparative exercise. It
proceeds from the existence of financial transactions, the Petitioner’s
involvement in certain activities connected with Rife Solutions and his
acquaintance with Rajendra Malviya, to the conclusion that contractual
receipts were diverted to him as gratification. The steps in between remain
unsupported.
The 2017 purchase order
50. NTPC relied upon a purchase order dated 16 th December, 2017,
placed upon M/s Rife Solutions for the supply of occupancy sensors. The
purchase order was executed and the Petitioner processed the bill for
payment. The Petitioner explained that the order had been placed through
the prescribed Contracts and Materials procedure and that he processed the
bill only because Tapas Mishra, the Engineer-in-Charge of the package, was
unavailable. The Presenting Officer relied upon Tapas Mishra’s attendance
record to question that explanation. The material, at the least, establishes
that the Petitioner had previously dealt with Rife Solutions in the discharge
of his official functions.
51. That circumstance answers any broad suggestion that Rife Solutions
was wholly unconnected with the Petitioner’s official sphere. It does not,
however, establish that he was dealing officially with the firm throughout
the period in which the disputed financial transactions occurred. The
purchase order preceded the period principally under scrutiny, and the
Petitioner’s more specific plea was that he had no direct official dealings
with Rife Solutions during the relevant period.
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52. The evidentiary consequence of the 2017 transaction must also be
confined to what it proves. There is no allegation or finding that the
Petitioner procured the purchase order for Rife Solutions, manipulated the
prescribed procurement process, falsely certified its execution, processed a
bill for goods not supplied, or secured payment contrary to contractual
entitlement. Nor has any subsequent credit to the Petitioner or his wife been
linked to the value, execution, certification or payment of that purchase
order.
53. The purchase order thus establishes a prior official dealing between
the Petitioner and Rife Solutions. It is relevant to the charge that the
Petitioner thereafter entered into a private financial relationship with the
proprietor of an agency with which he had official dealings. It does not,
without further evidence, establish that the later receipts were a reward for
processing the purchase order or for extending any other official favour.
The WhatsApp communication and the Petitioner’s involvement in the work
of Rife Solutions
54. The Inquiry Authority also relied upon a WhatsApp communication
sent from the Petitioner’s mobile phone to Ganesh, an accountant of M/s
Shivakriti, seeking release of money so that payment could be made to the
labour engaged by Rife Solutions. The Petitioner and Rajendra Malviya
attributed the message to another person who had allegedly used the
Petitioner’s phone. The Inquiry Authority rejected that explanation and
found it most probable that the message had been sent by the Petitioner.
55. For the purposes of the present examination, even if that finding is
accepted, the communication establishes that the Petitioner concerned
himself with the release of a contractual payment connected with Rife
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Solutions. The Inquiry Authority also relied upon the Petitioner’s admitted
payment to M/s HR Projects for electrical material required for work
awarded to Kunal Rai, a payment of ₹71,429 towards the GST liability of
Rife Solutions, and transfers made by the Petitioner and from the account of
3A Enterprises to Rajendra Malviya, who was looking after the site work of
Rife Solutions. These circumstances disclose a degree of private financial
involvement in the affairs of the agency which was plainly inappropriate for
an NTPC officer who had dealt officially with it.
56. They do not, however, answer the distinct and more serious question
whether the amounts credited by Rife Solutions to the Petitioner and his
wife were paid in consideration of an official favour. The Inquiry Report
identifies no bill improperly certified by the Petitioner, no measurement
manipulated by him, no contractual entitlement unlawfully accelerated, no
payment released despite non-performance, and no work order obtained
through his intervention.
57. The Presenting Officer asserted that the amounts received by Rife
Solutions from Shivakriti were thereafter diverted to the Petitioner. The
Inquiry Report accepts that assertion, but does not disclose any transaction-
wise analysis correlating a particular receipt from Shivakriti with a
corresponding credit to the Petitioner or his wife. It does not examine the
dates and amounts of the respective transfers, identify the contractual
payment allegedly diverted, or explain why the credits were more probably
contractual proceeds than repayment of the amounts earlier advanced by the
Petitioner. The conclusion that the “billing amount” was diverted as
gratification is therefore asserted rather than demonstrated.
58. The reasoning adopted by the Inquiry Authority makes the gap
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apparent. It first observed that it “may be construed” that the payments made
from 3A Enterprises to Rajendra Malviya “may be” for managing the works
of M/s Rife Solutions rather than for the purchase of clothes as claimed in
the defence. It then concluded, on a preponderance of probabilities, that the
Petitioner was managing the contract through Rajendra Malviya. From those
premises, it reached the further conclusion that the billing proceeds received
by Rife Solutions were diverted to the Petitioner as illegal gratification.
59. Preponderance of probabilities permits a finding founded upon
circumstantial evidence; it does not permit one conjecture to supply the
foundation for another. The established circumstances may render the
Petitioner’s financial association with Rife Solutions improper and may
attract the specific prohibitions contained in the CDA Rules. They do not,
without some evidence connecting the receipts to an identified official act or
advantage, establish their corrupt character. Suspicion arising from an
impermissible financial relationship cannot, merely by cumulative
repetition, be transformed into proof of illegal gratification.
Whether illegal gratification was proved
60. Thus, even if each of the primary circumstances relied upon by NTPC
is accepted, the material establishes that:
a. the Petitioner had previously dealt with Rife Solutions in the
discharge of his official functions;
b. he thereafter entered into substantial private financial dealings with its
proprietor;
c. he rendered financial and logistical assistance in matters connected
with the work of the agency;
d. he intervened in relation to the release of a contractual payment due in
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connection with that work; and
e. he failed to maintain the institutional distance expected of an officer
of a public-sector undertaking in his dealings with a person whose
commercial interests were connected with NTPC.
61. These circumstances disclose an improper financial relationship,
attended by a serious conflict of interest. They may sustain the specific
prohibitions governing lending, pecuniary obligations and transactions with
persons having official dealings. However, they do not establish that the
money received by the Petitioner and his wife was illegal gratification.
62. The record contains no evidence of any demand or solicitation of
gratification. Nor has any specific official favour, decision or advantage
been identified as having been sought or secured in return for the payments
in question. Significantly, no representative of Rife Solutions, or of any
other alleged payer, stated during the departmental proceedings that any
amount was paid as consideration for an official act. There is also no
contemporaneous correspondence, communication or record describing the
transfers as commission, reward or illegal gratification. No payment has
been linked to the award, execution, certification or release of payment
under any particular contract. While direct proof of a demand or quid pro
quo may not be indispensable in every case, the circumstantial evidence
must nevertheless establish a rational and persuasive nexus between the
receipts and an identifiable exercise or misuse of official authority. The
record discloses no such nexus.
63. There was, moreover, material on record showing that money had first
moved from the Petitioner to Kunal Rai. The Inquiry Authority itself
accepted that the Petitioner had advanced substantial sums to him, while the
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CBI investigation recorded that Kunal Rai had acknowledged the loan and
treated the subsequent transfers as repayments. Those prior outward
transfers furnished a concrete and record-based explanation for the later
receipts. NTPC could reject that explanation only upon material showing
that the receipts were, more probably than not, consideration for an official
favour. The Inquiry Report contains no such analysis.
64. The factum of receipt is established; its corrupt character is not. The
conclusion that the money represented illegal gratification does not arise as a
reasonable inference from the foundational facts found by the Inquiry
Authority. This is not a case in which two plausible views of the evidence
are available and the Court is impermissibly substituting its own. Even after
accepting the circumstances relied upon by NTPC, the essential evidentiary
link between the receipts and an official act remains missing.
65. The finding of misconduct under Rule 5(2) is, accordingly,
unsustainable. The finding under Rule 5(17), insofar as it proceeds on the
premise that the Petitioner’s receipt of money constituted a criminal offence
involving moral turpitude, must also fall.
Rule 14: prohibited lending and pecuniary obligation
66. Rule 14 prohibits an employee, save in the ordinary course of
business with a bank, the Life Insurance Corporation or a firm of standing,
from borrowing money from, lending money to, or otherwise placing
himself under a pecuniary obligation to any person with whom he has, or is
likely to have, official dealings. The prohibition also extends to any such
borrowing, lending or pecuniary obligation undertaken in the employee’s
name, for his benefit, or for the benefit of a member of his family.
67. The Petitioner’s attempt to place a “friendly loan” outside the ambit
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of Rule 14 is misconceived. The legal character of a transaction does not
depend upon the label assigned to it. An advance does not cease to be a loan
merely because it is interest-free, informal or prompted by friendship. The
Petitioner’s own case is that Kunal Rai was required to return the amount,
that it was repaid in instalments and that a blank cheque was furnished as
security. These features affirm the existence of a loan and a corresponding
pecuniary obligation.
68. Rule 14 is preventive in character. Its application does not depend
upon proof that the employee earned interest, caused pecuniary loss to the
employer or extended an actual official favour to the borrower. The Rule
seeks to forestall the conflict of loyalty and reciprocal obligation liable to
arise when an employee enters into a substantial private financial
relationship with a person whose commercial interests fall within, or may
come before, the employee’s official sphere.
69. Kunal Rai was the sole proprietor of Rife Solutions. The Petitioner
had dealt officially with that concern in connection with the purchase order
of 16th December, 2017 and was aware that it was executing works
connected with NTPC Khargone through principal contractors during the
relevant period. Rife Solutions and its sole proprietor cannot, for the
purposes of Rule 14, be treated as unrelated entities. Kunal Rai accordingly
answered the description of a person with whom the Petitioner had, or was
likely to have, official dealings for the purposes of Rule 14.
70. On the Petitioner’s own showing, he advanced substantial sums to
Kunal Rai and thereafter received repayments, some of them through the
account of Rife Solutions and into the account of his wife. The transaction
did not fall within any of the exceptions contained in Rule 14. The routing of
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some repayments through the spouse’s account does not alter the position,
for the Rule expressly encompasses pecuniary obligations created for the
benefit of a family member.
71. While the Petitioner’s explanation undermines the allegation of illegal
gratification, it simultaneously confirms that he had entered into a lending
transaction and a corresponding pecuniary relationship with Kunal Rai. The
failure of the charge of illegal gratification does not, therefore, exonerate the
Petitioner from the independent breach of Rule 14
Borrowing versus lending
72. The third imputation alleged that the Petitioner had borrowed ₹10
lakh from Kunal Rai. That allegation was not proved. The Inquiry Authority
expressly found that the transaction was in the opposite direction. The
charge, therefore, failed. What was found was that the Petitioner had lent
money to Kunal Rai and had incorrectly entered or omitted the transaction in
the relevant column of the annual property return.
73. Rule 25(19) of the CDA Rules permits the Inquiry Authority to record
a finding on an article different from the original article where the employee
has admitted the foundational facts or has been afforded a reasonable
opportunity to defend himself against it.
74. In the present case, the Petitioner himself introduced and maintained
the case of lending. It formed the centre of his written defence. He relied
upon the bank records, the narration “Loan to Kunal”, the alleged security
cheque and the subsequent repayments. The statement of imputations had
also questioned the alleged lending and its disclosure in the annual returns.
The Petitioner, therefore, had full notice of the relevant facts and contested
their disciplinary consequences. No prejudice arose from the Inquiry
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Authority treating the transaction as lending rather than borrowing.
75. The alternative finding under Rule 14 can thus be sustained under
Rule 25(19). It must nevertheless be recorded with precision: the charge that
the Petitioner borrowed ₹10 lakh was not proved; the proved misconduct is
that he lent money to Kunal Rai, with whom he had official dealings,
without permission.
Rule 16(2)
76. Rule 16(2) prohibits an employee from entering, without previous
sanction, into any transaction concerning movable or immovable property
with a person or firm having official dealings with the employee or his
subordinate.
77. A substantial loan and its repayment constitute transactions
concerning movable property. The provision is not confined to purchase or
sale of tangible goods. Its language is deliberately wide and seeks to subject
private property transactions with persons having official dealings to prior
scrutiny.
78. The Petitioner and his wife received substantial payments from Rife
Solutions. The Petitioner had previous official dealings with the firm and,
during the relevant period, was also involved in matters connected with its
work. No prior sanction was sought or obtained. The finding under Rule
16(2) is accordingly sustainable.
79. Rules 14 and 16(2), however, address overlapping aspects of the same
financial relationship. Rule 14 is the more specific prohibition governing
lending, borrowing and pecuniary obligation. Rule 16(2) additionally
requires prior sanction for transactions concerning property with persons
having official dealings. Their concurrent application does not permit the
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same conduct to be counted twice while assessing the gravity of the
misconduct.
80. The Petitioner’s analogy of an employee purchasing fuel or ordinary
goods from an establishment which happens to be an NTPC vendor is
misplaced. The present case concerns substantial reciprocal transfers of
money and a continuing private financial relationship with the proprietor of
an agency whose commercial work was connected with NTPC. It bears no
resemblance to an ordinary retail transaction conducted in the open market.
Rule 13(2): 3A Enterprises
81. Rule 13(2) requires an employee to report to the competent authority
where a member of his family is engaged in trade, business or any other
commercial activity.
82. It is admitted that the Petitioner’s wife registered 3A Enterprises on
7th July 2020 and that the Petitioner did not report this fact to NTPC. The
explanation that the business was unsuccessful, operated only for a short
period and was closed in March 2021 may bear upon penalty. It does not
extinguish the reporting obligation.
83. Nor is absence of pecuniary loss to NTPC an ingredient of Rule 13(2).
The purpose of disclosure is to enable the employer to identify a possible
conflict of interest. An employee cannot unilaterally decide that disclosure is
unnecessary because the business was modest or unsuccessful.
84. The finding under Rule 13(2) is therefore affirmed.
The general misconduct provisions
85. The breaches of Rules 13(2), 14 and 16(2) cannot be regarded as
merely technical. The Petitioner, while holding a responsible position in a
public-sector undertaking, entered into substantial private financial dealings
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with the proprietor of an agency with which he had official dealings,
received repayments through the accounts of the agency and his wife, and
failed to disclose his wife’s commercial venture. Such conduct compromises
the safeguards intended to preserve objectivity in official decision-making
and exposes the institution to a legitimate apprehension of divided loyalty.
86. The proved conduct may, therefore, legitimately sustain the derivative
findings that the Petitioner failed to maintain absolute integrity, acted in a
manner unbecoming of a public servant, and acted prejudicially to the
interests of NTPC, within the meaning of Rules 4(1)(i), 4(1)(iii) and 5(5),
respectively.
87. Those general provisions cannot, however, be employed to
reintroduce, under a different description, the finding of corruption which
has failed for want of evidence. The findings under Rules 4(1)(i), 4(1)(iii)
and 5(5) shall survive only insofar as they arise from the established
violations of Rules 13(2), 14 and 16(2). They cannot be understood as
findings that the Petitioner accepted a bribe, acted in consideration of an
official favour, or committed a criminal offence involving moral turpitude.
Effect on the penalty
88. Rule 23 prescribes a range of minor and major penalties, extending
from censure and withholding of increments to compulsory retirement,
removal and dismissal. Its first proviso stipulates that, where the charge of
possession of assets disproportionate to known sources of income, or
acceptance of gratification other than legal remuneration as a motive or
reward for doing or forbearing to do an official act, is established, the
penalty of removal or dismissal shall be imposed. The second proviso
permits departure from that consequence only in an exceptional case and for
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special reasons recorded in writing.
89. The Disciplinary Authority did not treat the finding of gratification
merely as one aggravating circumstance amongst several. After holding the
charges proved, it expressly recorded that, since demanding and accepting
illegal gratification in connection with official duty had been established, the
penalty under clauses (i) or (j) of Rule 23 was attracted, and that removal or
dismissal was consequently applicable. It thereafter imposed removal from
service.
90. The finding of gratification was thus the legal premise upon which the
Disciplinary Authority considered itself required to choose between the two
severest penalties. It was not an incidental finding capable of being severed
while leaving the process of selection of penalty unaffected.
91. At this stage, the principle enunciated by the Constitution Bench in
State of Orissa v. Bidyabhushan Mohapatra4 must be noticed. The
Supreme Court held that, where an order of punishment is founded upon
several findings and some of them are found unsustainable, the punishment
does not necessarily fall if a surviving finding constitutes substantial
misconduct for which the punishment imposed could lawfully have been
awarded. In such a case, the Court ordinarily does not speculate whether the
surviving charge alone would have led the disciplinary authority to impose
the same punishment. The principle was reiterated in B.C. Chaturvedi v.
Union of India.
92. The principle is unquestionable; its application is nevertheless
dependent upon the structure of the penalty order under examination. The
present case is not one in which the Disciplinary Authority evaluated several
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proved acts of misconduct, assessed their cumulative gravity, and selected
removal in the exercise of an unrestricted discretion. The Authority invoked
a proviso which made removal or dismissal mandatory upon proof of a
particular species of misconduct, acceptance of gratification as a motive or
reward for an official act.
93. Once the finding of gratification is set aside, the statutory premise
which governed the selection of penalty disappears. What survives is
prohibited lending, unauthorised monetary dealings with a person having
official dealings, failure to report the wife’s business, and the consequential
breaches of the general conduct provisions. These are serious acts of
misconduct. They are, however, qualitatively different from accepting
money as consideration for the exercise or misuse of official power.
94. Removal remains one of the penalties legally available under Rule 23
for the surviving misconduct. Its availability, however, is not the same as a
considered determination that it is the appropriate penalty in the absence of
the finding of illegal gratification. The impugned order was rendered on the
footing that the charge of illegal gratification stood established and that the
first proviso to Rule 23 was attracted. It therefore does not disclose any
independent assessment of what penalty would be warranted if the surviving
misconduct alone were taken into account.
95. In these circumstances, the penalty of removal from service, if
allowed to stand, would be shockingly disproportionate to the surviving
misconduct, which is qualitatively different from the charge of acceptance of
illegal gratification.
96. The rule in Bidyabhushan Mohapatra does not require such a result. It
4
AIR 1963 SC 779
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prevents interference merely because one of several charges has failed,
where the surviving substantial misconduct itself supports the punishment
and there is no reason to conclude that the process of selection has been
materially altered. It does not oblige the Court to preserve a penalty whose
very mode of selection rested upon a mandatory consequence attached
exclusively to a finding which has been set aside.
97. The selection of punishment ordinarily lies within the domain of the
disciplinary administration. Even where judicial interference with the
penalty is warranted, the normal course is to require the disciplinary or
appellate authority to reconsider it; substitution by the Court is reserved for
rare and exceptional cases supported by cogent reasons.5 The proper course
is, therefore, to remit the matter to the competent authority for
reconsideration of the penalty on the basis of the misconduct which lawfully
survives.
98. In undertaking that exercise, the authority must assess the gravity of
the surviving misconduct on its own terms. It shall not, however, proceed
upon the premise that the Petitioner accepted illegal gratification or
committed an offence involving moral turpitude.
Appellate and reviewing orders
99. An appellate order affirming a reasoned disciplinary order need not
reproduce the entire evidence. It must nevertheless disclose that the material
grounds raised in appeal were considered, particularly where the applicable
rules require the Appellate Authority to examine whether the findings are
justified and whether the penalty is excessive or inadequate.
100. The Petitioner’s appeal specifically raised the distinction between
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lending and borrowing, the absence of evidence of gratification, the outward
transfers preceding the receipts and the findings of the CBI. The appellate
order does not engage with these issues. It states only that no new evidence
had been furnished and that the penalty was appropriate.
101. An appeal in disciplinary law is not confined to new evidence. It
requires examination of whether the existing material supports the findings
and whether the penalty is justified. The absence of new material was,
therefore, no answer to the grounds urged.
102. The reviewing order is still more terse. It refers to deliberations by the
Committee and the Board but does not disclose why the charge of
gratification was considered proved, how the admitted outward transfers
were evaluated, or why the penalty of removal remained appropriate.
103. Since this Court has examined the substantive findings, it is
unnecessary to rest the decision solely upon the absence of reasons. The
appellate and reviewing orders must nevertheless fall with the penalty order
which they affirmed.
Conclusions
104. The Court, accordingly, records the following conclusions:
i. The material on record does not establish that the amounts received
by the Petitioner and his wife constituted illegal gratification or
consideration for any identified official favour, act or advantage. The
finding of misconduct under Rule 5(2) of the CDA Rules is, therefore,
unsustainable and is set aside.
ii. The finding under Rule 5(17), insofar as it proceeds upon the premise
that the receipt of those amounts constituted a criminal offence involving5
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moral turpitude, is also set aside.
iii. The third imputation, which alleged that the Petitioner had borrowed
₹10 lakh from Kunal Rai, was not proved and has not been disturbed.
iv. The lending transaction and the resulting pecuniary relationship with
the proprietor of an agency with which the Petitioner had official dealings
constituted a breach of Rule 14.
v. The substantial monetary transactions undertaken with Rife Solutions
without previous sanction attracted Rule 16(2).
vi. The Petitioner’s failure to report that his wife was the proprietor of 3A
Enterprises constituted a breach of Rule 13(2).
vii. The findings under Rules 4(1)(i), 4(1)(iii) and 5(5) survive only
insofar as they flow from the established violations of Rules 13(2), 14 and
16(2). They shall not be understood as findings that the Petitioner accepted a
bribe, acted in consideration of an official favour, or committed a criminal
offence involving moral turpitude.
viii. The penalty of removal was selected upon invocation of the
mandatory consequence attached to a proved charge of illegal gratification.
Since that finding cannot be sustained, the penalty must be reconsidered on
the basis of the misconduct which alone survives this judgment.
Directions
105. The writ petition is partly allowed in the following terms:
a. The Inquiry Report dated 18th August, 2022 is set aside to the extent
that it holds the Petitioner guilty of receiving illegal gratification from M/s
Rife Solutions and of misconduct under Rules 5(2) and 5(17) of the CDA
Rules.
b. The findings concerning the violations of Rules 13(2), 14 and 16(2)
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are affirmed, subject to the clarification that the allegation of borrowing was
not proved and that the transaction established by the record was one of
lending by the Petitioner to Kunal Rai.
c. The findings under Rules 4(1)(i), 4(1)(iii) and 5(5) are sustained only
to the limited extent indicated in paragraph 104(vii) above.
d. The order dated 23rd September, 2022 imposing the penalty of
removal, the appellate order dated 18th November, 2022 and the reviewing
order dated 27th October, 2023 are set aside.
e. The matter is remitted to the competent Disciplinary Authority for a
fresh decision on the penalty to be imposed for the misconduct which
survives this judgment.
f. Before determining the penalty, the Disciplinary Authority shall
afford the Petitioner a reasonable opportunity to submit a representation
confined to the question of penalty. It shall not proceed upon any
assumption that the Petitioner received illegal gratification or committed an
offence involving moral turpitude.
g. A reasoned order shall be passed within twelve weeks from the date
on which a copy of this judgment is received by NTPC.
h. Consequent upon the order of removal being set aside, the Petitioner
shall be reinstated into service within four weeks from today. This direction
shall not preclude NTPC from passing any interim order concerning his
status which is otherwise permissible under the CDA Rules pending the
fresh decision on penalty.
i. The Petitioner shall not, merely by reason of the setting aside of the
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of the fresh order is to be treated, including for the purposes of pay and
allowances, continuity of service and other consequential benefits, shall be
determined by the competent authority in accordance with the fresh penalty
order and the applicable rules.
106. The writ petition and all pending applications are disposed of in the
above terms.
SANJEEV NARULA, J
JULY 13, 2026
ab
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