The Hindu Business Line : HC disallows action against employee under articles of association

Chennai April 13 The Madras High Court has ruled that use of articles of association of a State-owned transport corporation or clarifications by the State Government cannot be used to persist with a departmental enquiry against an employee for alleged misconduct.

If an employee had committed a loss or damage to business or property of the corporation, it could always institute civil proceedings for recovery notwithstanding whether the person was in service or not, Mr Justice K. Chandru held while allowing a writ petition from R. Balraj, Managing Director, TN State Transport Corporation.

The petitioner had joined the transport corporation as Works Manager and served in Cheran Transport Corporation; he was later transferred to TN State Transport Corporation and became a permanent employee from 1976 as Assistant Manager. He was subsequently promoted as Managing Director of the corporation in 1987. While serving as MD, in relation to a certain decision taken by him as part of the purchase committee, two charge memos were served on him on August 28, 2002, just two days ahead of his retirement, and he was allowed to retire without prejudice to disciplinary proceedings, and his terminal benefits like pension, gratuity and PF were withheld. The present petition was against the charge memos.

The petitioner contended that in the absence of any service rule, there was no power vested on the employer to conduct an enquiry for alleged misconduct even after his superannuation. The respondents submitted that there were serious charges against the petitioner, and he was allowed to retire without prejudice to disciplinary action pending against him. They said that though there was no specific power enjoyed by the corporation, Rule 10 of articles of association of Corporation provided for the Government to issue instructions.

The Judge said that articles of association of the corporation could not be raised to the level of any statutory provision to proceed against employees. Also, in the absence of any substantive power to retain an employee, the corporation could not rely upon articles of association or any clarification issued by the Government.

Holding that the corporation could always institute civil proceedings for recovery of any loss allegedly caused by the employee, the Judge said there were also enough provisions in the Companies Act for making such recoveries from employees of Corporation.

Allowing the petition, the Judge directed the corporation to settle the terminal benefits of the petitioner within four weeks.

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