The Principal Commissioner Of CGST & Central Excise vs. Arvind Mohan Sahay & Ors

Held

The Court held that the charge memo dated April 13, 2018, issued more than two years after the compulsory retirement of the respondent on March 18, 2016, was not a bona fide act and lacked fairness. Drawing inspiration from precedents, the Court concluded that such a delay undermines the principle of fairness expected from a model employer when making decisions regarding compulsory retirement under FR 56(j). The Court found that the issuance of the charge sheet after such a significant delay smacked of arbitrariness. Consequently, the charge sheet dated April 13, 2018, was set aside. As a corollary, the respondent was held entitled to receive all service benefits, including outstanding retiral dues, as directed by the Tribunal. The Court found no reason to interfere with the Tribunal's order.

Facts

The petitioner, Principal Commissioner of CGST, challenged an order by the Central Administrative Tribunal (CAT) that quashed a charge memo and directed the release of retirement benefits to respondent Arvind Mohan Sahay. Sahay was compulsorily retired on March 18, 2016, under Rule 56(j) of the Fundamental Rules due to a pending disciplinary proceeding initiated after a CBI investigation into alleged corruption. He had been suspended since April 5, 2014. Sahay's representation for release of his pension and gratuity was rejected on June 15, 2017, citing delays due to non-availability of his service book and vigilance report. Subsequently, a charge memo was issued on April 13, 2018, more than two years after his compulsory retirement.

Key Issues

1. Whether the charge memo dated April 13, 2018, issued more than two years after the compulsory retirement of the respondent on March 18, 2016, is a bona fide act and fair in the circumstances, considering the pendency of disciplinary proceedings. The petitioner argued that the issuance of a charge sheet after compulsory retirement is permissible if proceedings were bona fide initiated. They relied on cases like (2014) 15 SCC Pg. 476 [GOVT. OF NCT (DELHI) Vs. K. SRIVATSAN], Civil Appeal No. 4689 of 2011 [State of West Bengal And Others Vs. Aswini Kumar Mahato], and (1995) 6 SCC Pg. 442 [Union of India Vs. Ajoy Kumar Patnaik], and an unreported Delhi High Court judgment. The respondent argued that the delay in issuing the charge sheet after compulsory retirement rendered it arbitrary and lacking fairness, undermining the principles of a model employer. They relied on (1994) 4 SCC Pg. 579 [High Court of Punjab & Haryana Vs. Iswar Chand Jain And Another].