Dismissal From Service Must Be Reserved for Grave Misconduct: Supreme Court

New Delhi: The Supreme Court on Thursday observed that disciplinary authorities must exercise extreme caution before imposing dismissal from service, describing it as the harshest form of punishment that can have a devastating impact not only on an employee but also on their dependent family members.A bench comprising Justices Sanjay Karol and N. Kotiswar Singh made the observations while hearing an appeal filed by a former employee of the Maharashtra State Electricity Distribution Company Limited (MSEDCL), whose dismissal from service was upheld by the Bombay High Court's Nagpur Bench in April 2024.Setting aside the July 2017 dismissal order as "wholly disproportionate" to the misconduct established against the employee, the apex court directed

the competent authority to reconsider the penalty and impose any punishment other than dismissal after taking into account her long service record and other relevant factors.“Dismissal is ordinarily justified where the misconduct is of such gravity that continuance of the employee would be wholly incompatible with discipline, trust or institutional functioning,” the bench said.The court clarified that cases involving corruption, illegal gratification, moral turpitude, misappropriation, conduct causing substantial financial loss to the employer, or actions demonstrating complete unfitness for service stand on a different footing.It further observed, “Where the misconduct does not involve corruption, moral turpitude, financial misappropriation or proved loss to the employer, and where there is long service without much blemish, the disciplinary authority must carefully examine whether any lesser punishment would meet the ends of justice.”Referring specifically to the appellant's case, the court said: “With respect to the punishment of dismissal which we consider wholly disproportionate to the charges proved, the competent authority shall consider any punishment other than the ultimate penalty of dismissal from service, after considering the appellant’s long service, past record, age, nature of misconduct, absence or presence of financial loss, and other relevant circumstances.”According to the judgment, the employee joined service in April 1985 and was placed under suspension in September 2006 pending a departmental inquiry. The allegations against her included indiscipline, insubordination, disobedience of superior officers, tampering with official documents, and negligence.The court noted that her suspension continued for nearly 11 years before the authority finally dismissed her from service in July 2017.Emphasising the far-reaching consequences of termination, the bench observed: “Dismissal from service is the severest form of penalty which can be inflicted on a delinquent employee in service jurisprudence. It brings the relationship of employer and employee to an end permanently, and ordinarily deprives the employee of the incidents of past service, including retiral benefits.”The judges added that dismissal affects not only the employee but also family members dependent on that income.“Thus, it will have a devastating effect not only on the dismissed employee but also on all those who are dependant on the employee,” the bench said.“Because of the severity of its impact not only on the employee but also to his dependents, the disciplinary authority must be very careful in seeking to impose the severest form of punishment of dismissal,” it added.At the same time, the court clarified that it was not undermining the importance of discipline in workplaces. It noted that the allegations in the present case largely stemmed from internal office functioning and service-related disputes and did not involve conduct in the public domain.The bench also ruled that imposing a second punishment by treating the suspension period itself as punishment was impermissible.Directing further action, the court ordered the competent authority to issue a show-cause notice within four weeks proposing an alternative penalty and pass a reasoned order within eight weeks.Since the appellant has already crossed the age of superannuation, the court said reinstatement was not possible.“The monetary and retiral consequences, if any, shall abide by the fresh order to be passed by the competent authority in terms of this judgment and the applicable regulations,” the bench said.