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by sayum
09 January 2026 6:13 AM
“In the absence of a conscious decision by the Board adopting Pension Rules, the Corporation had no jurisdiction to proceed against a retired employee”, Delivering a decisive ruling on January 6, 2026, the Supreme Court in Kadir Khan Ahmed Khan Pathan vs. Maharashtra State Warehousing Corporation & Ors. held that a government corporation cannot launch or continue disciplinary proceedings against a retired employee without explicit authority under its service regulations and prior sanction of the State Government. The Court strongly denounced the post-retirement inquiry initiated against the appellant nearly a year after his superannuation, calling the proceedings “without jurisdiction, unsupported by law, and violative of the mandatory safeguards under Rule 27 of the 1982 Pension Rules.”
The Division Bench comprising Justice J.K. Maheshwari and Justice Vijay Bishnoi declared that the Corporation acted illegally by withholding the retiral dues of the appellant and directing recovery of ₹18,09,809/-, in absence of any enabling provision under the Maharashtra State Warehousing Corporation (Staff) Service Regulations, 1992, or a valid adoption of the Maharashtra Civil Services (Pension) Rules, 1982.
Quashing the entire disciplinary proceedings, the Court ruled, “The Corporation had no jurisdiction to initiate or continue the enquiry against the appellant post-retirement. The recovery directed against him is illegal and unenforceable.”
“Rule 110 Is Not a Free Pass” – Supreme Court Rejects Corporation’s Reliance on Residual Clause for Post-Retirement Action
At the centre of the dispute was Rule 110 of the 1992 Regulations, a miscellaneous provision invoked by the Corporation to justify its post-retirement proceedings against the appellant, a retired Storage Superintendent. Rule 110 allows the Corporation to regulate matters “in the same manner as in the case of employees of the Government of Maharashtra” in situations where its own regulations are silent.
But the Court cautioned that this cannot be stretched to confer automatic adoption of government pension rules unless supported by a conscious, formal decision by the Corporation’s Board. The Bench observed:
"Rule 110 is general in nature. It cannot be interpreted to have ipso facto adopted the 1982 Pension Rules unless the Corporation, by a conscious decision at the appropriate level, made it applicable to its employees."
Referring to an additional affidavit filed by the Corporation itself, the Court recorded that “no resolution, circular, or formal order adopting the 1982 Pension Rules has been placed on record.” Hence, the entire foundation of the proceedings collapsed for want of legal authority.
“Sanction Is Not a Symbolic Gesture” – Court Holds Prior Government Approval Mandatory Under Pension Rule 27(2)(b)(i)
The Corporation had further argued that since the 1992 Service Regulations had been approved by the State Government back in 1990, that approval must be treated as a general sanction for taking action under Rule 27(2)(b)(i) of the Pension Rules.
Rejecting this reasoning, the Court stressed the mandatory nature of prior sanction for instituting post-retirement disciplinary proceedings. It held:
"The usage of the word 'shall' in Rule 27(2)(b)(i) implies that the requirement of sanction from the Government prior to institution of departmental enquiry is mandatory in nature for each case."
The Bench made it clear that such safeguards are not formalities but substantive protections against arbitrary action. “This mandate cannot be diluted or bypassed under the pretext of general sanction or historical practice,” the judgment declared.
“Retired, Not Defenceless” – Supreme Court Affirms Right to Retiral Benefits in Absence of Enabling Law
The appellant had retired on 31 August 2008 after nearly four decades of service. Nearly a year later, he was served a show-cause notice holding him responsible for financial losses caused during his tenure. The disciplinary proceedings that followed culminated in an order dated 4 March 2017 directing recovery of over ₹18 lakh and withholding his gratuity, provident fund, and leave encashment.
Calling the action “wholly without jurisdiction”, the Supreme Court ruled that in absence of any authority under the 1992 Regulations, the Corporation could not have initiated or continued proceedings post-retirement.
Relying on its earlier decision in Bhagirathi Jena v. OSFC, the Court noted:
"There is no provision for conducting a disciplinary enquiry after retirement of the appellant and nor any provision stating that in case misconduct is established, a deduction could be made from retiral benefits."
High Court Order Set Aside – Supreme Court Directs Full Refund and Dues Within Eight Weeks
The Bombay High Court had earlier refused to entertain the appellant’s writ petition and had directed him to pursue a departmental appeal under the 1992 Regulations. The Supreme Court found this approach flawed and unjustified.
The Court said, “Once the action itself was without jurisdiction, relegating the appellant to the remedy of appeal under the Regulations was misconceived.”
Allowing the appeal in full, the Bench directed:
"The impugned departmental proceedings against the appellant are hereby quashed. The Corporation is directed to release all the retiral benefits to the appellant within a period of eight weeks. The recovery, if any, made from the appellant in the interregnum, shall also be refunded."
“Departmental Power Ends With Retirement” – A Strong Judicial Reminder
The ruling stands as a vital precedent on limiting executive power beyond retirement, particularly for statutory corporations and public sector undertakings. It reinforces that disciplinary powers must be rooted in explicit legal authority, and cannot be conjured from residual or assumed provisions.
The Court’s parting message is clear: “Jurisdiction cannot be presumed; it must be found in law. In the absence of such authority, the retired employee cannot be made to suffer.”
Date of Decision: January 6, 2026
