Chhattisgarh High Court sets aside Coal India penalty, holding employees cannot be punished for duties never entrusted under service rules

News Citation : 2026 LN (HC) 53

Bilaspur, January 15, 2026 : The Chhattisgarh High Court has set aside a major penalty imposed on a Coal India executive, holding that disciplinary authorities cannot punish an employee for duties that were never lawfully entrusted to him. In a detailed judgment delivered on January 15, Justice Amitendra Kishore Prasad quashed both the punishment order dated July 7, 2022 and the appellate order dated April 4, 2023, restoring all consequential service benefits to the petitioner, Rajneesh Kumar Gautam.

The case arose from disciplinary proceedings initiated against Gautam, an Accounts Officer posted with South Eastern Coalfields Limited, a subsidiary of Coal India Limited. He had been accused of failing to ensure withholding and recovery of amounts from coal loading and transportation bills of Ex-Servicemen agencies, allegedly causing financial loss to the company. Following a departmental inquiry, he was subjected to a major penalty of reduction to a lower stage in the time scale of pay for one year, along with denial of increments during the penalty period.

Challenging the action, Gautam approached the High Court of Chhattisgarh, arguing that the punishment was illegal on two counts. First, the duties relating to audit, scrutiny and recovery of the disputed bills were never assigned to him. Second, the penalty imposed was dehors the statutory rules governing Coal India executives.

After examining the record, the Court found that a binding note-sheet issued in September 2012 had clearly demarcated responsibilities between the Dipka Expansion Project Accounts Department and the Area Finance Department. Under this framework, coal loading and transportation bills, including those of Ex-Servicemen agencies, were to be audited and passed by the Area Finance Department. Gautam’s role was limited to receiving such bills for record purposes and forwarding them onward. There was no material to show any delegation or entrustment of scrutiny or recovery functions to him.

Justice Prasad observed that the disciplinary authorities proceeded on the erroneous assumption that routing of bills through the petitioner or the presence of his signature automatically established responsibility. Such an inference, the Court held, was impermissible in service jurisprudence, where misconduct must be directly referable to a duty lawfully assigned to the employee.

The judgment also faulted the inquiry officer and disciplinary authority for ignoring crucial administrative instructions that formed the backbone of the petitioner’s defence. Although the inquiry report was lengthy, the Court said it failed to address the core issue of lack of authority, rendering the findings perverse and jurisdictionally flawed.

Relying on settled Supreme Court precedent, the Court reiterated that a punishment imposed outside the scope of statutory rules is a nullity in law. Since the foundational fact of entrustment of duties was missing, the very initiation of disciplinary proceedings was held to be illegal and void from the outset.

Allowing the writ petition, the High Court directed Coal India and its subsidiaries to restore Gautam’s pay, increments and all allied benefits within three months, as if the punishment had never been imposed. No order as to costs was made.

Case Reference : WPS No. 5831 of 2023, Rajneesh Kumar Gautam (S/o Shri Babu Ram), Korba v. Coal India Limited & Others; Counsel: for the Petitioner, Mr. Prafull N. Bhjarat, Senior Advocate, with Mr. Keshav Dewangan, Advocate; for the Respondents, Mr. Vinod Deshmukh, Advocate.