Residuary “Adoption” Clauses Do Not Authorise Post‑Retirement Discipline Without Formal Adoption and Case‑Specific Government Sanction

1) Introduction

The Supreme Court of India in KADIRKHAN AHMEDKHAN PATHAN v. THE MAHARASHTRA STATE WAREHOUSING CORPORATION & ORS. (06.01.2026) considered whether a public corporation can initiate and continue departmental proceedings against an employee after superannuation when its own service regulations do not expressly provide for such post-retirement proceedings.

The appellant (a retired Storage Superintendent of the Maharashtra State Warehousing Corporation) retired on 31.08.2008. About 11 months later, the Corporation served a show-cause notice alleging storage loss and Railway Transit Loss during his tenure, eventually culminating in a punishment order directing recovery (and withholding parts of retiral dues).

The central dispute was jurisdictional: in the absence of an express post-retirement disciplinary framework in the Maharashtra State Warehousing Corporation (Staff) Service Regulations, 1992 (“1992 Regulations”), could the Corporation rely on Rule 110 (a residuary/miscellaneous clause) to apply Rule 27 of the Maharashtra Civil Services (Pension) Rules, 1982 (“1982 Pension Rules”) and thereby proceed against a retired employee?

2) Summary of the Judgment

The Court held that Rule 110 of the 1992 Regulations does not make the 1982 Pension Rules applicable ipso facto; it permits regulation “as far as possible” only where the Corporation has taken an appropriate, conscious decision to adopt/apply.
The Corporation failed to show any board decision/order/notification adopting the 1982 Pension Rules (particularly Rule 27) for post-retirement disciplinary proceedings.
Even assuming Rule 27 could be invoked, the Corporation did not comply with the mandatory case-specific Government sanction requirement under Rule 27(2)(b)(i). The plea of “general sanction” flowing from government approval of the 1992 Regulations was rejected.
Consequently, the Corporation lacked jurisdiction to institute post-superannuation proceedings and order recovery; the departmental proceedings were quashed, and the Corporation was directed to release all retiral benefits and refund recoveries (if any) within eight weeks.

3) Analysis

3.1 Precedents Cited

(A) Girijan Cooperative Corporation Limited Andhra Pradesh Vs. K. Satyanarayana Rao

The Court relied on Girijan Cooperative Corporation Limited Andhra Pradesh Vs. K. Satyanarayana Rao to underline a key administrative-law point: where an organisation claims authority to apply government service rules through a “silence-filling” mechanism, it must demonstrate actual adoption or a valid authorising act, not merely a practice.

In Girijan, a board resolution/circular framework existed empowering adoption of Andhra Pradesh Civil Service/Fundamental Rules where internal rules were silent; yet the Court found continuance of proceedings invalid because the relevant adoption was not shown to have been made/established for the case at hand.

Applying that logic here, the Supreme Court treated the Corporation’s reliance on Rule 110 as insufficient without evidence of a conscious and traceable decision adopting Rule 27 for post-retirement proceedings.

(B) Bhagirathi Jena Vs. Board of Directors, O.S.F.C. and Others

Bhagirathi Jena Vs. Board of Directors, O.S.F.C. and Others is used as a direct authority for the proposition that: in the absence of an enabling provision in the governing regulations, the employer lacks authority to continue departmental inquiry after retirement and to effect reductions from retiral benefits based on such inquiry.

The Supreme Court quoted its core holding that once retirement occurs, and no rule authorises post-retirement inquiry or deduction from retiral benefits, the inquiry “had lapsed” and full retiral benefits follow.

This precedent strongly influenced the outcome: the Court treated the absence of a specific post-retirement power in the 1992 Regulations as a decisive jurisdictional bar, unless valid adoption and statutory preconditions are satisfied.

(C) Anant R. Kulkarni Vs. Y.P. Education Society and Others

Anant R. Kulkarni Vs. Y.P. Education Society and Others was cited to reinforce the broader principle governing post-superannuation disciplinary action: such proceedings are not inherent powers; they depend on express rule-based authority and must fit within the rule’s conditions.

The case supports the judgment’s insistence on legality at the threshold: jurisdiction to proceed after retirement must be sourced in validly applicable rules, and not in administrative convenience or institutional “practice”.

3.2 Legal Reasoning

(i) Rule 110 as a “residuary/miscellaneous” clause—limits of referral

Rule 110 of the 1992 Regulations permits, where the Regulations are silent, regulation “as far as possible” in the manner applicable to Government of Maharashtra employees, “to such extent as may be considered as appropriate by the Corporation.”

The Court treated Rule 110 as a referral/residuary clause rather than an automatic importation of all State service rules. Therefore:

Government rules do not apply ipso facto to Corporation employees merely because Rule 110 exists.
The Corporation must demonstrate a conscious decision (at the appropriate level, typically the Board) adopting/applying the relevant government rule.
A “general practice” of resorting to Rule 27 cannot substitute for lawful adoption.

(ii) Rule 27 of the 1982 Pension Rules—stringent preconditions for post-retirement proceedings

Rule 27 is a structured power: it allows withholding/withdrawing pension and recovery from pension for grave misconduct/negligence found in departmental/judicial proceedings. Crucially, where departmental proceedings were not instituted while in service, Rule 27(2)(b) imposes safeguards.

The Court highlighted Rule 27(2)(b)(i): proceedings “shall not be instituted save with the sanction of the Government.” The Court treated “shall” as mandatory and emphasised the provision’s protective purpose: preventing unwarranted proceedings against retirees.

(iii) Rejection of “general sanction” theory

The Corporation argued that because the State Government approved the 1992 Regulations (including Rule 110) in 1990 and the Regulations were gazetted in 1992, this amounted to a “general sanction” to institute proceedings under Rule 27.

The Court rejected this as “devoid of any discernable logic,” holding that Rule 27(2)(b)(i) requires case-specific prior sanction, and the safeguard cannot be diluted by:

general approval of service regulations,
institutional practice, or
post-facto rationalisation.

(iv) Evidentiary consequence of the additional affidavit

A significant procedural moment was the Court’s order dated 11.11.2025 seeking clarity on adoption and sanction. The Corporation’s additional affidavit (15.11.2025) effectively conceded:

there was no specific order/circular by the MD/Board adopting Rule 27, and
no document showing compliance with the sanction requirement under Rule 27(2)(b)(i).

These admissions crystallised the jurisdictional defect and allowed the Court to decide the matter on a clear rule-of-law footing.

3.3 Impact

For public corporations/PSUs with “government rules apply where silent” clauses: such clauses will be read narrowly. Employers must evidence formal adoption (through a competent decision-making process) before invoking government service/pension rules against their employees.
For post-retirement disciplinary actions: the judgment reinforces that post-superannuation proceedings are exceptional and strictly rule-bound; any statutory safeguards (like Government sanction and limitation periods) are mandatory, not optional.
For recovery from retiral benefits: recoveries premised on invalid post-retirement inquiries are vulnerable to being set aside, with directions for refund and release of benefits.
Administrative governance: “practice” cannot replace legality. Institutions must document adoption decisions and sanction approvals to avoid systemic invalidation of similar proceedings.

4) Complex Concepts Simplified

Superannuation: Retirement on reaching the prescribed age of retirement.
Departmental enquiry / disciplinary proceedings: An internal employer-led process to determine misconduct and impose service penalties.
Residuary / miscellaneous clause (Rule 110): A “gap-filling” provision meant to handle matters not expressly covered by the organisation’s own rules—without automatically importing external rules unless the organisation validly adopts them.
Ipso facto: “By the fact itself”; automatically, without needing a further act or decision.
Mandatory sanction (Rule 27(2)(b)(i)): A compulsory prior approval from the Government before starting post-retirement proceedings. The Court held this safeguard is case-specific and cannot be presumed.
Withholding/withdrawal of pension vs. other retiral benefits: Pension rules often regulate pensionary entitlements; other benefits (like provident fund/leave encashment) may have different legal treatment. In this case, the Supreme Court’s decisive holding was jurisdictional: the very foundation for the post-retirement proceedings failed.

5) Conclusion

The judgment establishes a clear compliance rule: a corporation cannot use a general “apply government rules where silent” clause to initiate or continue post-retirement disciplinary proceedings unless it shows (i) a valid, conscious adoption/applicability decision for the relevant government rule and (ii) strict compliance with that rule’s safeguards—especially case-specific Government sanction under Rule 27(2)(b)(i).

By quashing the proceedings and directing release/refund of retiral benefits, the Supreme Court reinforced that post-superannuation disciplinary jurisdiction is not assumed; it must be expressly sourced, properly adopted, and procedurally compliant.