Andhra HC (Pre-Telangana)
D. Ramesh Sinha vs Cadre Authority For Key Personnel Of ... on 19 June, 2001
Author: S.B. Sinha
Bench: Satyabrata Sinha
JUDGMENT S.B. Sinha, C.J.
1. In these three writ appeals, as common questions of law and fact are involved, they are taken up for hearing together and are being disposed of by this common judgement.
2. The appellants are working in A.P. State Co-operative Bank Limited. (for short 'APCOB') in different capacities. Sri. M. Yalla Reddy, the appellant in W.A. No. 892 of 2001, is the Chief General Manager, and insofar as the matter relating to initiation of disciplinary proceedings, is concerned, he is governed by Regulation 51 of the APCOB Service Regulations. The said Regulation reads:
a) An employee against whom disciplinary action is proposed or likely to be taken shall be given a charge sheet clearly setting forth the circumstances appearing against him and a date shall be fixed for enquiry, sufficient time being given to him/her to enable him/her to appear and give his/her explanation as also to produce any evidence that he/she may wish to tender in his/her defence. He/she shall be permitted, if so desired by him/her, to appear before the officer conducting enquiry, to cross-examine any witness whose evidence is adduced to prove the charges and produce evidence in his/her defence he/she shall also be given a hearing as records the nature of the proposed punishment in case any charge is held to be proved.
b) Pending such enquiry he/she may be suspended but if on the conclusion of the enquiry, he/she is acquitted on the charge(s) he/she shall be deemed to have been on duty and shall be entitled to the full pay and allowances and to all other privileges for the period of suspension, and if some punishment other than dismissal is inflicted, the whole or part of the period of suspension, may, at the discretion of the competent authority be treated as on duty with the right to a corresponding portion of the pay, allowances etc.
3. Insofar as Sri. D. Ramesh Sinha, the appellant in W.A. No. 562 of 2001 and Sri. K. Tulasi Prasad, the appellant in W.A. No. 848 of 2001, are concerned, they are governed by the Common Cadre Regulations, and the provision relating to suspension is engrafted in Regulation 37. The said Regulation reads:
4. An employee of the Common Cadre may be placed under suspension from service, pending investigation of enquiry into grave charges, where such suspension is necessary in the interests of the Bank. The Member Secretary is the authority competent to keep a Cadre officer under suspension. (Approved by CC & RCS vide Lr. Rc. No. 38040/92/C1, dt. 06-06-93).
5. It is not in dispute that charge memos were issued to the appellants in W.A. No. 562 of 2001 and W.A. No. 848 of 2001 on 21--12-2000, asking them to submit their explanation to the said charge memos within fifteen days. It is also not in dispute that they submitted their explanations on 8-1-2001 and 9-1-2001 respectively. However, by proceedings dated 10-2-2001, impugned in the writ petitions, the appellants were placed under suspension. The order of suspension relating to Sri. K. Tulasi Prasad, reads:
6. Whereas certain irregularities took place in sanctioning the loan of Rs. 76.00 lakhs to M/s. Kurnool Petro Products Pvt. Ltd., by admitting bogus land documents and the internal probe conducted into the matter prima-facie established the lapsed on the part of Sri. K. Tulasi Prasad, who was then working as Manager, IF Department, in the acceptance of fake documents and non-conduct of field inspection and non-cross verification of valuation of the collateral securities with reference to the valuation recorded in Sub-Registrar Office.
7. Now, therefore, in exercise of the powers conferred by virtue of Cadre Regulation No. 37(1) Sri. K. Tulasi Prasad, Class II Officer and presently working as General Manager (FAC) at Anantapur DCCB, Anantapur, is hereby placed under suspension with immediate effect, pending further enquiry on the subject-matter and in the interest of the bank.
8. It is further ordered that during the suspension the Head quarters of Sri. K. Tulasi Prasad shall be Anantapur and he shall not leave the Head Quarters without prior permission of the undersigned.
9. Sri. K. Tulasi Prasad, Class-II Officer, presently working as General Manager (FAC), Anantapur DCCB, Anantapur, is eligible for subsistence allowance as per Common Cadre Regulations.
10. Sri. K. Tulasi Prasad, shall immediately handover the charge of his post of B.K. Swamy, presently working as Zonal Manager, APCOB Zonal Office, Cuddapah. Sri. B.K. Swamy, shall immediately relieve Sri. K. Tulasi Prasad and hold the post of the General Manager, Anantapur DCCB, Anantapur and hand over the charge of post of the General Manager, DCCB, Anantapur to Sri. B. Yellamanda Reddy, Asst. General Manager/Class-II Officer, APCOB Zonal Officer, Cuddapah, who is transferred and posted as General Manager, DCCB, Anantapur.
11. After taking charge from Sri. B.K. Swamy, Zonal Manager, APCOB Zonal Officer, Cuddapah, Sri. B. Yellamanda Reddy, Asst. General Manager/Class-II Cadre Officer shall hold the charge of the post of General Manager, DCCB Anantapur, until further orders.
12. The above orders shall come into force with immediate effect.
13. One of the contentions raised by the learned counsel appearing on behalf of the appellants is that respondent No. 1 at the instance of the State Government had passed the aforementioned order of suspension, and in support of this contention, the learned counsel drew our attention to the statements made in the writ petitions to the effect that in the meeting of the Board of Directors, the Managing Director has agreed to abide by the directions of the State Government.
14. It was reported that certain irregularities took place in sanctioning the loan of Rs. 75.00 lakhs in Kurnool District to the company M/s. Kurnool Petro Products (P) Ltd., by admitting bogus land documents, with the collusion of the officials of A.P. State Coop. Bank.
15. Pursuant to the directions of this Court dated 16-4-2001, the learned counsel appearing on behalf of the respondent-Bank has produced the relevant records. From a perusal of the records, it appears that relying on and on the basis of the preliminary report, the Principal Secretary to Government by Memo dated 6-1-2001 addressed to the Registrar of Cooperative Societies, copy of which was marked to the Managing Director, A.P. State Cooperative Bank, directed:
16. In this connection, the Registrar of Cooperative Societies, is informed that the company M/s. Kurnool Petro Products (P) Ltd., has cheated the Bank by giving false securities. Further, lands are also overvalued and that there is sample scope for taking action against the valuers also. Further, nobody from the bank actually inspected the land also. It is felt that there is a clear case of collusion between the company, valuers and the Bank officials.
17. The A.P. State Coop. Bank is conducting enquiry. As such, the APCOB may be directed to expedite the said enquiry and also to take stern action to recover and prosecute the promoters, the valuers as well as the officials of the bank.
18. Besides the above, the Registrar of Coop. Societies/Managing Director, A.P. State Coop. Bank, is also requested to take necessary action to suspend the colluded officials of the Bank immediately and expedite the action for recovery and prosecution of the offenders.
19. The Registrar of Coop. Societies/Managing Director, APCOB, is also requested to report the action taken within (15) fifteen days.
20. The matter, thereafter, was placed before the Managing Director, APCOB, who asked for a factual note to be placed before him. Such factual note having been prepared, was placed before the Managing Director. The Managing Director merely agreed with the suggestion made in the note file, which reads:
21. In this context, it is submitted that in the PICs meeting held on 22-1-2001 it was specifically resolved that necessary action be taken immediately on the directions received from Government/RCS which implies that whoever was found to be involved in the case be suspended from the service of the bank besides initiating action on other aspects mentioned. However, the resolution can also be interpreted to mean that the employee involved may be proceeded against immediately as per applicable regulations. There are two ways of initiating such action. One is to keep the employee under suspension immediately, then frame charges, call for explanation and depending on the satisfactory nature or otherwise of the explanations received, order for domestic enquiry. This course of action is taken only in such cases where the involvement of the official is prima facie established. The undersigned is of the view that the prima facie involvement of all the employees mentioned supra is established by our internal probe/assessment, and hence, all the employees mentioned supra need to be suspended and further action like framing of charges, ordering domestic enquiry be initiated in due course.
22. In this context it is submitted for kind information that in the case of four employees the MD/Member Secretary is the competent authority to issue suspension proceedings, whereas in the case of fifth employee i.e. Sri. M. Yalla Reddy, CGM (Banking) whose substantive post is G.M., the subject has to be placed before the Board for taking an appropriate decision on the recommendation of the Managing Director. Further, in the case of the first four employees also, except Jamuna Devi, the suspension proceedings will have to be issued either in the name of MD or Member Secretary as the case may be. However, if a view is taken that prima facie case is not yet established against Sri. Yalla Reddy, we may first frame charges against him and depending on the satisfactory nature or otherwise of the explanations received from him to the charges so framed, order for domestic enquiry in due course instead of suspending him now itself. If this course of action is preferred, the Government/RCS will have to be addressed suitably and the subject placed in the ensuing PIC meeting for information. As regards the other aspects mentioned in the letters received from the Govt. and RCS, further action may be initiated in continuation of the criminal case already filed and further references/petitions received in the matter can also be referred to the Investigating Agency as is usually done by us in cases where criminal case has already been filed.
23. Pursuant thereto, the Managing Director, made the following note:
Yes subject to the suggestion at in para 67.
24. Having regard to the aforementioned notings in the records, we have no doubt whatsoever that the impugned orders of suspension have been passed pursuant to and in furtherance of the directions issued by the State Government. Power to initiate disciplinary proceedings against an employee or place him under suspension emanates from a statute. While exercising such statutory power, the competent authority, must therefore, apply its mind independently as to whether the conditions precedent for exercising such power exist. It is now trite that if a statutory authority acts at the behest of some other authority, however high he may be, who has no statutory role to play in the matter, then such action/or any order passed by him, would be a nonest in the eye of law. It is also well settled that while passing an order, if the statutory authority ignores the relevant factors or takes into considerations, factors not germane for the passing of the order, then such action or the order flowing from such action, would be vitiated in law. Equally well settled is the principle that the statutory authority while exercising statutory powers, must pose correct questions so as to apply correct legal principles and arrive at correct conclusions basing on the actual and exact state of affairs, and if he fails to do so, the same would amount to misdirection in law. Although decisions on this score are galore, suffice it to refer to the decision of the apex Court in COMMR. OF POLICE. V. GORDHANDAS, and the decision of the Court of Appeal, Civil Division, in SECRETARY OF STATE v. TAMESIDE, (1976) 3 All ER 665
25. In the instant case, Sri. K. Tulasi Prasad, appellant in W.A. No. 848 of 2001 has already been transferred. Insofar as Sri. Yalla Reddy, appellant in W.A. No. 892 of 2001, is concerned, admittedly, the date on which the order of suspension was passed, no charge memo, as required under Regulation 51(b) of the APCOB Service Regulations, was issued to him.
26. In the above view of the matter, we are of the opinion that the impugned orders of suspension cannot be sustained. Hence, the orders of the learned single Judge dismissing the writ petitions are set aside. Consequently, the orders of suspension dated 10-2-2001, impugned in the writ petitions, also stand set aside. There cannot, however, be any doubt whatsoever that in the event the statutory authority intends to pass appropriate order afresh upon consideration of the materials on record, it would always be at liberty to do so. There also cannot be any doubt whatsoever that before exercising such power, the statutory authority shall take into consideration all the relevant factors and apply its mind independent to the materials placed before it.
27. In view of our aforementioned findings, we do not think it appropriate to go into the other contentions such as malice on the part of the Managing Director etc., raised by the learned counsel for the appellants at the bar.
28. With the observations/directions, as aforementioned, the writ appeals are allowed. No costs.