Madras High Court
M.Mohandas vs State Bank Of India on 23 December, 2011
Author: K.K.Sasidharan
Bench: D.Murugesan, K.K.Sasidharan
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 23.12.2011
CORAM:
THE HONOURABLE MR.JUSTICE D.MURUGESAN
and
THE HONOURABLE MR.JUSTICE K.K.SASIDHARAN
W.A. No.1699 of 2010
M.Mohandas ... Appellant
versus
1.State Bank of India,
rep. By Deputy General Manager,
Zonal Office,
Kurinji Complex,
Coimbatore 641 018
2.Assistant General Manager III,
State Bank of India,
Zonal Office,
Kurinji Complex,
Coimbatore 641 018 ... Respondents
Writ Appeal filed against the order of this Court dated 16 July 2010 in W.P.No.23258 of 2001.
For Appellant : Mr.Balan Haridas
For Respondents : Mr.K.Sankaran
JUDGMENT
K.K.SASIDHARAN, J.
This intra court appeal challenges the order dated 16 July 2010 in W.P.No.23258 of 2001, dismissing the writ petition filed by the appellant challenging the order of discharge from service. THE FACTS :-
2.The appellant is stated to be an Ex-Serviceman. After his discharge from military service, he joined the service of State Bank of India on 19 August 1994 at their branch at Gajalnaickanpatti. He was transferred to Hosur branch during the year 1998.
3.While the appellant was working as Watchman in the Hosur Branch of State Bank of India, he was issued with a charge memo on 15 June 1999. There were two substantial charges : one relating to failure on his part to deposit the amount paid by one Jayapal to deposit in his recurring account and the other relating to acceptance of loan from the customers of Bank. The appellant submitted his explanation to the charge memo. Thereafter, Inquiry Officer was appointed. The Inquiry Officer submitted a report on the basis of the voluntary statement given by the delinquent, concluding that the charges were proved. The said report was not accepted by the Disciplinary Authority. The Disciplinary Authority therefore, ordered for a de novo enquiry on 1 December 1999. Before the Inquiry Officer, the appellant was assisted by his representative. Since the complainant Jayapal failed to appear during the inquiry proceedings, the Inquiry Officer gave a finding that the first charge was not proved. The Inquiry Officer was of the view that there were enough materials to establish one out of five charges, constituting the second substantial charge.
4.The enquiry report was placed before the Disciplinary Authority. The Disciplinary Authority opined that non examination of Jayapal was not a serious irregularity, especially on account of the confession statement given by the delinquent. Accordingly, the Disciplinary Authority differed from the findings recorded by the Inquiry Officer and passed an order on 27 October 2000 and the said finding was communicated to the appellant along with a show cause notice dated 21 November 2000. Thereafter, the authorized representative submitted an explanation on behalf of the appellant. However, the Disciplinary Authority confirmed the punishment proposed, by his order dated 27 December 2000 and accordingly, the appellant was discharged with superannuation benefits as would be due otherwise at that stage and without disqualification from future employment. The said order was unsuccessfully challenged before the Appellate Authority.
5.The order passed by the Appellate Authority dated 17 March 2001 was challenged by the appellant in W.P.No.23258 of 2001. The learned single Judge considered the issue in extenso and arrived at a finding that reasonable opportunity was given to the appellant to prove his case and that there were enough materials to arrive at a finding and accordingly, the writ petition was dismissed. It is the said order which is impugned in this writ appeal.
6.Though several grounds were raised in support of the present appeal, the learned counsel for the appellant has confined his arguments to the prejudice aspect alone, on account of the failure on the part of the Disciplinary Authority to give a hearing to the delinquent before differing from the findings recorded by the Inquiry Officer.
PRINCIPAL SUBMISSIONS:-
7. ARGUMENTS OF THE APPELLANT :-
(i)The appellant was slapped with two charges. The first charge was found not proved. The said finding was not accepted by the Disciplinary Authority. Before taking a decision to punish the delinquent, on the basis of the differed opinion, opportunity should have been given to the delinquent. However, no such opportunity was given to the appellant;
(ii)The order dated 27 December 2000 shows that the Disciplinary Authority has already arrived at a conclusion that all the charges were proved. The finding was not a tentative one. It was mentioned as charge-wise findings given by the Disciplinary Authority. Therefore, a decision has already been taken to give maximum penalty to the appellant. The so called hearing given subsequently was an empty formality. The appellant was put to prejudice on account of the failure to give an opportunity before taking a decision, after differing from the findings recorded by the Inquiry Officer. The failure to give an opportunity itself was a prejudice and as such, it is not necessary to show prejudice separately.
Submissions on behalf of the respondent :-
8.A disciplinary proceeding would end only by passing an order by the Disciplinary Authority. The Disciplinary Authority found that there were materials to prove the first charge and as such, a decision was taken tentatively to differ from the findings recorded by the Inquiry Officer. Therefore, a show cause notice was given on 21 November 2000, enclosing a copy of the tentative finding dated 20 November 2000. The Appellant was given an opportunity and he has availed the said opportunity and it was only thereafter, ultimate order was passed on 17 March 2001. The said tentative finding given on 20 November 2000 was enclosed along with the order of discharge dated 17 March 2001. Therefore, it cannot be said that sufficient opportunity was not given to the Appellant before taking a decision by differing from the opinion given by the Inquiry Officer.
CITATIONS :-
9.The learned counsel for the Appellant placed reliance on the following authorities:-
1.(1998) 7 SCC 84 [Punjab National Bank v. Kunj Behari Misra],
2.(1999) 7 SCC 739 [Yoginath D. Bagde v. State of Maharashtra],
3.CDJ 2001 SC 2517 [S.B.I. And others vs. Arvind K.Shukla] 4.2003(2) SCC 449 [SBI and others vs. K.P.Narayanan Kutty]
5.(2006) 4 SCC 153 [Ranjit Singh v. Union of India]
6.(2010) 13 SCC 494 [Punjab National Bank v. K.K. Verma] 7.2010(3) LLN 764 [V.Arulkumar vs. Housing and Urban Development Corporation Ltd., rep. By its Board of Directors]
10.The learned counsel for the bank placed strong reliance on the following authorities:-
1.(1996) 3 SCC 364 [State Bank of Patiala v. S.K.Sharma],
2.(1997) 2 SCR 198 [Tara Chadn Khatri v. Municipal Corporation of Delhi and ors.], 3.2000(8) SCC 12 [State Bank of India vs. Tarun Kumar Banerjee and others] 4.2001 (6) SCC 392 [State of U.P. vs. Harendra Arora and another],
5.(2004) 8 SCC 653 [J.A.Naiksatam v. Prothonotary & Sr.Master, High Court of Bombay and others;
6.(2010) 3 SCC 556 [Sarva Uattar Pradesh Gramin Bank vs. Manoj Kumar Sinha], CONSIDERATION :-
11.Before dealing with the contentions raised on behalf of the Appellant, we consider it appropriate to indicate the legal position, as explained by the Supreme Court in a plethora of decisions.
12.In service jurisprudence, is open to the Disciplinary Authority to conduct an enquiry or to appoint an Inquiry Officer to look into the matter and to submit his report. In case, inquiry was conducted by the Disciplinary Authority, opportunity of hearing has to be given by him to the delinquent. In case, an Inquiry Officer is appointed and he submits a report, there are two courses open to the Disciplinary Authority. The Disciplinary Authority in his discretion may accept the report. In case the Disciplinary Authority is dissatisfied with the findings recorded by the Inquiry Officer and proposes to arrive at a different conclusion, he should indicate the tentative reasons to the delinquent. The delinquent should be given an opportunity to submit his version with respect to the tentative findings recorded by the Disciplinary Authority. There is a laudable purpose in giving such an opportunity. It would enable the delinquent to plead and convince the Disciplinary Authority to accept the views expressed by the Inquiry Officer rather than to take a different view in the matter. Therefore, this is a very valuable right given to the employee. The courts have time and again indicated the importance of this right.
13.The Supreme Court in Punjab National Bank v. Kunj Behari Misra, (1998) 7 SCC 84, indicated the steps to be taken by the Disciplinary Authority in case he is not in agreement with the findings recorded by the Inquiry Officer :-
"19. The result of the aforesaid discussion would be that the principles of natural justice have to be read into Regulation 7(2). As a result thereof, whenever the disciplinary authority disagrees with the enquiry authority on any article of charge, then before it records its own findings on such charge, it must record its tentative reasons for such disagreement and give to the delinquent officer an opportunity to represent before it records its findings. The report of the enquiry officer containing its findings will have to be conveyed and the delinquent officer will have an opportunity to persuade the disciplinary authority to accept the favourable conclusion of the enquiry officer. The principles of natural justice, as we have already observed, require the authority which has to take a final decision and can impose a penalty, to give an opportunity to the officer charged of misconduct to file a representation before the disciplinary authority records its findings on the charges framed against the officer."
14.The Supreme Court in Yoginath D. Bagde v. State of Maharashtra, (1999) 7 SCC 739, considered the issue once again and held thus :
"31. In view of the above, a delinquent employee has the right of hearing not only during the enquiry proceedings conducted by the enquiry officer into the charges levelled against him but also at the stage at which those findings are considered by the disciplinary authority and the latter, namely, the disciplinary authority forms a tentative opinion that it does not agree with the findings recorded by the enquiry officer. If the findings recorded by the enquiry officer are in favour of the delinquent and it has been held that the charges are not proved, it is all the more necessary to give an opportunity of hearing to the delinquent employee before reversing those findings. The formation of opinion should be tentative and not final. It is at this stage that the delinquent employee should be given an opportunity of hearing after he is informed of the reasons on the basis of which the disciplinary authority has proposed to disagree with the findings of the enquiry officer. This is in consonance with the requirement of Article 311(2) of the Constitution as it provides that a person shall not be dismissed or removed or reduced in rank except after an enquiry in which he has been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges. So long as a final decision is not taken in the matter, the enquiry shall be deemed to be pending. Mere submission of findings to the disciplinary authority does not bring about the closure of the enquiry proceedings. The enquiry proceedings would come to an end only when the findings have been considered by the disciplinary authority and the charges are either held to be not proved or found to be proved and in that event punishment is inflicted upon the delinquent. That being so, the right to be heard would be available to the delinquent up to the final stage. This right being a constitutional right of the employee cannot be taken away by any legislative enactment or service rule including rules made under Article 309 of the Constitution.
35.Since the Disciplinary Committee did not give any opportunity of hearing to the appellant before taking a final decision in the matter relating to the findings on the two charges framed against him, the principles of natural justice, as laid down by a three-Judge Bench of this Court in Punjab National Bank v. Kunj Behari Misra referred to above, were violated."
15.The Supreme Court in Ranjit Singh v. Union of India, (2006) 4 SCC 153, indicated the duty of the Disciplinary Authority while differing from the findings recorded by the Inquiry Officer in the following words :-
"22.In view of the aforementioned decisions of this Court, it is now well settled that the principles of natural justice were required to be complied with by the disciplinary authority. He was also required to apply his mind to the materials on record. The enquiry officer arrived at findings which were in favour of the appellant. Such findings were required (sic sought) to be overturned by the disciplinary authority. It is in that view of the matter, the power sought to be exercised by the disciplinary authority, although not as that of an Appellate Authority, but is akin thereto. The inquiry report was in favour of the appellant but the disciplinary authority proposed to differ with such conclusions and, thus, apart from complying with the principles of natural justice it was obligatory on his part, in the absence of any show-cause filed by the appellant, to analyse the materials on record afresh."
16.The decisions cited by the learned counsel for the respondent relates to cases in which copy of the enquiry report was not given to the delinquent. When the ultimate decision was challenged on the said ground also, the Supreme Court observed that unless prejudice is shown, punishment cannot be set aside on the said ground alone. Since the issue here is entirely different, we are not dealing with those decisions.
17.The charge memo issued to the appellant on 15 June 1999 contains as many as six charges. The charges could be grouped under two heads : one relating to misappropriation and the other pertains to loan taken from the customers of the Bank. The Inquiry Officer appointed by the Disciplinary Authority observed that the guilt of the employee has been proved. The report was considered by the Disciplinary Authority. It was found that the finding was solely on the basis of the confession given by the appellant. Therefore, the Inquiry Officer was directed to conduct fresh enquiry and to submit independent findings. Accordingly, the Disciplinary Authority conducted a de novo enquiry through the Inquiry Officer. The Inquiry Officer in his report indicated that the complainant has not chosen to appear before him and as such, there was no reliable evidence to arrive at a conclusion that the delinquent has misappropriated the amount given by Mr.Jayapal. The Inquiry Officer was of the view that out of six charges, only the sixth charge was proved. The enquiry report was once again considered by the Disciplinary Authority. The Disciplinary Authority independently considered the enquiry report and he has given his charge wise findings. The order dated 27 October 2000 on the file of the Disciplinary Authority clearly indicates that he has differed from the findings arrived at by the Inquiry Officer and a factual finding was given that all the charges were proved.
18.The order dated 27 October 2000 was not a tentative finding. The Disciplinary Authority very clearly observed that he has independently considered the enquiry report and that he is giving charge wise findings. The Inquiry Officer in the concluding paragraph of the order indicated that he proposes to discharge the appellant from service with superannuation benefits as would be due otherwise at that stage and without disqualification from future employment. Therefore, the Disciplinary Authority has concluded by differing from the opinion given by the Inquiry Officer that the appellant has committed a serious misconduct and had given the maximum penalty. The order dated 27 October 2000 was communicated to the appellant along with a show cause notice dated 21 November 2000. The authorized representative of the appellant submitted his explanation to the show cause notice dated 21 November 2000. In the said explanation, it was pointed out that the complainant Jayapal never appeared before the Inquiry Officer and as such, it was not correct on the part of the Disciplinary Authority to conclude that the appellant has committed misconduct purely on the basis of letters, which were not marked either through the complainant or through the Branch Manager, to whom it was addressed. The other proved charges regarding borrowal from the account holders were also explained.
19.The appellant through his representative contested the very statement that there was a voluntary confession. The appellant in his response very clearly stated the circumstances under which the confession was taken from the appellant. The Disciplinary Authority was expected to consider the objections submitted by the appellant through his representative. In case the order dated 27 October 2000 was a tentative finding, necessarily, a final finding should have been given by the Disciplinary Authority, after considering the explanation given by the appellant. However, the impugned order dated 17 March 2001 does not contain any material to show that the explanation was considered by the Disciplinary Authority. The Disciplinary Authority simply confirmed the punishment and the copy of the so called tentative finding was enclosed along with the order of punishment.
20.It is true that the appellant has filed an appeal. In the appeal memorandum, the appellant has very specifically contended that the action taken by the Disciplinary Authority to impose the punishment after differing from the view taken by the Inquiry Officer caused serious prejudice to him. However, the said issue was not specifically considered by the Appellate Authority.
21.The learned counsel for the respondent would contend that there was no prejudice caused to the appellant in view of the show cause notice issued to him before imposing the punishment.
22.The very fact that no notice was issued to the appellant before arriving at a decision to differ from the findings and to punish the appellant itself is a prejudice.
23.The order dated 27 October 2000 proceeds as if it is a final order. There is nothing mentioned in the said order that it was tentative in nature. While differing from the findings given by the Inquiry Officer, very strangely, the Disciplinary Authority has placed reliance on the confession statement given by the appellant. It is worth mentioning here that the second enquiry was ordered only on account of the earlier report submitted by the Inquiry Officer solely on the basis of confession report. The second enquiry was directed to be conducted with a specific instruction to examine the witnesses and to submit a report notwithstanding the confession statement. It is also a matter of record that the complainant has not appeared at all. Since the complainant has not appeared before the Inquiry Officer, the only other alternative to prove his complaint was to mark it through the Manager who received the said complaint. However, very strangely, the Bank Manager was also not examined. The Inquiry Officer simply marked the document without examining witnesses. This caused serious prejudice to the appellant. It was only this point which was dealt with in the explanation submitted to the Disciplinary Authority by the appellant. The very fact that the final order does not contain any indication that the explanation was considered clearly prove the contention taken by the appellant that a decision was taken as early as on 27 October 2000 to punish him by differing from the findings arrived at by the Inquiry Officer.
24.The Supreme Court in Lav Nigam v. Chairman & MD, ITI Ltd., (2006) 9 SCC 440, observed that an employee is entitled to a notice to show cause against the tentative decision taken to differ with the finding given by the Inquiry Officer. The Supreme Court said :-
"10.The conclusion of the High Court was contrary to the consistent view taken by this Court that in case the disciplinary authority differs with the view taken by the inquiry officer, he is bound to give a notice setting out his tentative conclusions to the appellant. It is only after hearing the appellant that the disciplinary authority would at all arrive at a final finding of guilt. Thereafter, the employee would again have to be served with a notice relating to the punishment proposed."
25.The Supreme Court in Yoginath D. Bagde v. State of Maharashtra, (1999) 7 SCC 739, indicated that in the absence of a specific provision to give opportunity of hearing, before differing from the findings arrived at by the Inquiry Officer, opportunity of hearing should be read into the rule. The Supreme Court said :-
28.In view of the provisions contained in the statutory rule extracted above, it is open to the disciplinary authority either to agree with the findings recorded by the enquiring authority or disagree with those findings. If it does not agree with the findings of the enquiring authority, it may record its own findings. Where the enquiring authority has found the delinquent officer guilty of the charges framed against him and the disciplinary authority agrees with those findings, there would arise no difficulty. So also, if the enquiring authority has held the charges proved, but the disciplinary authority disagrees and records a finding that the charges were not established, there would arise no difficulty. Difficulties have arisen in all those cases in which the enquiring authority has recorded a positive finding that the charges were not established and the delinquent officer was recommended to be exonerated, but the disciplinary authority disagreed with those findings and recorded its own findings that the charges were established and the delinquent officer was liable to be punished. This difficulty relates to the question of giving an opportunity of hearing to the delinquent officer at that stage. Such an opportunity may either be provided specifically by the rules made under Article 309 of the Constitution or the disciplinary authority may, of its own, provide such an opportunity. Where the rules are in this regard silent and the disciplinary authority also does not give an opportunity of hearing to the delinquent officer and records findings different from those of the enquiring authority that the charges were established, an opportunity of hearing may have to be read into the rule by which the procedure for dealing with the enquiring authority's report is provided principally because it would be contrary to the principles of natural justice if a delinquent officer, who has already been held to be not guilty by the enquiring authority, is found guilty without being afforded an opportunity of hearing on the basis of the same evidence and material on which a finding of not guilty has already been recorded.
26.Now coming to the facts of this case, out of six charges, the Inquiry Officer found that only one charge was proved. The substantial charge regarding non deposit of amount taken from a depositor was found not proved in view of the failure on the part of the complainant to appear before the Inquiry Officer. Except the complaint, there was no other evidence before the Inquiry Officer. Even the Bank manager who received the said complaint was not examined. Therefore, the Inquiry Officer was fully justified in his conclusion that the documents were not proved. Mere production of documents alone is not sufficient. It should be proved in the manner known to law. The Disciplinary Authority resorted to a short cut method by saying that the appellant has given his confession and as such, the documents were proved. While giving such a reason, the Disciplinary Authority conveniently omitted to note that the earlier report was not taken note of and a fresh enquiry was ordered only because of recording a finding on the basis of confession. The fact remains that even during the second enquiry, other than the complaint given by Jayapal, there was no legal evidence before the Inquiry Officer with respect to the principal charge.
27.There is no dispute that the Disciplinary Authority is not bound to pass a detailed order. However, before differing from the findings arrived at by the Inquiry Officer, he should give reasons tentatively as to why he is not in agreement with the views. Those tentative findings should be forwarded to the delinquent so as to enable him to submit his version. However in the subject case, such a course was not adopted by the Disciplinary Authority. The Disciplinary Authority independently considered the report of the Inquiry Officer and after differing from the findings, imposed a punishment and the said order was sent along with the show cause notice. Even after receiving the explanation submitted on behalf of the appellant, the Disciplinary Authority has not considered the matter independently. The Disciplinary Authority simply confirmed the punishment proposed by his order dated 27 October 2000. The order is bereft of details and does not contain any indication that the explanation submitted by the appellant was considered and it was not acceptable on account of certain reasons.
28.The course adopted by the Disciplinary Authority was in violation of the principles of natural justice and it was also against the law declared by the Supreme Court in Punjab National Bank and the subsequent judgment in Yoginath Bagde.
29.The learned counsel for the respondent vehemently contended that the principles of natural justice was duly complied with inasmuch as a copy of the order dated 27 October 2000, differing from the findings of the Inquiry Officer was given to the appellant. Similarly, the very same order dated 27 October 2000 was enclosed along with the final order dated 17 March 2001 and as such, there was substantial compliance of the principles of natural justice. We are not inclined to accept the said submission for more than one reason. The order dated 27 October 2000 was not a tentative finding arrived at by the Inquiry Officer. In fact, the Inquiry Officer very clearly stated that he has independently considered the report and observed that "the following are my charge-wise findings". He has also given an indication that the delinquent must be discharged from service.
30.The learned counsel for the respondent would be justified in his contention in case the subsequent order dated 17 March 2001 and the enclosure to the said order contains fresh reasons as a supporting material to confirm the order dated 27 October 2000. However, very strangely, it was only the order dated 27 October 2000 which was enclosed along with the order of punishment dated 17 March 2001. Therefore, it is very clear that the Disciplinary Authority has taken a final decision to differ from the finding given by the Inquiry Officer and to punish the appellant even before giving a hearing to the appellant. The said act caused substantial prejudice to the appellant. The appellant was having a right to canvas points before the Disciplinary Authority, to accept the favourable report given by the Inquiry Officer. That opportunity was denied to him in view of the decision taken by the Disciplinary Authority on 27 October 2000. The show cause notice dated 21 November 2000 was in the nature of a ritual just to pass a final order. This issue was not considered by the learned single Judge.
31.In the subject case, we have scrutinized the reasons given by the Disciplinary Authority and we find that the statutory authority has taken its final decision without giving an opportunity of hearing to the appellant at the stage at which it proposed to differ with the findings given by the Inquiry Officer. This violation goes to the root of the matter and as such, is sufficient to vitiate the findings recorded by the Disciplinary Authority contrary to the findings recorded by the Inquiry Officer.
32.Therefore, we set aside the order dated 17 March 2001 as confirmed by the order dated 15 June 2001. The matter is remitted to the Disciplinary Authority for fresh consideration. It is open to the Disciplinary Authority to commence the proceedings from the stage of issuance of fresh show cause notice to the appellant indicating his tentative disagreement with the findings recorded by the Inquiry Officer.
33.The writ appeal is allowed as indicated above. No costs. Consequently, connected miscellaneous petitions are closed.
tar To
1.Deputy General Manager, State Bank of India, Zonal Office, Kurinji Complex, Coimbatore 641 018
2.Assistant General Manager III, State Bank of India, Zonal Office, Kurinji Complex, Coimbatore 641 018