Karnataka High Court
H.R. Ravindranath vs Syndicate Bank Represented By Its ... on 29 October, 2004
Equivalent citations: ILR2005KAR2350, (2005)IIILLJ124KANT, 2005 LAB. I. C. 1902, 2005 AIR - KANT. H. C. R. 1015 (2005) 3 LABLJ 124, (2005) 3 LABLJ 124
Author: N. Kumar
Bench: N. Kumar
ORDER N. Kumar, J.
1. The petitioner joined the services of the respondent Bank on 13.8.1973 as a Stenographer. He came to be promoted as an Officer in Junior Management Grade Scale-I w.e.f. 13.9.1978. From 30. 10.1992, the petitioner was functioning as Manager at Lachyan Branch of the respondent Bank. While working in the said Branch, the petitioner was served with a charge sheet dated 25.8.1993 alleging that he demanded bribe of Rs. 1,000/-- from five persons namely (1) Sharanappa S. Sambhaji, (2) Madeva R. Badigara, (3) Dharmaraya Peerappa Mujagond, (4) Siddappa Hanumantha Harijan and (5) Iyagand Yeshwant Sindgi, and when they did not pay, the petitioner refused to release the loan. The further allegation was he released loans to three persons namely (1) Shivappa Gowda Iranagonda Patil, (2) Mahadeva Siddappa Talakere and (3) Naganatha Shankarappa Patel, after accepting the bribe from them. Annexure-Ais the charge sheet. The petitioner submitted a defence statement on 22.9.1993 denying the charges and also alleging malafides against the management as per Annexure-B. Not being satisfied with a defence of the petitioner, an enquiry was initiated and an Enquiry Officer was appointed. Parties adduced evidence, the Enquiry Officer, on appreciation of oral and documentary evidence adduced by both parties submitted a report dated 24.5.1998 holding that the charges against the petitioner are not proved by giving detailed reasons. Annexure-E is the copy of the said enquiry report The Disciplinary Authority issued a communication dated 24.8.1998 as per Annexure-G enclosing a copy of the report of the Enquiry Officer and pointing out the grounds on which he disagrees with the finding of the Enquiry Officer and also holding that the petitioner was guilty of the charges levelled against him and called upon the petitioner to submit his submissions if any as per Annexure-G The petitioner submitted a detailed representation as per Annexure-H dated 29.9.1998, pointing out why he should not disagree with the findings of the Enquiry Officer. Thereafter, the Disciplinary Authority proceeded to pass the impugned order at Annexure-J rejecting the contention of the petitioner as not convincing and holding the petitioner guilty of the charges leveled against him and accordingly punishment was imposed compulsorily retiring the petitioner from service. Aggrieved by the order of the Disciplinary Authority, the petitioner preferred statutory appeal to the Appellate Authority as per Annexure-K on 27.11.1998 urging several grounds. The appellat authority considering the entire record and on careful evaluation of the case, held that there is no extenuating factors warranting intereference with the orders of the Disciplinary Authority and according confirmed the penalty imposed by an order dated 7.1.1999, Aggrieved by the same, the petitioner has preferred this Writ Petition.
2. The Learned Counsel for the petitioner Sri P.S. Rajagopal, contended that the impugned order passed by the Disciplinary Authority is liable to be quashed on the ground of violation of principles of natural justice, in as much as, even before hearing the petitioner, on the second show cause notice, the Disciplinary Authority has made up his mind to hold that the petitioner guilty of the charges levelled against him. Therefore, there is no necessity to consider other grounds urged for quashing the impugned order.
3. Per contra, the learned Senior Counsel Sri S.S. Ramdas, appearing for the respondent Bank contended that, when the Disciplinary Authority disagrees with the finding of the Enquiry Officer, the law requires the delinquent employee should be given a second show cause notice pointing out the grounds on which the Disciplinary Authority disagrees with the finding of the Enquiry Officer and once such requirement is complied with, as in this case, there is no violation of principles of natural justice. Though the contents in the second show cause notice is not happily worded, the very fact the an opportunity was given to the petitioner to show cause shows that the Disciplinary Authority had kept his mind open and after considering the objections filed by the petitioner, as he found the same to be without any substance, he has rejected those objections and has held the charges are proved. Even if there is any flaw in the order passed by the Disciplinary Authority, the entire matter was before the Appellate authority, who after considering the entire material on record and after referring to the objections raised by the petitioner, has by a considered order, rejected those objections and has affirmed the finding of the Disciplinary Authority and therefore, it cannot be said that the impugned orders are vitiated for not following the principles of natural justice.
4. Both the learned counsels in support of their respective contentions have relied on several judgments of the Supreme Court.
5. From the aforesaid facts and rival contentions, the short point that arise for consideration is:
"whether the second show cause notice issued and the order of the Disciplinary Authority passed thereafter is vitiated as offending the principles of natural justice"?
6. In order to answer the aforesaid point, it is necessary to have a look at the second show cause notice Annexure-G issued by the disciplinary authority. The relevant portion is extracted as hereunder:
"I have perused the findings of the Inquiring Authority and am not satisfied with the same. I have meticulously perused the Report of the Inquiring Authority as also the connected papers pertaining to the case and I am compelled to disagree with the findings of the Inquiring Authority on the following grounds:
That two of the complainants/borrowers, viz, Sri Dharmaraja Peerappa Mujgond (MW-3) and Sri S.I. Patil (MW-4) have stood by their complaints and the contents therein, that they paid illegal gratification to you (M.Ex-36 and 47 respectively) and despite extensive cross examination of these witnesses, their evidence could not be dislodged/rebutted. It has also come to record that you, on 29.1.1993 sanctioned OSL/SEUY 1/93 for Rs. 23,600/- to Sri S.I. Patil in spite of his unsatisfactory dealings/irregular DL 22/90.
In view of the foregoing, 1 hold that the Article of Charge levelled against you vide Charge Sheet No. CGS(O)/BNG/ 93/47 dated 25.8.1993 is conclusively proved beyond any doubt.
Under the circumstances, you are directed to make your submissions, if any, on the above within 15 days of receipts of this letter, failing which I shall proceed further in the matter without any reference to you. A copy of the Inquiring Authority's Report dated" 24.5.1998 is sent enclosed."
(Underlining by me)
7. The learned Counsel for the petitioner contends, though the Disciplinary Authority has set out the grounds on which it differs from the findings from the Inquiry Officer, even before hearing the explanation of the petitioner, lie has made up his mind and has held the articles of charge levelled against the petitioner is conclusively proved beyond any doubt. This fact as is also clear from the following observation in the impugned order:
"As regards the contentions of Sri Ravindranath vide his letter dated 14.9.1998, I do not find the same convincing. I have already discussed above, no clear and unambiguous terms, the reasons for holding for Sri H.R. Ravindranath guilty of the charges levelled against him vide the above charges sheet. I, therefore, once again hold Sri H.R, Ravindranath guilty of the Article of charge levelled against him in the above charge sheet and proved in the inquiry".
(underlining by me) From this it is submitted, it does not disclose any application of mind to the objections raised by the petitioner and in the contrary, it affirms the contention of the petitioner that even before hearing his objections, the authority had made up his mind which was only confirmed formally in the final order. Therefore, the impugned orders is liable to be quashed on the ground of violation of principles of natural justice.
8. The Constitution Bench of the Supreme Court in the case of MANAGING DIRECTOR, ECIL v. B. KARUNAKAR, AIR 1994 SC 1075 dealing with the right of an employee, to receive the report of the Inquiry Officer, when the Inquiry Officer is not the Disciplinary Authority has held as under:-
11"......Both the dictates of the reasonable opportunity as well as the principles of natural justice, therefore, require that before the disciplinary authority comes to its own conclusions, the delinquent employee should have an opportunity to reply to the Inquiry Officer's findings. The disciplinary authority is then required to consider the evidence, the report of the inquiry Officer and the representation of the employee against it.
It will thus be seen that where the Inquiry Officer is other than the disciplinary authority, the disciplinary proceedings break into two stages. The first stage ends when the disciplinary authority arrives at its conclusions on the basis of the evidence, Inquiry Officer's report and the delinquent employee's reply to it. The second stages begins when the disciplinary authority decides to impose penalty on the basis of its conclusions. If the disciplinary authority decides to drop the disciplinary proceedings, the second stage is not even reached. The employee's right to receive the report is thus, a part of the reasonable opportunity of defending himself in the first stage of the inquiry. If this right is denied to him, he is in effect denied the right to defend himself and to prove his innocence in the disciplinary proceedings."
9. The Supreme Court in the case of PUNJAB NATIONAL BANK AND ORS. v. KUNJ BEHARI MISRA, dealing with the procedure to be followed when the disciplinary authority differs from the view of the Inquiry Officer and proposes to come to a different conclusion has held as under:
"... If the inquiry officer had given an adverse finding, as per Karunakar's case (1994 AIR SCW 1050) (supra) the first stage required an opportunity to be given to the employee to represent to the disciplinary authority, even when an earlier opportunity had been granted to them by the inquiry officer. It will not stand to reason that when the finding in favour of the delinquent officers is proposed to be over-turned by the disciplinary authority then no opportunity should be granted. The first stage of the inquiry is not completed till the disciplinary authority has recorded its findings. The principles of naturals justice would demand that the authority which proposes to decide against the delinquent officer must give him a hearing. When the inquiring officer holds the charges to be proved then that report has to be given to the delinquent officer who can make a representation before the disciplinary authority takes further action which may be prejudicial to the delinquent officer. When, like in the present case, the inquiry report is in favour of the delinquent officer but the disciplinary authority proposes to differ with such conclusions then that authority which is deciding against the delinquent officer must give him an opportunity of being heard for otherwise he would be condemned unheard. In departmental proceedings v/hat is of ultimate importance is the finding of the disciplinary authority.
... When the inquiry is conducted by the inquiry officer his report is not final or conclusive and the disciplinary proceedings do not stand concluded. The disciplinary proceedings stand concluded with decision of the disciplinary authority. It is the disciplinary authority which can impose the penalty and not the inquiry officer. Where the disciplinary authority itself holds an inquiry an opportunity of hearing has to be granted by him. When the disciplinary authority differs with the view of the inquiry officer and proposes to come to a different conclusion, there is no reason as to why an opportunity of hearing should not to be granted., It will be most unfair and iniquitous that where the charged officers succeed before the inquiry officer they are deprived of representing to the disciplinary authority before that authority differs with the inquiry officer's report and while recording a finding of guilt, imposes punishment on the officer. In our opinion, in any such situation the charged officer must have an opportunity to represent before the Disciplinary Authority before final findings on the charges are recorded and punishment imposed. This is required to be done as a part of the first stage of inquiry as explained in Karnataka's case (1994 AIR SCW 1050) (Supra).
... Whenever the disciplinary authority disagrees with the inquiry 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 inquiry 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 favorable conclusion of the inquiry officer. The principles of natural justice, as we have already observed, required the authority, which has to lake a final decision and can impose a penalty, to give an opportunity to the officer charged of misconduct to file representation before the disciplinary authority records its findings on the charges framed against the officer."
10. The Supreme Court in the case of STATE BANK OF PATIALA AND ORS. v. B.K. SHARMA, dealing with the principles to be followed in context of disciplinary enquiries has held:
"Distinction between a total violation of principles of natural justice (autdi alteram pattern) and violation of a facet of the said principles. In other words, a distinction must be made between "no opportunity" and "no adequate opportunity that is between "no notice", "no hearing" and "no fair hearing" or to put it in different words, "no opportunity" and "no adequate bearing". In the case of no opportunity, the order passed would undoubtedly be invalid (one may call it "void" or a nullity if one choses to"). In such cases, normally, liberty will be reserved for the Authority to take proceedings afresh according to law i.e., in accordance with the said rule (audi alteram pattern). But, in the latter case, effect of violation (of a facet of the rule of audi alteram partem) has to be examined from the stand point of prejudice; in other words, what the Court or Tribunal has to see whether in the totality of the circumstances, the delinquent officer/ employee did or did not have a fair hearing and the orders to be made shall depend upon the answer to the said query".
11. In a recent Judgment, the Supreme Court in the case of CANARA BANK AND ORS. v. SRI DEBASIS DAS OTHERS, emphasizing the need to observed the principles of natural justice in domestic enquiries has held that:
"Natural justice is another name for commonsense justice. Rules of Natural Justice are not codified canons. But they arc principles ingrained into the conscience of man. Natural justice is the administration of justice in a commonsense liberal way. Justice is based substantially on natural ideals and human values. The administration of justice is to be freed from the narrow and restricted considerations which are usually associated with a formulated law involving linguistic technicalities and grammatical niceties. It is the substance of justice which has to determine in its form. Whenever legal justice fails to achieve this solemn purpose, natural justice is called in aid of legal justice. Natural justice relieves legal justice from unnecessary technicality, grammatical pedantry or logical prevarication. It. supplies the omission of a formulated law".
12. In the case of ALEXANDER MACHINERY (DUDLEY) LTD. v. CRABTREE, 1974 ICR 120 where it was observed that failure to give reasons amounts to denial of justice. Reasons arc live links between the mind of the decision-taker to the controversy in question and the decision or conclusion arrived at." Reasons substitute subjectivity by objectivity. The emphasis on recording reasons is that if the decision reveals the "inscrutable face of the sphinx", it can, by its silence, render it virtually impossible for the courts to perform their appellate function or exercise the power of judicial review in adjudging the validity of the decision. Right to reason is an indispensable part of a sound judicial system, reasons at least sufficient to indicate an application of mind to the matter before court. Another rationale is that the affected party can know why the decision has gone against him. One of the salutary requirements of natural justice is spelling out reasons for the order made, in other words, a speaking out. The "inscrutable face of the sphinx" is ordinarily incongruous with a judicial or quasis-judicial performance."
13. The Supreme Court in the case of H.L. TREHAN v. UNION OF INDIA, dealing with the post decisional hearing held that:
"... .post decisional opportunity of hearing does not sub serve the rules of natural justice. The Authority who embarks upon a post decisional hearing will naturally proceed with a closed mind and there is hardly any chance of getting a proper consideration of the representation at such a post decisional opportunity".
14. In the case of K.I. SHEPHARD AND ORS. v. UNION OF INDIA AND ORS., dealing with the same, the Supreme Court has held that:
"there is no justification to think of a post decisional hearing. On the other hand, the normal rule should apply. The employees have already been thrown out of employment having been deprived of livelihood they must be facing serious difficulties. There is no justification to throw them out of employment and have been given them an opportunity of representation that the requirement is that they should have the opportunity referred to above as a condition precedent to act. It is common existence that once a decision has been taken there is a tendency to uphold it and a representation may not really yield any fruitful purpose".
15. From the aforesaid decisions, it is now well settled that in domestic enquiries, whether rules and regulations provide for reasonable opportunity or not principles of natural justice must be followed. Any violation of the principles of natural justice would vitiate the entire enquiry. When the Enquiry officer is other than the disciplinary authority, the disciplinary proceedings brake into two stages. The first stage ends where the disciplinary authority arrives at its conclusion on the basis of the evidence, Inquiry Officer's report and the delinquent employees reply to it. The second stage begins when the disciplinary authority decides to impose penalty on the basis of its conclusion. If there is any violation of the principles of natural justice during the 1st stage, the order of the disciplinary authority would be void, nonest, in the eye of law. If the violation complained of, is in the course of 2nd stage, even if that violation is held to be proved unless the delinquent shows, as to how it has prejudiced his interest, the order of the disciplinary authority is not liable to be interfered with as a matter of course.
16. In cases where the disciplinary authority disagrees with the finding of the Inquiry Officer, the principles of natural justice requires that the disciplinary authority must issue a second show cause notice, recording in the said show cause notice his tentative reason for such disagreement and give to the delinquent officer, an opportunity to represent before it to record its findings. When such an opportunity is given, the delinquent will have an opportunity to persuade the disciplinary authority to accept the favourable conclusion of the Inquiry Officer. It is after consideration of such explanation offered by the, delinquent officer, the Disciplinary Authority has to record its own findings on such charges. Giving of a second show cause notice and giving an opportunity to the delinquent officer to persuade the Disciplinary Authority to accept the finding of the Enquiry Officer is not an idle formality. It is a mandatory requirement of law. It is only, after all these stages are over, the disciplinary authority has to apply its mind not only to the evidence on record, findings of the Inquiry Officer but also to the explantion offered by the delinquent officer and then to record a finding on the basis of the said materials.
17. Even before issue of second show cause notice and considering the representation of the delinquent employee, the disciplinary authority should not come to any definite conclusion or finding. It should keep an open mind. It must record its tentative reasons for differing from the findings of the enquiry officer, to enable the delinquent to know the mind of the disciplinary authority, so that he has an opportunity to persuade to change the mind. But, if the authority makes up its mind before issue of second show cause notice and embarks upon a post decisional hearing, it will naturally proceed with a closed mind and there is hardly any chance of getting a proper consideration at a post decisional opportunity. Once a decision has been taken there is a tendency to uphold it, and representation may not really yield any fruitful purpose.
18. The order holding the delinquent guilty should contain reasons. Giving reasons is one of the fundamentals of good administration. Failure to give reasons amounts to denial of justice. Reasons are live-links between the mind of the decision taker to the controversy in question and the decision or conclusions arrived at.
Reasons substitute subjectivity by objectivity. Right to reasons is an indispensable part of a sound judicial system. Reasons at least sufficient to indicate an application of mind to the matter dealt with, so that the affected party can know why the decision has gone against him.
19. In the background of this legal position, in the instant case, the disciplinary authority decided to disagree with the findings of the Inquiry Officer, issued a second show cause notice setting out the grounds on which he proposes to disagree from the findings of the Inquiry Officer. If the said grounds were only in the nature of a proposal and if he had called upon the petitioner to show cause why he should not come to a conclusion that the misconduct is proved on the basis of the said material it could be said, the disciplinary authority had kept his mind open and it is in compliance with the fair dealing, the said notice had been issued. But the tenor of the notice makes it clear, even before hearing the petitioner, on those grounds had held that the articles of charge levelled against the petitioner vide charge sheet dated 24.8.1998 is conclusively proved beyond any doubt. Giving an opportunity, after coming to such finding is only an idle formality. Assuming for the argument sake, the Disciplinary Authority has not used appropriate words in the said second show cause notice and it is to be understood that on the grounds mentioned therein he proposed to hold the petitioner guilty, when the petitioner gave a detailed statement of objection pointing out how the grounds mentioned in the second show cause notice are without any substance, in the final order passed by the Disciplinary Authority if there was any indication of application of mind to the explanation offered and thereafter if he had recorded a finding that the misconduct stands proved, it was possible to hold that a case for interference is not made out. But unfortunately, though in the final order, the disciplinary authority sets out in detail all the material on record at length, when it came to the question of considering the objections by the petitioner to the second show cause notice, all that has been said is, he do not find the same convincing. He reiterates that he has already given grounds for holding him guilty thereby affirming what he has stated in the second show cause notice holds good. Further, he proceeds to hold once again that the petitioner guilty of the articles of charges. It clearly demonstrates that the disciplinary authority has proceeded with a closed mind and there is no indication of application of mind to the representation made by the petitioner in reply to the second charge sheet. Therefore, the impugned order passed by the disciplinary authority is in violation of principles of natural justice and it falls it the 1st stage as such it is void and nonest in the eye of law.
20. The learned Counsel for the respondent contends whatever defect is there in the impugned order is made good by the Appellate Authority by giving a reasoned order. A perusal of the appellate order shows, that it has specifically considered all the objections raised by the petitioner, item wise and offered good reasons. The same has been rejected. And therefore, as held by the Supreme Court in the case of UNITED PLANTERS ASSOCIATION OF SOUTHERN INDIA v. K.G. SANGARIES WARAN AND ANR., that when an Appellate Authority has come to its own conclusion on the basis of evidence recorded by it, irrespective of the findings recorded by the Domestic enquiry, the Rule laid down in Ratna's case, will not strictly apply. The opportunity of hearing being given at the appellate stage will sufficiently meet the demand for a just and proper enquiry. In the aforesaid case, the delinquent did not participate in the domestic enquiry. Documents are offered for inspection, but he did not avail the opportunity. But after preferring the appeal, he sought permission to adduce evidence before the Appellate Authority which was granted. The Appellate Authority on the basis of the evidence recorded by it, came to the conclusion that the misconduct alleged against is proved. The said finding was challenged on the ground, that would not meet the requirement of natural justice as the Domestic Enquiry was held vitiated. It is in that context the Supreme Court has said that the delinquent officer did not avail the opportunity in the domestic enquiry, he chose to prefer appeal, in the appeal he sought an opportunity which was granted and the findings is recorded by the appellate authority, on such material, then it would not be open to him to challenge it on the ground that the Domestic Enquiry is vitiated.
21. Sir Willian Wades in his classic work "Administrative Law" observes, "in principal there ought to be an observance of natural justice equally at both stages and if natural justice is violated at the 1st stage, the right of appeal is not so much a true right of appeal as a corrected initial hearing; instead of fair trial followed by appeal, the procedure is reduced to unfair trail followed by fair trial".
22. In the case of MEGARRY. J. IN LEARY v. NATIONAL UNION OF VEHICLE BUILDERS, (1971)1 CH. 34 it was observed as under:
"if one accepts the contention that a defect of natural justice in the trial body can be cured by the presence of natural justice in the trial body, this has the result of depriving member of his right of appeal from the expelling body. If the rules and the law combined to give the member the right to a fair trial and right of appeal, why should he be told _____that he ought to be satisfied with a unjust trial and a fair ___ appeal? Even if the appeal is treated as a hearing denovo, the member is being stripped of his right to appeal to another body from the effective decision to expel him. I cannot think that natural justice is satisfied by a process whereby an unfair trial, though not resulting in a valid expulsion, will nevertheless have the effect of depriving the member of his right of appeal when a valid decision to expel him is subsequently made, such a deprivation would be a powerful result would be achieved by what in law is a mere nullity and it is no mere vitality that might be justified on the ground that natural of justice does not mean perfect justice. As a general rule, at all events, I hold that a failure of natural justice in the trial truely cannot be cured by a sufficiency of natural justice in an appellate body.''
23. In the case of INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA v. L.K. RATNA, these observations were approved by the Supreme Court and in para 20 has held that there is a manifest need to ensure that there is no breach of fundamental procedure in the original proceedings and to avoid treating the appeal as a overall substitute for the original proceedings, thus repelling the contention that, when sufficient opportunity is given in appeal, insufficiency in the domestic enquiry can be cured.
24. Therefore, the principles of natural justice has to be observed at both stages. If natural justice is violated in the first sage, observance of natural justice in the appellate stage would not cure the said initial defect. Violation of natural justice in the first stage, render order void and nonest. The order which is void nonest cannot be made valid by offering ample opportunities or by following the principles of natural justice at the appellate stage. If the Appellate Authority were to consider the entire matter denovo and pass a consider order, it is all the more necessary that the authority which pass the impugned order should also follow the said minimum requirement. Otherwise, it would be a case of unfair trial followed by a fair trial. The principles of natural justice do not countenance such procedure. Failure of natural justice in the trial truly cannot be cured by a suffciency of natural justice in appeal. Therefore, I do not find any substance in the aforesaid contention also.
25. For the reasons aforesaid (a) Writ Petition is allowed. (b) The impugned order passed by the Appellate Authority as well as the Disciplinary Authority are hereby quashed, (c) Liberty is reserved to the Disciplinary Authority to issue a second show cause notice keeping in mind the observations made above and then proceed with the matter, from the first stage onwards in accordance with law.
26. The question whether the petitioner would be entitled to the back wages and other benefits from the day of his dismissal till the date of his reinstatement, is left open to be decided by the Disciplinary Authority. If the petitioner is reinstated, it should be treated as reinstatement for the purpose of completing the enquiry from the stage of issue of second show cause notice. No costs.