Karnataka High Court
Reserve Bank Of India vs B.R. Srinivasa Prasad on 27 July, 1990
Equivalent citations: ILR1990KAR2791, 1990(2)KARLJ118
Author: Shivaraj Patil
Bench: Shivaraj Patil
JUDGMENT Mohan, C.J.
1. Both these appeals are disposed of by this common Judgment, since common point arises for our consideration.
2. The first respondent in each of the Writ Appeals, namely, B.R. Srinivasa Prasad and Smt. N, Nagasundaram, were working as Supervisors in the Currency Note Examination Section in the Reserve Bank of India, Bangalore (Appellant). In connection with a large-scale fraud discovered in the Bank relating to non-issuable currency notes of Rs. 100/- denomination, these two respondents along with many others were suspected to be involved in the matter. They were placed under suspension pending completion of the investigation by the Central Bureau of Investigation. B.R. Srinivasa Prasad was placed under suspension on 31-7-1979 and Smt, Nagasundaram was placed under suspension on 4-7-1979.
3. These orders of suspensions were passed by exercise of powers under Regulation 47(4) of the Reserve Bank of India (Staff) Regulation, 1948 (for short Regulation 1948). After the completion of investigation by the C.B.I., management decided to launch disciplinary proceedings against these two employees since a prima facie case has been disclosed. However, what happened prior to that was the order of suspension came to be withdrawn on 24-9-1983. The charge-memos were issued to the above said respondents on 23-7-1984 and 1-6-1984 respectively. In the meanwhile, both the respondents moved the Labour Court on 27-11-1984 for computation of their monetary claim during the pendency of suspension from 31-7-1979 and 4-7-1979 (respectively) to 24-9-1983 claiming full salary stating when once the order of suspension has been revoked, it shall be deemed to be as though they have been in continuous service. Then an Award came to be passed on 10-2-1986. Thereafter, an enquiry took place in relation to the charge-memos finding that the explanations offered by them were not satisfactory. Ultimately, orders were passed on 13-10-1988 to the following, effect as against both Srinivasa Prasad and Smt. Nagasundaram:
"FINAL ORDER of the Competent Authority in the Disciplinary Proceedings instituted against Shri B.R. Srinivasa Prasad Coin Note Examiner Gr.I. Shri B.R. Srinivasa Prasad, Coin Note Examiner Gr.I was found guilty of the charges framed against him vide charge-sheet Staff No. 337/156-84/85 dated 23-7-1984, Accordingly, a show-cause notice Staff No. 1270/Dis. 156/SNFC/88-89. dated 26-9-1988 was issued to him, tentatively proposing the following punishment:
(i) His pay should be reduced by three stages for a period of three years; and
(ii) a sum of Rs. 6,666.65 (Rupees Six thousand six hundred sixty six and paise sixty five) being his share of the pecuniary loss caused to the Bank, should be recovered from him.
He was given time upto 8th October 1988 for making a representation against the proposed punishment if he so desired.
2. Shri B.R. Srinivasa Prasad in his reply to the show-cause notice has requested that his case be reconsidered sympathetically and he be exonerated of the charges on the ground that (i) he was a victim of the ruse played by the culprits; (ii) no action has been taken against the punching operator who has punched the note packets in Shri Srinivasa Prasad's absence; (iii) no action has been taken against the Assistant Treasurer of the Section who has been a party to such violation, directly or indirectly; (iv) it is not fair to recover the pecuniary loss from him as he is not among those who profits by the wrongful loss caused to the Bank; and (v) unlike the other employees who had been placed in a similar situation and charge-sheeted in this case, he was kept under suspension for more than four years and his increments during the period were not drawn during this period and thus he has already undergone more punishment than the proposed one.
3. Shri Srinivasa Prasad has not disputed the fact that he is guilty of negligence in the discharge of his duties which has resulted in a pecuniary loss to the Bank and the punishment proposed is for his negligence in the matter. Further, the punishment was proposed keeping in view the fact that Shri B.R. Srinivasa Prasad was not a party to the perpetration of the fraud. Had he been a party to the same, the punishment would have been more severe. As for the recovery of the pecuniary loss only from those who profited from the substitution, the substitution could take place only because these employees had been negligent in the discharge of their duties.
4. Shri Srinivasa Prasad has contended that the Management has prejudged the issue since no action has been taken against either the Punching Operator or the Assistant Treasurer of the Section under whose supervision the Manual provisions were violated. The mere fact that no disciplinary action has been taken by the Bank against the above mentioned persons so far does not in any way mitigate the gravity of the extent of negligence displayed by Shri Srinivasa Prasad in discharge of his duties. However, I have taken note of his statement that he had been placed under suspension for more than four years and during the period he was not granted any increments. In other words, his pay already stands reduced by four increments on a permanent basis. Hence his plea for reduction in quantum of punishment deserves consideration.
5. I, therefore, order that in terms of Regulation 47(l)(c) and (d) of the Reserve Bank of India (Staff) Regulations, 1948,.
(i) Shri B.R. Srinivasa Prasad's pay should be reduced by one increment for a period of one year; and
(ii) A sum of Rs. 6666.65 (Rupees Six thousand six hundred sixty six and paise sixty five) representing his share of the pecuniary loss caused to the Bank should be recovered from his salary in 13 monthly instalments, the first twelve monthly instalments being Rs. 500/-(Rupees five hundred only) each and the last Rs. 666.65 (Rupees six hundred sixty-six and paise sixty five).
6. I also order that the period when Shri B.R. Srinivasa Prasad was under suspension (i.e., 31st July 1979 to 25th September 1983) should be treated as extra-ordinary leave without pay and allowances not counting for increments.
7. I direct that a copy of this order be served on Shri B.R. Srinivasa Prasad.
FINAL ORDER OF THE COMPETENT AUTHORITY IN THE DISCIPLINARY PROCEEDINGS INSTITUTED AGAINST KUM. N. NAGASUNDARAM, COIN NOTE EXAMINER GR.I. Kum. N. Nagasundaram, Coin Note Examiner Gr.I. was found guilty of the charges framed against her view Charge sheet Staff No. 5208/156-83/84 dated 1st June 1984. Accordingly, a show-cause notice Staff No. 1185/Dis. 156/SNFC/88-89 dated 19-9-1988 was issued to her tentatively proposing the following punishment:
(i) her pay shall be reduced by three stages for a period of three years; and
(ii) a sum of Rs. 3,400/- (Rupees three thousand and four hundred only) being her share of the pecuniary loss caused to the Bank should be recovered from her.
She was given time upto 1st October 1988 for making a representation against the proposed punishment if she so desired.
2. Kum. N. Nagasoundaram in her reply (to the show cause notice) dated 22nd September 1988 has requested that the proposed punishment be reviewed and that she be exonerated of the above charges on the grounds that (i) the Enquiry Officer's findings are perverse and unjust and since the Competent Authority's findings are based on the Enquiry Officer's findings, they are not fair; (ii) though the employee by her negligence might have helped the substitution to take place, she has not made profits out of it like the person who has perpetrated the fraud thereby giving room to an impression that the loss is not caused by the employees at the extraction level who are also charge-sheeted in this case.
3. The submission of Kum. N. Nagasoundaram at 2(i) above had already been dealt with at length in ray findings. However, to further clarify the points, I may mention here that the Enquiry Officer in his findings has taken into account the contention of the defence that the packet examined and prepared by Shri H.G. Srinivasa Prasad only showed defective stitching resulting in defective punching. In fact, I may reiterate here that if there was defective stitching, it should have been noticed by Kum. N. Nagasoundaram before getting it punched. The fact that she was the figures in CD.28 merely to tally the same with CD.55, without ensuring that she had actually scrutinised the packets are sufficient evidence to indicate the negligent manner in which Smt. Nagasoundaram had conducted the duties entrusted to her.
4. Coming to Kum. Nagasoundaram's representation on the punishment tentatively imposed on her, it may be mentioned that the same was proposed keeping in view the fact that Kum. Nagasoundaram was not a party to the perpetration of the fraud. Had she been a party to the same, the punishment would have been more severe. However, I have taken note of her statement that she had been placed under suspension for a little over 4 years. During this period she was not granted any increments. In other words, her pay already stands reduced by 4 increments on a permanent basis. Hence her plea for reduction in quantum of punishment deserves consideration. As for the recovery of the pecuniary loss from the employees responsible for the fraud at the substitution level, the substitution could take place only because these employees had been negligent in the discharge of their duties. Had they followed the prescribed procedures, the fraud would have been detected immediately and the culprits apprehended then and there. The pecuniary loss caused to the Bank had been equally distributed among all the concerned persons and the principle adopted is equitable. The argument that Kum. Nagasoundaram through her negligence helped substitution but did not profit from the act of substitution does not cut any ice with me. If it was found that Kum. Nagasoundaram profited from the act of substitution, then she deserved very severe punishment.
5. Having considered Kum. Nagasoundaram's reply to the show cause notice and taking into account her submissions, I order that in terms of Regulation 47(l)(c) and (d) of the Reserve Bank of India (Staff) Regulations, 1948.
(i) her pay should be reduced by one increment for a period of one year; and
(ii)a sum of Rs. 3,400/- (Rupees three thousand and four hundred only) representing her share of pecuniary loss caused to the Bank should be recovered from her salary in ten monthly instalments of Rs. 340/- (Rupees three hundred and forty only) each.
6. I also order that the period when Kum. Nagasoundaram was under suspension (i.e., 4th July to 25th September 1983) should be treated as extra-ordinary leave without pay and allowances not counting for increments.
7. I direct that a copy of this order be served on Kum. N. Nagasoundaram."
4. The Labour Court took up the application filed under Section 33C of the Industrial Disputes Act in CGA No. 9/1984 and by its order dated 10-2-1986 held that the application was not maintainable as being premature. Against this order of the Labour Court, two Writ Petitions in W.P.Nos.7643/36 and 7644/83 were filed to this Court. The matter came up before Hon'ble Justice Doddakalegowda who by his Judgment dated 28-7-1987 held that the Bank could not withhold the payment of wages payable to the respondents herein, merely because of the subsequent domestic enquiry and the Labour Court is directed to dispose of the application, in the light of the said observation, quantify the amount and make an order of payment. Aggrieved by this Judgment dated 28-7-1987, the Reserve Bank of India has preferred Writ Appeal No. 1780/87 against W.P,No. 7643/86 and W.A.No. 1781/87 against W.P.No. 7644/ 1986.
5. Mr. Sundaraswamy, learned Counsel for the appellant, would strenuously urge that having regard to the powers under Rule 47(4) of Regulation 1948, it will be well open to the management to keep the erring employees under suspension. Therefore where by service of charge-memo concerning which an enquiry took place an ultimate order was passed 13-10-1988 treating as to how the period of suspension should be dealt with, that subsequent event must be taken note of. From this point of view the order of the learned Judge cannot be supported because the learned Judge proceeded as though the subsequent proceeding which resulted in punishment even though a minor one is inconsequential.
6. In opposition to this Mr. Padake, learned Counsel for the respondent-1 in each of the appeals contended that this is a case in which an application under Section 33C(2) was filed as early as 27-11-1984 long before the service of charge-memos. That resulted in the rejection of the claim on an erroneous view which has been rightly interfered with by the learned Judge. Certainly, it cannot be said when the order dated 13-10-1988 was passed, that would have any relation to the suspension made on 31-7-1979 and 4-7-1979 which ultimately came to be revoked on 24-9-1983. In other words, according to him, the subsequent order will have no bearing as to how the period between 31-7-1979 and 24-9-1983 should be treated. Further the order of the learned Judge is dated 28-7-1987. That again cannot be construed by the order dated 13-10-1988.
7. We have narrated the facts at some detail because the short question that arises for our consideration is: How the period when the contesting respondents were under suspension between 31-7-1979 and 4-7-1979 to 24-9-1983 is to be treated, consequent to the revocation order of suspension on 24-9-1983. Regulation 47(4) of Regulation 1948 on which a great stress is set up by Sri Sundaraswamy may now be extracted:
"(4) An employee may be placed under suspension by the Officer empowered to pass the final order under this regulation. During such suspension, he shall receive subsistence allowance equal to his substantive pay plus twenty-five per cent thereof, provided that if no penalty under Clauses (b), (c), (d) or (e) of sub-regulation (I) is imposed the employee shall be refunded the difference between the subsistence allowance and the emoluments which he would have received but for such suspension, for the period he was under suspension, and that, if a penalty is imposed on him under the said clauses, no order shall be passed which shall have the effect of compelling him to refund such subsistence allowance. The period during which an employee is under suspension shall, if he is not dismissed from the service, be treated as period spent on duty or leave as the Officer who passes the final order may direct."
Regulation 47(4) no doubt thus confers absolute power on the Appellant to place an employee under suspension. It does not even say suspension in contemplation of charges or pending enquiry or pending framing of charges or pending enquiry as is usually found for instance in C.C.A. Rules. Be that so. Nevertheless what is important in our view, for our purpose is the orders of suspension which were admittedly passed on 31-7-1979 and 4-7-1979 respectively against the respondents, namely, Srinivasa Prasad and Smt. N. Nagasundaram came to be revoked on 24-9-1983. Long after revocation of the suspension on 23-7-1984, practically one year later, charge-memos came to be issued. The charge-memos by themselves cannot amount to suspension. In fact, the respondents were not placed under suspension then. Nor again in law would it have the effect of ratifying the suspension. Therefore, the period between 31-7-1979 to 24-9-1983 or 4-7-1979 to 24-9-1983, as the case may, be, stood independent of the charge-memo. Concerning that alone, an application was moved on 27-11-1984. The Labour Court, nevertheless, took the view that the application was premature. For our part, we are unable to see as to how it can be premature, because as we stated above the charge-memos would have no bearing on the earlier suspensions which came to be revoked on 24-9-83. Once there is a valid order of revocation in law, it would mean as though the suspended officer has been restored to duty. However, the order of Labour Court had been rightly set aside by the learned Judge on 28-7-1987. It is not possible to undo the effect of revocation by a subsequent charge-memo. As the charge-memos came to be served later, that cannot infringe upon the right of contesting respondents for computation of the full salary. Accordingly, therefore, though orders have been passed on 13-10-1988, as to how the period of suspension ought to be treated, while imposing the ultimate punishment, that cannot in any manner affect the Judgment of the learned Judge or cannot in any manner affect the jurisdiction of the Labour Court to decide the entitlement of the respondents to the full salary between the period of suspensions i.e., from 31-7-1979 to 24-9-1983 and 4-7-1979 to 24-9-1983 respectively. Under Section 33-C(2) of the Industrial Disputes Act, 1947 the Labour Court is empowered to decide as follows:
"33-C(2) Where any workman is entitled to receive from the employer any money or any benefit which is capable of being computed in terms of money and if any question arises as to the amount of money due or as to the amount at which such benefit should be computed, then the question may, subject to any rules that may be made this Act, be decided by such Labour Court as may be specified in this behalf by the appropriate Government within a period not exceeding three months.
(Provided that where the Presiding Officer of a Labour Court considers it necessary or expedient so to do, he may, for reasons to be recorded in writing, extend such period by such further period as he may think fit)."
Therefore, power ought to have been exercised by the Labour Court. Instead, it wrongly took the view that having regard to the subsequent proceedings, it would be premature. If the subsequent events have no bearing on the suspension between 31-7-1979 to 24-9-1983 and 4-7-1979 to 24-9-1983 respectively, we are at a loss to understand how the claim of the workman could be defeated in this way. For these reasons, we find the Judgment of the learned Judge unquestionable. However, the learned Judge has directed the Labour Court to quantify the amount and make an order of payment.
8. When we suggested to Mr. Sundaraswamy, whether it was not possible for the Bank to agree for some amount instead of driving these two employees to the Labour Court once more for quantification, the learned Counsel fairly submitted that should this Court suggest a figure, he would ask his client to agree. We suggested Rs. 50,000/- to each of the respondents which was agreeable to the first respondent in both the appeals and Mr. Sundaraswamy also agrees. Accordingly, we direct the appellant to pay Rs. 50,000/- to each of the first respondents, i.e., Srinivasa Prasad and Smt. N. Nagasundaram, respectively. Time for payment two months.
The payment will be spread over commencing from 1-8-1979 to 1-9-1983. By this reason of spread over if Income-tax is due on this, the Bank will be entitled to deduct it at source.
Writ Appeals are accordingly disposed of.