THE HONBLE SRI JUSTICE M.S. RAMACHANDRA RAO
W.P.Nos.1821 of 2004
24-03-2015
K.Srinivas.Petitioner.
The AP State Co-operative Bank, rep. by its Chairman and Managing Director,
Troop Bazar, Hyderabad and another...Respondents.
Counsel for the petitioner in W.P.No.11868 of 2008:Sri S. Sridhar
Counsel for the petitioner in W.P.Nos.13872
and 13882 of 2008: Sri Vijay Kumar Heroor
Counsel for the petitioner: Sri S.Lakshma Reddy
Standing Counsel for the respondent-Bank:Sri A.H.Rama Krishna
<GIST:
>HEAD NOTE:
?Cases referred
(1998) 7 S.C.C. 84
2AIR 1999 S.C. 3734
THE HONBLE SRI JUSTICE M.S. RAMACHANDRA RAO
W.P.Nos.1821 & 1827 of 2004
COMMON ORDER:
The petitioner in both these Writ Petitions is one and the same
and the respondents are common in both the Writ Petitions.
Therefore, these two Writ Petitions were heard together and a
common order is being delivered.
Brief facts leading to file these Writ Petitions are as under:
2. The petitioner herein was appointed as a Staff Assistant in
the erstwhile Andhra Pradesh Central Cooperative Land Mortgage
Bank on 30-12-1969. He was promoted as Superintendent on
18-04-1977 and when the said Bank was merged with the AP State
Cooperative Bank (for short the Bank), the petitioners services were
transferred to the said Bank and his services were being utilized as
Assistant Development Officer (Legal Assistant) (ADO/LA). By
1998, he was given designation as Junior Officer in the Bank.
3. On 30-12-1998, a charge memo was issued to the petitioner
wherein it was alleged that while working as ADO/LA at Sangareddy
Branch of the Bank, he has scrutinized loan applications of Medak
DCCB approving the title of the applicants to the security offered and
recommended loans of 76 loan applications, violated circular
instructions and exhibited gross negligence causing deficit in security
and committed other administrative lapses.
4. It was also alleged that he exhibited gross negligence in
approving the title of the applicants to the hypotheca which caused
deficit in security resulting in loss to the PACS/Bank and that he is
also liable for Rs.3,67,080/- jointly with members of the Field
Inspection Team and individually for Rs.8,14,130/- totaling to
Rs.11,81,210/- besides disciplinary action.
5. He was asked to submit explanation within two weeks from
the date of receipt of the said charge memo. The petitioner did not
submit any explanation to the charge memo.
6. An enquiry was ordered by appointing Smt. G.Shashikala,
AGM as enquiry officer vide Memo dt.01-08-2000. She conducted
enquiry and submitted an enquiry report dt.31-12-2000 holding that
allegations mentioned in the charge memo were not proved.
7. The Persons In-charge Committee of the Bank in a meeting
held on 21-05-2001, considered the charge/allegations and findings of
the enquiry officer but did not accept any of the findings of enquiry
officer on the ground that some of the findings were not based on the
record. It therefore decided to deal with the issue of fixation of
financial liability separately while taking a decision of inflicting the
punishment for lapses of petitioner.
8. The petitioner was issued a show cause notice dt.31-05-2001
to show cause within 15 days from the date of receipt of the said
notice as to why proposed punishment of demotion without pay and
protection should not be inflicted on him.
9. The petitioner submitted his explanation on 01-08-2001 and
12.09.2001.
10. The Committee of Persons In Charge of the Bank in a
meeting held on 07-01-2002, after examining the gravity of the
charges, the findings of the enquiry officer apart from the contentions
of the petitioner in his explanation dt.01-08-2001 and 12-09-2001,
passed a Resolution No.11 rejecting his request for giving an
opportunity for personal hearing and decided to confirm the proposed
punishment of demotion to the next post of Staff Assistant for a period
of one year or his superannuation whichever is earlier, without pay
protection while reserving the right to fix financial liability on him
for the loss caused to the Bank as a consequence of his lapses in the
scrutiny of long term loan applications in due course. It was also
resolved that specifying the period of demotion will not confer a right
on the petitioner to get the original post on the expiry of the said
period. This decision was communicated by the Managing Director
of the Bank to the petitioner vide proceedings dt.21.2.2002.
11. An appeal against the said decision was preferred by the
petitioner to the competent authority i.e. General Body of the Bank.
12. The appellate authority in a meeting held on 23-09-2002
vide resolution No.4 partly allowed the appeal as regards the quantum
of punishment and directed that the petitioner be placed in the
minimum scale of the post held by him prior to demotion subject to
fixation of financial liability. This was communicated to the
petitioner vide proceeding dt.05-10-2002 of the Managing Director of
the Bank.
13. As a consequence to the orders passed in the appeal,
the petitioners pay was re-fixed at Rs.3,970/- in the minimum pay
scale of the Junior Officer/Manager with effect from 21-02-2002 vide
proceedings dt.23-12-2002.
14. In the meantime, the petitioner retired from the service
of the Bank with effect from 31-03-2002 on attaining the age of
superannuation.
15. The petitioner filed W.P.No.1827 of 2004 seeking a to
call for the records of the proceedings dt.5.10.2002 as well as
proceedings dt.21.12.2002; to quash the same by issuing a Writ of
Certiorari; to declare that they are illegal, without jurisdiction, violate
principles of natural justice; and for grant of all consequential benefits
with continuity of service, increments apart from arrears of pay as
Junior Officer/Asst.Development Officer with interest.
16. Inter alia, the petitioner contended that the disciplinary
authority of the Bank had no power to differ with the findings of the
enquiry officer under the Service Rules, and even assuming that such
power existed, it had no power to impose punishment while differing
with the findings of the enquiry officer without first issuing a notice
and giving opportunity to the petitioner to show cause against the
reasons for differing with the findings of the enquiry officer. It is also
contended that the penalty imposed on the petitioner was not
prescribed in the service regulations and therefore the order refixing
him to the minimum scale in the post of Junior Officer is illegal and
without jurisdiction.
17. Learned counsel for the petitioner reiterated the above
submissions and relied upon the judgment of the Supreme Court in
Punjab National Bank and others Vs. Kunj Behari Misra and
Yoginath D. Bagde Vs. State of Maharashtra and another in
support of his contention that even if there is no provision in the
service regulations, it was incumbent upon the punishing authority to
give notice to the delinquent employee if the said authority desired to
differ with a favourable finding of the enquiry officer.
18. In the counter affidavit filed by the respondents in
W.P.No.1827 of 2004, the respondents submitted that the Committee
of the Persons In-charge of the Bank had decided not to accept the
findings of the enquiry officer exonerating the petitioner; that show
cause Notice dt.31-05-2001 was issued to the petitioner explaining in
detail why it did not agree with findings of the enquiry officer and
differed with them; and that his objections/explanations were called to
show cause why proposed punishment of demotion to the lower post
of Staff Assistant should not be done. According to the respondents,
the petitioner submitted his explanation vide his letter dt.01-08-2001
and 12-09-2001 to the show cause notice; and therefore, he cannot
complain that no opportunity was given to him for differing with the
findings of the enquiry officer.
19. I have noted the submission of both sides.
20. In Kunj Behari Misra (1 supra), the Supreme Court held
that if the enquiry 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; this is necessary because in departmental
proceedings, what is of ultimate importance is the finding of the
disciplinary authority; and it would be most unfair and iniquitous if
the charged officers were to succeed before the enquiry officer, and
they are deprived of representing to the disciplinary authority, before
that authority differs with the enquiry officers report; and, while
recording a finding of guilt, that authority imposes punishment on the
officer. It held that in such a situation, the charged officer must have
an opportunity to represent to the disciplinary authority before final
findings on the charges are recorded and punishment is imposed. It
held that whenever the disciplinary authority disagreed 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. It held that the principles of natural justice require the
authority which has to take final decision and can impose a penalty, to
give an opportunity to the officer charged of misconduct to file a
representation before it records its findings and the charges framed
against the officer.
21. This principle was again reiterated in Yoginath D.Bagde
(2 supra) wherein it was declared:
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 authoritys 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.
29. We have already extracted Rule 9(2) of the
Maharashtra Civil Services (Discipline and Appeal) Rules,
1979 which enables the disciplinary authority to disagree
with the findings of the enquiring authority on any article of
charge. The only requirement is that it shall record its
reasoning for such disagreement. The rule does not
specifically provide that before recording its own findings,
the disciplinary authority will give an opportunity of hearing
to a delinquent officer. But the requirement of hearing in
consonance with the principles of natural justice even at that
stage has to be read into Rule 9(2) and it has to be held that
before the disciplinary authority finally disagrees with the
findings of the enquiring authority, it would give an
opportunity of hearing to the delinquent officer so that he
may have the opportunity to indicate that the findings
recorded by the enquiring authority do not suffer from any
error and that there was no occasion to take a different view.
The disciplinary authority, at the same time, has to
communicate to the delinquent officer the TENTATIVE
reasons for disagreeing with the findings of the enquiring
authority so that the delinquent officer may further indicate
that the reasons on the basis of which the disciplinary
authority proposes to disagree with the findings recorded by
the enquiring authority are not germane and the finding of
not guilty already recorded by the enquiring authority was
not liable to be interfered with.
22. In the present Writ Petition, admittedly the enquiry
officer in her report dt.31-12-2000 totally exonerated the petitioner.
Thereafter, the matter was placed before the Committee of Persons In-
charge of the Bank which was the disciplinary authority to impose
punishment. The said committee, in a meeting held on 21-05-2000,
did not accept the findings of the enquiry officer and issued a show
cause notice to the petitioner to show cause why the proposed
punishment of demotion should not be inflicted on him within 15 days
from the date of receipt of that show cause notice.
23. No doubt in the said show cause notice, reasons for
differing with the decision of the enquiry report were given but they
were not tentative and it appears as if the disciplinary authority has
finally determined that the report of the enquiry officer and the
reasons given by her, are not correct. This can be gauged from the
following statements in the show cause notice dt.31.5.2001 of the
Managing Director of the Bank asking petitioner to show cause why
the proposed punishment of demotion without pay protection should
not be inflicted on him.
The allegation (1) is that the said ADO has violated
circular instructions contained in Cir. No.33/IDD/SWC/95-96
dated 19-09-1995 and conducted legal scrutiny of (12) loan
applications of DCC Bank of Medak and approved the title of the
applications basing on the revenue records not duly verified and
attested by the Field Inspecting Officer.
Therefore the finding of the Enquiry officer that the
instructions issued in circular No.33/IDD/SWC/95-96 dated 19-
09-1995 are not violated is only partially accepted by the
Committee of Persons-in-Charge. Thus he is made liable for the
financial loss caused to the Bank.
The allegation II, held as not proved by the Enquiry
Officer is that the said Sri K.Srinivas was negligent in scrutiny
of loan applications and his negligence resulted in release of loan
amounts in favour of the persons who do not have marketable
title to the security offered and resulted in advancement of
Rs.8,14,130/- in 37 loan applications. But this finding of the
Enquiry Officer is not accepted by the Committee of Persons-in-
Charge.
The allegation No.III is that the charged employee
committed various other irregularities of administrative nature in
scrutiny of (27) loan applications. The Enquiry Officer observed
that in the case of purchase of Oil Engine/Electric Motor, 50%
cost of the machinery is added to the estimated value of the land
while arriving at loan eligibility and similarly the cost of
Generator was added to the land value in some of the loan
applications, though there are no circular instructions as to
whether to add or not the cost of Generator to the estimated value
of the land, and as the Generator is also a machine, the cost of it
was added treating it on par with electric motor/oil engine. The
findings of the E.O. are not accepted by the Committee of
Persons-in-Charge, since in the absence of the any circular
instructions, the Charge-sheeted Officer should not have
accepted the valuation by adding Generator cost and he should
have sought instructions from higher authorities. Hence it is a
lapse on his part.
On close examination of the facts of the case and keeping
in view the findings of the Enquiry Officer the charge-sheeted
Officer has committed the following irregularities in scrutiny of
loan applications, besides accepting fake revenue
records/certificates in a large number of cases and thereby
facilitating irregular sanctions.
In view of the above, it is noted by the Committee of
Persons-in-Charge that the charge-sheeted officer violated
circular instructions and exhibited gross negligence and
committed grave misconduct as per S.R.No.47 (i) of APCOB
service conditions (though charge was framed under SR No.77
(i) of erstwhile APCCADB, the SRs of APCOB are made
applicable to him in view of inserting Rule 73 (b) to APCS
Rules) and the charge-sheeted employee is punishable with any
of the penalties prescribed under SR No.48 of APCOB by the
competent authority prescribed under SR No.52.
Further the Committee of Persons In-Charge considering
the above and by not accepting the findings of the E.O. and in
view of the gravity of proven grave misconduct committed by the
Charge-sheeted Officer, decided to inflict the punishment of
demotion to the post of Staff Assistant for a period of one year or
his superannuation whichever is earlier subject to
eligibility/selection norms and availability of vacancies etc.
against Sri K.Srinivas, J.O. besides reserving the right to the
Bank to fix financial liability on him for the loss caused to the
DCCB as a consequence of his lapses in the scrutiny of LT loan
applications in Medak, DCCB in due course after securing the
requisite information from the said DCCB.
Therefore Sri K.Srinivas, J.O. is called upon to show-
cause, if any, within 15 days from the date of receipt of his show-
cause notice as to why the proposed punishment of demotion
should not be inflicted on him, failing which, it would be
construed that he has no plausible explanation to offer and
further action will be taken as per rules.
24. The petitioner gave an explanation on 01-08-2001 to the
said show cause notice requesting that he may be exonerated from the
charges. The same was not accepted by the Committee of Persons
In-charge which imposed the punishment of demotion from the post
of Junior Officer/Manager to the next lower post of Staff Assistant for
a period of one year or his superannuation, whichever is earlier,
without pay protection reserving the right to the Bank to fix up
financial liability on him for the loss/non recovery caused to the Bank
as consequences of lapses in the scrutiny of LT loan applications.
25. As per the law laid down in the above decisions Kunj
Behari Misra ( 1 supra) and Yoginath D. Bagde (2 supra), the
disciplinary authority is expected to communicate to the petitioner
tentative reasons for disagreeing with the findings of the enquiry
officer, so that the petitioner may further indicate that the reasons on
the basis of which the disciplinary authority proposes to disagree with
the findings recorded by the enquiry authority, are not germane and
that the finding that he is not guilty already recorded by the enquiry
authority, was not liable to be interfered with.
26. In the present case, this was not done. The show cause
notice dt.31-05-2001 asked the petitioner to show cause why the
proposed punishment of demotion should not be inflicted on him and
contained a final determination by the disciplinary authority (i.e the
Persons In Charge Committee) that the findings of the enquiry officer
are not correct. As per the above decisions, the show cause notice
should have asked the petitioner only to show cause as to why, for the
tentative reasons indicated for disagreeing with the findings of the
enquiry authority, the disciplinary authority should not disagree with
the findings of the enquiry authority. This would enable the petitioner
to represent before the disciplinary authority before final findings on
the charges are recorded that the view of the enquiry officer was
correct and there was no case made out to disagree with the findings
of the enquiry officer. Fairness and equality would require that such a
course of action be adopted.
27. Since admittedly this requirement of law has not been
followed, the decision of the Committee of Persons Incharge of the
Bank in their meeting held on 07-01-2002 vide resolution No.11
confirming the punishment of demotion to the next lower post of Staff
Assistant for a period of one year or his superannuation whichever is
earlier (as communicated by the proceedings dt.21-02-2002 of the
Managing Director of the Bank to the petitioner) and the decision of
the appellate authority i.e. the General body of the Bank in its
meeting held on 23-09-2002 vide resolution No.4 modifying the
punishment (by placing him in the minimum scale of the post held by
him in the post of Junior Officer/Manager) (as communicated by the
proceedings dt.05-10-2002 of the Managing Director of the Bank) are
liable to be quashed and are accordingly quashed. Consequently
proceedings dt.21-02-2002 of the Managing Director of the Bank and
proceedings dt.23-12-2002 of the Deputy General Manager (ADM of
the Bank) also cannot stand and are accordingly set aside.
28. The effect of this would be that the petitioner would be
deemed to have continued in the post of Junior Officer/Manager till he
retired on 31-03-2002 in the same scale of pay of Junior
Officer/Manager as he would have been on the date when he had
retired from service i.e.31-03-2002.
29. Although the learned counsel for the respondents sought
for remand of the matter to the disciplinary authority again in order to
rectify this irregularity committed by the respondents, I am not
inclined to accede to the said request for the reason that the petitioner
is no longer in service, having retired on 31-03-2002, and no
provision in the Service Regulations is pointed out by counsel for
respondent which permits the conduct of a disciplinary enquiry
against a retired employee of the Bank. Also it would be unjust to now
direct the disciplinary proceedings to be revived 12 years after orders
were passed by the respondents.
30. For the above reasons, W.P.No.1827 of 2007 is allowed.
31. Coming to W.P.No.1821 of 2004, the petitioner in this
Writ Petition had questioned the proceeding dt.26-12-2003 of the 2nd
respondent communicating to the petitioner the decision of the Person
Incharge Committee of the Bank in its meeting held on 28.11.2003
fixing the financial liability of Rs.1,30,232/- on him, being the deficit
in securities for certain loans pertaining to the Bank. The basis for
this order is the decision of the Committee of the Persons In charge
taken on 07-01-2002 vide resolution No.11 demoting the petitioner to
the post of Staff Assistant from the post of Junior Officer/Manager for
a period of one year or the superannuation, whichever is earlier, as
modified by the decision of the appellate authority i.e. the General
body of the Bank in its meeting held on 23-09-2002 vide resolution
No.4 reducing the punishment (by placing him in the minimum scale
of the post held by him in the post of Junior Officer/Manager) (as
communicated by the proceedings dt.05-10-2002 of the Managing
Director of the Bank).
32. This is clear for the impugned order dt.26.12.2003
wherein, after referring to the explanation dt.20.10.2003 of the
petitioner why he cannot be made to pay this amount (in reply to the
show cause notice dt.9.4.2003 issued by respondents), it is stated :
With regard to the above contentions, he is informed that the
disciplinary authority and the Appellate authority have already
examined his contentions earlier and the Appellate authority
disposed of his appeals, by reducing the punishment inflicted
earlier, which was also communicated to him
33. Since the said proceedings of the disciplinary and
appellate authority itself have now been set aside in W.P.No.1827 of
2004, the proceeding dt.26-12-2003 of the 2nd respondent
communicating to the petitioner the decision of the Person In charge
Committee of the Bank in its meeting held on 28.11.2003 directing
the petitioner to pay a sum of Rs.1,30,232/- is also set aside.
Accordingly, W.P.No.1821 of 2004 is also allowed.
34. In the result, both the Writ Petitions are allowed; the
decision of the Committee of Persons Incharge of the Bank in their
meeting held on 07-01-2002 vide resolution No.11 confirming the
punishment of demotion to the next lower post of Staff Assistant for a
period of one year or his superannuation, whichever is earlier (as
communicated by the proceedings dt.21-02-2002 of the Managing
Director of the Bank to the petitioner), and the decision of the
appellate authority i.e. the General body of the Bank in its meeting
held on 23-09-2002 vide resolution No.4 modifying the punishment
(by placing him in the minimum scale of the post held by him in the
post of Junior Officer/Manager) (as communicated by the proceedings
dt.05-10-2002 of the Managing Director of the Bank) are quashed;
the proceeding dt.26-12-2003 of the 2nd respondent communicating to
the petitioner the decision of the Person Incharge Committee of the
Bank in its meeting held on 28.11.2003 that petitioner shall pay
Rs.1,30,332/-, is also set aside; it is declared that petitioner is entitled
to all consequential benefits with continuity of service upto 31.3.2002,
increments (if any) apart from arrears of pay as Junior
Officer/Asst.Development Officer for the period 17.1.2002 till
31.3.2002 with interest @ 9% p.a from 17.1.2002 till date of payment
of the same by respondents. Any payment made by the petitioner to
the respondents pursuant to the proceeding dt.26.12.2003 of the 2nd
respondent shall also be refunded to him by respondents with interest
@ 9% from the date of such payment by him till its repayment by
respondents. Costs of Rs.2,000/- also shall be paid by the respondents
to the petitioner within a period of four weeks from the date of receipt
of a copy of this order.
35. As a sequel, the miscellaneous petitions, if any pending,
shall stand closed.
___________________________________
JUSTICE M.S. RAMACHANDRA RAO
Date: 24-03-2015
W.P.Nos.1821 of 2004
24-03-2015
K.Srinivas.Petitioner.
The AP State Co-operative Bank, rep. by its Chairman and Managing Director,
Troop Bazar, Hyderabad and another...Respondents.
Counsel for the petitioner in W.P.No.11868 of 2008:Sri S. Sridhar
Counsel for the petitioner in W.P.Nos.13872
and 13882 of 2008: Sri Vijay Kumar Heroor
Counsel for the petitioner: Sri S.Lakshma Reddy
Standing Counsel for the respondent-Bank:Sri A.H.Rama Krishna
<GIST:
>HEAD NOTE:
?Cases referred
(1998) 7 S.C.C. 84
2AIR 1999 S.C. 3734
THE HONBLE SRI JUSTICE M.S. RAMACHANDRA RAO
W.P.Nos.1821 & 1827 of 2004
COMMON ORDER:
The petitioner in both these Writ Petitions is one and the same
and the respondents are common in both the Writ Petitions.
Therefore, these two Writ Petitions were heard together and a
common order is being delivered.
Brief facts leading to file these Writ Petitions are as under:
2. The petitioner herein was appointed as a Staff Assistant in
the erstwhile Andhra Pradesh Central Cooperative Land Mortgage
Bank on 30-12-1969. He was promoted as Superintendent on
18-04-1977 and when the said Bank was merged with the AP State
Cooperative Bank (for short the Bank), the petitioners services were
transferred to the said Bank and his services were being utilized as
Assistant Development Officer (Legal Assistant) (ADO/LA). By
1998, he was given designation as Junior Officer in the Bank.
3. On 30-12-1998, a charge memo was issued to the petitioner
wherein it was alleged that while working as ADO/LA at Sangareddy
Branch of the Bank, he has scrutinized loan applications of Medak
DCCB approving the title of the applicants to the security offered and
recommended loans of 76 loan applications, violated circular
instructions and exhibited gross negligence causing deficit in security
and committed other administrative lapses.
4. It was also alleged that he exhibited gross negligence in
approving the title of the applicants to the hypotheca which caused
deficit in security resulting in loss to the PACS/Bank and that he is
also liable for Rs.3,67,080/- jointly with members of the Field
Inspection Team and individually for Rs.8,14,130/- totaling to
Rs.11,81,210/- besides disciplinary action.
5. He was asked to submit explanation within two weeks from
the date of receipt of the said charge memo. The petitioner did not
submit any explanation to the charge memo.
6. An enquiry was ordered by appointing Smt. G.Shashikala,
AGM as enquiry officer vide Memo dt.01-08-2000. She conducted
enquiry and submitted an enquiry report dt.31-12-2000 holding that
allegations mentioned in the charge memo were not proved.
7. The Persons In-charge Committee of the Bank in a meeting
held on 21-05-2001, considered the charge/allegations and findings of
the enquiry officer but did not accept any of the findings of enquiry
officer on the ground that some of the findings were not based on the
record. It therefore decided to deal with the issue of fixation of
financial liability separately while taking a decision of inflicting the
punishment for lapses of petitioner.
8. The petitioner was issued a show cause notice dt.31-05-2001
to show cause within 15 days from the date of receipt of the said
notice as to why proposed punishment of demotion without pay and
protection should not be inflicted on him.
9. The petitioner submitted his explanation on 01-08-2001 and
12.09.2001.
10. The Committee of Persons In Charge of the Bank in a
meeting held on 07-01-2002, after examining the gravity of the
charges, the findings of the enquiry officer apart from the contentions
of the petitioner in his explanation dt.01-08-2001 and 12-09-2001,
passed a Resolution No.11 rejecting his request for giving an
opportunity for personal hearing and decided to confirm the proposed
punishment of demotion to the next post of Staff Assistant for a period
of one year or his superannuation whichever is earlier, without pay
protection while reserving the right to fix financial liability on him
for the loss caused to the Bank as a consequence of his lapses in the
scrutiny of long term loan applications in due course. It was also
resolved that specifying the period of demotion will not confer a right
on the petitioner to get the original post on the expiry of the said
period. This decision was communicated by the Managing Director
of the Bank to the petitioner vide proceedings dt.21.2.2002.
11. An appeal against the said decision was preferred by the
petitioner to the competent authority i.e. General Body of the Bank.
12. The appellate authority in a meeting held on 23-09-2002
vide resolution No.4 partly allowed the appeal as regards the quantum
of punishment and directed that the petitioner be placed in the
minimum scale of the post held by him prior to demotion subject to
fixation of financial liability. This was communicated to the
petitioner vide proceeding dt.05-10-2002 of the Managing Director of
the Bank.
13. As a consequence to the orders passed in the appeal,
the petitioners pay was re-fixed at Rs.3,970/- in the minimum pay
scale of the Junior Officer/Manager with effect from 21-02-2002 vide
proceedings dt.23-12-2002.
14. In the meantime, the petitioner retired from the service
of the Bank with effect from 31-03-2002 on attaining the age of
superannuation.
15. The petitioner filed W.P.No.1827 of 2004 seeking a to
call for the records of the proceedings dt.5.10.2002 as well as
proceedings dt.21.12.2002; to quash the same by issuing a Writ of
Certiorari; to declare that they are illegal, without jurisdiction, violate
principles of natural justice; and for grant of all consequential benefits
with continuity of service, increments apart from arrears of pay as
Junior Officer/Asst.Development Officer with interest.
16. Inter alia, the petitioner contended that the disciplinary
authority of the Bank had no power to differ with the findings of the
enquiry officer under the Service Rules, and even assuming that such
power existed, it had no power to impose punishment while differing
with the findings of the enquiry officer without first issuing a notice
and giving opportunity to the petitioner to show cause against the
reasons for differing with the findings of the enquiry officer. It is also
contended that the penalty imposed on the petitioner was not
prescribed in the service regulations and therefore the order refixing
him to the minimum scale in the post of Junior Officer is illegal and
without jurisdiction.
17. Learned counsel for the petitioner reiterated the above
submissions and relied upon the judgment of the Supreme Court in
Punjab National Bank and others Vs. Kunj Behari Misra and
Yoginath D. Bagde Vs. State of Maharashtra and another in
support of his contention that even if there is no provision in the
service regulations, it was incumbent upon the punishing authority to
give notice to the delinquent employee if the said authority desired to
differ with a favourable finding of the enquiry officer.
18. In the counter affidavit filed by the respondents in
W.P.No.1827 of 2004, the respondents submitted that the Committee
of the Persons In-charge of the Bank had decided not to accept the
findings of the enquiry officer exonerating the petitioner; that show
cause Notice dt.31-05-2001 was issued to the petitioner explaining in
detail why it did not agree with findings of the enquiry officer and
differed with them; and that his objections/explanations were called to
show cause why proposed punishment of demotion to the lower post
of Staff Assistant should not be done. According to the respondents,
the petitioner submitted his explanation vide his letter dt.01-08-2001
and 12-09-2001 to the show cause notice; and therefore, he cannot
complain that no opportunity was given to him for differing with the
findings of the enquiry officer.
19. I have noted the submission of both sides.
20. In Kunj Behari Misra (1 supra), the Supreme Court held
that if the enquiry 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; this is necessary because in departmental
proceedings, what is of ultimate importance is the finding of the
disciplinary authority; and it would be most unfair and iniquitous if
the charged officers were to succeed before the enquiry officer, and
they are deprived of representing to the disciplinary authority, before
that authority differs with the enquiry officers report; and, while
recording a finding of guilt, that authority imposes punishment on the
officer. It held that in such a situation, the charged officer must have
an opportunity to represent to the disciplinary authority before final
findings on the charges are recorded and punishment is imposed. It
held that whenever the disciplinary authority disagreed 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. It held that the principles of natural justice require the
authority which has to take final decision and can impose a penalty, to
give an opportunity to the officer charged of misconduct to file a
representation before it records its findings and the charges framed
against the officer.
21. This principle was again reiterated in Yoginath D.Bagde
(2 supra) wherein it was declared:
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 authoritys 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.
29. We have already extracted Rule 9(2) of the
Maharashtra Civil Services (Discipline and Appeal) Rules,
1979 which enables the disciplinary authority to disagree
with the findings of the enquiring authority on any article of
charge. The only requirement is that it shall record its
reasoning for such disagreement. The rule does not
specifically provide that before recording its own findings,
the disciplinary authority will give an opportunity of hearing
to a delinquent officer. But the requirement of hearing in
consonance with the principles of natural justice even at that
stage has to be read into Rule 9(2) and it has to be held that
before the disciplinary authority finally disagrees with the
findings of the enquiring authority, it would give an
opportunity of hearing to the delinquent officer so that he
may have the opportunity to indicate that the findings
recorded by the enquiring authority do not suffer from any
error and that there was no occasion to take a different view.
The disciplinary authority, at the same time, has to
communicate to the delinquent officer the TENTATIVE
reasons for disagreeing with the findings of the enquiring
authority so that the delinquent officer may further indicate
that the reasons on the basis of which the disciplinary
authority proposes to disagree with the findings recorded by
the enquiring authority are not germane and the finding of
not guilty already recorded by the enquiring authority was
not liable to be interfered with.
22. In the present Writ Petition, admittedly the enquiry
officer in her report dt.31-12-2000 totally exonerated the petitioner.
Thereafter, the matter was placed before the Committee of Persons In-
charge of the Bank which was the disciplinary authority to impose
punishment. The said committee, in a meeting held on 21-05-2000,
did not accept the findings of the enquiry officer and issued a show
cause notice to the petitioner to show cause why the proposed
punishment of demotion should not be inflicted on him within 15 days
from the date of receipt of that show cause notice.
23. No doubt in the said show cause notice, reasons for
differing with the decision of the enquiry report were given but they
were not tentative and it appears as if the disciplinary authority has
finally determined that the report of the enquiry officer and the
reasons given by her, are not correct. This can be gauged from the
following statements in the show cause notice dt.31.5.2001 of the
Managing Director of the Bank asking petitioner to show cause why
the proposed punishment of demotion without pay protection should
not be inflicted on him.
The allegation (1) is that the said ADO has violated
circular instructions contained in Cir. No.33/IDD/SWC/95-96
dated 19-09-1995 and conducted legal scrutiny of (12) loan
applications of DCC Bank of Medak and approved the title of the
applications basing on the revenue records not duly verified and
attested by the Field Inspecting Officer.
Therefore the finding of the Enquiry officer that the
instructions issued in circular No.33/IDD/SWC/95-96 dated 19-
09-1995 are not violated is only partially accepted by the
Committee of Persons-in-Charge. Thus he is made liable for the
financial loss caused to the Bank.
The allegation II, held as not proved by the Enquiry
Officer is that the said Sri K.Srinivas was negligent in scrutiny
of loan applications and his negligence resulted in release of loan
amounts in favour of the persons who do not have marketable
title to the security offered and resulted in advancement of
Rs.8,14,130/- in 37 loan applications. But this finding of the
Enquiry Officer is not accepted by the Committee of Persons-in-
Charge.
The allegation No.III is that the charged employee
committed various other irregularities of administrative nature in
scrutiny of (27) loan applications. The Enquiry Officer observed
that in the case of purchase of Oil Engine/Electric Motor, 50%
cost of the machinery is added to the estimated value of the land
while arriving at loan eligibility and similarly the cost of
Generator was added to the land value in some of the loan
applications, though there are no circular instructions as to
whether to add or not the cost of Generator to the estimated value
of the land, and as the Generator is also a machine, the cost of it
was added treating it on par with electric motor/oil engine. The
findings of the E.O. are not accepted by the Committee of
Persons-in-Charge, since in the absence of the any circular
instructions, the Charge-sheeted Officer should not have
accepted the valuation by adding Generator cost and he should
have sought instructions from higher authorities. Hence it is a
lapse on his part.
On close examination of the facts of the case and keeping
in view the findings of the Enquiry Officer the charge-sheeted
Officer has committed the following irregularities in scrutiny of
loan applications, besides accepting fake revenue
records/certificates in a large number of cases and thereby
facilitating irregular sanctions.
In view of the above, it is noted by the Committee of
Persons-in-Charge that the charge-sheeted officer violated
circular instructions and exhibited gross negligence and
committed grave misconduct as per S.R.No.47 (i) of APCOB
service conditions (though charge was framed under SR No.77
(i) of erstwhile APCCADB, the SRs of APCOB are made
applicable to him in view of inserting Rule 73 (b) to APCS
Rules) and the charge-sheeted employee is punishable with any
of the penalties prescribed under SR No.48 of APCOB by the
competent authority prescribed under SR No.52.
Further the Committee of Persons In-Charge considering
the above and by not accepting the findings of the E.O. and in
view of the gravity of proven grave misconduct committed by the
Charge-sheeted Officer, decided to inflict the punishment of
demotion to the post of Staff Assistant for a period of one year or
his superannuation whichever is earlier subject to
eligibility/selection norms and availability of vacancies etc.
against Sri K.Srinivas, J.O. besides reserving the right to the
Bank to fix financial liability on him for the loss caused to the
DCCB as a consequence of his lapses in the scrutiny of LT loan
applications in Medak, DCCB in due course after securing the
requisite information from the said DCCB.
Therefore Sri K.Srinivas, J.O. is called upon to show-
cause, if any, within 15 days from the date of receipt of his show-
cause notice as to why the proposed punishment of demotion
should not be inflicted on him, failing which, it would be
construed that he has no plausible explanation to offer and
further action will be taken as per rules.
24. The petitioner gave an explanation on 01-08-2001 to the
said show cause notice requesting that he may be exonerated from the
charges. The same was not accepted by the Committee of Persons
In-charge which imposed the punishment of demotion from the post
of Junior Officer/Manager to the next lower post of Staff Assistant for
a period of one year or his superannuation, whichever is earlier,
without pay protection reserving the right to the Bank to fix up
financial liability on him for the loss/non recovery caused to the Bank
as consequences of lapses in the scrutiny of LT loan applications.
25. As per the law laid down in the above decisions Kunj
Behari Misra ( 1 supra) and Yoginath D. Bagde (2 supra), the
disciplinary authority is expected to communicate to the petitioner
tentative reasons for disagreeing with the findings of the enquiry
officer, so that the petitioner may further indicate that the reasons on
the basis of which the disciplinary authority proposes to disagree with
the findings recorded by the enquiry authority, are not germane and
that the finding that he is not guilty already recorded by the enquiry
authority, was not liable to be interfered with.
26. In the present case, this was not done. The show cause
notice dt.31-05-2001 asked the petitioner to show cause why the
proposed punishment of demotion should not be inflicted on him and
contained a final determination by the disciplinary authority (i.e the
Persons In Charge Committee) that the findings of the enquiry officer
are not correct. As per the above decisions, the show cause notice
should have asked the petitioner only to show cause as to why, for the
tentative reasons indicated for disagreeing with the findings of the
enquiry authority, the disciplinary authority should not disagree with
the findings of the enquiry authority. This would enable the petitioner
to represent before the disciplinary authority before final findings on
the charges are recorded that the view of the enquiry officer was
correct and there was no case made out to disagree with the findings
of the enquiry officer. Fairness and equality would require that such a
course of action be adopted.
27. Since admittedly this requirement of law has not been
followed, the decision of the Committee of Persons Incharge of the
Bank in their meeting held on 07-01-2002 vide resolution No.11
confirming the punishment of demotion to the next lower post of Staff
Assistant for a period of one year or his superannuation whichever is
earlier (as communicated by the proceedings dt.21-02-2002 of the
Managing Director of the Bank to the petitioner) and the decision of
the appellate authority i.e. the General body of the Bank in its
meeting held on 23-09-2002 vide resolution No.4 modifying the
punishment (by placing him in the minimum scale of the post held by
him in the post of Junior Officer/Manager) (as communicated by the
proceedings dt.05-10-2002 of the Managing Director of the Bank) are
liable to be quashed and are accordingly quashed. Consequently
proceedings dt.21-02-2002 of the Managing Director of the Bank and
proceedings dt.23-12-2002 of the Deputy General Manager (ADM of
the Bank) also cannot stand and are accordingly set aside.
28. The effect of this would be that the petitioner would be
deemed to have continued in the post of Junior Officer/Manager till he
retired on 31-03-2002 in the same scale of pay of Junior
Officer/Manager as he would have been on the date when he had
retired from service i.e.31-03-2002.
29. Although the learned counsel for the respondents sought
for remand of the matter to the disciplinary authority again in order to
rectify this irregularity committed by the respondents, I am not
inclined to accede to the said request for the reason that the petitioner
is no longer in service, having retired on 31-03-2002, and no
provision in the Service Regulations is pointed out by counsel for
respondent which permits the conduct of a disciplinary enquiry
against a retired employee of the Bank. Also it would be unjust to now
direct the disciplinary proceedings to be revived 12 years after orders
were passed by the respondents.
30. For the above reasons, W.P.No.1827 of 2007 is allowed.
31. Coming to W.P.No.1821 of 2004, the petitioner in this
Writ Petition had questioned the proceeding dt.26-12-2003 of the 2nd
respondent communicating to the petitioner the decision of the Person
Incharge Committee of the Bank in its meeting held on 28.11.2003
fixing the financial liability of Rs.1,30,232/- on him, being the deficit
in securities for certain loans pertaining to the Bank. The basis for
this order is the decision of the Committee of the Persons In charge
taken on 07-01-2002 vide resolution No.11 demoting the petitioner to
the post of Staff Assistant from the post of Junior Officer/Manager for
a period of one year or the superannuation, whichever is earlier, as
modified by the decision of the appellate authority i.e. the General
body of the Bank in its meeting held on 23-09-2002 vide resolution
No.4 reducing the punishment (by placing him in the minimum scale
of the post held by him in the post of Junior Officer/Manager) (as
communicated by the proceedings dt.05-10-2002 of the Managing
Director of the Bank).
32. This is clear for the impugned order dt.26.12.2003
wherein, after referring to the explanation dt.20.10.2003 of the
petitioner why he cannot be made to pay this amount (in reply to the
show cause notice dt.9.4.2003 issued by respondents), it is stated :
With regard to the above contentions, he is informed that the
disciplinary authority and the Appellate authority have already
examined his contentions earlier and the Appellate authority
disposed of his appeals, by reducing the punishment inflicted
earlier, which was also communicated to him
33. Since the said proceedings of the disciplinary and
appellate authority itself have now been set aside in W.P.No.1827 of
2004, the proceeding dt.26-12-2003 of the 2nd respondent
communicating to the petitioner the decision of the Person In charge
Committee of the Bank in its meeting held on 28.11.2003 directing
the petitioner to pay a sum of Rs.1,30,232/- is also set aside.
Accordingly, W.P.No.1821 of 2004 is also allowed.
34. In the result, both the Writ Petitions are allowed; the
decision of the Committee of Persons Incharge of the Bank in their
meeting held on 07-01-2002 vide resolution No.11 confirming the
punishment of demotion to the next lower post of Staff Assistant for a
period of one year or his superannuation, whichever is earlier (as
communicated by the proceedings dt.21-02-2002 of the Managing
Director of the Bank to the petitioner), and the decision of the
appellate authority i.e. the General body of the Bank in its meeting
held on 23-09-2002 vide resolution No.4 modifying the punishment
(by placing him in the minimum scale of the post held by him in the
post of Junior Officer/Manager) (as communicated by the proceedings
dt.05-10-2002 of the Managing Director of the Bank) are quashed;
the proceeding dt.26-12-2003 of the 2nd respondent communicating to
the petitioner the decision of the Person Incharge Committee of the
Bank in its meeting held on 28.11.2003 that petitioner shall pay
Rs.1,30,332/-, is also set aside; it is declared that petitioner is entitled
to all consequential benefits with continuity of service upto 31.3.2002,
increments (if any) apart from arrears of pay as Junior
Officer/Asst.Development Officer for the period 17.1.2002 till
31.3.2002 with interest @ 9% p.a from 17.1.2002 till date of payment
of the same by respondents. Any payment made by the petitioner to
the respondents pursuant to the proceeding dt.26.12.2003 of the 2nd
respondent shall also be refunded to him by respondents with interest
@ 9% from the date of such payment by him till its repayment by
respondents. Costs of Rs.2,000/- also shall be paid by the respondents
to the petitioner within a period of four weeks from the date of receipt
of a copy of this order.
35. As a sequel, the miscellaneous petitions, if any pending,
shall stand closed.
___________________________________
JUSTICE M.S. RAMACHANDRA RAO
Date: 24-03-2015
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