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Central Bank Of India And Others v. Amar Nath Upadhyay - SPECIAL APPEAL DEFECTIVE No. 408 of 2002 [2006] RD-AH 2686 (6 February 2006)


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Reserved on 10.11.2005

Delivered on February 6, 2006

Special Appeal No.408 (Defective) of 2002

Chairman and Managing Director (Competent Authority) & others vs. Amar Nath Upadhyay

Hon'ble S. Rafat Alam, J.

Hon'ble Sudhir Agarwal, J.

Heard Shri A.C. Tripathi, learned counsel for the appellant and Dr. O.N. Tripathi, learned counsel for the respondent.

Instant special appeal has been filed against the judgment dated 11.4.2002 passed by the Hon'ble Single Judge allowing writ petition no.12631 of 1998 and setting aside the orders of punishment imposed upon the petitioner.

Brief facts, relevant for the purpose of present appeal, are that the petitioner-respondent was initially appointed as Lower Division Clerk in the Central Bank of India, Branch Raniganj Bazar, Baria, District Ballia.  It appears that in the year 1983 an amount of Rs.51,015/- was sanctioned in his name as house loan for the construction of a house over plot no.363, village Biur, Tehsil Handia, District Allahabad for which charge was created in favour of the bank vide registered mortgage deed dated 9.6.1983.  It is stated that the petitioner-respondent had another plot no.63 at village Biur, Tehsil Handia, District Allahabad and he had to get the construction of the house at plot no.63, but due to inadvertent, mistake, in the document executed with the bank, it was mentioned as plot no.363.  However, as a matter of fact, the amount of bank was utilized by the petitioner-respondent for the construction of his house at plot no.63.  In the year 1990 plot no.363 was sold by the petitioner-respondent.  The petitioner-respondent in terms of loan agreement was required to repay the amount by way of deduction of Rs.300/- per month from his salary, which has continuously been deducted from his salary for the satisfaction of loan and there was no default in the repayment.  However, a charge-sheet dated 10.5.1993 was served upon the petitioner-respondent containing following charges: -

"He has been allowed a housing loan of Rs.51,615/- for construction of house over plot no.363, village - Biur, Tehsil - Handia, District - Allahabad I the year 1983.  He had also created a registered mortgage of the said plot as a security for the housing loan on 10.06.83 in favour of the Bank as per stipulation of the sanction.  Now it has been found that he has not constructed the said house over plot no.363 Village - Biur, Tehsil - Handia, District Allahabad and also transfer the said plot to Shri Shyam Sunder, Sri Brij Behari, Shri Surya Mani and Shri Chandra Mani s/o Late Sri Ram Shiromani during the year 1990.  The name of purchasers has also been entered in the records of Registry Office, Handia as well as Tehsil Handia."

After completion of inquiry, the inquiry officer submitted his report dated 11.7.1994 holding charge proved.  Accordingly, the disciplinary authority vide order dated 3.1.1995 imposed punishment of discharging him from service under clause 19.6 (j) of the Bipartite Settlement dated 10.10.1966.  The petitioner-respondent filed an appeal and the appellate authority vide order dated 24.2.1996, as communicated vide letter dated 11.3.1996, modified the punishment order converting it in compulsory retirement with superannuation benefits and with disqualification for future employment.  It is further submitted that the petitioner-respondent thereafter preferred mercy appeal dated 13.4.1996.  In this mercy appeal, the punishment was further modified to lowering reduction in the pay scale at two stages permanently.  Challenging the aforesaid orders of punishment the petitioner-respondent filed writ petition, which was allowed by the Hon'ble Single Judge on the ground that the allegation, contained in the charge-sheet against the petitioner-respondent, which has been found to be proved and on the basis whereof the punishment has been imposed, does not constitute misconduct.

Learned counsel for the appellant contended that the Hon'ble Single Judge has committed an error in holding that the allegation found proved against the petitioner-respondent does not constitute gross misconduct under clause 19.5 (j) of the Bipartite Settlement, whereunder the punishment can be awarded to the employee of the bank.  It is further submitted that the bank has already taken a lenient view reducing punishment to large extent and, therefore, the Hon'ble Single Judge ought not to have exercised extra ordinary jurisdiction under Article 226 of the Constitution of India.

Learned counsel for the respondent, however, contended that the Hon'ble Single Judge has rightly allowed the writ petition and committed no error in the aforesaid judgment.

Having heard the learned counsel for the parties and after careful perusal of the record, we find that the only question required to be considered in the present appeal is whether the allegations levelled against the petitioner-respondent in order to impose punishment upon him do constitute a "misconduct" or does it fall within.  Clause 19.5 (j) of the First Bipartite Settlement, which reads as under: -

"Doing any act prejudicial to the interest of the bank or gross negligence or negligence involving or likely to involve the bank in serious loss."

The orders impugned clearly show that the allegation against the petitioner-respondent is of gross misconduct and in violation of the provisions contained in clause 19.5 (j) of the First Bipartite Settlement. There are two angles from which the aforesaid contention of the learned counsel for the appellant may be considered.  Firstly, where general misconduct rules are applicable the allegations made against the employee may show an act or omission on his part but still may not construe misconduct; and secondly, when the act or omission does not fall within the specified act or omission under the Rules.  It may be wrong in the view of social or moral parameters of certain section of the persons but in the light of the rules cannot be said to be misconduct for which the employee may be punished.  

Dealing the second aspect as first, in the present case, the respondent-appellant have sought to bring the aforesaid charge against the petitioner-respondent being a misconduct under clause 19.5 (j) of the First Bipartite Settlement.  A bare perusal of the aforesaid clause shows that the act of the employee of the bank, which is prejudicial to the interest of the bank or gross negligence or negligence involving or likely to involve the bank in serious loss, would only be an act of misconduct under the aforesaid clause.  It is not the case of the bank that as a result of loan agreement the repayment has consistently not been made by the petitioner-respondent by deduction of his salary regularly and the bank has suffered any loss.  The bank has not demonstrated as to how the act of the petitioner-respondent has prejudiced or caused serious loss to the bank.  Thus, in our view, the charge against the appellant cannot be within the purview of clause 19.5 (j) of the First Bipartite Settlement.  

In the case of A.L. Kalra vs. The project and Equipment Corporation of India Ltd., AIR 1984 SC 1361 the Hon'ble Apex Court has held as under: -

"What in a given context would constitute conduct unbecoming of a public servant to be treated as misconduct would expose a grey area not amenable to objective evaluation.  Where misconduct when proved entails penal consequences, it is obligatory on the employer to specify and if necessary define it with precision and accuracy so that any ex post facto interpretation of some incident may not be camouflaged as misconduct." (para 22)

Again in the case of Glaxo Laboratories (I.) Ltd. vs. Presiding Officer, Labour Court, Meerut, AIR 1984 SC 505 the Hon'ble Apex Court has held as under: -

"everything which is required to be prescribed has to be prescribed with precision and, no argument can be entertained that something not prescribed can yet be taken into account as varying what is prescribed.  In short it cannot be left to the vagaries of management to say ex post facto that some acts of omission or commission nowhere found to be enumerated in the relevant standing order is nonetheless a misconduct not strictly failing within the enumerated misconduct in the relevant standing order but yet a misconduct for the purpose of imposing a penalty." (para 23)

Coming to the first aspect of the matter, in our view, even if the entire allegation contained in the charge-sheet against the petitioner-respondent, as quoted above, is treated to be correct, it does not amount to misconduct and, therefore, the entire proceeding against the petitioner-respondent culminating in the impugned punishments are vitiated in law.  The charge only shows that the petitioner-respondent was sanctioned house loan at plot no.363 for which a registered mortgage deed was executed in favour of the bank creating security against the aforesaid plot, but the house was not constructed on the said plot the aforesaid plot was subsequently transferred to some other person in the year 1990.  There is no charge or allegation that the aforesaid act of the petitioner-respondent was deliberate in order to defraud the bank and/or to extract loan amount without creating any proper security with an intention not to pay loan etc.  He was in the service of the bank and as per loan agreement a sum of Rs.300/- per month was regularly deducted from his salary.  It is not the case of the petitioner that by doing the aforesaid act the petitioner-respondent has actually caused any prejudice to the interest of the bank or it has caused serious loss to the bank.  The petitioner-respondent has categorically explained mistake on account of similarity in the number of plots no.363 and 63 situated in the same village.  It is not the case of the bank that it required the petitioner-respondent to furnish fresh security, which he failed, and ultimately caused any loss or prejudiced to the interest of the bank.  The charge levelled against the petitioner only narrate the state of affairs without showing any state of mind on the part of the petitioner-respondent to cause any detriment to the bank or which may show any intention or deliberate fault on his part in discharge of his duty.

In these circumstances, the aforesaid allegations do not constitute misconduct and, therefore, the Hon'ble Single Judge has rightly allowed the writ petition.  

Explaining the meaning of the word ''misconduct' the Hon'ble Apex Court in the case of Union of India and others vs. J. Ahmed, AIR 1979 SC 1022 has held as under: -

"It would be appropriate at this stage to ascertain what generally constitutes misconduct, especially in the contest of disciplinary proceedings entailing penalty." (para 10)

"Code of conduct as set out in the Conduct Rules clearly indicates the conduct expected of a member of the service.  It would follow that that conduct which is blameworthy for the Government servant in the context of Conduct Rules would be misconduct.  If a servant conducts himself in a way inconsistent with due and faithful discharge of his duty in service, it is misconduct (see Pearce v. Foster) (1988) 17 QBD 536 (at p.542).  A disregard of an essential condition of the contract of service may constitute misconduct [see Laws v. London Chronicle (Indicator Newspaper)].  (1959) 1 WLR 698.  This view was adopted in Shardaprasad Onkarprasad Tiwari v. Divisional Supdt., Central Railway, Nagpur Divn., Nagpur, 61 Bom LR 1596: (AIR 1961 Bom 150) and Satubha K. Vaghela v. Moosa Raza, (1969) 10 Guj LR 23.  The High Court has noted the definition of misconduct in Stroud's Judicial Dictionary which runs as under: -

"Misconduct means, misconduct arising from ill motive; act of negligence, errors of judgment, or innocent mistake, do not constitute such misconduct."

In industrial jurisprudence amongst others, habitual or gross negligence constitute misconduct but in Management, Utkal Machinery Ltd. v. Workmen, Miss Shanti Patnaik, (1966) 2 SCR 434: (AIR 1966 SC 1051), in the absence of standing orders governing the employee's undertaking, unsatisfactory work was treated as misconduct in the context of discharge being assailed as punitive.  In S. Govinda Menon v. Union of India, (1967) 2 SCR 566: (AIR 1967 SC 1274), the manner in which a member of the service discharged his quasi judicial function disclosing abuse of power was treated as constituting misconduct for initiating disciplinary proceedings.  A single act of omission or error of judgment would ordinarily not constitute misconduct though if such error or omission results in serious or atrocious consequences the same may amount to misconduct as was held by this Court in P.H. Kalyani v. Air France, Calcutta, (1964) 2 SCR 104: (AIR 1963 SC 1756), wherein it was found that the two mistakes committed by the employee while checking the load-sheets and balance charts would involve possible accident to the aircraft and possible loss of human life and, therefore, the negligence in work in the context of serious consequences was treated as misconduct.  It is, however, difficult to believe that lack of efficiency or attainment of highest standards in discharge of duty attached to public office would ipso facto constitute misconduct.  There may be negligence in performance of duty and a lapse in performance of duty or error of judgment in evaluating the developing situation may be negligence in discharge of duty but would not constitute misconduct unless the consequences directly attributable to negligence would be such as to be irreparable or the resultant damage would be so heavy that the degree of culpability would be very high.  An error can be indicative of negligence and the degree of culpability may indicate the grossness of the negligence.  Carelessness can often be productive of more harm than deliberate wickedness or malevolence.  Leaving aside the classic example of the sentry who sleeps at his post and allows the enemy to slip through, there are other more familiar (examples) instances of which (are) a railway cabinman signalling in a train on the same track where there is a stationary train causing headlong collision; a nurse giving intraveious injection which ought to be given intramuscular causing instantaneous death; a pilot overlooking an instrument showing snag in engine and the aircraft crashing causing heavy loss of life.  Misplaced sympathy can be a great evil (see Navinchandra Shakerchand Shah v. Manager, Ahmedabad Co.-op.  Department Stores Ltd., (1978) 19 Guj LR 108 at p.120).  But in any case, failure to attain the highest standard of efficiency in performance of duty permitting an inference of negligence would not constitute misconduct nor for the purpose of Rule 3 of the Conduct Rules as would indicate lack of devotion to duty." (para 11)

Again in the case of State of Punjab and others vs. Ram Singh Ex-Constable, (1992) 4 SCC 54 the Hon'ble Apex Court has held as under: -

"Misconduct has been defined in Black's Law Dictionary, Sixth Edition at page 999 thus:

"A transgression of some established and definite rule of action a forbidden act, a dereliction from duty, unlawful behavior, wilful in character, improper or wrong behavior, its synonyms are misdemeanor, misdeed, misbehavior, delinquency, impropriety, mismanagement, offence, but not negligence or carelessness."

Misconduct in office has been defined as:

"Any unlawful behavior by a public officer in relation to the duties of his office, wilful in character.  Term embraces acts which the office holder had no right to perform, acts performed improperly and failure to act in the face of an affirmative duty to act."

P. Ramanatha Aiyar's Law Lexicon, Reprint Edition 1987 at page 821 defines ''misconduct' thus:

"The term misconduct implies a wrongful intention, and not a mere error of judgment.  Misconduct is not necessarily the same thing as conduct involving moral turpitude.  The word misconduct is a relative term, and has to be construed with reference to the subject matter and the context wherein the term occurs, having regard to the scope of the Act or statute which is being construed.  Misconduct literally means wrong conduct or improper conduct.  In usual parlance, misconduct means a transgression of some established and definite rule of action, where no discretion is left, except what necessity may demand and carelessness, negligence and unskilfulness are transgressions of some established, but indefinite, rule of action, where some discretion is necessarily left to the actor.  Misconduct is a violation of definite law; carelessness or abuse of discretion under an indefinite law.  Misconduct is a forbidden act; carelessness, a forbidden quality of an act, and is necessarily indefinite.  Misconduct in office may be defined as unlawful behaviour or neglect by a public officer, by which the rights of a party have been affected." (para 5)

"Thus it could be seen that the word ''misconduct' though not capable of precise definition, on reflection receives its connotation from the context, the delinquency in its performance and its effect on the discipline and the nature of the duty.  It may involve moral turpitude, it must be improper or wrong behaviour; unlawful behaviour, wilful in character; forbidden act, a transgression of established and definite rule of action or code of conduct but not mere error of judgment, carelessness or negligence in performance of the duty; the act complained of bears forbidden quality or character.  Its ambit has to be construed with reference to the subject matter and the context wherein the term occurs, regard being had to the scope of the statute and the public purpose it seeks to serve.  The police service is a disciplined service and it requires to maintain strict discipline.  Laxity in this behalf erodes discipline in the service causing serious effect in the maintenance of law and order."  (para 6)

In this view of the matter, we do not find any flaw in the judgment of the Hon'ble Single Judge, which requires interference in this appeal.  The special appeal, therefore, is devoid of merit and is accordingly dismissed.  No order as to costs.

February 6, 2006



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