High Court of Punjab and Haryana, Chandigarh
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RK Uppal v. Oriental Bank of Commerce & anr - CWP-19115-2004  RD-P&H 1987 (24 March 2006)
Civil Writ Petition 19115 OF 2004
Date of decision: 23.1.2006
RK Uppal ...Petitioner
Oriental Bank of Commerce & anr ...Respondents
CORAM: HON'BLE MR JUSTICE S.S.NIJJAR.
HON'BLE MR JUSTICE S.S.SARON.
Present: Mr PS Patwalia, Sr Advocate with Mr TPS Chawla, Advocate, for the petitioner.
Mr Jagat Arora, Advocate, for the respondents.
This petition under Articles 226/227 of the Constitution of India has been filed seeking quashing of the order dated 14.2.2004 (Annexure P6) whereby the petitioner has been dismissed from service and the order dated 4.6.2004 (Annexure P8) whereby his appeal has been rejected.
The petitioner joined the Oriental Bank of Commerce (respondent No.1) (Bank for short) as a Clerk-cum-Cashier on 1.6.1971.
He was promoted in May 1982 as an Officer of the Junior Management Grade Scale (JMGS- for short) (Manager). In 1989, he was assigned the independent charge of the Branch at Nadaun, District Hamirpur (HP). He was promoted as JGMS-II on 11.11.1991 w.e.f. 15.2.1991 and was posted as Branch Manager at Dera Bassi (Punjab). Thereafter, vide order dated 8.6.1995, he was promoted as JGMS-III (Senior Manager) w.e.f. 5.6.1995 on 16.3.1996. The petitioner was transferred to the Sector 19-D Chandigarh Branch of the Bank. Thereafter, vide order dated 3.5.2001, he was promoted as JGMS-IV (Chief Manager) w.e.f. 1.4.2001 and posted in the CWP 19115-04
Regional Office of the Bank at Bhatinda. He was confirmed in the Senior Management Grade Scale-IV vide order dated 1.3.2003 (Annexure P1). The petitioner remained posted as Senior Manager at the Sector 19-D Branch, Chandigarh, of the Bank for the period from 16.3.1996 to 3.5.2001. In relation to this period, it was alleged vide letter dated 26.12.2001 (Annexure P2) that the petitioner had committed serious irregularities in processing, appraising, recommending various facilities in the account of M/s Dunroll Industries Limited, which are indicated therein. The petitioner submitted his reply dated 30.1.2002 (Annexure P3) to the same. The Bank, however, issued a memorandum of charge sheet dated 3/4.2.2003 (Annexure P4) proposing to hold an inquiry under Regulation 6 of Oriental Bank of Commerce Office Employees (Discipline and Appeal) Regulations, 1982 (Regulations for short) for the acts of omission and commission committed by the petitioner while working as Senior Manager/Incumbent Incharge at the Sector 19-D, Chandigarh Branch of the Bank. The articles of charges in respect of which the inquiry was proposed to be held, the statement of imputation of misconduct, list of documents by which articles of charges was proposed to be proved and list of witnesses were enclosed as Annexures I to IV with the memorandum of charge sheet. The petitioner was asked to submit a written statement in his defence within ten days of the receipt of the memo. Thereafter, Mr MK Ghosh, Commissioner for Departmental Enquiries (CDI) Central Vigilance Commission (CVC), New Delhi, was appointed as an Inquiry Officer, to conduct the inquiry, who submitted his inquiry report dated 11.11.2003 (Annexure P5). As per the findings recorded by the Inquiry Officer, charges 1 and 2 were held to be partly proved and charges 3 and 4 to be proved. The report of the Inquiry Officer was sent to the petitioner vide letter dated 14.11.2003 and he submitted his representation vide letter dated 15.12.2003. The General Manager (PER), disciplinary authority, after considering the inquiry record CWP 19115-04
of the case and the representation made by the petitioner against the order of the Inquiry Officer, found that the inquiry was conducted in consonance with the principles of natural justice. After consideration of the matter, the disciplinary authority concurred with the findings of the inquiring authority in terms of his order dated 14.2.2004 (Annexure P6). As a consequence of the consideration, the disciplinary authority imposed the penalty of dismissal which was ordinarily to be a disqualification for future employment in terms of Regulation 4(j). Besides, his suspension period was ordered to be treated as not spent on duty and he was held to be not entitled to any benefit during the suspension period except the subsistence allowance already drawn. The petitioner, aggrieved against the order dated 14.2.2004 (Annexure P6) imposing the punishment of dismissal from service, filed a statutory appeal (Annexure P7) under Regulation 17. The Chairman and Managing Director of the Bank, vide order dated 4.6.2004 (Annexure P8) dismissed the appeal by holding that the order dated 14.2.2004 (Annexure P6) did not suffer from any infirmity. Besides, no reason/justification was found to interfere with the penalty awarded by the disciplinary authority and the penalty awarded was held to be adequate and commensurate with the gravity of proven misconduct. The request of the petitioner for the grant of personal hearing, it was held, cannot be considered as the same was not permissible in terms of the Regulations of the Bank.
On notice of motion, the respondent-Bank filed a written statement on behalf of respondents-1 and 2. It is stated that the present petition raises many disputed questions of fact which may not be gone into in proceedings under Articles 226/227 of the Constitution of India. Besides, the petitioner was imposed the punishment of dismissal vide order dated 14.2.2004 (Annexure P6) which is in pursuance of the charge sheet dated 3.2.2003 (Annexure P4) issued by the Bank. It is stated that the CWP 19115-04
departmental inquiry was conducted in consonance of the principles of natural justice and after affording due opportunity to the delinquent employee. The departmental inquiry was conducted by the Central Vigilance Commission i.e. by an independent organization. It is also submitted that it is a matter of record that credit facilities were sanctioned in favour of M/s Dunroll Industries Limited by the Regional Office to the tune of Rs 3.89 crores. However, the said sanction was made on the basis of recommendations given by the petitioner. It is stated that the petitioner without properly verifying the credentials of the borrower, had recommended for sanction of huge amount of loan to the borrower which ultimately resulted in loss to the Bank and claim for recovery of Rs 612.77 crores has been filed before the Debt Recovery Tribunal against M/s Dunroll Industries Limited. Therefore, it is submitted that the writ petition is liable to be dismissed.
Mr PS Patwalia, Senior Advocate, appearing with Mr TPS Chawla, Advocate, for the petitioner, sought to raise several contentions as regards the errors committed by the disciplinary authority and the appellate authority of the Bank on the merits of the case. However, during the course of hearing, he has submitted and confined his submissions to the appellate order dated 4.6.2004 (Annexure P8) dismissing his appeal. It is contended that without prejudice to the other rights of the petitioner, the appellate order is liable to be set aside and an opportunity of hearing is liable to be granted to the petitioner which is absolutely necessary in order to show the errors committed by the disciplinary authority in the conduct of the proceedings. Besides, also to show that keeping in view the long length of service and the past record of the petitioner, the punishment that has been imposed is not in any manner commensurate to the gravity of the alleged misconduct. It is contended that the principles of natural justice enjoin that the appellate authority grants a personal hearing to a delinquent employee CWP 19115-04
in the departmental proceedings at the appellate stage as well. In support of his contentions, the learned senior counsel refers to a Full Bench judgment of this Court in Ram Niwas Bansal v. State Bank of Patiala 1998(4) SLR 711.
In response, Mr Jagat Arora, learned counsel appearing for the respondents contends that the petitioner is not entitled to have a re- consideration of his appeal and mere denial of personal hearing in any case, does not vitiate the order of the appellate authority. Besides, it is contended that the principles of natural justice cannot be put in a straitjacket and keeping in view the huge embezzlement committed by the petitioner, he is not entitled to any hearing so as to invalidate the appellate order. In support of his contention, the learned counsel cites Ganesh Santa Ram Sirur v. State Bank of India and another (2005)1 SCC 13.
We have given our thoughtful consideration to the contentions of the learned counsel for the parties.
Keeping in view the limited prayer that has been made by the learned senior counsel for the petitioner, the question that requires to be considered is whether the appellate order dated 4.6.2004 (Annexure P8) calls for interference and is liable to be set aside as no opportunity of hearing has been given to the petitioner at the appellate stage. The petitioner has been charge sheeted for various acts of omission and commission in terms of the memorandum of charges dated 3.2.2003 (Annexure P4). On the basis of the allegations as made in the charge sheet, an inquiry was conducted by the Inquiry Officer Mr MK Ghosh, CDI, CVC, New Delhi and it was concluded in the inquiry that the petitioner, during general examination, had stated that the case in respect of which he has been charged had in fact been referred to him by the General Manager, so he considered the concerned party in whose favour the advance was made as sound. It was observed that even if the case was referred by the General CWP 19115-04
Manager of the petitioner, it was his responsibility to examine the matter as per normal banking practice and he should himself have been satisfied with the party's integrity and capacity. It was not the duty of the petitioner to act as per the desires of his superior officers if they were wrong. Besides, the petitioner could not produce any papers that his superior officers gave any instructions to do the job in a particular way. The inquiry report (Annexure P5) was considered by the disciplinary authority and in terms of order dated 14.2.2004 (Annexure P6), the petitioner was imposed the punishment of dismissal which, it was recorded, shall ordinarily be a disqualification for future employment. The petitioner filed an appeal (Annexure P7) which has been dismissed by the appellate authority in terms of order dated 4.6.2004 (Annexure P8) which is now primarily under challenge. A reading of the appellate order shows that the appellate authority apart from giving the factual narration regarding the serving of charge sheet and submitting of reply by the petitioner, as also the imposition of penalty and noticing the contentions of the petitioner, has merely observed that it does not find any force/merit in the allegations of the petitioner that the disciplinary authority has taken into account the matter of pending inquiries in respect of the charge sheet dated 12.8.2003. Besides, it is observed that after carefully analyzing the inquiry record and other documents as also the facts and circumstances of the case that the findings and order dated 14.2.2004 (Annexure P6) passed by the disciplinary authority are based on evidence brought on record of inquiry and not grounded on part record/any other matter not connected with the inquiry, as alleged. The penalty imposed, it is observed, is for the proven charges. Consequently, it has been observed that considering all the facts and circumstances of the case and other related record, the order dated 14.2.2004 (Annexure P6) does not suffer from any infirmity. Therefore, the appellate authority did not find any reason/justification to interfere with the penalty awarded by the disciplinary CWP 19115-04
authority especially when it is adequate and commensurate with the gravity of proven misconduct against him. In short, a perusal of the order passed by the appellate authority would show that there has been no due and proper consideration of the appeal (Annexure P7) filed by the petitioner. Besides, the request of the petitioner for the grant of personal hearing has also been declined by observing that it cannot be considered as the same is not permissible. A Full Bench of this Court in Ram Niwas Bansal's case (supra) considered the question whether in the absence of a specific provision under Regulation 70 of the State Bank of Patiala (Officers) Service Regulations, 1979, for granting right of personal hearing to a delinquent officer before the appellate authority in departmental proceedings, the Court would read into such rule and provide a right of such hearing on the application of the maxim; audi alteram partem. After discussing the facts and circumstances of the case, it was held that adherence to the principles of natural justice would normally have to keep three ingredients in mind when an appeal is preferred before such authority, which are as follows:-
"a) There should be proper application of mind and scrutiny of the records before it, by the appellate authority to enable it to record its satisfaction in terms of the rules.
b) It should pass a speaking order which would atleast prima facie show that the authority concerned has applied its mind to the various contentions or points of determination raised before it. Further that it has particularly examined whether the penalty imposed is excessive and/or inadequate.
c) The scope of applicability of the maxim Audi Alteram Partem before the appellate authority depends upon the language of relevant regulation/rule.
As far as the first two ingredients are concerned, they are well settled through various pronouncements. They do not arise for determination directly in the present case. Therefore, we do not find the need to discuss them in any further elucidation. It is the third ingredient and its applicability which is the pertinent question falling for determination. The maxim Audi Alteram Partem means hear the other side: hear both sides. In other words the authority hearing the matter must afford hearing to the party who is likely to be affected by its decision. The right to be heard has been accepted by all civilized countries as part of due process of law where questions affecting rights, privileges or claims of the persons are considered or adjudicated."
In the case in hand, a reading of the order dated 4.6.2004 (Annexure P8) passed by the appellate authority rejecting the appeal of the petitioner, does not satisfy the requirements of passing a reasoned order dealing with the contentions raised in his appeal (Annexure P7). The right of appeal under Regulation 17 is a statutory remedy. Therefore, the appellate authority was enjoined to pass a reasoned order dealing with the contentions raised by the petitioner in his appeal. In the circumstances of the case, an objective consideration of the contentions raised by the petitioner would be possible only if he is given a chance to satisfy and show the appellate authority that as per his contentions the order that has been passed by the disciplinary authority is unjust and unreasonable. Therefore, in the circumstances, the consideration of fair play and justice would require not only a reasoned order being passed but a personal hearing being also given. Primarily where a statute provides for a right of appeal then there has to be observance of the principles of natural justice not only at the first stage but at the appellate CWP 19115-04
stage as well. In Ram Chander v. Union of India and ors 1986(2) SLR 608, it was observed by the Hon'ble Supreme Court as under:- "It is not necessary for our purposes to go into the vexed question whether a post-decisional hearing is a substitute of the denial of a right of hearing at the initial stage or the observance of the rules of natural justice since the majority in Tulsiram Patel's case (AIR 1985 SC 1416) unequivocally lays down that the only stage at which a Government servant gets `a reasonable opportunity of showing cause against the action proposed to be taken in regard to him' i.e. an opportunity to exonerate himself from the charge by showing that the evidence adduced at the inquiry is not worthy of credence or consideration or that the charges proved against him are not of such a character as to merit the extreme penalty of dismissal or removal or reduction in rank and that any of the lesser punishments ought to have been sufficient in his case, is at the stage of hearing of a departmental appeal. Such being the legal position, it is of utmost importance after the Forty-second Amendment as interpreted by the majority in Tulsiram Patel's case that the Appellate Authority must not only give a hearing to the Government servant concerned but also pass a reasoned order dealing with the contentions raised by him in the appeal.
We wish to emphasize that reasoned decisions by tribunals such as the Railway Board in the present case, will promote public confidence in the administrative process. An objective consideration is possible only if the delinquent servant is heard and given a chance to satisfy the Authority regarding the final orders that may be passed on his appeal. Considerations of fair CWP 19115-04
play and justice also require that such a personal hearing should be given." (Emphasis added)
The learned counsel for the respondents, however, has placed strong reliance on the case of Ganesh Santa Ram Sirur's (supra). In the said case, the delinquent employee therein had joined the service of the Bank as a Clerk and was charge sheeted for some irregularities committed by him which inter alia included pertaining to grant of advance by the appellant therein to his wife. The inquiry report did not contain any recommendation regarding the punishment. The disciplinary authority sent the inquiry report to the appellant and he was asked to make a representation on the report.
Thereafter, it was recommended to the punishing/appointing authority of the appellant for the imposition of the punishment of reduction in the substantive salary at one stage from Rs 4020/- to Rs 3900/-. The punishing authority relied on the recommendations of the disciplinary authority and imposed the punishment accordingly. An appeal was preferred before the appellate authority and it was pleaded that the punishment imposed was too severe and in the facts of the case only one of the seven charges was proved.
The appellate authority, however, proposed the enhancement in the penalty imposed upon the appellant to an order of dismissal. The appellate authority ordered the punishing/appointing authority to issue notice to show cause to the delinquent employee therein as to why the penalty should not be enhanced as had been proposed. The said order of the appellate authority was communicated to the delinquent employee therein by the appointing authority. The employee therein submitted his detailed reply against the proposed order of dismissal. The appellate authority thereafter decided to enhance the penalty inflicted from reduction in the basic pay by one stage to removal of service in stead of dismissal, as earlier proposed.
The disciplinary authority communicated the said order to the appellant but made an attempt for justice to the Chairman of the Bank requesting for CWP 19115-04
review of his case. It was replied that the rule did not provide it mandatorily for the reviewing authority to make the review of each and every order passed by the competent authority. The delinquent employee being aggrieved against the imposition of penalty, filed a writ petition before the High Court which was dismissed and it was held that the appellate authority had rightly exercised its power in enhancing the punishment. Against the said order, SLP was filed and on leave to appeal having been granted by the Hon'ble Supreme Court, the case was considered and was dismissed. The Hon'ble Supreme Court considered the case law in the context of the service rules of the Bank in the said case and held that the principles of natural justice cannot be put in straitjacket and that their applicability depends upon the context and facts and circumstances of each case. Besides, where the relevant rule did not provide for a personal hearing by the appellate authority before enhancing the punishment and the appellate authority after issuing a notice to show cause against the proposed enhancement of punishment from reduction of salary to that of dismissal, it thoroughly considered the submissions of the appellant therein and modified the punishment to removal. It was held that there was full application of mind in taking the decision. Hence, denial of personal hearing in the facts and circumstances of the said case did not vitiate the decision taken by the appellate authority therein. Therefore, evidently it is to be seen in the facts and circumstances of the each case as to whether the delinquent employee is entitled to an opportunity of hearing at the appellate stage and if not granted whether the same has resulted in any prejudice to him. It is appropriate to note that the decisions in Ram Chander's case (supra) and Ram Niwas Bansal's case (supra) were considered by the Hon'ble Supreme Court in Ganesh Santa Ram Sirur's case (supra). It is after considering the entire matter that it was held that the question of personal hearing in compliance with the principles of natural justice at the appellate stage depends on the CWP 19115-04
facts and circumstances of each case and that there is no straitjacket with respect to the same. In the case in hand, as has already been noticed, the appellate order dated 4.6.2004 (Annexure P8) does not satisfy the requirement of passing a reasoned order. In fact, it is merely a narration of the history of the case with no due consideration to the matters in issue and the contentions raised. Besides, there has been no consideration to the length of service put in by the petitioner and whether the punishment imposed is commensurate with the gravity of the offence. Although, where the appellate authority concurs with the reasoning given by the initial or the first authority, it need not give elaborate reasons for its conclusions.
However, it is expected of it to at least objectively assess the matter and record reasons in support to its conclusions. This rule would be inoperative in a case where the statute expressly or by necessary implication dispenses with the requirement of recording reasons. However, in the case in hand, the appellate order is vitiated for failure to record any reasons in support of its decision. Therefore, we are of the view that the appellate order is liable to be quashed and the matter re-considered by the appellate authority by affording a personal hearing to the petitioner. Ganesh Santa Ram Sirur's case (supra) was a case where only the punishment that had been imposed was enhanced and it was held that there had been full application of mind in taking the said decision. However, in the present case, a perusal of the appellate order does not indicate due application of mind to the decision taken. Therefore, the matter requires re-consideration by the appellate authority without at this stage in any manner interfering with the other orders that have been assailed by the petitioner. Therefore, we make it clear that the invalidation of the appellate order dated 4.6.2004 (Annexure P8) would not confer any benefits to the petitioner and he would only be entitled to re-hearing of his appeal in accordance with law. This would be in accord with the dictum of the Hon'ble Supreme court in the case of Managing CWP 19115-04
Director, ECIL, Hyderabad v. B. Karunakaran AIR 1994 SC 1074 wherein it has been observed that when an enquiry is found to be faulty, the matter is required to be remitted to the stage at which the fault is detected or pointed out. The defect that has been detected in the present case is at the appellate stage and it is to the said stage that the matter requires to be remitted for re-consideration.
For the fore going reasons, this writ petition is partly allowed, the order dated 4.6.2004 (Annexure P8) is set aside and quashed with the direction to the appellate authority to pass a reasoned order, after giving an opportunity of
hearing to the petitioner, in accordance with law.
( S.S.SARON )
23.1.2006. ( S.S.NIJJAR )
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