WP/18591/2004 of S.Manohar, Vs The Dist.Cooperative Central Bank Ltd., on 30 December 2004

COMMON ORDER:

Both the writ petitions are filed challenging the show-cause Notice in Rc.No.B9/Estt/2002-03 dated 4.10.2004 issued bythe 2[nd] respondent by the order of the 1[st] respondent as illegal andarbitrary and violative of principles of natural justice. Since the point atissue in both the writ petitions is one and the same, both the writpetitions are being disposed of by a common order at the request oflearned counsel for both sides.

The brief facts in W.P.18593 of 2004 may be stated asfollows:

For certain financial irregularities the petitioner was

Conclusion

placed under suspension by the 2[nd] respondent by proceedings25.7.2002. On 25.10.2002 a charge memo was issued framing singlecharge for which the petitioner submitted explanation denying theallegations. Not satisfied with the explanation, an Enquiry Officer wasappointed on 7.10.2002. Again a new Enquiry Officer in supercessionof the earlier Enquiry Officer was appointed on 19.12.2002. Theimpugned show-cause notice dated 4.10.2004 was issued statingthat the enquiry report was already submitted on 10.9.2003.Challenging the same, the present writ petition is filed on the groundthat the 1[st] respondent-Committee, who is the appellate authority asper the special Bye-Law No.13(c) of the 1[st] respondent-bank, is notthe disciplinary authority and that before issuing the show-causenotice for infliction of punishment it is the duty of the respondents tofurnish the enquiry report and ask for the explanation and, therefore,the action of the respondents amounts to prejudging the issue andthe impugned proceedings are only an empty formality. Hence thepresent writ petition.

The respondents filed counter admitting about thesuspension order, calling for the explanation and appointment ofEnquiry Officer. It is further stated that the Enquiry Officer conductedthe enquiry by giving fair and reasonable opportunity to the petitioner to defend the charge levelled against him. The petitioner participatedin the enquiry and availed the opportunity given to him. The EnquiryOfficer in his report has held that the charge against the petitioner isproved. The disciplinary authority after taking into account the gravityand seriousness of the charge proved against the petitioner,proposed to impose the punishment of dismissal from service.Accordingly a show-cause notice was issued to the petitioner. Thepetitioner instead of submitting his explanation, approached this courtand obtained interim orders. The petitioner is at liberty to fileexplanation and the disciplinary authority after considering the samemay pass appropriate orders as per the service rules applicable tothe petitioner. As per the special bye-laws governing the serviceconditions of the employees of the Bank, the competent authority toimpose the proposed punishment of dismissal is General Manager.However, the Commissioner for Cooperation and Registrar ofCooperative Societies has prescribed the condition thatnotwithstanding the provisions of the Bye-law, the PIC Committeeshall decide disciplinary matters of staff as a whole. Therefore, thePIC Committee of the Bank is fully empowered to take decision in thisregard. As per the disciplinary proceedings, a body higher in statusthan the officer authorized to take disciplinary action shall beempowered to deal with and dispose of any appeals against theorders passed in disciplinary matters and that the impugnedproceedings are strictly in accordance with law. Hence, therespondents pray to dismiss the writ petition.

as follows:

The pleadings in W.P. No. 18593 of 2004 may be stated

Arguments

as follows:

The pleadings in W.P. No. 18593 of 2004 may be stated The petitioner while working as In-charge AssistantManager was placed under suspension by proceedings dated25.7.2002 for certain financial irregularities. A charge sheet dated25.10.2002 was issued framing two charges for which the petitionergave explanation denying the allegations. Not satisfied with the saidexplanation, the 1[st] respondent appointed an Enquiry Officer on19.12.2002. In the enquiry proceedings, the Bank has not examined any witnesses nor produced any documents nor supplied thedocuments to the petitioner. Thereafter the impugned show-causenotice dated 4.10.2004 was given stating that the enquiry reportdated 14.8.2003 was furnished to the 2[nd] respondent. Aggrieved bythe same, the present writ petition is filed.

The grounds of attack are similar to the grounds taken inthe other writ petition i.e. W.P. No.18591 of 2004. The counteraffidavit filed by the respondents would go to show admitting aboutissuance of charge sheet, calling for the explanation andappointment of Enquiry Officer. Basing on the enquiry report a show-cause notice was issued. With regard to the legal pleas, they aresimilar to the one taken in W.P. 18591 of 2004. Hence, it is redundantto reproduce the same.

Learned counsel for the petitioners raised twocontentions, firstly, that the impugned proceedings has been issuednot by the disciplinary authority but by the Committee of the person-in-charge, which is the appellate authority as per the Special Bye-Law No.13 (c) and therefore the petitioners have lost their valuableright of appeal to the 1[st] respondent-Committee and, secondly, thatthe enquiry report has not been furnished to the petitioners andbefore issuing the impugned proceedings no explanation is called forwith regard to the enquiry report and therefore the impugnedproceedings are liable to be set aside.

On the other hand, the learned standing counsel for therespondents contended that the right of appeal has not been lost.When a disciplinary order is passed by a person or body, appeal liesto the body higher in status than the officer authorized to takedisciplinary action and therefore the first contention is not sustainablein law. Insofar as the second contention of the learned counsel for thepetitioners is concerned, he contended that the enquiry report hasbeen sent along with the show-cause notice and no prejudice hasbeen shown in not supplying the enquiry report. Even assuming for amoment that it has not been supplied, in any view of the matter, the grounds can as well be agitated before the disciplinary authority.Hence, he prays to dismiss the writ petitions.

Conclusion

As per Clause 13(c) of the Special Bye-Laws governingthe service conditions of the employees of Warangal DistrictCooperative Central Bank, the Executive Committee is the appellateauthority in respect of all other employees except Secretary,Assistant Secretary, Manager, Development officer, Executive Officerand Assistant Executive Officer. As per Clause 13, the authority toimpose punishment is the President in respect of all other employeesexcept the abovementioned Officers. As seen from these bye-laws,the Managing Committee is the appellate authority in respect of majorpenalties that may be imposed by the President of the Bank. Placingreliance on these special bye-laws, the learned counsel for thepetitioners vehemently contended that the petitioners have lost theirvaluable right of appeal to the Committee. It is not in dispute that theimpugned proceedings dated 4.10.2004 were issued by the GeneralManager by the Order of the Committee of the Persons-in-charge ofthe Bank. As seen from the impugned proceedings, the Committee ofPIC of the Bank by its meeting dated 15.9.2004 vide Resolution No.7considered the matter relating to the charge and allegations,explanations of the delinquents and resolved to propose punishmentof dismissal from service of the Bank. Therefore, the petitioners inboth the writ petitions were called upon to show-cause as to why theproposed punishment of dismissal from service should not beimposed.

The Commissioner for Cooperation and Registrar of theCooperative Societies vide proceedings No.Rc.34861/2003 Z-V/6dated 27.2.2004 in exercise of powers vested in him under Section32(7) (a) of the A.P. Cooperative Societies Act appointed theCommittee of Persons to manage the affairs of Warangal DistrictCooperative Central Bank Limited for a period of six months from thedate of expiry of the term of the previous Committee of Persons-in- Charge or till the elections to the Managing Committees of theSociety is conducted, whichever is earlier. It is stated in theseproceedings that the Committee of Persons as appointed shall,subject to the control of the of the Government or as the case may beof the Registrar and subject to such instructions or directions as theymay issue, from time to time have power to exercise all or any of thefunctions of the Committee as per the Bye-laws of the Society. It isalso indicated that notwithstanding the provisions of the byelaw, PICCommittee shall adhere to the directions, inter alia, that all mattersrelating to sanction of loan, transfers, and disciplinary matters of staffetc. shall only be decided by the PIC Committee as a whole.

Therefore, the above proceedings make it clear that thePIC Committee is competent to decide the disciplinary matters of theStaff. This disciplinary power is conferred on PIC Committeenotwithstanding the provisions of the byelaws of the respondent-Bank. Therefore, the above provisions make it clear that the PICCommittee will be having disciplinary control over the staff. So, thecontention of the learned counsel for the petitioners that the PICCommittee, which is an appellate authority, has no jurisdiction toissue the impugned proceedings is unsustainable and wholly devoidof merit.

With regard to the loosing of vested right of filing theappeal, no doubt, as per byelaws the PIC Committee is the appellateauthority, but when the PIC Committee acts as a disciplinaryauthority, it does not mean the writ petitioners have lost their valuableright of appeal. On this aspect, the learned standing counsel for therespondents relied upon the Memorandum of Settlement dated21.9.1977 entered in between the Workmen employed by theCooperative Central Banks represented by the A.P. BankEmployees’ Federation, Hyderabad and 25 District CooperativeCentral Banks wherein the terms of settlement have been reducedinto writing. Chapter XIII of the Memorandum of Settlement deals withdisciplinary proceedings. As per this Chapter, the Principal Officer ofa Bank or an alternate officer at the Head Office of the Bank appointed by him for the purpose, shall decide which officer (s) shallbe empowered to hold enquiry and take disciplinary action in thecase of each office or establishment or branch. He shall also decidewhich officer or a body higher in status than the officer authorized totake disciplinary action shall be empowered to deal with and disposeof any appeals against orders passed in disciplinary matters. Thenames of such officers or the body who are empowered to pass theoriginal orders or hear and dispose of the appeal shall, from time totime be published on the bank’s notice board.

For this purpose, learned counsel for the petitionersrelied upon a decision of the apex court in Surjit Ghosh v. Chairman & M.D., United Commercial Bank[1] wherein it is held:

“This is particularly so when there are noguidelines in the Rules/Regulations as towhen the higher authority or the appellateauthority should exercise the powers of thedisciplinary authority The higher or appellateauthority may choose to exercise the powerof the disciplinary authority in some cases,while not doing so in other cases. In suchcases, the right of the employee dependsupon the choice of the higher/appellateauthority which patently results indiscrimination between an employee andemployee. Surely, such a situation cannotsavour of legality. Hence we are of the viewthat the contention advanced on behalf ofthe respondent bank that when an appellateauthority chooses to exercise the power ofdisciplinary authority, it should be held thatthere is no right of appeal provided under theRegulations cannot be accepted.

The above decision has no application to the presentfacts of the case because there are circular instructions in this casethat the higher authority can exercise of the powers of the disciplinaryauthority. In this case, right of appeal is provided even against theorders passed by the PIC Committee. So, the above settlement makes it very clear that an officer or body higher in status than theofficer authorized to take disciplinary action shall be empowered todeal with and dispose of the appeals. In the counter it is stated thatthe General Body of the Bank is the higher body in status to the PICCommittee. Therefore, even if the PIC Committee is the disciplinaryauthority, an appeal shall lie to the General Body of the Bank.Therefore, from the above provisions it is clear that the petitionershave not lost their valuable right. Hence, the first contention of thelearned counsel for the petitioners is wholly devoid of merit anduntenable.

The second contention of the learned counsel for thepetitioners is that before issuing the impugned proceedings, theenquiry report has not been furnished to the writ petitioners calling fortheir remarks with regard to conducting of enquiry. The Rules orbyelaws do not indicate that before issuing a show-cause notice forthe proposed punishment the disciplinary authority has to call for theremarks of the delinquent as to the findings of the Enquiry Officer. Forthis purpose, learned counsel for the petitioners placed strongreliance on the decision of the apex court in Managing Director,ECIL v. B. Karunakar[2 ]wherein it is held:

“Both the dictates of the reasonableopportunity as well as the principles ofnatural justice, therefore, require that beforethe disciplinary authority comes to its ownconclusions, the delinquent employeeshould have an opportunity to reply to theInquiry Officer’s findings. The disciplinaryauthority is then required to consider theevidence, the report of the Inquiry Officerand the representation of the employeeagainst it”.

It is further held:

“Since the denial of the report of the InquiryOfficer is a denial of reasonable opportunityand a breach of the principles of natural justice, it follows that the statutory rules, ifany, which deny the report to the employeeare against the principles of natural justiceand, therefore, invalid. The delinquentemployee will, therefore, be entitled to acopy of the report even if the statutory rulesdo not permit the furnishing of the report orare silent on the subject”.

There is no dispute about the proposition of law laiddown by the Constitution Bench of the apex Court. Since the show-cause notice along with the enquiry report has been furnished to thewrit petitioners, there is every opportunity for the writ petitioners togive reply to the enquiry officer’s findings. So, in this case reasonableopportunity is given to the petitioners to defend themselves againstthe findings of the Enquiry Officer. In this case, the first stage has notbeen commenced since the petitioners have not given reply to theshow-cause notice. Therefore, it is not a case of denial of reasonableopportunity to challenge the findings of the Enquiry Officer. Hence,the above decision has no application to the present facts of thecase. None of the rules or byelaws of the respondent-Bank providesthat the enquiry report has to be furnished to the delinquent in the firstinstance calling for his explanation or remarks and thereafter a show-cause notice for the proposed punishment should be given. It is truethat reasonable opportunity demands that the employee should getan opportunity not only to represent on the evidence adduced duringthe enquiry but also on the findings of the Enquiry Officer so that thedisciplinary authority may be able to have full appreciation. Theenquiry continues till the disciplinary authority considers the evidencewhich includes the report of the Enquiry Officer and the enquiry isreserved for recording the findings and the penalty. In the impugnedproceedings it is specifically stated that the copy of the enquiry reportis enclosed along with the show-cause notice. It is not specificallydenied or disputed in the affidavits filed in support of the writ petitionsthat no enquiry report is furnished to the petitioners. But, thecontention of the learned counsel for the petitioners is that preceding

the impugned proceedings the enquiry report has to be furnished tothe petitioners calling for the explanation, which, in my consideredopinion, cannot be furnished in the absence of any byelaw or rulegoverning the service conditions of the writ petitioners. Evenassuming for a moment that the enquiry report has not beenfurnished to the writ petitioners, the same cannot be a ground to setaside the impugned proceedings. To what extent the non-supplyingof enquiry report caused prejudice to the writ petitioners is notaverred or stated in the affidavits filed in support of the writ petitions.In any view of the matter, this aspect can be decided by thedisciplinary authority and the petitioners would be given liberty to givethe reasons for prejudice in not supplying the enquiry report to thedisciplinary authority and the same shall have to be considered bythe disciplinary authority in accordance with the rules and thebyelaws. Considering the serious nature of allegations, theCommittee has decided to propose the punishment in the show-cause notice. Under no stretch of imagination it can be said that thedisciplinary authority has come to pre-conclusion or pre-judged theissue with regard to the punishment. It is for the disciplinary authorityto accept or not to accept the reasons in the explanation that may befurnished by the writ petitioners. Therefore, the plea with regard tonon-supply of enquiry report and in what manner and in what way itcaused prejudice to the petitioners, is left open.

For the aforesaid reasons, the impugned proceedings donot suffer from any legal infirmities so as to call for interference of thisCourt. All the defences are left open. After issuance of show-causenotice the petitioners have approached this court and obtained stay.There is no opportunity for the petitioners to give explanation to theimpugned proceedings. Therefore, an opportunity has to be given tothe petitioners for giving the explanation and thereafter appropriateorders have to be passed by the disciplinary authority duly taking intoaccount the explanation that may be submitted by the petitioners.

The writ petitions are accordingly disposed of with adirection to the petitioners to submit their explanation within a periodof two weeks from the date of receipt of a copy of this order andthereafter appropriate orders have to be passed by the disciplinaryauthority duly taking into account the explanation that may besubmitted by the petitioners, in accordance with the rules and thebyelaws of the respondent-Bank.

____________________

K.C. Bhanu, J.

Date: 30--12—2004.

MVB.

..... REGISTRAR

// TRUE COPY //

SECTION OFFICER

To

1 The Person-in-charge committee, The Dist.Cooperative Central Bank Ltd.,HO, Subedari, Hanamkonda, Warangal-506001.

2 The General Manager, District Cooperative Central Bank, Ltd., Hanamkonda.

3. 2CD copies