STATE BANK OF INDIA & ORS. versus C.K. KARUNAKARAN on 30 September 2021

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The respondent was employed with the appellant-bank in theMiddle Management Grade Scale-II and his promotion to MiddleManagement Grade Scale-III came up for consideration in November,1984 when he was interviewed by the Interview Committee which madeFits recommendation to the promoting authority. In the meantime, apparentlythe disciplinary authority took a decision to initiate departmental actionagainst the respondent on 28.1.1985. His explanation was called for on18.2.1985 and the charge-sheet was issued on 04.11.1985. In view ofthe pendency of these disciplinary proceedings, the promoting authorityafter considering the recommendations of the Interview CommitteeGissued a select list on 23.8.1985 but the result of the respondent waskept in a sealed cover. The charge-sheet resulted in a punishment ofcensure to the respondent on 28.7.1987 and thus the promotion was notgiven effect to. The order of the disciplinary authority was assailed bythe respondent in departmental appeal and the same was dismissed onH13.12.1988 which attained finality.

The grievance of the respondent was that despite the censure,the sealed cover procedure having been adopted, the same shall havebeen given effect to after the period of censure was over. In this behalfthe respondent filed an appeal before the Appellate Authority on26.11.1990 but the same was rejected and thus Writ Petition being O.P.No.8947/1992 was filed before the High Court of Kerala at Ernakulamdirecting the bank to consider the case of the respondent ignoring thesealed cover procedure.

The Writ Petition was allowed by the learned Single Judge interms of order dated 30.5.2003 opining that the ex-post facto decision ofimposing censure could not be relied upon for denying the benefit ofpromotion and since the decision dated 28.1.1985 to take disciplinaryaction against the respondent was the only impediment standing in theway of the respondent, he is entitled to the benefit of promotion. Theappeal was dismissed by a brief order dated 30.5.2003 by the DivisionBench which has been assailed in the present appeal. Interim stay of theoperation of the order was granted on 29.9.2009 while granting leave.Respondent from the inception has not entered appearance in the presentproceedings.

We may note at the inception that of the impugned order itselfrecords that the respondent was subsequently granted promotion. Thusthe issue is only as to whether the respondent could be entitled topromotion from an earlier date. The other factor which has been pointedout to us is that the respondent retired in the year 2003 and is stated tohave received all retiral and pensionery benefits.

Learned counsel for the appellant sought to canvas before us thatthe appellant bank acted in accordance with its norms of sealed coverprocedure as per staff Circular No.118 (Exhibit P-2). The relevant partof the Circular is as under:- “3. Keeping in view the principles of natural justice and with aview to maintaining uniformity in this regard. It has been decidedto introduce the ‘Sealed Cover Procedure’ in respect of officersin the Bank with effect from the 1[st] March 1983 on the linesfollowed by the Government and the following guidelines are laiddown for the purpose:

i) The ‘Sealed Cover Procedure’ would be applicable in respectof promotion/confirmation of the following categories of officers:- AB

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[2021] 9 S.C.R.

A(a) Officers against whom disciplinary proceedings have beencontemplated provided there is a prima facie case against theofficer (b) Officers against whom disciplinary proceedings are in progressand

B(c) Officer who have been placed under suspension.”

It is the submission of the learned counsel for the appellant thatthe case of the respondent would be covered by sub-clause (a) of Clause(i) of para 3 as stated aforesaid. As to what would be the consequenceof the same is set out in sub clause (iv) thereafter which is reproducedChereinunder:- “iv) Where the department proceedings have ended with theimposition of a minor penalty, viz. censure, recoveries of pecuniaryloss to the Bank withholding of increments of pay and withholdingof promotion the accommodation of the Selection Committee inDfavour of the employees, kept in the sealed cover, will not begiven effect to. But the case of the employees concerned may beconsidered at the time of next promotions immediately after theconclusion of the departmental proceedings, if the employee isselected for promotion, he may be promoted in the usual mannerEalongwith others if the penalty, is that of ‘ensure’ or ‘recovery ofpecuniary loss’. But in the case of employees, who have beenawarded the minor penality of ‘withholding of increments’ or‘withholding of promotion’, promotion of the officers concernedcan be made only after the expiry of the period of his penalty.”

FLearned counsel for the appellant thus contends that the respondentwas imposed with a minor penalty of censure, the sealed cover is not tobe given effect to but his case may be considered at the time of nextpromotion immediately after the conclusion of the departmentalproceedings and he may be promoted if otherwise eligible. This is whatappears to have been done since the respondent earned his promotionGsubsequently.

Learned counsel for the appellant seeks to refer on two judicialpronouncements of this Court for the proposition that even if there is aminor penalty of the nature of censure, the recommendation of the DPCcannot be given effect to. In State of M.P. & Anr. Vs. I.A. Qureshi[1] it has been opined that once a minor penalty has been imposed on theemployee in departmental proceedings, the directions given in respect ofthe relevant circular would be applicable and the sealed coverrecommendation of DPC cannot be opened and the recommendation ofthe DPC cannot be given effect to because the employee has not beenfully exonerated when a minor penalty has been imposed. The employeecan only be considered for promotion on prospective basis from the dateafter the conclusion of the departmental proceeding. Similarly, in Unionof India & Ors. Vs. A.N. Mohanan[2 ]it has been opined that awarding ofcensure is a blame worthy factor and where even such a penalty hasbeen imposed the findings of the sealed cover are not to be acted uponand the case for promotion may be considered by the next DPC in thenormal course.

We have examined the aforesaid judicial pronouncements whichdo give rise to a conclusion that the censure having been imposed albeitthe least of the minor penalty, a recommendation of the sealed coverprocedure cannot be given effect to for promotion. This is also inconformity with what the relevant rule provide as under the State Bankof India (Supervising Staff) Service Rules ‘censure’ is mentioned as thefirst ‘minor penalties’ in Section 2 dealing with ‘disciplinary and appeal’in paragraph 49. The staff Circular No.118, quoted aforesaid, providesthat once a disciplinary proceeding has been contemplated provided thatthe prima facie case against the officer (which is apparent from theultimate penalty imposed) the sealed cover procedure should be adopted.However, where the said departmental proceedings end with theimposition of a minor penalty even like a censure, the recommendationsof the selection committee in favour of an employee, kept in a sealedcover, will not be given effect to and his case may be considered only inthe next promotion immediately thereafter.

On the aforesaid principles applying to the facts of the presentcase, a recommendation was made to the promoting authority inNovember, 1984 but soon thereafter the disciplinary authority took adecision to initiate departmental action against the respondent on28.1.1985, before the promoting authority could take a view on therecommendation of the interview committee, a notice was issued callingupon the response of the respondent. Before issuance of a charge-sheet,in contemplation of the aforesaid disciplinary proceedings, the promoting 2 2007 (5) SCC 425

AB

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Aauthority issued a select list on 23.8.1985 keeping the result of therespondent in a sealed cover. If the punishment would not have beenultimately imposed, the question of giving effect to the result of the sealedcover procedure would have arisen. However, the charge-sheet issuedon 04.11.1985 resulted in a punishment of censure on 28.7.1987 and thedepartmental appeal against the same was dismissed making that aspectBfinal. The consequence was that the sealed cover was not given effectin terms of the aforesaid rules.

In view of the aforesaid position, we are of the view, that theimpugned orders of learned Single Judge dated 30.5.2003 and the DivisionBench dated 17.10.2008 cannot be sustained and are set aside and theCappeal is allowed leaving parties to bear their own costs.

We may only add in the end that the respondent having earned hispromotion albeit belatedly as stated aforesaid, is a possible reason whyhe may not have joined the present proceedings.

D

Devika Gujral

Appeal allowed

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