Full Judgment Text
REPORTABLE
2023 INSC 908
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.8516 OF 2011
UCO BANK AND OTHERS … Appellants
VERSUS
M.B. MOTWANI (DEAD)
THR. LRS. & OTHERS …Respondents
J U D G M E N T
RAJESH BINDAL, J.
1
1. The challenge in the present appeal is to the judgment of
2 3
the High Court passed in A Writ Petition . Vide the aforesaid
judgment, the Division Bench of the High Court had set aside the
order dated 03.03.1993, passed by the appellant-Bank, wherein the
Signature Not Verified
Digitally signed by
Neetu Khajuria
Date: 2023.10.13
16:41:35 IST
Reason:
1
Dated 30.07.2009.
2
High Court of Bombay
3
Writ Petition No. 15 of 1995.
1
punishment of dismissal was imposed upon the respondent no.1 and
the order dated 23.07.1993, by which the appeal filed by him was
dismissed by the Appellate Authority.
FACTS
2. Briefly the facts, available on record, are that the
respondent no.1 was appointed as an Apprentice in the appellant-
4
Bank in the year 1952. In the year 1974, he was posted as a Branch
Manager at Moradabad Branch. From there, he was transferred to
Calcutta Main Branch as an Assistant Manager. In the year 1976, the
respondent no.1 was promoted and was transferred to Bombay as
Senior Management Scale-IV Officer. Between the year 1988-90, he
served as an Assistant General Manager at Bombay Main Branch. He
attained the age of superannuation on 02.07.1991 and was due to
retire on 31.07.1991. An intimation notice for retirement was served
upon him on 07.05.1991. Immediately, thereafter on 17.06.1991, the
respondent no.1 was served with a memo requiring him to explain
the irregularities and lapses relating to certain accounts during his
tenure when he was heading the Bombay Main Branch. Vide letter
dated 20.06.1991, he sought time and certain documents to enable
4
United Commercial Bank.
2
him to reply to the show cause notice. A fresh notice was served upon
him on 06.07.1991, to which the respondent no.1 again sought time
and the documents for filing his reply. On 15.07.1991, the General
Manager (Personnel) exercising power under Regulation 12 of the
5
1976 Regulations placed the respondent no.1 under suspension and
ordered that the respondent no.1 shall not be retired from the service
of the Bank, despite attaining the age of superannuation under
6
Regulation 20(3)(iii) of the 1979 Regulations .
3. Aggrieved by the order of suspension, the respondent
no.1 preferred an appeal which was dismissed by the Appellate
Authority on 07.11.1991. A chargesheet dated 07.12.1991 was served
upon the respondent no.1 on 10.12.1991 and he was called upon to
face the departmental enquiry. The respondent no.1 filed his reply
to the chargesheet, denying all the allegations as baseless. The order
of suspension was challenged by the respondent no.1 by filing a Writ
7
Petition before the High Court, which was disposed of on 10.01.1992,
with certain directions regarding the enquiry, while not interfering
with the order of suspension.
5
The United Commercial Bank Officer, Employees (Discipline and Appeal) Regulations, 1976.
6
The United Commercial Bank Officer’s Service Regulations, 1979.
7
Writ Petition No. 3667 of 1991.
3
4. On 09.04.1992, the Inquiry Officer submitted his report.
On 03.03.1993, the Disciplinary Authority dismissed the respondent
no.1 from the service under Regulations 7(3) read with Regulation 4-
D of the 1976 Regulations. The respondent no.1, aggrieved against
the order of dismissal, preferred a statutory appeal, which was
dismissed by the Appellate Authority on 23.07.1993.
5. The aforesaid order was challenged by the respondent
3
no.1 by filing a Writ Petition in the High Court, which was allowed
vide impugned order. Against the aforesaid order, the appellant-
Bank is in appeal before this Court.
ARGUMENTS
6. Mr. Vikramjit Banerjee, learned Additional Solicitor
General of India appearing for the appellant-Bank, submitted that the
impugned judgment of the High Court has been passed on a wrong
premise, without properly appreciating the arguments. The 1979
Regulations clearly permitted action even against a retired
employee. He submitted that Regulation 20 thereof which was duly
approved by the Reserve Bank of India and the Central Government
has to be given its full effect. However, the High Court has gone
wrong in holding that a chargesheet was required to be issued,
4
though the 1979 Regulations provide that a show cause notice was
good enough to show that proceeding has been initiated against an
employee.
7. With reference to the amendment in Regulation 20 of 1979
Regulations, he referred to a communication dated 01.07.1985 from
the Government of India, Ministry of Finance, Department of
Economic Affairs (Banking Division) addressed to the Chief
Executive Officers of the Nationalised Banks, wherein a direction was
issued to initiate process for amendment of Regulation 20 of the 1979
Regulations. The draft of the said amendment, as approved by the
Board of Directors in its meeting held on 31.08.1985, was forwarded
to the Government of India, Ministry of Finance and to the Reserve
Bank of India for its formal sanction. On 17.12.1985, the Reserve Bank
of India granted approval to the proposed amendment. Thereafter,
the Government of India also granted approval on 30.01.1986. After
the aforesaid approvals were received, the appellant-Bank had put
up the amendment before the Board of Directors for adoption on
12.03.1986, which was duly approved on 17.04.1986. A circular was
issued to all the branches of the Bank on 28.05.1996, informing them
about the amendment made in the 1979 Regulations.
5
8. Referring to the Regulation 20(3)(b) of the 1979
Regulations, the learned counsel for the appellant-bank argued that
this clearly provides that the disciplinary proceedings against an
employee shall be deemed to be pending on the date of retirement
in case a show cause notice has been issued to him before that.
Regulation 20(3)(c) of the 1979 Regulations further provides that an
officer under suspension of a charge of misconduct shall not be
retired or permitted to retire on attaining the age of superannuation.
He shall be retained in the service till the inquiry into the charge
levelled against him is concluded and a final order passed thereon.
9. Learned counsel for the appellant-Bank further argued
that the High Court had misdirected itself while referring to the 1979
Regulations as being amended in the year 1993 i.e., after the
retirement date of the respondent no.1. Whereas the fact remains
that these were amended in the year 1986 itself. Though this Court
opined in the case of UCO Bank & Anr. v. Rajender Lal Capoor
8
(2007) 6 SCC 694 that, any proceeding against an employee shall be
deemed to be pending only when a chargesheet is issued, but the
judgment was delivered while ignoring true meaning of the plain
language used in Regulation 20 of the 1979 Regulations. He further
8
Rajender Lal Capoor - I.
6
submitted that on the same day another judgment was delivered by
the same Bench of this Court in Ramesh Chandra Sharma v. Punjab
National Bank (2007) 8 SCALE 240, wherein this Court opined that,
the Regulation should be given full effect even with reference to the
legal fiction provided therein. Identical Regulations with reference
to the case of Punjab National Bank ( supra ) were under
consideration therein. Subsequently, the matter was referred to a
three-Judge Bench of this Court for consideration in Canara Bank v.
D.R.P. Sundharam, (2016) 12 SCC 724, wherein this Court upheld
the view expressed in UCO Bank v. Rajinder Lal Capoor, (2008) 5
9
SCC 257 . However, the fact remains that in that case the issue was
not considered in its entirety with reference to the 1979 Regulations
and its true spirit, especially the deeming provisions. He further
submitted that recently in Chairman-cum-Managing Director,
Mahanadi Coalfields Ltd. v. Rabindranath Choubey, (2020) 18
SCC 71 , a three-Judge Bench of this Court had expressed its
reservation with reference to the view expressed in Rajender Lal
Capoor -I ( supra ) delivered by a Two-Judge Bench of this Court.
10. While concluding the argument, the learned counsel for
the appellant-Bank submitted that the impugned judgment of the
9
Rajender Lal Cooper -II.
7
High Court goes even beyond the views expressed by this Court in
Rajender Lal Capoor -I ( supra ) . In any case, there being a conflict
of opinion among the two judgments of Three-Judge Benches each
i.e., Canara Bank (supra) and Mahanadi Coalfields Ltd. (supra) ,
the matter may be referred to a larger Bench.
11. In response, Mr. Aman Hingorani, learned counsel
appearing for the respondent no.1, submitted that the facts of the
case in Rajender Lal Capoor -I ( supra ) were totally different, as in
that case chargesheet had been issued to the employee while he was
in service. Hence, the proceeding could continue even after his
retirement. The judgment of this Court in Mahanadi Coalfields
( supra ) is also not relevant as the issue involved therein was
altogether different. There also, the chargesheet was issued to the
employee during the course of his employment, after which the
employee was suspended. The suspension order was revoked,
however, the departmental inquiry remained pending till
superannuation. In any case, reference in the aforesaid judgment was
made to Rajender Lal Capoor -I ( supra ) and not to the views
expressed by a Three-judge Bench of this Court in Canara Bank
( supra ), which upheld the views expressed by a Two-Judge Bench in
Rajinder Lal Capoor -II (supra).
8
12. He further submitted that the 1979 Regulations do not
provide for any procedure to be followed for inquiry or the
punishment which can be imposed. For this, the disciplinary
authority will have to refer to the 1976 Regulations, which provide
that after retirement of an employee, the only punishment which
could be awarded is with reference to the retiral benefits and not
termination from service.
13. It was further submitted by learned counsel for the
respondent no.1 that even if the amendment to Regulation 20 of the
1979 Regulations as proposed by the Bank had been approved by the
Reserve Bank of India and thereafter by the Government of India and
adopted by the appellant-Bank on 17.04.1986, however, any
amendment in the Regulations would take effect only after its
publication in the Official Gazette in terms of the amendment made
10
in Section 19(1) of the 1970 Act. Admittedly, the idea behind the
publication in the Official Gazette is to make the affected people
aware about the changes in law. Admittedly, there was no
publication in the Official Gazette and for the first time, the appellant-
bank had issued a circular to all the branches on 28.05.1986,
regarding the amendment carried out in Regulation 20 of the 1979
10
The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970.
9
Regulations. After the amendment in Section 19(1) of 1970 Act, the
pre-requisite of the publication through gazette notification was
required to be complied with. On failure of publication in the Official
Gazette, the amended provisions of Regulation 20 could not be
enforced against the respondent no.1. The counsel for the
respondent no.1 referred to the judgment of this Court in B.K.
Srinivasan v. State of Karnataka, (1987) 1 SCC 658 and Rajendra
Agricultural University v. Ashok Kumar Prasad, (2010) 1 SCC
730 . He further submitted that even prior to the judgment of this
Court in Rajender Lal Capoor -II ( supra ) , this Court in United Bank
of India Officers Association v. United Bank of India, 1987 (1) LLJ
104 , had struck down the 1979 Regulations.
14. He further submitted that even the Government of India
vide letter dated 15.12.1988, addressed to all Nationalised Banks,
requested that the Regulation 20 of the 1979 Regulations having been
held to be ultra vires by this Court in United Bank of India Officers
Association’s case ( supra ) , the same should not be invoked by the
Banks.
15. While concluding the argument, counsel for the
respondent no.1 submitted that, the respondent no.1 had expired on
30.12.2012. He is now represented by his legal representatives. No
10
retiral dues were paid to the employee (i.e., respondent no. 1)
concerned. Hence, on account of delay, direction should be issued
to the appellant-Bank for payment thereof, along with interest.
16. We have heard learned counsel for the parties and
perused the relevant referred record.
DISCUSSION
17. Before we proceed to consider the arguments raised by
the learned counsel for the parties, we deem it appropriate to refer
to the legal position with reference to the arguments raised
regarding Regulation 20 of the 1979 Regulations.
18. The undisputed facts on record are that the respondent
no.1 while serving as Assistant General Manager at Bombay Main
Branch, had attained the age of superannuation on 02.07.1991 and
was due to retire on 31.07.1991. An intimation notice for retirement
was served upon him on 07.05.1991. Immediately, thereafter on
17.06.1991, the respondent no. 1 was served a memo, requiring him
to explain the irregularities and lapses related to certain accounts
during his tenure, when he was heading the Bombay Main Branch.
The aforesaid notice was served upon the respondent no.1 on
20.06.1991. He sought time and certain documents to enable him to
11
reply to the show cause notice. A fresh notice was served upon him
on 06.07.1991, to which the respondent no.1 again sought time and
the documents for final reply. On 15.07.1991, the General Manager
(Personnel) exercising power under Regulation 12 of the 1976
Regulations placed the respondent no.1 under suspension and
ordered that he shall not be retired from the service of the bank,
despite attaining the age of superannuation under Regulation
20(3)(iii) of the 1979 Regulations. The respondent no.1, aggrieved
against the order of suspension, preferred an appeal, which was
dismissed by the Appellate Authority. Thereafter, the chargesheet
was served upon the respondent no.1 on 07.12.1991. The respondent
no.1 filed his reply to the chargesheet denying all the allegations
being baseless. The order of suspension was challenged by the
respondent no.1 by filing a Writ Petition before the High Court, which
was disposed of on 10.01.1992, with certain directions regarding the
inquiry, while not interfering with the order of suspension. On
03.03.1993. the Disciplinary Authority dismissed the respondent no.1
from service under Regulations 7(3) read with 4(d) of the 1976
Regulations. The respondent no.1, aggrieved against the order of
dismissal, preferred a statutory appeal, which was dismissed by the
Appellate Authority on 23.07.1993. The aforesaid order was
12
challenged by the respondent no.1 by filing a writ petition in the High
Court, which was allowed by the impugned order.
Legal Position
19. Vide judgment of this Court in United Bank of India
Officers Association’s case ( supra ) , Regulation 20 of the United
Bank of India Regulations 1979 which was identical, was held to be
unconstitutional and void.
20. The matter was considered subsequently by this Court in
Rajender Lal Capoor -I ( supra ) . In that case, the employee
concerned had attained the age of superannuation on 30.10.1996.
Show cause notice was issued to him on 24.10.1996. Chargesheet
was issued on 13.11.1998. Finally, after the enquiry, he was removed
from service. The statutory appeal filed against the order of
punishment of removal, was dismissed by the Appellate Authority. In
a challenge to the aforesaid order, the High Court opined that the
punishment of removal was disproportionate vis-à-vis the gravity of
charge framed against him. Finally, it was directed that the
punishment of removal be converted into compulsory retirement.
The intra-court appeal against the aforesaid appeal was dismissed by
the High Court. The matter was agitated before this Court.
13
20.1. While interpreting the 1979 Regulations, this Court
opined that the legal fiction created in clause (iii) of Sub-Regulation
20(3) of the 1979 Regulations, must be given full effect, but it is well-
settled that the scope and ambit of the legal fiction should be
confined to the object and purport for which the same has been
created. It was opined that the 1979 Regulations could be invoked
only when the disciplinary proceeding had been initiated prior to the
ceasing of the employees service. The delinquent employee would
be deemed to be in service, although he has reached the age of
superannuation, only if a valid departmental proceeding had been
initiated. The departmental proceeding was not initiated merely on
issuance of a show cause notice. It is initiated only when a
chargesheet is issued. That is the date of application of mind on the
allegations levelled against an employee by the competent authority.
Pendency of a preliminary disciplinary inquiry by itself cannot be a
ground for invoking Regulation 20 of the 1979 Regulations. On an
employee having been allowed to superannuate, only proceeding
inter alia including , withdrawal of his pension or any other retiral
dues under the applicable regulation, could have been initiated. As
in that case, the chargesheet was issued after the employee had
already superannuated, the same along with inquiry report and the
14
order of punishment was set aside. The order of removal or dismissal
from service can be passed only when an employee is in service. If
a person is not in employment, the question of terminating his service
ordinarily would not arise unless there exists a specific rule in this
behalf. In the aforesaid case, even though the employee was not in
appeal before this Court against the order of his compulsory
retirement but still this Court invoking the principles, as contained in
Order XLI Rule 33 CPC, granted relief to the respondent.
21. The Bank, being aggrieved against the aforesaid
judgment of this Court, filed a review petition, which was decided by
this Court in Rajinder Lal Capoor -II ( supra) . While harmoniously
construing the 1976 and 1979 Regulations, this Court opined that
Clause (iii) of Sub-Regulation 20 (3) of the 1979 Regulations is an
independent provision. It provides for continuation of disciplinary
proceeding which must have been initiated in terms of the 1976
Regulations. The 1979 Regulations will be applicable only in a case
where proceeding has been initiated for the purpose of taking
disciplinary action against a delinquent officer for the purpose of
imposition of punishment on him. The disciplinary proceeding, thus,
is initiated only in terms of the 1976 Regulations and not in terms of
the 1979 Regulations. The complete procedure for holding the
15
disciplinary proceeding is provided only in the 1976 Regulations.
The 1979 Regulations would be attracted independently where no
disciplinary proceeding is to be initiated. However, when read in
context of Regulation 20(3), initiation and pendency of disciplinary
proceeding is a must. The 1976 Regulations provided for the mode
and manner in which the disciplinary proceeding is initiated. It
expressly provides for service of chargesheet which is a sine qua non
for disciplinary proceeding. While putting the tools for
interpretation and giving a harmonious construction to the provisions
of the 1976 and the 1979 Regulations, this Court opined that if the
intention of the Regulation making authority had been that the legal
fiction as created in Clause (ii) of Sub-Regulation (3) of Regulation 20
of the 1979 Regulations would cover both clauses (i) and (iii), the
same should have been placed only after clause (iii). In such an
event, clause (ii) of Sub-Regulation (3) of Regulation 20 should have
been differently worded. With these observations, the review
petition filed by the Bank was dismissed.
22. In Canara Bank’s case ( supra ), this Court noticed that
the earlier judgments of this Court in the cases of Rajender Lal
Capoor -I & Rajender Lal Capoor -II ( supra ) were delivered by the
Division Bench of this Court. When the matter came up for hearing,
16
having a doubt on the view expressed, reference was made to a
larger Bench of this Court vide order dated 04.08.2010. A Bench
consisting of Three Judges of this Court found that the provisions of
the 1976 Regulations with reference to initiation of the disciplinary
proceeding has been correctly appreciated and interpreted,
especially with reference to the departmental proceeding. This
Court had quoted with approval paras 14 to 23 of the aforesaid
judgment of this Court in Rajender Lal Capoor-II ( supra ) by which
the review petition, filed by the Bank in Rajender Lal Capoor -I
( supra ) , was dismissed. Para 8 thereof is extracted below:
“ 8. On an exhaustive consideration of the
manner in which the provisions have been analysed
and the clear and unambiguous language of the same
and also having regard to the provisions of the 1976
Regulations of the Bank with regard to initiation of
disciplinary proceeding we have no doubt in our mind
that the meaning given to the provisions of the
Regulations in the said case is correct and does not
require any reconsideration. From the above it would
follow that by virtue of the provisions contained in
Regulation 20(3)( iii ), a disciplinary proceeding
initiated by means of a charge-sheet prior to the
retirement of a bank employee would continue even
after his retirement in view of the deeming provision
17
contained in the said Regulation 20(3)( iii ) by which the
officer is deemed to continue in service till completion
of the proceedings.”
23. From the aforesaid referred judgments of this Court
especially by a larger Bench consisting of Three Judges, in our
opinion, there is no merit in the present appeal as the principles laid
down therein have been followed by the High Court. In the case in
hand, the deceased employee had attained the age of
superannuation on 31.07.1991, whereas the chargesheet was issued
to him on 07.12.1991. Meaning thereby that on the date of his
superannuation, no disciplinary proceeding was pending against
him.
24. The arguments raised by the learned counsel for the
appellant-Bank that the matter needs to be referred to a larger Bench
as the legal fiction and true spirit of the 1976 and the 1979 Regulations
have not been considered by this Court, is merely to be noticed and
rejected, as the larger Bench consisting of Three-Judges in Canara
Bank’s case (supra) had already considered the judgment of the
Division Bench of this Court in Rajender Lal Capoor -I and
Rajender Lal Capoor -II cases ( supra ) and had reiterated the same
legal position.
18
25. The observation made in para 38 of the Mahanadi
Coalfields Limited (supra) , as relied upon by the learned counsel
for the appellant-Bank, will also not come to its rescue for the reason
that the observation was made while referring to the judgment of this
Court in Rajender Lal Capoor -I ( supra ) and not the Rajender Lal
Capoor -II ( supra ) and also in Canara Bank’s case (supra) where
on a reference to a Larger Bench the law laid down in Rajender Lal
Capoor’s (II) case ( supra ) was reiterated.
26. The judgment of this Court in Punjab National Bank’s
case (supra) , as relied upon by the learned counsel for the appellant-
Bank, is also distinguishable on facts as in that case the chargesheet
was issued to the employee concerned before his retirement.
CONCLUSION
27. For the reasons mentioned above, in our opinion, the
appeal filed by the appellant-Bank is meritless and the same is
accordingly dismissed with costs, quantified at ₹ 25,000/-.
28. At the time of hearing, it was pointed out by the learned
counsel for the respondent no.1 that the employee had expired
during the pendency of this appeal on 30.12.2012. It has been
noticed by the Division Bench in the impugned judgment of the High
19
Court that the subsistence allowance was not paid to the deceased
employee. As we have set aside the punishment order inflicted on
the deceased employee, all the service benefits due to him along
with interest @ 7% per annum from the date of his retirement till the
payment is made, shall be paid by the appellant-Bank to his legal
heirs within a period of three months from the date of receipt of copy
of this judgment.
29. The appeal is accordingly dismissed
…..……………….J
(HIMA KOHLI)
…………………..J
(RAJESH BINDAL)
New Delhi
October 12, 2023.
20