Full Judgment Text
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PETITIONER:
NAGARAJ SHIVARAO KARJAGI
Vs.
RESPONDENT:
SYNDICATE BANK HEAD OFFICE MANIPAL AND ANR.
DATE OF JUDGMENT30/04/1991
BENCH:
SHETTY, K.J. (J)
BENCH:
SHETTY, K.J. (J)
YOGESHWAR DAYAL (J)
CITATION:
1991 AIR 1507 1991 SCR (2) 576
1991 SCC (3) 219 JT 1991 (2) 529
1991 SCALE (1)832
ACT:
Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1970: Section 8-Policy matters-Directions
to Banks-Disciplinary matters-Awarding punishment to
delinquent officers-Uniform policy-Feasibility of-Directive
issued to comply with Central Vigilance Commission’s advice-
Whether within jurisdiction-Whether contrary to Regulations
governing such matters.
Syndicate Bank Officer Employees (Disciplinary &
Appeal) Regulations, 1976:
Regulations 3, 4, 5, 6, 7, 10-Punishment for
misconduct-Consultation with Central Vigilance Commission-
Advice tendered by the Commission-Whether binding on
disciplinary authorities.
Central Vigilance Commission Manual: Articles 22 and
23-Guidelines for Banks-Major penalty cases-Consultation
with Commission-Advice tendered-Acceptance of-Whether
obligatory upon disciplinary authority.
HEADNOTE:
The appellant was a Manager in one of the branches of
the Respondent-Bank. In 1985, there was a departmental
enquiry against him on the charges that he discounted a
cheque for Rs.50,000 drawn in the name of some other person
to accommodate one of his colleagues and when the cheque
returned unpaid, he retained the same for about two months
without taking action for realisation of the amount. An
enquiry was conducted by the Commissioner for Vigilance
Inquiry from the Central Vigilance Commission, following the
procedure prescribed by the Syndicate Bank Officer
Employees’ (Disciplinary & Appeal) Regulations. The Inquiry
Officer submitted his report holding that the charges were
proved against the appellant. The Respondent-Bank referred
the matter to the Central Vigilance Commission for advice
and the Commission recommended the punishment of compulsory
retirement.
After considering the Inquiry Report and after
affording opportunity to the appellant, the Disciplinary
Authority imposed on him the
577
penalty of compulsory retirement. On appeal, the appellate
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authority concurred with the findings recorded and the
punishment imposed. The appellant filed a Writ Petition
before the High Court challenging the order of his
compulsory retirement. The High Court declined to interfere
with the order. Hence the present appeal, by special leave.
The appellant also filed a Writ Petition before this
Court challenging the validity of the direction dated
21.7.1984 issued by the Finance Ministry, following which
the Respondent-Bank has imposed on him the penalty of
compulsory retirement.
On behalf of the appellant/petitioner it was contended
that the advice given by the Central Vigilance Commission
was blindly followed by the Respondent-Bank as it was made
binding on it by virtue of the directions dated 21.7.84
issued by the Ministry of Finance and in that process the
merits of the case and the statutory regulations governing
departmental inquiries were ignored. It was also contended
that the subject matter of the inquiry was only regarding
irregularities in banking practice and since the interest of
the Bank was not affected as he had the money recovered and
credited to the Bank with interest thereon, the alleged
misdemeanour did not warrant any major penalty like
compulsory retirement, which even according to the
Respondent-Bank, was too harsh.
On behalf of the Respondent-Bank it was contended that
it had independently considered the material on record
notwithstanding the advice given by the Central Vigilance
Commission and since the orders did not refer to the
circulars or to the advice of Central Vigilance Commission,
the punishment imposed on the appellant/petitioner was not
vitiated by extraneous influences.
Allowing the matters, this Court
HELD: 1. The Respondent-Bank itself felt that the
compulsory retirement recommended by the Central Vigilance
Commission was too harsh and excessive on the
appellant/petitioner in view of his excellent performance
and unblemished antecedent service. The Bank made two
representations, one in 1986 and another in 1987 to the
Central Vigilance Commission for taking a lenient view of
the matter and to advise lesser punishment. Apparently,
those representations were not accepted by the Commission.
The disciplinary authority and the appellate authority
therefore had no choice in the matter. They had to impose
the punishment of compulsory retirement as advised by the
Central Vigi-
578
lance Commission. The advice was binding on the authorities
in view of the directive of the Ministry of Finance issued
on 21.7.1984, followed by two circulars issued by the
successive Chief Executives of the Bank. The disciplinary
and appellate authorities might not have referred to the
directive of the Ministry of Finance or the Bank circulars.
They might not have stated in their orders that they were
bound by the punishment proposed by the Central Vigilance
Commission. But it is reasonably foreseeable and needs no
elaboration that they could not have ignored the advice of
the Commission. They could not have imposed a lesser
punishment without the concurrence of the Commission.
Indeed, they could have ignored the advice of the Commission
and imposed a lesser punishment only at their peril. [586F-
H; 587 A-C]
2.1 But for the Finance Ministry’s directive dated
21.7.1984, the advice tendered by the Central Vigilance
Commission is not binding on the Bank or the punishment
authority; it is not obligatory upon the punishing authority
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to accept the advice of the Central Vigilance Commission.
[588C]
2.2 The Ministry of Finance has no jurisdiction to
issue such a directive to Banking institutions. The
Government may regulate the Banking institutions within the
power located under the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1970. Even though Section 8
thereof empowers the Government to issue directions in
regard to matters of policy, there cannot be any uniform
policy with regard to different disciplinary matters and
much less there could be any policy in awarding punishment
to the delinquent officers in different cases. The
punishment to be imposed depends upon the nature of every
case and the gravity of the misconduct proved. The
authorities have to exercise their judicial discretion
having regard to the facts and circumstances of each case.
They cannot act under the dictation of the Central Vigilance
Commission or of the Central Government in the exercise of
their power and the imposition of punishment on the
delinquent officer. Therefore the directive of the Ministry
of Finance is wholly without jurisdiction and contrary to
the statutory Regulations governing disciplinary matters and
is quashed. [588D-H; 589A]
A.N.D’silva v. Union of India, [1962] Suppl. S.C.R.
968, relied on.
De Smith’s Judicial Review of Administrative Action,
4th Edn. p. 309, referred to.
579
3. the Chairman of the Respondent-Bank is directed to
withdraw the circular letters dated 27.7.1984 and 8.9.1986
issued in furtherance of the Finance Ministry’s directive
dated 21.7.1984. [589C]
[Setting aside the orders of the disciplinary authority
and the appellate authority, this Court directed the
disciplinary authority to dispose of the case in accordance
with law and observations made in the judgment.]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2123 of
1991.
From the Judgment and Order dated 20.12.1988 of the
Bombay High Court in Appeal No. 1649 of 1988.
WITH
WRIT PETITION NO. 1287 OF 1989.
(Under Article 32 of the Constitution of India).
Rajinder Sachhar, R.K. Agnihotri and S.C. Paul for the
Appellant/Petitioner.
K.N. Bhat, Vineet Kumar, Lalit Bhasin and Ms. Nina
Gupta for the Respondents.
The Judgment of the Court was delivered by
K. JAGANNATHA SHETTY, J. Nagaraj Shivarao Karjagi, the
petitioner in SLP No. 4415 of 1989 has challenged his
compulsory retirement and in Writ Petition No. 1287 of 1989
he has questioned the validity of the direction dated 21
July 1984 issued by the Finance Ministry, Government of
India. Since the questions raised in both the cases are
inter looked, we grant special leave in the SLP and proceed
to dispose of the same along with the writ petition.
The events leading to these cases may briefly be
stated. In 1982, the petitioner was a Manager of the
Syndicate Bank (‘the Bank’) at East Patel Nagar Branch at
New Delhi. He discounted a cheque of the sum of Rs. 50,000
drawn on Punjab National Bank, Madras, after obtaining, by
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phone prior approval of the Regional Divisional Manager of
the Bank. The cheque was sent for realisation to the Punjab
National Bank at Madras, but it was returned unpaid. The
petitioner did not take prompt action to recover the amount
from the person in whose favour he discounted the cheque.
He kept the cheque
580
with him even without reporting to the higher authorities.
In 1983, the Assistant General Manager of the Bank called
upon him to explain why the amount due under the discounted
cheque has not been recovered. The petitioner in his reply
explained the circumstances under which the cheque was
discounted. He has stated that the credit was given to the
account of one Dr. N. Ramakrishnan who was a Senoir
Scientist in Indian ‘Agricultural Research Institute, New
Delhi but the amount was withdrawn by another person called
A. Chandrashekhar who is an officer of the Bank. He has
further stated that A. Chandrashekhar has promised to pay
the amount and therefore, he has retained the instrument
with him hoping that A. Chandrashekhar would keep up his
promise. On 6 July 1984 a sum of Rs.52,167.15 was deposited
with the Bank. A sum of Rs.36,000 towards principal sum and
Rs.16,167.15 towards interest. A suit was filed to recover
a sum of Rs.14,000 out of the principal amount. And later
on, this principal amount was also recovered and credited to
the Bank.
However, in 1985 there was a departmental inquiry
against the petitioner. The Commissioner for Vigilance
Inquiry from the Central Vigilance Commission conducted the
inquiry. The first charge against the petitioner was that
when he was functioning as Manager, he discounted under his
discretionary jurisdiction a cheque for Rs.50,000 drawn in
the name of Dr. N. Ramakrishnan in order to accommodate A.
Chandrashekhar an officer of the Bank or others known to
him. The second charge framed against him, related to the
retention of the discounted instrument with him from
December, 1982 till January 1984 without taking/causing to
be taken any action to realise the amount due under the
unpaid cheque. It was also alleged that the petitioner made
available undue financial accommodation to A. Chandrashekhar
or others to the detriment of the interests of the Bank. He
was charged with lack of the integrity, honesty devotion to
duty, diligence and conduct unbecoming of the status of Bank
Officer in contravention of Regulation No. 3(1) of the
Syndicate Bank Officer Employees’ (Conduct) Regulations,
1976.
The inquiry was held as per the procedure prescribed by
Syndicate Bank Officer Employees’ (Discipline & Appeal)
Regulations, 1976, (‘the Regulations’). On 16 October 1986,
the Inquiry Officer submitted his report holding that the
charges were proved against the petitioner. He has held
that the petitioner has failed to take any effective steps
for recovery of the amount paid under the discounted
instrument. He has kept the instrument with himself for
unduly long period without even surrendering the same to the
custody of the Bank. It was
581
Only after the Additional General Manager reminded him by
letter dated 15 December 1983, the petitioner assured him
that he would return the cheque which he finally did on 18
January 1984. The Inquiry Officer has finally concluded that
the transaction connected with the unpaid instrument was of
an accommodative nature with a view to assist A.
Chandrashekhar by using another person as benami and it was
in clear violation of the rules of the Bank.
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It is said and indeed not disputed that the Bank
referred the matter to the Central Vigilance Commission for
advice and the Commission has recommended that the
petitioner may be compulsorily retired from service by way
of punishment.
The disciplinary authority after considering the
inquiry report and affording an opportunity to the
petitioner passed an order dated 7 October 1987 imposing on
the petitioner the penalty of compulsory retirement. The
petitioner appealed to the General Manager challenging the
punishment. On 27 August 1988 the General Manager dismissed
the appeal concurring with the findings recorded and the
punishment imposed by the disciplinary authority. The
petitioner thereupon moved the Bombay High Court for relief
under Article 226 of the Constitution. The High Court has
also dismissed the writ petition. He has now appealed to
this Court.
THE CONTENTIONS OF THE PETITIONER
The petitioner has been complaining throughout and also
before us that the punishing authorities did not apply their
mind and did not exercise their power in considering the
merits of his case. They have imposed on him the penalty of
compulsory retirement in obedience to the advice of the
Central Vigilance Commission which has been made binding on
them by the direction dated 21 July 1984 issued by the
Ministry of Finance, Department of Economic Affairs (Banking
Division). They have blindly followed the advice given by
the Central Vigilance Commission without regard to the
merits of the matter and contrary to the statutory
Regulations governing the departmental inquiries. The
subject matter of inquiry was only regarding irregularities
in the banking practice and the action complained of has not
affected the interests of the Bank. The petitioner by his
own efforts has recovered the money due under the discounted
cheque and credited the same with interest to the Bank. The
findings recorded by the Inquiry Officer on the alleged
misdemeanour does not warrant any major penalty like the
compulsory retirement. Reference was also
582
made to certain representations said to have been made by
the Bank to the Central Vigilance Commission for approval to
impose a lesser punishment. It is said that the Bank
pleaded in the representations that the punishment of
compulsory retirement advised by the Commission was too
harsh.
SYNDICATE BANK OFFICER EMPLOYEES’ (DISCIPLINE AND APPEAL)
REGULATION 1976
These Regulation have been framed under Section 19 of
the Banking Companies (Acquisition and Transfer
Undertakings) Act, 1970. They were framed by the Board of
Directors of the Syndicate Bank in consultation with the
Reserve Bank of India and with the previous sanction of the
Central Government. Regulation 4 prescribes penalties for
acts of misconduct. Regulation 5 specifies the authority
to institute disciplinary proceedings and impose penalties.
Regulation 6 lays down procedure for imposing major
penalties and Regulation 7 provides for action on the
inquiry report. Regulation 7 confers power to the
disciplinary authority either to agree or disagree with the
findings of the inquiry authority on any article of charge.
The disciplinary authority may reach its own conclusion on
the material on record and impose any penalty prescribed
under Regulation 4. Or if it is of the opinion that no
penalty should be imposed on the delinquent officer, it may
pass an order exonerating the delinquent officer.
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Regulation 17 provides for appeals against the order
imposing any of the penalties specified in Regulation 4.
The appellate authority has been given the power to pass any
order of penalty or remitting the case to the disciplinary
authority or to any other authority for fresh disposal.
Regulation 19 provides for consultation with the Central
Vigilance Commission. It states that "that the Bank shall
consult the Central Vigilance Commission wherever necessary,
in respect of all disciplinary cases having a vigilance
angle." There is no other Regulation requiring consultation
with Central Vigilance Commission, or providing that the
advice given by the Commission is binding on the punishing
authorities.
The Central Vigilance Commission, however, appears to
have framed guidelines for Banks to consult the Commission
in respect of cases where major penalty is prescribed under
the Regulation. Article 22 of the Central Vigilance
Commission Manual reads :
"The Scheme of consultation with the Commission in
respect of major penalty cases pertaining to such
officers envisages consultation with the Commission
at two stages.
583
The first stage of consultation arises when
initiating disciplinary proceedings while the
second consultation is taken at the conclusion of
the proceedings."
Article 23.2 of the C.V.C. Manual Chapter 10 reads:
"In all cases where C.V.C. advises initiation of
major penalty proceedings, it also nominates
simultaneously a Commissioner for Departmental
Inquiries to whom the inquiry should be entrusted."
THE DIRECTION OF THE MINISTRY OF FINANCE, DEPARTMENT OF
ECONOMIC AFFAIRS (BANKING DIVISION)
On 21 July 1984 Joint Secretary, Ministry of Finance,
Department of Economic Affairs (Banking Division) has
written a letter to all Banking Institution thus :
"Recently a case been reported where a bank has
revised the punishment awarded to an officer in a
disciplinary case contrary to the advice of the
Central Vigilance Commission. The case has figured
in the Annual Report of the CVC as a case of non-
consultation with the Commission and thus created
an embarrassing situation. You will, perhaps, be
aware of the Annual Reports of the CVC, which
contain cases where the disciplinary authorities
had not accepted its recommendations or had not
consulted it, are laid on the Tables of both the
Houses of Parliament. This may, thereafter be
discussed in the Parliament also. You will agree
that under no circumstances the advice of the CVC
should be modified except with the prior
concurrence of the commission and this Ministry.
I may mention here that revision of the penalty
imposed on a delinquent officer as a result of an
appeal filed by him before the appellate authority
against the decision of the original disciplinary
authority also amounts to non-consultation/non-
acceptance of the advice of the CVC and is included
in CVC’s Annual Report.
Kindly circulate these instructions to the
concerned officers in your bank for strict
compliance. The receipt of this D.O. letter may
please be acknowledged. A copy of this D.O. letter
is being marked to CVO in your bank separately."
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584
CIRCULARS OF THE BANK
On 27 July 1984, A. Krishna Rao, Chairman and managing
Director of the Bank, issued a circular to all branches of
the Bank as follows :
"I am enclosing herewith a photostat copy of the DO
letter No.41/3/84-Vig. dated 21.7.1984 received by
me from Shri Ashok Kumar, joint Secretary, ministry
of Finance, Department of Economic Affairs,
(Banking Division), Vigilance Cell, New Delhi, in
the above connection for strict compliance of the
instructions contained therein.
As the advice in vigilance cases received from
Central Vigilance commission is communicated to the
authorities concerned by the Chief Vigilance
Officer, I advise, that the Chief Vigilance
Officer’s advice, as explained in my above referred
to DO letter, should be complied with.
Even when a revision of the penalty imposed on a
delinquent officer at the advice of the Chief
Vigilance Officer by of Original Disciplinary
Authority were to be considered as a result of an
appeal filed by him before the appellate/high
authorities, such revision shall be effected only
after consulting the Chief Vigilance Officer.
Please acknowledge receipt of this and ensure
compliance of the instructions contained herein."
On 8 September 1986 P.S.V. Mallya, the succeeding
Chairman and Managing Director of the bank issued another
circular letter to all branches of the bank in the following
terms:
"All vigilance cases in bank are being
investigated/ processed at Vigilance Cell at the
HO, under the administrative control of the Chief
Vigilance Officer, who is reporting directly to me.
After processing of the reports is concluded, the
cases are referred to Central Vigilance Commission
as per the existing procedure and the advice
received from the commission is being communicated
to the Disciplinary/Appellate Authority by the
Chief Vigilance Officer.
585
If the advice tendered by the Commission is
not accepted/acted upon, it will amount to non-
acceptance of the advice of the Commission and such
instance will figure in the Annual Report of the
Central Vigilance Commission placed before the
Parliament.
This apart the non-acceptance of the advice
in vigilance cases is likely to lead to a
situation, in which, different types of decisions
are possible to be taken in similar cases, which is
sure to result in a voidable complications and
injustice to certain sections of the
Officers/employees community. Again in such a
situation, ensuring uniform stantards in finalising
action on vigilance cases will also become a very
difficult phenomenon, which is not a desirable
trend and does not augur well for the healthy
functioning of the vigilance machinery in the Bank.
I therefore, advice all Disciplinary
/Appellate Authorities to see that they refer as
hitherto all vigilance cases to Chief Vigilance
Officer and consult him on such cases and act upon
his advice.
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xxxxx xxxxx xxxxx xxxxx
If for any reasons, the authorities concerned feel
that the advice needs to be reconsidered or a
departure is called for, they may refer back the
matter to Chief Vigilance Officer for
reconsideration of the advice, with the reasons for
such disagreement and the Chief Vigilance Officer
will see whether and to what extent such
reconsideration is desirable or feasible and will
tender advice again on reconsideration.
If the authority concerned is still not
disposed to act on the advice, the disinclination
on the part of the authority concerned will have to
be brought to my notice and the advice given by me
in respect of such cases shall be treated as final.
It is also necessary that the authorities concerned
should for obvious reasons keep the advice in
strict confidence and see that no reference thereof
is made in any of the correspondence communication,
whether emanating from their end."
586
The petitioner being aware of the directions of the
Ministry of Finance and the circulars issued by the Bank has
in his memo of appeal before the appellate authority inter
alia complained that the system and procedure adopted by the
Bank in dealing with vigilance cases, is totally against the
principles of natural justice. The Bank has no control over
such cases. The Disciplinary Authority and Appellate
Authority are required to carry into effect the punishment
advised by the Central Vigilance commission without change.
He has also pointed out that his appeal could be nothing but
an empty formality as the appellate authority would be also
bound by the decision of the Central Vigilance commission.
The petitioner has also added post script to his appeal Memo
stating thus "This appeal has been filed without prejudice
to my contention that this appeal is an exercise in futility
as the appellate authority also is not the deciding
authority and this appeal also will be decided by the
CVO/CVC, who has already decided and whose decision is
binding on you. There is in fact no effective right of
appeal."
Counsel for the Bank however, submits that
notwithstanding the advice of the Central Vigilance
Commission and the directive dated 21 July 1984 of the
Ministry Finance, Department of Economy Affairs (Banking
Division), the case of the petitioner has received the
fullest consideration from the disciplinary and
appellate authorities. They have independently considered
the material on record both on the articles of charges and
also on the appropriate punishment of compulsory retirement
imposed on the petitioner. The orders of the authorities do
not refer to the circulars of the Bank, nor to the
punishment proposed by the Central Vigilance Commission. It
is therefore, illegitimate, to contend that the punishment
imposed on the petitioner has been vitiated by extraneous
influences.
We are not even remotely impressed by the arguments of
counsel for the Bank. Firstly, the Bank itself seems to
have felt as alleged by the petitioner and not denied by the
Bank in its counter that the compulsory retirement
recommended by the Central Vigilance Commission was too
harsh and excessive on the petitioner in view of his
excellent performance and unblemished antecedent service.
The Bank appears to have made two representations; one in
1986 and another in 1987 to the Central Vigilance Commission
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for taking a lenient view of the matter and to advise lesser
punishment to the petitioner. Apparently, those
representations were not accepted by the Commission. The
disciplinary authority and the appellate authority therefore
have no choice in the matter. They had to impose the
punishment of com-
587
puslory retirement as advised by the Central Vigilance
Commission. The advice was binding on the authorities in
view of the said directive of the Ministry of Finance,
followed by two circulars issued by the successive Chief
Executive of the Bank. The disciplinary and appellate
authorities might not have referred to the directive of the
Ministry of Finance or the Bank circulars. They might not
have stated in their orders that they were bound by the
punishment proposed by the Central Vililance Commission.
But it is reasonably foreseeable and needs no elaboration
that they could not have ignored the advice of the
Commission. They could not have imposed a lesser punishment
without the concurrence of the Commission. Indeed, they
could have ignored the advice of the Commission and imposed
a lesser punishment only at their peril.
The power of the punishing authorities in departmental
proceedings is regulated by the statutory Regulations.
Regulation 4 merely prescribes diverse punishment which may
be imposed upon delinquent officers. Regulation 4 does not
provide specific punishments for different misdemeanours
except classifying the punishments as minor or major.
Regulations leave it to the discretion of the punishing
authority to select the appropriate punishment having regard
to the gravity of the misconduct proved in the case. Under
Regulation 17, the appellate authority may pass an order
confirming, enhancing, reducing or completely setting aside
the penalty imposed by the disciplinary authority. He has
also power to express his own views on the merits of the
matter and impose any appropriate punishment on the
delinquent officer. It is quasi-judicial power and is
unrestricted. But it has been completely fettered by the
direction issued by the Ministry of Finance. The Bank has
been told that the punishment advised by the Central
Vigilance Commission in every case of disciplinary
proceedings should be strictly adhered to and not to be
altered without prior concurrence of the Central Vigilance
Commission and the Ministry of Finance.
We are indeed surprised to see the impugned directive
issued by the Ministry of Finance, Department of Economic
Affairs (Banking Division). Firstly, under the Regulation,
the Bank’s consultation with Central Vigilance Commission in
every case is not mandatory. Regulation 20 provides that
the Bank shall consult the Central Vigilance Commission
wherever necessary, in respect of all disciplinary cases
having a vigilance angle. Even if the Bank has made a self
imposed rule to consult the Central Vigilance Commission in
every disciplinary matter, it does not make the Commission’s
advice binding on the punishing authority. In this context,
reference may be made to Article
588
320(3) of the Constitution. The Article 320 (3) like
Regulation 20 with which we are concerned provides that the
Union Public Service Commission or the State Public
Commission, as the case may be, shall be consulted-on all
disciplinary matters affecting a civil servant including
memorials or petitions relating to such matters. This Court
in A.N. D’Silva v. Union of India, [1962] Suppl; 1 SCR 968
has expresed the view that the Commission’s function is
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purely advisory. It is not an appellate authority over the
inquiry officer or the disciplinary authority. The advice
tendered by the Commission is not binding on the Government.
Similarly, in the present case, the advice tendered by the
Central Vigilance Commission is not binding on the Bank or
the punishing authority. It is not obligatory upon the
punishing authority to accept the advice of the Central
Vigilance Commission.
Secondly, the Ministry of Finance, Government of India
has no jurisdiction to issue the impugned directive to
Banking institutions. The government may regulate the
Banking institutions within the power located under the
banking Companies (Acquisition and Transfer of Undertakings)
Act, 1970. So far as we could see, Section 8 is the only
provision which empowers to the Government to issue
directions. Section 8 reads:
"Every corresponding new bank shall, in the
discharge of its function, be guided by such
directions in regard to matters of policy involving
public interest as the Central Government may,
after consultation with the Governor of the Reserve
bank, give."
The corresponding new bank referred to in Section 8 has
been defined under Section 2(f) of the Act to mean a banking
company specified in column 1 of the First Schedule of the
Act and includes the Syndicate Bank. Section 8 empowers the
Government to issue direction in regard to matters of policy
but there cannot be any uniform policy with regard to
different disciplinary matters and much less there could be
any policy in awarding punishment to the delinquent officers
in different cases. The punishment to be imposed whether
minor or major depends upon the nature of every case and the
gravity of the misconduct proved. the authorities have to
exercise their judicial discretion having regard to the
facts and circumstances of each case. They cannot act under
the dictation of the Central Vigilance Commission or of the
Central Government. No third party like the Central
Vigilance Commission or the Central Government could dictate
the disciplinary authority or the appellate authority as to
how they should exercise
589
their power and what punishment they should impose on the
delinquent officer. (See: De Smith’s Judicial Review of
Administrative Action, Fourth Edition, p. 309). The
impugned directive of the Ministry of Finance, is therefore,
wholly without jurisdiction, and plainly contrary to the
statutory Regulations governing disciplinary matters.
For the foregoing reasons, we allow the appeal and the
writ petition quashing the directive issued by the Finance
Ministry, Department of Economic Affairs, (Banking Division)
dated 21 July 1984. We also issue a direction to the
Chairman of the Syndicate Bank to withdraw the circular
letters dated 27 July 1984 and 8 September 1986. We
further set aside the impugned orders of the disciplinary
authority and appellate authority with a direction to the
former to dispose of the petitioner’s case in accordance
with law and in the light of the observation made.
The petitioner is entitled to costs which we quantify
in both the cases at Rs. 15,000 which shall be paid by the
Central Government.
G.N. Appeal and petition allowed.
590