RAM DHIN GUPTA v. STATE BANK OF INDIA — 1989 DIGILAW 2 (MP)

JUDGMENT : ( 1. ) IN this petition under Article 226 of the constitution, the petitioner has challenged the order dated 19th May, 1984 dismissing him from service (Annexure A) as well as the order dated 8-12-1984 dismissing his appeal by the appellate authority (Annexure B ). ( 2. ) PRIOR to his dismissal from service the petitioner was working as Officer junior Management in the State Bank of India at Rewa Branch. The petitioner had two accounts in the State Bank - one Saving Bank Account and another gold Loan Account. On scrutiny of his Saving Bank Account it appeared to the bank Authorities that the balance contained in his Saving Bank Account was inflated by the petitioner by Rs 1,000/- by adding the figure 1 in the thousand column in the ledger sheet in the balance of 26th and 28th April, 1982. It was alleged that this was done by the petitioner with a fraudulent intention to get withdrawal of Rs. 1,034. 30 P. posted and transferred to his Gold Account. An explanation was sought from the petitioner about his aforesaid conduct. The petitioner denied the allegation regarding addition of figure 1 to the thousand column in the ledger sheet. The petitioner stated in his explanation that he had an occasion to check the entries in his account and found discrepancy and, therefore, he corrected the balance and reported the matter immediately to the officials. Thereafter the petitioner was suspended on 27th October, 1982 and formal charge sheet was issued against him, in respect of the aforesaid allegations. A departmental enquiry was held against him by Shri R. M. Upadhyaya. The Enquiring Officer by his report dated 24th October, 1983 (Annexure G) exonerated the petitioner by recording the finding that the charge that "on 6th May, 1982, he wilfully and with the mala fide intention of facilitating the debit of the amount to the account, caused fraudulent manipulations in his saving Bank Account and further wilfully caused creation of unauthorised overdraft in his saving bank account", was not proved and that the petitioner was sincere, honest and he had no mala fide intention to cheat the Bank. The enquiring Officer, however, observed that only defect that he could find during the enquiry, was that the petitioner did not act prudently and failed to assess the risk, he took in not reporting the fact to the Branch Manager. The enquiring Officer, however, observed that only defect that he could find during the enquiry, was that the petitioner did not act prudently and failed to assess the risk, he took in not reporting the fact to the Branch Manager. Disciplinary authority differed with the findings of the Enquiring Officer and after recording his reasons for disagreement (Annexure H) took the view that the charges against the petitioner were proved and finding him guilty of the misconduct passed the impugned order dated 19th May, 1984 (Annexure A) dismissing the petitioner from service. ( 3. ) THE petitioner preferred an appeal to the Local Board of the State Bank of India under Rule 51 of the state Bank of India (Supervisory Staff) Service rules. The Local Board by its resolution upheld the order of dismissal passed by the Disciplinary Authority and dismissed the petitioners appeal which was communicated to the petitioner by order dated 8-12-1984 (Annexure B ). The petitioner seeks quashing of these 2 orders by a writ in the nature of certiorari and a direction to the respondents to reinstate him in service with full back wages and other monetary benefits, on the grounds : (i) that the petitioner was denied reasonable opportunity inasmuch as no copy of the findings of the Enquiring Authority was supplied to him nor he was heard by the Disciplinary Authority before recording reasons for disagreement which is a clear violation and breach of natural justice; (ii) that the appellate authority dismissed the petitioners appeal without application of mind and without recording reasons in violation of Rule 51; and (iii) that the petitioner had 13 years unblemished record of service of the Bank and, therefore, imposition of severe penalty of dismissal was disproportionate and excessive which totally ruined his career. ( 4. ) THE respondents have opposed the petition by contending that the disciplinary Authority, after considering the evidence on record was justified in holding that misconduct was established against the petitioner and having regard to the gravity of the charges, was justified in imposing the punishment for dismissal from sendee. ( 4. ) THE respondents have opposed the petition by contending that the disciplinary Authority, after considering the evidence on record was justified in holding that misconduct was established against the petitioner and having regard to the gravity of the charges, was justified in imposing the punishment for dismissal from sendee. It has been stressed in the return that in a petition under articles 226 and 227 of the Constitution, the High Court does not act as a Court of appeal over the findings of the Disciplinary Authority and, therefore, no interference is permissible in exercise of jurisdiction under Articles 226 and 227 of the Constitution. The Disciplinary Authority has given cogent reasons for its disagreement with the findings of the Enquiring Officer which cannot be said to be perverse. It has been stated that the entire material of the Enquiry was placed before the appellate authority which was looked into and considered while deciding the petitioners appeal and the appellate authority after considering the appeal on merits as well as on question of punishment maintained the order of dismissal. The respondents have averred that the appellate order is one of affirmation, It was not necessary for the appellate authority to give detailed reasons for its conclusion. As regards the supply of the copy of the Inquiring officers report, it has been stated that after 42nd Amendment of the constitution, there is no rule or law to supply the copy and afford a hearing before imposing the punishment by the Disciplinary Authority. ( 5. ) PLACING his reliance on the decision in Union of India vs. Bashyan, AIR 1988 SC 1000 , learned counsel for the petitioner first urged that the petitioner was not supplied with a copy of the Inquiring Officers report before the disciplinary Authority passed the impugned order dated 19th May, 1984 (Annexure A) which violated the principles of natural justice and, therefore, the impugned orders deserve to be quashed on this ground. In this connection it may be pointed out that a Division Bench of the Supreme Court in the case of Bashyan (supra) referred the matter to a larger Bench to consider whether failure to supply of the copy of the report of the Inquiring Officer to the delinquent before the Disciplinary Authority makes up his mind and records the findings of guilt, would constitute violation of Article 311 (2) of the Constitution of India and violation of principles of natural justice. It is true that in the referring order Their lordships expressed the opinion that opportunity required to be given to a delinquent which must be reasonable opportunity compatible with principles of natural justice has not been dispensed with by virtue of the amendment of Article 311 of the Constitution in 1977 and non-supply of the Inquiring Officers report would constitute violation of principles of natural justice and accordingly will be tantamount to denial of reasonable opportunity within the meaning of Article 311 (2) of the Constitution. Nevertheless the matter has been referred to a larger bench of course with the aforesaid opinion of their Lordships. But it may be pointed out here that a Bench of 3 Hon. Judges of the Supreme Court in the case of Kailash Chander vs. State of U. P. , AIR 1988 SC 1338 , took a positive view that after the amendment of the Constitution by 42nd Amendment a Government servant cannot legitimately demand a second opportunity and as such non-service of the copy of the report was immaterial. Prior to the amendment of article 311 of the Constitution by 42nd Amendment, the Disciplinary Authority was required to give second notice to the delinquent officer to show cause why the proposed punishment may not be inflicted to him and it was then the disciplinary Authority had to give a copy of the report of the Inquiring Officer to the delinquent in order to enable him to explain the circumstances, appearing against him and make an effective representation. That requirement has been done away with by the 42nd Amendment. The question of furnishing a copy of the report of the Inquiring Officer before passing the order of punishment by the disciplinary Authority may arise if there is a rule to that effect by which the delinquent officer is governed. That requirement has been done away with by the 42nd Amendment. The question of furnishing a copy of the report of the Inquiring Officer before passing the order of punishment by the disciplinary Authority may arise if there is a rule to that effect by which the delinquent officer is governed. In the present case neither the provisions of article 311of the Constitution are attracted to the petitioner who is not a government servant; but a Bank employee nor any rule was shown to us in that behalf. That being so, it cannot be said that the petitioner was entitled for a copy of the report of the Inquiring Officer before the Disciplinary Authority passed the impugned order against him and, therefore, no question of violation of principles of natural justice arises. ( 6. ) THIS brings us to the question whether the appellate order dated 8th december, 1984 dismissing the petitioners appeal is violative of the principles of natural justice and provisions of Rule 51 of the State Bank of India (Supervisory staff) Service Rules and bad in law, having been passed without application of mind and without recording reasons for the decision dismissing the petitioners appeal. ( 7. ) FORMERLY in England as well as in U. S. A. the Adjudicatory Bodies and administrative Tribunals were not bound to give reasons for their decisions and, therefore, the High Court could not interfere by a writ of certiorari, however erroneous the decision may be. But after introduction of Tribunals and Inquiring act, 1958 (now the Act of 1971), the person concerned can obtain a statement of reasons for the decision of any of the Tribunals specified in the Act or of any minister making a statutory enquiry and such statement forms a part of the decision. So also in U. S. A. the introduction of the Administrative Procedure Act, 1946, makes it obligatory for every Adjudicatory Body to give reasons for its decision on all the material issues of fact as well as of law and now the administrative Law in course of time has developed so much so that even outside the scope of the Statute, it has been held that one who decides must give reasons for its decision so as to enable the Court to effectively exercise its power of judicial review. In India until a few years back the judicial opinion on the above subject was not consistent and uniform but a divided one, till recent past and different views in different cases were expressed by the various High Courts of the country as well as by the Supreme Court. In some cases it was held that requirement for Adjudicatory Bodies to give reasons for their decision was not a part of natural justice and accordingly Administrative Tribunals were not obliged to give reasons in support of their decisions while in other cases it was expressed that even outside the scope of the Statute it was necessary for the administrative Tribunals to give reasons for their decision; but now this ticklish question seems to have been settled by their Lordships of the Supreme Court in some of their recent decisions which shall be discussed hereinafter, in which it has been expressed that it is obligatory on the Adjudicatory Bodies to give reasons in support of their decisions failing which the order would be bad. ( 8. ) BEFORE we proceed to discuss the various decisions we would prefer to discuss the scope and necessity of a speaking order. Ordinarily a speaking order, as it is commonly understood, means an order which speaks for itself or tells its own story. Therefore, in the absence of a speaking order, the Courts will not be in a position to understand the working of the mind of the concerned authority and as such it will not be possible to decide whether there was any legitimate ground for the Court to interfere with the decision, of the said authority. There is yet another aspect of the problem, if the order or decision is not a speaking one. Under several statutes the decisions of one Adjudicatory Body are appealable or subject to revision by higher authority. If the lower authority does not make a speaking order, the party subjected to the same would be at a loss to effectively exercise its rights to approach the higher authority and thus failure to give reasons may, in substance, amount to deprive the party of the right of appeal or revision. In this connection a reference may be made to the decision in Moti miyan vs. Commissioner, Indore Division, Indore and others, 1960 MPLJ 100 = air 1960 M. P. 157. In this connection a reference may be made to the decision in Moti miyan vs. Commissioner, Indore Division, Indore and others, 1960 MPLJ 100 = air 1960 M. P. 157. It may be noted that giving of reasons is one of the fundamentals of good administration and a safeguard against the arbitrariness. ( 9. ) IF Administrative Tribunal is obliged to give reasons for its conclusion it will make necessary for it to consider the matter carefully and the process will ensure that the authority applied its mind to the case. The condition to give reasons introduces clarity and minimises arbitrariness because the compulsion of disclosure of reasons will guarantee consideration of all aspects of the case. The adjudicatory Body or a Administrative Tribunal will have to give such reasons for its decision as may be regarded fair and legitimate by a reasonable man and thus it will avoid passing of vague orders and minimise the chances of irrelevant or extraneous considerations from entering his decisional process and it will minimise chances of unconscious infiltration of personal bias or unfairness in its decision. Viewed from the another angle, giving of reasons also gives satisfaction to the delinquent or the party concerned against whom the decision is made. Giving of reasons also appears to be just and proper on the principle that justice should not only be done but it should also seem to be done, as unreasoned decisions may be just but in the absence of reasons may not appear to be so to the person affected by the decision. A reasoned decision on the other hand will have at least appearance of justice. ( 10. ) NOW we advert to the different views expressed by Their Lordships in their various pronouncements. In the case of M. P. Industries Ltd. vs. Union of india, AIR 1966 SC 671 , which was a case in which the application for mining lease was rejected by the State Government giving full reasons and a revision against that order was rejected by the Central Government on the ground that the applicant did not disclose any valid ground for interference. The order was challenged in the Supreme Court in which Their Lordships took the view that the order of the Central Government was not bad for not giving reasons as it had agreed with the reasons given in the order of the State Government. The order was challenged in the Supreme Court in which Their Lordships took the view that the order of the Central Government was not bad for not giving reasons as it had agreed with the reasons given in the order of the State Government. Subbarao, J. (as he then was) in a dissenting order took the view that the Central Government acts as a Judicial Tribunal which is subject to appeal under Article 136 of the constitution and, therefore, giving of reasons for its decision was necessary. Again in the case of State of Madras vs. A. R. Shrinivasan, AIR 1966 SC 1827 , their Lordships of the Supreme Court took the view that whenever the government agrees with Inquiring Tribunal it is not necessary to give reasons but in case of dissent alone the reasons should be given. In other words if the order of the higher authority is the affirming order, reasons need not be given but if it is dissenting order, it must be supported by reasons. The same view was expressed in Tarachand vs. Delhi Municipality, AIR 1977 SC 567 . In the case of Som Datt vs. Union of India, AIR 1969 SC 414 , Their Lordships observed that apart from any requirement imposed by the Statutes or Statutory Rules, either expressly or by necessary implication, it cannot be said that there is any general principle or any rule of natural justice that a Statutory Tribunal should always and in every case give reasons in support of its decision. ( 11. ) BUT having regard to the fact that most often the Statutes do not impose a condition that the decision of a particular Adjudicatory Body should give reasons for the decision that they take in exercise of their executive or administrative powers and, therefore, to cover up such situation the courts have spelled out a general obligation for Adjudicatory Bodies to give reasons for their decisions partly from the rule of natural justice and partly from the constitutional provisions contained in Articles 226/227 of the Constitution, on consideration that Courts cannot exercise their supervisory role over the adjudicatory Bodies effectively if reasons are not given by them for their decisions. It appears that it is for this reason that various High Courts and in some of the later decisions Supreme Court took the view that an Adjudicatory authority should give reasons for its decision. It appears that it is for this reason that various High Courts and in some of the later decisions Supreme Court took the view that an Adjudicatory authority should give reasons for its decision. See - M/s. Mahabir Prasad vs. State of U. P. , AIR 1970 SC 1302 , State of Gujarat vs. Krishna Cinema, AIR 1971 sc 1650 , Chowgule and Co. vs. Union of India, AIR 1971 SC 2021 and travancore Rayons vs. Union of India, AIR 1971 SC 862 . ( 12. ) ON a perusal of the later decisions of the Supreme Court there appears to be a considerable change in the trend of view which has been discussed above. In the case of Travancore Rayons (supra) Their Lordships of the Supreme Court observed that the earlier decision in the case of M. P. Industries (supra) was overruled by Bhagat Raja vs. Union of India, AIR 1967 SC 1606 , and in explicit terms pointed that a higher authority may agree with a conclusion of lower body but may not necessarily agree with all its reasonings and, therefore, appellate body should give its own reasons even when it was affirming a reasoned order of the lower body. This view further finds explicit support from yet another later decision of Their Lordships of the Supreme Court in the case of Siemens engineering and Manufacturing Co. vs. Union of India, AIR 1976 SC 1785 , wherein it has been stressed that each of the Adjudicatory Body whether it is original or appellate, it has to make a speaking order of its own. As a necessary corollary it therefore, follows that appellate authority should give its own reasons irrespective of the fact whether it is affirming the decision of the lower authority and whether the lower authority has given its reasons or not. ( 13. ) IN the case of Siemens Engineering (supra) Their Lordships observed that if Courts of Law are to be replaced by Administrative Authorities and tribunals as indeed, in some kinds of cases, that proliferation of the administrative law, they may have to be so replaced, it is essential that administrative Authorities and Tribunals should accord fair and proper hearings to the person sought to be affected by their orders and given sufficiently clear and explicit reasons in support of the orders made by them. Then alone administrative authorities and tribunals exercising quasi-judicial functions will be able to justify their existence and carry credibility with the people by inspiring confidence in the adjudicatory process. It has been further observed that the rule requiring reasons to be given in support of an order is like the principle of audi alteram partem a basic principle of natural justice which must inform every quasi-judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law. Having considered the principle of audi alteram partem Their Lordships held as under : "it is now settled law that where an authority makes an order in exercise of a quasi-judicial function, it must record its reasons in support of the order it makes. Every quasi-judicial order must be supported by reasons. That has been laid down by a long line of decisions of this court ending with N. M. Desai vs. Testeels Ltd. , C. A. No. 245 of 1970 decided on 17-12-1985 (S. C. ). " ( 14. ) A similar view appears to be flowing from a few recent decisions of the supreme Court in that connection. Reference with advantage may be made to R. P. Bhatt vs. Union of India, AIR 1986 SC 1040 and Ram Chander vs. Union of india, AIR 1986 SC 1173 . In the case of R. P. Bhatt (supra) the Chief Engineer after departmental enquiry terminated the services of Supervisor who preferred an appeal before the Director General who also dismissed the appeal observing that after thorugh examination of the fact brought out in appeal, the Director general was of the opinion that the punishment imposed was just and in accordance with the rules applicable. Their Lordships took the view that in dismissing the appeal, the Director General has not applied his mind to the requirements of Rule 27 (2) of the Rules and there was no indication in the order that the Director General was satisfied as to whether the procedure laid down in the rules has been complied. Their Lordships took the view that in dismissing the appeal, the Director General has not applied his mind to the requirements of Rule 27 (2) of the Rules and there was no indication in the order that the Director General was satisfied as to whether the procedure laid down in the rules has been complied. Considering the earlier decisions in State of Madras vs. A. R. Shrinivasan (supra); Som Datt vs. Union of India (supra) and Tarachand vs. Delhi Municipality (supra) which have been discussed by us in the foregoing paragraph, Their Lordships of the Supreme Court set aside the order of the appellate authority and sent back the case with a direction to dispose of the appeal afresh after applying the mind to the requirements of the rule. In the ease of Ram Chander (supra) also Their Lordships set aside the order of the Railway board which was the appellate authority for not giving reasons in the appellate order and sent back the case to the Railway Board to hear and dispose of the appeal by a reasoned order. ( 15. ) IT is thus now clear that the appellate authority even though it may be affirming order of the lower authority, has to give its own reason for its decision and in the case before us which shall be discussed hereinafter, the appellate order suffers from the same infirmity inasmuch as the same is without any reason. ( 16. ) LEARNED counsel for the respondents, however urged that a Division bench of this Court in Yeshwant Dattatraya Sapre vs. State Bank of India and another, M. P. No. 2330 of 1984 decided on 24-9-1987, while examining a similar order with reference to Rule 51 (2) in respect of another employee of the respondent Bank, has taken the view that if the order of the appellate authority is affirming order, it need not give reasons while deciding the appeal. In this connection it may be pointed out that the facts of that case are distinguishable from the facts of the present case inasmuch as in the present case before us the inquiring Authority, as said earlier, had exonerated the petitioner from the charges that were levelled against him but the Disciplinary Authority disagreed with the findings and recommendation of the Inquiring Officer, while this was not the position in the case of Yeshwant Dattatraya Sapre (supra); wherein the disciplinary Authority accepting and affirming the report of the Inquiring officer had passed the order of termination of service of the employee in that case. ( 17. ) LEARNED counsel for the respondents then submitted that the disciplinary Authority while disagreeing with the findings of the Inquiring officer, took into consideration all the facts and circumstances of the case while imposing the punishment and in that connection prepared a chart (Annexure R-4)stating the allegations/charge, the findings of the Inquiring Officer and the reasons for disagreement and that all this record was placed before the appellate authority and the appellate authority decided the appeal after considering all the material and, therefore, it cannot be said that the appellate authority had decided the appeal without application of mind. In our opinion, there is no merit in this submission because the reasons in the appellate order are given for the benefit of the party aggrieved and for a review by the higher authority and not for being kept close in the files and records of the appellate authority till the aggrieved party is forced to approach the Court to know the reasons. While it was obligatory on the appellate authority to support the order by reasons which may not be elaborate but only to the extent to lend assurance that the case of the petitioner had been properly considered. ( 18. ) HERE it may not be out of place to reproduce the relevant part of Rule 51, which runs as under : "51 (1) An employee may appeal to the Appellate Authority against an order imposing upon him any of the penalties specified in rule 49 or against the order of suspension referred to in rule 50-A. (2) An appeal shall be preferred within 45 days from the date of receipt of the order appealed against. The appeal shall be addressed to the Appellate Authority and submitted to the authority whose order is appealed against. The employee may, if he so desires, submit an advance copy to the Appellate Authority. The authority whose order is appealed against shall forward the appeal together with its comments and records of the case to the appellate Authority. The Appellate Authority shall consider whether the findings are justified and/or whether the penalty is excessive or inadequate and pass appropriate orders. The appellate Authority may pass an order confirming, enhancing, reducing or setting aside the penalty or remitting the case to the authority which imposed the penalty or to any other authority with such directions as it deems fit in the circumstances of the case. " while dismissing the petitioners appeal in exercise of the appellate power, the board passed the following order : the BOARD after having fully considered the facts of the case and after having applied their minds, concluded that there are no grounds to sustain the appeal filed by Shri N. D. Gupta, Officer Junior management Grade Scale I and accordingly RESOLVED that the order of the Disciplinary Authority be upheld and that the appeal made by the official, be dismissed. " Here it is noteworthy that a perusal of the order of this Court passed in Dattatraya sapres case (supra) will go to show that the order passed by the appellate authority in that case dismissing the appeal of Sapre (supra), it was couched exactly in the same terms and language word by word, identical to the impugned order in this petition passed in the petitioners appeal which shows that the appellate authority had a special readymade form which was used whenever an appeal was to be rejected by it. This raises a serious doubt whether the appellate authority had in fact and properly applied its mind to all the facts and circumstances of the case or not while deciding the appeal. ( 19. ) APART from the above facts a reading of sub-rule (2) of Rule 51 reproduced above will go to show that it was obligatory on the appellate authority to consider - (i) Whether the findings are justified; and (ii) Whether the penalty is excessive or inadequate. ( 19. ) APART from the above facts a reading of sub-rule (2) of Rule 51 reproduced above will go to show that it was obligatory on the appellate authority to consider - (i) Whether the findings are justified; and (ii) Whether the penalty is excessive or inadequate. Admittedly the petitioner had 13 years unblemished record of service in the bank and it was for the first time after 13 years of service that the petitioner was found to have misconducted for which he was charged. It was for this reason that the petitioner had submitted that the punishment of dismissal from service would be disproportionate and excessive as the same shall ruin his career. But there is nothing in the order to indicate that the appellate authority applied its mind as to whether the act of misconduct with which the petitioner was charged together with attending circumstances and past record of the petitioner were such that he should have been visited with the extreme penalty of dismissal from service, for a single lapse during his past 13 years service, although sub-rule (2) of Rule 51 clearly required the Appellate Authority to consider whether the penalty is excessive or inadequate. These facts clearly indicate that the appellate authority had not passed the order rejecting the petitioners appeal with due application of mind and, therefore, the same deserves to be quashed. Since the appellate order is being quashed it is not necessary for us to go into question whether the punishment of dismissal from service is excessive or otherwise as the said question shall be considered and examined by the appellate authority itself. ( 20. ) IN the result, the petition partly succeeds and is hereby allowed. The impugned order dated 8-12-1984 (Annexure B) passed by the Appellate authority is quashed and we direct the appellate authority (Local Board) to dispose of the petitioners appeal on merits afresh by a reasoned order in conformity with the requirment of rule 51 (2) of the State Bank of India (Supervisory Staff) Service rules. In the circumstances of the case, we make no order as to costs of this petition. The outstanding amount of security, if any, shall be refunded to the petitioner. Petition partly allowed.