( 1 ) THE principal point that falls for determination in this writ petition is the question as to whether the termination from service of the petitioner who was at the relevant time working as manager of the Gandhinagar Branch of the Andhra Bank by order dated August 29, 1984 on the ground that the management has lost confidence in him can pass legal scrutiny. Whereas situations may arise in appropriate cases wherein a contract of service can be repudiated by the employer with due notice on the ground that the management has lost confidence in an employee, the real issue at dispute in this case is as to whether this ground is available in cases where specific misconduct has been alleged and the order of termination on this ground is being used as a camouflage for the non-holding of disciplinary proceedings. In other words, the subtle point that is canvassed in justification of the action is that if an employee has misconducted himself and has thereby forfeited the confidence of the employer the discretion vests with the management insofar as either disciplinary proceedings can be held which would culminate in an order of punishment or the management can adopt the more humane line of terminating the employee's services simpliciter. As far as the last course of action is concerned, the argument proceeds on the footing that it is certainly more to the advantage of the employee, whereas the challenge to the action is principally on the ground that since the termination of service is one of the major penalties, that if there is a background or an allegation of misconduct and no enquiry is held, that the action can never pass judicial scrutiny insofar as it would be tantamount to a flagrant violation of the rules of natural justice. I need to elaborate here that the challenge to such an order in the present petition proceeds on the footing that the petitioner has been divested of his employment without following the procedure prescribed by law and that consequently, the action is ipso facto bad. The ground of loss of confidence according to the petitioner is only a smoke-screen for a patent illegality. The ground of loss of confidence according to the petitioner is only a smoke-screen for a patent illegality. ( 2 ) THE brief facts that are relevant for the determination of the issues herein and which are virtually undisputed are as follows : The petitioner was working as Manager of the Gandhinagar branch, Bangalore, of the Andhra Bank Limited and was served with a charge-sheet dated July 11, 1984 whereby it was also directed the he was placed under suspension pending enquiry into some of the charges. The allegations were that the petitioner had purchased cheques of a particular concern by the name of M/s. Srinidhi Enterprises which had a regular C. D. A/c. No. 1467 with the Bank and which cheques were subsequently dishonoured thus causing loss to the bank. The allegation was that the petitioner had colluded with the account holders in these transactions. According to the petitioner, he lodged his protest by letter dated July 16, 1984 and he also pointed out that he had taken action against the account holders by lodging a complaint with the Police. It is his allegation that at the instance of the 4th Respondent who is the General manager, and some other Officers, that charge was forcibly taken over from him by breaking open the desk of the petitioner and removing important correspondence documents etc. , in his absence. Certain correspondence ensued in the course of which the petitioner asked for various documents and the petitioner also complained to some of the top authorities such as the governor of the Reserve Bank, the Union Finance Minister, C. B.. , the Prime Minister at Delhi etc. , It is the allegation of the petitioner that the action was mala fide and motivated at the instance of certain officials and that there were no irregularities or illegalities as far as his conduct was concerned. On August 30, 1984, the petitioner submitted his reply to the charge-sheet and he pointed out that he had always acted in consonance with the interest of the institution and requested for holding of an enquiry in order to prove his bona fides. On August 31, 1984, the petitioner was served with a copy of the order dated August 29, 1984 informing him that his services are terminated with immediate effect as the management has lost confidence in him. On August 31, 1984, the petitioner was served with a copy of the order dated August 29, 1984 informing him that his services are terminated with immediate effect as the management has lost confidence in him. Strangely enough, on the same day he received another letter dated August 25, 1984 stating that he had been given time to reply to the charges till September 3, 1984. ( 3 ) ANOTHER circumstance which the petitioner relies on heavily is the fact that he was the Deputy general Secretary of the Andhra Bank Officers Union and that he had been very active in that organisation. He states that on August 1, 1984 the Association issued a Circular cautioning the various Managers and Officers of the branches against the designs of higher Officers who force their subordinates to carry out oral instructions in nonnal business transactions and how the subordinate Officers were thereafter made scape-goats when the irregular transactions came to be detected. The petitioner has challenged the order of termination on the ground that it could not have been passed under any circumstances other than after the holding of an enquiry and that the ground given for his termination namely loss of confidence is sham and unenforceable. The petitioner has also sought the quashing of Regulation 4, Explanation (ix) which reads as follows : "regulation 4 - Penalties x x x x. Explanation.- The following shall not amount to a penalty within the meaning of this Regulation namely, x x x x x. (ix) Termination of employment of a permanent Officer employee by giving three months' notice or on payment of three months' pay and allowances in lieu of notice". It is his submission that this particular Regulation is unconstitutional and is liable to be struck down. ( 4 ) THE Bank has seriously contested the matter and the 4th Respondent has also filed a separate reply denying the personal allegations against him. As far as the Bank is concerned, it is contended that the petitioner was a responsible Officer of the Bank and that he had acted totally in collusion with the client in opening the account in question on his own introduction and accommodating the party to the tune of Rs. 7. 85 lakhs within 3 days of the opening of the account. 7. 85 lakhs within 3 days of the opening of the account. The petitioner is alleged to have, without obtaining prior sanction or permission of the superior authorities, issued guarantees for large amounts and accepted clean bills and further, he purchased cheques to the extent of Rs. 16 lakhs which were returned. It is alleged that apart from these irregularities running into lakhs of rupees, that the petitioner had executed guarantees to the extent of more than Rs. 25 lakhs in favour of Karnataka Silk Board without bringing the same into the books of the Bank and that he had tried to bush up the matter so that the same did not come to the notice of the authorities. It is submitted on behalf of the Bank that these facts are eloquent and that there was more than adequate ground for the Bank to have proceeded against the petitioner in which case there is little doubt about the fact that a dismissal order would have followed. It is contended that having regard to the petitioner's misconduct that the Bank had completely lost confidence in him which was why his services came to be terminated. The respondents learned Advocate very vehemently submitted that the Bank had taken the lesser of the two courses of action open to it and that in these circumstances, they had acted not only correctly but with a degree of kindness. Admittedly, no enquiry was held in this case. The short point that falls for determination therefore is as to whether the Bank was obliged to hold an enquiry in this matter. Whereas, it is vehemently contended by the respondents learned Advocate that the option or the discretion of whether to institute disciplinary proceedings or not vests entirely with the management, the learned Advocate has submitted further that it is only in those of the cases where the management is desirous of punishing an employee that disciplinary proceedings are obligatory and that if the management is of the view that such punishment can be waived, then such a course of action is not compulsory. On the other hand, the petitioner's learned Advocate has very strongly attracted the line of argument because he submits that in the ultimate analysis the petitioner has been deprived of his job and that is absolutely on par with the imposition of a major penalty. On the other hand, the petitioner's learned Advocate has very strongly attracted the line of argument because he submits that in the ultimate analysis the petitioner has been deprived of his job and that is absolutely on par with the imposition of a major penalty. He submits that this is not a case where the disciplinary action was waived and no adverse effects resulted to the petitioner. In that event perhaps, the learned advocate submits the management could have contended that the holding or otherwise of disciplinary proceedings was within its discretion. Learned Advocate in this case heavily relies on the fact that it was the petitioner's defence right from the beginning that certain higher officers of the Bank were involved in these transactions and that he had acted under their directions and the further allegation is that had the enquiry been held that all these unpleasant facts would have come out. It is therefore submitted that the non-holding of the enquiry was a cover up action despite which the petitioner has wrongly been victimised. ( 5 ) PETITIONER's learned Advocate has relied on a decision of the Supreme Court in the case of anoop Jaiswal v. Government of India and another, (1984-I-LLJ-337) where an employee was discharged and the Court set aside the order on the ground that it was tantamount to an order of dismissal for misconduct. The Court observed that it was necessary to go behind the form and ascertain the true character of the order and had occasion to quash it. The learned Advocate has also drawn my attention to another decision of the Supreme Court in the case of Delhi Transport corporation v. D. T. C. Mazdoor Congress and Others, (1991-I-LLJ-395) whereby, the Court had occasion to strike down Regulation 9 (b) which empowers the Corporation to remove an employee from service without assigning any reasons and the Court observed that the Regulation was arbitrary, unfair, unjust, unreasonable and opposed to public policy. The judgment also specifies that in the case of a permanent employee termination of service without holding an enquiry is ipso facto bad in law. The judgment also specifies that in the case of a permanent employee termination of service without holding an enquiry is ipso facto bad in law. The learned Advocate has also placed reliance on one more decision of the Supreme Court in the case of The Regional Manager and Another v. Pawan kumar Dubey, (1976-II-LLJ-266) wherein the Court had occasion to quash an order of reversion in the case of a Government servant and the Court had occasion to observe that once misconduct is alleged, it would not be permissible to stigmatise the Government servant as not being fit to work in a particular post. The sum total of the submissions is to the effect that the termination order having regard to its abruptness and having regard to the fact that it was preceded by a charge-sheet can only be categorised as an order of dismissal and that it is virtually non est insofar as it was not preceded by an enquiry and an adverse finding. It was therefore submitted that the order is liable to be quashed and the petitioner is entitled to a direction that he be reinstated in service with all consequential benefits. ( 6 ) AS indicated earlier, the main plank of defence in this petition stems from the fact that the bank contends that as a financial institution it can only retain an Officer in service provided he is absolutely trustworthy and one in whom confidence can be reposed. The acts of the petitioner, according to the respondents, were sufficient to shatter the confidence that the employer had in him and it was therefore decided to terminate his services after giving him three months' notice or salary in lieu thereof. The Bank seeks to take shelter behind Regulation 4 which prescribes that this shall not amount to a penalty. As far as Regulation 4 is concerned, the petitioner has challenged its i validity and I do not need to labour on this point because the Supreme Court had occasion to deal with an identical Regulation in the case of West Bengal State Electricity Board and Others v. Desh Bandhu Ghosh and Others, (1985-I-LLJ-373) wherein, the Supreme Court had occasion to strike down such a Regulation as being arbitrary and unconstitutional. In the light of that decision, the inipugned Regulation 4 is liable to be struck down. In the light of that decision, the inipugned Regulation 4 is liable to be struck down. I need to add here, that it is wholly impermissible for an employer to frame Regulations of this type which go against the grain of the law and all accepted cannons of jurisprudence. ( 7 ) RESPONDENT's learned Advocate did try to press forward a novel argument namely that where the instances of misconduct directly point to an order of dismissal being passed and where an employer has, having regard to the age and background of the employee decided to send him away without damaging his future career prospects, that a Court should not interfere with such an order because the same has been passed in the interest of the employee himself. The fallacy in this argument is two-fold, the first being that it is impermissible to assume that an enquiry will result in an adverse order to an employee. One cannot pre-judge such a proceeding particularly where an employee has pleaded a valid defence. In this case, the petitioner had contended that one of the top Officers of the Bank at the instance of his colleague from the Canara Bank had directed him to accept the cheques and to accord the facilities and that in order to destroy the evidence to this effect, the petitioner's desk was forcibly opened and all such material which would support this position was taken away. In this background therefore, one can never jump to the conclusion that the acts alleged against the petitioner would establish misconduct or that a punishment could be justified. Secondly, as regards the aspect of charity that is alleged to have been shown to the petitioner, I need to very clearly record that it is inconceivable on the facts of this case where the Bank contends that heavy loss had occurred to it, and where there is nothing to indicate that the petitioner had made up this deficit, that the Bank would still desire to be kind to him. On the other hand, there is good reason to uphold the submission of the petitioner's learned Advocate that this was a cover up action to protect some higher ups who would otherwise have been exposed in the enquiry and that therefore, the Bank desired not to proceed with such an enquiry at all. On the other hand, there is good reason to uphold the submission of the petitioner's learned Advocate that this was a cover up action to protect some higher ups who would otherwise have been exposed in the enquiry and that therefore, the Bank desired not to proceed with such an enquiry at all. ( 8 ) THERE is another aspect of the matter which is paramount not only (sic) from the aspect of service jurisprudence but also form the angle of public interest. A disciplinary proceeding is necessary from the point of view of maintaining standards of honesty and integrity as also efficiency in public affairs and it is therefore equally imperative that where instances of gross misconduct surface, that an enquiry be held and if the misconduct is established that an appropriate punishment he awarded. It is not an aspect of retribution so much as the need to maintain standards of purity in public life that necessitates punishment in such instances. Conversely, it is equally important that if the charges are unsubstantiated that the employee be given a chance to redeem his reputation and safeguard his career interests when the facts are fresh in the public line. Therefore, the holding of an enquiry is of equal necessity vis-a-vis the interest of the employee as it is to safeguard the employer and to my mind therefore, in cases where serious misconduct is alleged the holding of an enquiry can never be dispensed with. If that is done, there can be no two opinions about the fact that it is for oblique purposes which are not beyond suspicion and the action will therefore have to be struck down. ( 9 ) ON the facts of the present case, the charge-sheet having been issued, the holding of an enquiry was obligatory. If for any reason the management was of the view that subsequent investigation or reconsideration of the case did not justify the charge-sheet, the same ought to have been unconditionally withdrawn. In the background of that charge-sheet, the passing of a termination order smacks of mala fides and is liable to be struck down. I have already held that regulation 4 on the basis of which this order was passed cannot pass the test of judicial scrutiny and consequently, the termination order dated August 29, 1984 will also have to be quashed. I have already held that regulation 4 on the basis of which this order was passed cannot pass the test of judicial scrutiny and consequently, the termination order dated August 29, 1984 will also have to be quashed. Having regard to the circumstances in which this order was passed and the abruptness with which it was given effect to, I have no hesitation in holding that it was effectively an order of dismissal which could not have been passed without following the procedure prescribed by law. ( 10 ) HAVING regard to the aforesaid conclusions, the petitioner is entitled to succeed and the respondents would normally have been directed to reinstate the petitioner in service. There are certain additional aspects which I need to consider in this regard insofar as the respondents allege that the petitioner has not only been gainfully employed but that he is the Managing director of a company by the name of M/s. Star Poly Glass Private Limited and that he has been employed all through. The petitioner has admitted that his family had taken over this concern which according to him was virtually a sick unit and he disputes the fact that he has been making any money through this business. The fact remains that the petitioner is gainfully employed and in this background, though normally he would have been entitled to an order of reinstatement, that does not appear to be practicable. The additional ground on which I am not inclined to direct reinstatement is because admittedly the Bank did not hold an enquiry against the petitioner but this is a case on documents and if the Bank desires to hold such an enquiry, it could still do so at this point of time and it may not be in the petitioner's best interest if he is required to face such a proceeding after reinstatement. Respondent's learned Advocate further submitted that having regard to the fact that the Bank is a financial institution and even if there have been procedural lapses, that it would be extremely difficult for the respondents to repose faith in him and to entrust him with duties of high responsibility. On the special facts of this case therefore, it would be undesirable to direct that the petitioner be reinstated in service. On the special facts of this case therefore, it would be undesirable to direct that the petitioner be reinstated in service. ( 11 ) SUPPLEMENTING the aforesaid submissions, the respondents' learned Advocate contended that the payment of back wages is not obligatory in every case and it is well setded law that if it is demonstrated that the employee was gainfully employed and that he was probably earning even more than what he has lost, that a Court ought not to award back wages. It is true that the respondents have contended that in the year 1988-89, the petitioner has returned an income of rs. 30,000/- but the petitioner has denied this. The learned Advocate made a plea that he should be reinstated with all consequential benefits which includes back wages and the promotions that he would normally have got in the course of the last 11 years. To my mind, the Court will have to take into consideration the fact that reinstatement is not being ordered and to suitably compensate the petitioner for this. Similarly, the Court will have to take note of the earnings of the petitioner which will have to be reasonably assessed for purposes of deciding as to whether the full back wages for the entire period has to be awarded. Another factor that respondents' learned Advocate has pointed out is that the petitioner cannot dispute that he was a party to the transactions and even if it is his contention that he acted under instructions from some other officer that his personal liability can never be diluted and that while assessing the over all complexion of the case, the Court will have to draw appropriate inferences from these facts. I have taken stock of all these factors and to my mind having regard to all that is on record, a fair order would be that the respondent-Bank be directed to pay to the petitioner within an outer limit of three months from today the equivalent of seven years salary and allowances calculated on the basis of the last drawn salary of the petitioner. The only two additional factors which shall be taken into account are that the Bank shall do the computation as though the petitioner had continued in service for 7 years after August 29, 1984 and therefore, any normal promotions which would result in revision of salary and allowances or any benefits by way of salary revision during this period will have to be given to the petitioner. ( 12 ) THE petition accordingly partially succeeds. The order of termination dated August 29, 1984 is quashed and set aside and it is directed that the back wages to the extent as indicated in this judgment be paid to the petitioner within the period prescribed. In the circumstances of this case, there shall be no order as to costs. Petition to stand disposed of.