Pradyuman Prasad v. Bihar State Financial Corporation
1996-02-28
ASOK KUMAR GANGULY
body1996
DigiLaw.ai
Judgment A. K. Ganguly, J. 1. The subject matter of challenge in this writ petition is an order of dismissal dated 17th October, 1994 passed in a departmental enquiry on the basis of certain charges against the petitioner. 2. Two charge-sheets, one dated 29th March, 1993 and the other dated 9th December, 1993 were issued against the petitioner by the Managing Director of Bihar State Financial Corporation (hereinafter referred to as the said corporation ). At the time when the charge-sheets were issued to the petitioner, he was working as Assistant general Manager of the said Corporation. The details of charge-sheets need not be reproduced here but, suffice it to say that charges alleged against the petitioner are serious in nature alleging financial irregularities and impropriety committed by the petitioner. 3. In the enquiry which followed, the petitioner participated. Ultimately, the report of the Enquiring Officer was filed in which the Enquiring Officer held that most of the charges against the petitioner were proved. The petitioners comments and the enquiry report were called for and thereafter the order of dismissal was passed against him by the managing Director. The said order is dated 17-10-1994. The petitioner was to superannuate on 31st October, 1994. 4. The petitioner, however, made a complaint about non-supply of certain documents in order to enable him to effectively defend himself in the disciplinary proceeding. Letters were exchanged between the petitioner and the authorities of the said Corporation over the same. From a perusal of those documents, this Court is of the view that principle of natural justice has been substantially complied with in the matter of holding of departmental proceeding. 5. It is right to say that the principles of natural justice are not inscriptions on tablets of stone and there cannot be any rigidity in their application. In the instant case, the petitioner is a literate person and a high-ranking officer and the charges in the disciplinary proceeding against him are mostly about his functioning as an officer of the said Corporation. Judged in this context the principles of natural justice have been sufficiently complied with by the opportunity afforded to him in the matter of defending himself against the said charges. In fact, no specific grievances on this score was made out in course of argument and the general murmur of denial of opportunity is more feigned than real. 6.
Judged in this context the principles of natural justice have been sufficiently complied with by the opportunity afforded to him in the matter of defending himself against the said charges. In fact, no specific grievances on this score was made out in course of argument and the general murmur of denial of opportunity is more feigned than real. 6. The main point urged before this Court is that the Managing Director of the said Corporation does not have the power to impose on the petitioner the penalty of dismissal inasmuch as the Managing Director is not the appointing authority of the petitioner and secondly the authority of the Managing Director to pass the order of dismissal was specifically delegated by the resolution dated 8th May, 1995 and the impugned order of dismissal having been passed on 17th October, 1994 it lacks authority and competence. 7. This Court on consideration of the facts and circumstances of the case and the provision of Bihar State Financial Corporation Act, 1951 (hereinafter referred to as the said Act) as also the regulation framed, namely, Bihar State financial Corporation (Staff) Regulation, 1965 (hereinafter referred to as the said regulation) is not convinced with the correctness of the said submission. 8. The said regulations have admittedly been framed under Sec.23 read with Sec.48 of the said Act. Section 23 of the said Act is set out herein-below: "23. Officers and other employees of the Financial Corporation-The Financial corporation may appoint such officers, advisers and employees as it considers necessary for the efficient performance of its functions, and determine, by regulations, the conditions of appointment and service and the remuneration payable to him : provided that the State Government may in consultation with and after obtaining the advice of the Development Bank specify the class or categories of posts in respect of which appointments may be made by the Board on such remuneration and other conditions of service as the board may determine and no regulation made under this Act shall apply to such posts in respect of matters so determined by the Board. " 9. From a perusal of Sec.23 of the said Act it is clear that it is divided into two parts.
" 9. From a perusal of Sec.23 of the said Act it is clear that it is divided into two parts. The first part relates to the power of the said Corporation to appoint such officers, advisors and employees as it considers necessary for the efficient performance of its functions and it also empowers the said Corporation to determine by regulations, their conditions of appointment and service and the remuneration payable to them. The proviso incorporated an exception to the first part and virtually enacts another provision whereby the state Government may in consultation with and after obtaining the advice of the Development Bank specify a class or categories of posts in respect of which appointments may be made by the board on such remuneration and other conditions of a service as the Board may determine and no regulation made under this Act shall apply to such posts in respect of matters so determined by the Board. 10. Therefore, the regulation framed under first part of Sec.23 of the said Act applies to one category of officers and this regulation will not apply to the category of posts which are contemplated under proviso to Section 23 of the said Act. 11. It is common ground that the service of the petitioner is governed by the said regulation. Therefore, the petitioner does not and cannot claim he is an officer whose appointment is contemplated under the second part of Sec.23 of the said Act. Therefore, his case that his appointing authority is board is contradicted by the terms of section 23 of the said Act. The aforesaid scheme of Sec.23 of the said Act can be illustrated by the fact that the regulation framed under Sec.23 of the said act do not apply to the Managing director. It is clear from clause 2 (b) of the said regulation. 12. Apart from that under clause 9 of the said regulation it is clear that all appointments to the service of the said corporation shall be made by the managing Director, subject to such general or special instructions as may be issued from time to time by the Board of directors, provided that no person shall be appointed as an officer unless his appointment is approved by the Board.
Therefore, the power of appointment to the service of the said Corporation vests in the Managing Director but such power is obviously subject to approval of the Board. The Board thus may retain some control over exercise of power by the Managing Director. This is in consonance with Sec.43-B (2) of the act. The said sub-section is set out hereinbelow: "every action taken by the Managing director and any other officer of the Financial Corporation shall, as soon as may be after it is taken by them be reported to the board. " 13. Along with the power of appointment the power of passing the penalty also vests to the Managing director. The same is clear from a perusal of Sec.39 (ii) of the said regulation. In the instant case, by passing the impugned order of dismissal, the managing Director of the said Corporation has acted in terms of the said regulation. In this context, delegation of power on which reliance has been placed by the learned Counsel for the petitioner and which is annexed as annexure-7 to the supplementary affidavit does not and cannot establish the contention raised by the petitioner that without the aforesaid delegation of power the Managing Director is powerless to pass the impugned order of dismissal. 14. In fact the power of the Managing Director to pass the order of dismissal against the petitioner is recognised under Sec.39 (ii) of the said regulation. These regulations are statutory and legislative in character inasmuch as such regulations can have retrospective effect as provided under section 48 (3) of the said Act. Section 48-A contains a clause for laying down such regulations before the legislature. Therefore, the executive order for delegation of power passed by the board cannot be read in a manner which runs contrary to the express language of the said regulation. 15. Section 17 (1) (b) of the said act empowers the Managing Director to perform such duties as the Board may, by regulations, entrust or delegate to him. The power of the Managing director under Regulation 39 (ii) of the said regulations to pass the dismissal order against the petitioner is by way of entrustment of power to him under the regulation as warranted under Section 17 (1) (b)of the said Act. This power having been validly entrusted under the said regulation exists in the Managing Director independently of any allegation.
This power having been validly entrusted under the said regulation exists in the Managing Director independently of any allegation. At the time of passing the dismissal order on 17th october, 1994 the said delegation was not in existence and even then the order of dismissal passed by the Managing director does not suffer from any infirmity in view of the provisions of regulation 39 (ii) of the said regulation read with Sec.17 (1) (b) of the said Act. 16. Judging it from another angle also, it appears that it is well settled that when power is conferred on a particular officer or (he authority under statutory regulations framed under an Act, a mere administrative order does not and cannot run down the power which already vests in the officer on the strength of statutory provision. Therefore, this court is of the view that impugned order of dismissal passed by the Managing Director is perfectly valid and legal even without such delegation. 17. Learned Counsel for the petitioner has also relied upon certain documents which have been disclosed in the rejoinder affidavit at annexure-10 in order to show that the appointment of the petitioner has been done in terms of boards resolution dated 30th November, 1991. Therefore, the petitioners contention is that the appointing authority of the petitioner is Board. But the said order shows that the petitioner has been appointed by the Managing director in terms of resolution of the board. This shows that such appointment has been made to terms of regulation 9 of the said regulation. It is equally true about the petitioners appointment to the post of Assistant General manager. The appointment and promotion orders issued by the Managing director are thus approved by the board in terms of regulation 9 of the said Regulation. All these facts show that the Managing Director is the appointing authority of the petitioner and, therefore, there is no illegality in his passing the dismissal order of the petitioner. 18. The last point argued on behalf of the petitioner in this case is that assuming that the Managing Director has the power to impose the order of punishment, against such an order of punishment the petitioner has right to appeal given to him under regulation 40 of the said regulation.
18. The last point argued on behalf of the petitioner in this case is that assuming that the Managing Director has the power to impose the order of punishment, against such an order of punishment the petitioner has right to appeal given to him under regulation 40 of the said regulation. Under Sec.41 of the said Regulation it has been provided that an appeal against an order passed by the Managing Director shall lie to the Board. 19. In this case it is the consistent stand of the said Corporation that the order of dismissal has been passed by the Managing Director and the Managing Director is competent to pass the said order. In Paragraph 9, of the counter-affidavit the said stand is firmly taken by the said Corporation. But in paragraph No.9 and also in paragraphs 14 and 15 of the said counter-affidavit, it has been stated that the matter was placed in the meeting of the Board of directors on 26.10.94. In support of the aforesaid contention the proceedings of the said meeting dated 26.10.94 has been disclosed from which it appears that the Board, after considering the entire materials relating to the dismissal, approved the punishment imposed upon the petitioner by the Managing director. In the said resolution of the boards meeting dated 26.10.94 it has been stated that against such an order of punishment the petitioner may file an appeal under Sec.40 of the said regulation. 20. Referring to this resolution of the Boards meeting dated 26.10.94 and also repeated stand taken in the counter affidavit, learned Counsel for the petitioner submitted that if the Board, on perusal of the entire materials and facts, have approved the order of the managing Director imposing punishment upon him, an appeal to such authority will be totally an empty ritual. It will be an appeal from caesar to caesar. In other words it has been contended that the authorities have already formed an opinion in respect of the punishment imposed upon the petitioner. Therefore, the petitioners right of appeal given to him under regulations 40 and 41 of the said regulation in the facts of this case has become illusory.
It will be an appeal from caesar to caesar. In other words it has been contended that the authorities have already formed an opinion in respect of the punishment imposed upon the petitioner. Therefore, the petitioners right of appeal given to him under regulations 40 and 41 of the said regulation in the facts of this case has become illusory. In support of the said submission, learned Counsel for the petitioner relied on a decision in the case of Surjit Ghosh V/s. Chairman and managing Director, United Commercial bank and Others, reported in 1995 a. I. R. S. C. W 1080. 21. To the said judgment in paragraph 5 it has been made clear that when an appeal is provided to a higher authority against the order of disciplinary authority, the employee concerned is deprived of the remedy of appeal which is a substantive right given to him by Rules and Regulations if the higher appellate authority passes the order of penalty. In this case, the order of punishment might have been passed by the Managing Director but from the minutes of the Boards meeting dated 26.10.94 it appears that the Board has also passed a resolution dismissing the petitioner. It is clear from the following extracts from the Board Resolution: "yeh Nirnay Liya Gaya Ki Unhe sewa Se Barkhastagi Kar Diya Jay. " therefore, in fact, it amounts to imposition of punishment by the higher authority. 22. In the background of the facts, this Court is of the view that no purpose will be served by filing an appeal before the appellate authority. Learned Counsel for the respondents has also fairly stated that in the facts of said case an appeal by the petitioner will be meaningless. Therefore, in this context the following observations made in Surjit ghosh case (supra) are applicable. "an employee cannot be deprived of his substantive right. What is further, when there is a provision of appeal against the order of the disciplinary authority and when the appellate or the higher authority against whose order there is no appeal exercises the powers of the disciplinary authority in a given case, it results in discrimination against the employee concerned. This is particularly so when there are no guidelines in the rules/regulations as to when the higher authority or the appellate authority should exercise the powers of the disciplinary authority.
This is particularly so when there are no guidelines in the rules/regulations as to when the higher authority or the appellate authority should exercise the powers of the disciplinary authority. The higher or appellate authority may choose to exercise the power of the disciplinary authority in some cases while not doing so in other cases. In such cases, the right of the employee depends upon the choice of the higher/appellate authority which patently results in discrimination between an employee and employee. Surely, such a situation cannot favour of legality. Hence we are of the view that the contention advanced on behalf of the respondent-Bank that when an appellate authority chooses to exercise the power of disciplinary authority, it should be held that there is no right of appeal provided under the Regulations cannot be accepted the result, therefore, is that the present order of dismissal suffers from an inherent defect and has to be set aside. " Here also no indication is given why it was found necessary for the board to approve the order of punishment passed by the Managing Director under Regulation 39 (2) of the said regulation. In fact, there is no requirement under regulation 39 (2) of the said regulation for such approval. In the absence of such a requirement there cannot be any guideline for exercise of unwarranted power by the appellate authority. To say that even if such a power has been exercised by the appellate authority, it will while hearing the appeal will function independently as an appellate authority under clause 40 of the said Regulation is to contend for an unreality. In fact, the quasi-judicial function of an appellate authority in such matters as has been summed up by the Supreme Court in its decision in case of Ram Chandra V/s. Union of India, reported in 1986 (3) SCC 103 militates against such a contention. In the judgment of Ram Chandra (supra) it was emphasised that an appellate authority in order to observe fair play and natural justice must give reasons in support of its decision and, if necessary, will give an opportunity of hearing to the appellant. Here the appellate authority even without an appeal from delinquent servant and even when there is no statutory requirement, has of its own considered and affirmed and, in fact, reiterated the punishment imposed by the disciplinary authority.
Here the appellate authority even without an appeal from delinquent servant and even when there is no statutory requirement, has of its own considered and affirmed and, in fact, reiterated the punishment imposed by the disciplinary authority. In such a situation, to expect that the said authority will again act objectively and impartially as an appellate authority is an absurd and unreal expectation which no person of ordinary prudence and reasonably instructed in the law can entertain. Such an expectation is also fundamentally opposed to one cardinal principle to fair play and justice, namely, that justice must not only done but it must appear to be done as well. It goes without saying that all quasi-judicial authorities including the appellate authority in this case must adhere to this principle while exercising their functions. 23 For the reasons aforesaid, this court cannot uphold the order of punishment passed against the petitioner. The order of punishment, is therefore, set aside. Since the petitioner has retired from service with effect from 31.10.94 there is no question of reinstatement. It is however (sic) clear that retirement benefits of the petitioner, to which he is entitled to, will not in any way be affected by the reason of the order of dismissal which stands quashed. The salary of the petitioner from the date of dismissal till the date of retirement be also made available to him within a period of one month from the date of receipt/production of a copy of this judgment. 24. This writ-petition is, thus, allowed to the extent indicated above. No order as to costs. Petition Allowed.