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2000 DIGILAW 55 (AP)

Bhaskara Rao v. V. VS State Bank of India

2000-02-01

R.RAMANUJAM

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R. RAMANUJAM, J. ( 1 ) THE petitioner, who is working as a middle Management Officer Grade-II, in State bank of India (for short the Bank ), filed this writ Petition praying for issue of a Writ of certiorari calling for the records relating to the appellate order issued by the Local Board, 4th respondent herein, communicated by the Chief general Manager of the Bank, 1 st respondent herein, through his letter (2-4) (DPC) No. 378 dated February 15, 1989 and the punishment order issued by the General Manager of the bank, 3rd respondent herein, in his letter (2-4) (DPC) No. 1038 dated May 10,1988, and for quashing the same. ( 2 ) THE petitioner was working at ellamanchili Branch of the Bank, as its manager during the period July 28, 1979 to november 23, 1981. On October 18, 1986 the chief General Manager and the Disciplinary authority issued a Charge Memo to the petitioner listing out certain serious irregularities/lapses alleged to have been committed by him in sanction and conduct of advances and called upon him to submit his written statement of defence, if any, within seven days of the receipt of the said Charge Memo. ( 3 ) BY his letter dated December 27, 1986 the petitioner replied to the said Charge Memo stating that in the Charge Memo as well as in the statement of allegations the basic procedural safeguards were disregarded and requested the disciplinary authority to specify the basic procedural safeguards to enable him to submit his statement of defence. The disciplinary authority, however, treated the said letter as a written statement of defence and informed the petitioner, by letter dated January 7, 1987, that his explanation was not satisfactory and, therefore, an enquiry was ordered into the charges levelled against him. The petitioner was further informed that the enquiry would be held at the time and place to be decided by the Enquiry Officer, whose name was mentioned therein. The petitioner was also informed that the enquiry would be held in accordance with the procedure laid down under rule 50 (2) of the State Bank of India (Supervising Staff) Service Rules (for short the Rules ). The petitioner was also informed that the enquiry would be held in accordance with the procedure laid down under rule 50 (2) of the State Bank of India (Supervising Staff) Service Rules (for short the Rules ). ( 4 ) ON January 27, 1987 the petitioner again wrote to the disciplinary authority stating that his letter dated December 27, 1986 requesting clarifications was wrongly treated as his written statement of defence and pointing out that the required clarification was not given and that amounts to denial of reasonable opportunity. The petitioner once again requested to indicate the procedural safeguards. In response to the said letter, the disciplinary authority wrote to the Enquiry officer on February 14, 1987 enclosing the petitioner s letter dated January 27, 1987, directing him to examine the contents brought out in the petitioner s representation as and when the enquiry commences. A copy of that letter was also issued to the petitioner stating that the charge-sheet and the statement of allegations clearly indicate the basic procedural aspects alleged to have been violated by him and "no further clarifications were considered necessary", and advised him to attend the enquiry. ( 5 ) THEREAFTER the petitioner by his letter dated February 27, 1987 submitted an elaborate statement of defence to the disciplinary authority. It appears that thereafter enquiry was conducted by the Enquiry Officer. During the course of that enquiry the petitioner requested the Enquiry Officer by his letter dated May 28, 1987, to direct the respondent-Bank authorities to produce certain documents, a list of which was enclosed thereto. He also enclosed a list of witnesses to be examined by him. Instead of taking a decision on the aforesaid request of the petitioner, the Enquiry Officer appears to have addressed the disciplinary authority, by his letter dated June 11,1987, recording his remarks on the request of the petitioner. A copy of that letter was also marked to the petitioner. It appears that, thereafter, the Enquiry Officer conducted enquiry on several dates. ( 6 ) AFTER conclusion of the enquiry, the petitioner by his letter dated January 19, 1988 submitted an elaborate defence brief, explaining his case to the Enquiry Officer. Thereafter, the Enquiry Officer has submitted his report to the disciplinary authority, 1st respondent herein, holding the petitioner guilty of the charges levelled against him. ( 6 ) AFTER conclusion of the enquiry, the petitioner by his letter dated January 19, 1988 submitted an elaborate defence brief, explaining his case to the Enquiry Officer. Thereafter, the Enquiry Officer has submitted his report to the disciplinary authority, 1st respondent herein, holding the petitioner guilty of the charges levelled against him. Without issuing any further show-cause notice or opportunity to the petitioner, the 3rd respondent, by his order dated May 10, 1988 imposed upon the petitioner the punishment of censure . The petitioner was further informed that he could file an appeal against the punishment order within the prescribed period to the appellate authority. Thereupon the petitioner submitted an appeal on June 24,1988 to the 4th respondent-Appellate Authority. In that appeal the petitioner has raised several grounds, both on the factual and the legal issues involved, explaining in detail as to why the punishment of censure imposed on him is unjustified. ( 7 ) THE appellate authority on a consideration of the petitioner s appeal has tentatively decided to enhance the penalty to "reduction in time-scale by one stage" and directed that a show- cause notice be served on the petitioner in terms of Rule 51 (2) (ii) of the rules. The said decision of the appellate authority was communicated to the petitioner by the Disciplinary Authority 1st respondent, vide his letter dated November 4, 1988. By the said letter, the petitioner was required to show-cause, within seven days from the date of receipt of the said letter, as to why the penalty of reduction in time-scale by one stage should not be imposed on him. A copy of the resolution passed by the appellate authority in their meeting dated October 17, 1988 was also enclosed to the said letter. ( 8 ) THE petitioner then submitted his reply/explanation contending, inter alia, that on the facts and circumstances of the case the question of the appellate authority considering the aspect whether the penalty is excess or inadequate does not arise and the appellate authority was seeking to deal with matters that do not fall within the scope of the appeal submitted by him. To put it simply, what the petitioner has contended is that the appellate authority has no power to propose enhancement of the punishment in the appeal submitted by him. To put it simply, what the petitioner has contended is that the appellate authority has no power to propose enhancement of the punishment in the appeal submitted by him. Thereafter the appellate authority in their meeting held on February 3, 1989 resolved to uphold their earlier decision in enhancing the punishment to reduction in the time scale by one- stage. That decision was again communicated to the petitioner by the 1st respondent by his letter dated February 15,1989. ( 9 ) THE petitioner filed the present Writ petition challenging the aforesaid decision of the appellate authority - 4th respondent, communicated in the letter dated February 15, 1989 issued by the disciplinary authority-1st respondent and the punishment of censure issued by the 3rd respondent by his letter dated May 10, 1988. ( 10 ) APPEARING for the petitioner, the learned Senior Counsel Sri. Y. Suryanarayana strenuously contended that: (I) the order passed by the appellate authority is not a speaking order and does not deal with any of the grounds raised by the petitioner in his appeal dated June 24, 1988 and his explanation dated November 10,1988, and, therefore, it is liable to be set aside; (ii) the state Bank of India (Supervising Staff) service Rules were not made in exercise of the power conferred under Section 50 (1) of the State Bank of India Ac,1955 or under any other statutory power; hence the action taken thereunder is not valid; (iii) Service rule 32 (4) of the Rules is inconsistent with the declaration of fidelity in Schedule-II of the State Bank of India Act; therefore, the disciplinary action for its alleged violation is illegal and void; (iv) Service Rule 32 (4) of the Rules does not specify the misconduct alleged to have been committed by the petitioner; therefore, there cannot be any enquiry; and (v) The disciplinary authority has wrongly delegated the disciplinary powers to the Enquiry Officer, who in turn delegated the same to the Presenting Officer, that vitiates the whole enquiry and the impugned punishment passed on such enquiry is unsustainable. ( 11 ) SRI. K. Sreenivasa Murthy, learned senior Counsel appearing for the respondent-Bank strongly disputed each one of the aforesaid contentions. ( 12 ) IN my considered view, Sri. Y. Suryanarayana, learned Senior Counsel appearing for the petitioner, is right in his first contention. ( 11 ) SRI. K. Sreenivasa Murthy, learned senior Counsel appearing for the respondent-Bank strongly disputed each one of the aforesaid contentions. ( 12 ) IN my considered view, Sri. Y. Suryanarayana, learned Senior Counsel appearing for the petitioner, is right in his first contention. Before I embark upon a detailed examination of his contention, I feel it appropriate to refer, briefly, to the settled legal position on this aspect. ( 13 ) IT is now well settled that the disciplinary proceedings are quasi-judicial proceedings and there is no reason to distinguish them from other types of quasi-judicial proceedings in the matter of giving reasons. It is also fairly well settled now that an administrative authority exercising quasi-judicial powers must give reasons for its order. See the decisions of the Supreme Court in C. I. T. v. Walchand and Co. AIR 1967 SC 1435 and Siemens Engg. and Mfg. Co. v. Union of India AIR 1976 SC 1785 . ( 14 ) IN S. N. Mukherjee v. Union of India, air 1990 SC 1984 , a Constitutional Bench of the Supreme Court on a consideration of the entire case law on this aspect held that:"keeping in view the expanding horizon of the principles of natural justice, we are of the opinion, that the requirement to record reason can be regarded as one of, the principles of natural justice which govern exercise of power by administrative authorities. "the Constitution Bench also held that:". . . . . . . . . . . . . . except in cases where requirement is dispensed with expressly or by necessary implication, the administrative authority exercising judicial or quasi-judicial functions is required to record the reasons for its decision" (Para 39 of the report ). ( 15 ) THE only exception recognized by the Supreme Court to this general rule is where the authority merely confirms the reasoned order made by the lower authority. This authoritative pronouncement has thus set at rest the much debated question that whether it is necessary for the appellate authority to record reasons when it is merely confirming the order of the original authority. This authoritative pronouncement has thus set at rest the much debated question that whether it is necessary for the appellate authority to record reasons when it is merely confirming the order of the original authority. In paragraph 35 of the said report, the Constitutional Bench has also clarified the extent and nature of the reasons that are required to be recorded by the quasi-judicial authority by holding that:"what is necessary is that the reasons (are) must be clear and explicit so as to indicate that the authority has given due consideration to the points in controversy". ( 16 ) IN the light of the aforementioned settled legal position, I now propose to deal with the first contention of the learned Counsel for the petitioner that the impugned appellate order is not a speaking order and is, therefore, liable to be set aside. ( 17 ) IT is appropriate at this juncture to extract relevant portion of Rule 51 (2) of the rules, which according to the respondent-Bank is the Rule that authorizes the appellate authority to enhance the punishment imposed by the disciplinary authority. "rule 51 (2 ). . . . . . 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". There are as many as three provisos to the aforesaid sub-rule (2 ). The second proviso, which is relevant to the issue involved is as under :-" (II) If the Appellate Authority decides to enhance the punishment but an enquiry has already been held as provided in sub-rule (2) of Rule 50, the Appellate Authority shall give a show-cause notice to the employee as to why the enhanced penalty should not be imposed upon him and shall pass final order after taking into account the representation, if any, submitted by the employee". (emphasis supplied ). A close reading of the aforesaid proviso makes it abundantly clear that the appellate authority has to pass final order enhancing punishment only after taking into account the representation, if any, submitted by the employee. (emphasis supplied ). A close reading of the aforesaid proviso makes it abundantly clear that the appellate authority has to pass final order enhancing punishment only after taking into account the representation, if any, submitted by the employee. ( 18 ) IN my considered view, the requirement of giving reasons is thus clearly implied in the aforesaid provision. In any event, it is beyond any shadow of doubt that this proviso has not expressly excluded the requirement of giving reasons. Therefore, the appellate Authority, who enhanced the punishment, differing with the Disciplinary authority, is under a legal obligation to give reasons in support of their decision after taking into account the representation submitted by the petitioner. ( 19 ) THE question now arises for consideration is - whether in this case the appellate authority had discharged that obligation. ( 20 ) IT is now appropriate to extract the relevant portion of the impugned appellate order, which is as under:- "the Local Board and the Appellate authority have gone through in detail the reply of the appellant Shri V. V. Bhaskara rao. The Local Board and the Appellate authority having gone through in detail in the allegation against the appellant and having gone through the appeal of the appellant to the local Board and the Appellate Authority have found that the Disciplinary Authority has agreed with the findings of the Inquiring authority in respect of the allegation (a) for the reasons detailed in the proceedings (Annexure-VII) and imposed on the appellant a penalty of censure in terms of Rule No. 49 (a) of the SBI (Supervising Staff) Service rules (Annexure-VIII ). The Local Board and the Appellate authority has clearly and in detail has given speaking orders and the appellant should have gone through No. 2 para of the decision which is specific and what more speaking order the appellant requires is not understandable. The appellant has again in his reply questions the scope of the Board with relation to his appeal and has stated that it is unfortunate that the Board though fit to deal with the matters that do not fall within the scope of the appeal submitted. It is unfortunate that the appellant in his appeal has stated that (page 18-9. 3 ). It is unfortunate that the appellant in his appeal has stated that (page 18-9. 3 ). It is suffice from the foregoing that the claim by the Disciplinary Authority in paragraph 06 of his proceedings is not supported by the facts of the case and on the same page i. e. ,18-9. 4 and 9. 5 questions the authority of the disciplinary Authority and states that the disciplinary Authority s decision amounts to discrimination violating constitutional protection over principles of natural justice. The Local Board and the Appellate Authority do not see any reason to reconsider or alter their decision given on October 17,1988 and since we are not satisfied with the reply given to show-cause notice. Hence, the Local Board and the Appellate authority uphold the earlier decision in enhancing the punishmet of reduction in time-scale by one stage . ( 21 ) A plain reading of the aforesaid order clearly shows that except stating that the Appellate Authority had gone through the reply given by the petitioner, the Appellate authority have not at all considered the various grounds raised by the petitioner in his appeal dated June 24,1988. Such a consideration is not to be found even in the show-cause notice dated November 4,1988. The aforesaid order also does not show that the Appellate Authority have considered the contentions raised by the petitioner in his reply/explanation dated November 10,1988. The appellate order merely states that the local Board and the Appellate Authority do not see any reason to consider or alter the decision given on October 17,1988 and they are not satisfied with the reply given by the petitioner to the show-cause notice. It is thus clear that the Appellate Authority did not really take into account the various grounds raised by the petitioner both on the merits of the case and on legal aspects in his detailed appeal dated June 24,1988 and his subsequent explanation dated November 10,1988. Thus, the appellate authority have clearly failed to record reasons in support of their decision/order. The appellate order is, therefore, liable to be set aside on this ground alone. ( 22 ) SINCE I am inclined to set aside the appellate order on the ground that it is not a reasoned order, I do not propose to deal with the other contentions raised on behalf of the petitioner. The appellate order is, therefore, liable to be set aside on this ground alone. ( 22 ) SINCE I am inclined to set aside the appellate order on the ground that it is not a reasoned order, I do not propose to deal with the other contentions raised on behalf of the petitioner. ( 23 ) FOR the aforementioned reasons, the writ Petition is allowed. A Writ of Certiorari shall issue quashing the order of the Appellate authority, 4th respondent herein, communicated by the letter of the 1st respondent-Disciplinary Authority dated february 15,1989 imposing the punishment of "reduction in time- scale by one stage". It is made clear that this will not automatically revive the order of the 3rd respondent imposing the punishment of "censure". However, this order will not preclude the 4th respondent-Appellate Authority, if they so choose, from considering the appeal filed by the petitioner afresh and pass appropriate orders thereon. No costs.