Research › Search › Judgment

Calcutta High Court · body

2015 DIGILAW 147 (CAL)

Arup Basu Chowdhury v. UCO Bank

2015-02-20

SANJIB BANERJEE

body2015
Judgment Sanjib Banerjee, J. The legal question that has arisen herein is as to when a challenge to the conduct of any disciplinary proceedings ought to be entertained in the extraordinary jurisdiction under Article 226 of the Constitution. The petitioner is an employee of the first respondent, which is a nationalised bank. The substance of the charges levelled against him is that he had exceeded his authority in granting over-draft facilities or overdrawal in certain loan accounts that had either resulted in pecuniary loss to the bank or had the potential to do so. The petitioner is familiar with the court and his previous essay about a year back set the clock back by several years upon his obtaining an order by which the punishment awarded to him was set aside on the ground of breach of the principles of natural justice. The process of taking disciplinary action against the petitioner began by or about January, 2008. The voluminous papers appended to the petition reveal that a final order of April 13, 2010 was passed against the petitioner by the disciplinary authority, imposing a punishment of compulsory retirement from service. The appeal failed on January 20, 2011 whereupon the petitioner sought a review of the appellate order. On such review petition not being disposed of within reasonable time by the concerned executive director of the bank, the petitioner carried WP 31682(W) of 2013 to this court which was disposed of on October 7, 2013 with a direction on the concerned official to decide the review petition in accordance with law within four weeks of the receipt of a copy of the order. Upon the review failing, the petitioner challenged the order of punishment, as upheld in appeal and not interfered with in review, in WP no. 172 of 2014. Such petition was allowed on March 10, 2014 on the ground that the petitioner had been denied inspection of key documents in course of the inquiry proceedings and the complaint in such regard was disregarded by the disciplinary and the appellate authorities despite there being an apparent breach of the principles of natural justice by reason thereof. The bank was left free to pursue the charges against the petitioner on the basis of the charge-sheet already served. The bank was left free to pursue the charges against the petitioner on the basis of the charge-sheet already served. The petitioner has now come up against the report of the inquiry officer of January 15, 2015 on divers grounds, including that the charge-sheet referred to only three documents in support of the charges but 92 documents were used against the petitioner in course of the inquiry with several of such documents not being given inspection of. The other grounds pertain to the failure or the refusal by the bank and the inquiry officer to make available several documents sought by the petitioner and the perceived absence of reasons in the findings rendered by the inquiry officer in respect of the more grievous charges that have been found to have been established against the petitioner. When the petition was received on January 29, 2015, expeditious directions were issued for filing affidavits. The bank’s submission was also recorded in the relevant order that an order of punishment was passed against the petitioner on January 24, 2015 which was attempted to be served on the petitioner by post on January 27, 2015. The order noticed the bias alleged against the inquiry officer and other counts of serious irregularity and restrained the penalty order of January 24, 2015 being given effect to. The matter has been heard on affidavits. The bank contends that the petition should not have been entertained at all and it ought to be rejected without considering the merits. According to the bank, it is the accepted norm that an employee charged with misconduct may ordinarily not challenge the disciplinary proceedings before suffering any order of punishment. The bank says that unless any punishment is awarded against the charged employee, there is no prejudice and nothing that is actionable. The bank points out that the findings rendered by an inquiry officer is never final but is subject to the acceptance thereof by the disciplinary authority by assessing any ground that may be urged by the charged employee against the findings. The petitioner submits that if the procedure is seen to be so irregular that the next or higher domestic authority would have no choice but to find it to have been grossly irregular, the existence of any domestic remedy should not deter the court exercising jurisdiction under Article 226 of the Constitution from passing an appropriate order. The petitioner submits that if the procedure is seen to be so irregular that the next or higher domestic authority would have no choice but to find it to have been grossly irregular, the existence of any domestic remedy should not deter the court exercising jurisdiction under Article 226 of the Constitution from passing an appropriate order. The petitioner suggests that the court should not condemn a charged employee to further suffering or humiliation despite finding the procedure to be in breach of the principles of natural justice and the findings of the inquiry officer to be patently perverse. The petitioner refers to the circumstances in which the writ court declines to exercise the judicial self-restraint, particularly when an abject violation of the principles of natural justice is demonstrated. As to the rule that a petition challenging the disciplinary proceedings or any apprehended disciplinary action prior to an order of punishment should not generally be entertained, the bank refers to a judgment reported at (1976) 3 SCC 361 (Chanan Singh v. Registrar, Co-op. Societies, Punjab) which dealt with the revival of a disciplinary action against the appellant after the charges had earlier been dropped by an authority who was perceived to not have any jurisdiction in the matter. The objection raised by the employer before the Supreme Court was that the petition before the High Court was premature “since no action has been taken finally against the appellant, the disciplinary proceedings are still pending and the explanation of the appellant is under consideration.” In rejecting the challenge as premature, the court observed that since no punitive action had been taken against the appellant, it was “difficult to state, apart from speculation, what the outcome of the proceedings will be.” In the next decision cited by the bank, reported at (1996) 1 SCC 327 (Executive Engineer, Bihar State Housing Board v. Ramesh Kumar Singh), the court observed in the second sentence of the report that “the extraordinary discretionary jurisdiction vested in the High Court under Article 226 of the Constitution was improperly invoked, and the High Court was pleased to exercise its jurisdiction resulting in an abuse of process.” A show-cause notice was challenged in that case and the court observed that unless the notice was ex facie a nullity or totally without jurisdiction in the traditional sense of that expression, a writ petition ought not to be entertained. In the judgment reported at (1993) 4 SCC 727 (ECIL v. B. Karunakar), which has been cited by the bank, the Constitution Bench considered the first proviso to Article 311(2) of the Constitution of India after the Forty-second Amendment. The essence of the judgment is that when an inquiry officer is other than the disciplinary authority, the delinquent employee is entitled to a copy of the inquiry report before the disciplinary authority takes a decision on the question of the guilt of the delinquent and the delinquent has a right to reasonable opportunity to represent against the findings in the inquiry report. Paragraphs 23 to 25 of the report are instructive: “23. What emerges from the above survey of the law on the subject is as follows. “24. Since the Government of India Act, 1935 till the Forty-second Amendment of the Constitution, the Government servant had always the right to receive the report of the enquiry officer/authority and to represent against the findings recorded in it when the enquiry officer/authority was not the disciplinary authority. This right was however, exercisable by him at the second stage of the disciplinary proceedings viz., when he was served with a notice to show cause against the proposed penalty. The issuance of the notice to show cause against the penalty necessarily required the furnishing of a copy of the enquiry officer’s report since, as held by the Courts, the right to show cause against the penalty also implied the right to represent against the findings on the charges. This was considered to be an essential part of the ‘reasonable opportunity’ incorporated earlier in Section 240(3) of the GOI Act and later in Article 311(2) of the Constitution as originally enacted. The right to receive the enquiry officer’s report and to show cause against the findings in the report was independent of the right to show cause against the penalty proposed. The two rights came to be confused with each other because as the law stood prior to the Forty-second Amendment of the Constitution, the two rights arose simultaneously only at the stage when a notice to show cause against the proposed penalty was issued. The two rights came to be confused with each other because as the law stood prior to the Forty-second Amendment of the Constitution, the two rights arose simultaneously only at the stage when a notice to show cause against the proposed penalty was issued. If the disciplinary authority after considering the enquiry officer’s report had dropped the proceedings or had decided to impose a penalty other than that of dismissal, removal or reduction in rank, there was no occasion for issuance of the notice to show cause against the proposed penalty. In that case, the employee had neither the right to receive the report and represent against the finding of guilt nor the right to show cause against the proposed penalty. The right to receive the report and to represent against the findings recorded in it was thus inextricably connected with the acceptance of the report by the disciplinary authority and the nature of the penalty proposed. Since the Forty-second Amendment of the Constitution dispensed with the issuance of the notice to show cause against the penalty proposed even if it was dismissal, removal or reduction in rank, some courts took the view that the Government servant was deprived of his right to represent against the findings of guilt as well. The error occurred on account of the failure to distinguish the two rights which were independent of each other. “25. While the right to represent against the findings in the report is part of the reasonable opportunity available during the first stage of the inquiry viz., before the disciplinary authority takes into consideration the findings in the report, the right to show cause against the penalty proposed belongs to the second stage when the disciplinary authority has considered the findings in the report and has come to the conclusion with regard to the guilt of the employee and proposes to award penalty on the basis of its conclusions. The first right is the right to prove innocence. The second right is to plead for either no penalty or a lesser penalty although the conclusion regarding the guilt is accepted. It is the second right exercisable at the second stage which was taken away by the Forty-second Amendment.” The Constitution Bench thereafter noticed the two stages of disciplinary proceedings where the inquiry officer is other than the disciplinary authority. It is the second right exercisable at the second stage which was taken away by the Forty-second Amendment.” The Constitution Bench thereafter noticed the two stages of disciplinary proceedings where the inquiry officer is other than the disciplinary authority. It held that the “first stage ends when the disciplinary authority arrives at its conclusion on the basis of the evidence, enquiry officer’s report and the delinquent employee’s reply to it.” The judgment proceeded to add that the “second stage begins when the disciplinary authority decides to impose penalty on the basis of its conclusions.” In another judgment brought by the bank, reported at (1999) 5 SCC 762 (Bank of India v. Degala Suryanarayana), the court observed that the strict rules of evidence were not applicable to departmental inquiry proceedings and that the “only requirement of law is that the allegation against the delinquent officer must be established by such evidence acting upon which a reasonable person acting reasonably and with objectivity may arrive at a finding upholding the graveman of the charge against the delinquent officer.” The Supreme Court also cautioned that while exercising the jurisdiction of judicial review, a court should not interfere with the findings of fact except in a case of mala fides or perversity “i.e. where there is no evidence to support a finding or where a finding is such that no man acting reasonably and with objectivity could have arrived at that finding.” The judgment emphasises that in course of judicial review a court cannot embark on an exercise of re-appreciating the evidence or weighing the same as an appellate authority. On the issue of a bank officer being required to function within the rules established by the bank and his conduct being actionable if he acts in derogation thereof despite no pecuniary loss being suffered by the employer, the bank in this case has relied on a judgment reported at (1996) 9 SCC 69 (Disciplinary Authority–cum-Regional Manager v. Nikunja Bihari Patnaik) for the observation therein, at paragraph 7 of the report, that if every officer of a bank were allowed to act beyond his authority the discipline of the organisation would disappear and its functioning would become chaotic. The Supreme Court added that an “officer of the bank cannot be allowed to carve out his own little empire wherein he dispenses favour and largesse.” The petitioner has referred to a single Bench judgment of this court reported at AIR 1956 Cal 662 (A.R.S. Choudhury v. The Union of India) for the proposition that when a relevant witness or a relevant document is within the control of the authorities and the delinquent cannot produce the person or the material “and the evidence appears to be relevant, the authorities must extend all help to the delinquent to procure such evidence.” The petitioner says that it is evident from the inquiry report that several documents on which the charges against the petitioner were founded were not made available to him and several documents sought by the petitioner were denied. The petitioner complains that no prudent person in the position of the inquiry officer could, in such circumstances, have rendered a finding of the charges being established against the petitioner. The petitioner also submits that since the petitioner has missed the bus, so to say, before the disciplinary authority, the petitioner should not be relegated to undertaking a futile exercise before the appellate authority; particularly since the disciplinary authority and the appellate authority had failed to appreciate the gross breach of natural justice in course of the previous round that the court could discover without much ado. The petitioner has placed a judgment reported at AIR 1964 SC 364 (Union of India v. H.C. Goel) where the Constitution Bench ruled that in dealing with writ petitions filed by public servants who had been dismissed, or otherwise dealt with so as to attract Article 311(2) of the Constitution, “the High Court under Art. 226 has jurisdiction to enquire whether the conclusion of the Government on which the impugned order of dismissal rests is not supported by any evidence at all.” However, that opinion of the Constitution Bench arose in proceedings after the order of punishment was passed. In the last decision carried by the petitioner, reported at (1995) 6 SCC 749 (B.C. Chaturvedi v. Union of India), the Supreme Court enunciated the scope of judicial review in disciplinary proceedings in a case where the domestic remedy against the order of punishment had been exhausted by the delinquent. In the last decision carried by the petitioner, reported at (1995) 6 SCC 749 (B.C. Chaturvedi v. Union of India), the Supreme Court enunciated the scope of judicial review in disciplinary proceedings in a case where the domestic remedy against the order of punishment had been exhausted by the delinquent. In allowing the appeal of the Union of India and dismissing that of the delinquent, the court observed thus at paragraph 12 of the report: “12. Judicial review is not an appeal from a decision but a review of the manner in which the decision is made. Power of judicial review is meant to ensure that the individual receives fair treatment and not to ensure that the conclusion which the authority reaches is necessarily correct in the eye of the court. When an inquiry is conducted on charges of misconduct by a public servant, the Court/Tribunal is concerned to determine whether the inquiry was held by a competent officer or whether rules of natural justice are complied with. Whether the findings or conclusions are based on some evidence, the authority entrusted with the power to hold inquiry has jurisdiction, power and authority to reach a finding of fact or conclusion. But that finding must be based on some evidence. Neither the technical rules of Evidence Act nor of proof of fact or evidence as defined therein, apply to disciplinary proceeding. When the authority accepts that evidence and conclusion receives support therefrom, the disciplinary authority is entitled to hold that the delinquent officer is guilty of the charge. The Court/Tribunal in its power of judicial review does not act as appellate authority to re-appreciate the evidence and to arrive at its own independent findings on the evidence. The Court/Tribunal may interfere where the authority held the proceedings against the delinquent officer in a manner inconsistent with the rules of natural justice or in violation of statutory rules prescribing the mode of inquiry or where the conclusion or finding reached by the disciplinary authority is based on no evidence. The Court/Tribunal may interfere where the authority held the proceedings against the delinquent officer in a manner inconsistent with the rules of natural justice or in violation of statutory rules prescribing the mode of inquiry or where the conclusion or finding reached by the disciplinary authority is based on no evidence. If the conclusion or finding be such as no reasonable person would have ever reached, the Court/Tribunal may interfere with the conclusion or the finding, and mould the relief so as to make it appropriate to the facts of each case.” Before the court is called upon to assess the merits of the challenge launched by the petitioner, it has to be ascertained whether such challenge is at all to be entertained at this stage. In disciplinary proceedings where the rules require the disciplinary authority to appoint an inquiry officer to gather the material against the charged employee and render findings thereon or in disciplinary proceedings where the disciplinary authority delegates (the delegation not being in derogation of the applicable rules) the fact-finding exercise to an inquiry officer, it goes without saying that the guilt of the charged employee is not established upon the inquiry officer rendering an opinion that the charges, or some of them, have been established on the basis of the material assessed in course of the inquiry proceedings. The inquiry officer’s report, including his findings, would be required to be placed before the disciplinary authority; whereupon the disciplinary authority has several options open to him. The disciplinary authority may tentatively agree with the findings in their entirety and call upon the charged employee to respond to such findings. It is also possible that the disciplinary authority may tentatively agree with some of the findings in the inquiry report and may not agree with some other findings. In such a case, the disciplinary authority may remit the matter before the inquiry officer for a further fact-finding and assessment exercise in respect of the findings that the disciplinary authority does not agree with; whereupon the charged employee will have a chance before the inquiry officer in respect of such matters. It is equally possible that the disciplinary authority may itself indicate why it does not agree with all or some of the findings in the inquiry report and forward such tentative opinion to the charged employee if the disagreement is to the prejudice of the charged employee. It is equally possible that the disciplinary authority may itself indicate why it does not agree with all or some of the findings in the inquiry report and forward such tentative opinion to the charged employee if the disagreement is to the prejudice of the charged employee. The disciplinary authority may even disagree with the findings against the charged employee and drop the proceedings altogether. When the disciplinary authority tentatively agrees with the findings rendered against the charged employee in the inquiry report or disagrees with the findings rendered in favour of the charged employee in the inquiry report or, in any event, the disciplinary authority forms a tentative opinion of actionable misconduct having been committed by the charged employee, it is incumbent on the disciplinary authority to forward the inquiry report and the tentative view of the disciplinary authority to the charged employee. This requirement is in consonance with procedural fairness and in-keeping with the doctrine of natural justice. In disciplinary proceedings conducted upon the inquiry being entrusted to someone other than the disciplinary authority, the first stage of the proceedings does not conclude with the inquiry officer’s report or with the furnishing of the inquiry officer’s report to the charged employee. In any process of adjudication, there is a fact-finding exercise which culminates in the conclusion or the inference being drawn from the facts; and, a final process where the conclusion on the facts is used to decide on the order that may be passed on such facts. The first stage of the disciplinary proceedings conclude upon the representation of the charged employee being assessed by the disciplinary authority against the tentative view of the disciplinary authority communicated to the charged employee upon a prima facie view being taken on the inquiry report. If the disciplinary authority finds the charged employee to be guilty of misconduct, it proceeds to the second stage to consider the appropriate punishment. If the disciplinary authority comes to a final opinion of the charge or charges not being established, upon assessing the representation made by the charged employee to the prima facie opinion earlier rendered by the disciplinary authority on the basis of the inquiry report, the second stage of the disciplinary proceedings does not commence at all. If the disciplinary authority comes to a final opinion of the charge or charges not being established, upon assessing the representation made by the charged employee to the prima facie opinion earlier rendered by the disciplinary authority on the basis of the inquiry report, the second stage of the disciplinary proceedings does not commence at all. It would defy reason then that a challenge to an inquiry report is received in this extraordinary jurisdiction prior to the final consideration thereof by the disciplinary authority. It is conceivable that a charged employee may have excellent grounds to discredit an inquiry report or the conduct of the inquiry proceedings, but he must carry such grounds to the disciplinary authority and the court in exercise of its jurisdiction under Article 226 of the Constitution, will, ordinarily, not preempt or speculate as to what may happen before the disciplinary authority. The consideration here is, strictly, not as to whether there is an efficacious alternative remedy available to the petitioner. The issue relates to the propriety in receiving a challenge mid-stream when no prejudice has been suffered by the petitioner. After all, the disciplinary authority has to be afforded a chance to weigh the material that a charged employee brings against the tentative view expressed by the disciplinary authority on the basis of the fact-finding exercise conducted and findings rendered by the inquiry officer. The rule would apply with even more force if there is no case of bias or predetermined mind made out against the disciplinary authority. The right to seek a remedy arises only upon any real prejudice being suffered by a person. For the same reasons that a challenge to a show-cause notice is, ordinarily, not entertained except on grounds of illegality and completely erroneous jurisdiction, a challenge against a process which has not been completed – and, consequently, has not been afforded a chance to correct itself before it is concluded – is, generally, not to be entertained as it would be premature to do so. More importantly, the power of judicial review is exercised primarily to scrutinise the decision-making process rather than the decision itself, unless the decision is shown to be so perverse that the meanest mind could not have arrived at the decision on the material before it. More importantly, the power of judicial review is exercised primarily to scrutinise the decision-making process rather than the decision itself, unless the decision is shown to be so perverse that the meanest mind could not have arrived at the decision on the material before it. When a process is challenged before it is completed, particularly after accepting the initiation of the process, judicial review would, ordinarily, not be available since the decision has not been made and there is no scope to scrutinise a decision-making process when the decision itself is not there. It is possible for a public servant or like employee charged with misconduct to challenge the charge-sheet or the disciplinary proceedings or the order of punishment by way of a petition under Article 226 of the constitution at various stages. The degree of warmth with which the court would receive such a challenge would depend on the stage at which it is brought. When a charge-sheet is challenged, high tests have to be met, inter alia, as to the legality thereof. When the departmental proceedings or the order of punishment is challenged without the proceedings being allowed to be played out in the usual course or without the remedy available in the domestic forum being exhausted by the delinquent, a separate set of considerations arises. But it is difficult to imagine that a challenge by a charged employee is entertained under Article 226 of the Constitution unless it is on the legality of the charge-sheet; or, against the order of punishment when grounds are asserted that would dissuade the court to exercise its self-restraint in not pushing the petitioner to the next domestic forum available. One of the possible arguments to challenge any disciplinary proceedings or other process mid-stream may be that the initiation of the proceedings or the process was illegal. But such argument should not count for much as the challenge to the initiation of a process, particularly any disciplinary proceedings upon the issuance of a show-cause notice, has to be before the process progresses any further than the notice of its initiation. But such argument should not count for much as the challenge to the initiation of a process, particularly any disciplinary proceedings upon the issuance of a show-cause notice, has to be before the process progresses any further than the notice of its initiation. Once the chance to challenge the initiation of a process is missed and the process is allowed to progress in right earnest, the challenge to the initiation of the process ought not to be entertained for judicial review till such time that the process is completed, whereupon the outcome of the process may be also challenged on the ground of its illegal initiation. In allowing a process to progress without challenging the legality of its initiation, a person is estopped from questioning the legality of its initiation till the process runs its course and culminates in a decision that prejudices such person. In course of challenging such decision, the legality of the initiation of the process may also be questioned; provided that such question had not been raised earlier and repelled. The argument is not available to the petitioner in this case since the petitioner either did not challenge the legality of the show-cause notice in course of his previous petition which culminated in the order dated March 10, 2014; or, the court is deemed to have repelled the challenge to the show-cause notice in permitting the disciplinary proceedings to be continued on the basis thereof. It is generally unwise to recognise or lay down a rule of law in absolute or inflexible terms for experience shows that there could be situations that may not have been contemplated or imagined at the time of recognising the rule. But the exception to the rule as recognised in this case would be so rare so as to take it to the vanishing point. A challenge to the inquiry report without waiting for the disciplinary authority to assess the grounds that may be urged against the findings rendered against a charged employee in the inquiry report has, almost in every case, to be regarded as premature and impermissible. That the disciplinary authority in this case has already passed an order of punishment – the nature whereof has not yet been disclosed – will not change the rules of the game or alter the basis of the considerations relevant herein. That the disciplinary authority in this case has already passed an order of punishment – the nature whereof has not yet been disclosed – will not change the rules of the game or alter the basis of the considerations relevant herein. It is not for the court at this stage to gaze into the crystal ball to guess what may have impelled the disciplinary authority to agree with the findings of the inquiry officer. It would be for the petitioner to assess whether the order of punishment and the opinion of guilt on which it is based ought to be challenged before the domestic forum or by way of a further petition under Article 226 of the Constitution. If a further petition is immediately brought to the court, it is at such stage that the considerations as to an efficacious alternative remedy being available to the petitioner in the domestic forum would be relevant. Since the petitioner has carried the present petition when no prejudice on the basis of the inquiry report has been suffered by him, the challenge is not entertained. Indeed, the petitioner should have been repelled at the first instance, but not much harm has been done in this petition being decided within three weeks of its receipt, particularly when the legal issue deserved more consideration that what is generally afforded at the receiving stage of a petition under Article 226 of the Constitution. WP No. 3197 (W) of 2015 is dismissed without going into the merits thereof. The petitioner will pay costs assessed at 3,000 GM to the bank. Later: After the judgment is pronounced, the petitioner seeks a direction on the appellate authority to dispose of his proposed appeal expeditiously. Subject to the petitioner carrying the appeal within the time permitted, the appellate authority should endeavour to dispose of the appeal in accordance with law and upon due consideration of the relevant material within six weeks of the receipt of the appeal. In view of the prayer made after the judgment is pronounced, the costs are reduced to 30 GM. Urgent certified website copies of this judgment, if applied for, be supplied to the parties subject to compliance with all requisite formalities.