Research › Search › Judgment

Gauhati High Court · body

2016 DIGILAW 536 (GAU)

Md. Matiur Rahman v. State of Assam

2016-06-09

UJJAL BHUYAN

body2016
JUDGMENT : Ujjal Bhuyan, J. Heard Mr. B.D. Konwar, learned Sr. Counsel assisted by Mr. R. Kalita, learned counsel for the petitioner and Mr. L. P. Sharma, learned counsel appearing for the Cooperative City Bank Ltd., respondent Nos. 2, 3 and 4. 2. This case was heard on 07.06.2016 and today is fixed for delivery of judgment. Accordingly, judgment is dictated in the open Court. 3. By filing this petition under Article 226 of the Constitution of India, petitioner seeks quashing of order dated 01.07.2014 passed by the Managing Director, Cooperative City Bank Ltd. discharging the petitioner from the service of the Cooperative City Bank Ltd. (Bank). 4. A brief narration of the relevant facts is considered necessary. While the petitioner was serving as Branch Manager of the Bank, a show-cause notice dated 24.07.2013 was issued to him by the Managing Director with the allegation that while he was the Branch Manager of Ganeshguri Branch in the year 2007, he had obtained two cheques from M/s Sarma Enterprise issued by Sri Haren Sarma, proprietor drawn on his C/C A/c No. 19 maintained at the same Branch. One cheque bearing No. 049675 dated 13.04.2007 for an amount of Rs.3,80,000.00 was drawn in the name of the petitioner and the other cheque bearing No. 049676 dated 13.04.2007 for an amount of Rs.3,00,000.00 was drawn in the name of petitioner's wife Meera Rahman. The cheque amounts were debited from the aforesaid C/C A/c No. 19 of M/s Sarma Enterprise on 17.04.2007 and credited in the S/B A/c No. 2974 which stood jointly in the name of petitioner and his wife in the Ganeshguri Branch. In connection with the aforesaid incident, seven charges were framed against the petitioner primarily dealing with violation of Rule 41 of the Cooperative City Bank Ltd. (Staff) Rules, 1991 (Staff Rules). Staff Rule 41 says that an employee of the Bank shall not borrow money from or in any way place himself under a pecuniary obligation to any person or any other employee of the Bank or any firm or person having dealings with the Bank. An employee shall also not make any investment in any business or trade without prior approval of the Bank. 5. An employee shall also not make any investment in any business or trade without prior approval of the Bank. 5. The show-cause notice was accompanied by a statement of allegation, a list of documents by which the charges were sought to be established and a list of witnesses by whom the charges were sought to be proved. Petitioner submitted his written statement on 12.08.2013 denying the charges including the charge of violation of Rule 41. 6. An additional written statement was also submitted on 24.08.2013. Sum and substance of the stand taken by the petitioner is that his transaction with M/s Sarma Enterprise was purely an internal matter between himself and the proprietor as they have personal relationship. Financial transaction between the two had no nexus with the commercial activities of the Bank and noway affected discharge of duty by the petitioner. He therefore requested the management to take a lenient view of the matter and to drop the proceedings. 7. It appears that written statements submitted by the petitioner were not accepted by the management and it was decided to hold a departmental enquiry. In this connection, Sri Sumanta M. Baruah, an Advocate was appointed as enquiry officer. After holding the enquiry, the enquiry officer submitted his report on 20.01.2014 to the disciplinary authority holding that the charges levelled against the petitioner stood proved. Proceeding further, the enquiry officer held that apart from violation of Rule 41 of the Staff Rules of the Bank there was also breach of Rules 30 and 32(i) of the Staff Rules which relates to breach of trust by an employee of the Bank. Managing Director issued second show-cause notice dated 16.04.2014 to the petitioner stating that report of the enquiry officer was accepted. Since charges against the petitioner stood proved, it was proposed that the punishment of discharge from service should be imposed on the petitioner. Petitioner was asked to show-cause as to why the proposed punishment should not be imposed on him. Along with the second show-cause notice a copy of the enquiry report was furnished to the petitioner. 8. Petitioner submitted his reply to the second show-cause notice on 07.05.2014. Petitioner was asked to show-cause as to why the proposed punishment should not be imposed on him. Along with the second show-cause notice a copy of the enquiry report was furnished to the petitioner. 8. Petitioner submitted his reply to the second show-cause notice on 07.05.2014. In his reply, petitioner had pointed out certain short comings in the departmental enquiry and requested the disciplinary authority to either drop the departmental proceeding or alternatively to hold a fresh enquiry as he contended that the departmental enquiry was not conducted in accordance with law. 9. Thereafter impugned order dated 01.07.2014 was passed by the Managing Director imposing the punishment of discharge from service on the petitioner with immediate effect. 10. Petitioner submitted an appeal before the Chairman, Board of Directors on 09.07.2014. The Chairman vide his letter dated 04.09.2014 informed the petitioner that the decision to impose the punishment of discharge from service was taken by the Board of Directors. Managing Director had only issued the consequential discharge letter. Therefore there could be no appeal to the Board of Directors. However, it was stated that the Board had reviewed its decision and found that since the charges were grave and proved in the enquiry the penalty of discharge from service was appropriate and did not call for any interference. 11. Aggrieved, present writ petition has been filed. 12. Respondent Nos. 2, 3 and 4 have filed a common affidavit. 13. Stand taken in the affidavit is that the charge against the petitioner was very serious as it was clearly evident that he had maintained pecuniary relationship with a person having business dealings with the Bank. Reply of the petitioner was found to be not satisfactory and accordingly enquiry was held. In the enquiry all reasonable opportunity was granted to the petitioner and thereafter report was submitted and based on such report impugned penalty was imposed. In the facts and circumstances of the case, punishment imposed cannot be said to be disproportionate to the gravity of the misconduct which stood proved in the domestic enquiry. Therefore, no case for interference is made out. 14. Petitioner had submitted reply affidavit to the counter affidavit filed by the said respondents wherein it has been urged that Rule 41 of the Staff Rules is clearly not attracted in the facts and circumstances of the case. Therefore, no case for interference is made out. 14. Petitioner had submitted reply affidavit to the counter affidavit filed by the said respondents wherein it has been urged that Rule 41 of the Staff Rules is clearly not attracted in the facts and circumstances of the case. A personal transaction between the petitioner and the proprietor of M/s Sarma Enterprise has been blown out of proportion to give a colour of financial misdemeanor on the part of the petitioner. 15. Mr. Konwar, learned Sr. Counsel for the petitioner submits that management was pre-determined to punish the petitioner. Even when it is evident that Rule 41 was not attracted in the facts and circumstances of the case, management in a pre-determined manner proceeded with the enquiry and imposed the penalty of discharge from service. He also submits that Board of Directors had unauthorisely interfered with the exercise of jurisdiction by the Managing Director and therefore impugned penalty stood vitiated because of extraneous and undue interference by the Board of Directors. His further submission is that having regard to the gravity of the mis-conduct, punishment imposed is grossly disproportionate and shocking to the judicial conscience. 16. In his reply, Mr. Sharma, learned counsel for the Bank submits that petitioner was holding the pivotal post of Branch Manager A Branch Manager holds an office of trust. By his activities as manifested through the charges framed, petitioner had exhibited conduct unbecoming of a Branch Manager. It is a case where the management had lost confidence and trust on the petitioner. Therefore, retention of the petitioner in service would not be in the interest of the Bank. In support of his submissions, Mr. Sharma has placed reliance on the following two decisions:- General Manager (P), Punjab and Sind Bank v. Daya Singh, (2010) 11 SCC 233 Sarva Uttar Pradesh Gramin Bank v. Manoj Kumar Sinha, (2010) 3 SCC 556 . Mr. Sharma also submits that a careful reading of the written statements submitted by the petitioner would go to show that he had in fact admitted his guilt and in view of such admission of guilt, punishment imposed is justified. Mr. Sharma has also produced the relevant record, including the record produced. 17. Submissions made have been considered. Also perused the materials on record, including the record produced. 18. Mr. Sharma has also produced the relevant record, including the record produced. 17. Submissions made have been considered. Also perused the materials on record, including the record produced. 18. Scope of interference in the findings of a departmental proceeding by the Writ Court exercising power under Article 226 of the Constitution of India has by now become well crystallized. The Writ Court is only concerned with the decision making process and not with the decision per se. Writ Court would be guided by the well recognised grounds of interference which includes violation of the principles of natural justice, procedural impropriety, non-consideration of relevant materials or consideration of irrelevant materials rendering the impugned decision perverse or if there is an error apparent on the face of the record. Another ground of interference which has been judicially evolved is that in an appropriate case if it shocks the judicial conscience, the Writ Court may also examine whether the punishment imposed is disproportionate to the gravity of the misconduct by applying the doctrine of proportionality. 19. Having noticed the broad para-meters governing writ jurisdiction in a matter relating to disciplinary proceeding, the facts of the present case may now be adverted to. 20. Charges framed against the petitioner have already been noticed above. From the report of the enquiry officer it is not discernible whether any presenting officer was appointed or not but it is evident that the enquiry officer was a lawyer. Of course the documents on record do not indicate that petitioner had raised any issue on the point of enquiry officer being a legal professional and on that ground he should also be allowed to be represented by a legal practitioner. Since this appears not to be have been urged, Court would refrain from commenting on this aspect of the matter. 21. A perusal of the enquiry report would go to show that enquiry officer had given his opinion that the charges framed against the petitioner stood proved. Not only that he had gone ahead and opined that the mis-conduct of the petitioner was also violative of Staff Rules 30 and 32 which deals with trust reposed on an employee of the Bank. According to the enquiry officer, it was a case of breach of trust by the petitioner. This enquiry report was submitted to the disciplinary authority i.e. the Managing Director. According to the enquiry officer, it was a case of breach of trust by the petitioner. This enquiry report was submitted to the disciplinary authority i.e. the Managing Director. Managing Director in turn issued second show-cause notice to the petitioner on 16.04.2014 enclosing therewith a copy of the enquiry report. In this notice Managing Director stated that the Bank had carefully considered and thoroughly discussed the findings of the enquiry officer regarding all the charges and thereafter had accepted the enquiry report. Since the charges against the petitioner stood proved and the Bank had lost confidence on the petitioner, petitioner was called upon to show-cause as to why the punishment of discharge from service should not be imposed on him. 22. Punishment of discharge from service is a recognised punishment under Rule 46 (v) of the Staff Rules. A careful scrutiny of the second show-cause notice dated 16.04.2014 would go to show that the said notice was issued primarily to have the response of the petitioner on the proposed penalty. While issuing the second show-cause notice, it was made clear that the enquiry report submitted by the enquiry officer had been accepted and since charges against the petitioner stood proved the penalty of discharge from service was proposed. Thus, the decision holding the petitioner guilty of misconduct was already taken on consideration of the enquiry report prior to furnishing of a copy of the same to the petitioner and obtaining his response. 23. Rule 46 (b) generally lays down as to how and in what circumstances the penalties mentioned in said Clause (a) should be imposed. It says no employee shall be subjected to any of the penalties except by an order in writing signed by the Managing Director/Chief Executive Officer in respect of all employees and no such order shall be passed without the charge or charges being formulated in writing and given to the charged employee so that he has a reasonable opportunity to answer them in writing or in person. By way of clarification it is stated that the penalty of censure or warning may be imposed without drawing a formal proceeding, after issuing a notice to the charged employee to show-cause as to why such penalty should not be imposed. By way of clarification it is stated that the penalty of censure or warning may be imposed without drawing a formal proceeding, after issuing a notice to the charged employee to show-cause as to why such penalty should not be imposed. As per the proviso, requirement of this Rule may be waived if the action is taken on the basis of facts established in a Court of Law or where the employee has absconded or where it may not be reasonably practicable to hold such proceeding. 24. From a careful analysis of Rule 46(b) of the Staff Rules, more particularly the clarification, it becomes quite clear that except in a case where the penalty proposed to be imposed is censure or warning, in respect of other penalties, holding of a formal proceeding is necessary. In any case, principles of natural justice and fair procedure mandates holding of departmental enquiry either by the disciplinary authority himself or through an enquiry officer. In the instant case, the departmental enquiry was conducted through an enquiry officer appointed by the disciplinary authority. 25. Report of the enquiry officer is only an opinion. No doubt it is a vital and a relevant document to be considered by the disciplinary authority while considering guilt of the charged employee. Ultimate decision is that of the disciplinary authority but while taking such decision he can take into consideration relevant materials including the report of the enquiry officer. It is a well recognised proposition that in a departmental proceeding if the disciplinary authority wants to rely on any document against the charged employee the latter would have to be put on notice and copy of such document would have to be given to the charged employee so that he can rebut the same. Otherwise it would amount to denial of reasonable opportunity. Enquiry report is a vital document and in the present case it was on the basis of such document that charges against the petitioner were held to have been proved. But from a perusal of the second show-cause notice dated 16.04.2014 what transpires is that the enquiry report was accepted by the disciplinary authority without having the response of the petitioner who thereafter took the decision to impose the penalty of discharge from service on the petitioner. It was at this stage that petitioner was called upon to submit his response as to the proposed penalty. It was at this stage that petitioner was called upon to submit his response as to the proposed penalty. Principles of natural justice and fair procedure would require that before acceptance of the enquiry report and holding that the charges against the petitioner stood proved, it was incumbent upon the disciplinary authority to have furnished a copy of the enquiry report to the petitioner, obtained his response, if any, on the enquiry report or on the enquiry proceeding and thereafter to have taken a considered decision whether to have accepted the enquiry report or not or whether to hold the petitioner guilty of the charges or not. But instead of doing that, the disciplinary authority straightaway accepted the enquiry report holding the petitioner guilty without having the views of the petitioner. This, in the opinion of the Court, was in clear violation of the principles of natural justice and had vitiated the decision making process. 26. Having said that, it may also be noticed that Rule 46(b) provides that an order of punishment has to be passed by the Managing Director/Chief Executive Officer. Rule 47 provides for right of appeal by an aggrieved employee. As per Rule 48, an appeal against an order passed by the Branch Manager would lie to the Managing Director/Chief Executive Officer and against an order passed by the Managing Director/Chief Executive Officer to the Board of Directors. From the communication dated 04.09.2014 of the Chairman of the Board of Directors, it is evident that the decision to impose the punishment of removal from service was taken by the Board of Directors. It is admitted that having taken such decision Managing Director had only issued the consequential removal order. Therefore the appeal filed could not be entertained by the Board of Directors. However, as per the said letter, the punishment imposed on the petitioner was reviewed by the Board of Directors but found no reason to interfere with such decision. I am afraid, the said communication dated 04.09.2014 reveals two fundamental flaws in the decision making process. Firstly, Rule 46 (b) provides that it is the Managing Director/Chief Executive Officer who will pass the order of punishment. Though the impugned order was issued by the Managing Director, in reality it was the decision of the Board of Directors as admitted by the Chairman himself in his letter dated 04.09.2014. Firstly, Rule 46 (b) provides that it is the Managing Director/Chief Executive Officer who will pass the order of punishment. Though the impugned order was issued by the Managing Director, in reality it was the decision of the Board of Directors as admitted by the Chairman himself in his letter dated 04.09.2014. Thus, Board of Directors had clearly exceeded its jurisdiction and interfered with the independent decision making of the Managing Director acting as the disciplinary authority, not only rendering the said impugned decision untenable in law but also making the appeal provision redundant. Secondly, the assertion by the Chairman that notwithstanding appeal being ruled out, the Board had reviewed the impugned decision, carries no meaning in as much as there is no power of review conferred either on the Managing Director or on the Board of Directors by the Staff Rules. Right of review being a statutory right, the same is not to be exercised in absentia. 27. Thus on a cumulative assessment of the facts and circumstances of the case as discussed above, what transpires is that there has been a serious breach of the principles of natural justice and gross procedural impropriety in imposing the punishment of discharge from service on the petitioner rendering the impugned decision untenable in law. Accordingly, impugned decisions dated 01.07.2014 and 04.09.2014 are hereby set aside and quashed. Having regard to the discussions made above, the second show-cause notice dated 16.04.2014 would also stand quashed. 28. However, without expressing any opinion on the merit of the charge, Court is of the view that it would be in the interest of justice if the disciplinary proceeding is re-commenced from the stage of submission of the enquiry report by the enquiry officer. Since petitioner is in receipt of the enquiry report, he may now submit his response to the enquiry report before the Managing Director taking all available grounds by 09.07.2016. On receipt of the response of the petitioner as above, Managing Director shall consider the same along with the enquiry report and take a fresh decision in accordance with law. While taking such decision, the Managing Director shall apply his own mind and shall not be influenced by the previous decision taken or by any views expressed by the Board of Directors. 29. While taking such decision, the Managing Director shall apply his own mind and shall not be influenced by the previous decision taken or by any views expressed by the Board of Directors. 29. Since the impugned order of removal has been set aside, petitioner would stand re-instated in service but such re-instatement would be subject to such further order(s) that may be passed by the Managing Director as the disciplinary authority. 30. Writ petition is allowed to the extent indicated above but without any order as to cost. 31. Record produced by Mr. Sharma, learned counsel is returned back.