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2023 DIGILAW 357 (TS)

K. Narsaiah v. Warangal District Co. op. Bank

2023-06-05

SUREPALLI NANDA

body2023
ORDER : 1. Heard the Learned Counsel for the Petitioners and Learned counsel for Respondents. 2. The Present Writ Petition is filed by the Petitioner praying to issue a Writ of Mandamus declaring the impugned action of the 2nd Respondent in not releasing the terminal benefits of Gratuity and Leave Encashment on the Petitioner’s retirement on superannuation w.e.f 31.10.2013 and further action of the respondents in withholding the payment of Petitioners fixed deposit for a sum of Rs.1,00,000/- on its maturity on 13.10.2013 and not allowing the Petitioner to operate his savings bank account including issuing the impugned Proceedings Rc. No. Admn/HRD-I/JFC/2014-15 Dated 13.01.2014 for punishment of dismissal from service after retirement as totally illegal, apart from in violation to the 1st Respondent Bank Employees Service Regulations and law laid down by the Hon’ble High Court of A.P and the Hon’ble Supreme Court in 1993(3) SCC P.666 and consequently set aside the same by directing the Respondents to release the Petitioner’s terminal benefit of Gratuity, Leave Encashment including withheld fixed deposit amount of Rs. 1.00 Lakh along with interest with all consequential reliefs and benefits. 3. The case of the Petitioner, in brief, is as follows: a) The Petitioner was appointed as supervisor on 16.7.1977 and over the years was promoted to the post of In-charge Dy. General Manager and retired on superannuation from the said post on 31.10.2013. b) While was working as Asst. General Manager and as In-charge of Dy. General Manager, the petitioner had received Summons on 09.07.2013 from the Enquiry Officer alleging that the petitioner has committed serious financial irregularities/gross negligence in discharging the petitioners duties while working as DCCB, Jangaon Branch and was informed to appear before the Dy. Manager /Enquiry Officer on 19.07.2013. c) The Petitioner has appeared before the Dy. Manager/Enquiry officer and has denied all such allegations or connections. The Dy. Manager/Enquiry officer had submitted a report on 30.08.2013 to the General Manager (Respondent No. 2). d) On the basis of the said report, the 2nd respondent had issued a Charge Memo to the petitioner vide proceedings dated 08.10.2013 and directed the Petitioner to file explanation within 7 (Seven) days. e) Petitioner was not furnished with the Enquiry report of Dy. Manager/Enquiry officer and for that reason, petitioner through FAX letter dated 15.10.2013 requested the General Manager (Respondent No.2) to extend the time for submission of reply. e) Petitioner was not furnished with the Enquiry report of Dy. Manager/Enquiry officer and for that reason, petitioner through FAX letter dated 15.10.2013 requested the General Manager (Respondent No.2) to extend the time for submission of reply. f) Pending Enquiry, the Petitioner was placed under suspension on 21.10.2013. Further the Petitioner made a detailed representation to General Manager (Respondent No. 2) to furnish the reports dated 06.05.2013, as well as, the documents referred therein. g) The Petitioner received a reply from the General Manager (Respondent No. 2) that, the petitioner could verify the records at head office during the office time of any day. h) The Petitioner on following dates made representation to General Manager (2nd respondent): On 18.11.2013 – To refund the deposited amount of Rs. 1,00,000/- and to allow the Petitioner to operate the savings bank account to meet the Petitioners family and medical expenses. On 21.11.2013 – To release the Gratuity and leave encashment by dropping charges levelled against the Petitioner. On 17.12.2013 – Made a representation reminding to release the gratuity, leave encashment and terminal benefits. i) This being the scenario, General Manager (Respondent No. 2) on 13.01.2014 issued the Show Cause Notice (impugned show cause notice herein) imposing the punishment of ‘dismissal from service’, the same has been received by the petitioner on 20.01.2014. j) The service conditions of all the employees of Respondent No. 1 is governed by Service Regulations of Employees of the Warangal District Cooperative Central Bank Ltd., Subedari, Hanmakonda and under chapter X deals with the conduct, discipline, procedure, suspension, punishment and appeal. k) The competent authority for dismissal from service as “Punishment” is the president and not General Manager (Respondent No. 2) and further that there is no provision in to continue the disciplinary proceedings after the retirement on superannuation. l) Such illegal exercise of powers and denying the opportunity to defend himself and non-furnishing of reports and documents relied therein by the respondents is not only in violation of Constitution of India but also the procedure prescribed in the Employee Service Regulations of the 1st Respondent Bank. Hence this Writ Petition. 4. The case of the respondents, in brief, is as follows: a) Petitioner was given enough time to file Explanation to Charge Memo and petitioner has never come to the Head Office to verify the records. Hence this Writ Petition. 4. The case of the respondents, in brief, is as follows: a) Petitioner was given enough time to file Explanation to Charge Memo and petitioner has never come to the Head Office to verify the records. b) Petitioner’s application for leave on Medical grounds was to escape/dodge, the disciplinary action and submission of explanation to the Bank. The Petitioner has always through his several representations been requesting for time, without denying his involvement or submitting his explanation. c) A fraud had been detected during the computerization at Janagaon Branch and the 2nd respondent ordered an enquiry, upon which the 2nd respondent received a letter from Respondent No. 1, and was cautioned that even after completion of 3 months, the Enquiry Report has not been finalised and directed to explain the enquiry and furnish copy to Registrar of Co-operative Societies, A.P, Hyderabad and Managing Director of APCOB. d) During the enquiry conducted on the orders of the 2nd respondent, it has been revealed that there has been a huge misappropriation of Rs. 29.04 in Janagaon Branch by certain employees by fictitiously creating DLD (Dhanalakshmi Deposit) loan accounts and have been manipulating them and on detection of involvement in the said fraud, actions against individuals were duly taken. e) Respondent no. 3 submitted the Final Investigation Report dated 18.12.2013 along with the certificate for amount of cash misappropriated and persons responsible thereof. f) Action of the Respondents in continuing of ‘Disciplinary Action’ against the Petitioner and also withholding the operations of the bank and the retirement benefits are well within the purview of the Respondents and since there is misappropriation of public money by the Petitioner, the Writ Petition is not maintainable and is liable to be dismissed. g) Further, the Superannuation is subject to the outcome of the Disciplinary Action and that the Petitioner cannot take the guise of Superannuation and that the Punishment for Gross Misconduct and Misappropriation against Petitioner is correct and the respondent is entitled to take action against the Petitioner. Hence there are no merits in the case and is liable to be dismissed. 5. Common Orders passed by The learned Single Judge in W.P. Nos. Hence there are no merits in the case and is liable to be dismissed. 5. Common Orders passed by The learned Single Judge in W.P. Nos. 15335, 1909 of 2014 and 25102 of 2012, dated 24.06.2014 reads as under: “The Learned single Judge upon observing that all three Writ Petitions are not isolated, have passed a common order, wherein: a) The Learned Single Judge has directed the Chief Auditor, Commissioner for Cooperation and Registrar of Corporate Societies to implead as a respondent and submit his response within a period of 4 (Four) weeks and: b) The Learned Single Judge has, for the reason that the retired persons would be exposed to for want of financial support, directed that the bank accounts secured by Respondents shall be freed to the extent of 50% of the amounts lying in the respective accounts. PERUSED THE RECORD : 6. The respondents filed counter affidavit, in particular, the relevant last para, reads as under: “The petitioner was relieved from the Bank's services on 31.10.2013 vide Bank's Proceedings Rc.No.Admn./HRD-1/Retmnt/2013-14 dated 31.10.2013 pending disposal of the Charge Memo. Further, the action so far initiated by this respondent is only a coercive step which is well within our jurisdiction in view of involvement of the Writ Petitioner along with others under conspiracy of misappropriation, cannot be said that the proceedings Rc.No.Admn/HRD-1/JFC/2014-15 dated 13.01.2014 are beyond our jurisdiction. In view of his involvement in the misappropriation taken place to a greater extent and since the Public Money is involved in the said misappropriation, the writ petition as filed is not maintainable and liable to be dismissed without entitling him to any relief. I further submit that the Proceedings Dt.31-10-2010 including the retirement Proceedings of the petitioner clearly indicates the fact that the Superannuation is subject to the outcome of Disciplinary Action. Therefore, the Writ Petitioner cannot take shelter under the guise of superannuation, the Punishment to be imposed for Gross Misconduct and Misappropriation and therefore this respondent is entitled to take action for the said Offence against the Petitioner and in view of the pendency of the Criminal case against him.” 7. The order dated 20.06.2014 passed in a batch of three writ petitions i.e. W.P.Nos. The order dated 20.06.2014 passed in a batch of three writ petitions i.e. W.P.Nos. 15335 and 1909 of 2014 and 21502 of 2012 read as under : “These three cases are not the isolated instances or the sporadic ones, which came to the notice of the Court concerned, where employees of the Cooperative Societies, either by design or by default, swindle huge sums of money and then ensure that before they attain the age of superannuation, the same will not get detected either and even if, by any misfortune, it is detected, proper care is not employed in ensuring that the persons found responsible for misappropriation /not rendering proper accounts, are not proceeded against strictly in accordance with law. Every Cooperative Society has several provisions under the Andhra Pradesh Cooperative Societies Act, 1964, for securing the interests of the Societies. Interests of the society are far-more paramount than that of the individuals. However, I concede, in principle, that an employee of a Cooperative Society cannot be proceeded against, as a measure of discipline, after he retires from service on attaining the age of superannuation and in the absence of any specific provision for subjecting him to any such disciplinary control, after the retirement, he cannot be penalized unnecessarily and harassed in the name of interminable enquiries. The Additional Registrar of Cooperative Societies, under Section 122 of the Act, is designated as the Chief Auditor. It is time that the Chief Auditor secures, in all the Service Byelaws of the Cooperative Societies Act, a provision incorporated for proceeding against the retired employees with the disciplinary proceedings not exceeding a period of one year from the date of retirement so that they will not be harassed by interminable disciplinary proceedings. Similarly, the Chief Auditor shall also ensure that all competent authorities must necessarily entertain claims from the third parties for recovery of money from its employees and complete all such enquiries strictly in accordance with law and also with due observation of principles of natural justice, within a maximum period of six months from the date on which the Society receives such claim. I consider it appropriate to implead the Chief Auditor, O/o the Commissioner for Cooperation & Registrar of Companies, Gruhakalpa Building, Nampally, Hyderabad, as a proper and necessary party to these writ petitions and accordingly implead him, so that appropriate steps and measures can be ensured. I consider it appropriate to implead the Chief Auditor, O/o the Commissioner for Cooperation & Registrar of Companies, Gruhakalpa Building, Nampally, Hyderabad, as a proper and necessary party to these writ petitions and accordingly implead him, so that appropriate steps and measures can be ensured. Registry is directed to implead the Chief Auditor, O/o the Commissioner for Cooperation & Registrar of Companies, Gruhakalpa Building, Nampally, Hyderabad, as a party respondent to these writ petitions, communicate this order specifically directing him to file his response within a maximum period of four weeks from today and list these matters for consideration before appropriate Court after four weeks. However, in view of the peculiar hardships that the retired persons would be exposed to for want of financial support, it is only appropriate that the freezes on the bank accounts secured by the respondents shall be freed to the extent of 50% of the amounts lying in the respective accounts.” 8. The Registry was directed to implead the Chief Auditor, Office of the Commissioner for Co-operation and Registrar of Co-operative Societies, Gruhakalpa Building, Nampally, Hyderabad as party Respondent to the writ petitions W.P.Nos. 15335/2014, 1909/2014 & 21502/2012 vide order of the Court dt. 20.06.2014. (referred to and extracted above). 9. Aggrieved by the said order dated 20.06.2014, the Petitioner herein had preferred W.A.No.984 of 2014 and the same was allowed, which reads as under : “Both the writ appeals arise out of a common order, dated 20.06.2014 passed by the learned Single Judge in W.P.Nos.1909 of 2014 and 21502 of 2012. The appellants were the employees of the District Cooperative Central Bank, Warangal. They retired from service on attaining the age of superannuation. The appellant in W.A.No.984 of 2014 is said to have been issued a charge memo, before he retired from service. The appellants filed the writ petitions feeling aggrieved by the non-payment of retirement benefits. Learned Single Judge took those writ petitions as well as W.P.No.15335 of 2014 and passed an order directing that the Chief Auditor in the office of the Commissioner for Cooperation & Registrar of Co-operative Societies, Gruhakapa Building, Nampally, Hyderabad be impleaded and that certain steps be taken to enquire into the various financial matters of the Bank. The only interim relief that the learned Single Judge granted was that the freezing of the accounts of the appellants be suspended to the extent of 50%. The only interim relief that the learned Single Judge granted was that the freezing of the accounts of the appellants be suspended to the extent of 50%. No relief whatever was granted as regards the payment of the retirement benefits. Heard learned counsel for the appellants and learned counsel for the respondents. It is a matter of record that the appellants have retired from service. On retirement from service, they became entitled to be extended the benefits that have accrued over the length of their service. Prima facie, we find that either no disciplinary proceedings were initiated against the appellants while they were in service or if initiated, they were not continued, to enable the conclusion of the disciplinary proceedings. On retirement, the appellants ceased to be employees. Much would depend upon the purport of the relevant service Regulations as to whether any disciplinary proceedings can be continued against the appellants. We are of the view that the ends of justice would be met, if the respondents are directed to release 75% of the retirement benefits to the appellants forthwith. The writ appeals are accordingly allowed directing that the respondents shall release 75% of the retirement benefits to the appellants within four weeks. Such release however shall be subject to the result of the writ petitions. The miscellaneous petitions filed in these writ appeals shall also stand disposed of. There shall be no order as to costs.” 10. The order impugned Rc.No.Admn./HRD-1/JFC/2014-15, dated 13.01.2014 reads as under : “Whereas through reference 1st cited. Memorandum of charges were framed against Sri.KNarsaiah, I/c.DGM (Retd. under suspension) in connection with the fraud detected at Jangaon Branch during his tenure to the tune of 29.04 Lakhs and he has the liability of 3,41,371/- (Rupees Three Lakhs Forty One Thousand Three Hundred Seventy One Only), which has to be recovered @18% from the date of occurrence of fraud as per the Enquiry Report. However, in spite of availing enough time, receiving correspondence from the Bank regularly, he is adamant to submit his explanation for the allegations framed on him. In this connection, since the charges levelled on the delinquent are grave in nature and constitutes a major misconduct, it will be presumed that he has no explanation to offer. As such, it is proposed to dismiss him from the service as per Service Regulations of the Employees Chapter XSI.No.61(1). In this connection, since the charges levelled on the delinquent are grave in nature and constitutes a major misconduct, it will be presumed that he has no explanation to offer. As such, it is proposed to dismiss him from the service as per Service Regulations of the Employees Chapter XSI.No.61(1). Therefore, he is directed to show cause to furnish his explanation if any within (3) days from the date of receipt hereof as to why proposed punishment of "dismissal from service" should not be implemented.” 11. Order dated 26.09.2013 passed in the W.A.No.1911 of 2005, reads as under:- “The District Cooperative Central Bank Limited, represented by its General Manager, Warangal has filed this writ appeal challenging the order dated 09.06.2005 passed by a learned single Judge in W.P.No.2409 of 2005, whereby the writ petition was allowed directing the appellants to release not only the increments, which were due to the respondent/writ petitioner before his retirement, but also to pay the entire retiral benefits. 2. The respondent/writ petitioner was appointed as Staff Assistant in the appellant-bank on 01.03.1977 and retired from service in the same post on 31.03.2004 on attaining the age of superannuation. Prior to his retirement, disciplinary proceedings were initiated against him and charge sheet was issued on 07.02.2004 on certain irregularities. Even before an enquiry officer could be appointed, he was superannuated. Despite retirement of the respondent, the appellant-bank continued the disciplinary proceedings and did not release 50% of the retiral benefits. This action of the appellant-bank was challenged by the respondent by filing W.P.No.2409 of 2005, which has been allowed by order dated 09.06.2005. 3. Learned Standing Counsel for the appellant-bank submits that as the respondent was found to have committed certain irregularities while in service, the appellant-bank is entitled to withhold the retiral benefits of the employee. 4. On the other hand, learned counsel for the respondent/writ petitioner contended that since the disciplinary proceedings were not concluded prior to the superannuation of the respondent, in the absence of any specific rule or Bye-law to continue the disciplinary proceedings initiated against a retired employee of the bank, there is no justification for the appellantbank to withhold the retiral benefits of the respondent. In support of his contention, the learned counsel placed reliance on a judgment of the Apex Court in BHAGIRATHIJENA v. BOARD OF DIRECTORS, O.S.F.C.. In support of his contention, the learned counsel placed reliance on a judgment of the Apex Court in BHAGIRATHIJENA v. BOARD OF DIRECTORS, O.S.F.C.. Reliance is also placed on an unreported judgment in W.A.No.183 of 2005, dated 08.02.2005, wherein a Division Bench of this Court held that in the absence of any specific provision, continuance of disciplinary proceedings against a retired employee is illegal. 5. We have heard the learned counsel for the parties at length. 6. From a perusal of the aforesaid judgments, we find that there is no specific rule or Bye-Law which permits continuance of disciplinary proceedings initiated against a retired employee of the bank. In the absence of any specific provision, the appellant-bank could not have withheld the retiral benefits of the respondent/writ petitioner. 7. For the aforesaid reasons, we find no merit in the appeal filed by the appellant-bank. 8. Accordingly, this writ appeal is dismissed. No order as to costs.” 12. Order dated 08.02.2005 passed in W.A.No.183 of 2005, reads as under: “This writ appeal is filed by the respondent-Bank in the writ petition aggrieved by the order of the learned single Judge in allowing the writ petition filed by the writ petitioner-respondent herein holding that the continuance of disciplinary proceedings pursuant to the chargesheet dated 14.12.2000 have no legality, with a consequential direction to release the benefits to the petitioner including the amount of Rs.25,000/- recovered from the petitioner, in accordance with law. The respondent herein is the writ petitioner. According to the appellant, as the charge memo was issued even before retirement, the continuance of the disciplinary proceedings even after retirement, is in accordance with law. It is also contended by the learned counsel that as per the order allowing the writ petitioner to retire was subject to the disciplinary proceedings already initiated and therefore, the appellant employer is entitled to proceed with the enquiry and the said enquiry ultimately resulted in imposition of penalty of Rs.25,000/-, which was in fact recovered from the writ petitioner. Therefore, the learned single Judge was not justified in allowing the writ petition. The learned counsel appearing on behalf of the writ petitioner, however, supports the order of the learned single Judge and relies upon the judgment of the Apex Court in the case of BHAGIRATHIJENA VS. BOARD OF DIRECTORS, O.S.F.C.. Therefore, the learned single Judge was not justified in allowing the writ petition. The learned counsel appearing on behalf of the writ petitioner, however, supports the order of the learned single Judge and relies upon the judgment of the Apex Court in the case of BHAGIRATHIJENA VS. BOARD OF DIRECTORS, O.S.F.C.. The Apex Court held in the above decision that in the absence of specific provision for the continuance of the disciplinary proceedings after retirement, the enquiry would lapse and therefore, there could be no recovery proceedings. The learned counsel also relied upon the judgment of the Division Bench of this Court reported in GENERAL MANAGER, ADILABAD DISTRICT CO OPERATIVE CENTRAL BANK LIMITED, ADILABAD VS. K.RANGARAO AND ANOTHER. Heard both sides and considered the material on record. At the time of hearing, for a specific question, the learned counsel appearing for the appellant, is not able to show any specific provision which empowers the employer to continue the disciplinary proceedings after retirement of the writ petitioner-employee. In the absence of any specific provision to that effect, the continuance of disciplinary proceedings, is illegal and therefore, the learned single Judge was right in holding that the continuance of the disciplinary proceedings as well as the conclusion of proceedings-against the writ petitioner, would not have any affect as the proceedings initiated against the writ petitioner, would lapse on his retirement. Under the above circumstances and in the light of the above referred decision of the Apex Court, we do not find any merits in the writ appeal. Accordingly, this writ appeal is dismissed. However, 4 (four) Weeks time is granted to the appellant to refund the amount recovered from the writ petitioner as well as to pay any other amounts due to the writ petitioner.” DISCUSSION AND CONCLUSION : 13. A bare perusal of the counter affidavit filed by the Respondents indicates that the Respondents failed to justify their action to initiate or continue disciplinary proceedings after the retirement of the employee as per the Service Regulations of the Respondent Bank. Counter affidavit is silent to that effect and the Respondents fail to trace their power to do so by any relevant provisions or bye-laws or regulations. In BHAGIRATHIJENA VS. Counter affidavit is silent to that effect and the Respondents fail to trace their power to do so by any relevant provisions or bye-laws or regulations. In BHAGIRATHIJENA VS. BOARD OF DIRECTORS, O.S.F.C., reported in 1999 (3) SCC 666 the Apex Court held that in the absence of any rule no Departmental enquiry can be conducted nor any deduction can be made from the retiral benefits. It was also held that enquiry initiated before retirement lapses on superannuation. In view of the settled legal position, this Court opines that the order impugned calling upon the Petitioner to furnish his explanation within 3 days from the date of receipt of impugned show cause notice Rc.No.Admn./HRD-1/JFC/2014-15, dt. 13.01.2014 of the 2nd Respondent herein as to why the proposed punishment of dismissal from service should not be implemented is uncalled for and unwarranted in view of the fact that the charges were framed against the Petitioner on 08.10.2013 and the Petitioner was superannuated from service even as per the counter filed by the Respondents on 31.10.2013 and the impugned show cause notice issued to the Petitioner is dt. 13.01.2014. 14. The Hon’ble Supreme Court in Dev Prakash Tiwari Vs. U.P. Co-operative Institutional Service Board reported in (2014) 7 SCC 260 in para 8 while reiterating the law laid down by the Hon’ble Supreme Court in BHAGIRATHIJENA VS. BOARD OF DIRECTORS, O.S.F.C., observed at paras 8, 9 and 10 as under : “Para 8. Once the appellant had retired from service on 31.3.2009, there was no authority vested with the respondents for continuing the disciplinary proceeding even for the purpose of imposing any reduction in the retiral benefits payable to the appellant. In the absence of such an authority it must be held that the enquiry had lapsed and the appellant was entitled to get full retiral benefits. Para 9. The question has also been raised in the appeal with regard to arrears of salary and allowances payable to the appellant during the period of his dismissal and upto the date of reinstatement. Inasmuch as the inquiry hadlapsed, it is, in our opinion, obvious that the appellant would have to get the balance of the emoluments payable to him. Para 10. Inasmuch as the inquiry hadlapsed, it is, in our opinion, obvious that the appellant would have to get the balance of the emoluments payable to him. Para 10. The appeals are, therefore, allowed and the judgment and order of the High Court are set aside and the respondents are directed to pay arrears of salary and allowances payable to the appellant and also to pay him his all the retiral benefits in accordance with the rules and regulations as if there had been no disciplinary proceeding or order passed therein. No costs.” 15. Taking into consideration the above said facts and circumstances and the law laid down by the Apex Court in the judgements referred to and extracted above reported in BHAGIRATHIJENA VS. BOARD OF DIRECTORS, O.S.F.C., 1999 (3) SCC 666 , and Dev Prakash Tiwari Vs. U.P. Co-operative Institutional Service Board reported in 2014 (7) SCC 260 , that in the absence of any provision in regulations providing for continuation of disciplinary proceedings after the retirement of the employee the Respondent cannot continue the disciplinary proceedings after the retirement of the employee, the writ petition is allowed as prayed for, the impugned show cause notice Rc.No.Admn./HRD-1/JFC/2014-15, dated 13.01.2014 of the 2nd Respondent is set aside and the respondents are directed to release the petitioner’s terminal benefits and all other amounts legally due to the petitioner which had been withheld by the respondents herein unlawfully within a period of two weeks from the date of receipt of the copy of this order. However, there shall be no order as to costs. Miscellaneous petitions, if any, pending shall stand closed.