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2024 DIGILAW 1651 (GUJ)

Firozbhai Yakubbhai Shaikh v. Administrator

2024-08-01

VAIBHAVI D.NANAVATI

body2024
JUDGMENT : 1. By way of present petition, the petitioner herein has challenged the dismissal order bearing Reference No.GM/52/PST/5518, dated 11.01.2011 issued by the respondent No.2. 2. Heard Mr. D.G. Shukla, learned advocate appearing for the petitioner, Mr. Aadit R. Sanjanwala, learned advocate appearing for the respondent Nos.2 and 4 and Mr. Darshan M. Parikh, learned advocate appearing for the respondent No.3. 3. It is the case of the petitioner herein that the petitioner was initially temporarily appointed as an Apprentice Junior Clerk with effect from 10.06.1994 for a period of six months by the respondent No.2, later on confirmed on 06.03.1995 by the Board on the post of Junior Clerk at Surat Branch. The said orders are duly produced at Annexure – A colly. 3.1 The petitioner was promoted to the post of Junior Officer by the Board on 29.07.2003. The petitioner was assigned additional powers of Assistant Manager on 30.04.2005 initially, for a period of six months, which was further extended from time to time till 30.04.2009 by the respondent No.2. The said communications are duly produced at Annexure – B and Annexure – C colly. 3.2 Because of some under-statement of financial data in the balance sheet and net worth of the bank; not being fully reflected and due to suspicion of fraud in the business of respondent No.2 – bank, the Reserve Bank of India vide order dated 23.01.2009 superseded the Board of Directors of the respondent No.2 under the provisions of Section 36AAA of Banking Regulations Act, 1949 (for short ‘the Act’). By order dated 23.01.2009, the Executive Director of the Reserve Bank of India issued certain directions to the respondent No.2 under Section 35A read with Section 56 of the Act. The business of the respondent No.2 was put under moratorium by the Reserve Bank of India on even date i.e. 23.01.2009, which came to be subsequently modified on 26.01.2009 and to be continued under the supervision of the Administrator – Respondent No.1 herein. 3.3 It is the case of the petitioner that the respondent No.2 being the General Manager and Chief Executive Officer of the bank, subsequent to the order dated 23.01.2009; having handed over the charge to the respondent No.1, could not have exercised the powers vested in him prior to 23.01.2009. The respondent No.2 was required to only assist and provide necessary support to the respondent No.1 in discharging the duties. The respondent No.2 was required to only assist and provide necessary support to the respondent No.1 in discharging the duties. 3.4 It is the case of the petitioner that the impugned order of dismissal dated 11.01.2011 is issued by the respondent No.2 duly produced at page 87, Annexure – P, in the capacity as General Manager of the respondent No.2 – bank. It is further the case of the petitioner that it was not competent for the respondent No.2 to issue the aforesaid order when the Administrator had taken over the management of the bank as back as on 23.01.2009. It is also the case of the petitioner that the impugned order of dismissal dated 11.01.2011, as referred above, is without following the principles of natural justice or initiation of any inquiry against the petitioner to arrive at the alleged misconduct pursuant to the show cause notice issued to the petitioner on 11.08.2009 for commission of act of misconduct involving willful insubordination and habitual absence without leave. It is submitted that on the aforesaid ground also, the impugned order of dismissal of the petitioner dated 11.01.2011 is required to be interfered with; the same having been passed without following due procedure. 4. Mr. D.G. Shukla, learned advocate appearing for the petitioner, substantiated the aforesaid facts and placed reliance on the order passed by the Hon’ble Bombay High Court in Writ Petition No.275 of 2011 in the case of another employee, who was similarly situated as that of the petitioner wherein, the Bombay High Court while passing the said order, initially pending the said proceedings, held that once the Administrator was appointed, it was not open for the CEO of the respondent – bank to pass any order and that, the order passed in the case of the said employee on 18.02.2011, would be non-est in the eye of law. It is submitted that subsequently, vide order dated 27.07.2011 duly produced at page 144, Annexure – R-V, the petition stood allowed wherein, it was held that in absence of the provision empowering the Board of Directors to delegate its authority to remove the employee of the bank, who was initially appointed by the Board of Directors, the General Manager was not competent to pass the order 18.12.2010. On the aforesaid ground, the effect of the direction, was restored status-quo ante, as operated prior to 18.12.2010 and the petitioner, in the said case, was deemed to be continued in service and would be entitled to such benefits, as may be available, to similarly placed employees provided in the scheme of arrangement of transfer of specific Assets and Liabilities of the respondent No.2 – bank. It was further directed that so far as the consequential reliefs claimed by the petitioner, in the said case, were with respect to the salary, the Court was not inclined to issue such directions and that, the petitioner was relegated to pursue remedy in consonance with the scheme of liquidation. 4.1 Mr. Shukla, learned advocate, further submitted that the present petitioner is identically placed to the petitioner before the Bombay High Court in Writ Petition No.275 of 2011 and the case of the present petitioner would also be governed by the aforesaid order passed by the Bombay High Court in the aforesaid petition. It is reiterated that the said order is also violative of the principles of natural justice and that, the respondent authority be directed to consider the petitioner for being inducted/absorbed in the respondent No.3 bank pursuant to the notice dated 09.03.2011. 4.1.1 The aforesaid submission was substantiated by relying on the ratio laid down by the Hon’ble Apex Court in 1993 (2) GLH 174 in case of D.K. Yadav vs. (M/s.) J.M.A. Industries Ltd. more particularly, paragraph 14 wherein, it is held that the termination of service of workman without inquiry offence the right of a delinquent under Article 14 of the Constitution of India. It is submitted that in the facts of the present case, the petitioner herein is dismissed without initiation of any inquiry and the charge against the petitioner is also not proved. It is submitted that the show cause notices which are issued to the petitioner from time to time, would not entitle the respondent authority to issue an order of dismissal without inquiring into the issue. It is also submitted that on 14.10.2010, the petitioner informed the respondent authority by written communication to resume the service, which was declined by communication dated 20.10.2010. It is submitted that the petitioner again requested on 01.11.2010 reiterating the request however, the impugned order of dismissal came to be passed on 11.01.2011. 5. Mr. It is also submitted that on 14.10.2010, the petitioner informed the respondent authority by written communication to resume the service, which was declined by communication dated 20.10.2010. It is submitted that the petitioner again requested on 01.11.2010 reiterating the request however, the impugned order of dismissal came to be passed on 11.01.2011. 5. Mr. Darshan M. Parikh, learned advocate appearing for the respondent No.3, placed reliance on the affidavit-in-reply filed by the respondent No.3 and submitted that the petitioner herein was an employee of the Memon Co-operative Bank Limited – the respondent No.2 herein and was never an employee of the respondent No.3. If the petitioner has any grievance against the respondent No.2, the same can be agitated against the respondent No.2 herein. Reliance is placed on paragraphs 5 and 6 of the affidavit-in-reply which is duly produced at page 104, and submitted that the petitioner herein has sought for two independent reliefs against two parties for two independent actions and there is no direction prayed against the respondent No.3. 5.1 Mr. Parikh, learned advocate, submitted that the Reserve Bank of India passed and sanctioned a Scheme for transfer of the Specific Assets and Liabilities of the respondent No.2 – bank under Section 18(b) of the Multi-State Co-operative Societies Act, 2002 read with Section 56 of the Banking Regulation Act, 1949. Some of the assets and liabilities are taken over as referred to in Schedule ‘A’, which is duly produced at Annexure ‘A’. Reliance is placed on Chapter VI of the Scheme with respect to the rights and obligations of the transferor bank. It is submitted that the bank has not taken over any liability of the employees of the transferor respondent No.2 – bank. The only right given to the permanent employees, who were on the roll of the respondent No.2 – bank as on 12.01.2011 i.e. the effective date, was that the said employees would be eligible to appear before the screening committee; to be appointed by the bank, after assessment of suitability of such persons based on various criteria subject to exceptions provided in clause 2 of the chapter. Placing reliance on the same, it is submitted that if any of the employees of the transferor bank would fall into the criteria as stated in clause 2 of Chapter VI of the said Scheme which is duly produced at Annexure – B, page 111, no opportunity would be offered to appear before the screening committee. Clause 2(B) of the said scheme provides for absent from duty from service the service of transferor bank for more than or equivalent to 30 days on the effective date whereas, Clause 2(D) provides for against whom disciplinary action pending. Placing reliance on the aforesaid, it is submitted that the screening committee has already completed the job and therefore, the petitioner would not be eligible for selection in any case. 5.2 Mr. Parikh, learned advocate, also submitted that the Administrator and subsequently, the Official Liquidator will have power to pass appropriate orders even if, it were to be held that the General Manager had no power to pass the impugned orders. It is lastly submitted that the petitioner has no right to avail any opportunity of being inducted/absorbed in the respondent No.3 – bank as prayed for in the petition. 6. Mr. Aadit R. Sanjanwala, learned advocate appearing for the respondent Nos.2 and 4, placed reliance on the affidavit-in- reply filed on behalf of the respondent No.4 – Official Liquidator of the respondent No.2 – bank, and submitted that the impugned order of dismissal dated 11.01.2011 duly produced at page 87, Annexure – P, is passed by the Administrator whereby, the recommendation of the CEO of the respondent No.2 – bank has been approved and the CEO is directed to issue the order dismissal. It is submitted that the eligible employees of bank been taken as fresh recruits by the Bank of Baroda - respondent No.3 herein in terms of the scheme sanctioned by the Central Registrar of Co-operative Societies, New Delhi as well as RBI whereby, a specific Scheme of Arrangement whereunder specific assets and liabilities of the bank have been transferred to the Bank of Baroda with effect from 18.04.2011. 6.1 Reliance is placed on communication dated 23.01.2009 issued by the RBI vide letter No.VBD.CO.NSG.I No.7285/12.22.141-2008-2009 addressed to the CEO of the Bank wherein, it is conveyed that in view of supersession of the Board of Directors, the CEO should assist and provide the Administrator all necessary support to discharge his duties. 6.1 Reliance is placed on communication dated 23.01.2009 issued by the RBI vide letter No.VBD.CO.NSG.I No.7285/12.22.141-2008-2009 addressed to the CEO of the Bank wherein, it is conveyed that in view of supersession of the Board of Directors, the CEO should assist and provide the Administrator all necessary support to discharge his duties. Placing reliance on the aforesaid, it is submitted that no error could be said to have been committed by the respondent No.2 in passing the impugned order. 6.2 Mr. Sanjanwala, learned advocate, has also placed reliance on the various communications undertaken between the petitioner and the respondent No.2 from time to time which are on record wherein, on 09.06.2009, the petitioner was issued an order of transfer to the other bank and an order of even date, to hand over the charge; duly produced at page 50 and 51 respectively. It is submitted that the petitioner resisted such transfer and in view thereof, the respondent No.2 has issued five show cause notices to the petitioner to resume the duty however, the petitioner resisted the same until 04.10.2010 which is after a period of one year to resume the duties. However, the same was declined by the respondent No.2. It is submitted that in view thereof, the respondent authority has followed due procedure and that, the impugned order of dismissal dated 11.01.2011 is just and proper. Analysis:- 7. Heard the learned advocates appearing for the respective parties. It emerges that the impugned order passed by the respondent No.2 dated 11.01.2011 whereby, the petitioner’s services are terminated with immediate effect and the petitioner is dismissed without following due procedure and cardinal principles of natural justice. 7.1 The following order came to be passed on 11.01.2011 by the respondent No.2, duly signed by the General Manager (CEO): “Dear Sir, While employed as Junior Officer holding temporary powers of Asst. Manager, at Bank's Surat Branch, by order dated 09.06.2009 you were transferred and posted at Bank's Dhoraji Branch with effect from 11.06.2009. You instead of joining duty at Dhoraji Branch on transfer remained absent unauthorizedly for which you were issued show cause notice dated 11.08.2009 for commission of acts of misconduct Involving 'willful insubordination' and 'habitual absence without leave'. Even thereafter you totally falled and neglected to report for duty in spite of various reminders and demands to that effect. You instead of joining duty at Dhoraji Branch on transfer remained absent unauthorizedly for which you were issued show cause notice dated 11.08.2009 for commission of acts of misconduct Involving 'willful insubordination' and 'habitual absence without leave'. Even thereafter you totally falled and neglected to report for duty in spite of various reminders and demands to that effect. Your conduct in not reporting for duty since June 2009 amounts to 'willful in- subordination' and 'unauthorized absenteeism'. Further, it is explicit from your long unauthorized absence that you have no interest in continuing with the services of the Bank amounting to abandonment of job. Because of these acts of misconducts the Management has lost the confidence reposed in you as an Officer and you have rendered yourself unfit to be retained in the services of the Bank. In view of the above facts please take notice that your service with the Bank stands terminated with immediate effect and accordingly you are hereby dismissed from service. Further, you are also instructed to surrender Bank’s Identity Card and all the properties belonging to the Bank lying with you, within two days of receipt of this order to the Branch Manager at Surat. Sd/- P.S. Telang General Manager (CEO)” 8. The aforesaid order if read with the affidavit-in-reply which is filed by the respondent No.4 herein, it states that the Administrator had passed the following order, which reads thus: “I have perused the contents of this note in 3 pages and observe that the service record of the concerned Officer has not been satisfactory for long since 2003 with many instances or acts of omission and commission for which many Show Cause Notices were issued to him. It is also observed that when the Officer was transferred to Dhoraji branch without complying with the order, he went on leave and submitted Medical Certificate. Even after extending his leave at his request on Medical ground he did not report for duty. For over one year since October 2009 the Officer abstained from work without any intimation which is a matter of serious misconduct. Considering all the issues stated in the note, I am in agreement with the recommendation that he is unfit to be retained in the Bank and deserves severe punishment. Accordingly, as recommended, the dismissal of the officer is approved C.E.O. to issue the dismissal order.” 9. Considering all the issues stated in the note, I am in agreement with the recommendation that he is unfit to be retained in the Bank and deserves severe punishment. Accordingly, as recommended, the dismissal of the officer is approved C.E.O. to issue the dismissal order.” 9. The aforesaid appears to be a noting. No order is produced on record. In light of the aforesaid undisputed facts, in absence of any order produced on record, the contention raised in the petition by the learned advocate appearing for the petitioner that the respondent No.3 had no power to pass the impugned order, requires consideration. Further, it is also apposite to refer to the communication issued by the Reserve Bank of India duly produced at Annexure – R – II, page 140, whereby, the respondent No.2 was directed to handover the charge to Shri R.V. Iyer, who was appointed as Administrator of the Bank, with further direction to assist and provide him all the necessary support to discharge his duties. Admittedly, the impugned order of dismissal is signed by the CEO of the respondent No.3 and the same is not signed by the Administrator of the bank, Shri R.V. Iyer. 10. The aforesaid issue was subject matter of consideration before the Hon’ble Bombay High Court. It is apposite to refer to the ratio laid down in 2011 (4) ALL MR 334 in case of Mr. Arif Mohd. Ghasswala Vs. Shri R.V. Iyer & Ors.. Paragraphs 4 to 8 of the said decision read thus: “4. However, in the present case, it is indisputable that the Board of Directors of the said Respondent bank has been superseded on 23.1.2009 under orders passed by the competent authority in exercise of powers under Section 36(kkk) of the Banking Regulation Act. Consequent to the said order, the respondent R. V. Iyer has been appointed as Administrator. In this background, Counsel for the petitioner placing reliance on the decision of the Apex Court in the case of Gayatri De Vs. Mousmi Co-operative Housing Society Ltd. & Ors. reported in (2004)5 Supreme Court Cases 90, in particular the dictum in paragraph-47 of the reported decision contends that since Administrator has been appointed to supersede the Board of Directors of the Co-operative bank in question, a writ would lie. Mousmi Co-operative Housing Society Ltd. & Ors. reported in (2004)5 Supreme Court Cases 90, in particular the dictum in paragraph-47 of the reported decision contends that since Administrator has been appointed to supersede the Board of Directors of the Co-operative bank in question, a writ would lie. Paragraph-47 reads thus : "The appellant herein filed a writ petition in question in the nature of mandamus commanding the respondent therein not to give effect to the letter dated 1-11-1988 issued by the Special Officer of the Society and to forbear from acting on the basis thereof and pursuant thereto. Thus it is seen that since the subject-matter of the writ petition is the order passed by the Special Officer in discharging of his statutory functions, the writ petition is maintainable in law. The Special Officer is appointed under the provisions of the Act and as such he is a statutory officer and, therefore, he should be regarded as a public authority. Apart from that, Article 226 of the Constitution is not confined to issue of writ only to a public authority, the bar extends also to issue directions to any person. In our opinion, in a case where the co-operative society is under the control of a Special Officer, a writ would lie." 5. In view of the legal position expounded by the Apex Court, specific to cases where Special Officer such as Administrator is appointed in discharging statutory functions, the grievance regarding order passed by such Officer is amenable to writ jurisdiction. As a result, Writ petition will have to proceed on merits. 6. Insofar as merits is concerned, it is not in dispute that the petitioner was employed as Assistant General Manager (Legal & Recovery, main branch) by the then Board of Directors of the Respondent bank. However, the impugned order of dismissal from service, has been issued under the signature of General Manager (CEO) presumably on the basis of direction given by the Administrator to issue such order against the petitioner. The Administrator having stepped into the shoes of Board of Directors would therefore, be the appointing authority. The appointing authority alone would be competent to take action such as dismissal from service against the employee of the bank. 7. The Administrator having stepped into the shoes of Board of Directors would therefore, be the appointing authority. The appointing authority alone would be competent to take action such as dismissal from service against the employee of the bank. 7. In the present case, the order, however has been issued under the signature of General Manager/CEO of the bank and not the Board of Directors or the Administrator of the bank as such. If it is so, the impugned order cannot be sustained in the eyes of law. Faced with this situation, the counsel for the Respondent-Bank prays for time to place on record express provision which enables the Board of Directors/Administrator to delegate powers of dismissal to some other Officer such as General Manager/CEO. Alternatively, if such provision is absent, the Administrator would take appropriate measures in that behalf and issue orders as may be necessary in the fact situation of the present case. He further submits that now Notification has been issued, as a result of which, the respondent-bank would cease to exist in the eye of law w.e.f. 18.4.2011. He submits that as per the scheme of Reserve Bank of India, the petitioner in any case, would not be entitled for being absorbed in some other bank as that absorption is limited to the workers covered under Industrial Disputes Act. We are not expressing any opinion on these matters for the present. If under the scheme, the petitioner is required to be absorbed, in the event of setting aside of the impugned decision, it would necessarily follow that the appropriate authority under whose employment the petitioner would be placed, will be required to take necessary steps as may be advised. Respondent nos.1 & 2 may consider these aspects of the matter. 8. We make it clear that Administrator or the new authority as the case may be, is free to pass appropriate order in spite of pendency of this petition, by treating the impugned order passed by the General Manager as non-existent in law.” 11. Subsequent to the aforesaid, the Hon’ble Bombay High Court also passed the final order in the petition of the similarly placed employee whereby, the petition was allowed and it was held that the respondent No.3 did not have any power to remove the employee of the bank; the bank having been taken over by the Administrator. The aforesaid are undisputed facts. 12. The aforesaid are undisputed facts. 12. Further, Mr. Shukla, learned advocate appearing for the petitioner, in rejoinder, referred to the reply filed by the respondent No.3 – Bank of Baroda and submitted that the screening committee had undertaken the exercise of considering the employees of the respondent No.3- bank on 12.01.2011 and the order dismissal qua the petitioner herein came to be passed on 11.01.2011 i.e. a day prior to the exercise undertaken by the screening committee of the respondent No.3. 13. Upon perusal of the affidavit filed by the respondent No.3, it appears that the screening committee had undertaken the aforesaid exercise on 12.01.2011 i.e. the effective date and the employees of the respondent No.3 would be eligible to appear before the screening committee. 14. It is also apposite to refer to the ratio as laid down in 1993 (2) GLH 174 in case of D.K. Yadav vs. (M/s.) J.M.A. Industries Ltd., wherein, paragraph 14 reads thus: “14. It is thus well settled law that right to life enshrined under Art. 21 of the Constitution would include right to livelihood. The order of termination of the service of an employee/workman visits with civil consequences of jeopardising not only his/her livelihood but also career and livelihood of dependents. Therefore, before taking any action putting an end to the tenure of an employee/workman fair play requires that a reasonable opportunity to put forth his case is given and domestic enquiry conducted complying with the principles of natural justice. In D.T.C. v. D.T.C. Mazdoor Congress and Ors. (supra) the constitution bench, per majority, held that termination of the service of a workman giving one month's notice or pay in lieu thereof without enquiry offended Art. 14. The order terminating the service of the employees was set aside.” 15. In light of the aforesaid undisputed facts and the position of law, as referred above, the aforesaid exercise undertaken by the respondent authority is without following the principles of natural justice. Further, the respondent No.4 has failed to placed on record any order passed by the respondent No.4. The impugned order dated 11.01.2011 on record duly produced at page 87, is an order which is passed by the CEO of the respondent No.2-bank. In light of the aforesaid, the said order is held to be non-est in eye of law. 16. Further, the respondent No.4 has failed to placed on record any order passed by the respondent No.4. The impugned order dated 11.01.2011 on record duly produced at page 87, is an order which is passed by the CEO of the respondent No.2-bank. In light of the aforesaid, the said order is held to be non-est in eye of law. 16. For the foregoing reasons, this is a fit case to exercise extra-ordinary jurisdiction under Article 226 of the Constitution of India. The impugned order dated 11.01.2011 passed by the respondent No.2 is required to be quashed and set aside and the same is hereby quashed and set aside. Accordingly, the petitioner herein is entitled to the consequential benefits. The respondent authority to act accordingly within a period of two months from the receipt of this order. 17. The present petition is allowed to the aforesaid extent. Rule is made absolute to the aforesaid extent.