I.Muthuvel v. Union Bank of India & Ors.

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 29.06.2009CORAMTHE HONOURABLE MR.JUSTICE S.RAJESWARANW.P.No.8926 of 2009andM.P.Nos.2 & 3 of 2009I.Muthuvel ..Petitioner Vs1. Union Bank of India rep. by its Chief Manager (Personal) No.139, Broadway, Chennai-600 108.2. Assistant General Manager Human Resources Management Department, Union Bank of India, General Manager Office, No.139, Broadway, Chennai-600 108. ..RespondentsWrit petition is filed under Article 226 of theConstitution of India for issuance of a Writ of certiorarifiedmandamus, after calling for the concerned records from therespondents, quash the order of the second respondent dated27.08.2008 bearing Ref.GMO:HRM: 1302:08-08 in so far as stating thatthe disciplinary proceedings will continue, the petitioner will notbe entitled for the payment of retirement benefits till thedisciplinary proceedings are completed and final order is passed andthe charge sheet dated 22.04.2009 issued by the first respondentbearing Ref.No.GMO:DP: 856-04-09 as illegal, arbitrary, withoutjurisdiction and without authority and consequently direct therespondents to release all the terminal benefits to the petitionersuch as gratuity, leave encashment, commuted value of pension,pension etc. along with interest at the rate of 18% from the datewhen it became payable and for cost.For Petitioner : Mr. Balan Haridas For Respondents : Mr. V. Karthik for M/s. T.S.Gopalan and Co. https://hcservices.ecourts.gov.in/hcservices/ O R D E R The case of the petitioner is as follows:When the petitioner was working as an officer in the respondent bank,he was issued with a memo dated 21.08.2008, alleging certainirregularities in the loans sanctioned. On 27.08.2008., thepetitioner submitted his explanation. He was to retire on30.08.2008. On 27.08.2008 the impugned order was passed by the secondrespondent reserving their right to initiate departmentalproceedings. It was also stated therein that the petitioner would notreceive any retirement benefits till the disciplinary proceedings arecompleted and the final order is passed thereon. On 22.04.2009 chargesheet was issued asking him to give his explanation within 7 days.Challenging the charge sheet, the writ petitioner has filed the abovepetition for the above said prayer.2. This court on 14.05.2009 directed the respondent Bank notto proceed further pursuant to the issuance of charge sheet dated22.04.2009. 3. I have heard the learned counsel for the petitioner andthe learned counsel for the respondents. I have also gone through thedocuments available on record.4. Learned counsel for the petitioner while reiterating theaverments made in the affidavit would submit that in the recentjudgment reported in (2007)6 SCC 694, (UCO Bank v. Rajinder LalCapoor), wherein while dealing with the similar issue the Hon'bleSupreme Court has categorically held that continuation ofdepartmental enquiry is possible only in those cases, wheredepartmental enquiry has commenced by issuing charge sheet when thedelinquent officer was in service. It is also stated by the learnedcounsel for the petitioner that Hon'ble Supreme Court has furtherdirected that while quashing the notice issued by the bank, directedthe bank to pay all attendant and terminal benefits expeditiously.Learned counsel for the petitioner would further submit that reviewagainst the judgment filed by the bank before the Hon'ble SupremeCourt was also turned down by the Hon'ble Supreme Court. Learnedcounsel for the petitioner adds that the dictum laid down by theHon'ble Supreme Court will squarely apply to the facts of this caseand the petitioner is entitled to receive all the terminal benefitsand the charge sheet is also to be quashed, as no charge sheet wasissued before his retirement.5. Per contra the learned counsel for the respondent Bankwould contend that initiation of departmental proceedings would meanthat issuance of show cause notice only and not issuance of chargesheet as contended by the learned counsel for the petitioner. He has https://hcservices.ecourts.gov.in/hcservices/ very much relied on clause 20(3)(ii) of Union Bank of India(Officers) Service Regulations 1979 in this regard.6. I have considered the rival submissions carefully withregard to facts and citations.7. From the records, it is made clear that on 21.08.2008, anotice was issued by the second respondent to the petitioner allegingirregularities in the advances sanctioned by the petitioner fortractor loans, housing loans and Union mortgage loans. Thepetitioner was called upon to give his reply within five days. Thepetitioner submitted his reply dt.27.08.2008 stating that what he didwas only for the interest of the Bank and also to achieve thebusiness parameters as fixed by the Bank and considering the factthat he would be retiring from service on 31.8.2008, further actioncould be dropped.8. On the very same day, i.e., 27.8.2008, the secondrespondent issued an order informing the petitioner that in terms ofRegulation 20(3)(iii) of the Union Bank of India Officers EmployeesService Regulation 1979, he would cease to be in the service of theBank from the date of his superannuation i.e. with effect from01.09.2008, but the disciplinary proceedings would continue as if heis in the service till the proceedings are concluded and final orderis passed. It is made clear in the order dt.27.08.2008 that thepetitioner would not receive any pay or allowances after the date ofsuperannuation and he would also be not entitled to for the paymentof retirement benefits till the departmental proceedings arecompleted and final order is passed except his own contribution toC.P.F. Consequently, the petitioner was allowed to retire from theservice of the Bank on and from 01.09.2008. Thereafter, thepetitioner has been making representations to the respondents torelease his retirement benefits and also to stop further action. Infact, on 16.02.2009, he made a representation to the respondentsstating that the issuance of memorandum dt.27.08.2008 is not legalas no disciplinary proceedings were initiated against him by issuingthe charge sheet before his retirement. Thereafter, therespondent/Bank issued Articles of charge dt.22.04.2009 to thepetitioner and challenging the same along with the Memodt.27.08.2008, the above writ petition has been filed for theaforesaid relief.9. The learned counsel for the petitioner has very muchplaced his reliance on the decision of the Hon'ble Supreme Courtreported in (2007)6 SCC 694 (cited supra) and submitted that the memoissued by the Bank in terms of Regulation 20(3)(iii) of the UnionBank of India Officer Employees (Service) Regulations 1979 is illegaland without jurisdiction. According to him, even otherwise theclause cannot be relied on by the Bank as no charge sheet was issuedagainst the petitioner when he was in service. He further pointed https://hcservices.ecourts.gov.in/hcservices/ out that when the judgment reported in (2007)6 SCC 694 (cited supra)was sought to be revived, the Hon'ble Supreme Court dismissed theReview petition by reiterating the law laid down by them and theReview judgment was also reported in (2008)2 SCC (L&S) 263 (UCO Bankand another Vs. Rajinder Lal Capoor). Hence, the learned counselsubmitted that the writ petition is to be allowed as prayed for asthe Regulations of UCO Bank dealt with by the Hon'ble Supreme Courtin the above decisions and the Regulations of respondent Bank areidentical and similar in nature.10. In (2007)6 SCC 694 (cited supra), the delinquent Officerwas to retire on 30.10.1996. A show cause notice was issued to himon 24.10.1996 alleging that certain irregularities were committed bythe respondent in sanctioning and disbursing the loans. Admittedly,he was allowed to retire on 01.11.1996. He was not paid with hisretirement benefits. A charge sheet was issued on 13.11.1998 andenquiry was conducted. Based on the findings of the Enquiry Officer,a punishment of removal from service was imposed on him and theappeal filed by the delinquent Officer was also dismissed by theappellate authority. The delinquent officer filed a writ petitionchallenging the charge sheet dt.13.11.1998 as well as the orders ofthe disciplinary authority and the appellate authority. A learnedSingle Judge of Punjab & Harayana High Court allowed the writpetition in part after finding that the punishment imposed wasgrossly disproportionate to the gravity of charges and directed thatthe penalty of removal from service should be converted to that ofcompulsory retirement. The appeal filed before the Division Benchwas dismissed and the UCO Bank challenged the order of the DivisionBench before the Hon'ble Supreme Court in the above decision.11. In the light of the facts and circumstances of the case,the Hon'ble Supreme Court in (2007)6 SCC 694 (cited supra) observedas under:"18. The fact that charge-sheet was issuedonly on 13-11-1998 is not in dispute. It alsostands admitted that the respondent attained theage of superannuation on or before 1-11-1996.Disciplinary proceedings admittedly were initiatedagainst the respondent in terms of Regulation 20(3)(iii) of the UCO Bank Officer Employees’Services Regulations, 1979 which reads as under:“20. (3)(iii) The officer against whomdisciplinary proceedings have been initiated willcease to be in service on the date ofsuperannuation but the disciplinary proceedingswill continue as if he was in service until theproceedings are concluded and final order ispassed in respect thereof. The officer concerned https://hcservices.ecourts.gov.in/hcservices/ will not receive any pay and/or allowance afterthe date of superannuation. He will also not beentitled for the payment of retirement benefitstill the proceedings are completed and final orderis passed thereon except his own contributions toCPF.”19. A bare perusal of the said provisionwould clearly show that by reason thereof a legalfiction has been created. We are not oblivious ofthe legal principle that a legal fiction must begiven full effect but it is equally well-settledthat the scope and ambit of a legal fiction shouldbe confined to the object and purport for whichthe same has been created.21. The aforementioned Regulation, however,could be invoked only when the disciplinaryproceedings had clearly been initiated prior tothe respondent’s ceasing to be in service. Theterminologies used therein are of seminalimportance. Only when a disciplinary proceedinghas been initiated against an officer of thebank despite his attaining the age ofsuperannuation, can the disciplinary proceeding beallowed on the basis of the legal fiction createdthereunder i.e. continue “as if he was inservice”. Thus, only when a valid departmentalproceeding is initiated by reason of the legalfiction raised in terms of the said provision, thedelinquent officer would be deemed to be inservice although he has reached his age ofsuperannuation. The departmental proceeding, it istrite law, is not initiated merely by issuance ofa show-cause notice. It is initiated only when acharge-sheet is issued (see Union of India v. K.V.Jankiraman11). This aspect of the matter has alsobeen considered by this Court recently in CoalIndia Ltd. v. Saroj Kumar Mishra12 wherein it washeld that date of application of mind on theallegations levelled against an officer by thecompetent authority as a result whereof a charge-sheet is issued would be the date on which thedisciplinary proceedings are said to have beeninitiated and not prior thereto. Pendency of apreliminary enquiry, therefore, by itself cannotbe a ground for invoking Clause 20 of theRegulations. Albeit in a different fact situationbut involving a similar question of law in CoalIndia Ltd.12 this Court held: (SCC p. 631, paras12-13). https://hcservices.ecourts.gov.in/hcservices/ “12[13]. It is not the case of the appellantsthat pursuant to or in furtherance of thecomplaint received by the Vigilance Department,the competent authority had arrived at asatisfaction as is required in terms of the saidcirculars that a charge-sheet was likely to beissued on the basis of a preliminary enquiry heldin that behalf or otherwise.13[14].The circular letters issued by theappellants put restrictions on a valuable right ofan employee. They, therefore, are required to beconstrued strictly. So construed, there cannot beany doubt whatsoever that the conditions precedentcontained therein must be satisfied before anyaction can be taken in that regard.”It was furthermore observed that: (SCC p. 632,para 18)“18[20]. A departmental proceeding is ordinarilysaid to be initiated only when a charge-sheet isissued.”(See also Union of India v. Sangram KeshariNayak13.)22. The respondent, therefore, having beenallowed to superannuate, only a proceeding, interalia, for withholding of his pension under thePension Regulations could have been initiatedagainst the respondent. Discipline and AppealRegulations were, thus not attracted. Consequentlythe charge-sheet, the enquiry report and theorders of punishment passed by the disciplinaryauthority and the appellate authority must be heldto be illegal and without jurisdiction."12. The UCO Bank filed a Review petition and in thatpetition also the Hon'ble Supreme Court in (2008)2 SCC (L&S) 263(cited supra) observed as under:"13.Sub-regulation (1) of Regulation 20 ofthe 1979 Regulations, thus, deals withtermination of service where the performance ofan officer is unsatisfactory or inadequate orwhere there is a bona fide suspicion about hisintegrity or where his retention in the Bank’sservice is prejudicial to interests of thedisciplinary procedure Other sub-regulations ofRegulation 20 provide for the mode and manner inwhich such termination may be effected as alsohis entitlement to prefer an appeal thereagainst https://hcservices.ecourts.gov.in/hcservices/ and other benefits to which he would be otherwiseentitled to.14. Sub-regulation (2) of Regulation 20 ofthe 1979 Regulations places an embargo on anofficial to leave or discontinue his service ofthe Bank without giving a notice in writing. Itprescribes a period of notice.15. Sub-regulation (3) of Regulation 20,however, places an embargo on an officer to leaveor discontinue or resign from service without theprior approval in writing of the competentauthority and a notice or resignation given bysuch an officer before or during the disciplinaryproceedings shall not take effect unless it isaccepted by the competent authority. Clause (ii)of sub-regulation (3) of Regulation 20 must beconsidered from that aspect of the matter. Itraises a legal fiction. Such legal fiction hasbeen raised only for the purpose of “thisRegulation” and for no other, which would meanRegulation 20(1). The final orders which arerequired to be passed by the competent authorityalthough indisputably would be in relation to thedisciplinary proceedings but evidently it is forthe purpose of accepting resignation or leaving ordiscontinuing of the service by the employeeconcerned or grant of approval thereof. Clause(ii) of sub-regulation (3) of Regulation 20 ineffect and substance acts as a proviso to Clause(i) thereof.16. Clause (iii) of sub-regulation (3) ofRegulation 20 is an independent provision. Itprovides for continuation of the disciplinaryproceedings. Such disciplinary proceedingsindisputably for the purpose of applicability ofsub-regulation (3) must have been initiated interms of the 1976 Regulations.17. It is worth noticing the distinctionbetween terminologies “proceeding pending” or“proceeding initiated”. Clause (ii) of sub-regulation (3) of Regulation 20 defines what wouldbe pending viz. for the purpose of attractingClause (i) thereof.18. A disciplinary proceeding is initiated interms of the 1976 Regulations, which areapplicable only in a case where a proceeding isinitiated for the purpose of taking disciplinaryaction against a delinquent officer for the https://hcservices.ecourts.gov.in/hcservices/ purpose of imposing a punishment on him.Disciplinary proceedings, thus, are initiated onlyin terms of the 1976 Regulations and not in termsof the 1979 Regulations.19. It is worth noticing that the 1979Regulations would be attracted when nodisciplinary proceeding is possible to beinitiated. The 1976 Regulations, however, on theother hand, would be attracted when a disciplinaryproceeding is initiated. Both operate in separatefields. We do not see any nexus betweenRegulations 20(1) and 20(2) of the 1979Regulations and the 1976 Regulations.20. The 1976 Regulations provide for the modeand manner in which a disciplinary proceeding isinitiated. It expressly provides for service ofcharge-sheet. Service of charge-sheet is anecessary ingredient for initiation ofdisciplinary proceedings. A preliminary enquiry isnot contemplated under the 1976 Regulations. Ifsuch an enquiry is held, the same is only for thepurpose of arriving at a satisfaction on the partof the disciplinary authority to initiate aproceeding and not for any other purpose.21. If it is found that a disciplinaryproceeding can be and should be initiated,recourse to the 1976 Regulations would have to betaken, if not, the 1979 Regulations may beresorted to if the conditions precedent thereforare satisfied. It is only with a view to put anembargo on the officer to leave his job, Clause(ii) of sub-regulation (3) of Regulation 20 of the1979 Regulations has been made. It’s scope islimited.22. We have noticed herein before that eachregulations operate in different fields. When aproceeding is initiated for the purpose of takingany disciplinary action on the ground of anymisconduct which might have been committed by theofficer concerned indisputably the procedures laiddown in the 1976 Regulations are required to beresorted to.23. The 1979 Regulations would be attractedonly for the purpose of termination of service.Had the intention of the regulation-makingauthority been that the legal fiction createdunder Clause (ii) of sub-regulation (3) of https://hcservices.ecourts.gov.in/hcservices/ Regulation 20 would cover both Clauses (i) and(iii), the same should have been placed onlyafter Clause (iii). In such an event, Clause (ii)of sub-regulation (3) of Regulation 20 shouldhave been differently worded. Some non obstanteclause would have been provided for making anexception to the applicability of the 1976Regulations when a legal fiction is created,although it is required to be taken to thelogical conclusion (see East End Dwellings Co.Ltd. v. Finsbury Borough Council5), but the samewould not mean that the effect thereof would beextended so as to transgress the scope andpurport for which it is created.28. All the regulations must be given aharmonious interpretation. A court of law shouldnot presume a casus omissus but if there is any,it shall not supply the same. If two or moreprovisions of a statute appear to carry differentmeanings, a construction which would give effectto all of them should be preferred. (See GujaratUrja Vikash Nigam Ltd. v. Essar Power Ltd.11)29. In terms of the 1976 Regulations drawingup of a charge-sheet by the disciplinaryauthority is the first step for initiation of adisciplinary proceeding. Unless and until,therefore, a charge-sheet is drawn up, adisciplinary proceeding for the purpose of the1976 Regulations cannot be initiated. Drawing upof a charge-sheet, therefore, is the conditionprecedent for initiation of a disciplinaryproceeding. We have noticed in para 15 of ourjudgment that ordinarily no disciplinaryproceedings can be continued in absence of anyrule after an employee reaches his age ofsuperannuation. A rule which would enable thedisciplinary authority to continue a disciplinaryproceeding despite the officers reaching the ageof superannuation must be a statutory rule. Afortiori it must be a rule applicable todisciplinary proceedings."13. Now, it is an admitted fact that the Regulations ofrespondent Bank are similar and identical to that of the UCO Bank,which were dealt with by the Hon'ble Supreme Court in the aforesaidtwo decisions. The Regulations were also enclosed by the petitionerin the typed set and I have also gone through them. https://hcservices.ecourts.gov.in/hcservices/

14. I am satisfied that both the Regulations are identicalin nature and therefore, the law laid down by the Hon'ble SupremeCourt in the above said decisions would apply to the facts of thiscase in all force.15. Therefore, I have no hesitation to hold that therespondent Bank has no jurisdiction to issue the order dt.27.08.2008as well as the charge sheet dt.22.04.2009, having allowed thepetitioner to retire from the services of the Bank on and from31.08.2008 without issuing any charge sheet and thereby withoutissuing any disciplinary proceedings. Consequently, the petitioneris entitled to get all the terminal benefits and the respondents aredirected to release all the retirement benefits to the petitionerwithin a period of six weeks from the date of receipt of a copy ofthis order. It is open to the Bank to proceed against the petitionerif it is permitted under the law.16. In the result, writ petition is allowed in the aboveterms. No costs. Consequently, connected miscellaneous petitions areclosed. Sd/Asst.Registrar/true copy/Sub Asst.Registrarkpr/vaanTo1. The Chief Manager (Personal), Union Bank of India, No.139, Broadway, Chennai-600 108.2. The Assistant General Manager, Human Resources Management Department, Union Bank of India, General Manager Office, No.139, Broadway, Chennai-600 108.+ 1 c.c. to Mr. T.S. Gopalan & Co., Advocate. S.R.No.26885.+ 1 c.c. to Mr. Balan Haridas, Advocate. S.R.No.26941. W.P.No.8926 of 2009PUR (CO)GSK 17.09.2009.