CoramThe Honourable Mr v. Canara Bank

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 5-10-2007CoramThe Honourable Mr.Justice K. VENKATARAMANWRIT PETITION No.24153 of 2007andM.P.Nos.1 and 2 of 2007D.R.P.Sundharam .. PetitionerVs.Canara Bank,rep. by its Executive Director,Industrial Relations Section,Personnel Wing,112, J.C. Road,Bangalore 560 002. .. Respondent Writ Petition filed under Article 226 of the Constitution ofIndia praying to issue a writ of certiorarified mandamus calling forthe records relating to the charge sheet issued by the respondent inproceedings No.REF:IRS:DP:CBEO:CS-14/2007dated 28.6.2007, quash thesame and consequently direct the respondent to disburse allretirement benefits with interest for the delayed period as well asregularise the period of suspension and pay the full pay andallowances with all fringe benefits in respect of the said period ofsuspension. For Petitioner : Mr.Vijay Narayan, S.C. For Mr.P.Nehru For Respondent : Mr.P.R.Raman O R D E RThe petitioner has come forward with the present WritPetition challenging the charge memo issued by the respondent in hisproceedings dated 28.6.2007, for quashing the same, and consequentlydirecting the respondent to disburse all retirement benefits withinterest for the delayed period as well as regularise the period ofsuspension and pay full pay and allowances with all benefits. https://hcservices.ecourts.gov.in/hcservices/

2. The facts which are necessary for the disposal of thepresent Writ Petition are as follows:-(a) The petitioner had joined the service of the CanaraBank as Officer on Contract on 6.4.1970 and thereafter promoted asDeputy General Manager in the respondent-bank. In December 2004,the respondent issued a memorandum to the petitioner in respect ofcertain minor irregularities said to have occurred while thepetitioner was working as Assistant General Manager in the RegionalOffice of the bank at Coimbatore. The petitioner immediatelysubmitted his explanation on 22.12.2004 followed by a further letterdated 15.4.2005. Thereafter, no action was taken in pursuant to thesaid memorandum. (b) In April 2005, the petitioner applied for appointmentas General Manager in Tamil Nadu Mercantile Bank Ltd, a privatesector bank and also got an appointment order on 11.5.2005.Thereafter, the petitioner applied for V.R.S. with the Canara Bankon 18.5.2005. The petitioner's action in seeking new employment hadangered the respondent-management and in the result, resurrectingthe earlier show cause notice, the respondent gave the letter dated13.7.2005 stating that certain disciplinary proceedings werecontemplated against the petitioner and therefore, it is notpossible to relieve the petitioner from service. (c) Thereafter, on 23.7.2005, a letter was issued inrespect of some irregularities said to have been committed while thepetitioner was working at Coimbatore. The petitioner immediatelyreplied the same on 9.8.2005. The petitioner was not promoted asGeneral Manager when eligibility came in June 2006. Thereafter, on12.6.2006, a further memorandum was issued in respect of certainirregularities and immediately a reply was given by the petitioneron 27.6.2006. At that time, the petitioner was working as DeputyGeneral Manager, New Delhi and was transferred from New Delhi toBangalore in July 2006. (d) Thereafter, on 30.12.2006, yet another memorandum wasissued to the petitioner in respect of some irregularities said tohave taken place while the petitioner was working at New Delhi from23.12.2003 to 15.7.2006. The petitioner immediately replied on16.1.2007. In the meanwhile, the petitioner had been suspended fromservice by an order dated 23.11.2006.(e) The petitioner was due to retire from service on31.5.2007 and therefore, the respondent passed an order on 19.5.2007permitting the petitioner to retire from service and also statedthat in terms of Regulation 20(3)(iii) of the Canara Bank (Officers)Service Regulations, 1979 [hereinafter referred to as "theRegulation"], disciplinary proceedings will continue as if he was inservice of the bank until the proceedings are concluded and finalorders are passed in respect thereof. It is further stated in thesaid proceedings that the petitioner will not receive and pay and https://hcservices.ecourts.gov.in/hcservices/ allowance after the date of superannuation and he will not beentitled for any retirement benefits till the disciplinaryproceedings are completed and final orders passed, except his owncontribution to the provident fund. Thereafter, the respondentissued the impugned charge memo dated 28.6.2007 initiatingdisciplinary proceedings against him.3. Aggrieved over the issuance of the said charge memo,the petitioner has come forward with the present Writ Petition onthe following grounds:-(i) After the date of superannuation of the petitioner,the respondent would not have any jurisdiction in law to initiateany disciplinary proceedings again him.(ii) Rule 20(3)(iii) of the said Regulations will notapply to the facts and circumstances of the case, inasmuch as nodisciplinary proceeding was initiated against the petitioner priorto the date of his retirement on superannuation and the respondentcannot proceed with the enquiry in pursuance of the said chargememo.4. Counter affidavit has been filed by the respondentwherein it has been pointed out that disciplinary proceedings havebeen initiated against the petitioner in view of certainirregularities committed by the petitioner. The petitioner was alsoplaced under suspension by proceedings dated 23.11.2006, havingregard to the seriousness of the lapses/irregularities committed andalso the huge financial risk involved. Since the petitioner reachedthe age of superannuation on 31.5.2007, the petitioner was permittedto retire by the competent authority vide proceedings dated19.5.2007 invoking the provision of 20(3)(iii) of the saidRegulations in order to continue the disciplinary proceedingsagainst the petitioner as if he is still in service until thedisciplinary proceedings are concluded and the final orders passedthereon. Thereafter, the petitioner had been issued with the chargememo dated 28.6.2007. Since the charge memo has been issued to thepetitioner in pursuance of Regulation 20(3)(iii) of the saidRegulations, the Writ Petition is liable to be dismissed.5. The crux of the counter affidavit is to the followingeffect:-(a) In view of certain irregularities committed by thepetitioner, the petitioner had been placed under suspension videproceedings dated 23.11.2006 and thereafter by proceedings dated19.5.2007, the petitioner had been permitted to retire from service,since the petitioner reached the age of superannuation on 31.5.2007.Regulation 20(3)(iii) of the said Regulations empowers the bank tocontinue the disciplinary proceedings even after the petitionerattained the age of superannuation and hence, the petitioner cannotraise a huge cry that after the petitioner attained the age of https://hcservices.ecourts.gov.in/hcservices/ superannuation, the disciplinary proceedings cannot be continuedagainst him.(b) Since the petitioner had already been placed undersuspension on 23.11.2006, it is deemed that the disciplinaryproceedings have been initiated against the petitioner and hence,the claim of the petitioner that the disciplinary proceeding hasbeen initiated against him subsequent to his attaining the age ofsuperannuation on 31.5.2007 is absolutely incorrect.6. Mr.Vijay Narayan, the learned senior counsel appearingfor the petitioner and Mr.P.R.Raman, the learned counsel appearingfor the respondent, placed their respective contentions basing onthe affidavit and the counter affidavit of the petitioner and therespondent respectively.7. The main contentions raised by Mr.Vijay Narayan, thelearned senior counsel appearing for the petitioner, are asfollows:-(a) The petitioner attained the age of superannuation on31.5.2007 and the respondent has no jurisdiction in law to initiateany disciplinary proceedings subsequent to the said date. Since thecharge memo has been issued on 28.6.2007, after the petitionerretired from service on attaining the age of superannuation, thesame is non est in law.(b) Regulation 20(3)(iii) of the said Regulations will notapply to the facts and circumstances of the case, inasmuch as nodisciplinary proceeding was initiated prior to the date ofsuperannauation. In that view of the matter, the respondent has nopower or right to initiate disciplinary proceedings after the dateof his superannuation.(c) It is a settled proposition that disciplinaryproceedings can be initiated only by issuance of a charge memo. Inthe case on hand, the charge memo was not issued prior to thepetitioner's attending the age of superannuation, but it was issuedonly later to his retirement, that is, it was issued only on28.6.2007 and hence, the respondent cannot invoke the Regulationreferred to above. Hence, the charge memo issued by the respondentis illegal and without any authority of law.8. Per contra, Mr.P.R.Raman, the learned counsel appearingfor the respondent, mainly contended as follows:-(a) Since the petitioner had already been suspended byproceedings dated 23.11.2006, having regard to the seriousness ofthe lapses committed by him and also the huge financial riskinvolved, it is deemed that the disciplinary proceedings havealready been initiated against the petitioner. https://hcservices.ecourts.gov.in/hcservices/ (b) Regulation 20(3)(ii) of the said Regulations clearlystates that an Officer against whom disciplinary proceedings hasbeen initiated will cease to be in service on the date ofsuperannuation, but the disciplinary proceedings will continue as ifhe was in service until the proceedings are concluded and finalorders are passed in respect thereof. In view of the said positionmade through the Regulation referred to above, there is nojustification on the part of the petitioner to contend that thedisciplinary proceeding has been initiated against the petitionerafter he attained the age of superannuation on 31.5.2007.9. On the backdrop of the matter in issue and also on thesubmission made by the learned senior counsel for the petitioner aswell as the learned counsel for the respondent, now it has to beseen "whether the charge memo issued to the petitioner dated28.6.2007, after the petitioner's attaining the age ofsuperannuation on 31.5.2007 is liable to quashed or not."10. The basic facts which are not in dispute are that thepetitioner was placed under suspension by the proceedings of therespondent-bank dated 23.11.2006, that by the proceedings dated19.5.2007 invoking Regulation 20(3)(iii) of the said Regulations,the competent authority has passed the order that the petitionerwill cease to be in service of the bank on 31.5.2007 and thedisciplinary proceedings will continue as if he is in service of thebank until the disciplinary proceedings are concluded and the finalorders are passed in respect thereof, and that charge memo has beenissued to the petitioner dated 28.6.2007 listing certain chargesagainst him.11. The case of the petitioner is that when once thepetitioner has been allowed to retire on his attaining the age ofsuperannuation on 31.5.2007, the respondent has no power orjurisdiction to issue the charge memo dated 28.6.2007. Regulation20(3) of the said Regulations reads as follows:- "(i) An Officer against whom disciplinaryproceedings are pending shall not leave/discontinueor resign from his service in the bank without theprior approval in writing of the competent authorityand any notice or resignation given by such anOfficer before or during the disciplinary proceedingsshall not take effect unless it it is accepted by theCompetent Authority.(ii) Disciplinary proceedings shall be deemed tobe pending against any employee for the purpose ofthis Regulation if he has been placed undersuspension or any notice has been issued to him toshow cause why disciplinary proceedings shall not beinstituted against him and will be deemed to bepending until final orders are passed by thecompetent Authority. https://hcservices.ecourts.gov.in/hcservices/ (iii) The officer against whom disciplinaryproceedings have been initiated will cease to be inservice on the date of superannuation but thedisciplinary proceedings will continue as if he wasin service until the proceedings are concluded andfinal order is passed in respect thereof. Theconcerned officer will not receive any pay and/orallowance after the date of superannuation. He willalso not be entitled for payments of retirementbenefits till the proceedings are completed and finalorder is passed thereon except his own contributionsto CPF."12. By pointing out the said Regulation, Mr.Vijay Narayan,the learned senior counsel appearing for the petitioner, submittedthat initiation of disciplinary proceeding means that charge memoshould be pending before the petitioner attains the age ofsuperannuation. In this connection, the learned senior counselappearing for the petitioner, has drawn my attention to the decisionreported in 2007 (4) S.C.C. 474 (U.C.O. BANK v. RAJINDER LALCAPOOR) and submitted that the Honourable Apex Court has clearlyheld that the departmental proceeding is ordinarily said to beinitiated only when a charge sheet is issued. The Apex Court in theabove pronouncement has dealt with the Regulations in respect ofU.C.O. Bank. The learned senior counsel for the petitionersubmitted that the Regulations of the U.C.O. Bank and theRegulations of the Canara Bank, the respondent herein, are one andthe same, which is not being disputed by the learned counselappearing for the respondent. It is useful to refer paragraphs 17to 23 of the said judgment which is reproduced as follows:-"17. The High Court, therefore, may not correct inarriving at its opinion. However, as would appear fromthe discussions made hereinafter, initiation of thedepartmental proceedings itself, in our consideredopinion, was wholly illegal and without jurisdiction.18.The fact that charge-sheet was issued only on13.11.98 was not in dispute. It also stands admittedthat the respondent attained the age of superannuationon or before 1.11.1996. Disciplinary Proceedingsadmittedly were initiated against the respondent interms of Regulation 20(3)(iii) of UCO Bank OfficerEmployees Services Regulations, 1979 which reads asunder:"The officer against whom disciplinaryproceedings have been initiated will cease tobe in service on the date of superannuationbut the disciplinary proceedings will continueas if he was in service until the proceedingsare concluded and final order is passed inrespect thereof. The concerned officer willnot receive any pay and/or allowance after the https://hcservices.ecourts.gov.in/hcservices/ date of superannuation. He will also not beentitled for the payment of retirementbenefits till the proceedings are competed andfinal order is passed thereon except his owncontributions to CPF."19. A bare perusal of the said provision wouldclearly show that by reason thereof a legal fiction hasbeen created. We are not oblivious of the legalprinciple that a legal fiction must be given fulleffect but it is equally well-settled that the scopeand ambit of a legal fiction should be confined to theobject and purport for which the same has been created.20.In DILIP S.DAHANUKAR v. KOTAK MAHINDRA CO LTDAND ANOTHER (2007 (5) SCALE 452), it was observed:"46.Legal fiction, it is well-settled,must be construed having regard to the purportof the statue. [See Sadashiv Dada Patil vs.Purushottam Onkar Patil (D) By L/Rs (2006(10)SCALE 21); M.P.State Electricity Board v.Union of India & Others (2006(9)SCALE 194);Maruti Udyog Ltd vs. Ramlal & Others (2005 (2)S.C.C. 638); Barat Petroleum Corpn.Ltd v.P.Kesavan & Another (2004 (9) S.C.C. 772)]."21. The aforementioned Regulation, however, couldbe invoked only when the Disciplinary Proceedings hadclearly been initiated prior to the respondent's ceasesto be in service. The terminologies used therein areof seminal importance. Only when a disciplinaryproceeding has been initiated against an officer of thebank despite his attaining the age of superannuation,can the disciplinary proceeding be allowed on the basisof the legal fiction created thereunder, i.e., continue"as if he was in service". Thus, only when a validdepartmental proceeding is initiated by reason of thelegal fiction raised in terms of the said provision,the delinquent officer would be deemed to be in servicealthough he has reached his age of superannuation. Thedepartmental proceeding, it is trite law, is notinitiated merely by issuance of a show cause notice.It is initiated only when a charge sheet is issued (SeeUNION OF INDIA, etc. v. K.V.JANKIRAMAN (AIR 1991 S.C.2010). This aspect of the matter has also beenconsidered by this court recently in COAL INDIA LIMITEDAND OTHERS v. SAROJ KUMAR MISHRA (2007 (5) SCALE 724)wherein it was held that date of application of mind onthe allegations levelled against an officer by theCompetent Authority as a result whereof a charge sheetis issued would be the date on which the disciplinaryproceedings said to have been initiated and not priorthereto. Pendency of a preliminary enquiry, therefore,by itself cannot be a ground for invoking Clause 20 ofthe Regulations. Albeit in a different fact situation https://hcservices.ecourts.gov.in/hcservices/ but involving a similar question of law in COAL INDIALTD (supra) this Court held:"13.It is the case of the appellants thatpursuant to or in furtherance of the complaintreceived by the vigilance department, thecompetent authority had arrived at asatisfaction as is required in terms of thesaid circulars that a charge sheet was likelyto be issued on the basis of a preliminaryenquiry held in that behalf or otherwise.14. The circular letters issued by theappellants put restrictions on a valuableright of an employee. They, therefore, arerequired to be construed strictly. Soconstrued there cannot be any doubt whatsoeverthat the conditions precedent containedtherein must be satisfied before any actioncan be taken in that regard."It was further more observed that:-20. A departmental proceeding isordinarily said to be initiated only when acharge sheet is issued." (See also Union ofIndia v. Sangram Keshari Nayak (2007 (6) SCALE348).22. Respondent, therefore, having been allowed tosuperannuate, only a proceeding, inter alia, forwithholding of his pension under the PensionRegulations could have been initiated against therespondent. Discipline and Appeal Regulations were,thus not attracted. Consequently the chargesheet, theenquiry report and the orders of punishment passed bythe Disciplinary Authority and the Appellate Authoritymust be held to be illegal and without jurisdiction.23. An order of dismissal or removal from servicecan be passed only when an employee is in service. Ifa person is not in employment, the question ofterminating his services ordinarily would not ariseunless there exists a specific rule in that behalf. AsRegulation 20 is not applicable in the case of therespondent, we have no other option but to hold thatthe entire proceeding initiated against the respondentbecame vitiated in law."13. Per contra, Mr.P.R.Raman, the learned counselappearing for the respondent, submitted that in the above referredcase, the Honourable Apex Court was dealing with an employee who hasbeen served with a show cause notice before retirement and not anorder of suspension and hence, the present case on hand could bedistinguished. But, I am unable to accept the said contention ofthe learned counsel for the respondent for the simple reason thatRegulation 20(3)(ii) deals with not only show cause notice, but alsodeals with the case of suspension. Thus, it can be seen that before https://hcservices.ecourts.gov.in/hcservices/ an employee of the bank could retire from service on attaining theage of superannuation, if show cause notice or an order ofsuspension has been passed, the same will not clothe the bank toproceed with the said employee after he attains the age ofsuperannuation by issuing a charge memo subsequent to hisretirement.14. Yet another submission that has been made by thelearned senior counsel appearing for the petitioner is that sincethe Honourable Apex court, while considering the other issues, hadincidentally touched upon the Regulations in that case, theinterpretation of the said Regulation was not the issue involved inthe said case. Regulation 20(3)(ii) of the said Regulations,according to the learned counsel for the respondent, specificallystates that the disciplinary proceedings shall be deemed to bepending against the employee if the employee is placed undersuspension or any show cause notice has been issued. This issuenever came for consideration before the Honourable Supreme Court inthe above referred case, was the contention of the learned counselappearing for the respondent.15. The learned counsel appearing for the respondent inthis connection relied on the judgment of the Honourable Apex courtreported in 2006 (1) S.C.C. 275 (STATE OF ORISSA v. MD.ILLIYAS).The relevant passage relied on by the learned counsel for therespondent is found in paragraph 12 of the said judgment, which isextracted hereunder:-"When the allegation is of cheating ordeceiving, whether the alleged act is wilful or notdepends upon the circumstances of the case concernedand there cannot be any straitjacket formula. TheHigh Court unfortunately did not discuss the factualaspects and by merely placing reliance on an earlierdecision of the Court held that prerequisiteconditions were absent. Reliance on the decisionwithout looking into the factual background of thecase before it, is clearly impermissible. A decisionis a precedent on its own facts. Each case presentsits own features. It is not everything said by aJudge while giving judgment that constitutes aprecedent. The only thing in a Judge's decisionbinding a party is the principle upon which the caseis decided and for this reason it is important toanalyse a decision and isolate from it the ratiodecidendi. According to the well-settled theory ofprecedents, every decision contains three basicpostulates; (i) findings of material facts, directand inferential. An inferential finding of facts isthe inference which the Judge draws from the direct,or perceptible facts; (ii) statements of theprinciples of law applicable to the legal problems https://hcservices.ecourts.gov.in/hcservices/ disclosed by the facts; and (iii) judgment based onthe combined effect of the above. A decision is anauthority for what it actually decides. What is ofthe essence in a decision is its ratio and not everyobservation found therein nor what logically flowsfrom the various observations made in the judgment.the enunciation of the reason or principle on which aquestion before a court has been decided is alonebinding as a precedent. (See State of Orissa v.Sudhansu Sekhar Misra(AIR 1968 S.C. 647) and Union ofIndia v. Dhanwanti Devi (1996 (6) S.C.C. 44)). Acase is a precedent and binding for what isexplicitly decides and no more. The words used byJudges in their judgments are not to be read as ifthey are words in an Act of Parliament. In Quinn v.Leathem (1901 A.C. 495) the Earl of Halsbury, L.C.observed that every judgment must be read asapplicable to the particular facts proved or assumedto be proved, since the generality of the expressionswhich are found there are not intended to be theexposition of the whole law but governed andqualified by the particular facts of the case inwhich such expressions are found and case is only anauthority for what it actually decides."16. I am unable to accept the said contention of thelearned counsel appearing for the respondent for more than onereason. While dealing with the Regulations of the U.C.O. Bank, moreparticularly, Regulation 20(3)(iii), the Honourable Apex Court hasclearly laid down that the departmental proceeding is ordinarilysaid to be initiated only when a charge sheet is issued. In thatparticular case, the charge memo has been issued to the employee ofthe bank after he has attained the age of superannuation. TheHonourable Apex Court dealt with the Regulations in extensio andcame to the conclusion that unless and otherwise the charge memo hasbeen issued to the concerned person before he could retire fromservice, the disciplinary proceeding cannot be proceeded with.Thus, the categorical pronouncement has been made by the HonourableApex Court that the disciplinary proceeding is said to be initiatedonly when a charge sheet is issued. While so, to contend that theHonourable Apex Court did not touch the issue whether disciplinaryproceeding could be initiated against a person after his retirementby issuing charge memo after the retirement of the concernedofficial, is totally unacceptable. It is also far fetching tocontend that interpretation of Regulation was not the issue involvedin the said case and that interpretation of Regulation 20(3)(ii) didnot come up for consideration before the Honourable Apex Court.17. Thus, summing up the entire issue revolved in thepresent case on hand, it is to be answered in the following manner.The charge memo issued to the petitioner dated 28.6.2007 subsequentto the petitioner's attaining the age of superannuation on 31.5.2007 https://hcservices.ecourts.gov.in/hcservices/ is totally not permissible. Hence, the issuance of the charge memodated 28.6.2007 by the respondent is liable to be quashed andaccordingly, quashed. The Writ Petition is therefore allowed.Consequently, the connected Miscellaneous Petitions are closed.However, there is no order as to costs.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.dpp ToThe Executive Director,Canara Bank,Industrial Relations Section,Personnel Wing,112, J.C. Road,Bangalore 560 002.1 cc to Mr.P.R. Raman, Advocate, Sr. 619631 cc to Mr.P. Nehru, Advocate, SR. 62043W.P.No.24153 of 2007;&M.P.Nos.1 and 2 of 2007NG (CO)kk 9/1