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Thursday, October 8, 2015

whether the termination of the services of the appellant Gambhir was in any manner vitiated. = At this stage, it may be mentioned that in Chairman, Canara Bank, Bangalore v. M.S. Jasra[4] an employee of the Lakshmi Commercial Bank (which had amalgamated with Canara Bank at the same time when Hindustan Commercial Bank amalgamated with the PNB) the contention of the employee was that the age of retirement (60 years) in Lakshmi Commercial Bank could not be varied to his disadvantage (58 years) on the amalgamation of that Bank with the Canara Bank. This contention was rejected by holding that the employee became an employee of the Canara Bank and was, therefore, entitled to the rights given to employees of the Canara Bank. Applying this principle to the facts of this case, it is clear that Gambhir became an employee of the PNB and was subject to the discipline of all its rules and regulations, including those pertaining to misconduct. 28. It is also contended that the allegations against Gambhir had already been inquired into by the Hindustan Commercial Bank and therefore the PNB could not reopen issues relating to the alleged misconduct and hold an inquiry into them. We do not find any merit in this submission also. There were a large number of transactions which were alleged to be irregular and in which Gambhir was said to be involved. It is possible that there may have been an overlap in respect of some of them (although no such overlap has been shown to us) but that is not an indication that the alleged irregularities committed by Gambhir in respect of other transactions were condoned. In fact, Gambhir has not pointed out which were the transactions which were the subject matter of concern in the Hindustan Commercial Bank and which were the transactions which were the subject matter of inquiry by the PNB. This would have certainly given us a far clearer picture. However, on a random consideration of the allegations made, it does appear that there were certain transactions particularly the transactions pertaining to R.K. Tandon & Co. which were not inquired into by the Hindustan Commercial Bank. It may be recalled that it is the admitted position that in respect of one alleged irregular transaction, the Hindustan Commercial Bank could not take any decision one way or the other due to the amalgamation of that Bank with the PNB. We have not found any duplication in the allegations and are not inclined to carry out any investigation in this regard at this stage. 29. In view of the above, we find no reason to interfere with both the judgments delivered by the Calcutta High Court. The appeal is dismissed.

                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 6975 OF 2009

Jagdish Lal Gambhir                          ....Appellant


                                   Versus

Punjab National Bank & Ors.                         …Respondents


                               J U D G M E N T


Madan B. Lokur, J.

1.    This appeal is directed against the  judgment  and  order  dated  24th
July, 2006 passed by the Division Bench of the High  Court  at  Calcutta  in
FMA No.388 of 2001.
2.    The  issue  for  consideration  is  whether  the  termination  of  the
services of the appellant Gambhir  was  in  any  manner  vitiated.   In  our
opinion, the question requires to be answered in the negative and we  uphold
the judgment and order of the Division Bench  confirming  the  dismissal  of
the writ petition filed by Gambhir.
3.    Gambhir was working as an Assistant General Manager in  the  Hindustan
Commercial  Bank  Limited.   This  bank  was  amalgamated  with  the  Punjab
National Bank on 19th December, 1986.  On amalgamation, the services  of  28
or 29 officials of the Hindustan Commercial Bank including Gambhir were  not
taken over by the Punjab National Bank (for short the  ‘PNB’).   It  may  be
stated that two other banks were similarly amalgamated with the Canara  Bank
and the State Bank of India, but we are not concerned with them.
4.    Several officers whose services were not taken over  by  the  PNB  and
other banks filed a writ petition in this Court  under  Article  32  of  the
Constitution challenging the failure of the transferee banks in  not  taking
over their services.  This Court decided the writ petition and the  decision
is reported as K.I. Shephard v. Union of India[1].   It  was  held  by  this
Court that the transferee banks could not refuse to take over  the  services
of the officials  of  the  transferor  banks.   Consequently,  the  PNB  was
obliged to  take  over  the  officials  of  the  Hindustan  Commercial  Bank
including Gambhir.  It was also directed  if  there  was  any  necessity  of
initiating  disciplinary  proceedings  against  any   of   the   transferred
employees, the transferee banks including PNB were at liberty to do so.
5.    As far as  Gambhir  is  concerned,  while  he  was  working  with  the
Hindustan Commercial Bank, he was issued a  charge-sheet  on  3rd  February,
1983 alleging irregularities in sanctioning of loans  to  the  customers  of
the bank and a failure to take follow  up  steps.  Gambhir  replied  to  the
charge-sheet and was thereafter administered a ‘caution’ and  was  asked  to
be more discreet in respect of granting advances and  management  of  credit
portfolio.  Thereafter in 1986 another set of allegations were made  against
Gambhir but no final decision was taken by  the  Hindustan  Commercial  Bank
until its amalgamation with the PNB.
6.    In view of the above, the PNB issued  a  charge-sheet  to  Gambhir  on
28th November, 1987 in  which  it  was  alleged  that  he  had  deliberately
flouted the bank lending norms and accommodated some parties  unauthorisedly
thereby putting huge funds of the bank at stake.
7.    Feeling  aggrieved  by  the  initiation  of  departmental  proceedings
against him, Gambhir preferred W.P. (C) No. 121 of 1988 in this Court  under
Article 32 of the Constitution.  By an order dated  22nd  April,  1988  this
Court declined to entertain the writ petition but expressed  the  view  that
the inquiry against Gambhir should be completed quickly.    Thereafter,  the
inquiry was conducted and  by  a  report  dated  22nd  September,  1988  the
Inquiry Officer held that the charges against Gambhir were proved  and  that
he had  failed  to  discharge  his  duties  with  utmost  integrity,  honest
devotion and diligence thereby putting huge funds of the bank at stake.
8.    In the meanwhile, Gambhir preferred a writ petition  in  the  Calcutta
High Court being C.M.No.11992  (W)  of  1988  challenging  the  charge-sheet
issued to him and the inquiry proceedings.
9.    It appears that during the pendency of the writ petition  Gambhir  was
dismissed from service with effect from 2nd August, 1989.
10.   Be that as it may the writ  petition  was  dismissed  by  the  learned
Single Judge by judgment and order dated 7th December, 2000.
11.   Before the learned Single Judge,  Gambhir  raised  three  contentions.
It was firstly contended that the charge-sheet  was  issued  to  him  by  an
officer of the same rank, that is, an Assistant  General  Manager  and  this
was not permissible in law.  Therefore, since the issuance  of  the  charge-
sheet was itself vitiated the entire departmental  proceedings  against  him
were null and void.  The learned Single Judge rejected  this  contention  by
referring to Clause 12 of the scheme of amalgamation  whereby  the  PNB  was
entitled  to  classify  and  categorize  the  employees  of  the   Hindustan
Commercial Bank whose services were being taken over.  As far as Gambhir  is
concerned, even though he may have been an Assistant General Manager in  the
Hindustan Commercial Bank, he was placed as a Scale-III officer in the  PNB.
 This is an admitted position and Gambhir did not make any  grievance  about
this at any stage.  The charge-sheet was no doubt  issued  by  an  Assistant
General Manager of the PNB  but  he  was  placed  higher  than  a  Scale-III
officer in  the  hierarchy  and  under  the  Punjab  National  Bank  Officer
Employees (Discipline and Appeal Regulations), 1977  the  Assistant  General
Manager was the disciplinary authority for officers placed in  Scale-III.
12.   The second contention  urged  by  Gambhir  was  that  the  allegations
against him were already the subject matter of an inquiry by  the  Hindustan
Commercial Bank and thus could not be reopened by the PNB merely because  of
a change of employer.  This contention was  also  rejected  by  the  learned
Single Judge holding that what was sought  from  Gambhir  by  the  Hindustan
Commercial Bank was an  explanation  with  regard  to  certain  transactions
which indicated an irregular  conduct  on  his  part.   However,  no  formal
disciplinary proceedings had been initiated against  Gambhir  and  that  did
not preclude the PNB from looking  into  those  alleged  irregularities  and
holding a formal inquiry into them.
13.   The third contention urged by Gambhir before the learned Single  Judge
was that Inquiry Report was not supplied to him before  his  dismissal  with
effect from 2nd August, 1989.  This contention was rejected by  the  learned
Single Judge by holding  that  the  requirement  of  supplying  the  Inquiry
Report arose out of a decision of this Court in  Union  of  India  v.  Mohd.
Ramzan Khan[2]. However that decision was rendered by this  Court  (on  20th
November,  1990)  after  Gambhir  was  dismissed  from  his  service.   That
decision had only prospective effect.  Subsequently, the Constitution  Bench
in Managing Director, ECIL v. B. Karunakar[3]  made it clear that orders  of
punishment passed prior  to  the  decision  in  Mohd.  Ramzan  Khan  without
furnishing the report of  the  Inquiry  Officer  should  not  be  disturbed.
Therefore, Gambhir had no right to a copy of the  Inquiry  Report  prior  to
his dismissal.
14.   At this stage it may be mentioned that Gambhir has not challenged  the
merits of the inquiry at any stage or the punishment  awarded  to  him.   In
that sense Gambhir was not prejudiced by the failure to supply  him  with  a
copy of the Inquiry Report.
15.   Feeling aggrieved by the  decision  rendered  by  the  learned  Single
Judge, Gambhir preferred an appeal before the Division Bench  but  that  was
dismissed by the impugned judgment and order dated 24th July, 2006.
16.   Before the Division Bench  Gambhir  raised  five  contentions.   These
were noted by the Division Bench as follows:-
“(i)  Gambhir was entitled to be appointed in terms  of  the  order  of  the
Apex  Court  in  K.I.  Shephard  (supra).   He  was  to  be  fitted  in  the
appropriate post which he was holding earlier which was not done.
(ii)The disciplinary authority who issued the charge-sheet was nor  properly
authorized to act as such under the service rules.
(iii) No copy of the inquiry report was given to him.  As a result he  could
not defend himself in the proceeding by  offering  his  explanation  to  the
disciplinary authority pointing out the illegality  and  irregularity  crept
in the enquiry report.
(iv)  No second show cause notice was issued to him.
(v)   The charges were stale and could not be proceeded with.”

17.    As far as the first contention  is  concerned  it  has  already  been
mentioned that Gambhir was posted as a Scale–III officer  in  the  PNB  upon
the amalgamation  of  the  Hindustan  Commercial  Bank  with  the  PNB.   No
grievance was made by Gambhir at any point of time regarding his  placement.
 The Division Bench therefore rejected his contention and held that  he  was
appropriately placed in the PNB as a Scale-III officer.  The Division  Bench
held that that apart since the Hindustan Commercial Bank was a much  smaller
bank than the PNB, Gambhir’s designation as an Assistant General Manager  in
the Hindustan Commercial Bank could not be equated  with  the  corresponding
designation in the PNB.  In any event, there was no loss of pay  as  far  as
Gambhir was concerned.
18.     The second contention urged by Gambhir  was  also  rejected  by  the
Division Bench relying principally upon the decision of the  learned  Single
Judge.  Additionally, it was held that when Gambhir  preferred  W.P.(C)  No.
121 of 1988 in this Court, it was observed that the inquiry against  Gambhir
should be expedited.  The Division Bench was of the view that  this  was  an
indication that this Court did not find any procedural irregularity  in  the
issuance of the charge-sheet against Gambhir.
19.     The third contention urged by Gambhir was rejected in   view of  the
decisions rendered in Mohd. Ramzan Khan and Karunakar. Additionally, it  was
noted that Gambhir had been supplied with a copy of the Inquiry  Report  but
had not raised any issue on the merits of the allegations made  against  him
and the findings arrived at by the Inquiry Officer.
20.     The fourth contention was also rejected by  the  Division  Bench  on
the ground that there was no requirement of  issuing  a  second  show  cause
notice to Gambhir.
21.     The last contention urged by Gambhir was  also  rejected  since  the
PNB was entitled to look  into  any  final  irregularity  committed  by  the
employees of the Hindustan Commercial Bank whose services  were  taken  over
by the PNB.  On this basis, the Division Bench  dismissed  Gambhir’s  appeal
by the impugned judgment and order dated  24th  July,  2006.   It  is  under
these circumstances that Gambhir is now before us.
22.     The contentions urged by learned  counsel  for  Gambhir  are  merely
repetitions of the contentions urged either before the learned Single  Judge
or before the Division Bench of the High Court.
23.     As far as the principal ground urged by  learned  counsel  that  the
charge-sheet could not have been issued to Gambhir by the Assistant  General
Manager in the PNB is concerned, we find no merit in  the  contention.   The
admitted position is that Gambhir was a Scale-III officer in the  PNB  while
the rank of the Assistant General Manager in the PNB  is  Scale-V.   Gambhir
could only have been placed in Scale–III in terms  of  his  responsibilities
and keeping in mind the corresponding scale upon  the  amalgamation  of  the
Hindustan Commercial  Bank  with  the  PNB.  Clause  12  of  the  scheme  of
amalgamation as sanctioned by the Government  of  India  clearly  states  as
follows:-
“The transferee bank shall, on the expiry of a period not longer than  three
years from the date on which this scheme is sanctioned, pay or grant to  the
employees of the transferor bank the same remuneration and  the  same  terms
and  conditions  of  service  as  are  applicable  to   the   employees   of
corresponding  rank  or  status  of  the  transferee  bank  subject  to  the
qualifications and experience of the said employees of the  transferor  bank
being the same as or equivalent to those of  such  other  employees  of  the
transferee bank.”


24.     There is no allegation by Gambhir at any point of time that  he  was
either reduced in rank or that his placement was incorrect  or  any  similar
grievance.  That being the position, it is now  too  late  in  the  day  for
Gambhir to  contend  that  his  placement  in  the  PNB  was  erroneous  and
therefore the issuance of the charge-sheet by the Assistant General  Manager
in the PNB was vitiated in any manner.
25.     We are in agreement with the view of the High Court that  the  rules
applicable to Gambhir  were  the  Punjab  National  Bank  Officer  Employees
(Discipline and Appeal) Regulations, 1977. In terms  of  these  Regulations,
as discussed by the High Court, the disciplinary authority  of  Gambhir  was
the Assistant General Manager (P).  That being the position, merely  because
Gambhir was an Assistant General Manager in the  Hindustan  Commercial  Bank
does not mean that the Regulations of 1977 would not be  applicable  to  him
or that the Assistant General Manager (P) in the PNB could not  have  issued
a charge-sheet to Gambhir.
26.     At this stage, it may be mentioned that in  Chairman,  Canara  Bank,
Bangalore v. M.S. Jasra[4]  an  employee  of  the  Lakshmi  Commercial  Bank
(which had amalgamated with Canara Bank at  the  same  time  when  Hindustan
Commercial Bank amalgamated with the PNB) the  contention  of  the  employee
was that the age of retirement (60 years) in Lakshmi Commercial  Bank  could
not be varied to his disadvantage (58 years) on  the  amalgamation  of  that
Bank with the Canara Bank.  This contention was  rejected  by  holding  that
the employee became an employee of  the  Canara  Bank  and  was,  therefore,
entitled to the rights given to employees of the Canara Bank.
27.     Applying this principle to the facts of this case, it is clear  that
Gambhir became an employee of the PNB and was subject to the  discipline  of
all its rules and regulations, including those pertaining to misconduct.
28.     It is also  contended  that  the  allegations  against  Gambhir  had
already been inquired into by the Hindustan Commercial  Bank  and  therefore
the PNB could not reopen issues relating to the alleged misconduct and  hold
an inquiry into them.  We do not find any merit  in  this  submission  also.
There were  a  large  number  of  transactions  which  were  alleged  to  be
irregular and in which Gambhir was said to  be  involved.   It  is  possible
that there may have been an overlap in respect of some of them (although  no
such overlap has been shown to us) but that is not an  indication  that  the
alleged  irregularities  committed  by   Gambhir   in   respect   of   other
transactions were condoned.  In fact, Gambhir  has  not  pointed  out  which
were the transactions which were  the  subject  matter  of  concern  in  the
Hindustan Commercial Bank and which were the  transactions  which  were  the
subject matter of inquiry by the PNB.  This would have certainly given us  a
far clearer picture.
However, on a random consideration of the allegations made, it  does  appear
that  there  were  certain  transactions   particularly   the   transactions
pertaining to R.K. Tandon  &  Co.  which  were  not  inquired  into  by  the
Hindustan Commercial Bank. It may  be  recalled  that  it  is  the  admitted
position  that  in  respect  of  one  alleged  irregular  transaction,   the
Hindustan Commercial Bank could not take any decision one way or  the  other
due to the amalgamation of that Bank with the PNB.  We have  not  found  any
duplication in the allegations  and  are  not  inclined  to  carry  out  any
investigation in this regard at this stage.
29.     In view of the above, we find no reason to interfere with  both  the
judgments delivered by the Calcutta High Court.  The  appeal  is  dismissed.


                                                                ……………………………J
                                                      (Madan B. Lokur)


                                                               …………………………..J
New Delhi;                                        (R.K. Agrawal)
October 6, 2015
-----------------------
[1]    (1987) 4 SCC 431
[2]    (1991) 1 SCC 588
[3]    (1993) 4 SCC 727
[4]    (1992) 2 SCC 484

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