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Saturday, December 5, 2015

The observation made in J.K. Synthetics Ltd. v. K.P. Agrawal, (2007) 2 SCC 433 that on reinstatement the employee/workman cannot claim continuity of service as of right is contrary to the ratio of the judgments of three Judge Benches referred to hereinabove and cannot be treated as good law. This part of the judgment is also against the very concept of reinstatement of an employee/workman.” Accordingly, we set aside the Orders of the Division Bench imposing the penalty of reduction of one increment to the appellant for one year and restore and modify the order of the learned Single Judge with regard to award of reinstatement with full back wages for the period from the date of removal till the date of the appellant attaining the age of superannuation, on the basis of periodical revisions of salary to the appellant herein and deduct the pension amount from the back wages payable to the appellant. The same shall be paid to the appellant within eight weeks from the date of receipt of the copy of this order.

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                      CIVIL APPEAL NO(s). 13448 OF 2015
                (Arising out of S.L.P. (C) No. 9833 of 2015)




                       O R D E R

            Leave granted.
            This appeal by special leave is filed by the appellant as he  is
aggrieved of the judgment and order dated 26.11.2014 passed by the  Division
Bench of the Gauhati High Court at Guwahati in Writ Appeal No. 192  of  2014
holding that  there  was  no  negligence  on  the  part  of  the  respondent
(appellant herein) in disbursing the  loan  and  he  had  taken  appropriate
steps, however, the other Manager of that Branch, who has been found  guilty
and levied with lesser penalty, therefore, the  minor  penalty  would  visit
the respondent (appellant herein). Accordingly, the Division  Bench  of  the
High Court modified the penalty of dismissal to  one  of  reduction  of  one
increment for one year and further directed the appellant to  be  reinstated
in service with no back wages for  the  reason  that  he  had  already  been
taking pension for the period and  further  clarified  that  the  period  of
dismissal and the  reinstatement  shall  be  reckoned  as  a  continuity  of
service for the purpose of pension  and,  accordingly,  partly  allowed  the
Writ Appeal preferred by the Bank.
            Aggrieved of the aforesaid portion of the finding and the  order
of penalty imposed by the Division Bench of the High Court by setting  aside
the order of reinstatement with  25%  back  wages  awarded  by  the  learned
Single Judge of the High Court in the Writ Petition filed by  the  appellant
questioning the correctness of the impugned judgment and order, the  present
appeal is filed by the appellant, urging various legal contentions.
            Brief facts necessary to appreciate the rival legal  contentions
urged on behalf of  the  parties  to  the  lis  are  that  the  disciplinary
proceedings were initiated against  the  appellant  by  issuing  chargesheet
dated 28.10.2004 alleging that he  had  influenced  the  Branch  Manager  of
Hallydayganj  Branch,  against  whom  the  disciplinary   proceedings   were
initiated and upon finding him guilty, minor penalty  of  lesser  punishment
was imposed on him for being negligent in giving  the  loans.  In  the  said
proceedings, the appellant herein was Defence  Representative  of  the  said
Manager Mr. Pradeep  Kumar  Das.  The  brief  allegation  contained  in  the
chargesheet was that he had influenced the Branch  Manager  of  Hallydayganj
Branch to sanction cash credit facility  sans  disclosing  earlier  loan  of
Abdul Kuddus Mondal and, therefore, he had failed to protect  the  interests
of the Bank. The second charge was about illegal  grant  of  cash  facility.
The said charges were divided into six allegations, which were extracted  in
the chargesheet. The said charges  were  denied  by  the  appellant  herein,
therefore, the enquiry officer was appointed by the  disciplinary  authority
to enquire into the allegations made against him.
            The enquiry officer found that allegation Nos. 1,  2,  4  and  6
are proved, however, allegation No. 3 is partly proved and allegation No.  5
is not proved. He found that the loan application of the loanee was  written
by the appellant herein despite the fact that it was  within  his  knowledge
that the borrower had earlier taken loan from his Branch and even  then  the
appellant  has  helped  the  borrower  to  borrow  more   money   from   the
neighbouring branch without disclosing  the  earlier  transaction  with  the
appellant's Branch.
            The disciplinary authority has taken the view that  charge  Nos.
3 and 5 also held to be proved from the material on  record  without  giving
an opportunity to the appellant herein to show cause as to why  the  finding
on  those  charges  should  not  be  reversed.  The  disciplinary  authority
forwarded to the appellant herein the enquiry report after taking  the  view
that charge Nos. 3 and 5 were proved for which  the  appellant  submitted  a
reply on 22.11.2005.
            In the meantime, in the  disciplinary  proceedings  against  Mr.
Pradeep  Kumar  Das,  Branch  Manager  of  Hallydayganj  Branch,  where  the
borrower got filled up the application through the appellant and  taken  the
loan without disclosing the borrowing/loan from the  appellant's  Branch  of
the Bank, the disciplinary authority, after concluding the  enquiry  against
Mr. Pradeep Kumar Das, awarded penalty of one stage lower in the  time-scale
for a period of one year without cumulative effect. The penalty was  imposed
holding that the same will not adversely affect  the  pension  of  the  said
delinquent Manager Mr. Pradeep Kumar Das.
            On 05.01.2006, the disciplinary  authority,  not  accepting  the
reply submitted by the appellant herein, imposed the  penalty  of  reduction
of basic pay for 3 years. The Chief Vigilance Officer (“C.V.O.”) was of  the
view that there was extreme mala fides on the part of the  appellant  as  he
had acted against the interests of the  Bank,  therefore,  the  stiff  major
penalty was directed to be imposed upon him  vide  Order  dated  01.02.2006.
Accordingly, the Appointing Authority passed the Order dated 24.04.2006  for
removal of the appellant from service. Against the said  order  of  removal,
the appellant filed an appeal before the Appellate Authority, which came  to
be rejected vide Order dated 18.11.2006 sans examining  the  merits  of  the
case and considering the  legal  contentions  urged  in  the  memorandum  of
appeal. On  07.02.2007,  the  respondent-Bank  sanctioned  pension  and  the
appellant is drawing pension since then.
            Aggrieved of the order of the dismissal  which  is  affirmed  by
the Appellate Authority, the appellant herein filed a writ  petition  before
the Gauhati High Court in the month of  March,  2009.  The  Bank  filed  its
affidavit by way of reply in the said writ petition. After hearing both  the
parties, the  learned  Single  Judge  of  the  High  Court  by  Order  dated
04.03.2014 allowed the writ petition  and  granted  reinstatement  with  all
service benefits and payment of  back  wages  to  the  extent  of  25%.  The
learned Single Judge while granting such relief adverted to the rival  legal
contentions  has  recorded  a  finding  of  fact  holding  that  there   was
unfairness in the enquiry as  the  list  of  witnesses  and  the  copies  of
documents were not given to the appellant and the  finding  of  the  enquiry
officer was held to be perverse.
            The correctness of the said judgment and order  of  the  learned
Single Judge of the High Court was challenged in the Writ  Appeal  filed  by
the respondents herein before the Gauhati High Court. The Division Bench  of
the High Court after considering the  rival  legal  contentions  substituted
the order of the learned Single Judge by imposing penalty  of  reduction  of
one increment for one year and reinstatement without  back  wages  since  he
was already drawing pension. The said order passed by the Division Bench  of
the High Court modifying the order of the learned Single Judge  is  impugned
in this civil appeal by the appellant, urging various legal contentions.

            It is contended by Mr. Vijay Hansaria,  learned  senior  counsel
for the appellant, that the finding is recorded by the learned Single  Judge
in the order passed in writ  petition  after  considering  the  rival  legal
contentions that the statutory requirements to conduct fair  and  reasonable
enquiry, list of witnesses and copies of documents  were  not  furnished  to
the  appellant-officer,  thereby  conducting  the  enquiry  proceedings  are
vitiated and the findings recorded against the  appellant  and  the  charges
are perverse.  The  said  finding  is  placed  on  undisputed  fact  of  non
furnishing of list of witnesses  and  copies  of  documents  which  are  the
statutory  requirements  for  conduct  of  disciplinary   proceedings.   The
Division Bench of the High Court has erroneously set aside the same  without
there being any evidence on record  that  the  appellant  is  negligent  and
other acts of misconduct in discharging his duties and reversed the  finding
of the learned Single Judge in holding that the conduct of  the  enquiry  is
not fair and reasonable and there is non-compliance  of  the  principles  of
natural justice in conducting enquiry  thereby   grave  prejudice  has  been
caused to the appellant herein. The learned Single Judge has  also  referred
to the judgment of this Court in the case of State Bank of  India  and  Ors.
vs.  K.P. Narayanan Kutty, (2003) 2 SCC 449, while recording such a  finding
holding that the finding of fact recorded by the enquiry  officer  that  the
charges are proved is  perverse  in  law.  Learned  senior  counsel  further
contended that the disciplinary  authority  has  to  follow  the  procedural
safeguards provided under the disciplinary Regulations. Not considering  the
reply to the chargesheet given to the appellant herein by  the  disciplinary
authority,  the  action  that  would  be  taken   upon   such   disciplinary
proceedings by recording the finding by the  enquiry  officer  holding  that
the charges are proved, on the basis of  evidence  of  the  witnesses  whose
names were not notified to the appellant and copies of  documents  were  not
furnished to him which were relied upon by the enquiry officer, thereby  the
case of the appellant was prejudiced, therefore, the same will have  serious
civil consequences upon the Service Conditions  of  the  appellant,  if  the
minor or major penalties are imposed, including the order  of  removal  that
is passed by the  disciplinary  authority.  Therefore,  the  learned  senior
counsel submitted that the Division Bench without application  of  mind  and
assigning valid and cogent reasons, not noticing the undisputed  facts  that
list of  witnesses  and  copies  of  documents  were  not  provided  to  the
appellant in the enquiry proceeding, it has erroneously set aside the  order
passed by the learned Single  Judge,  who  has  assigned  valid  and  cogent
reasons in rendering the finding of fact holding that the  enquiry  was  not
fair and the same is not in accordance with the  statutory  requirements  of
the  Conduct  and  Disciplinary  Regulations  and  in  compliance  with  the
principles of natural  justice.  The  said  conclusion  arrived  at  by  the
learned Single Judge is supported by the judgments of  this  Court  rendered
in a catena of cases, particularly in the case of  S.  A.  Venkataraman  vs.
U.O.I. and Anr., AIR 1954 SC 375, this Court observed as follows:

“14.  As the law stands at present, the only purpose, for which an   enquiry
 under Act 37 of 1850 could be made,   is   to  help   the   Government   to
come to  a definite  conclusion  regarding   the  misbehavior  of  a  public
servant   and       thus  enable  it    to   determine   provisionally   the
punishment  which  should  be  imposed  upon  him  prior  to  giving  him  a
reasonable opportunity  of showing cause,  as  is  required  under   article
311(2)      of the Constitution. An enquiry under this  Act  is not  at  all
compulsory and it is quite open to the Government to adopt any other  method
if it so chooses.  It is a  matter of convenience merely and  nothing  else.
It is against  this  background   that   we   will  have  to   examine   the
material provisions  of the Public Servants (Inquiries), Act   of  1850  and
see whether from the nature  and  result  of  the   enquiry  which  the  Act
contemplates it is at all possible to say that  the   proceedings  taken  or
concluded under  the  Act  amount   to  prosecution  and  punishment  for  a
criminal offence.”

        In Union of India  vs. T.R. Varma,  AIR  1957  SC  882,  this  Court
observed that if a person whose services have been wrongfully terminated  is
entitled to institute an action to vindicate his rights.

“6.  At the very outset, we have to observe that a writ petition under  Art.
226 is not the appropriate proceeding for adjudication of disputes like  the
present. Under the  law,  a  person  whose  services  have  been  wrongfully
terminated, is entitled to institute an action to vindicate his rights,  and
in such an action, the Court will be competent to award all the relief's  to
which he may be entitled, including some which would not be admissible in  a
writ petition.

             It  is  well-settled  that  when  an  alternative  and  equally
efficacious remedy is open to a litigant, he should be  required  to  pursue
that remedy and not invoke the special jurisdiction of  the  High  Court  to
issue a prerogative writ. It is true that the existence  of  another  remedy
does not affect the jurisdiction of the Court  to  issue  a  writ;  but,  as
observed by this Court in Rashid Ahmed vs. Municipal Board, Kairana,  [1950]
S.C.R. 566 (AIR 1950 SC 163(A) ”the existence of an  adequate  legal  remedy
is a thing to be taken into consideration in the matter  of  granting  writs
". Vide  also  K.  S.  Rashid  and  Son  vs.  The  Income-tax  Investigation
Commission, 1954 SCR 738 at p.747: (AIR 1954  SC  207  at  p.  210)(B).  And
where such remedy exists, it will be  a  sound  exercise  of  discretion  to
refuse to interfere in a petition under Art.  226,  unless  there  are  good
grounds therefor. None such appears in the present case. On the other  hand,
the point for determination in this  petition  whether  the  respondent  was
denied a reasonable opportunity to present his case,  turns  mainly  on  the
question whether he was prevented from cross- examining the  witnesses,  who
gave evidence in support of the charge.

            That is a question on which there is a  serious  dispute,  which
cannot be satisfactorily decided without taking  evidence.  It  is  not  the
practice of  Courts  to  decide  questions  of  that  character  in  a  writ
petition, and it would have been a proper  exercise  of  discretion  in  the
present case if the learned Judges had referred the respondent to a suit.

            In this appeal, we should have ourselves  adopted  that  course,
and passed the order which the learned Judges should  have  passed.  But  we
feel pressed by the fact that the order  dismissing  the  respondent  having
been made on September 16, 1954, an action to set  it  aside  would  now  be
time-barred. As the High Court has gone into the matter on  the  merits,  we
propose to dispose of this appeal on a consideration of the merits.

10.   Now, it is no doubt true that the evidence of the respondent  and  his
witnesses was not taken in the mode prescribed  in  the  Evidence  Act;  but
that Act has no  application  to  enquiries  conducted  by  tribunals,  even
though they may be  judicial  in  character.  The  law  requires  that  such
tribunals should observe rules of natural justice  in  the  conduct  of  the
enquiry, and if they do so, their decision is not liable to be impeached  on
the ground that the procedure followed was  not  in  accordance  with  that,
which obtains in a Court of law.

            Stating it broadly and without intending it  to  be  exhaustive,
it may be observed that rules  of  natural  justice  require  that  a  party
should have the opportunity of adducing all relevant evidence  on  which  he
relies, that the evidence of the opponent should be taken in  his  presence,
and  that  he  should  be  given  the  opportunity  of  cross-examining  the
witnesses examined by that party, and that no materials should be relied  on
against him without his being given an opportunity of explaining them.

            If these rules are satisfied, the enquiry is not open to  attack
on the ground that the procedure laid down in the Evidence  Act  for  taking
evidence was not strictly followed.”

            Learned senior counsel for the appellant  vehemently  challenged
that the appellant is also aggrieved of the non-grant of back wages  by  the
Division Bench and setting aside the grant of 25% back wages awarded by  the
learned Single Judge and imposing penalty of reduction of one increment  for
one year. The said finding is recorded without there being any  evidence  on
record. He contended that because pension amount  does  not  substitute  the
grant of back wages, particularly in the absence of any  material  with  the
respondent-Bank, whatsoever, to deny the back wages,  as  he  was  gainfully
employed from the date  of  dismissal  and  till  passing  of  the  impugned
judgment and order by the learned  Single  Judge  and  the  Division  Bench.
Further the learned Single Judge and the Division bench have not  given  any
reason, whatsoever, in depriving the back wages and imposing the penalty  of
withholding increment without there being any evidence, therefore, the  same
is contrary to the law laid down by this Court in a catena of cases.
            Per contra, Mr. Gaurav Agrawal, learned  counsel  appearing  for
the respondents, sought to justify the order passed by  the  Division  Bench
of the High Court  and  submitted  that  the  correctness  of  the  impugned
judgment and order of the Division Bench is challenged  on  various  grounds
by filing a Special Leave Petition  and  further,  alternatively,  contended
that, even assuming the Special Leave  Petition  cannot  be  entertained  by
this Court, even then the Division Bench of the High Court  in  exercise  of
its extraordinary and supervisory  jurisdiction  has  done  justice  to  the
parties in  imposing  minor  penalty  and  not  granting  back  wages  while
awarding reinstatement keeping in view that the appellant has been paid  the
pension since 07.02.2007, therefore, he prayed for dismissal  of  the  Civil
Appeal filed by the appellant seeking for the reliefs, as stated above.
            We  have  given  our  thoughtful  considerations  to  the  rival
contentions urged by the learned counsel for the  parties  to  the  lis  and
have carefully  perused  the  materials  on  the  record  and  examined  the
impugned Orders passed by both the learned Single  Judge  and  the  Division
Bench of the High Court.
            The chargesheet was issued on 28.10.2004 against  the  appellant
making 6 allegations against him and it is  undisputed  fact  that  list  of
witnesses and the copies of documents were not furnished to  the  appellant.
Further, the disciplinary authority has  reversed  the  findings  on  charge
Nos. 3 and 5 without giving an opportunity to the appellant  to  show  cause
in the matter and, thereafter, the  order  of  removal  was  passed  by  the
Appointing Authority on the advice of the  C.V.O.  vide  his  opinion  dated
01.02.2006 and further  it  is  brought  on  record  that  similarly  placed
person, namely, Mr. Pradeep Kumar Das, the Manager of  Hallydayganj  Branch,
who has loaned the loan to one  Mr. Tapan Kumar Sangma,  in  his  case  they
have imposed lesser punishment of withholding one increment  thereby  making
discrimination in differently treating with the appellant herein,  which  is
violation of Article 14  of  the  Constitution  of  India.  Further,  it  is
brought to our notice by Mr. Vijay Hansaria, learned senior counsel for  the
appellant that the loan amount lent by Mr. Pradeep Kumas  Das,  the  Manager
of Hallydayganj Branch, the same has been cleared by Mr. Tapan Kumar  Sangma
with interest  by  paying  Rs.  1,61,000/-.  The  overdraft  is  beyond  the
permissible limit is held to be not  proved.  The  finding  of  the  learned
Single Judge while examining the entire  enquiry  report,  on  which  strong
reliance is placed by the  respondent-Bank,  the  learned  Single  Judge  in
exercise of his extraordinary and Original Jurisdiction  examined  the  case
on merits and referred to Rule 68(1)(IX)(a)  of  the  State  Bank  of  India
Service Rules, wherein it mandates the  disciplinary  authority  to  furnish
the delinquent the list of documents through which the charges are  proposed
to be proved. It is the case of the appellant that such a list of  witnesses
and copies of documents  were  not  furnished  either  by  the  disciplinary
authority or the enquiry officer which are vital aspects of the case,  based
on which the finding is recorded on the  charges  by  the  enquiry  officer,
referred to supra, holding that the same are proved against  the  appellant.
Further, with regard to lending  of  loan  in  favour  of  Mr.  Tapan  Kumar
Sangma, the learned Single Judge examined and recorded the finding  of  fact
stating that a sum of Rs. 2,13,595 was recovered from the  said  loanee  and
it is stated that the Power of Attorney furnished  by  Abdul  Kuddus  Mondal
was never utilized to recover the balance loan due of  Rs.  15,450/-,  which
will not be the negligence on the part of the appellant,  however,  it  will
be negligence of those responsible for loan recovery, a small unpaid  amount
had to  be  written  off  by  the  Bank.  Further,  with  reference  to  the
opinion/report  Exhibit D-4 furnished in support of the disbursement of  the
loan clearly  disclosed  the  previous  loans  of  the  borrowers  from  the
Phulbari Branch  but  surprisingly  neither  the  enquiry  officer  nor  the
disciplinary  authority  or  the  C.V.O.  had  taken  note   of   the   said
opinion/report, which establishes the bona fide of  the  appellant's  action
in rendering assistance to his  neighbouring  Branch  Manager  to  meet  the
target  for  disbursal  of  contract  finance  by  the  Hallydayganj  Branch
Manager. Upon the contention urged on behalf of the  appellant  that  taking
multiple loans is not prohibited in the S.B.I.  and  contract  finance  were
sanctioned for the 2 borrowers by the Hallydayganj Branch Manager with  full
knowledge of the previous loans taken by them from the Phulbari Branch,  the
learned Single Judge has referred to non-furnishing of  the  control  return
file of the Branch as well as the Bank's Ledger sheets  of  the   J.N.  High
School account and Mr. Tapan Kumar Sangma accounts to the appellant  at  the
time of conducting enquiry  on  the  charges  to  defend  the  case  by  the
appellant  effectively,  the  same  was  projected  as  cause  for   serious
prejudice to the case of the appellant as  the  said  documents  established
that the borrowers had availed similar overdraft facility  earlier  and,  in
any case, this was within the  permissible  discretionary  capacity  of  the
Manager of the Phulbari Branch. The learned Single Judge  on  the  basis  of
reliance placed by the appellants's counsel upon the decision of this  Court
in the case of State  Bank  of  India  &  Ors.  vs.  K.P.  Narayanan  Kutty,
(supra), wherein it has been held the the non compliance  of  the  statutory
requirements as per the aforesaid rules,  the  action  of  the  disciplinary
authority is inconsistent with the principles of  natural  justice  and  the
settled principles  of  service  jurisprudence.  In  the  said  case,  while
concurring with the decision of this Court in the case of   Punjab  National
Bank vs. Kunj, (1998) 7 SCC 84, para 19 was quoted, which reads as follows:
“19.   The result of the aforesaid discussion would be that  the  principles
of natural justice have to  be  read  into  Regulation  7(2).  As  a  result
thereof, whenever the disciplinary  authority  disagrees  with  the  enquiry
authority on any article of charge, then before it records its own  findings
on such charge, it must record its tentative reasons for  such  disagreement
and give to the delinquent officer an opportunity  to  represent  before  it
records its findings. The report  of  the  enquiry  officer  containing  its
findings will have to be conveyed and the delinquent officer  will  have  an
opportunity to persuade the disciplinary authority to accept the  favourable
conclusion of the enquiry officer. The principles of natural justice, as  we
have already observed, require the authority  which  has  to  take  a  final
decision and can impose a penalty, to give an  opportunity  to  the  officer
charged of misconduct to  file  a  representation  before  the  disciplinary
authority records its findings on the charges framed against the officer."

            While  dealing  with  the  similar  fact  situation  in  William
Vincent Vitarelli v. Fred A. Seaton, Secretary of the Interior, et al   (359
U.S. 535 (1959), the learned Judge observed as follows:

“An executive agency must be rigorously held to the standards  by  which  it
professes its action to be judged. See Securities & Exchange  Commission  v.
Chenery Corp., 318 U.S.  80,  87—88,  63  S.Ct.  454,  459,  87  L.Ed.  626.
Accordingly, if dismissal from employment is based on a  defined  procedure,
even though generous beyond the requirements that  bind  such  agency,  that
procedure must be scrupulously observed. See Service  v.  Dulles,  354  U.S.
363, 77 S.Ct. 1152,  1  L.Ed.2nd  1403.  This  judicially  evolved  rule  of
administrative law is now firmly established and, if I may add, rightly  so.
He that takes the procedural sword shall perish with that sword.”

            The said judgment in Vitarelli's case was referred  to  by  this
Court in R.D. Shetty vs. International Airport Authority, 1979 (3) SCC  489,
the relevant extract of which is quoted hereinunder:

“10……It is a well-settled rule  of  administrative  law  that  an  executive
authority must be rigorously held to the standards  by  which  it  professes
its actions to be judged and it must scrupulously  observe  those  standards
on pain of invalidation of an act  in  violation  of  them.  This  rule  was
enunciated by Mr. Justice  Frankfurter  in  Viteralli  v.  Saton  where  the
learned Judge said:

‘An executive agency must be rigorously held to the standards  by  which  it
professes  its  action  to  be  judged.  Accordingly,  if   dismissal   from
employment is based on a defined procedure, even though generous beyond  the
requirements that bind such agency,  that  procedure  must  be  scrupulously
observed. This judicially evolved rule of administrative law is  now  firmly
established and, if I may add, rightly so.  He  that  takes  the  procedural
sword shall perish with the sword.’

This Court accepted the rule as  valid  and  applicable  in  India  in  A.S.
Ahluwalia  v.  Punjab  and  in  subsequent  decision  given  in  Sukhdev  v.
Bhagatram, Mathew, J., quoted the above-referred observations of Mr  Justice
Frankfurter  with  approval.  It  may  be  noted  that  this  rule,   though
supportable also as an emanation from Article 14, does not  rest  merely  on
that article. It has an independent existence apart from Article 14.  It  is
a rule of administrative law which has been judicially evolved  as  a  check
against exercise of arbitrary power by the executive authority. If  we  turn
to the judgment of Mr Justice Frankfurter and examine it, we  find  that  he
has not sought to draw support for the rule from the equality clause of  the
United  States  Constitution,  but  evolved  it  purely   as   a   rule   of
administrative law. Even in England, the recent trend in administrative  law
is in that direction as is evident from what is  stated  at  pp.  540-41  in
Prof Wade’s “Administrative Law”, 4th Edn. There is no reason why we  should
hesitate to  adopt  this  rule  as  a  part  of  our  continually  expanding
administrative law. Today with tremendous expansion of  welfare  and  social
service functions, increasing control of  material  and  economic  resources
and large scale assumption of industrial and commercial  activities  by  the
State, the power of the executive Government to  affect  the  lives  of  the
people is steadily growing. The attainment of socio-economic  justice  being
a conscious end of State policy, there is a vast and inevitable increase  in
the frequency with which ordinary citizens come into relationship of  direct
encounter with State power-holders. This renders it necessary  to  structure
and restrict the power of the executive Government  so  as  to  prevent  its
arbitrary application or exercise…..”

            Further, the learned  Single  Judge  has  examined  the  opinion
sought for from the C.V.O. by the disciplinary authority on the  penalty  to
be imposed upon the appellant, the C.V.O. has suggested  the  major  penalty
of removal, the same is  inconsistent  with  the  norms  applicable  in  the
Bank's disciplinary proceedings.  The  learned  Single  Judge  examined  the
action of the disciplinary authority  in  relation  to  the  Branch  Manager
Hallydayganj Branch that facilitating the second loan  to  the  loanee,  Mr.
Tapan Kumar Sangma, closely known to the said Manager, the  same  allegation
has been treated as a minor lapse, but in the context of the appellant  they
have imposed major penalty, which is a clear  case  of  discrimination.  The
appellant's admission with regard to writing the loan applications of  Abdul
Kuddus Mondal and Hasanuzzaman to enable  them  to  avail  contract  finance
from the  Hallydayganj  Branch,  the  contention  urged  on  behalf  of  the
appellant is examined and held that the said applicants  had  availed  loans
to the extent of  Rs.  10,000/-  and  Rs.  15,000/-  respectively  from  the
Phulbari Branch of the S.B.I., projecting that minimal  loss  and  both  the
loans were cleared of, assuming that the disciplinary proceedings were  just
and fair, learned senior counsel for the appellant  argued  that  the  minor
punishment proposed by the disciplinary authority of  pay  reduction  should
have been considered reasonable in the context of the charges.  The  learned
Single Judge, after considering the  opinion/report  DEX-4,  held  that  the
enquiry officer did not base his conclusion on any  incriminatory  materials
and  in  fact  the  report  DEX-4  was  totally  ignored  which  would  have
established the innocence of  the  delinquent  and  further  held  that  the
enquiry officer conducted the enquiry sans furnishing the copies of  crucial
documents and furnishing the list of witnesses. It appears to be a  case  of
denial of fair opportunity to the  delinquent  in  gross  violation  of  the
procedural requirements of the Service  Rules.  That  finding  is  based  on
factual, undisputed facts and in conformity with the law, therefore, in  our
opinion, the  learned  Single  Judge  has  rightly  held  that  the  enquiry
conducted against the appellant was unfair and the findings recorded on  the
charges are perverse in law. While recording  such  a  finding  the  learned
Single Judge has also proceeded to hold that the enquiry  was  found  to  be
vitiated for the reason that the then Branch Manager Mr. Pradeep Kumar   Das
of Hallydayganj Branch was never examined in the  enquiry  and  without  his
evidence,  conclusion  on  culpability  of  the  delinquent  on  the   loans
disbursed by the Branch Manager of Hallydayganj  to  the  loanee  could  not
have been reasonably reached by anyone, including the  enquiry  officer  and
imposing major penalty on the basis of the C.V.O. without  there  being  any
legal evidence on record, the enquiry was not properly conducted due to non-
furnishing the list of witnesses and copies  of  the  documents,  therefore,
the exercise of power on the basis of the C.V.O.'s opinion  for  removal  of
the appellant from service entail serious consequences.  Therefore,  placing
reliance on K.P. Narayanan Kutty (supra),  the  learned  Single  Judge  held
that the action taken in accepting the C.V.O.'s view and  passing  order  of
removal is arbitrary, unreasonable and gross violation of Article 14 of  the
Constitution of India. Having said so, the  learned  Single  Judge  has  set
aside the order of removal and granted reinstatement of the  appellant  with
25% back wages in the absence of any proof to show  that  he  was  gainfully
employed from the date of order of removal till the  date  of  the  decision
rendered by the learned Single Judge and the  Division  Bench  of  the  High
Court, therefore, the same is contrary to the law laid down  by  this  Court
in  the  case  of  Deepali  Gundu  Surwase   vs.   Kranti  Junior   Adhyapak
Mahavidyalaya (D. ED.) &  Ors.,  (2013)  10  SCC  324,  para  38  is  quoted
“38.   The propositions which can be  culled  out  from  the  aforementioned
judgments are:

i)    In cases of  wrongful  termination  of  service,  reinstatement   with
continuity of service and back wages is the normal rule.

ii)   The aforesaid rule is subject to the rider that  while  deciding   the
issue of back wages, the adjudicating authority or the Court may take   into
consideration the length of service of the employee/workman, the nature   of
misconduct,  if  any,  found proved against   the   employee/workman,    the
financial condition of the employer and similar other factors.

iii)  Ordinarily, an employee or workman whose services are terminated   and
who is desirous of getting back wages is required to  either  plead  or   at
least make a statement before the adjudicating authority or  the  Court   of
first instance that he/she was not gainfully employed or  was  employed   on
lesser wages.  If the employer wants to avoid payment of full  back   wages,
then it has to plead and also  lead  cogent  evidence  to  prove  that   the
employee/workman was gainfully employed and was getting wages equal to   the
wages he/she was drawing prior to the termination of service.  This  is   so
because it is settled law that the burden of proof of the  existence  of   a
particular fact lies on the person who makes a positive averments about  its
existence.  It is always easier to prove a positive fact than  to  prove   a
negative fact.   Therefore,  once  the  employee  shows  that  he  was   not
employed, the onus lies on the employer to  specifically  plead  and   prove
that the employee was gainfully  employed  and  was  getting  the  same   or
substantially similar emoluments.

iv)   The cases in which the  Labour  Court/Industrial  Tribunal   exercises
power under Section 11-A of the Industrial Disputes  Act,  1947  and   finds
that  even  though  the  enquiry  held  against  the  employee/workman    is
consistent with the rules of natural  justice  and/or   certified   standing
orders, if any, but holds that the punishment was disproportionate  to   the
misconduct found proved, then it will have the discretion not to award  full
back wages. However, if the Labour Court/Industrial Tribunal finds that  the
employee or workman is not at all guilty of  any  misconduct  or  that   the
employer had foisted a false charge, then there will be ample  justification
for award of full back wages.

v)    The cases in which the competent Court or  Tribunal  finds  that   the
employer has acted in gross violation of the  statutory  provisions   and/or
the principles of natural justice or is guilty of victimizing the   employee
or workman, then the Court or Tribunal concerned will be fully justified  in
directing payment of full back wages. In such cases,  the  superior   Courts
should not exercise power under Article 226 or 136 of the Constitution   and
interfere with the award passed by the Labour Court, etc.,   merely  because
there is a possibility of forming a different opinion on the entitlement  of
the employee/workman to get full back wages or the employer’s obligation  to
pay the same.   The  Courts  must  keep  in  view  that  in  the  cases   of
wrongful/illegal termination of service, the wrongdoer   is   the   employer
and the sufferer is the employee/workman and there is  no  justification  to
give a premium to the employer of his wrongdoings by relieving him  of   the
burden to pay to the employee/workman his dues in  the  form  of  full  back

vi)   In a number of cases, the superior Courts have  interfered  with   the
award  of  the  primary  adjudicatory  authority  on  the    premise    that
finalization of litigation has taken long time ignoring that in majority  of
cases  the  parties  are  not  responsible  for  such   delays.   Lack    of
infrastructure and manpower  is  the  principal  cause  for  delay  in   the
disposal of cases. For this the litigants cannot be blamed or penalised.  It
would amount to grave injustice to an employee or workman if he  is   denied
back wages  simply  because  there  is  long  lapse  of  time  between   the
termination  of  his  service  and  finality  given   to   the   order    of
reinstatement. The Courts should bear in mind that in most of these   cases,
the employer is in an  advantageous  position  vis-à-vis  the  employee   or
workman. He can avail the services of best legal brain for  prolonging   the
agony of the sufferer, i.e., the employee or workman, who  can  ill   afford
the luxury of spending money on a  lawyer  with  certain amount   of   fame.
Therefore, in such cases it would be prudent to adopt the course   suggested
in Hindustan Tin Works  Private  Limited  vs.  Employees  of  Hindustan  Tin
Works Private Limited, (1979) 2 SCC 80.

vii)  The observation made in J.K. Synthetics Ltd. v. K.P.  Agrawal,  (2007)
2 SCC 433  that  on  reinstatement   the   employee/workman   cannot   claim
continuity  of service as  of  right  is  contrary  to  the  ratio   of  the
judgments  of  three Judge Benches referred to  hereinabove  and  cannot  be
treated  as  good  law. This part of the judgment is also against  the  very
concept of reinstatement of an employee/workman.”

            For  the  reasons  stated  supra,  we  have  examined  the  case
threadbare on the basis of the material placed on  record  and  rival  legal
contentions urged on behalf of the parties, we hold that the finding of  the
enquiry officer on the charges is vitiated on account of  non-compliance  of
the statutory Rules and  the principles of natural justice. In  the  absence
of evidence, the order of reinstatement sans full back wages is  unjustified
in law. At best, the High Court should have made deduction of the amount  of
pension received by the appellant after awarding full  back  wages  for  the
period in question. In not doing so, the orders of the learned Single  Judge
and the Division Bench of the High Court are liable to  be  set  aside  with
regard to non-grant of full  back  wages.  Accordingly,  we  set  aside  the
Orders of the Division Bench  imposing  the  penalty  of  reduction  of  one
increment to the appellant for one year and restore and modify the order  of
the learned Single Judge with regard to  award of  reinstatement  with  full
back wages for the period from the date of removal  till  the  date  of  the
appellant attaining the age of superannuation, on the  basis  of  periodical
revisions of salary to the appellant herein and deduct  the  pension  amount
from the back wages payable to the appellant. The same shall be paid to  the
appellant within eight weeks from the date of receipt of the  copy  of  this
            The appeal is allowed in the  aforesaid  terms,  directions  and

                                        (V. GOPALA GOWDA)

                                         (AMITAVA ROY)
        NEW DELHI,
        NOVEMBER 17, 2015

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