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Friday, May 20, 2016

This appeal has been filed against the order dated 01.12.2010 of the Division Bench of the High Court of Uttrakhand by which judgment, the writ petition filed by the respondent – Raghunath Singh Rana has been disposed of after quashing the dismissal order dated 01.02.2002. Aggrieved by the judgment, the Chamoli District Co-operative Ltd., is in appeal before this Court.-Appeal is dismissed= From the above decisions, the following principles would emerge: i) The enquiries must be conducted bona fide and care must be taken to see that the enquiries do not become empty formalities. ii) If an officer is a witness to any of the incidents which is the subject matter of the enquiry or if the enquiry was initiated on a report of an officer, then in all fairness he should not be the Enquiry Officer. If the said position becomes known after the appointment of the Enquiry Officer, during the enquiry, steps should be taken to see that the task of holding an enquiry is assigned to some other officer. (iii) In an enquiry, the employer/department should take steps first to lead evidence against the workman/delinquent charged and give an opportunity to him to cross-examine the witnesses of the employer. Only thereafter, the workman/delinquent be asked whether he wants to lead any evidence and asked to give any explanation about the evidence led against him. (iv) On receipt of the enquiry report, before proceeding further, it is incumbent on the part of the disciplinary/punishing authority to supply a copy of the enquiry report and all connected materials relied on by the enquiry officer to enable him to offer his views, if any.”= From the proposition of law, as enunciated by Apex Court as noted above, and the facts of the present case, we arrive at the following conclusions:- (a) After service of charge sheet dated 16.01.1993 although the petitioners submitted his reply on 04.02.1993 but neither Inquiry Officer fixed any date of oral inquiry nor any inquiry was held by the Inquiry Officer. (b) Mandatory requirement of a disciplinary inquiry i.e. is holding of an inquiry when the charges are refuted and serving the inquiry report to the delinquent has been breached in the present case. (c) The employee/respondent No.1 having not been given opportunity to produce his witnesses in his defence and having not been given an opportunity of being heard in person, the statutory provisions as enshrined in Regulation 85 (i)(b), have been violated. (d) The Disciplinary Authority issued show case notice dated 04.05.1993 to the employee/respondent No.1 without holding of an inquiry and subsequent resolution by Disciplinary Authority taken in the year 2000 without their being any further steps is clearly unsustainable. The High Court has rightly quashed the dismissal order by giving liberty to the bank to hold de-novo inquiry within a period of six months, if it so desires. (e) The bank shall be at liberty to proceed with the Disciplinary Inquiry as per directions of the High Court in paragraph (1) of the judgment. The High Court has already held that petitioner shall be deemed to be under suspension and shall be paid suspension allowance in accordance with rules.

                                                                  REPORTABLE

                         IN THE SUPREME COURT OF INDIA
                         CIVIL APPELLATE JURISDICTION


                        CIVIL APPEAL  NO.2265 OF 2011


CHAMOLI DISTRICT CO-OPERATIVE BANK LTD.
THROUGH ITS SECRETARY/MAHAPRANDHAK & ANR.            APPELLANT(S)

                                VERSUS

       RAGHUNATH SINGH RANA & ORS.                         RESPONDENT(S)



                               J U D G M E N T

ASHOK BHUSHAN, J.


1.    This appeal has been filed against the order dated 01.12.2010  of  the
Division Bench of the High Court of Uttrakhand by which judgment,  the  writ
petition filed by the respondent – Raghunath Singh Rana  has  been  disposed
of after quashing the dismissal order dated 01.02.2002.   Aggrieved  by  the
judgment, the Chamoli District Co-operative Ltd., is in appeal  before  this
Court.
      The short facts necessary for deciding this appeal are:   the  Chamoli
District  Co-operative  Bank  Ltd.  (hereinafter   referred   to   as   ‘the
appellant/Bank’) is a District Co-operative Bank  registered under the  U.P.
Co-operative Societies Act, 1965 (hereinafter referred  to  as  ‘the  Act’).
The Raghunath Singh Rana, respondent No.1 (hereinafter referred to  as  ‘the
employee/Respondent No.1’) at the relevant time, was  working  as  a  Branch
Manager at Ghat Branch  of  the  Chamoli  District.  A  charge  sheet  dated
03.07.1992 was issued to the employee leveling 19 charges against  him.  The
employee/respondent No.1 was asked to reply upto  3rd  August,  1992.  There
was allegation against the employee/respondent No.1 that  he  made  payments
to the bearers of cheques without its prior collection and made  payment  to
the bearer of the  cheque,  causing  loss  to  the  appellant/Bank.  Further
charges were that he had not taken any action against the persons  concerned
and had thus committed serious irregularities. Another set of  charges  were
imputation  that  the  respondent–employee   has   issued   overdrafts/loans
against the provision of the Act.

2.          The employee/respondent No.1 submitted  a  reply  on  31.07.1992
denying the allegations. On 05.8.1992, an Inquiry Officer was  appointed  to
conduct the  inquiry.  The  Inquiry  Officer  also  submitted  a  report  on
21.09.1992. The employee/respondent No.1  was  placed  under  suspension  by
order dated 21.10.1992. No further steps were taken on  the  inquiry  report
dated 21.09.1992. However, a  fresh  charge  sheet  containing  the  charges
which were levelled in the charge sheet dated  03.07.1992  as  well  as  six
additional charges was issued on 16.01.1993.  The  employee/respondent  No.1
submitted  a  reply  dated  04.02.1993  to  the  charge  sheet  denying  the
allegations. After submission of the reply by the employee/respondent  No.1,
a show-cause notice was  issued  to  the  petitioner  by  the  District  Co-
operative Bank Ltd. dated 04.05.1993 asking the employee/respondent No.1  to
submit a reply, failing which action under Regulation 84  of  the  U.P.  Co-
operative Societies Employees  Service  Regulations  Act,  1975  was  to  be
taken. The Disciplinary Authority passed a Resolution dated 11.07.2000  that
charges against the employee/respondent No.1 have been  proved  and  further
action  to  be  taken.  The  Disciplinary  Authority  passed  an  order   on
01.02.2002, dismissing the employee/respondent No.1 with  immediate  effect.
Aggrieved by dismissal order, writ  petition  was  filed  by  the  employee-
respondent No.1  praying  for  quashing  the  order  dated  01.02.2002  with
further prayer that employee/respondent No.1 be reinstated in  service  with
full back wages and salary.

3.          The employee/respondent No.1's case in  the  writ  petition  was
that  after  receipt  of  the  charge  sheet  dated  18.01.1993,  reply  was
submitted by the employee but without holding an inquiry,  the  Disciplinary
Authority took a decision to dismiss the petition.   No  Inquiry  have  been
held as provided by statutory regulations,  hence,  the  entire  proceedings
are liable to be set aside.

4.          The  appellant-Bank  filed  a  counter  affidavit  in  the  writ
petition. In the counter affidavit no inquiry report  subsequent  to  charge
sheet dated 18.01.1993 was referred to.

5.          The Division Bench of the High Court heard the matter  and  vide
judgment dated 01.12.2010 quashed the dismissal order.  The  Division  Bench
took the view that dismissal orders have  been  passed  without  holding  an
inquiry which deserves to be set aside.

6.           Learned  senior  counsel  appearing  for   the   appellant-Bank
contends that Inquiry Officer had issued a letter dated  11.09.1992  to  the
employee/respondent No.1 asking the employee/respondent No.1  to  appear  on
18.09.1992 at 10.00 AM, but employee/respondent No.1  failed  to  appear  in
the inquiry, hence, the view of the High court that no inquiry was  held  is
not correct. He further submits that inquiry  report  dated  21.09.1992  was
submitted by the Inquiry  Officer  which  has  been  brought  on  record  as
Annexure P3.  Learned counsel for the appellant-Bank  further  submits  that
there were serious allegations against the employee/respondent No.1  on  the
basis of which the employee/respondent No.1 was dismissed from service.

7.          It is further contended  that  First  Information  Reports  have
been lodged against the employee/respondent  No.1  and  criminal  cases  are
pending.

8.          We have considered the submissions and perused the record.

9.          The statutory  regulations  have  been  framed  under  the  Act,
namely, U.P. Co-operative Societies  Employees  Service  Regulations,  1975,
which regulations are applicable with regard to the conduct of  Disciplinary
enquiry against the employee/respondent No.1 and where governing  the  field
at the relevant time. Regulation 84, Chapter-VII  of  the  Regulation  deals
with Penalties, Regulation  85  deals  with  Disciplinary  proceedings,  and
Regulation  86  deals  with  Appeal.  Regulation  85    which   deals   with
Disciplinary proceedings, is as follows:-
“85.  Disciplinary Proceedings.-

(i)   The disciplinary proceedings against an employee  shall  be  conducted
by the Inquiring Officer  (referred  to  in  clause  (iv)  below)  with  due
observance of the principles of  natural  justice  for  which  it  shall  be
necessary -

(a)   The employee shall be served with a charge-sheet  containing  specific
charges and mention of evidence in support of each charge and  he  shall  be
required to submit explanation in respect of the charges  within  reasonable
time which shall not be less than fifteen days;

(b)   Such an employee shall also be given an opportunity to produce at  his
own cost or to cross-examine witnesses in his  defence  and  shall  also  be
given an opportunity of being heard in-person, if he so desires;

(c)   If no explanation in respect  of  charge  sheet  is  received  or  the
explanation submitted is unsatisfactory, the competent authority  may  award
him appropriate punishment considered necessary.

(ii)(a) Where an employee is  dismissed  or  removed  from  service  on  the
ground of conduct which has led to his conviction on a criminal charge; or

(b)   Where the employee has absconded and his whereabouts are not known  to
the society for more than three months; or

(c)   Where the employee  refuses  or  fails  without  sufficient  cause  to
appear before  the  Inquiring  Officer  when  specifically  called  upon  in
writing to appear; or

(d)   Where it is otherwise (for reasons to be  recorded)  not  possible  to
communicate  with  him,  the  competent  authority  may  award   appropriate
punishment without taking or continuing disciplinary proceedings.

(iii) Disciplinary proceedings shall be taken by  the  society  against  the
employee on a report made to this effect by the inspecting authority  or  an
officer of the society under whose control the employee is working.

(iv)  The inquiring officer shall be appointed by the  appointing  authority
or by  an  officer  of  the  society  authorised  for  the  purpose  by  the
appointing authority:

            Provided that the officer at whose instance disciplinary  action
was started shall not be appointed as an inquiring  officer  nor  shall  the
inquiring officer be the appellate authority.

            ….......”

10.   From the facts, as noted above, it is clear that  charge  sheet  dated
03.07.1992 was issued to the employee/respondent No.1 to which he  submitted
a reply on 31.07.1992.  Inquiry  report  dated  21.09.1992  was  issued  and
submitted. However, without proceeding any  further  on  the  basis  of  the
inquiry report dated 21.09.1992, a fresh charge sheet dated  18.01.1993  was
issued  to  the  employee/respondent  No.1  containing   24   charges.   The
employee/respondent No.1 was asked to submit a reply within 15  days.  Reply
to the subsequent charge sheet was again filed  by  the  employee/respondent
No.1  on  04.02.1993.  The  second  charge  sheet  having  been  issued   on
18.01.1993 which included all  the  charges  which  were  contained  in  the
earlier charge sheet, the earlier proceedings  consequent  to  charge  sheet
dated 03.07.1992 stood abandoned.  The  appellant-Bank  decided  to  proceed
with  the  Disciplinary  Inquiry  on  the  basis  of  charge   sheet   dated
18.01.1993. After  18.01.1993  charge  sheet  reply  was  submitted  by  the
employee/respondent No.1 on 04.02.1993 but  there  is  no  material  on  the
record  brought  by  the  appellant-Bank   indicating   that   any   inquiry
proceedings were conducted.

11.   It is relevant to  note  that  in  the  writ  petition  filed  by  the
employee/respondent No.1, specific averments  were  made  that  disciplinary
proceedings against  him  were  conducted  in  violation  of  principles  of
natural justice and against  the  procedure  prescribed  in  Regulation  85,
which averments were made in  paragraphs 19 and 25 of the writ petition,  to
the following effect:-
“19.  That since the whole of the procedure adopted  in  conducting  of  the
disciplinary proceeding is against the  principle  of  natural  justice  and
procedure mention in regulation 85, In fact, no inquiry worth  to  name  has
been conducted by the respondents. The so called inquiry  was  a  mere  eye-
wash. It is a farce  and  fraud  played  on  the  statutory  rights  of  the
petitioner.”


25.   That the disciplinary proceeding held against the petitioner  was  not
conducted  in  accordance  with  the  provisions  of  natural  justice   and
procedure prescribed under the Regulations of 1975. Serious objections  were
raised by the petitioner through his replies  dated  31.07.1993,  04.02.1993
and 21.03.1993 but no heed  was  given  to  the  objections  raised  by  the
petitioner. Once the charge sheet has been issued to the petitioner,  second
charge sheet cannot be sent by the Inquiry Officer in the same  disciplinary
proceeding. But this objections was  also  not  considered  by  the  Inquiry
Officer or disciplinary authority. After the reply dated 04.02.1993  to  the
charge-sheet dated 18.01.1993, no inquiry was held by the  Inquiry  Officer.
Instead of holding the  inquiry  in  accordance  with  the  provisions,  the
disciplinary authority sent the letter  dated  04.05.1993  saying  that  the
charges  were  proved  against  the  petitioner.   Between   18.01.1993   to
04.05.1993 no inquiry was held and the petitioner was never called  upon  to
cross examine the witnesses. No records or documents  which  the  petitioner
has requested to inspect were summon or made available  to  the  petitioner.
Even these documents were  not  available  to  the  petitioner.  Even  those
documents were not inspected or considered  by  the  disciplinary  authority
and inquiry officer. The way the Disciplinary Proceeding were  conducted  it
cost serious doubt and aspersion against the respondents.  It  appears  that
before the conduct of the inquiry the respondents made up their mind to  get
rid of the petitioner and for that reason they have  conducted  the  inquiry
in  such  a  perfunctory  manner,   which   is   not   known   to   services
jurisprudence.”


12.   In the counter affidavit, the averments made in paragraph  19  and  25
were replied by the appellant-Bank in paragraph 18 and 24, which are to  the
following effect:-
“18.  That in reply to the  contents  of  para  nos.18  &  19  of  the  writ
petition it is submitted that the grounds on which the charges  issued  were
found proved was supplied to the petitioner vide letter  no.251-52  annexure
no.7 to the writ petition, instead of a copy  of  the  enquiry  report.  The
letter of charges serves the purpose  of  an  enquiry  report.  That  it  is
incorrect to say that no reasonable opportunity was given to the  petitioner
by the Inquiry Officer a letter dated  6-1-93  Annexure  No.5  to  the  writ
petition was sent to the petitioner to know whether he wanted to  be  cross-
examined by his  witnesses,  but  the  petitioner  did  not  want  any  such
opportunity. Further, the petitioner  was  directed  to  appear  before  the
committee of management in person, but he did not  appear  at  all.  Another
opportunity was given as per resolution no.14  dated  25.11.1993  which  was
also not available by him. Petitioner was  again  given  an  opportunity  to
appear before the committee on 3-8-2000 Annexure No.10 to the writ  petition
to explain his case personally, but he did  not  appear.  It  is  therefore,
totally false to say that no opportunity of being heard  was  given  to  the
petitioner. Copy  of  the  resolution  no.14  dated  25.11.1993  is  annexed
herewith and is marked as Annexure No. CA.5 to this counter affidavit.”


24.   That the contents of para nos.25, 26, 27 & 28  of  the  writ  petition
are denied. It is incorrect to say that the second charge sheet dated  18-1-
93 was sent in the same disciplinary proceedings as a matter  of  fact  this
was the first and the  only  chargesheet  issued.  Disciplinary  proceedings
were initiated on 21.10.92 and, therefore, charge sheet was  issued  to  the
petitioner on 18.1.93 to which reply was  submitted  by  the  petitioner  on
4.2.93. It is wrong to allege that records were not made  available  to  the
petitioner as the petitioner did not want to refer to any record and he  did
not make any request even during the course of the cross examination of  the
witness. It is further  incorrect to state that opportunity  was  not  given
to the petitioner. That the answering respondent is justified  a  dismissing
the  services  of  the  petitioner   as   heavy   loss   of   Rs.35,00,000/-
approximately  was  caused  to  the  bank,  exceeding  all  his  powers  and
overlooking all the  norms  laid  down  by  the  bank  in  making  unsecured
advances  to  various  customers/parties.  Therefore,  the  order   of   the
respondents dismissing the services of the petitioner is lawful and  in  the
interest of justice and the writ petition of the petitioner is liable to  be
dismissed on this ground alone.”

13.   As noted above, learned counsel for the  appellant/Bank  has  referred
to the letter issued by the Inquiry Officer dated  11.09.1992,  calling  the
employee/respondent  No.1  to  appear  before   the   Inquiry   Officer   on
18.09.1992.  The  inquiry  report  dated  21.09.1992  mentioned   that   the
employee/respondent No.1 did  not  appear,  hence  the  inquiry  report  was
submitted.  The  letter  dated  11.09.1992  and  the  inquiry  report  dated
21.09.1992 looses all its importance when the bank decided to issue a  fresh
charge  sheet  on  18.11.1993  which  includes  all  earlier  charges.   The
petitioner submitted  a  reply  on  04.02.1993  but  thereafter  no  inquiry
proceeding seems to have taken place. The employee/respondent  No.1  made  a
specific complaint that inquiry proceeding has not been held  and  there  is
violation of Regulation 85.  No  specific  reply  have  been  made,  by  the
appellant/bank referring  to  any  inquiry  proceeding  before  the  Inquiry
Officer or the date of any inquiry.

14.   As noted above, Regulation 85 is a statutory Regulation  according  to
which an opportunity to the employee to produce at his own cost or to cross-
examine witnesses in his defence and shall also be given an  opportunity  of
being  heard  in  person,  if  he  so  desires.  Regulation  85  (i)(b)   is
specifically mandates the said requirements.

15.   From the pleadings and the materials on record, it is  clear  that  no
inquiry was conducted by the appellant/Bank in  conformity  with  Regulation
85 (i)(b) after issuance of charge sheet dated 16.01.1993.  The  High  Court
has set aside the dismissal  order  after  coming  to  the  conclusion  that
without holding an inquiry the employee/respondent No.1 has been  dismissed.
No materials have been brought in the appeal to indicate  that  any  inquiry
was conducted or inquiry report  was  submitted  subsequent  to  the  charge
sheet dated 16.01.1993.

16.   Learned counsel for the  appellant/Bank  has  submitted  that  in  the
Resolution passed by the Disciplinary  Authority  that  inquiry  report  has
been mentioned.

17.   Imposing of any penalty on an employee of  the  bank  that  too  major
penalty of dismissal from service can  only  be  done  after  following  the
statutory provisions governing the disciplinary proceedings.

18.   It is also relevant to note  that  after  submission  of  reply  dated
04.02.1993, Disciplinary Authority issued a show-cause notice on  04.05.1993
asking the employee/respondent No.1 to submit his reply.  When  the  Inquiry
Officer was appointed, conducting of the inquiry was mandatory  and  without
conducting of an inquiry and without any inquiry report having  been  served
on the employee/respondent  No.1,  Disciplinary  Authority  could  not  have
proceeded to   impose  any  punishment.  The  compliance  of  principles  of
natural justice by the appellant-Bank is not a mere formality, more so  when
the   statutory   provisions   specifically   provides   that   disciplinary
proceedings shall be conducted with due observations of  the  principles  of
natural justice.

19.   The compliance of natural justice in domestic/disciplinary inquiry  is
necessary has long been established. This Court has  held  that  even  there
are no specific statutory rule requiring observance of natural justice,  the
compliance of natural justice is necessary. Certain  ingredients  have  been
held to be constituting integral part of holding of  an  inquiry.  The  Apex
Court in Sur Enamel and Stamping Works Pvt. Ltd. v. Their  Workmen  reported
in (1964) 3 SCR 616 has laid down following:-
“... An enquiry cannot be said to have been properly held  unless,  (i)  the
employee  proceeded  against  has  been  informed  clearly  of  the  charges
levelled against him, (ii) the witnesses are examined –  ordinarily  in  the
presence of the employee – in respect of the charges, (iii) the employee  is
given a fair opportunity to cross-examine witnesses,  (iv)  he  is  given  a
fair opportunity to examine witnesses including himself in  his  defence  if
he so wishes on any relevant matter, and (v)  the  inquiry  officer  records
his findings with reasons for the same in his report.”


20.   The Apex Court again in State Bank of India Vs. R.K.  Jain  and  Ors.,
reported in (1972) 4 SCC  304  held  that  if  an  inquiry  is  vitiated  by
violation of principles of natural justice or if no  reasonable  opportunity
was  provided  to  the  delinquent  to  place  his  defence,  it  cannot  be
characterized as a proper domestic  inquiry  held  in  accordance  with  the
rules of natural justice. In paragraph 23, the following was laid down:-
“......As emphasised by this Court in Ananda Bazar Patrika (P) Ltd.  v.  Its
Workmen, (1964) 3 SCR 601, the termination of an employee's service must  be
preceded by a proper domestic inquiry held in accordance with the  rules  of
natural justice. Therefore, it is evident that if the  inquiry  is  vitiated
by violation of the principles  of  natural  justice  or  if  no  reasonable
opportunity was provided to a delinquent to place his defence, it cannot  be
characterized as a proper domestic  inquiry  held  in  accordance  with  the
rules of natural justice......”

21.   The Apex Court  in  State  of  Uttranchal  &  Ors.  Vs.  Kharak  Singh
reported in (2008) 8 SCC 236 had occasion to  examine  various  contours  of
natural justice which need to be specified in a  departmental  inquiry.  The
Apex Court noticed earlier judgments where principles were laid down  as  to
how inquiry is to be conducted. It is useful to refer paragraphs 9, 10,  11,
12, 13 and 15, which are to the following effect:-
“…..9. Before analyzing the correctness of  the  above  submissions,  it  is
useful to refer various principles  laid  down  by  this  Court  as  to  how
enquiry is to be conducted and which procedures are to be followed.

10. The following observations and principles laid down  by  this  Court  in
Associated Cement Co. Ltd. vs. The Workmen and Anr. [1964]  3  SCR  652  are
relevant:
"... ... In the present case, the first serious  infirmity  from  which  the
enquiry suffers proceeds from the  fact  that  the  three  enquiry  officers
claimed that they themselves had witnessed the alleged misconduct  of  Malak
Ram. Mr. Kolah contends that if the  Manager  and  the  other  officers  saw
Malak  Ram  committing  the  act  of  misconduct,  that  itself  would   not
disqualify them from holding the domestic enquiry. We are  not  prepared  to
accept this argument. If  an  officer  himself  sees  the  misconduct  of  a
workman, it is desirable that the enquiry should be left to be held by  some
other person who does not claim to  be  an  eye-  witness  of  the  impugned
incident. As we have  repeatedly  emphasised,  domestic  enquiries  must  be
conducted honestly and bona fide  with  a  view  to  determine  whether  the
charge framed against a particular employee is proved or not, and  so,  care
must be taken to see that these enquiries do not become  empty  formalities.
If an officer claims  that  he  had  himself  seen  the  misconduct  alleged
against an employee, in fairness steps should be taken to see that the  task
of holding an enquiry is assigned to some other officer. How  the  knowledge
claimed by the enquiry officer can vitiate the  entire  proceedings  of  the
enquiry is illustrated by the present enquiry itself. ... .....

            ..... It is necessary to emphasise that in  domestic  enquiries,
the employer should take steps first to lead evidence  against  the  workman
charged, give an opportunity  to  the  workman  to  cross-examine  the  said
evidence and then should the workman be asked whether he wants to  give  any
explanation about the evidence led against him. It seems to us  that  it  is
not fair in domestic enquiries against  industrial  employees  that  at  the
very commencement of the enquiry, the  employee  should  be  closely  cross-
examined even before any other evidence is led against him. In dealing  with
domestic enquiries held in such industrial matters, we cannot  overlook  the
fact that in  a  large  majority  of  cases,  employees  are  likely  to  be
ignorant, and so, it is necessary not to expose them to the risk  of  cross-
examination in the  manner  adopted  in  the  present  enquiry  proceedings.
Therefore, we are satisfied that Mr. Sule is right in  contending  that  the
course adopted in the present enquiry proceedings by  which  Malak  Ram  was
elaborately cross-examined at the outset constitutes  another  infirmity  in
this enquiry."

11) In ECIL v. B. Karunakar (1993) 4 SCC 727, it was held:

 "(1) Where the enquiry officer is other than  the  disciplinary  authority,
the disciplinary proceedings break into two stages.  The  first  stage  ends
when the disciplinary authority arrives at its conclusions on the  basis  of
the evidence, enquiry officer's report and the delinquent  employee's  reply
to it. The second stage begins when the disciplinary  authority  decides  to
impose penalty  on  the  basis  of  its  conclusions.  If  the  disciplinary
authority decides to drop the disciplinary proceedings, the second stage  is
not even reached.

While the right to represent against the findings in the report is  part  of
the reasonable opportunity available during the first stage of  the  inquiry
viz.,  before  the  disciplinary  authority  takes  into  consideration  the
findings in the  report,  the  right  to  show  cause  against  the  penalty
proposed belongs to the second stage when  the  disciplinary  authority  has
considered the findings in the report and has come to  the  conclusion  with
regard to the guilt of the employee and proposes to  award  penalty  on  the
basis of its conclusions. The first right is the right to  prove  innocence.
The second right is to plead for either  no  penalty  or  a  lesser  penalty
although the conclusion regarding the guilt is accepted. It  is  the  second
right exercisable at the second stage which was taken  away  by  the  Forty-
second Amendment. The second stage consists of the issuance  of  the  notice
to show cause against the proposed penalty and of considering the  reply  to
the notice and deciding upon the penalty. What  is  dispensed  with  is  the
opportunity of making representation on the  penalty  proposed  and  not  of
opportunity of making representation on the report of the  enquiry  officer.
The latter right was always there. But before the Forty-second Amendment  of
the Constitution, the point of time at which it  was  to  be  exercised  had
stood deferred till the second stage viz.,  the  stage  of  considering  the
penalty. Till that time, the conclusions  that  the  disciplinary  authority
might have arrived at both with regard to the guilt of the employee and  the
penalty to be imposed were only tentative. All that has happened  after  the
Forty-second Amendment of the Constitution is to advance the point  of  time
at which the representation of the employee against  the  enquiry  officer's
report would be considered. Now, the disciplinary authority has to  consider
the representation of the employee against the report before it  arrives  at
its conclusion with regard to his guilt  or  innocence  in  respect  of  the
charges.

                                    * * *

Article  311(2)  says  that  the  employee  shall  be  given  a  "reasonable
opportunity of being heard in respect  of  the  charges  against  him".  The
findings on the charges given by a third person like  the  enquiry  officer,
particularly when they are not borne out by the evidence or are  arrived  at
by  overlooking  the  evidence  or  misconstruing   it,   could   themselves
constitute new unwarranted imputations. The proviso  to  Article  311(2)  in
effect accepts two successive stages of differing scope. Since  the  penalty
is to be proposed after the inquiry,  which  inquiry  in  effect  is  to  be
carried out by the disciplinary authority (the enquiry  officer  being  only
his delegate  appointed  to  hold  the  inquiry  and  to  assist  him),  the
employee's reply to the enquiry officer's report and consideration  of  such
reply by the disciplinary authority also  constitute  an  integral  part  of
such inquiry.

             Hence,  when  the  enquiry  officer  is  not  the  disciplinary
authority, the delinquent employee has a right to  receive  a  copy  of  the
enquiry officer's report before the disciplinary authority  arrives  at  its
conclusions with regard to the guilt  or  innocence  of  the  employee  with
regard to the charges levelled against him. That right  is  a  part  of  the
employee's right to defend himself  against  the  charges  levelled  against
him. A denial of  the  enquiry  officer's  report  before  the  disciplinary
authority takes its decision on the  charges,  is  a  denial  of  reasonable
opportunity to the employee to prove his innocence and is a  breach  of  the
principles of natural justice.”

12) In Radhey Shyam Gupta vs. U.P. State 1Agro Industries  Corporation  Ltd.
and Another, (1999) 2 SCC 2, it was held:

"34. But in cases where the  termination  is  preceded  by  an  enquiry  and
evidence is received and findings as to misconduct of  a  definitive  nature
are arrived at behind the back of the officer and  where  on  the  basis  of
such a report, the termination order  is  issued,  such  an  order  will  be
violative of the principles of natural justice inasmuch as  the  purpose  of
the enquiry is to find out the truth of  the  allegations  with  a  view  to
punish  him  and  not  merely  to  gather  evidence  for  a  future  regular
departmental enquiry. In such cases, the termination is  to  be  treated  as
based or founded upon misconduct and will be punitive. These  are  obviously
not cases where the employer feels that there is a mere  cloud  against  the
employee's conduct but are cases where the employer has  virtually  accepted
the definitive and clear findings of the  enquiry  officer,  which  are  all
arrived at behind the back of the employee -- even  though  such  acceptance
of findings is not recorded in the order of termination.  That  is  why  the
misconduct is the foundation and not merely the motive in such cases."

13) In Syndicate Bank and Others vs. Venkatesh Gururao Kurati, (2006) 3  SCC
150, the following conclusion is relevant:



"18. In our view, non-supply of documents on which the enquiry officer  does
not rely during the course of enquiry does not create any prejudice  to  the
delinquent. It is only  those  documents,  which  are  relied  upon  by  the
enquiry officer to arrive at his conclusion, the non-supply of  which  would
cause prejudice, being violative of  principles  of  natural  justice.  Even
then,  the  non-supply  of  those  documents  prejudice  the  case  of   the
delinquent officer must be established by  the  delinquent  officer.  It  is
well-settled law that the doctrine of principles of natural justice are  not
embodied rules. It cannot be put in a straitjacket formula. It depends  upon
the facts and circumstances of each  case.  To  sustain  the  allegation  of
violation  of  principles  of  natural  justice,  one  must  establish  that
prejudice has been  caused  to  him  for  non-observance  of  principles  of
natural justice."

15.   From the above decisions, the following principles would emerge:

i) The enquiries must be conducted bona fide and care must be taken  to  see
that the enquiries do not become empty formalities.

ii) If an officer is a witness to any of the incidents which is the  subject
matter of the enquiry or if the enquiry was initiated  on  a  report  of  an
officer, then in all fairness he should not be the Enquiry Officer.  If  the
said position becomes known after the appointment of  the  Enquiry  Officer,
during the enquiry, steps should be taken to see that the  task  of  holding
an enquiry is assigned to some other officer.

(iii) In an enquiry, the employer/department  should  take  steps  first  to
lead  evidence  against  the  workman/delinquent   charged   and   give   an
opportunity to him to cross-examine the  witnesses  of  the  employer.  Only
thereafter, the workman/delinquent be asked whether he  wants  to  lead  any
evidence and asked to give any explanation about the  evidence  led  against
him.

(iv)    On receipt of the enquiry report, before proceeding  further,     it
    is    incumbent     on    the  part    of    the  disciplinary/punishing
authority to  supply  a  copy  of  the  enquiry  report  and  all  connected
materials relied on by the enquiry  officer  to  enable  him  to  offer  his
views, if any.”



22.   From the proposition of law, as enunciated  by  Apex  Court  as  noted
above, and the facts of  the  present  case,  we  arrive  at  the  following
conclusions:-

(a)    After  service  of  charge  sheet  dated  16.01.1993   although   the
petitioners submitted his reply on 04.02.1993 but  neither  Inquiry  Officer
fixed any date of oral inquiry nor any  inquiry  was  held  by  the  Inquiry
Officer.

(b)   Mandatory requirement of a disciplinary inquiry i.e. is holding of  an
inquiry when the charges are refuted and serving the inquiry report  to  the
delinquent has been breached in the present case.

(c)   The employee/respondent No.1 having  not  been  given  opportunity  to
produce  his  witnesses  in  his  defence  and  having  not  been  given  an
opportunity of being heard in person, the statutory provisions as  enshrined
in Regulation 85 (i)(b), have been violated.

(d)   The Disciplinary Authority issued show case  notice  dated  04.05.1993
to  the  employee/respondent  No.1  without  holding  of  an   inquiry   and
subsequent resolution by Disciplinary  Authority  taken  in  the  year  2000
without their being any further steps is clearly  unsustainable.   The  High
Court has rightly quashed the dismissal order by giving liberty to the  bank
to hold de-novo inquiry within a period of six months, if it so desires.

(e)   The bank shall be at liberty to proceed with the Disciplinary  Inquiry
as per directions of the High Court in paragraph (1) of  the  judgment.  The
High Court has already held that petitioner shall  be  deemed  to  be  under
suspension and shall be paid suspension allowance in accordance with rules.

23.   In view of the foregoing  discussion  and  our  conclusion,  as  noted
above, we do not find any merit in this appeal. In the  result,  the  appeal
is dismissed.


                                           ....................J.
                                             (ABHAY MANOHAR SAPRE)


NEW DELHI                             ....................J.
MAY 17, 2016                          (ASHOK BHUSHAN)

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