Non-Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No .22970 of2017
(Arising out of S.L.P. (Civil) No.25040 of 2012)
STATE BANK OF INDIA & ORS. .... Appellants
Versus
B.R. SAINI …. Respondent
J U D G M E N T
L. NAGESWARA RAO, J.
Leave granted.
2. The Respondent who was working in the
Appellant-Bank was removed from service. The order of
removal was set aside by a Single Judge of the High Court of
Punjab & Haryana at Chandigarh. The judgment of the
learned Single Judge was affirmed by a Division Bench. The
correctness of the judgment of the High Court is challenged
in this Appeal.
3. Articles of Charges framed against the Respondent
when he was working as an Officer MMGS-II are as follows:
“ CHARGE No. 1
You availed Demand Loans fraudulently under
fake signatures of the depositors/ owners of the
STDRs.
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CHARGE No. 2
You closed certain Demand Loans granted at the
branch before the date of inspection and
reopened the same on the same day with a view
to avoid inspection of securities charged to
Demand Loans.
CHARGE No. 3
Certain fraudulent Demand Loans availed by you,
were liquidated out of proceeds of cheques
purchased by you, drawn on your personal
Savings Bank A/c No. 01190077112 maintained at
Sector 22, Chandigarh branch through the
account of Shri Sant Ram.
CHARGE No. 4
You availed ACC Loans fraudulently under take
signatures and without supporting revenue
records to justify quantum of loan.
CHARGE No. 5
Certain fraudulent ACC Loan availed by you, were
liquidated out of proceeds of cheques purchased
by you, drawn on your savings Bank Account No.
01190077112 maintained at Sector 22,
Chandigarh Branch, through the accounts of Shri
Hira Pal, a part time Sweeper, who has alleged
that he has not requested for purchase of any
cheque in DD and further alleged that you got
blank cheques signed by him drawn on his CC SBF
A/c No.48.
CHARGE No. 6
You got purchased your personal cheques in DD
at Karnal Branch, without keeping sufficient
balance in your account.
CHARGE No. 7
You purchased cheques of heavy amount drawn
on your personal savings Bank A/c in the accounts
of Shri Hira Pal, a part time sweeper and Shri Sant
Ram Sharma, without keeping sufficient balance
in your account. Further you exercised financial
2 | P a g e
powers not vested with you. You also caused
delay in payment of these DDs.
CHARGE No. 8
Your account shows transactions of heavy
amounts, which are much above your known
sources of income.
You have thus violated Rule 50 (3) & 50 (4) of
State Bank of India Officers Service Rules. ”
4. Shri A.K. Sharma, SMGS-IV was appointed as an Inquiring
Authority in terms of Rule 68 (2) (ii) of the State Bank of India
Officers Service Rules (for short “the Rules”). A detailed Inquiry
was held and the Inquiring Authority concluded that the Charge
Nos. 1, 2, 4, 5 and 7 were proved, Charge No. 6 was partly proved
and Charge Nos. 3 and 8 were not proved. The Disciplinary
Authority disagreed with the findings of the Inquiring Authority
qua Charge Nos. 6 and 8. A copy of the Report of the Inquiring
Authority along with reasons for the disagreement was forwarded
to the Respondent. The Respondent submitted his explanation to
the findings of the Inquiring Authority as well as the disagreement
of the Disciplinary Authority regarding Charge Nos. 6 and 8.
5. The Disciplinary Authority was not empowered to impose
a major penalty as per Rule 66 (3) (iii) of the Rules. He
transmitted the entire record which contained the findings of the
Inquiring Authority, reasons of disagreement regarding Charge
Nos. 6 and 8, the explanation submitted by the Respondent and
3 | P a g e
the bio-data of the Respondent to the Appointing Authority. The
Appointing Authority by an Order dated 22nd January, 2000
considered the entire material which was sent to him and
imposed a penalty of “removal from service” on the Respondent.
6. The Respondent filed a Writ Petition in the High Court of
Punjab & Haryana at Chandigarh questioning the legality of the
order of dismissal. A learned Single Judge of the High Court
allowed the Writ Petition relying upon the judgment of this Court
in State Bank of India & Ors. v. Ranjit Kumar Chakraborty
& Anr.1
wherein it was held that even when the Rule does not
contemplate issuance of a notice before imposing a punishment,
principles of natural justice would require an opportunity to be
given to the delinquent employee as per the judgment cited
supra. The Appellants filed a Letters Patent Appeal which was
dismissed by a Division Bench of the High Court in which it was
held that an order of removal cannot be passed without a
show-cause notice against the proposed punishment. The
Appellant-Bank is in appeal challenging the judgments of the High
Court in this Appeal.
7. Rule 68 (3) of the State Bank of India Officers Service
Rules is as under:
“68.(3)(i) The Disciplinary Authority, if it is not
itself the Inquiring Authority, may, for reasons to
be recovered by it in writing, remit the case to
1 (2009) 7 SLR 347
4 | P a g e
the Inquiring Authority-whether the Inquiring
Authority is the same or different-for fresh or
further inquiry and report, and the Inquiring
Authority shall thereupon proceed to hold further
inquiry according to the provisions of sub-rule (2)
as far as may be.
(ii) The Disciplinary Authority shall, if it disagrees
with the findings of the Inquiring Authority on
any article of charge, record its reasons for such
disagreement and record its own findings on
such charge, if the evidence on record is
sufficient for the purpose.
(iii) If the Disciplinary Authority, having regard to
its findings on all or any of the articles of charge,
is of the opinion that any of the penalties
specified in rule 67 should be imposed on the
officer, it shall, not-with-standing anything
contained in sub-rule (4), make an order
imposing such penalty.
(iv) If the Disciplinary Authority or the Appointing
Authority, as the case may be, having regard to
its findings on all or any of the articles of charge,
is of the opinion that no penalty is called for, it
may pass an order exonerating the officer
concerned.”
8. As stated above, the Disciplinary Authority after supplying
the Report of the Inquiring Authority had given an opportunity to
the Respondent to submit his explanation, which he did. In view
of the disability of the Disciplinary Authority in passing an “order
of removal” under Rule 68 (2), the entire record was sent to the
Appointing Authority who examined the matter and passed an
“order of removal”.
5 | P a g e
9. In State Bank of India v. Ranjit Kumar Chakraborty
(supra) which is the basis of the judgment of the High Court, it
was held that the Appointing Authority could not pass an order
imposing a major penalty. In that case, the Disciplinary Authority
sent the Records to the Appointing Authority who passed order of
“dismissal from service”. It is not clear from the judgment as to
whether the delinquent officer in that case was given a notice by
the Disciplinary Authority before the records were sent to the
Appointing Authority. This Court held that even in the absence of
any Rule requiring a notice to be given, the principles of natural
justice would require an opportunity to the delinquent employee.
It was not held in the said judgment that even if the Inquiry
Report was furnished and an opportunity was given to the
delinquent there is a further requirement of another opportunity
before imposing the penalty. This Court found that before
imposition of a major penalty the delinquent was entitled for an
opportunity of being heard. The High Court was wrong in holding
that the delinquent employee is entitled for a notice before the
penalty is imposed.
10. Though Article 311 (2) of the Constitution of India, 1951 is
not applicable to the Officers of the Appellant-Bank; in Managing
Director, ECIL v. B. Karunakar2
, this Court held that
2 (1993) 4 SCC 727
6 | P a g e
Government servants as well as others are governed by their
service rules and that whenever an Inquiry is conducted and a
punishment is awarded, a delinquent employee is entitled to a
copy of Report of the Inquiring Authority and an opportunity to
submit his explanation. The absence of any rule providing for an
opportunity to be given to a delinquent employee before
imposition of a penalty cannot be taken advantage of by the
employer. However, there is no requirement of a second show
cause notice before imposition of a penalty.
11. In this case, the Respondent had sufficient opportunity to
respond to the Report of the Inquiring Authority and to the
findings of the Disciplinary Authority disagreeing with the
Inquiring Authority regarding Charge Nos. 6 and 8. He is not
entitled to any further notice before imposition of a penalty.
Apart from the requirement of a second show-cause notice before
imposition of penalty no other point was raised in this Appeal.
12. For the aforementioned reasons, the Appeal is allowed
and the judgment of the High Court is set aside.
........................................J.
[S.A. BOBDE]
..……................................J.
[L. NAGESWARA RAO]
New Delhi;
December 15, 2017
7 | P a g e
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No .22970 of2017
(Arising out of S.L.P. (Civil) No.25040 of 2012)
STATE BANK OF INDIA & ORS. .... Appellants
Versus
B.R. SAINI …. Respondent
J U D G M E N T
L. NAGESWARA RAO, J.
Leave granted.
2. The Respondent who was working in the
Appellant-Bank was removed from service. The order of
removal was set aside by a Single Judge of the High Court of
Punjab & Haryana at Chandigarh. The judgment of the
learned Single Judge was affirmed by a Division Bench. The
correctness of the judgment of the High Court is challenged
in this Appeal.
3. Articles of Charges framed against the Respondent
when he was working as an Officer MMGS-II are as follows:
“ CHARGE No. 1
You availed Demand Loans fraudulently under
fake signatures of the depositors/ owners of the
STDRs.
1 | P a g e
CHARGE No. 2
You closed certain Demand Loans granted at the
branch before the date of inspection and
reopened the same on the same day with a view
to avoid inspection of securities charged to
Demand Loans.
CHARGE No. 3
Certain fraudulent Demand Loans availed by you,
were liquidated out of proceeds of cheques
purchased by you, drawn on your personal
Savings Bank A/c No. 01190077112 maintained at
Sector 22, Chandigarh branch through the
account of Shri Sant Ram.
CHARGE No. 4
You availed ACC Loans fraudulently under take
signatures and without supporting revenue
records to justify quantum of loan.
CHARGE No. 5
Certain fraudulent ACC Loan availed by you, were
liquidated out of proceeds of cheques purchased
by you, drawn on your savings Bank Account No.
01190077112 maintained at Sector 22,
Chandigarh Branch, through the accounts of Shri
Hira Pal, a part time Sweeper, who has alleged
that he has not requested for purchase of any
cheque in DD and further alleged that you got
blank cheques signed by him drawn on his CC SBF
A/c No.48.
CHARGE No. 6
You got purchased your personal cheques in DD
at Karnal Branch, without keeping sufficient
balance in your account.
CHARGE No. 7
You purchased cheques of heavy amount drawn
on your personal savings Bank A/c in the accounts
of Shri Hira Pal, a part time sweeper and Shri Sant
Ram Sharma, without keeping sufficient balance
in your account. Further you exercised financial
2 | P a g e
powers not vested with you. You also caused
delay in payment of these DDs.
CHARGE No. 8
Your account shows transactions of heavy
amounts, which are much above your known
sources of income.
You have thus violated Rule 50 (3) & 50 (4) of
State Bank of India Officers Service Rules. ”
4. Shri A.K. Sharma, SMGS-IV was appointed as an Inquiring
Authority in terms of Rule 68 (2) (ii) of the State Bank of India
Officers Service Rules (for short “the Rules”). A detailed Inquiry
was held and the Inquiring Authority concluded that the Charge
Nos. 1, 2, 4, 5 and 7 were proved, Charge No. 6 was partly proved
and Charge Nos. 3 and 8 were not proved. The Disciplinary
Authority disagreed with the findings of the Inquiring Authority
qua Charge Nos. 6 and 8. A copy of the Report of the Inquiring
Authority along with reasons for the disagreement was forwarded
to the Respondent. The Respondent submitted his explanation to
the findings of the Inquiring Authority as well as the disagreement
of the Disciplinary Authority regarding Charge Nos. 6 and 8.
5. The Disciplinary Authority was not empowered to impose
a major penalty as per Rule 66 (3) (iii) of the Rules. He
transmitted the entire record which contained the findings of the
Inquiring Authority, reasons of disagreement regarding Charge
Nos. 6 and 8, the explanation submitted by the Respondent and
3 | P a g e
the bio-data of the Respondent to the Appointing Authority. The
Appointing Authority by an Order dated 22nd January, 2000
considered the entire material which was sent to him and
imposed a penalty of “removal from service” on the Respondent.
6. The Respondent filed a Writ Petition in the High Court of
Punjab & Haryana at Chandigarh questioning the legality of the
order of dismissal. A learned Single Judge of the High Court
allowed the Writ Petition relying upon the judgment of this Court
in State Bank of India & Ors. v. Ranjit Kumar Chakraborty
& Anr.1
wherein it was held that even when the Rule does not
contemplate issuance of a notice before imposing a punishment,
principles of natural justice would require an opportunity to be
given to the delinquent employee as per the judgment cited
supra. The Appellants filed a Letters Patent Appeal which was
dismissed by a Division Bench of the High Court in which it was
held that an order of removal cannot be passed without a
show-cause notice against the proposed punishment. The
Appellant-Bank is in appeal challenging the judgments of the High
Court in this Appeal.
7. Rule 68 (3) of the State Bank of India Officers Service
Rules is as under:
“68.(3)(i) The Disciplinary Authority, if it is not
itself the Inquiring Authority, may, for reasons to
be recovered by it in writing, remit the case to
1 (2009) 7 SLR 347
4 | P a g e
the Inquiring Authority-whether the Inquiring
Authority is the same or different-for fresh or
further inquiry and report, and the Inquiring
Authority shall thereupon proceed to hold further
inquiry according to the provisions of sub-rule (2)
as far as may be.
(ii) The Disciplinary Authority shall, if it disagrees
with the findings of the Inquiring Authority on
any article of charge, record its reasons for such
disagreement and record its own findings on
such charge, if the evidence on record is
sufficient for the purpose.
(iii) If the Disciplinary Authority, having regard to
its findings on all or any of the articles of charge,
is of the opinion that any of the penalties
specified in rule 67 should be imposed on the
officer, it shall, not-with-standing anything
contained in sub-rule (4), make an order
imposing such penalty.
(iv) If the Disciplinary Authority or the Appointing
Authority, as the case may be, having regard to
its findings on all or any of the articles of charge,
is of the opinion that no penalty is called for, it
may pass an order exonerating the officer
concerned.”
8. As stated above, the Disciplinary Authority after supplying
the Report of the Inquiring Authority had given an opportunity to
the Respondent to submit his explanation, which he did. In view
of the disability of the Disciplinary Authority in passing an “order
of removal” under Rule 68 (2), the entire record was sent to the
Appointing Authority who examined the matter and passed an
“order of removal”.
5 | P a g e
9. In State Bank of India v. Ranjit Kumar Chakraborty
(supra) which is the basis of the judgment of the High Court, it
was held that the Appointing Authority could not pass an order
imposing a major penalty. In that case, the Disciplinary Authority
sent the Records to the Appointing Authority who passed order of
“dismissal from service”. It is not clear from the judgment as to
whether the delinquent officer in that case was given a notice by
the Disciplinary Authority before the records were sent to the
Appointing Authority. This Court held that even in the absence of
any Rule requiring a notice to be given, the principles of natural
justice would require an opportunity to the delinquent employee.
It was not held in the said judgment that even if the Inquiry
Report was furnished and an opportunity was given to the
delinquent there is a further requirement of another opportunity
before imposing the penalty. This Court found that before
imposition of a major penalty the delinquent was entitled for an
opportunity of being heard. The High Court was wrong in holding
that the delinquent employee is entitled for a notice before the
penalty is imposed.
10. Though Article 311 (2) of the Constitution of India, 1951 is
not applicable to the Officers of the Appellant-Bank; in Managing
Director, ECIL v. B. Karunakar2
, this Court held that
2 (1993) 4 SCC 727
6 | P a g e
Government servants as well as others are governed by their
service rules and that whenever an Inquiry is conducted and a
punishment is awarded, a delinquent employee is entitled to a
copy of Report of the Inquiring Authority and an opportunity to
submit his explanation. The absence of any rule providing for an
opportunity to be given to a delinquent employee before
imposition of a penalty cannot be taken advantage of by the
employer. However, there is no requirement of a second show
cause notice before imposition of a penalty.
11. In this case, the Respondent had sufficient opportunity to
respond to the Report of the Inquiring Authority and to the
findings of the Disciplinary Authority disagreeing with the
Inquiring Authority regarding Charge Nos. 6 and 8. He is not
entitled to any further notice before imposition of a penalty.
Apart from the requirement of a second show-cause notice before
imposition of penalty no other point was raised in this Appeal.
12. For the aforementioned reasons, the Appeal is allowed
and the judgment of the High Court is set aside.
........................................J.
[S.A. BOBDE]
..……................................J.
[L. NAGESWARA RAO]
New Delhi;
December 15, 2017
7 | P a g e
