JUDGMENT Marlapalle, J.
1. This petition, filed under Article 226 of the Constitution, had initially prayed for three reliefs viz. (a) reinstatement in service, (b) payment of back wages with arrears with effect from the date of dismissal i.e. 31st July, 1970 till the date of reinstatement, and (c) for a declaration that the Respondents had no right or authority to initiate the departmental inquiry against the Petitioner as per the Memorandum of Charges dated 4th January, 1990 and for a declaration that the Petitioner was entitled for the consequential benefits of increments, medical allowance, bonus, promotion etc. as per seniority by treating him in regular service of the bank.
The Petition was subsequently amended and the following four more prayers came to be added:
(a) to quash and set aside the inquiry report and the order of disciplinary authority dated 4th February, 1990 (Exhibit-L and M);
(b) to declare the Union Bank of India Officers Employees (Discipline and Appeal) Regulations, 1976 as altravires Article 14 and 16 of the Constitution;
(c) to award salary from July, 1970 to February, 1990 as per the revised pay scales with cumulative interest; and
(d) to grant to the Petitioner each and every terminal benefit, including encashment of privilege leave accumulated during the period i.e. from July, 1970 to February, 1990.
2. The Petitioner came to be appointed as a Clerk on 27th of February, 1964 under the Union Bank of India and on completion of the probationary period he was confirmed in the said post from 14th September, 1964. He was promoted to the post of Special Assistant on 8th March, 1960 and to the post of Officer in Grade-II on 11th September, 1969. On completion of the probationary period he was confirmed as Accountant in the grade of Officer Grade-II with effect from 1st April, 1970 while he was working under the Jalna Branch of the said Bank.
3. On 7th August, 1970 the manager of the Jalna branch lodged a criminal complaint against one of the customers by name M/s Shantubhai Harjivandas Shah and Brothers and others in connection with disbursement of an amount of Rs.69,000/- against a documentary Hundi tendered to the bank but having failed to tender the requisite railway receipt. The complaint also impleaded the Petitioner as a co-accused for an offence punishable under section 420 of the Indian Penal Code. The Police Station at Jalna registered an offence and arrayed the Petitioner as one of the accused. These proceedings finally ended with "A" summary by the Magistrate vide his order dated 4th August, 1972.
4. The Manager of the bank, thereafter, filed a private complaint against the partners of the firm and the Petitioner for an offence punishable under section 420 read with section 109 of the Indian Penal Code and it came tobe registered as Criminal Case No. 73 of 1971 in the Court of Judicial Magistrate, First Class at Jalna, which complaint was dismissed under section 259 of the Criminal Procedure Code on account of absence of the complainant on 21st March, 1972. The manager filed a fresh complaint on 22nd March, 1972 which came tobe registered as Criminal Case No. 339 of 1972 against the Petitioner and after recording the evidence the learned Magistrate was pleased to hold the Petitioner guilty and he was convicted along with the principal accused No. 2 under section 420 read with 109 of the Indian Penal Code and sentenced to undergo rigorous imprisonment for six months and to pay a fine of Rs.500/-, in default of payment of fine, further rigorous imprisonment for one month, vide his order dated 28th May, 1979. The Petitioner preferred an appeal against the said order (Criminal Appeal No.62 of 1979) and it was allowed by the learned Additional Sessions Judge, Jalna on 8th September, 1980 by setting aside the conviction and directing the remand for retrial.
5. The Petitioner then approached this Court in Criminal Revision Application No. 751 of 1980 which was allowed as per the judgment dated 28th June, 1983 and the appeal was remanded to the Sessions Court for decision in the light of provisions of Section 464 of the Criminal Procedure Code.
6. While the Revision was pending, the Petitioner filed writ petition No. 416-A/1982 for the relief of reinstatement and back wages. By judgment and order dated 6th February, 1989 the petition was allowed with a direction to reinstate the Petitioner and to treat the period from 6th June, 1979 to 6th February, 1989 as the suspension period. The bank filed Review Application No. 428 of 1989 which came to be rejected by this Court on 20th April, 1989. The bank approached the Apex Court in S.L.P. No. 8993 of 1989 which came to be allowed on 28th September, 1989. The suspension of the Petitioner was continued tobe coterminable with the decision in Criminal Appeal pending before the Sessions Court, Jalna and the order of reinstatement was quashed.
7. The Criminal Appeal, on remand, came to be allowed and the conviction of the Petitioner was set aside by the Sessions Court on 27th November, 1989. This order was not carried further by the State or the bank and received its finality.
8. For the first time, the bank served a charge sheet to the Petitioner on 4th January, 1990 and the Petitioner approached us in the second round by filing the instant petition on 5th February, 1990 praying for the above referred three reliefs. On 28th February, 1990 this Court passed interim order directing the Petitioner tobe reinstated and granting liberty to the bank to initiate and conduct departmental inquiry. This order was challenged by the bank in S.L.P. No. 5978 of 1990 (Civil Appeal No. 3093 of 1990). On 4th May, 1990 the Supreme Court passed an order allowing the bank to keep the Petitioner under suspension on payment of full salary, granting liberty to the bank to complete the departmental inquiry against the Petitioner and to take decision thereon. It was further made clear that the said decision could be implemented only with the permission of this Court. The bank completed the inquiry on 20th July, 1990 and the Inquiry Officer submitted the report on 11th September, 1990. The Disciplinary Authority concurred with the findings of the Inquiry officer and held that two out of three charges were proved against the Petitioner viz. (a) failure to take steps to ensure and protect the interest of the bank and (b) the petitioner acted otherwise than in best of his judgment while discharging his duties.
9. The Disciplinary Authority, therefore, passed an order of imposing major penalty of reduction of pay by two stages in the time scale of pay which was considered to be just and proper punishment and, therefore, the bank filed Civil Application No. 103 of 1991 before this Court seeking permission to implement the decision to award the major punishment. After hearing both the parties and considering the affidavit in reply filed by the Petitioner, the Civil Application filed by the bank came to be rejected by this Court on 4th March, 1991 in terms of the following order.
"Heard counsel. Rejected as there is hardly any difference in getting actual payment by imposing penalty also. Petitioner is allowed tobe reinstated by consent of parties."
10. The Petitioner joined his duties as Routine Officer at Zonal Office, Pune on 12th March, 1991. He filed Civil Application No. 3168 of 2001 for amendment of the petition challenging the correctness of the inquiry report (Exhibit-L) and the legality of the order of punishment (Exhibit-M). While this application was pending the Petitioner was promoted as Manager (Scale-II) and worked in that capacity till he retired on reaching the age of superannuation on 31st May, 2001. By a communication dated 30th May, 2001 the bank informed the Petitioner that his retirement benefits could not be decided until the instant petition was disposed. The petitioner filed Civil Application No. 3569 of 2001 challenging the said communication. The Civil Application for amendment was allowed.
11. So far as the prayer for reinstatement is concerned, it does not subsist any more as the Petitioner came to be reinstated by order dated 4th March, 1991 passed in Civil Application No. 103 of 1991, by this Court and admittedly he joined his duties on 12th March, 1991. He worked for more than ten years continuously and finally retired on 31st March, 2001 by receiving promotion to the post of Manager, Scale-II on 16th February, 2001. This order of reinstatement has not been challenged by the bank. By order dated 4th May, 1990 the Supreme Court had allowed the bank to keep the Petitioner under suspension by paying full emoluments and, therefore, the salary for the period from March, 1990 till his retirement is covered by the said order of the Apex Court. The questions we are required to decide in this petition, are (a) whether the bank can be allowed to impose an order of punishment, as proposed; and (b) the Petitioners claim for payment of salary and arrears thereon with consequential benefits for the period from July, 1970 to February, 1990.
12. The Petitioner is covered by the Union bank of India Officer Employees (Discipline And Appeal) Regulations, 1976 (for short, D&A Regulations). Regulation 4 deals with penalties which are of two kinds viz. (a) minor penalties and (b) major penalties. Censure, Withholding of increments of pay with or without cumulative effect, withholding of promotion, recovery from pay or such other amount as may be due to him of the whole or part of any pecuniary loss caused to the Bank by negligence or breach of orders, are minor penalties. Whereas, the major penalties, with which we are concerned in this petition are sub-categorised, as under:
(i) Reduction to a lower grade or post, or to a lower stage in a time scale.
(ii) Compulsory Retirement.
(iii) Removal from service which shall not be a disqualification for future employment.
(iv) Dismissal which shall ordinarily be a disqualification for future employment.
Regulation 5 defines the "Authority to institute disciplinary proceedings and impose penalties" specified in Regulation 4. Regulation 6 has set out the procedure for imposing major penalties and Regulation 7 sets out the action on the inquiry report.
The said regulation reads, as under:
"7.Action on the inquiry report:
(1) The Disciplinary Authority if it is not itself the Inquiring Authority, may, for reasons to be recorded by it in writing, remit the case to the Inquiring Authority for fresh or further inquiry and report and the Inquiring Authority shall thereupon proceed to hold the further inquiry according to the provisions of Regulation 6 as far as may be.
(2) 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.
(3) 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 Regulation 4 should be imposed on the Officer Employee it shall, notwithstanding anything contained in Regulation 8, make an order imposing such penalty.
(4) If the Disciplinary Authority 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 Employee concerned."
13. Regulation 9 defines the mode of communication of orders and states that orders made by the Disciplinary Authority under Regulation 7 or Regulation 8 shall be communicated to the Officer Employee concerned who shall also be supplied with a copy of the report of inquiry, if any. Regulation 12 is regarding suspension by the Competent Authority where a disciplinary proceeding against an employee is contemplated or is pending or where case against him in respect of any criminal offence is under investigation, inquiry or trial.
14.The Petitioner has challenged the authority of the bank to initiate the disciplinary inquiry, the legality of the inquiry proceedings and the subsequent decision to impose major penalty on the following grounds:
(a) Once the criminal appeal No. 35 of 1983 (re-numbered after remand) was allowed and the conviction of the Petitioner was set aside, the charges against the Petitioner were set to rest and the bank had no further authority to initiate disciplinary proceedings on the same charges.
(b) The Petitioner was subjected to double jeopardy by initiating the departmental proceedings under the D&A Regulations.
(c) The departmental inquiry was sought to be initiated after a lapse of 20 years inasmuch the suspension order was issued on 21st July, 1970 and the show cause notice of the departmental inquiry was served on the Petitioner on 4th January, 1990 an such a belated action under the DA& Regulations was not permissible in law.
(d) Second show cause notice against the proposed punishment was not issued and thus violated the principles of natural justice.
(e) The findings of the Inquiry officer as well as the decision of the Disciplinary Authority, to impose one of the major penalties against the Petitioner, stood vitiated as there was violation of principles of natural justice and the findings of the Inquiry Officer were without application of mind and there was no evidence to support the same.
(f) Regulation 7 of the D&A Regulations is ultra vires the provisions of Article 14 and 16 of the Constitution inasmuch as it does not provide for issuance of notice to show cause to the delinquent so as to give him an opportunity of being heard before a final decision is taken by the Disciplinary Authority.
(g) The bank had moved Civil Application No. 103 of 1991 seeking permission to impose the proposed major penalty and this application was rejected on 4th March, 1991 as there was hardly any difference in getting actual payment by imposing penalty also. This order implies that this Court was satisfied about the non-availability of any ground to punish the Petitioner on the basis of the inquiry report which was accepted by the Disciplinary Authority.
15. Let us examine the last ground first. The learned counsel for the Petitioner vehemently argued that once this Court rejected Civil Application No. 103 of 1991 vide its order dated 4th March, 1991 the fate of the disciplinary inquiry was sealed and this is more so when the Court had taken into consideration the averments made in the Civil Application and the detailed reply filed by the Petitioner opposing the said application. The banks right to punish the petitioner was finally adjudicated vide order dated 4th March, 1991 and this Court, for the reasons which are implied, was not satisfied that there was a reasonable case made out by the bank warranting a punishment tobe imposed against the Petitioner on the basis of the inquiry report.
16. The question before us is, whether we should accept these submissions and if the answer is in the affirmative nothing further survives in the petition specially when the order dated 4th March, 1991 was not challenged by the bank and it received its finality. It is well established by a catena of decisions that the employer has inherent powers to punish an erring employee and while in this process the service rules, as applicable to the employee, are required to be followed. In addition, the entire process of departmental proceedings against the erring employee must satisfy the principles of natural justice and if there is any procedural error or infraction of the procedure laid down under the service rules the findings of the domestic tribunal as well as the action of imposing punishment would be vitiated and, therefore, become void ab-initio. Civil Application No. 103 of 1991 came to be presented before us pursuant to the order passed by the Supreme Court in Civil Appeal No. 3093 of 1990. The said application was filed seeking leave of this Court to proceed further against the Petitioner so as to impose on him the major penalty of reduction of pay by two stages in the time scale of pay which the Disciplinary Authority considered tobe a just and proper punishment. This Court rejected the said application and the order of rejection cannot, by any stretch of imagination, be termed as an order permanently putting a ban against the bank from exercising its power under Regulation 4 of the D&A Regulations. It ought to be treated as an interlocutory order thereby conveying to both the parties in the lis that the employer was debarred from invoking the power of imposing punishment during its pendency. The employers right to impose the penalty was subject to the final outcome in the Petition and such a right was tobe adjudicated upon after considering the pleas raised by the respective sides. We, therefore, reject the contentions that the bank was forbidden forever from imposing any punishment against the Petitioner in view of our order dated 4th March, 1991 in Civil Application No. 103 of 1991.
17. The first two grounds could be answered by a common reasoning. When the Petitioner was issued a charge sheet on 4th January, 1990 he approached us by filing the present petition praying for, inter alia, a declaration that the Respondent bank had no authority to initiate departmental inquiry. This Court, by order dated 28th February, 1990, directed the Petitioner tobe reinstated by granting liberty to the bank to initiate and conduct the departmental inquiry. This order itself implies that this Court was not prima facie satisfied on the contentions of the Petitioner that the bank had no authority to initiate departmental inquiry after he was acquitted by the Sessions Court. The Respondent bank approached the Apex Court against this interlocutory order passed by us, and Civil Appeal No. 3093 of 1990 came tobe allowed by order dated 4th May, 1990. The bank was allowed to keep the Petitioner under suspension by making the full payment of salary and it was granted liberty to complete the departmental inquiry and to take decision thereon with a caveat in the said order against the bank that its decision on the inquiry findings shall not be implemented without the permission of this Court. The Supreme Court also impliedly rejected the contentions of the Petitioner that the bank was estopped from initiating disciplinary proceedings under the D&A Regulations, on his acquittal.
18. The law is also well settled in this regard. In the case of "Nelson Motis V/s Union of India and Another" a three Judge Bench of the Supreme Court has set at rest the controversy regarding the employers right to proceed against the delinquent officer on the same charges in respect of which he was acquitted by a competent Court. The Court was interpreting the provisions of Rule 10 (4) of the Central Civil Services (Classification Control and Appeal) Rules, 1965. The employee was acquitted in a criminal case initiated against him and on the same charges a disciplinary proceeding was initiated and inquiry was conducted. The Inquiry Officer submitted his report holding the charges as proved. The report was accepted by the Disciplinary Authority who passed an order of removal from service. The order was challenged before the Central Administrative Tribunal which ultimately allowed the delinquent employees plea and the order of punishment was set aside. The Supreme Court, in para 5, stated, thus:
"5. So far the first point is concerned, namely whether the disciplinary proceeding could have been continued in the fact of the acquittal of the appellant in the criminal case, the plea has no substance whatsoever and does not merit a detailed consideration. The nature and scope of a criminal case are very different from those of a departmental disciplinary proceeding and an order of acquittal, therefore, cannot conclude the departmental proceedings. ... ..."
In the case of "Inspecting Assistant Commissioner, Bombay and others V/s Sharat Narayan Parab" the delinquent was working as an Uppar Division Clerk in the Income Tax office at Mumbai and on 30th September, 1980 he had forcibly entered the cabin of one Income Tax Officer leading a crowd of 20 to 25 employees and allegedly assaulted the said officer. It was alleged that he dragged the officer out of his room by putting a knife on his chest and physically removed him from the office building and told him never to return. On the complaint, filed by the officer concerned, he was chargesheeted under section 147, 149, 332 and 506 of the Indian penal Code and was convicted and sentenced by the Metropolitan Magistrate by his order dated 23rd June, 1983. By order dated 2nd July, 1983 he was put under suspension and a memorandum of charges was issued against him. The memorandum stated that since he was convicted his retention in public service had become undesirable and, therefore, the penalty of dismissal from service was proposed. Inspite of the representation made by the delinquent he was dismissed from service by order dated 18th August, 1983. Thereafter, the order of conviction and sentence passed by the Metropolitan Magistrate was set aside by the Additional Sessions Judge on 29th October, 1983 and the delinquent was acquitted by giving him the benefit of doubt. The employer set aside the order of dismissal and reinstated the delinquent vide order dated 3rd December, 1983 but, however, a departmental inquiry was directed. A charge sheet was served on him, inquiry was conducted in which the Inquiry Officer held the delinquent guilty. Penalty of dismissal from service was imposed after following the due procedure, by order dated 9th September, 1986. The appeal filed by the delinquent failed and, therefore, he approached the Central Administrative Tribunal, Bombay Bench. The tribunal set aside the order of dismissal by order dated 5th August, 1992 on the ground of principles of natural justice. When the matter was taken to the Apex Court it was held that the inquiry was properly conducted in which the delinquent had participated and had been given proper opportunity to defend himself. The reasoning of the tribunal viz. failure to follow the principles of natural justice, was unsustainable in view of the law laid down by the Supreme Court in the case of "Managing Director, ECIL V. B. Karunakar" . This judgment of the Supreme Court also impliedly upholds the right of the employer to proceed under the D&A Regulations even after the delinquent was acquitted by a competent Court on the same or similar charges.
In the case of "Senior Superintendent of Post Offices, Pathanamthitta and others V/s A. Gopalan" the delinquent was employed as Sub Post Master and the departmental proceedings were initiated against him on two charges of misconduct viz.
(a) while he was functioning as Sub Post Master from 21st August, 1985 he had fraudulently effected a withdrawal of Rs.8,000/- without the knowledge of the depositor from Savings Bank Account by himself putting the signature of the depositor on the application for withdrawal and (b) while functioning as Sub Post Master he failed to account for the amounts of Rs. 379/- and Rs. 799/- realised by him as customs duty from the addressees in respect of hand foreign parcels. An inquiry was conducted into these charges and the Inquiry Officer found both the charges as established. By accepting the Inquiry Officers report the Disciplinary Authority had imposed the penalty of dismissal from service and on appeal the said punishment was reduced to compulsory retirement. At the same time the delinquent was tried for offences under section 407, 467 and 477A of the Indian penal Code on the charge regarding the withdrawal of Rs.8,000/- by him and in the said criminal proceedings he was acquitted by the Judicial Magistrate, First Class by his order dated 31st August, 1987. The acquittal order was upheld by the High Court as well. In O.A. No. 1045 of 1991 the Central Administrative Tribunal set aside the order of punishment based on the acquittal order on the charge of withdrawal of Rs.8,000/- and the Appellate Authority was directed to consider the question of punishment afresh. Following the earlier decision in the case of "Nelson Motis" (supra) the Supreme Court did not agree with the view taken by the tribunal and the order of punishment was upheld.
On the touchstone of this well established legal position the first two grounds of challenge, as raised by the Petitioner, cannot hold water and his plea that the bank was not permitted in law to initiate disciplinary proceedings under the D&A Regulations into the same charges in respect of which he was acquitted by the Sessions Court cannot be accepted. We hold that the bank had exercised its power under the D&A Regulations legally and exercise of such powers was not curtailed by the acquittal order.
19. On the ground of delay in initiating the departmental proceedings, the chronology of events, which we have reproduced in this judgment, by itself, shows that the delay was not deliberate nor was it due to the reasons attributable to the bank. The acquittal order by the Sessions Court came in the year 1990 and immediately thereafter the bank decided to invoke its power under the D&A Regulations. The ground of delay is, thus, not available to the Petitioner in the facts and circumstances of this case and there is no lapse on the part of the bank in regard to initiating the departmental proceedings against him.
20. In the case of "Managing Director of ECIL (Supra) a Constitution Bench of the Supreme Court considered the scope of Article 311(2) of the Constitution as amended by the 42nd Amendment and it laid down the following principles in regard to the disciplinary proceedings vis-a-vis the principles of natural justice:
(i) Disciplinary proceedings break into two stages and the first stage ends when the Disciplinary Authority arrives at its conclusions on the basis of the evidence and the second stage begins when the said authority decides to impose penalty.
(ii) Delinquent employee has two rights in disciplinary proceedings, the first being to prove innocence and the second one is to plead for either no penalty or less penalty although the conclusion regarding guilt is accepted.
(iii) It is the second right exercisable at the second stage of the disciplinary proceedings that is taken away by the 42nd amendment of the Constitution.
(iv) Delinquent has tobe given a reasonable opportunity to defend himself before the domestic tribunal and the right to receive the report of the Inquiry Officer is an essential part of the reasonable opportunity.
(v) The delinquent employee is entitled to receive report of the Inquiry Officer before the Disciplinary Authority takes a decision as to the guilt of the employee and failure in this regard is a denial of reasonable opportunity to the employee to prove his innocence and is a breach of principles of natural justice.
(vi) Delinquent employee is required tobe given the report of the Inquiry Officer even if the statutory rules do not permit the furnishing of the report or are silent on the subject.
(vii) Whenever the service rules contemplate an inquiry before awarding punishment and when the Inquiry officer is not the Disciplinary Authority, the delinquent officer will have the right to receive the report of the Inquiry Officer notwithstanding the nature of the punishment.
(viii) The report of the Inquiry Officer has tobe furnished to the delinquent even when he does not ask for the same and irrespective of whether the establishment is Government, Private, Non-Government or Public.
(ix) In the event of non-supply of the report of the Inquiry Officer the Court or Tribunal should cause the same tobe supplied and after hearing the employee the Court or Tribunal should decide if the non-supply of the report would or would not have made any difference to the ultimate findings and the punishment. And
(x) The law laid down in Mohd. Ramzan Khans case will apply to only those orders of punishment which are passed by the Disciplinary Authority after 20th November, 1990 and no order of punishment passed earlier to the same date would be challengeable on the ground that there was failure to furnish a report of inquiry to the delinquent employee.
21. In the instant case, the bank had come before us with Civil Application No. 103 of 1991 seeking permission to impose the punishment and this application was rejected on 4th March, 1991. As a result, the bank could not proceed with the proposed order of punishment and the whole issue remained dormant before us. The provisions of Regulation 7, which are canvassed tobe unconstitutional, no more hold the field in view of the law laid down by the Apex Court in Karunakars case (supra). The bank had amended the D&A Regulations till 1984 and it is obvious that the said Regulations would be subject to amendments after the said decision of the Supreme Court. Even otherwise, the Supreme Court clearly ruled that the delinquent employee was required tobe given a copy of the report submitted by the Inquiry Officer even if the statutory rules do not permit the furnishing of the report or they are silent on the subject and even if the delinquent did not ask for the same. The report is required tobe supplied to the delinquent employee irrespective of whether the establishment is Government or Non-government, Public or Private. Once this legal position has been enunciated by the Apex Court (Constitution Bench) and it is made applicable to the orders passed by the Disciplinary Authority after 20th November, 1990 we are not required to decide the issue regarding the validity of Regulation 7 of the D&A Regulations. As the banks decision to impose punishment against the Petitioner is subject to the final outcome in this Petition, undoubtedly, the law laid down by the Apex Court in Karunakars case (supra) shall be applicable and, therefore, it is mandatory for the bank to follow the same. However, the failure of the bank to supply a copy of the Inquiry Officers report before filing Civil Application No. 103 of 1991 shall not vitiate the banks right to impose the punishment against the Petitioner on the basis of the said report as the final decision of the bank could not be implemented without the leave of this Court, all this while. The bank would follow the said procedure, if leave is granted by us, and in any case, mere failure to supply a copy of the report, is not the sole reason to hold that the bank has no right to impose punishment against the Petitioner under the D&A Regulations.
22. On the question of quantum of punishment and the Courts power to interfere with the same, the Supreme Court, in the case of "Union of India V/s Parma Nanda" has held that the jurisdiction of the Tribunal to interfere with disciplinary matters and punishment cannot be equated with appellate jurisdiction and it cannot interfere with the findings of the Inquiry Officer or the Competent Authority where they are not arbitrary or highly perverse. It specifically stated "it is appropriate to remember that the power to impose penalty on a delinquent officer is conferred on the competent authority either by an Act of legislature or Rules made under the proviso to Article 309 of the Constitution. If there has been an inquiry, consistent with the rules and in accordance with the principles of natural justice, what punishment would meet the ends of justice is a matter exclusively within the jurisdiction of the Competent Authority". Subsequently in the case of "Union of India V/s G. Ganayutham" the Apex Court held that the principle of proportionality can be invoked regarding punishment only in a case where the punishment was totally irrational in the sense that it was outrageous defines of logic or moral standards. The same view was followed in the case of "Director General, Indian Council of Medical Research and others V/s Dr. Anil Kumar Ghosh and another" . Similarly, in the case of "Inspecting Assistant Commissioner" (supra) it is laid down that the Court cannot go into the question of punishment unless it was of the view that the punishment imposed was such that no reasonable person could ever have imposed such a punishment looking to the circumstances of the case.
23. Now, let us come to the findings of the Inquiry Officer in the instant case. The main allegation against the Petitioner was that he had purchased Bills amounting to Rs.69,000/- without obtaining the necessary documents i.e. Railway Receipts. Out of the three charges levelled against him, the Inquiry Officer held that the Petitioner could not be held tobe guilty of the charge that he failed to perform his duties with utmost integrity, honesty, devotion and diligence, which was the first charge. In respect of other two charges, the Inquiry Officer held the Petitioner guilty i.e. he failed to take all possible steps to protect the interest of the bank and he failed in exercising his judgment in performance of his official duties for which the bank had suffered loss. The Inquiry Officer put the sole blame in respect of the first charge on Shri Joshi, who was at the relevant time, the Branch Manager and the Petitioner was his subordinate (Accountant). However, the following observations of the Inquiry Officer against the Petitioner are noteworthy:
(a) "The fact remains that even though the Branch Manager Shri Joshi was following wrong practice right from the inception of the Branch and was giving out of way benefits to the parties, the C.S.O. Shri Gudgille being the responsible officer i.e. Accountant No. 2 in the Branch should have objected for the illegal and incorrect practice followed by Shri Joshi and should not have overlooked these facts from time to time. It was his duty to bring these facts to the notice of higher officers particularly to the Regional Manager or the Central Office and should have put stop to this illegal practice followed at the branch. Instead of acting as watch dog in the interest of the bank he has shown contributory negligence and joined hand with the Branch Manager which has resulted the Bank into monetary loss to the extent of Rs.69,000/- and interest thereon."
(b) "Shri Gudgille was fully aware being the Accountant of the branch and as experienced officer the consequences of accepting bills without documents i.e. RR/MR and accepting them as documentary bills in IDBP register. He should not have joined hands with Shri Joshi, the Branch Manager in following this practice at the branch which was one day or other would have gone against him so much to the detrimental to the interest of the bank as well as to his own interest. He should have either protested in writing against this illegal and incorrect actions so followed by the Branch Manager or reported to the Regional Manager or the Zonal office. So that the remedial measures could have been taken in time and the illegal practice followed at the branch could have been stopped. Because of his keeping silent over the matter and following illegal and incorrect practice in connivance with the Branch Manager the Bank has been put to loss to the extent of Rs.69,000/- plus interest thereon and I, therefore, hold him guilty for having failed to take all possible steps to ensure and protect the interest of the bank."
The Inquiry Officer has followed the proper procedure and had given a reasonable opportunity to the Petitioner to defend his case. Having gone through the Inquiry Officers report we are satisfied that the inquiry proceedings are not vitiated on any count and the Inquiry Officer has applied his mind to the evidence adduced before him. The findings of the Inquiry Officer are supported by the oral and documentary testimony and he has analysed the oral testimony objectively. The findings are, thus, supported by a just and proper reasoning. We do not find any scope to hold as perverse the view than taken by the Inquiry Officer while holding the petitioner guilty of the two charges.
24. The Disciplinary Authority has applied its mind to the findings submitted by the Inquiry Officer and concurred with the same. We have no doubt, in our mind, that this is a fit case where we must grant leave to the bank to proceed further under the D&A Regulations for imposing proper punishment against the Petitioner. To err is human but to err knowingly is penal. The Petitioners case falls in the later category and, therefore, he must face the consequence and be subjected to the penal action as permissible under the D&A Regulations.
We also deem it appropriate to refer to one of the recent judgments of the Supreme Court in the case of "UCO Bank V/s Hardev Singh", who was an employee of the said Bank. He had illegally kept with him Rs.864/by rounding off the fixed deposit amounts and surrendered the same to the bank only after he was caught in the act. The bank, after following the procedure, set out in the Discipline and Appeal Rules, had imposed a punishment of removal from service with full retirement benefits and by taking a lenient view though he could have been dismissed from service, without any retirement benefits. The removal order was challenged before the Tribunal which upheld the order of punishment. The delinquent approached the Punjab and Haryana High Court which allowed the petition. Though the High Court had concurred with the findings about the misconduct on the part of the employee, the delinquent was directed to be reinstated in service. In appeal, the Supreme Court held that (a) even a minor embezzlements by bank employees could warrant their dismissal from service as banks were regarded as the custodian of public savings; (b) highest standards of honesty and integrity were expected from bank employees, (c) the charge framed was serious and normally punishment of dismissal of service could have been logical. but keeping in view the past clean record of the employee the bank took a lenient view and removed him from service, the bank in a sense has been more than considerate by not imposing the dismissa,l from service, and (d) the decision of the High Court directing reinstatement of the employee was uncalled for.
25. Whether the quantum of punishment proposed tobe imposed on the Petitioner is a matter which squarely falls within the managerial decision of the bank (Disciplinary Authority) and while continuing with the process of imposing penalty, the law laid down by the Apex Court in the case of Karunakar (supra) is mandatory and it must be followed by the bank. The Disciplinary Authority has already supplied a copy of the Inquiry Officers report, on which there is no dispute, and the Disciplinary Authority shall have to, therefore, issue a second show cause notice to the Petitioner on the quantum of the proposed punishment, as set out under Regulation 4 of the D&A Regulations so that the Petitioner is given an opportunity to submit his say in that regard. This will be in compliance with the principles of natural justice. The final order of imposing the punishment by the Disciplinary Authority is required to be passed only after providing such an opportunity of show cause and by considering the defence as put up by the delinquent officer i.e. the Petitioner. The bank shall have to go through this process. Whatever is the final punishment imposed by the Disciplinary Authority against the Petitioner shall also be subject to his right of appeal under Regulation 17 of the D&A Regulations. Under Regulation 17 (2) an appeal is required tobe preferred within 45 days from the date of receipt of the order appealed against. However, there is no time limit set out for deciding the appeal by the Appellate Authority. Looking to the peculiar facts and circumstances of this case and more particularly the rounds of litigation between the parties, during the last more than 30 years, we deem it appropriate that the Disciplinary Authority finalises its decision ib punishment within a period of six weeks. The Petitioner also has a further remedy of review under Regulation 18 of the D&A Regulations, in case he is dissatisfied with the order in appeal.
26. In the premises, we dismiss the petition and permit the bank to proceed against the Petitioner on the basis of the inquiry report (Exhibit-L) from the stage of giving show cause notice on the quantum of proposed punishment. The Petitioner shall be given two weeks time to submit his explanation in reply thereto and the Disciplinary Authority shall take a final decision thereon within a period of four weeks from the date of submission of the petitioners explanation or in case no explanation is submitted by the Petitioner, within a period of six weeks from the date of the show cause notice. The issue of payment of salary for the suspension period i.e. from July, 1970 to February, 1990 shall be decided by the Disciplinary Authority while taking a final decision on awarding punishment against the Petitioner, as per the provisions of the D&A Regulations. The same course shall be followed by the bank for settling the Petitioners retiral benefits, including encashment of privilege leave etc. Save and except the above directions, Rule is hereby discharged. No costs.
27. On application, ordinary copy of this judgment or provided to the parties, by the Registry.