Sps Mutyam vs State Of Ap
2021 Latest Caselaw 4896 AP

       HON'BLE SRI JUSTICE NINALA JAYASURYA

                         W.P.No.55 of 2019

ORDER:-

      This writ petition is filed questioning the proceedings of the

3rd respondent in Rc.No.Estt./2018-19 dated 05.12.2018 terminating

the services of the petitioner as Assistant Manager in the 2nd

respondent-Bank.

2. Heard Mr. K. Chidambaram, learned counsel for the

petitioner, and Sri K. Bharath Ram, learned Standing Counsel for

respondent Nos.2 to 4.

3. The brief averments as per the petitioner's affidavit are:

The petitioner was appointed as Assistant Manager in the 2nd

respondent-Bank on 19.07.2012. He was transferred and posted at

Elamanchili Branch in the year 2014 and also discharged the

functions as In-charge Manager. The 3rd respondent issued a Charge

Memo dated 25.05.2018 to him alleging negligence in discharge of

his duties and that it lead to heavy loss to the Bank. The petitioner

could not submit his explanation to the said Charge Memo, as the

same was issued while he was on medical leave. Under the said

circumstances, the 3rd respondent vide proceedings dated 09.08.2018

placed the petitioner under suspension, as no explanation was

submitted by him to the Charge Memo. Thereafter, the petitioner

submitted explanation to the Charge Memo on 25.09.2018 and vide

Note orders dated 28.09.2018, the 3rd respondent ordered domestic

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enquiry and appointed the DGM (Admn.) as Domestic Enquiry

Officer and the AGM (LT) as the Presiding Officer. The 3rd

respondent vide communication dated 29.09.2018 requested the

Enquiry Officer to conduct enquiry and submit a report within 15

days, pursuant to which, the enquiry was conducted and the Enquiry

Officer submitted a report on 13.11.2018. Basing on the report of

the Enquiry Officer, the 3rd respondent issued a show-cause-notice

dated 20.11.2018 calling upon the petitioner to show cause as to

why he should not be dismissed from the services of the Bank. The

petitioner submitted his explanation on 25.11.2018 denying the

charges and the report submitted against him. The 3rd respondent,

thereafter, passed the order of termination which is impugned in the

writ petition.

4. Learned counsel for the petitioner inter alia contended that

the order of termination is not sustainable, as the enquiry was

initiated in violation of the Employees Service Regulations (for

short 'the Service Regulations') of the District Cooperative Central

Bank Limited-2nd respondent. He submits that it is for the

Management to initiate the disciplinary proceedings and the C.E.O.-

3rd respondent has no power or authority to initiate the same. It is

his specific contention that though the 3rd respondent can inflict

punishment, he cannot initiate the disciplinary proceedings. In

support of his contentions, learned counsel for the petitioner refers

to the Service Regulations of the Bank, more specifically,

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Regulations 61, 62, 63, 66, etc. While drawing the attention of this

Court to Regulation 55 (2) of the Service Regulations, he submits

that 'Bank' means 'the Board of Management' and it alone has

power to initiate the disciplinary proceedings against the petitioner.

He contends that if the Bank/Management takes a decision to

initiate the disciplinary proceedings, the competent authority has to

take further action. He submits that in the present case, there is no

decision of the Management as contemplated under Regulation 63

of the Service Regulations and issuance of a Charge Sheet in the

absence of such decision taken by the Bank/Management as

contemplated under Rules 63, is not sustainable and therefore, the

whole proceedings are vitiated.

i) In elaboration, he submits that in respect of the allegations of

misconduct against an employee, as per the procedure contemplated

under Regulation 62 of the Service Regulations, it is the 'Bank'

which is empowered to appoint an Enquiry Officer and Rule 66 (v)

also refers to the steps to be taken by the 'Bank' while appointing an

Enquiry Officer. As the Enquiry Officer was not appointed by the

Bank, the impugned order on the basis of the report submitted by

such Officer is not legally valid. He further submits that Rule 66

(vii) contemplates the manner in which the enquiry is required to be

conducted. He contends that though in terms of the said provision,

three months' time is contemplated, the enquiry in the present case

was completed within one week, which itself would indicate that the

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enquiry was conducted without giving any reasonable opportunity to

the petitioner. He also contends that Rule 66 (ix), which deals with

imposition of penalties, contemplates that if the disciplinary

authority is not satisfied with the explanation submitted by the

delinquent and major penalty is proposed, the delinquent must be

given an opportunity to submit his reply/explanation to the

disciplinary authority, but the same has not been complied with. In

support of his contentions to the effect that the C.E.O. has no power

or jurisdiction to initiate the disciplinary proceedings, learned

counsel for the petitioner places reliance on a judgment of the High

Court of Judicature at Hyderabad for the State of Telangana and the

State of Andhra Pradesh in Bh. Syam Prasad Vs. Krishna District

Co-operative Central Bank Limited, reported in 2016 (3) ALT 483.

Contending so, the learned counsel for the petitioner urges that the

impugned termination order is liable to be set aside.

5. Refuting the said contentions, learned Standing Counsel for

the respondent-Bank contended that under Regulation 62 of the

Service Regulations, which deals with the procedure for imposing

any major penalty, the Management or the Disciplinary Authority is

empowered to initiate the disciplinary proceedings and accordingly,

the Enquiry Officer was appointed. It is contended that a Charge

Memo was issued to the petitioner on 25.05.2018 and as no

explanation was submitted despite affording ample opportunity, the

petitioner was placed under suspension. It is submitted that during

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the course of domestic enquiry, the petitioner admitted his guilt

before the Enquiry Officer and in view of the same, after serving a

copy of the Enquiry Report, the petitioner was called upon to show

cause as to why he should not be removed from the Bank for the

grave misconduct committed by him. The learned Standing Counsel

states that the petitioner submitted his explanation and after due

consideration of the same, he was terminated from service, after

giving ample opportunity, at every stage of the enquiry. It is

pleaded that as the allegations of grave misconduct were proved

during the enquiry, the issuance of termination order cannot be

found fault with. While submitting that the order impugned has

been passed in strict compliance with the principles of natural

justice and in terms of the Service Regulations, the learned Standing

Counsel contends that no interference is called for in the present

writ petition.

i) The learned Standing Counsel also submits that the Service

Regulations provides for an appeal to the appellate authority against

the order impugned in the writ petition and the petitioner, instead of

availing the remedy of appeal, instituted the present writ petition

and the same is liable to be dismissed on the ground of availability

of alternative remedy. It is also contended that the judgment relied

on by the learned counsel for the petitioner is not applicable to the

facts of the present case, and submits that the issue raised therein

relates to appointment of an Advocate as an Enquiry Officer, which

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in fact, was not interfered with by the Hon'ble Court. Making the

said submissions, it was urged to dismiss the writ petition.

6. This Court has considered the contentions advanced by the

respective Counsel with reference to the material available on

record, including the Service Regulations of the respondent-Bank.

7. Chapter-X of the Service Regulations deals with the Conduct,

Discipline, Procedure, Suspension, Punishment and Appeal. As per

Regulation 55 of the Service Regulations, the Rules of Conduct

Discipline and Appeals apply to all the Employees and Officers of

the Bank. Regulation 55 (2) envisages that in the said Rules unless

and otherwise specifically mentioned, 'Bank' means the 'Board of

Management', 'Employee' means the 'Workmen' and also the

'Officers' of the Bank. Regulation 56 deals with 'Misconduct' and

what constitutes 'Major Misconduct' is set out in Regulation 58.

Regulation 61 deals with major punishments and Regulation 62

deals with the procedure for imposing any major punishments.

Regulations 62, 63, 66, which are of immediate relevance for the

purpose of considering the submissions, reads thus:

"62 - PROCEDURE:

For imposing any of the above major punishments, the Bank shall follow the following procedure:

When an act of malfeasance or misconduct is brought to the notice of the Management and when the Management or the disciplinary Authority is of the opinion that there

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are prima facie grounds for any enquiry into the truth of misconduct of misbehaviour of an employee it may appoint any officer of the Bank to find out the truth thereof and give the report.

The Management need not conduct any preliminary enquiry if the nature of the misconduct is on the basis of the Enquiry, Inspection or Audit done by the financing Bank or by the office of the Registrar of Coop. Societies or by the Internal Audit of the Bank itself. If the Management comes to the conclusion that on the basis of the preliminary enquiry that there is no case for initiating disciplinary proceedings against the employee then the case may be dropped. However, when the act of malfeasance or misconduct prima facie appears and comes to the notice of the Management, it shall serve the memorandum on the employee calling upon him to offer his explanation for the alleged misconduct within a reasonable time. If the employee on whom the memorandum is served when seeking permission for offering his explanation beyond its stipulated time, such permission shall be granted at the sole discretion of the Competent Authority.

63. RECEIPT OF EXPLANATION:

On receipt of explanation from the employee, Bank may decide to

1) Accept the explanation and close the matter or reject the explanation and advise the employee accordingly or initiate Disciplinary Proceedings.

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2) In case the Management decides on the initiation of Disciplinary Proceedings, the Competent Authority should frame a detailed charge sheet against the employee concerned and the decisions to initiate disciplinary proceedings, against the employee be communicated to him/her within 15 days thereof.

66. (i) CHARGE SHEET:

On receipt of explanation from the employee, if the Bank Management is satisfied that there is nothing to proceed against him, the Management may let off the employee and drop further proceedings. However, if the misconduct on the part of the employee is such, that it requires further disciplinary action, the decision by the Bank to initiate disciplinary action against the employee shall be communicated to him and the charge sheet issued for the purpose shall clearly set forth the circumstances operating against him and a date shall be fixed and sufficient time must be given to him to enable him to prepare and give his explanation and also to produce any evidence that he may wish to tender in his defence.

Any Notice, Order, Charge sheet Communication or Intimation, which is meant for the employee, shall be in a language to be understood by him/her. In the case of an absent employee, Notice shall be sent to him/her by R.P.A.D. If an employee refused to accept any Notice, Order, Charge sheet, written communication or written intimation, in connection with the Disciplinary Proceedings, such a refusal should be treated as a good service upon him, provided such refusal takes place in the presence of at least 2 persons, including the person who

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goes to effect service on him. When any Notice, Order, Charge sheet, Intimation or any other official communication which is meant for the individual employee is sent to him by R.P.A.D. at the last recorded address, communicated in writing by the employee and acknowledged by the bank, the same is to be deemed as a good service. The charge sheet must also contain as to how the employee has committed breach of the relevant rules and regulations which are in force in the Bank. The charge sheet must also contain the essential particulars and details to support the charges levelled against the employee. The charge sheet shall be issued by the Competent Authority or the Disciplinary Authority or by the person for whom delegation of disciplinary power has been given.

(ii) EXPLANATION TO CHARGE:

The charge-sheeted employee shall be called upon to submit his explanation in respect of charges contained in the charge-sheet.

(iii) EXPLANATION FOR THE CHARGES:

When the employee admits the charges, there is no need for an enquiry and the employer may impose the punishment, other than dismissal. If he proposes to dismiss, then it shall be only after holding an Enquiry or after having a personal hearing in the matter.

If the employee concerned denies the charges and explain his conduct in a satisfactory manner, the Bank may accept the explanation and drop further proceedings, which will also lead to dropping of Enquiry. When the charge is refuted by the employee, in his explanation to

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the charge-sheet and when the Disciplinary Authority does not consider it to be satisfactory and comes to the conclusion that disciplinary action is called for, then further proceedings for conducting a domestic enquiry are to be initiated by appointing an Enquiry Officer and giving Notice of enquiry in the manner described for the purpose."

8. A plain reading of Rule 62 of the Service Regulations would

go to show that when the Management or the Disciplinary Authority

is of the opinion that there are prima facie grounds for an enquiry

into the allegations of misconduct, any Officer of the Bank may be

appointed to find out the truth (emphasis supplied) and to submit a

report. Thus, the power conferred on both the Management or the

Disciplinary Authority under Rule 62 relates to appointment of an

Enquiry Officer to the extent of enquiring into truth or otherwise of

the allegations and submission of a report, which in the opinion of

this Court, is ordering a preliminary enquiry and calling for a

preliminary enquiry report. Therefore, appointment of an Enquiry

Officer for the purpose of a preliminary enquiry, either by the

Management or the Disciplinary Authority would be valid.

However, the matter requires further examination in the context of

submissions made by the learned counsel for the petitioner with

reference to the other Regulations, that it is the Management alone

which is competent to appoint an Enquiry Officer and since in the

present case the Enquiry Officer was appointed by an incompetent

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authority i.e., the C.E.O. of the Bank, the impugned proceedings are

vitiated.

9. The contention of the learned counsel for the petitioner that

the Bank/Management alone is competent to appoint an Enquiry

Officer also gains significance, in the light of Regulation 66 (v)

which deals with Enquiry Officer.

10. A conjoint reading of the second part of Rule 62 and Rule 63

would indicate that on the basis of preliminary enquiry, the

'Management' may drop or take further action, in the event of

which, opportunity should be afforded to the delinquent to submit

explanation for the alleged misconduct and on receipt of the same,

the 'Bank' may either 'decide' to accept the explanation and close

the matter or reject the explanation and initiate the disciplinary

proceedings. In the event the 'Management' decides to initiate the

disciplinary proceedings, the competent authority should frame a

detailed charge sheet against the employee concerned and the

'decision' to initiate the disciplinary proceedings shall be

communicated to the delinquent. Further, Regulation 66

contemplates that if the 'Bank Management' is satisfied, on receipt

of explanation that there is nothing to proceed against the

delinquent, it may let him off and if it requires further disciplinary

action, the 'decision' of the 'Bank' to initiate disciplinary action

against the employee shall be communicated to him apart from

issuance of charge sheet and granting sufficient time, for submission

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of explanation. Regulation 66 (iii) contemplates, inter alia, that if

the employer proposes to dismiss the employee/delinquent, it shall

be only after holding an enquiry or after a personal hearing in the

matter. A reading of second part of Regulation 66 (iii) would again

indicate that the 'Bank' may accept the explanation and drop further

proceedings, which will also lead to dropping of enquiry. Though

there is a reference to satisfaction of the Disciplinary Authority with

reference to domestic enquiry by appointing an Enquiry Officer, a

reading of Rule 66 (v), which deals with Enquiry Officer, makes the

position clear that it is 'Bank' which is empowered to appoint an

Enquiry Officer.

11. From a holistic view of these Regulations, though there

appears to be some ambiguity, it has to be construed, that the 'Bank'

i.e., the 'Board of Management' as defined under Rule 55 (2) of the

Service Regulations is required to consider the explanation

submitted by the delinquent, take a 'decision' either to drop or

proceed further in the matter and appoint an Enquiry Officer, after

preliminary enquiry stage is concluded. In the present case, no such

'decision' appears to have been taken as specifically contemplated

under the relevant Rules, nor was the Enquiry Officer appointed by

the 'Bank'. The Service Regulations only empower the Disciplinary

Authority to appoint an Enquiry Officer at preliminary stage as

opined earlier, but would not clothe it with the power to appoint an

Enquiry Officer, at a later stage. The C.E.O. would be competent to

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take further action only after a 'decision' is taken by the Bank/

Board of Management with regard to initiation of disciplinary action

and appointment of Enquiry Officer in the given facts and

circumstances of the case. In the present case, no material is placed

before this Court that after the decision was taken by the Bank/

Board of Management to initiate the disciplinary action on

consideration of the explanation submitted by the petitioner, the

C.E.O. had taken up further action.

12. Even assuming that the Disciplinary Authority is entitled to

consider the explanation and take further action, in the absence of

specific power to appoint an Enquiry Officer, which in fact is vested

with the 'Bank'; such an appointment would not be valid and further

action on the basis of report of the Enquiry Officer would not be

sustainable. Though the learned Standing Counsel for the

respondent-Bank submits that the action of the C.E.O. is ratified by

placing reliance on the Board Resolution dated 22.01.2019, a

perusal of the same would go to show that the said Resolution

relates to the action of the C.E.O. in issuing the termination orders,

but not with reference to authorising the C.E.O. to take further

action in the matter after a decision was taken by the Bank/Board of

Management to continue disciplinary proceedings on not being

satisfied with the explanation of the petitioner and appointing an

Enquiry Officer in terms of Regulation 66 (v) of the Bank.

Therefore, the contention of the learned Standing Counsel for the

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respondent-Bank in this regard merits no consideration. Though the

appointment of Enquiry Officer by the Disciplinary Authority at the

preliminary stage would be valid, as the Regulations provides, in the

event of further action, for taking a decision by the Bank/Board of

Management on examination of the explanation of the petitioner and

appointment of an Enquiry Officer by the Bank thereafter, non-

adherence to the same, would vitiate the proceedings. Therefore,

the action of the C.E.O., in the considered opinion of this Court,

either in appointing an Enquiry Officer or acting further on the basis

of the report submitted by him is not legally sustainable.

13. At this juncture, it would be appropriate to refer to the

Judgment in Bh.Syam Prasad Vs. Krishna District Co-operative

Central Bank Limited, on which strong reliance was placed by the

learned counsel for the petitioner. It is a case where the petitioner

therein challenged the action of the respondents inter alia

contending that C.E.O. has no authority to initiate the disciplinary

proceedings. The Rules of Conduct of the Bank provides that the

Management of the Bank is empowered to appoint any Officer of

the Bank as an Enquiry Officer and the appointment of an Advocate

as Enquiry Officer is contrary to the Rules. Further, before

appointment of an Enquiry Officer, the Management shall issue

charge sheet and no such charge sheet has been issued. The learned

Judge, while referring to Rule (Regulation) 66 of the Rules of

Conduct, held that it is the Bank Management which is empowered

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to take a decision on the initiation of disciplinary action against an

employee and the C.E.O. being a functionary of the Bank cannot be

treated as Management and that it is the Managing Committee or the

Board of Directors which constitutes the Management of Bank and

therefore, the disciplinary proceedings initiated by the C.E.O. are

without jurisdiction. The learned Judge held that under Rule 62 of

the Rules of Conduct, for the purpose of finding out the truth of an

act of misconduct or malfeasance alleged against an employee, the

Management may appoint any Officer of the Bank as an Enquiry

Officer for the purpose of holding a preliminary enquiry and further

that when it comes to holding of the departmental enquiry, there can

be no restriction for appointment of any person of the choice of the

Management of the Bank as Enquiry Officer. The learned Judge at

paras 7 and 8 of the Judgment held as follows:

7. Coming to the third submission of the learned counsel, under Rule 66(i) of the Rules of Conduct, if the Bank Management is satisfied that an employee is guilty of misconduct and the same requires initiation of disciplinary action, the decision by the Bank to initiate disciplinary action against the employee shall be communicated to him and charge sheet issued for the purpose shall clearly set forth the circumstances operating against him. This Rule, thus, clearly envisages that the decision of the disciplinary authority i.e., the Bank Management which alone is empowered to issue charge sheet before appointing the Enquiry Officer, shall be communicated to the employee. As no such charge sheet has been issued by the Bank

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Management, appointment of an Enquiry Officer without issuing charge sheet cannot be sustained.

8. For the above mentioned reasons, the impugned proceeding is set aside. However, respondent No.1 is left free to initiate disciplinary proceedings by issuing charge sheet and appoint an Enquiry Officer of its choice."

14. The legal position as set out in the above judgment dealing

with the initiation of disciplinary action and appointment of an

Enquiry Officer in terms of Regulation 66 by the Management of

the Bank, applies to the present case. Though the learned Judge

dealt with the aspect of the issuance of charge sheet in the facts and

the circumstances of the said case, it is felt that the same need not be

delved further in view of the conclusions with regard to the power

of the disciplinary authority to appoint an Enquiry Officer which

were recorded supra. Though the learned Standing Counsel made a

submission with regard to remedy of appeal against the impugned

order under Regulation 66 (x) of the Service Regulations, the same

is not a bar for entertaining the writ petition, more particularly,

when the jurisdiction/power of the C.E.O. to appoint an Enquiry

Officer is under challenge. Therefore, the said contention is

rejected.

15. In the light of the aforesaid analysis of the matter, the

impugned proceedings are not sustainable in law and the same are

accordingly set aside. It is made clear that this Court has not

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examined the truth or otherwise of the allegations levelled against

the petitioner and this order will not preclude or come in the way of

the concerned authority empowered under the Regulations of the

Bank to take appropriate action, in terms thereof and in accordance

with law, against the petitioner.

16. Accordingly, the Writ Petition is allowed as indicated above.

No order as to costs.

17. As a sequel, miscellaneous petitions, if any, pending shall

stand disposed of.

_______________________ NINALA JAYASURYA, J 30th November, 2021 cbs

NJS, J W.P.No.55 of 2019

HON'BLE SRI JUSTICE NINALA JAYASURYA

W.P.No.55 of 2019

30th November, 2021

cbs

NJS, J W.P.No.55 of 2019

*HON'BLE MR. JUSTICE NINALA JAYASURYA

+WRIT PETITION No. 55 of 2019 % 30-11-2021

# S.P. Srinivasa Mutyam, S/o Srivenkateswarlu, Hindu, aged 32 years, Occ:Assistant Manager, R/o.Door No.1-106, Neggipudi village, Maruteru, Penmantra Mandal,W.G.Dt.,A.P. ..... Petitioner

Versus

$ The State of Andhra Pradesh, rep. by its Principal Secretary, Cooperative Department, A.P.Secretariat, Velagapudi, Amaravati, Guntur District, A.P., and others ....Respondents

< GIST :

>HEAD NOTE         :




! Counsel for the petitioner         : Mr. K.Chidambaram

^ Counsel for respondent No.1        : Government Pleader
                                       for Cooperation

^ Counsel for respondent Nos.2 to 4 : Mr. K. Bharath Ram

? CASES REFERRED :

1) 2016 (3) ALT 483

NJS, J W.P.No.55 of 2019

HON'BLE MR. JUSTICE NINALA JAYASURYA

WRIT PETITION No. 55 of 2019

S.P. Srinivasa Mutyam, S/o Srivenkateswarlu, Hindu, aged 32 years, Occ:Assistant Manager, R/o.Door No.1-106, Neggipudi village, Maruteru, Penmantra Mandal,W.G.Dt.,A.P. ..... Petitioner

Versus

The State of Andhra Pradesh, rep. by its Principal Secretary, Cooperative Department, A.P.Secretariat, Velagapudi, Amaravati, Guntur District, A.P., and others ....Respondents

DATE OF JUDGMENT PRONOUNCED: 30.11.2021

SUBMITTED FOR APPROVAL:

1. Whether Reporters of Local newspapers Yes/No may be allowed to see the Judgments?

2. Whether the copies of judgment may be Yes/No marked to Law Reporters/Journals?

3. Whether Their Ladyship/Lordship wish to Yes/No see the fair copy of the Judgment?

_______________________ NINALA JAYASURYA, J