Zia Ud Din Changal vs Kashmir Mercantile Cooperative
2021 Latest Caselaw 1643 j&K/2

      HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT
                        SRINAGAR

                                             Reserved on: 14.12.2021
                                             Pronounced on: 21.12.2021


                           SWP No.1755/2007


ZIA UD DIN CHANGAL                                    ...PETITIONER(S)
           Through: Mr. Ateeb Kanth, Advocate.


Vs.

KASHMIR MERCANTILE COOPERATIVE                     ....RESPONDENT(S)
BANK
           Through: Mr. B. A. Zargar, Advocate.


CORAM: HON'BLE MR. JUSTICE SANJAY DHAR, JUDGE


                                 JUDGMENT

1) Petitioner has challenged order No.KMCB/HO/1690/06-07 dated

01.11.2006 passed by the respondent Bank, whereby, while ordering

reinstatement of the petitioner, it has been directed that he shall not be

paid the salary for the period of suspension, he shall be reverted to the

post of Cashier from which he was elevated to the post of Assistant

Manager, additional increments and other monetary benefits granted to

the petitioner at the time of promotion be recovered from him and he

shall not be post at the cash receipt or payment counter.

2) It is the case of petitioner that he was appointed as Cashier-cum-

Clerk in the respondent Bank on 27.07.1992, whereafter on the basis of

his representations, pursuant to the decision and resolution of the Board

of Directors of the respondent Bank, he was promoted to the post of

Assistant Accountant (re-designated as Assistant Manager) in terms of

order No.KMCB/HO/2248-54/04-05 dated 30.03.2005. On

15.04.2006, an order bearing No. KMCB/HO/1437-41/06-07 came to

be issued by the Secretary of the respondent Bank whereby petitioner

was placed under suspension with immediate effect till further orders.

On 27.05.2006, vide No. KMCB/HO/183-90/06-07, issued by the

Secretary of the respondent Bank, a charge sheet was served upon the

petitioner levelling certain charges and allegations against him and he

was directed to file reply within a period of seven days. It is averred

that petitioner responded to the said charge sheet in terms of letter

dated 03.06.2006 and subsequently vide letter dated 22.06.2006,

whereby he refuted all the charges levelled against him. On 18.07.2006,

a show cause notice bearing No. KMCB/HO/1394-95/06-07, came to

be issued by the Secretary to the respondent Bank against the

petitioner, whereby action was proposed to be taken against the

petitioner and he was directed to file reply to the show cause notice

within a period of seven days. Petitioner submits that he filed a reply

dated 21.07.2006 to the said show cause notice. On 01.11.2006, the

impugned order came to be issued by the respondent Bank.

3) In terms of the Service Rules of the respondent Bank, petitioner

filed an appeal against the aforesaid impugned order on 28.11.2006 and

subsequently on 25.01.2007. However, no action was taken by the

respondent Bank on the said appeal(s) compelling the petitioner to file

the instant writ petition.

4) Petitioner has challenged the impugned order on the grounds that

as per the Service Rules applicable to the petitioner, the Secretary of

the respondent Bank has no competence to pass the impugned order;

that no charge sheet was served upon the petitioner nor any enquiry

was conducted by the respondents against him before passing the

impugned order; that the charges levelled against the petitioner are

vague and, as such, the charge sheet itself is liable to be set aside; that

the impugned order passed by the respondents is a result of malafides

and colourable exercise of power on the part of respondents and that

impugned order is not sustainable in law.

5) Respondents have contested the writ petition by filing a reply

thereto. In their reply it has been submitted that the conduct of

petitioner has not remained up to the mark and that the petitioner has

been involved in many acts of omission and commission right from his

initial appointment. It is contended that the petitioner has been involved

in misappropriation of funds of the respondent Bank and has been

suspended on several occasions. It is further averred that the petitioner

has never discharged his duties to the satisfaction of his superiors and

has tried to harass the respondents by filing several cases before the

Court. It is contended that the petitioner indulged in defalcation of

funds, as a result of which he was placed under suspension in terms of

order dated 15.04.2006. According to the respondents, the charges

levelled against the petitioner were found established beyond doubt, as

such, he deserved a deterrent punishment but keeping in view his

family condition, a lenient view in the matter was taken by the

respondents. It is averred that representations of the petitioner were

considered by the Board of Governors but the same were found devoid

of any merit. It has been also contended that the writ petition is not

maintainable against the respondents.

6)      Heard and considered.


7)      Although respondents have raised a preliminary objection with

regard to maintainability of the writ petition yet they have not placed

on record any material to show that the respondent Bank is not a State

within the meaning of Article 12 of the Constitution of India. However,

record produced by respondents reveals that District Development

Commissioner, Baramulla, happens to be the Chief Executive

Officer/Chairman of the respondent Bank whereas Registrar

Cooperative Societies, J&K, happens to be the Appellate Authority.

This clearly suggests that pervasive control over the respondent Bank

vests with the officials/officers of the Government of Jammu and

Kashmir. Therefore, it can safely be stated that the respondent Bank

qualifies to be a State within the meaning of Article 12 of the

Constitution. Thus, writ petition is maintainable against the respondent

Bank.

8) Coming to the merits of the case, the primary grounds raised by

the petitioner is that the charge sheet served upon him is vague and that

no enquiry was held against him before passing the impugned order.

9) Before coming to the merits of these contentions, the allegations

made in the charge sheet are required to be noticed. It would be apt to

reproduce the relevant portion of the charge sheet as under:

"1- That you have issued a CDR bearing No.0014027 dated 10-6-2003 for Rs.2400/- in favour of one Ali Mohd Lone of Watergam Sopore, against which only Rs.240/- have been remitted to the bank vide cash receipt No.80 dated 10-6-2003.

2- That you were requested by a client of the bank namely Latief Ahmad Rather to stop the payment of his cheque No.150055 of Rs.40000/- through a written application and you had assured the party that the cheque will not be passed & despite your assurance the cheque was allowed to be encashed for reasons not known.

3- That you have failed to observe the proper procedure laid down by recording stop payment instructions issued by the clients which shows your carelessness and inefficiency.

4- That although the complainant Shri Latief Ahmad Rather withdrew his complaint after the settlement of his account with the party but the fact of your affording the party a chance for filing of complaint against the bank can't be ignored.

5- That during the examinations of A/C opening forms by Gen. Manager it has been observed that while opening accounts you have failed to comply with the procedure and the instructions issued regarding KYC norms.

6- That your have also misbehaved with the General Manager of the bank on his visit to the Iqbal Market branch which indicates your insubordination and indiscipline."

10) From a perusal of the aforesaid charge sheet, it is clear that while

the charges at serial Nos.1 to 5 are specific but the charge at serial No.6

is vague, inasmuch as it does not specify when and where the petitioner

had misbehaved with the General Manager.

11) A perusal of the responses filed by petitioner to the aforesaid

charge sheet reveals that he has clearly denied and refuted all the

allegations made against him. After considering the responses filed by

the petitioner, it seems that the respondents issued show cause notice

dated 18.07.2006 to the petitioner asking him to show cause as to why

Bank shall not take a stern action against him and consider his

dismissal from the services of the Bank, which means that aforesaid

notice proposed punishment of dismissal against the petitioner. Now a

question arises as to whether respondent Bank could issue the notice of

show cause proposing penalty against the petitioner and whether any

enquiry was conducted prior to issuing the said notice. From a perusal

the of record, it comes to the fore that neither any enquiry officer was

appointed by the respondent Bank nor any enquiry was conducted by it

before issuing the show cause notice for imposing penalty against the

petitioner and before imposing the penalty upon him vide the impugned

order.

12) Here it would be apt to refer to the relevant Service Rules

applicable to the employees of the respondent Bank. Section 17 of the

Service Rules provides for penalties. It reads as under:

"Section 17

Penalties 17.1 Notwithstanding anything contained in any other regulation and without prejudice to such action which an employee becomes liable under any other law or regulations for time being in force, any or all of the following penalties may be imposed on a member on the service of the bank for good and sufficient reasons.

              a-    Censor
              b-    With holding of increment.
              c-    Recovery from pay of such other amount as
                    may be due to him for the whole or part of any
                    pecuniary loss caused the bank due to
                    negligence or breach of orders.
              d-    Fine and minor or major penalties.
              e-    Reduction to a lower category or grade.
              f-    Reduction in seniority.
              g-    Dismissal from service.


              17.2 Explanation:

The following shall not constitute penalty within the meaning of this rule:

a- Termination of service or revision to lower grade or post of an employee appointed or promoted on probation during the period of his probation.

b- Discharge of an employee from service as a measure of retirement.

c- Reversion of a employee promoted from a lower post to a higher post, to such lower post for want of vacancy.

17.3 Provision:

Provided that no penalty is imposed on an employee unless the charge has been communicated to him in writing and he is given a reasonable opportunity of being heard or the action proposed to be taken against him and his representation has been considered. In case of penalty under Cl.(e) (f) and (g) of preceding rule the authority competent to impose the penalty shall hold an enquiry to ascertain the correctness and the employee against whom the action is proposed shall be entitled to produce evidence and cross examine the witnesses and seek help from any employee of the bank to defend himself but shall not be entitled to engage a lawyer during the course of enquiry. "

13) From a perusal of the aforesaid provision, it becomes manifest

that so far as penalties of reduction to a lower category or grade,

reduction in seniority and dismissal from service are concerned, such

penalties cannot be imposed upon an employee unless the charge has

been communicated to him in writing and an enquiry to ascertain

correctness of the charges has been held and the employee against

whom action is proposed, has been given an opportunity to produce

evidence and cross-examine and seek help from any employee of the

Bank to defend himself. In the instant case, though the charge sheet has

been served upon the petitioner, yet there is nothing on record to even

remotely suggest that any enquiry has been conducted by the

respondents before imposing the penalty of reversion of the petitioner

from the rank of Assistant Manager to the rank of Cashier-cum-

Clerk. In the absence of holding any enquiry against the petitioner,

the question of granting him an opportunity to produce evidence or

to cross-examine the witnesses also does not arise. Thus,

respondent Bank has, while imposing penalty vide the impugned order

upon the petitioner, observed the provisions contained in Section 17.3

of the Service rules applicable to the employees of the Bank in breach.

It is not a case where petitioner had admitted the charges levelled

against him but it is a case where he has specifically refuted each and

every charge levelled against him by filing reply thereto. So it was

incumbent upon the respondent Bank to appoint an enquiry officer and

hold enquiry against the petitioner before imposing the penalty of

reduction of his rank.

14) The Supreme Court in the case of Jagdish Prasad Saxena vs.

State of Madhya Bharat, AIR 1961 SC 1070, has, while dealing with a

case to which Article 311(2) of the Constitution of India was applicable

which affords a similar protection to employees of the Government as

is being afforded by Section 17.3 of the Service Rules of the respondent

Bank to its employees, observed that an employee is entitled to have a

reasonable opportunity of meeting the charges framed against him.

15) Again, the Supreme Court in the case of Surath Chandra

Chakrabarty vs. State of West Bengal, (1970) 3 SCC 548, while

upholding the decree of the trial court, observed that when a person is

denied a proper and reasonable opportunity of defending himself, the

penalty imposed upon him cannot be sustained. Para 6 of the judgment

is relevant to the context and the same is reproduced as under:

"6. Now in the present case each charge was so bare that it was not capable of being intelligently understood and was not sufficiently definite to furnish materials to the appellant to defend himself. It is precisely for this reason that Fundamental Rule 55 provides, as stated before, that the charge should be accompanied by a statement of allegations. The whole object of furnishing the statement of allegations is to give all the necessary particulars and details which would satisfy the requirement of giving a reasonable opportunity to put up defence. The appellant repeatedly and at every stage brought it to the notice of the authorities concerned that he had not been supplied the statement of allegations and that the charges were extremely vague and indefinite. In spite of all this no one cared to inform him of the facts, circumstances and particulars relevant to the charges. Even if the Enquiry Officer had made a report against him the appellant could have been given a further opportunity at the stage of the second show-cause notice to adduce any further evidence if he so desired after he had been given the necessary particulars and material in the form of a statement of allegations which had never been supplied to him before. This could undoubtedly be done in view of the provisions of Article 311(2) of the Constitution as they existed at the material time. The entire proceedings show a complete disregard of Fundamental Rule 55 insofar as it lays down in almost mandatory terms that the charges must be accompanied by a statement of allegations. We have no manner of doubt that the appellant was denied a proper and reasonable opportunity of defending himself by reason of the charges being altogether vague and indefinite and the statement of allegations containing the material facts and particulars not having been supplied to him. In this situation, for the above reason alone, the Trial Judge was fully justified in decreeing the suit."

16) A bare perusal of the afore-quoted observations of the Supreme

Court clearly shows that each charge levelled against an employee has

to be sufficiently definite to furnish material to an employee to defend

himself and it is absolutely essential to supply whole material relied

upon by an employer against its employee in the enquiry.

17) In the instant case, as already noted, one of the charges levelled

against the petitioner is vague as it does not contain the sufficient and

definite particulars about the incidents of alleged misbehaviour by the

petitioner. This must have handicapped the petitioner from filing his

reply to the said charge. Not only this, even the enquiry has not been

conducted against the petitioner and, as such, there is no question of

giving an opportunity of presenting his case to the petitioner before the

enquiry officer. The entire proceedings conducted by the respondents in

the instant case show a complete disregard of Section 17.3 of the

Service Rules applicable to the employees of respondent Bank. The

impugned order, therefore, is not sustainable in law.

18) For the foregoing reasons, the writ petition is allowed and the

impugned order passed by the respondents is set aside. Consequently,

the petitioner is held entitled to all the benefits which will ensue to him.

It shall, however, be open to the respondents to hold an enquiry against

the petitioner in accordance with the Service Rules and thereafter take

an appropriate decision in accordance with law.

19) Record be returned to the learned counsel for the respondents.

(Sanjay Dhar) Judge Srinagar, 21.12.2021 "Bhat Altaf, PS"

                                           Whether the order is speaking:     Yes/No
                                           Whether the order is reportable:   Yes/No


MOHAMMAD ALTAF BHAT
2021.12.21 14:31
I attest to the accuracy and
integrity of this document