Madhya Pradesh High Court
Rakesh Kumar Rai vs The State Of Madhya Pradesh on 29 October, 2025
1
IN THE HIGH COURT OF MADHYA PRADESH
AT G WA L I O R
BEFORE
HON'BLE SHRI JUSTICE ASHISH SHROTI
WRIT PETITION No. 19937 of 2023
RAKESH KUMAR RAI
Versus
THE STATE OF MADHYA PRADESH AND OTHERS
Appearance:
Mr. Sameer Kumar Shrivastava - Advocate for the petitioner.
Mr. Naval Kishore Gupta - Government Advocate for the State.
Mr. Raj Bahadur Singh Tomar - Advocate for the caveator.
ORDER
Reserved on : 22.09.2025
Delivered on : 29.10.2025
ORDER
Invoking Article 226 of the Constitution of India, the petitioner has
filed the instant writ petition challenging the order, dated 26.09.2019,
(Annexure P/1) whereby he has been dismissed from service on account of
misconduct found proved against him with a further direction to recover
amount of loss caused to the Bank from him and to lodge an FIR against
him. He has also prayed for a direction to reinstate him in service with all
consequential benefits.
2. The facts necessary for decision of this case are that the petitioner was
initially appointed as Branch Manager in respondent- District Central
Cooperative Bank Maryadit, Vidisha (in short 'Bank') on 01.10.2003. At the
relevant time, he was posted as Branch Manager at Udaipur Branch of the
Bank when he was served with a charge sheet, dated 24.09.2014, (Annexure
P/4). As many as five charges of financial irregularities were levelled against
him. The petitioner denied the charges by giving reply to the charge sheet on
01.10.2014 (Annexure P/5). Since, the matter involved amount more than
Rs.10 lakh, an Enquiry Board was constituted by the Bank in terms of Rule
49.3.2.3 vide order, dated 11.11.2014. The petitioner has averred that the
Enquiry Board consisted of two Middle Management 1 officer while the
third member of the Board was an Accountant. This fact has not been
disputed by the Bank in its reply.
3. The Enquiry Board conducted the enquiry wherein the petitioner also
participated. The Board submitted its report to the Bank on 27/29.07.2019
wherein all the charges were found proved against the petitioner. The Chief
Executive Officer of the Bank then forwarded a copy of enquiry report to the
petitioner vide show cause notice, dated 09.08.2019, (Annexure P/10) and
asked him to submit his explanation to the findings recorded by Enquiry
Board. The petitioner gave his explanation on 20.08.2019 (Annexure P/11).
4. After receiving the explanation of the petitioner, the matter was placed
before the Staff Sub-Committee of the Bank in its meeting held on
20.08.2019. The petitioner was given an opportunity of personal hearing by
Staff Sub-Committee on 20.08.2019. The Committee concurred with the
findings recorded by Enquiry Board and resolved to impose punishment of
dismissal from service on the petitioner. It also resolved to recover an
amount of Rs.2,04,72,000/- from the retiral dues of the petitioner. The Bank
was also directed to initiate proceedings for recovery of balance amount and
the Branch Manager of the Udaipur Branch was directed to lodge an FIR also
against the petitioner. The Chief Executive Officer of the Bank accordingly
issued the impugned order on 26.09.2019 (Annexure P/1) thereby imposing
punishment on the petitioner as per the resolution of Staff Sub-Committee.
5. It be noted here that the Board of Directors of the Bank was superseded
and accordingly Joint Registrar, Cooperative Societies, Bhopal Division, was
appointed as Administrator of the Bank vide order, dated 28.02.2019. The
Administrator took charge of the Board of Directors of the Bank on
16.09.2019.
6. Challenging the order of punishment passed by Chief Executive
Officer of the Bank, the learned counsel for petitioner primarily submitted
that under Rule 49.3.2.3, the Enquiry Board should have consisted of a
Manager and two members of the rank of Senior Management 2 and Middle
Management 1 respectively. It is his submission that, all the three members
in this case were not competent to constitute the Enquiry Board and,
therefore, the enquiry conducted against the petitioner is illegal. In support of
his submission, the learned counsel placed reliance upon coordinate bench
judgment rendered in the case of Smt. Bhavna Kale vs. State of M.P. in W.P.
No.29501/2022 which was affirmed by Division bench in W.A.
No.602/2023. He also placed reliance upon another coordinate bench
judgment in the case of Surendra Khaiwariya vs. State of M.P. & others in
W.P. No.1054/2020, Gopal Prasad Panthi vs. State of M.P. & others in W.P.
No.23124/2019, Laxman Singh Raghuwanshi vs. State of M.P. & others in
W.P. No.25241/2019 and Shiv Narayan Bhargava vs. State of M.P. &
others in W.P. No.25240/2019.
7. The learned counsel also submitted that the Staff Sub-Committee was
competent to pass punishment order in the case, however, the impugned
order has been passed by Chief Executive Officer of the Bank which is
without jurisdiction. It is his further submission that the Staff Sub-
Committee was not in existence in view of appointment of Administrator
and, therefore, approval of the enquiry report by Staff Sub-Committee was
also without jurisdiction.
8. On the other hand, refuting the submissions made by petitioner'
counsel, the learned counsel for respondent no.2 to 4 submitted that the
petitioner has been found guilty of serious financial irregularities while
working as Branch Manager at Udaipur Branch of the Bank as a result of
which the Bank has suffered loss of more than Rs.2 crore. It is his
submission that the Enquiry Board could not be constituted as per Rule
49.3.2.3 for want of officials in the Bank. It is his submission that there is no
officer of the rank of Manager and Senior Management 2, available in the
Bank. It is his submission that constitution of Enquiry Board is a procedural
rule and non-adherence of the same would not vitiate the punishment order
inasmuch as it has been passed by the competent authority. In support of his
submission, the learned counsel placed reliance upon Division Bench
judgment of this Court in the case of District Central Cooperative Bank
Maryadit Vidisha vs. Laxman Singh & others in W.A. No.1026/2021.
9. The learned counsel also submitted that mere appointment of
Administrator would not defunct the Staff Sub-Committee and, therefore, the
Staff Sub-Committee was competent to approve the enquiry conducted
against the petitioner. He also submitted that the CEO of the Bank has only
passed the consequential order and the actual decision to dismiss the
petitioner from service was taken by Staff Sub-Committee. He, therefore,
submitted that no interference is warrant by this Court in the instant case
looking to the serious misconduct committed by the petitioner. He thus
prayed for dismissal of the writ petition.
10. Considered the arguments and perused the records.
11. For purposes of decision of this case, the scheme of service rules
prevalent in the Bank needs to be examined. The service conditions of the
petitioner are governed by rules namely "Jila Sahakari Kendriya Bank
Maryadit ke Sewayukton ke (Niyojan, Nibandhan tatha Karysthiti) Sewa
Niyam" (in short "Rules") which have been framed by Registrar,
Cooperative Societies, Bhopal, in exercise of powers under Section 55(1) of
M.P. Cooperative Societies Act, 1960. Rule 3.3 classifies the officers/
employees of the Bank in three groups 'A', 'B' & 'C'. The officers in Group
'A' are further classified into five categories as under:
सव न यम
सममह पबबध सर पद म
अ वररष पबबध -1 पबबधक (न नधयब एवब लख, बनकबग, ऋण एवब अन म), पबबधक (य ज ,
एवब नवकस/पश स , म व सबस ध / न र#कण एवब अबककण)
वररष पबबध -2 नवत#य नवशषक, कम)मटर प मर, आबतररक अबककक, नवपण
अनधकर# ।
मधम पबध -1 श ख पबबधक श ख न र#कक, आतररक न र#कक, कय/ लय अध#कक
।
मधम पबबध -2 सह यक म0खपय/वकक, स खखक#य अनधकर#, लखप ल, उप यबत#।
कन ष पबबध सह यक लखप ल, पय/वकक, स#न यर क5नशयर, उच शण# नलनपक,
स फर।
ब बनकग सह यक नलनपक / कम)मटर ऑपरटर, सबस पबबधक।
स अध# स शण# (सप ट/ दफतर#, जम द र, व ह च लक, भ?त, चAक#द र, (ड ईबग कडर)
स<फ)
12. The petitioner, being Branch Manager, is an officer in Middle
Management-1 category in Group A. Under Rule 15.1, his appointing
authority is Chief Executive Officer of the Bank. The appointment, however,
is to be made after the approval of selection by Staff Sub-Committee.
13. Rule 6.6.1 defines constitution of Staff Sub-Committee to be consists
of five members namely- Chairman of the Bank as its Chairman, two
Directors to be nominated by Board of Directors of the Bank, a
representative to be nominated by State Govt. and Chief Executive Officer/
Managing Director of the Bank. This rule further provides that in case of
supersession of Board of Directors of the Bank, the Staff Sub-Committee
shall consist of Administrator as its Chairman, a representative to be
nominated by State Govt. and Chief Executive Officer/Managing Director of
the Bank.
14. Rule 47.1 & 47.2 describes respectively the major and minor
misconducts and Rule 48.1 & 48.2 respectively prescribe the punishment for
major and minor misconducts. The center of issue for discussion in the
instant case is Rule 49. Rule 49.1 prescribes the authorities who are
competent to impose punishment. For petitioner i.e. an officer in Middle
Management 1, the Staff Sub-Committee is competent to impose punishment
for major/minor misconduct.
15. Further, Rule 49.3 prescribes the procedure to be adopted before
imposing major punishment on officer/employee of the Bank. The extract of
this rule, which are relevant for the case, are reproduced hereunder:
49.3 नकस# र व य0क पर पम0ख कद च र हत0 क ई दण तब तक अनधर नपत ह#ब नकय ज एग जब तक नक
वह, उसक नवरद न मनलखखत र#नत स क# गई जब च मI पम0ख कद च र क द ष# प य ज व -
49.3.1 सकम प नधकर# य उसक द र इस न नमत प नधक?त क ई अनधकर# इस सबबबध मI द ष# सव य0क
क करण बत ओ समच पत ज र# करI ग। द ष# सव य0क द र अप सष#करण उस नवन नOत नकए गय
अवनध मI पस0त नकय ज यग । यनद द ष# सव य0क क द र उस सष#करण पस0त कर हत0 नवन नOत क#
गई अवनध मI सष#करण ह#ब पस0त नकय ज त ह5 त ऐस# खसनत मI सकम अनधकर# क द र नवभ ग#य
जब च सखसत कर द# ज वग#।
49.3.2 द ष# सव य0क स प प हए ऐस सष#करण क बक अनभलख क पररपक मI ज च ज यग , और
यनद सष#करण सम ध करक ह#ब प य गय . त न म र#नत स नवभ ग#य जब च सबच नलत क# ज यग#-
49.3.2.1 सकम अनधकर# ऐस जब च अनधकर# क# न य0खक करग ज नक द ष# अनधकर# स
वररष ह ग एवब जब च अनधकर# क सम0ख आर प ब क स क पस0त कर तथ द ष# अनधकर# क
गव ह ब क कमट पर#कण कर हत0 पस0तकत/ अनधकर# क# न य0खक करग । म0ख कय/प ल
अनधकर# क नवरद नवभ ग#य जX च हत0 र ज श स क सव रत य सव न व?त अनधकर# क#
न य0खक क नलय सबच लक मडल द र न ण/य नलय ज कर पबज#यक स अ 0र ध नकय ज सकग
49.3.2.2 सकम प नधकर# य उसक द र इस न नमत प नधक?त क ई अनधकर# पम0ख कद च र
क नलए कम/च र# क एक आर प पत अनभलख#य स क एवब स क# समच# सनहत दग नजसमI
आर नपत कद च र क तथ उसक नवरद प ई ज व ल# पररखसनतय ब क सषतZ उपवनण/त नकय
ज एग और उस ब बत[ उसक अष#करण मब गग ।
49.3.2.3 नजल सहकर# कIद#य बक क समस नवभ ग#य जब च पकरण र. 10.00 ल ख य
उसस अनधक क# अन यनमतत ओब क नवभ ग#य जब च पकरण ब मI जब च अनधकर# क द नयत
न व/ह हत0 एक नवभ ग#य जब च ब ड/ ह ग , ज अप # पन^य न ध/ ररत कर, उस पन^य स ज<द
पमण/ करग । शष पकरण ब मI नवभ ग#य ज च क# पन^य म.प. श स मI इस हत0 न ध/ ररत पन^य स
जब च क न र करण नकय ज वग ।
49.3.2.4 सव य0कत क अप सष#करण पस0त कर क नलए 15 कय/ नदवस क# कल वनध
पद क# ज एग#।
49.3.2.5 नकस# सव य0क क अप पनतरकण सयब कर य बक क नकस# अन
कम/च र#/सव न व?त कम/च र# स कर य ज क नलए वह ऐस कर क# वब छ करत ह5 अ 0मत
नकय ज एग नकन0 अपच र# सव य0क क# ओर स पनतरकण कर क नलए नकस# ब हर# वखक क
अ 0मनत ह#ब द# ज एग#।
49.3.2.6 नसव य उ म मल ब क जहब वह, उसक नवरद लग ए गए आर प स#कर करत ह5 ,
अप पनतरकण मI स क# पस0त कर तथ ऐस नकस# स क# क नजसक# स क पर आर प आध ररत
ह5 य बक क स नकय ब स पनतपर#कण कर क नलए अ 0मत नकय ज एग ।
49.3.2.7 स क क स र अनभनलखखत नकय ज एग तथ सबबबनधत सव य0क क पढकर स0 य
ज एग ।
49.3.2.8 दण क आदश नलखखत ह ग तथ यह सकम प नधकर# य उसक प नधक?त अन
अनधकर# क हसकर स ज र# नकय ज एग । प ररत नकए गए उस आदश क#, नजसस दण नदय
गय ह5 , एक पनत सव य0क क वखकगत त नमल# / पबज#क?त ड क क म धम स पद क#
ज एग#।
16. A reading of Rule 49.3.1 & 49.3.2 makes it evident that taking action,
including conducting an enquiry, is the primary responsibility of competent
authority. However, it can delegate its power to conduct enquiry to any other
authority. Further, Rule 49.3.2.3 provides for constitution of a "Departmental
Enquiry Board" (hereinafter referred as "Enquiry Board") to discharge the
duties of an enquiry officer in cases involving amount more than Rs.10 lakh.
The term "Departmental Enquiry Board" is defined in Rule 2.21 as under:
"2.21 "नवभ ग#य जब च ब ड/ " स त तय/ नजल सहकर# कन#य बक मय/ नदत क सव य0क ब क
नवरद आर नपत गबभ#र द0 र चरण (Major Misconduct) क# र. 10.00 ल ख स अनधक क#
नवत#य अन यनमतत ओब स सबबबनधत नवभ ग#य जब च पमण/ कर हत0 गनhत नवभ ग#य जब च ब ड/ स ह5 ,
नजस बक ब क सकम अनधकर#, जब च अनधकर# क रप मI न य0क करI ग।"
17. The National Bank for Agriculture and Rural Development
(NABARD) issued guidelines for purposes of framing Human Resources
Policy for District Central Cooperative Banks vide its memo, dated
31.12.2009. Accordingly, the Registrar, Cooperative Societies, has framed
Human Resources Policy providing for necessary guidelines for
appointment, posting, training, transfer, promotion, leave and personal
file/Service Book of Bank's employees. Clause 3 of this Policy gives the
purpose of constituting Enquiry Board as under:
"3. ववभभगगय जभजच मजडल - वत/म मI नजल सहकर# कन#य बक ब क सर पर अ क
नवभ ग#य जब च स0 व ई हत0 लबनबत ह5। नवभ ग#य जब च क लबनबत ह क पररण म जहब एक और
प#नiत पककर क अ वशक पत ड क रप मI भ0गत पडत ह5 . वह# बक पबबध क नलय
भ# द ष# कम/च र# क दब नडत कर मI अ वशक नवलबब ह त ह5 . नजसस वब नछत नय एवब
अ 0श स सस मI सनपत ह#ब ह प त ह5। नवभ ग#य जब च ब मI नवलबब इसनलय ह त ह5 नक
स म न रप स यह जब च नज अनधकररय क सAबप# ज त# ह5 , उ क प स द5 न क कयk क# पमव/
स ह# भरम र ह त# ह5 , एवब उ म वसत क करण व इ जब च ब क नलय पय/ प समय ह#ब द
प त ह5।
अतZ नवभ ग#य जब च समय वनध मI सबपन ह एवब सबबबनधत क नय समय पर प प ह इस उदश
क# पमनत/ क नलय सतबत रप स नवभ ग#य जब च ब ड/ क# पररकल क# गई, तद 0स र भनवष मI
बक सर पर नवभ ग#य जब च ब ड/ क गh क न ण/य नलय गय ।
बक मI कय/रत कम/च र# / अनधकररय ब क द र सव न यम ब मI उलखखत ववसओब क नवपर#त
आचरण एवब कय/ ववह र कर पर उ क नवरद नवभ ग#य ज<च सबखसत क# ज वग# एव
सबखसत क# गई नवभ ग#य जX च, नवभ ग#य जX च मबडल द र पमण/ क# ज कर ज तद 0स र ज<च
पनतवद बक पबबध क पस0त नकय ज वग । वभ ग#य ज<च मबडल 3 सदस#य रहग , नजसमI
चक पबबध द र बक मI कय/रत कम/च र#/अनधकररय ब क# नवभ ग#य जX च कर क नलय
अनधक?त अनधकररय ब क मब नकत नकय ज वग नवभ ग#य जX च मबडल मI म नकत
अनधकररय ब क बक क अन क ई कय/ उ क# सAप# गई नवभ ग#य जX च क पमण/ ह तक ह#ब
सAबप ज वग । नवभ ग#य जX च मबडल अप # समस कय/व ह#यX बक सव न यम मI उलखखत
प वध ब क अबतग/त समन करग । इ जX च ब क नवभ ग#य ज<च मबडल 3 म ह क# समय वनध मI
पमण/ कर यग ।
ज भ# पकरण इस ब ड/ क स0 व ई हत0 सAबप ज यगI उ क न र करण नद पनतनद स0 व ई क
आध र पर नकय ज वग । ब ड/ द र स म नतZ त र#ख बढ क अ 0र ध स#कर ह#ब नकय
ज वग , नकन0 अससत अथव अन यथ नचत आध र पर त र#ख बढ क अ 0र ध नकय ज त
ह5 , त अनधकतम एक सपह तक त र#ख बढ ई ज वग# और यह अ 0र ध सपमण/ स0 व ई कल क
क0ल 02 अवसर तक ह# स#कर नकय ज सकग ।।
नवभ ग#य जब च ब ड/ नजल बक स समबनधत ऐस पकरण ब नज मI रपय 10 00 ल ख य उसस
अनधक क# आनथ/क अन यनमतत ओब / गब / नवत#य गडबड# क# गई ह , क# स0 व ई करग ।
नवभ ग#य जब च ब ड/ नवभ ग#य जब च क# सम खप पर अप पनतवद अप सष अ 0शबस सनहत
नजल बक पबबध क सAबपग । नवभ ग#य जब च ब ड/ अप सबच ल क न यम सबय ब यग ।
ववभभगगय जभजच मजडल म व म सदस ह ग
ज -
क पद भम हहवसयत
1 पबबधक अधक
2 बक सव य0क ज नक वररष पबबध -2 क# सदस शण# सदस
स न म शण# क ह
3 बक सव य0क ज नक मधम पबध -1 क# शण# स न म सदस
शण# क ह
18. It is thus evident from the aforesaid passage of HR Policy that the
purpose of constituting an Enquiry Board is to expedite the conclusion of
enquiry in the matters involving financial irregularities of more than Rs.10
lakh. Accordingly, Rule 49.3.2.3 has provided for constitution of Enquiry
Board. Pertinently, the officers who will constitute Enquiry Board is
provided in HR Policy and not the Rules.
19. The main thrust of argument of learned counsel for petitioner in this
case is that the constitution of Enquiry Board was not in accordance with
Rule 49.3.2.3 inasmuch as there was no officer of the rank of Manager and
Senior Management 2. As per his submission, the two officers constituted
Enquiry Board in this case were officer in Middle Management 1 and an
Accountant. He thus submitted that the entire enquiry conducted is bad in
law and liable to be quashed.
20. In response, it has been stated by the Bank in its reply that the post of
officer in Senior Management 1 & 2 are lying vacant in the Bank for a long
period of time and, therefore, the Enquiry Board was constituted by the
available officers in the Bank. It has been stated in para 11 of reply that the
three members of Enquiry Board were senior to the petitioner and, therefore,
no prejudice is caused to the petitioner.
21. Thus, it is not in dispute that the Enquiry Board was not constituted as
per the requirement of HR Policy. The reason for this is non-availability of
competent officers in the Bank for constituting Enquiry Board. The issues for
consideration before this Court are:
i. Whether, in view of supersession of Board of Directors of the
Bank, the Staff Sub-Committee was competent to pass resolution
for imposing punishment on the petitioner?
ii. Whether the impugned order passed by Chief Executive Officer
of the Bank, based upon resolution of Staff Sub-Committee is
legal and valid?
iii. Whether the provisions of HR Policy providing for the officers
who will constitute Enquiry Board, are mandatory or directory
particularly when the Rules do not provide for the same?
iv. Whether non-constitution of Enquiry Board as per HR Policy
would vitiate the entire action or the Bank can authorize any
other officer or enquiry board to conduct enquiry in view of
provisions of Rule 49.3.2.2 invoking doctrine of necessity?
Issue No.(i) & (ii):
22. The learned counsel for petitioner submitted that the Staff Sub-
Committee was not in existence when the impugned order was passed
against the petitioner and, therefore, the resolution, dated 20.08.2019,
allegedly passed by Staff Sub-Committee is without jurisdiction. He also
submitted that the Staff Sub-Committee was competent to pass the impugned
order but the same has been passed by the Chief Executive Officer of the
Bank. He therefore, submitted that the impugned order of punishment is
without jurisdiction and liable to be set aside.
23. The objection raised by the petitioner's counsel is required to be
examined in view of the Rules. Firstly, it be noted that the Board of Directors
of the Bank was superseded and the Joint Registrar, Cooperative Societies
was appointed as Administrator. The constitution of Staff Sub-Committee is
provided under Rule 6.6.1 as detailed hereinabove. This Rule further provide
that in case of supersession of Board of Directors, the Staff Sub-Committee
shall consist of Administrator being its Chairman, one member to be
nominated by Govt. and the Chief Executive Officer/Managing Director of
the Bank. Thus, merely because the Board of Directors of the Bank was
superseded, it cannot be said that the Staff Sub-Committee also ceased to
exist. The Staff Sub-Committee was thus very well in existence and was
competent to consider and pass resolution in question against the petitioner.
24. Further, Rule 49.3.2.8 provides that the punishment order shall be
passed either with signature of Competent Authority i.e. Staff Sub-
Committee in this case, or any other officer authorized by it. Thus, in the
case in hand, the decision to inflict punishment was taken by Staff Sub-
Committee and the punishment order was passed by CEO who is also the
appointing authority of petitioner. Thus, the punishment order cannot be set
aside only because it is not signed by Staff Sub-Committee.
25. In view of discussion made above, it is held that the Staff Sub-
Committee does not cease to exist merely because of supersession of Board
of Directors of the Bank and further that the impugned order passed by Chief
Executive Officer of the Bank based upon resolution of Staff Sub-Committee
is legal and valid.
Issue No.(iii) & (iv):
26. The power to take disciplinary action, including conducting enquiry, is
primarily with the Disciplinary/Competent Authority. However, it may
delegate its aforesaid power to any other authority which is commonly
known as 'enquiry officer'. In the case in hand also, this is evident from
reading provisions of Rule 49.3.1 & Rule 49.3.2.2. Thus, the enquiry could
have been conducted either by competent authority himself or by any other
authority who is authorized by competent authority in this behalf.
Interpreting somewhat similar rule regarding the authority to issue charge
sheet, the Apex Court in the case of State of Jharkhand & Others vs.
Rukma Kesh Mishra reported in 2025 SCC Online SC 676 held as under:
"36. Since invocation of the provisions in Discipline and
Appeal Rules similar to Rule 14(3) of the 1965 Rules or
Rule 17(3) of the 2016 Rules and citing failure to adhere
to the same to invalidate orders terminating services of
officers/employees is not too infrequent, we consider it
proper to briefly touch upon the requirement thereof.
The Disciplinary Authority is mandated by the law to
'draw up' or 'cause to be drawn up' the substance of the
imputations of misconduct or misbehavior as a definite
and distinct article of charge together with the statement
of such imputations. The phrases 'draw up' and 'cause
to be drawn up' do have different meanings in the
context of disciplinary proceedings, though both relate
to drawing up of a charge-sheet. By 'draw up', what is
express is that the Disciplinary Authority itself is
responsible for preparing the substance of imputation
and the statement of allegations in support thereof,
whereas 'cause to be drawn up' would enable
the Disciplinary Authority to instruct or direct someone
else to prepare the substance and statement. The effect
of it is that the Disciplinary Authority itself may not
prepare the document but rather delegate the task to
someone else. If the delegation is proved to have been
made in favour of an authority holding an office
superior to that of the officer/employee proposed to be
proceeded against, nothing much is required to be done
and the courts ought to exercise restraint".
27. Thus, by virtue of provisions of Rule 49.3.2.2, the Competent
Authority could have conducted the enquiry himself or could have
authorized any other authority to make enquiry. However, the controversy
arose because of Rule 49.3.2.3 which provides for constitution of an Enquiry
Board to conduct enquiry in the matters involving amount more than Rs.10
lakh. However, what if such an Enquiry Board is not available, the rule is
silent. Therefore, in the considered opinion of this Court, when it is not
possible to constitute the Enquiry Board, the Competent Authority shall still
be competent to either conduct the enquiry himself or to appoint some other
authority to enquire into the matter by virtue of power conferred on him
under Rule 49.3.2.2.
28. This issue can be examined from another angle. The term
'Departmental Enquiry Board' is defined under Rule 2.21 while Rule
49.3.2.3 provides for conducting enquiry by Enquiry Board in cases
involving amount more than Rs.10 lakh. Both these provisions or for that
matter any other provision of the Rules, do not provide as to who would be
the members of Enquiry Board. Only HR Policy provides that the Enquiry
Board shall consist of officers of the rank of Manager, Senior Management 2
& Middle Management 1. Apparently, the provisions of HR Policy are only
guidelines and would not bind the Competent Authority to depart from the
same in case of necessity. Thus, when the rules are silent, the Enquiry Board
may consist of officers other than the one provided in HR Policy and/or it
may consist of even less than three members in view of the power vested in
Competent Authority under Rule 49.3.2.2.
29. The next issue to be considered is as to whether the provision of Rule
49.3.2.3 is mandatory or directory? The question as to whether a statute is
mandatory or directory depends upon the intent of the legislature and not
upon the language in which the intent is clothed. It is profitable to refer to
Apex Court judgment rendered on this issue in the case of Lalit Kumar
Modi vs. Board of Control for Cricket in India reported in (2011)10 SCC
106. The Court held thus:
"34. In this connection, we must note that the word "shall"
has been interpreted as "may" in a number of judgments
while interpreting such provisions on different occasions.
In State of U.P. v. Manbodhan Lal Srivastava [AIR 1957 SC
912] a Constitution Bench of this Court was concerned with
the order of compulsory retirement of the respondent who
had challenged it on the ground that the Union Public
Service Commission had not been consulted. This was in the
context of Article 320(3)(c) of the Constitution which reads
as follows:
"320. (3) The Union Public Service Commission or the
State Public Service Commission, as the case may be,
shall be consulted--
(a)-(b)***
(c) on all disciplinary matters affecting a person
serving under the Government of India, or the
Government of a State in a civil capacity, including
memorials or petitions relating to such matters;"
The Constitution Bench held that the consultation was not
mandatory. The Court observed in para 11 of the judgment
as follows: (Manbodhan Lal case [AIR 1957 SC 912], AIR
pp. 917-18)
"11. ... the use of the word 'shall' in a statute, though
generally taken in a mandatory sense, does not
necessarily mean that in every case it shall have that
effect, that is to say, that unless the words of the statute
are punctiliously followed, the proceeding or the
outcome of the proceeding, would be invalid.
On the other hand, it is not always correct to say that where
the word 'may' has been used, the statute is only permissive
or directory in the sense that non-compliance with those
provisions will not render the proceeding invalid. In that
connection, the following quotation from Crawford on
Statutory Construction, Article 261 at p. 516, is pertinent:
'The question as to whether a statute is mandatory or
directory depends upon the intent of the legislature and
not upon the language in which the intent is clothed.
The meaning and intention of the legislature must
govern, and these are to be ascertained, not only from
the phraseology of the provision, but also by
considering its nature, its design, and the consequences
which would follow from construing it the one way or
the other.'
35. We may as well profitably refer to a judgment of this
Court in State of A.P. v. Rahimuddin Kamal [(1997) 3 SCC
505 : 1997 SCC (L & S) 827 : AIR 1997 SC 947] . In that
matter this Court was concerned with Rule 4(2) of the
Andhra Pradesh Civil Services (Disciplinary Proceedings
Tribunal) Rules, 1961, where the expression "shall" had
been used in the Rules, making it obligatory upon the part of
the Government, to examine the records, consult the Head of
the Department and Vigilance Commission and then pass an
appropriate order. In that case the order of removal from
service was passed in accordance with law and after
conducting appropriate inquiry but without consulting the
Commission. The Court took the view that the expression
"shall" had to be construed as "may" and non-consultation
with the Commission would not render the order illegal or
ineffective."
30. Keeping in view the aforesaid legal position, Rule 49.3.2.3 is required
to be examined. From Clause 3 of HR Policy framed by the Bank, it becomes
evident that the purpose of providing for constitution of Enquiry Board is to
expedite the disciplinary proceedings in matters involving heavy amount.
However, it is experienced that for want of officers in most of the
Cooperative Banks in the State, the constitution of Enquiry Board is not
possible. Thus, the very purpose of providing for constitution of Enquiry
Board is frustrated. Rule 49.3.2.3 does not provide for the officers who
should man the Enquiry Board. It also does not provide for the course of
action when the officers to constitute Enquiry Board are not available.
Looking to the purpose of constituting Enquiry Board as also in view of the
fact that the Competent Authority is authorized to conduct the enquiry
himself or through any other officer, it has to be held that the provisions of
Rule 49.3.2.3, being procedural, are not mandatory but are only directory.
Meaning thereby, in absence of officers to constitute Enquiry Board, the
Competent Authority could have conducted the enquiry himself or got the
enquiry done through any other officer also. Moreso, appointing an enquiry
officer or Enquiry Board is only to facilitate the Disciplinary/Competent
Authority to take a decision in the matter. The ultimate decision rests with
the Disciplinary/Competent Authority. Therefore, merely because the enquiry
is not conducted by the Enquiry Board, as provided in HR Policy, should not
vitiate the decision taken by the Disciplinary/Competent Authority, which is
otherwise competent to impose punishment on the petitioner.
31. The matter can be looked into from another angle. The matters of
departmental enquiry are mostly based upon principles of natural justice. The
purpose of conducting enquiry is to ensure that the delinquent is given
adequate opportunity to defend himself in the enquiry. However, there are
cases of necessity where the principles of natural justice are given a goby by
invoking 'doctrine of necessity'. The doctrine of necessity is a common law
doctrine, and is applied to tide over the situations where there are difficulties.
Law does not contemplate a vacuum, and a solution has to be found out
rather than allowing the problem to boil over. The issue has been dealt
with by the Apex Court in the case of Lalit Kumar Modi (supra). It was also
a case were an objection was raised to the constitution of committee which
was to enquire into the matter. Dealing with the situation, the Apex Court
held as under:
"33. We have noted the submissions of the rival parties. The
objection of Shri Jethmalani to the forming of the
Disciplinary Committee was on the basis of Rule 1(q). When
we read this Rule we find that the Rule states that the Board
shall at every Annual General Meeting appoint a committee
consisting of three persons. The President shall be one of
them and the function of the committee is to inquire into and
deal with the matters relating to any acts of misconduct, etc.
In view of the wording of this Rule, there is no difficulty in
accepting that normally the President has to be one of the
members of this Committee. The question is with respect to
the necessity arising on account of the President being
unavailable in a situation like the present one.
36. In the instant case the petitioner himself had objected to
the President being the member of the Committee. That
being the position, the President recused himself from the
Committee. When a situation thus arises, in view of the
objection of the petitioner, the society cannot be left without
a remedy. The submission of Shri Jethmalani is that the
alternate Disciplinary Committee has to be one which is not
objected by the petitioner.
37. The Rules lay down the terms of the contract amongst
the members of the society, and the terms can be altered only
with the consent of the members concerned. As far as this
submission is concerned, we must note that firstly, the Rule
does not say that if the President cannot be a member of
the Committee no substitution shall take place, nor does it
say that the substituting member should be one not objected
by the delinquent against whom the enquiry is proposed.
This rule is being canvassed as a term of the contract of
membership. A member of the society having accepted the
rules, agrees to the disciplinary authority of the three-
member Committee which is to be constituted under these
Rules. He cannot claim a right to dictate as to who should be
the members of the Committee. Any such interpretation will
lead to a situation that the delinquent will decide as to who
should be the members of the Disciplinary Committee. Such
a submission cannot be accepted. In our understanding the
rule is elastic enough, and in an appropriate situation the
word "shall" can be read as "may". It is very clear that,
normally the President shall be a member of three-member
Committee, but if for any reason his presence on the
Committee is objected to on grounds of unfairness, and he
recuses himself therefrom, Respondent 1 certainly has the
power to substitute him by some other person. The action of
the respondents is sought to be defended on the basis of
necessity.
38. The doctrine of necessity is a common law doctrine, and
is applied to tide over the situations where there are
difficulties. Law does not contemplate a vacuum, and a
solution has to be found out rather than allowing the
problem to boil over. Otherwise, as proposed by Shri
Jethmalani one will have to wait for one more year for a new
President to be elected, which submission cannot be
accepted."
32. Thus, by virtue of doctrine of necessity also, the Bank cannot be left
remediless and the persons who are allegedly involved in financial
defalcation of huge amount, cannot be left scot-free for want of Enquiry
Board.
33. In view of the discussion made above, this Court is of the view that the
provisions of Rule 49.3.2.3 are procedural and are thus directory and not
mandatory. Further, mere non-adherence of this rule shall not vitiate the
disciplinary action taken against the delinquent.
34. Now the decisions relied upon by the petitioner's counsel need to be
considered. He has placed reliance upon judgment rendered by coordinate
bench of this Court in the case of Gopal Prasad Panthi, Surendra
Khaiwariya & Laxman Singh Raghuwanshi (supra). All these cases were
decided by the same bench on the same day placing reliance upon another
coordinate bench judgment in the case of Ram Avtar Sharma vs. State of
M.P. & ors. in W.P. No.1970/2019. In the case of Ram Avtar Sharma
(supra), the Court held as under:
7. A bare perusal of the counter affidavit filed by respondent
no.3 reveals that the total amount in dispute is
Rs.17,49,958.74/-, which is certainly above Rs. 10 lacs. In
this regard, Rule 2.21 of the Seva Niyam reads thus:-
"2.21 "नवभ ग#य जब च ब ड/ " स त तय/ नजल सहकर# कन#य बक
मय/ नदत क सव य0क ब क नवरद आर नपत गबभ#र द0 र चरण (Major
Misconduct) क# र. 10.00 ल ख स अनधक क# नवत#य
अन यनमतत ओब स सबबबनधत नवभ ग#य जब च पमण/ कर हत0 गनhत
नवभ ग#य जब च ब ड/ स ह5 , नजस बक ब क सकम अनधकर#, जब च
अनधकर# क रप मI न य0क करI ग।"
From the above, it is clear that Rule 2.21 defines
Departmental Enquiry Board, which needs to be constituted
for major misconducts of employees with regard to financial
irregularities of more than Rs. 10 lacs. Admittedly, no such
Board has been constituted in the instant case and no
enquiry as contemplated under Rule 49.3.2.3 has been
conducted. For ready reference, the same is quoted thus:-
49.3.2.3 नजल सहकर# कIद#य बक क समस नवभ ग#य जब च
पकरण र. 10.00 ल ख य उसस अनधक क# अन यनमतत ओब क
नवभ ग#य जब च पकरण ब मI जब च अनधकर# क द नयत न व/ह हत0 एक
नवभ ग#य जब च ब ड/ ह ग , ज अप # पन^य न ध/ ररत कर, उस
पन^य स ज<द पमण/ करग । शष पकरण ब मI नवभ ग#य ज च क#
पन^य म.प. श स मI इस हत0 न ध/ ररत पन^य स जब च क
न र करण नकय ज वग ।
As such, the impugned order is completely without
jurisdiction and, therefore, availability of alternative remedy
would not be a bar in the light of dictum of the Apex Court
in the case of Whirlpool (Supra)."
35. Further, the case of Shiv Narayan Bhargava (supra) was also disposed
off relying upon the order passed in Ram Avtar Sharma & Gopal Prasad
Panthi (supra).
36. It is thus seen that in the aforesaid cases, no argument was made before
the Bench regarding mandatory or directory nature of provisions of Rule in
question. Further, the Bench proceeded with the presumption that imposing
punishment is the job of Enquiry Board. The Bench has also not considered
the fact that the Rule do not provide for the officers who are to constitute the
Enquiry Board. Further, the effect of doctrine of necessity was also not
argued. The powers vested in Competent Authority under Rule 49.3.2.2 were
also not appreciated. From the order, it appears that the only objection raised
by respondents was regarding availability of alternate remedy.
37. The learned counsel for petitioner also placed reliance upon another
coordinate bench judgment of this Court rendered in the case of Smt.
Bhavna Kale (supra). In this case, the argument invoking doctrine of
necessity was raised from respondents' side. However, even though learned
bench took note of the same, however, did not appreciate the same in view of
the fact that the issue has already been decided in the case of Gopal Prasad
Panthi (supra). Meaning thereby, this case also did not take note of various
issues which were germane for decision of the case. The order passed in the
case of Smt. Bhavna Kale (supra) was later affirmed by Division Bench in
W.A. No.602 of 2023 filed by the Bank however the issues pointed out
above are not raised and considered.
38. The case of Laxman Singh (supra) was also challenged in W.A.
No.1026/2021. Even though the order of writ court was not interfered, the
Division Bench relaxed the provisions of Rule 49.3.2.3 by permitting
respondents to constitute the Enquiry Board by officers above the rank of
respondents/writ petitioners. The Division Bench thus also impliedly treated
the provisions of Rule 49.3.2.3 as directory and not mandatory otherwise
directions to constitute Enquiry Board by other officers could not have been
issued.
39. In view of the discussion made above, this Court is in respectful
disagreement with the judgment rendered by coordinate benches in the cases
of Surendra Khaiwariya, Gopal Prasad Panthi, Laxman Singh
Raghuwanshi, Shiv Narayan Bhargava, Ram Avtar Sharma & Smt.
Bhavna Kale and the same needs reconsideration. Since, the cases of Smt.
Bhavna Kale and Laxman Singh (supra) have been dealt with by Division
Bench, this case needs to be placed before Hon. the Chief Justice for
constitution of a Larger Bench.
40. The provisions of Rule 8(3) of Chapter 4 of M.P. High Court Rules,
2008 may be referred at this stage which enables a Single Bench to refer
matter to a larger Bench for reconsideration of an issue already dealt with by
a Division Bench. As discussed above, following issues needs to be
reconsidered by a larger bench:
i. Whether the provisions of Rule 49.3.2.3 of Jila Sahakari
Kendriya Bank Maryadit ke Sewayukton ke (Niyojan,
Nibandhan tatha Karysthiti) Sewa Niyam, are directory or
mandatory?
ii. Whether the entire action of the Bank would be vitiated
merely because the Enquiry Board was not constituted as per
HR Policy particularly when Rules do not provide for the
officers who would consist the Enquiry Board?
iii. Whether, in view of the provisions of Rule 49.3.2.2, the
Competent Authority is within its power to either conduct the
enquiry himself of get it done through any other officer or
Enquiry Board as has been held by Division Bench in the case
of Laxman Singh (supra)?
iv. Whether invoking doctrine of necessity, the Competent
Authority could have constituted Enquiry Board consisting of
officers other than the one provided in HR Policy?
v. Whether the judgment rendered by coordinate bench of this
Court in cases of Surendra Khaiwariya, Gopal Prasad Panthi,
Laxman Singh Raghuwanshi, Shiv Narayan Bhargava, Ram
Avtar Sharma & Smt. Bhavna Kale (supra) and by Division
Bench of this Court in case of Smt. Bhavna Kale and Laxman
Singh (supra) correctly decided the issue or the same need
reconsideration?
41. The office is, therefore, directed to place the matter before Hon. the
Chief Justice for constitution of a larger bench for consideration of aforesaid
issues.
(ASHISH SHROTI)
JUDGE
bj/-
