M.Adam Raju vs Andhra Bank
2021 Latest Caselaw 4145 Tel

   HON'BLE SRI JUSTICE ABHINAND KUMAR SHAVILI

                        W.P.No.8033 of 2019

ORDER:

This Writ Petition is filed seeking a Writ of Mandamus

declaring the proceedings dt.28-08-2017 issued by the 3rd respondent

and dt.27-02-2018 issued by the 2nd respondent as illegal and arbitrary

and consequently direct the respondents to forthwith pay the petitioner

the gratuity amount together with interest @ 10% calculated from 09-

09-2015 till the date of actual payment.

2. Heard Sri P.S.Rajasekhar, learned counsel for the

petitioner and Sri K.Lakshmi Narasimha, learned Standing Counsel

for the respondents-bank.

3. It has been contended by the petitioner that he was

initially appointed as an Agricultural Assistant with the respondents-

bank in 1982 and after rendering considerable length of service, he has

earned promotions and while discharging his duties as Middle

Management Grade-2, the disciplinary authority has placed him under

suspension vide proceedings dt.14-08-2014 alleging that the petitioner

has disbursed loans contrary to the guidelines and a criminal case was

also registered against him in FIR No.293 of 2014 dt.17-11-2014.

4. Learned counsel for the petitioner has contended that the

disciplinary authority has issued charge memo on 09-12-2014 and the

petitioner has submitted a detailed explanation denying the charges.

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The disciplinary authority, not satisfying with the explanation,

initiated disciplinary proceedings and based upon the findings of the

enquiry officer's report, the petitioner was dismissed from service

vide proceedings 09-09-2015.

5. Aggrieved by the orders of dismissal, the petitioner

preferred appeal to the appellate authority on 26-10-2015. The

appellate authority considered the case of the petitioner and was

pleased to modify the dismissal order to that of compulsory retirement

vide orders dt.19-06-2017. Learned counsel for the petitioner has

further contended that the appellate authority has partly allowed the

appeal preferred by the petitioner by observing as follows:

"I have carefully gone through the various submissions made by you along with the entire material on record. I observe that there was an element of gross negligence on your part while sanctioning, disbursement and conduct of the referred loans. However, taking into consideration the fact that there has been recovery by way of compromise in certain accounts and few accounts are upgraded and also your long service in the Bank, I take a sympathetic view of the matter.

Hence, in exercise of the powers conferred on me vide Regulation 17 of ABOE (D&A) Regulations, I hereby modify the major penalty from "Dismissal from Bank service, to that of major penalty of 'Compulsory Retirement from Bank service", in terms of Regulation 4 (h) of ABOE (D&A) Regulations,

6. Learned counsel for the petitioner has contended that the

appellate authority has taken a lenient view and on the ground that in

some of the loans which were disbursed by the petitioner, the amounts 3 AKS,J W.P.No.8033 of 2019

were recovered by the respondents-bank in a compromise entered with

the loanees and taking that factor into account, the appellate authority

was pleased to modify the dismissal order.

7. Learned counsel for the petitioner has further contended

that in view of the orders of dismissal being modified by the appellate

authority, the petitioner is entitled for retiremental benefits including

gratuity, but the respondents-bank has not disbursed gratuity. On the

other hand, the respondents-bank has issued a show cause notice

contending as to why the gratuity should not be forfeited. The

petitioner has submitted explanation to the said show cause notice on

28-07-2016 and brought to the notice of the authority that no financial

loss has been caused to the bank and there were no charges of causing

financial loss to the respondents-bank. The disciplinary proceedings,

which were initiated by the disciplinary authority and appellate

authority, gave a specific finding that the loans disbursed by the

petitioner were recovered by the compromise entered with the loanees

and the question of forfeiting the gratuity from the petitioner would

not arise. Learned counsel for the petitioner has further contended

that that in the show cause notice, no where it is stated as to what is

the loss caused to the bank. The respondents have mechanically

passed the impugned orders on 28-08-2017 and 27-02-2018 and

wherein the respondents-bank without passing any detailed order has

forfeited the gratuity of the petitioner without assigning any reasons

and what is the loss caused was specifically dealt with and no 4 AKS,J W.P.No.8033 of 2019

opportunity was given to the petitioner before passing the forfeiting

order of gratuity.

8. Therefore, learned counsel for the petitioner has

contended that impugned orders are non-speaking orders and no

reasons are assigned and no opportunity was given to the petitioner

before passing the impugned orders. Therefore, the impugned orders

are liable to be set aside as they are violative of principles of natural

justice.

9. Learned counsel for the petitioner has further contended

that the Supreme Court in A.K.Kraipak and others v. Union of

India and others1 has held as under:

"13. The dividing line between an administrative power and a quasi-judicial power is quite thin and is being gradually obliterated. For determining whether a power is an administrative power or a quasi-judicial power one has to look to the nature of the power conferred, the person or persons on whom it is conferred, the framework of the law conferring that power, the consequences ensuing from the exercise of that power and the manner in which that power is expected to be exercised.

Under our Constitution the rule of law pervades over the entire field of administration. Every organ of the State under our Constitution is regulated and controlled by the rule of law. In a welfare State like ours it is inevitable that the jurisdiction of the administrative bodies is increasing at a rapid rate. The concept of rule of law would lose its vitality if the instrumentalities of the State are not charged with the duty of discharging their functions in a fair and just manner. The requirement of acting judicially in essence is nothing but a requirement to act justly and fairly and not arbitrarily or capriciously. The procedures which are

AIR 1970 SC 150 5 AKS,J W.P.No.8033 of 2019

considered inherent in the exercise of a judicial power are merely those which facilitate if not ensure a just and fair decision. In recent years the concept of quasi-judicial power has been undergoing a radical change. What was considered as an administrative power some years back is now being considered as a quasi-judicial power. The following observations of Lord Parker C.J., in Regina v. Criminal Injuries Compensation Board Ex parte Lain [(1967) 2 QB 864 at p. 881] are instructive.

"With regard to Mr Bridge's second point I cannot think that Atkin L.J., intended to confine his principle to cases in which the determination affected rights in the sense of enforceable rights. Indeed, in the Electricity Commissioners case the rights determined were at any rate not immediately enforceable rights since the scheme laid down by the commissioners had to be approved by the Minister of Transport and by resolutions of Parliament. The Commissioners nevertheless were held amenable to the jurisdiction of this court. Moreover, as can be seen from Rex v. Postmaster-General Ex parte Carmichael [(1928) 1 KB 291] and Rex v. Boycott Ex parte Kesslay [(1939) 2 KB 651] the remedy is available even though the decision is merely a step as a result of which legally enforceable rights may be affected.

The position as I see it is that the exact limits of the ancient remedy by way of certiorari have never been and ought not to be specifically defined. They have varied from time to time being extended to meet changing conditions. At one time the writ only went to an inferior court, later its ambit was extended to statutory tribunals determining a lis inter partes. Later again it extended to cases where there was no lis in the strict sense of the word but where immediate or subsequent rights of a citizen were affected. The only constant limits throughout were that it was performing a public duty. Private or domestic tribunals have always been outside the scope of certiorari since their authority is derived solely from contract, that is, from the agreement of the parties concerned.

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Finally, it is to be observed that the remedy has now been extended, See Reg. v. Manchester Legal Aid Committee, Ex parte R.A. Brand & Co. Ltd. [(1952) 2 QB 413] to cases in which the decision of an administrative officer is only arrived at after an inquiry or process of a judicial or quasi-judicial character. In such a case this court has jurisdiction to supervise that process.

We have as it seems to me reached the position when the ambit of certiorari can be said to cover every case in which a body of persons of a public as opposed to a purely private or domestic character has to determine matters affecting subjects provided always that it has a duty to act judicially. Looked at in this way the board in my judgment comes fairly and squarely, within the jurisdiction of this court. It is, as Mr Bridge said, 'a servant of the Crown charged by the Crown, by executive instruction, with the duty of distributing the bounty of the Crown.' It is clearly, therefore, performing public duties".

14. The Court of Appeal of New Zealand has held that the power to make a zoning order under Dairy Factory Supply Regulation, 1936, has to be exercised judicially, see New Zealand and Dairy Board v. Okita Co-operative Dairy Co. Ltd. [(1953) New Zealand Law Reports, p. 366] This Court in Purtabpore Co. Ltd. v. Cane Commissioner of Bihar [ Civil Appeal No. 1464 of 1968, decided on 21-11-1968] held that the power to alter the area reserved under the Sugarcane (Control) Order, 1966, is a quasi-judicial power. With the increase of the power of the administrative bodies it has become necessary to provide guidelines for the just exercise of their power. To prevent the abuse of that power and to see that it does not become a new despotism, courts are gradually evolving the principles to be observed while exercising such powers. In matters like these, public good is not advanced by a rigid adherence to precedents. New problems call for new solutions. It is neither possible nor desirable to fix the limits of a quasi-judicial power. But for the purpose of the present case we shall assume that the power exercised by the selection board was an administrative power and test the validity of the impugned selections on that basis.

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15. It is unfortunate that Naqishbund was appointed as one of the members of the selection board. It is true that ordinarily the Chief Conservator of Forests in a State should be considered as the most appropriate person to be in the selection board. He must be expected to know his officers thoroughly, their weaknesses as well as their strength. His opinion as regards their suitability for selection to the All-India Service is entitled to great weight. But then under the circumstances it was improper to have included Naqishbund as a member of the selection board. He was one of the persons to be considered for selection. It is against all canons of justice to make a man judge in his own cause. It is true that he did not participate in the deliberations of the committee when his name was considered. But then the very fact that he was a member of the selection board must have had its own impact on the decision of the selection board. Further admittedly he participated in the deliberations of the selection board when the claims of his rivals particularly that of Basu was considered. He was also party to the preparation of the list of selected candidates in order of preference. At every stage of his participation in the deliberations of the selection board there was a conflict between his interest and duty. Under those circumstances it is difficult to believe that he could have been impartial. The real question is not whether he was biased. It is difficult to prove the state of mind of a person. Therefore what we have to see is whether there is reasonable ground for believing that he was likely to have been biased. We agree with the learned Attorney General that a mere suspicion of bias is not sufficient. There must be a reasonable likelihood of bias. In deciding the question of bias we have to take into consideration human probabilities and ordinary course of human conduct. It was in the interest of Naqishbund to keep out his rivals in order to secure his position from further challenge. Naturally he was also interested in safeguarding his position while preparing the list of selected candidates."

He has further contended that as per the law laid by the Supreme

Court, the administrative authorities must also assign reasons, but in

the instant case, no reasons assigned and no opportunity was given to 8 AKS,J W.P.No.8033 of 2019

the petitioner. Therefore, impugned orders are liable to be set aside

and let the respondents to reconsider case the petitioner for payment

of gratuity in accordance with Rules including the Payment of

Gratuity Act, 1972.

10. Per contra, learned Standing Counsel for the respondents-

bank, on instructions, has contended that at the time of initiation of

disciplinary proceedings, question of causing of loss to the bank was

not dealt with at all and the charge was framed only about illegal

disbursement of loans and on that ground, disciplinary proceedings

were initiated and the disciplinary authority has imposed a major

penalty of dismissal from service and the appellate authority was

pleased to modify the dismissal order to that of compulsory

retirement. He has further contended that Section 4 (6) (a) of the

Payment of Gratuity Act contemplates recovery from the employee

who has caused loss to the bank and that is the reason why the

respondents have issued show cause notice and the respondents have

rightly passed the orders of forfeiting the gratuity. Therefore, there

are no merits in the Writ Petition and the same is liable to be

dismissed.

11. Learned Standing Counsel for the respondent-bank has

further contended that he has instructions to contend that since the

show cause notice is not specifying the amount loss which has been

caused to the bank, the impugned show cause notice and the

impugned forfeiting orders of gratuity be set aside. However liberty 9 AKS,J W.P.No.8033 of 2019

be given to the respondents-bank and the respondents would

reconsider the case of the petitioner afresh in accordance with Rules.

12. Having regard to the rival submissions made by the

parties, this Court is of the considered view that the impugned

forfeiting orders of gratuity are passed without assigning any reasons

and no opportunity is given to the petitioner before passing the

impugned order of forfeiting the gratuity of petitioner. Therefore,

with this short point, the impugned orders dt.28-08-2017 and

27-02-2018 are liable to be set aside as they are contrary to the law

laid down by the Supreme Court in D.K.Khanna (1 supra).

Accordingly they are set aside as they are violative of principles of

natural justice. The respondents are further directed to reconsider the

case of thee petitioner for payment of gratuity in accordance with the

provisions under the Payment of Gratuity Act, 1972.

13. With these observations, the Writ Petition is allowed. No

costs.

14. As a sequel, the miscellaneous petitions pending, if any,

shall stand closed.

______________________________________ JUSTICE ABHINAND KUMAR SHAVILI Date: 06-12-2021 kvr