HON'BLE SRI G.S.SINGHVI, THE CHIEF JUSTICE Writ Petition No.13334 OF 1993 Between: G.Rama Lakshmi ... Petitioner AND Nagarjuna Grameena Bank rep by its Chairman, Khammam and another .....Respondents ::JUDGMENT:: Counsel for the Petitioner : Sri P.B.Vijaya Kumar Counsel for Respondents : Sri K.Srinivasa Murthy Dated 16..2..2006 In this petition, the petitioner has prayed for quashing the proceedings bearing No.DPC/55/151/93 dated 10-5-1993 issued by the General Manager of Nagarjuna Grameena Bank, Khammam, whereby he communicated the decision of the Board of Directors of the Bank to dismiss the appeal filed by the petitioner against the order of dismissal. She has further prayed for issuance of a mandamus to the respondents to reinstate her with consequential benefits. The petitioner joined the services of the Bank as Clerk-cum-Cashier/Typist on 8.11.1979. After three years, the Chairman-cum-Disciplinary Authority (hereinafter referred to as ‘the Disciplinary Authority’) vide his order dated 11.11.1982 placed the petitioner under suspension. This was followed by memorandum dated 3.1.1983 issued for holding the enquiry against the petitioner under Chapter IV of the Bank’s Staff Service Regulations, 1980 (for short ‘the Regulations’) on the following charges: a. It is reported that you had paid Rs.35,000/- (Rupees Thirty Five Thousand only) to Shri P.Harshavardhan, Field Assistant and the then in-charge Branch Manager on 29-6-1982 being the amount of S.B. withdrawal in respect of S.B. Account No.2626 of Shri P. Bhaskar Rao, which was not signed by the depositor. The voucher was not branded with cash ‘paid’ stamp by you, after making the payment. The voucher was also not passed by the then Incharge Branch Manager for payment, nor was it posted in the relative ledger folio, by you. b. It is reported that you had paid a sum of Rs.50,000/- (Rupees Fifty thousand only) on 27-9-82 to Shri P. Harshavardhan, F.A. and the then in-charge B.M. being the aggregate amount in respect of the following cheques:- S.B A/c. Cheque Date Amount No. No. Rs. 1. 1800 103881 3-9-1982 15,000/- 2. 1800 103882 -do- 15,000/- 3. 1800 103883 -do 15,000/- 4. 1800 103884 -do- 5,000/- - - - - - - - - Total 50,000/- - - - - - - - The above cheques were drawn by I.T.D.A., Palwoncha in favour of Shri R. Yellaiah and paid to the payee in the usual course on 4-9-1982. But, these cheques were reportedly paid by you again on 27.9.1982 to Shri P. Harshavardhan, the then in-charge B.M. The following items appear to have been altered on the above cheques:- i. Date of the cheque was altered to read as 24-9-1982 instead of 3-9-1982. ii. Branch Manager’s passing scroll number was altered to read as 20, 21, 22, 23 instead of 10, 11, 12 and 13. iii. It is reported that you had paid Rs.5,000/- (Rupees Five thousand only) to Shri P. Harshavardhan, the then In- charge Branch Manager on 12-4-1982 being the amount of one S.B. withdrawal in respect of S.B. Account No.2117 of Shri K. Sudhakar Reddy, without the signature of the depositor. The voucher was not branded with ‘Cash paid’ rubber stamp by you, after payment of cash. iv. You had deliberately neglected balancing of S.B. Accounts, obviously in connivance with Shri P. Harshavardhan, the then in-charge Branch Manager perhaps in order to facilitate fraudulent transactions in the S.B. Accounts.” After receiving the charge sheet, the petitioner submitted an application dated 17.12.1984 to the Enquiry Officer for permission to inspect certain records and also to engage an advocate by contending that she will not be able to effectively cross- examine the witnesses. The Enquiry Officer accepted the petitioner’s request for inspection of record, but did not accede to her request for being allowed to avail the services of an advocate. The Enquiry Officer fixed the dates of enquiry as 5.11.1985, 29.11.1985, 27.2.1986 and 19.3.1986. On the first two of these dates, the proceedings were adjourned at the request of the petitioner. On the remaining two dates, she did not bother to appear. Consequently, the Enquiry Officer held ex parte proceedings and submitted report dated 30.4.1986 with the conclusion that all the charges levelled against the petitioner have been proved. The Disciplinary Authority accepted the findings and conclusion recorded by the Enquiry Officer and issued notice dated 17.12.1986 to the petitioner requiring her to show cause as to why she may not be dismissed from service. The petitioner filed reply to contest the notice. Thereafter, she was given opportunity of personal hearing. At the conclusion of hearing, the Disciplinary Authority passed an order dated 15.1.1987 and confirmed the proposed penalty. The petitioner challenged the order of punishment by filing an appeal before the Board of Directors of the Bank. After sometime, she filed Writ Petition No.2270 of 1993 with the complaint that the decision of her appeal was being unduly delayed. The same was disposed of by the learned Single Judge of this Court on 2.3.1993 with the direction that the petitioner’s appeal be decided within three months. In compliance of the direction given by the court, the Board of Directors of the Bank in its meeting held on 5.5.1993 considered the petitioner’s appeal and dismissed the same by recording the following observations: “All the contentions raised by the Appellant in her appeal dated Nil (received by the Bank on 19.3.1993) are examined in the light of the Chairman and Disciplinary Authority’s observations and decisions and found that the charges to the extent held by the Disciplinary Authority are proved beyond doubt and further the findings are based on evidences. Mere acquittal by the criminal court does not entitle the appellant for reinstatement so long as there is sufficient evidence in support of the findings of the Disciplinary Authority. As the proven acts of misconduct committed by the Appellant are of grave nature and detrimental to the interests of the Bank, it is found that the penalty imposed was just and proportionate to the gravity of the proven charges. After satisfying that the principles of natural justice, equity and fair play have been adequately observed while dealing with the issues raised by the appellant and also the findings of the Disciplinary Authority, the Board has unanimously decided to confirm the punishment namely “Dismissal” from the Bank’s service inflicted on the Appellant by the Chairman and Disciplinary authority.” The petitioner has challenged the proceedings of enquiry and the decision of appeal which were conveyed to her by the General Manager of the Bank vide letter dated 10.5.1993 on the following grounds: a. the proceedings of enquiry are vitiated due to violation of the rules of natural justice because she was not allowed to engage an advocate and on that account, she could not effectively defend herself. b. the Enquiry Officer arbitrarily passed order for ex parte proceedings and did not give her opportunity to adduce defence evidence. c. copy of the enquiry report was not supplied to her along with the show cause notice. d. the punishment of dismissal is arbitrary, unjust and shockingly disproportionate. e. in the face of the finding of not guilty recorded in Criminal Case No.398 of 1987 (State vs. Pudumbaka Harshavardan and others) by the Court of Additional Magistrate of First Class, Kothagudem, the Enquiry Officer could not have held her guilty of misconduct. In the written statement filed on behalf of the Bank, it has been averred that the order of punishment was passed by the Disciplinary Authority because the petitioner was found guilty of grave misconduct. It has been further averred that the enquiry was held against the petitioner in consonance of the rules of natural justice and she was given full opportunity of defence. According to the Bank, ex parte proceedings were held because the petitioner did not cooperate with the Enquiry Officer and did not even bother to appear on 27.2.1986 and 19.3.1986. In regard to the criminal case, it has been averred that prosecution was launched against Sri P.Harshavardhan, in- charge Branch Manager, Sri J. Bhadru, Junior Clerk-cum-Cashier and the petitioner for the offences under Sections 408, 420 and 471 of the Indian Penal Code, but the Court held that the charges were not proved against the petitioner due to lack of evidence. According to the Bank, the substratum of the allegations levelled against the petitioner in the disciplinary proceedings was substantially different from the allegations, which were subject matter of criminal case and, therefore, the findings recorded by the Additional Magistrate of First Class, Kothagudem were not binding on the disciplinary and the appellate authorities. I have heard learned counsel for the parties and carefully perused the record. I have also gone through the file produced by Ms.Uma Devi, advocate for the Bank. The questions which arise for determination in this petition are: 1. Whether the proceedings of enquiry held against the petitioner are vitiated due to violation of the rules of natural justice. 2. Whether the punishment of dismissal imposed on the petitioner is wholly arbitrary, unjust and shockingly disproportionate and calls for interference by the Court. 3. Whether the finding recorded by Additional Magistrate of First Class, Kothagudem in Criminal Case No.398 of 1987 can be made basis for nullifying the order of punishment. 4. Re: Question No.1 Sri P.B.Vijay Kumar argued that the orders passed by the disciplinary and appellate authorities are liable to be quashed because the petitioner was not allowed to avail the services of an advocate for the purpose of her defence and the Enquiry Officer arbitrarily held ex parte proceedings. Ms.Uma Devi, learned advocate for the Bank argued that the decision of the Enquiry Officer not to entertain the petitioner’s request for availing the services of an advocate does not have the effect of vitiating the enquiry because there is no provision in the Regulations for allowing the delinquent to be represented by an advocate. She further argued that the petitioner cannot complain of violation of the rules of natural justice on this count because the presenting officer was not an advocate or a legally trained person. I have thoughtfully considered the respective arguments. The petitioner has neither averred nor has any material been produced before the Court to show that the officer appointed by the Bank to present its case before the Enquiry Officer was an advocate or a law graduate. He was only an officer of the Bank. It is thus clear that the petitioner was not pitted against a legally trained mind and she did not suffer from any handicap or disability in defending herself. That apart, the question of any prejudice to the petitioner on account of not being allowed the services of an advocate does not arise because it is an undisputed position that even though Enquiry Officer had fixed four different dates of hearing, she did not bother to appear before him and present her case. On the first two dates, she sought adjournment and on the next two dates, she did not even bother to inform the Enquiry Officer that she would not be attending the enquiry. Indeed, it is not her case that she had refrained from the enquiry proceedings under protest and had informed that she would not be attending the proceedings on account of denial of legal assistance. Therefore, it is not possible to agree with the learned counsel for the petitioner that the proceedings of enquiry are vitiated due to violation of the rule of effective hearing. In my view, the situation in which the petitioner finds herself is her own creation and, at this belated stage, she cannot take advantage of her own decision to abstain from the proceedings of enquiry. Another facet of the first question which requires consideration is whether the orders passed by the disciplinary and appellate authorities should be quashed on the ground of non-supply of copy of enquiry report to the petitioner along with the show cause notice and consequential denial of opportunity to effectively represent her case against the proposed penalty. In my view, this question has to be answered in negative because in her reply to the show cause notice, the petitioner did not make any complaint regarding non-supply of the copy of enquiry report and her consequential inability to file a reply affidavit to the show cause notice. Even in the appeal filed against the order of punishment, the petitioner did not raise the plea that she could not effectively represent her cause because of non-supply of enquiry report. This omission on the petitioner’s part clearly amounts to waiver of the objection regarding non-supply of copy of the enquiry report and she cannot be allowed to urge this as a ground for challenging the order of punishment and the one passed by the appellate authority. In my view, the right to raise objection against the non-supply of copy of the enquiry report was purely personal to the petitioner and, by not raising it before the Disciplinary Authority or the appellate authority, she will be deemed to have given up the same. There is another reason for my disinclination to entertain the petitioner’s challenge to the order of punishment on the first two grounds because she has neither pleaded nor any evidence has been produced before the court to show that her case was prejudiced on account of rejection of her request for engaging a lawyer or non- supply of the copy of enquiry report. Though the rules of natural justice are multi- hyper dimensional and multi-faceted, but their applicability differs from case to case. One of the facets of the rules of natural justice is that no one shall be condemned unheard. In Sixties, Seventies and Eighties, the Courts used to invalidate the action taken by the employer on the ground of violation of the rules of natural justice simpliciter. This perhaps encouraged white collared employees to indulge in more indiscipline necessitating a re-thinking. Till one and half decade ago, the courts had insisted on rigorous compliance of the rules of natural justice and the theory of empty/useless formality was largely rejected. However, the judicial precedents of last fifteen years give a clear indication of the shift and now it must be treated as settled law that the court will not invalidate an action taken by the Disciplinary Authority acting in public domain only on the ground of violation of the rules of natural justice or violation of the procedure laid down by the rules, unless it is shown that such violation has prejudiced the defence/cause of the employee. This question was considered in Janki Nath Sarangi Vs. State of Orissa; R.C.Sharma Vs. Union of India; Sunil Kumar Banerjee Vs. State of West Bengal; K.N. Tripathi Vs. State Bank of India; Mumtaz Hussein Ansari Vs. State of U.P.; Kashinath Dikshita Vs. Union of India; Chandrama Tiwari Vs. Union of India; Managing Director, ECIL Vs. B. Karunakar; Krishanlal Vs. State of Jammu and Kashmir; State Bank of Patiala Vs. S.K. Sharma , S.K. Singh Vs. Central Bank of India; State of Uttar Pradesh Vs. Shatrughanlal; Food Corporation of India Vs. Padamkumar Bhuvan; State of Uttar Pradesh Vs. Harendra Arora; Oriental Insurance Company Vs. S. Balakrishnan; State of Uttar Pradesh Vs. Rameshchand Manglik; Indra Bhanu Gaur Vs. Committee, Management of M.M Degree College and Divisional Manager, Plantation Division A and N Islands Vs. Munnu Barrick. In some of the earlier judgments, the Supreme Court expressed the view that burden to prove that the employee’s cause had not been prejudiced on account of violation of the statutory rules or the rules of natural justice was on the employer, but this issue should be treated as finally concluded the other way by virtue of the Constitution Bench judgment in Managing Director, ECIL Vs. B. Karunakar (supra) and subsequent decisions and the contrary view can no longer be treated as good law. In B. Karunakar's case (supra), the Constitution Bench of the Supreme Court considered the apparent conflict of views expressed by two Benches in Union of India Vs. Mohd. Ramzan Khan and K.C. Asthana Vs. State of Uttar Pradesh on the interpretation of Article 311(2) of the Constitution (as amended by 42nd amendment). The Constitution Bench framed the following questions: “(i) whether the report of the enquiry officer is required to be furnished to the employee to enable him to make proper representation to the disciplinary authority before such authority arrives at its own finding with regard to the guilt or otherwise of the employee and the punishment, if any, to be awarded to him? (ii) Whether the report should be furnished to the employee even when the statutory rules laying down the procedure for holding the disciplinary inquiry are silent on the subject or are against it? (iii) Whether the report of the Inquiry Officer is required to be furnished to the delinquent employee even when the punishment imposed is other than the major punishment of dismissal, removal or reduction in rank? (iv) Whether the obligation to furnish the report is only when the employee asks for the same or whether it exists even otherwise? (v) Whether the law laid down in Mohd. Ramzan Khan's case (supra) will apply to all establishments – Government and non-Government, public and private sector undertakings? (vi) What is the effect of the non-furnishing of the report on the order of punishment and what relief should be granted to the employee in such cases? (vii) From what date the law requiring furnishing of the report, should come into operation? (viii)Since the decision in Ramzan Khan's case (supra) has made the law laid down there prospective in operation, i.e. applicable to the orders of punishment passed after 20th November, 1990 on which day the said decision was delivered, this question in turn also raises another question, viz. What was the law prevailing prior to 20th November, 1990?” After answering the first question in affirmative, their Lordships considered the ancillary questions and answered question No. (vi) in the following words: “The next question to be answered is what is the effect on the order of punishment when the report of the Inquiry Officer is not furnished to the employee and what relief should be granted to him in such cases. The answer to this question has to be relative to the punishment awarded. When the employee is dismissed or removed from service and the inquiry is set aside because the report is not furnished to him, in some cases the non- furnishing of the report may have prejudiced him gravely while in other cases it may have made no difference to the ultimate punishment awarded to him. Hence to direct reinstatement of the employee with back-wages in all cases is to reduce the rules of justice to a mechanical ritual. The theory of reasonable opportunity and the principles of natural justice have been evolved to uphold the rule of law and to assist the individual to vindicate his just rights. They are not incantations to be invoked nor rites to be performed on all and sundry occasions. Whether in fact, prejudice has been caused to the employee or not on account of the denial to him of the report, has to be considered on the facts and circumstances of each case. Where, therefore, even after the furnishing of the report, no different consequence would have followed, it would be a perversion of justice to permit the employee to resume duty and to get all the consequential benefits. It amounts to rewarding the dishonest and the guilty and thus to stretching the concept of justice to illogical and exasperating limits. It amounts to an “unnatural expansion of natural justice” which in itself is antithetical to justice.” The Constitution Bench then held: “Hence, in all cases where the Inquiry Officer's report is not furnished to the delinquent employee in the disciplinary proceedings, the Courts and Tribunals should cause the copy of the report to be furnished to the aggrieved employee if he has not already secured it because coming to the Court/Tribunal, and give the employee an opportunity to show how his or her case was prejudiced because of the non-supply of the report. If after hearing the parties, the Court/Tribunal comes to the conclusion that the non-supply of the report would have made no difference to the ultimate findings and the punishment given, the Court/Tribunal should not interfere with the order of punishment. The Court/Tribunal should not mechanically set aside the order of punishment on the ground that the report was not furnished as is regrettably being done at present. The courts should avoid resorting to short- cuts. Since it is the Courts/Tribunals which will apply their judicial mind to the question and give their reasons for setting aside or not setting aside the order of punishment, [and not any internal appellate or revisional authority', there would be neither a breach of the principles of natural justice nor a denial of the reasonable opportunity. It is only if the Court/Tribunal finds that the furnishing of the report would have made a difference to the result in the case that it should set aside the order of punishment. (Underlining is ours) In Harendra Arora's case (supra), the Supreme Court referred to the earlier judgment of the Constitution Bench in Managing Director, ECIL Vs. B. Karunakar (supra) and laid down the following propositions: i) From the case of ECIL it is plain that in cases covered by the Constitutional mandate i.e. Article 311 (2), non-furnishing of enquiry report would not be fatal to the order of punishment unless prejudice is shown. There-fore, requirement in the statutory rules of furnishing copy of the enquiry report cannot be made to stand on a higher footing by laying down that question of prejudice is not material therein. ii) Every infraction of the statutory provision could not make the constant action void and/or invalid. The statute may contain certain substantive provisions, e.g. which is the competent authority to impose a particular punishment on a particular employee. Such provision must be directly complied with as in such cases the theory of substantial compliance may not be available. But in respect of many procedural provisions, it would be possible to apply the theory of substantial compliance or the test of prejudice, as the case may be. Even amongst procedural provisions, there may be some provisions of a fundamental nature which have to be complied with and in whose cases the theory of substantial compliance may not be available, but the question of prejudice may be material. In respect of procedural provisions other than that of fundamental nature, the theory of substantial compliance would be available and in such cases objections on this score have to be judged on the touch stone of prejudice. iii)Even in the CPC there are various provisions viz. Section 99A and 115 besides Order 21, Rule 19 where merely because there is defect, error or irregularity in the order, the same would not be liable to be set aside unless it has prejudicially affected the decision. Likewise, in the Cr.P.C also Section 465 lays down that no finding, sentence or order passed by competent Court shall be upset merely on account of any error, omission or irregularity unless in the opinion of the Court a failure of justice has, in fact, been occasioned thereby. There is no reason why the principle underlying the aforesaid provisions would not apply in case of the statutory provisions of Rule 55-A of the CCS (CCA) Rules in relation to the disciplinary proceedings. Rule 55-A embodies in it nothing but the principles of reasonable opportunity and natural justice.” In Indra Bhanu Gaur Vs. Committee, Management of M.M. Degree College (supra), the Supreme Court considered the question whether non-payment of subsistence allowance could be a ground for quashing the order of punishment. While remanding the case to the High Court for fresh adjudication, the Supreme Court observed as under: “It is ultimately a question of prejudice. Unless prejudice is shown and established, mere non-payment of subsistence allowance cannot ipso-facto be a ground to vitiate the proceedings in every case. It has to be specifically pleaded and established as to