*THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY W.P.No. 460 of 2006 % 02-04-2008 Between: B.V. Bhaskar Reddy S/o Late B.C. Venkat Reddy R/o Flat No. 302 Indralik Apartments, Balajinagar, Proddatur, Kadapa District .... PETITIONER AND State bank of India rep by Chief General Manager Local Head Office, Bank Street, Hyderabad, and others. ...RESPONDENTS ! COUNSEL FOR PETITIONER: Sri T.Surya Karan Reddy ^ COUNSEL FOR RESPONDENTS: Dr.Y.Padmavathi (Standing Counsel for respondents) < Gist: > Head Note: ? CITATIONS: 1. (1998) 7 SCC 84 IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE SECOND DAY OF APRIL TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE L.NARASIMHA REDDY WRIT PETITION NO : 460 of 2006 Between: B.V. Bhaskar Reddy S/o Late B.C. Venkat Reddy r/o Flat No. 302 Indralik Apartments, Balajinagar, Proddatur, Kadapa District ..... PETITIONER AND 1 State bank of India rep by Chief General Manager Local Head Office, Bank Street, Hyderabad 2 The Deputy General Manager and APpellate Authority State Bank of India, Zonal Office, Tirupati, Chittoor Distri 3 The Assistant General Manager and Disciplinary Authority Region-I, State Bank of India, Zonal Office Tirupathi Chittoor District .....RESPONDENT(S) Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a Writ of Certiorari or any other appropriate wRit, order or direction calling for records form the respondents and quash the proceedigns of the 2nd respondent in his letter No. Per & HRD/9-1640 dt 20-10-2005 confirming with modifications, the proceedings of the 3rd respondetnin his letter No. DPC/R1/014 dt 29-07-2004 and pass such other order or orders as are deemed fit and proper inthe circumstances of the case. Counsel for the Petitioner:MR.T.SURYA KARAN REDDY Counsel for the Respondent No.: MR.DEEPAK BHATTACHARJEE The Court made the following : THE HON'BLE MR JUSTICE L.NARASIMHA REDDY WRIT PETITION NO : 460 of 2006 ORDER: The petitioner is employed as a Senior Assistant in the State Bank of India, 1st respondent herein. Initially, a memo, dated 30.08.2002 was served upon him, whereunder, two charges were framed. This was followed by another memo, dated 27.03.2003, in which, the charges contained in the memo, dated 03.08.2002, were repeated and a few more charges were incorporated. The petitioner was required to submit explanation, as to why suitable disciplinary action shall not be taken against him. After the petitioner submitted his explanation, the 1st respondent appointed an enquiry officer. A detailed enquiry was conducted, and the enquiry officer submitted a report, dated 10.01.2004, holding that the charges a, b(i)&(ii), c1(ii) and f(ii) are proved. On a consideration of the report of the enquiry officer, the 3rd respondent issued a show cause notice, dated 21.04.2004. Apart from accepting the findings of the enquiry officer, the 3rd respondent stated that he holds the charge in c(2)(i) as proved. Thereafter, it is stated that he tentatively proposes to inflict the punishment of dismissal, upon the petitioner. The petitioner submitted his explanation and appeared at the personal hearing held on 05.07.2004. The 3rd respondent passed an order, dated 29.07.2004, confirming the proposed punishment of dismissal. Aggrieved thereby, the petitioner preferred an appeal before the 2nd respondent. The appellate authority passed an order, dated 20.10.2005, confirming the findings recorded against the petitioner, but converting the order of dismissal into the one of removal from service. The petitioner challenges the respective orders passed by respondents 3 and 2. The petitioner contends that the 3rd respondent committed procedural lapses, inasmuch as a finding, contrary to the report of the enquiry officer, was recorded, even at the stage of show cause notice, and that the order of dismissal from service does not contain any reasons, worth their name. Certain other grounds are also urged. On behalf of the respondents, a counter affidavit is filed. It is stated that the petitioner has resorted to several acts of grave misconduct, causing loss of reputation and efficiency, to the Bank. It is stated that the procedure prescribed by law was meticulously followed at every stage and the proceedings did not suffer from any legal or factual infirmity. Sri T.Surya Karan Reddy, learned counsel for the petitioner submits that the charges framed against the petitioner are untenable and trivial in nature. He contends that totally unrelated issues, which are mostly personal to the petitioner, were raked up and disciplinary proceedings were initiated, though the Bank did not suffer anything, be it, in terms of money or efficiency. He contends that the 3rd respondent has straight away recorded a finding contrary to the report of the enquiry officer, even before the petitioner submitted an explanation. It is his case that the 3rd respondent reduced the submission of explanation to the 2nd show cause notice and the personal hearing, to an empty formality, and that the order of dismissal cannot be sustained in law. Dr.Padmavathi, learned standing counsel for the respondents, on the other hand, submits that the charges leveled against the petitioner are serious in nature and that the petitioner was given adequate opportunity at every stage of the proceedings. She further submits that the fact that the 3rd respondent has applied his mind to every facet of the matter, is evident from the show cause notice, and the final order was passed fully in conformity with the same. She contends that the findings or facts mentioned in the show cause notice were provisional in nature and they cannot be treated as final. She also contends that even if there was any minor lapse on the part of the 3rd respondent, the same was taken care of, by the 2nd respondent, at the stage of appeal, wherein a detailed and elaborate discussion was undertaken. Charges of different magnitude were framed against the petitioner under 6 heads. The first one relates to the alleged alienation of a house by the petitioner, even while the loan transaction in relation thereto with the bank was subsisting. The second is about the alleged delay in accounting for a sum of Rs.20,000/- said to have been received by the petitioner from a customer. In the third charge, the bank pointed out certain alleged discrepancies in the joint account held by the petitioner and his wife in the bank, including some instances of overdrafts. The fourth charge is about the alleged sanction of loans to various persons. The fifth one relates to sanction of loan to one Mr.K.Prasad Reddy and the role played by the petitioner, in the process. The last charge is as regards the sanction of loan to one Mr. K.Narayana Reddy and withdrawal of amounts from his account. The enquiry officer found some of the charges, or their facets, proved and some not, after conducting a detailed enquiry. On receipt of the report of the enquiry officer, the 3rd respondent issued a detailed show cause notice, which runs into 8 printed pages. Apart from agreeing with the findings recorded by the enquiry officer on the charges that were held proved, the 3rd respondent disagreed with the finding on charge c(2)(i). He proposed the punishment of dismissal from service and accordingly, issued a show cause notice to the petitioner. It was indicated that a personal hearing will be held, in the matter. The petitioner availed both the opportunities and ultimately, an order of dismissal was passed on 29.07.2004. The appeal preferred by the petitioner was partly allowed by the 2nd respondent, to the extent of converting the order of dismissal into the one of, removal from service. From the submissions made by the learned counsel for the parties, two question arise for consideration, viz., (i) whether it is competent for the 3rd respondent to straight away hold a charge proved, in disagreement with the enquiry officer; and (ii) whether the 3rd respondent was under obligation to furnish the reasons in support of his conclusions, while dismissing the petitioner from service. There is not much controversy about the findings recorded by the enquiry officer or the view expressed by the 3rd respondent, while agreeing with the same. The controversy is about charge c(2)(i). It is well settled that it is always open to a disciplinary authority to disagree with the findings recorded by the enquiry officer. However, before a final decision is taken, in this regard, he must require the delinquent employee to show cause, as to why the findings of the enquiry officer shall not be disagreed, duly indicating the basis therefor. It is only after the explanation is submitted, that the disciplinary authority can arrive at a conclusion, as to whether he shall disagree with the finding of the enquiry officer on any aspect, at all. In the instant case, the 3rd respondent made the following observations in his show cause notice, as regards charge c(2)(i): “In case of charge c(2)(i) I disagree with the findings of Enquiry Officer for the reasons: It is a current account personal overdraft sanctioned against the security of NSCs. The limit sanctioned and drawing power would be same. Moreover the Branch is fully computerized and it is not difficult to ascertain limit and drawing power at any point of time. The charge sheeted employee has availed the facility in excess of limit sanctioned hence I hold the charge as proved.” From this, it is evident that the 3rd respondent not only disagreed with the findings of the enquiry officer, but also held that another charge is proved. He did not give an opportunity to the petitioner, before he held a charge proved, in disagreement with the enquiry report. Such a course is totally impermissible in law. Reference, in this context, may be made to the Judgment of the Supreme Court in Punjab National Bank vs. Kunj Behari Misra[1]. The principle was explained as under: “Where the disciplinary authority itself holds an enquiry, an opportunity of hearing has to be granted by him. When the disciplinary authority differs with the view of the enquiry officer and proposes to come to a different conclusion, there is no reason as to why an opportunity of hearing should not be granted. It will be most unfair and iniquitous that where the charged officers succeed before the enquiry officer, they are deprived of representing to the disciplinary authority before that authority differs with the enquiry officer’s report and, while recording a finding of guilt, imposes punishment on the officer. In our opinion, in any such situation, the charged officer must have an opportunity to represent before the disciplinary authority before final findings on the charges are recorded and punishment imposed.” Therefore, the first question deserves to be answered in favour of the petitioner. Coming to the second question viz., the validity of the order of dismissal passed by the 3rd respondent, it is evident that though a show cause notice was issued and personal hearing was held, no discussion, worth its name, as regards the findings or the basis for dismissal, was undertaken. The order is brief and it is felt necessary to reproduce the same, which reads as under: “With reference to the Personal Hearing held on 05.07.04 and also representation submitted by you during Personal Hearing, I have carefully examined the matter in detail. You have not brought out any valid, reasonable points or circumstances, which merit consideration in the course of Personal Hearing or in the representation submitted by you. 02. In the circumstances, I have decided to confirm the punishment of “Dismissal” proposed to be imposed on you vide my memorandum No.DPC/R-I/07 dated 21.04.04 as provided in para 6 clause (a) of Annexure II of Memorandum of Settlement dated 10.04.2002 in modification of paragraph 521 of Sastry Award read with paragraph 18.28 of Desai Award. This would meet the ends of justice. I hold accordingly. 03. If you desire to make an appeal to the Appellate Authority against my above orders, you may do so within forty five days from the date of receipt of this memorandum as provided for in Awards. 04. Please acknowledge receipt of this memorandum on the duplicate hereof. “ The first paragraph is only introductory in nature. The third paragraph relates to the right of appeal of the petitioner and the fourth is procedural in nature. The actual consideration of the matter, if at all, is in second paragraph. Except stating that he has decided to confirm the punishment of dismissal and making a reference to the relevant provisions of the memorandum of settlement and Sastry award, he did not furnish any reasons in support of his conclusions. The 3rd respondent was discharging administrative, if not quasi-judicial functions. The Law requires that the conclusions arrived at by such authorities must be supported by reasons. The requirement becomes essential not only from the point of view of ensuring objectivity, but also as a measure, to enable the appellate and reviewing authorities, to know the basis for the conclusions arrived at by the authority concerned. Absence of reasons is prone to pave way for arbitrariness and subjectivity in the whole exercise. In the present case, the necessity to undertake discussion was more acute, in view of the fact that the 3rd respondent has disagreed with the findings of the enquiry officer on a charge and proceeded to hold the same as proved, without inviting explanation or objections about it from the petitioner. Further, personal hearing had also taken place, after the final show cause notice was issued. The very purpose of requiring an authority to issue show cause notice and to hold personal hearing is to ensure that he applies his mind not only to the facts borne out by the record, but also to the points urged by the delinquent employee. The need to record reasons for the decisions rendered by Administrative and Quasi Judicial Authorities, was underlined by H.W.R. Wade, in his treatise on “Administrative Law” (7th Edition page 541). He observed inter alia: “The principles of natural justice have not in the past included any general rule that reasons should be given for decisions. There appears to be no such rule even in the courts of law themselves and it has not been thought suitable to create one for administrative bodies. Nevertheless there is a strong case to be made for the giving of reasons as an essential element of administrative justice. The need for it has been sharply exposed by the expanding law of judicial review, now that so many decisions are liable to be quashed or appealed against on grounds of improper purpose, irrelevant considerations and errors of law of various kinds. Unless the citizen can discover the reasoning behind the decision, he may be unable to tell whether it is reviewable or not, and so he may be deprived of the protection of the law. A right to reasons is therefore an indispensable part of a sound system of judicial review. Natural justice may provide the best rubric for it, since the giving of reasons is required by the ordinary man’s sense of justice. It is also a healthy discipline for all who exercise power over others. ‘No single factor has inhibited the development of English administrative law as seriously as the absence of any general obligation upon public authorities to give reasons for their decisions.” The growth of Administrative Law in India has been on the same lines. Therefore, the order of dismissal passed by the 3rd respondent cannot be sustained in law, since it is totally bereft of reasons. It may be true that the appellate authority, 2nd respondent herein, had undertaken extensive discussion and in fact, modified the punishment of dismissal into the one of removal. That, however, is hardly of any solace to the petitioner. If a glaring illegality has taken place, in the hands of disciplinary authority, the only way, it can be cured, is by setting aside the order and by remanding the matter to the same authority, for fresh consideration. A semblance of relief granted by the appellate authority cannot cure the serious defect. For the foregoing reasons, the writ petition is allowed and the respective orders, dated 29.07.2004 and 20.10.2005, passed by respondents 3 and 2, are set aside. The matter is remanded to the 3rd respondent for fresh consideration and disposal, in accordance with law. Consequently, the petitioner shall be reinstated into service forthwith with all benefits up to date. The 3rd respondent shall issue a fresh show cause notice, pointing out the basis, in case he intends to disagree with the enquiry report on any aspect. The nature of action, that must ensue, would depend upon the orders, that may be passed by the 3rd respondent, on remand. There shall be no order as to costs. _________ 02.04.2008 Note: L.R.Copy to be marked. (B/o) JSU ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies Form-NIC-OGS/WP{TRT} THE HON'BLE MR JUSTICE L.NARASIMHA REDDY WRIT PETITION NO : 460 of 2006 Date: 02.04.2008 JSU [1] (1998) 7 SUPREME COURT CASES 84