* THE HON’BLE SRI JUSTICE NOOTY RAMAMOHANA RAO + WRIT PETITION NO.8598 OF 2011 % 7.06.2011 # T.Baba Prasad .....Petitioners Vs. $ 1. Andhra Bank and two others. .....Respondent ! Counsel for the petitioner: P.V.Venkateswara Rao ^ Counsel for the Respondents: Dr.K.Lakshminarasimha Standing Counsel for Andhra Bank <GIST: > HEAD NOTE: ? Cases referred [1] 2006-III-LLJ (Karnataka) 385 2 AIR 1937 Madras 51 3 AIR 1931 Bombay 198 4 AIR 1995 SC 1088 5 AIR 1961 SC 751 6 (1977) 2 SCC 578 7 AIR 1963 SC 1618 THE HON’BLE SRI JUSTICE NOOTY RAMAMOHANA RAO WP No. 8598 of 2011 ORDER: This writ petition has been instituted seeking a Writ of Mandamus for declaring the charge sheet issued on behalf of the respondent – Andhra Bank on 9.3.2010 in violation of Regulation 10 of Andhra Bank Officer Employees (Discipline and Appeal) Regulations, 1981, by the 2nd respondent and the consequential order of appointment of the 3rd respondent as Enquiry Officer on 29.4.2010 as illegal and to set aside the same. The writ petitioner was said to have been initially recruited as a casher in the service of the respondent-bank on 17.4.1985. On1.1.1993, he earned promotion as a Junior Management Grade – Scale I Officer, henceforth for brevity referred to as `officer’. He worked as an officer at Ke-samudram Branch of Warangal Zone and later on at Nakkalagutta Branch at Hanumakonda. Subsequently, on 30.5.2009, he was transferred and posted as Assistant Manager, at Kakatiya Medical College (KMC) Branch, Warangal. It is stated that on 26.8.2009, he was summoned to the Nakkalagutta Branch where he worked as a Departmental Officer and Gold Loan Officer earlier and he was pressurized into accepting certain irregularities in the matter of sanction of gold loans. It was also alleged that he was forced to accept to repay the amount latest by 28.8.2011. The petitioner was coerced into submission as he appears to have filled in the loan application forms of some of the gold loan accounts and hence he was prima facie made responsible for the lapses. It is stated that as per the dictates, he gave a letter of confession. But, however, acting contrary to the assurance, the Chief Manager of the bank lodged a complaint on 27.8.2009 at 5.30 PM at Subedari Police Station and Cr. No. 401/2009 was accordingly registered. It is stated that the petitioner has been arrested pursuant to the same and he was enlarged on bail on 17.9.2009 and the criminal case is still under investigation. It is stated by the petitioner that one Sri Koteswara Rao, a Senior Manager of the Zonal Office at Warangal seems to have submitted a report on 28.8.2009 to the Deputy General Manager, Warangal Zone in which he has pointed out that out of 63 cases recommended by the petitioner for sanction, eight (8) loans were sanctioned by the Chief Manager, by name Sri D.V.S.Chella Rao who currently was working at Vizag Zonal Office as Chief Manager and the balance Fifty five (55) loans were sanctioned by Sri A.Udaya Bhaskara Rao, Senior Manager at Nakkalagutta Branch at Warangal. However, leaving out these two officers, the petitioner alone has been picked up along with the jewellery appraiser, by the respondent bank for rough treatment. It is stated that the petitioner was initially suspended on 27.8.2009 from service and the 2nd respondent – Assistant General Manager and Disciplinary Authority has drawn a charge sheet on 9.3.2010 and served it on the petitioner, leveling serious allegations. Though the petitioner has denied his culpability behind the charges leveled against him through his reply dated 23.3.2010, but, nonetheless, the 3rd respondent has been appointed as an Inquiry Officer. The petitioner having attended the preliminary enquiry denied the allegations levelled against him. He has pointed out that for the very same allegations, he is facing prosecution and further when two other officers are also suspected to have played part in the allegations, it is only appropriate that common proceedings ought to have been initiated against all the three officers, one of whom is in the rank of Chief Manager, whose disciplinary authority is the General Manager (Personnel) at Head Office of the Bank. The petitioner contends that common proceedings are liable to be initiated and failure to do so amounts to failure of a reasonable opportunity apart from being unfair. He placed reliance in support of this contention upon Rule 10 of the Andhra Bank Officer Employees (Discipline & Appeal) Regulations, 1981 and also a judgment rendered by the Karnataka High Court in Arun Kumar Alva v. Vijaya Bank[1] wherein an identically worded provision of the Vijaya Bank Regulations fell for consideration before the Karnataka High Court. Heard Sri P.V.Venkateswara Rao, learned counsel for the petitioner. Learned counsel would strenuously submit that at the relevant point of time, the petitioner was only functioning as a Departmental Officer incharge of Gold loans and his primary duty was to get guided by the Gold jewellery appraisal appointed for the said purpose by the bank and it is for the sanctioning authority to be satisfied in all respects to sanction or not to sanction the loan applied for by the customer. When once the inspection carried out by the bank revealed that two other officers have actually sanctioned the gold loans, the respondent bank cannot proceed against the petitioner alone in isolation. In such circumstances, it is inevitable that the bank should have ordered for common proceedings to be held against the two other officers who have sanctioned the loans along with the petitioner, but in no case the petitioner can be singled out. Only when common proceedings are conducted, the whole truth will come out as to who is responsible for the sanction of the loans concerned and therefore it is impermissible for the respondents 2 and 3 to proceed with the disciplinary proceedings against the petitioner in isolation. It will be relevant to notice that the Board of Directors of the Andhra Bank in consultation with the Reserve Bank of India and with the previous sanction of the Central Government, in exercise of the power available to it under Section 19 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 framed Andhra Bank Officer Employees (Discipline and Appeal) Regulations, 1981, for short referred to as `Regulations’ henceforth. These regulations therefore have statutory force. Regulation 10 thereof reads as under: “Where two or more officer employees are concerned in a case, the authority competent to impose a major penalty on all such officer employees may make an order directing that disciplinary proceedings against all of them may be taken in a common proceeding.” This provision clearly uses the expression `may’ and hence it is to be construed as to whether the sweep of this provision is merely directory or it was intended to be mandatory. In the latter case only, the expression `may’ is required to be construed as `shall’. As was noticed already, the Karnataka High Court in Vijaya Bank’s case (supra 1), has considered an identically worded regulation framed by Vijaya Bank and held that the bank is bound to order for common enquiry against all the officers concerned. It is not in dispute that the writ petitioner at the relevant point of time worked as a departmental officer incharge of gold loans at Nakkalagutta Branch, Warangal. It is alleged that against certain spurious gold ornaments, loans were sanctioned and since the pledged jewellery turned out to be spurious, the petitioner is now sought to be proceeded against as a measure of discipline. It is a settled principle of law that courts are not required to substitute certain words found in statutes or rules made there under. It must be construed that the law maker after a wise counsel has purposefully deployed certain words and hence they have been deliberately used by the statute maker to achieve a particular result. Therefore, when called upon to interpret, the context in which the expressions are used must be borne in mind and they should be assigned the normal meaning that such words generally carry with them. It is no doubt true that on certain occassions the courts have swung in construing the expression `may’ as `shall’. But, before doing so, the court must be satisfied that grammatical construction otherwise leads to some absurdity or inconsistency with the rest of the instrument. Then alone, such construction should be resorted to for the purpose of avoiding any such absurdity, normally. It is a settled principle of law that individual cases of hardship or injustice have no bearing for rejecting the normal construction that has to be placed on the expressions used in a statutory instrument. The words which normally carry their ordinary meaning which is plain and simple must necessarily be attempted to be given to such words. Hence, it is impermissible for the courts to substitute the word `shall’, for the expression `may’, wherever it was found, without taking into account and consideration the context of the setting. I would prefer to deal with some of the leading authorities on the subject matter relating to interpretation of words and expressions found in legislations. Sir M.Venkatasubba Rao, Officiating CJ of Madras High Court had an occasion to deal with the effect of the words employed in Section 23 of the Guardians and Wards Act in The Rajah of Vizianagaram v. The Secretary of State for India[2]. It is contended before him that the rights possessed by the petitioner as the father in respect of his minor children came to an end consequent on the action taken by the local government under Section 15 of the said Act. It was further contended before the learned Judge as under: The learned Advocate-General puts forward an alternative contention: granting that the Court of Wards has not the full rights of guardianship, Section 23 confers upon it at any rate, certain defined rights, in the exercise of which, it cannot be controlled by a judicial tribunal. His argument involves that in respect of the four matters - custody, residence, education and marriage of the minors indicated - the rights which originally vest in the legal guardian, become, by virtue of the section, transferred to the Court of Wards. If this contention is right, what remains in the legal guardian is a truncated right, no more in fact than a merely theoretical right, as the four ingredients referred to above constitute, without question, some of the most essential incidents of a right of guardianship. In effect the argument is, if the Court of Wards is not the guardian in the strict sense of law, for all practical purpose it possesses that character. The provision, if properly understood, does not lend the slightest support to this contention. What is conferred upon the Court of Wards by Clauses (b) and (c) of Section 23 (with those clauses alone we are here concerned), is not a right, but a power and a good deal of confusion has been imported into the argument by failing to distinguish the one from the other. The purpose of those clauses is merely to make that, legal and possible, which otherwise the Court of Wards would have no right or authority to do; it is empowered to incur charges or make disbursements, which it would have no right to incur or make, in the absence of that provision. But the power so conferred is for the benefit of the persons indicated in the section. When a statute confers authority on some public body or person, in terms simply permissive or enabling (by the use of expressions, such as, 'may' or 'shall have power'), the question has often arisen, whether the power so conferred is merely a discretionary power or has a compulsory force. The learned Advocate- General contends that every one of the enabling words in every clause of Section 23 is to be construed as creating a duty, in other words, as mandatory. ………..” The learned Judge then went on to explain the legal principles in the following words: “…………. There can be no doubt, having regard to the scope and the object of the Act, that the second of these two alternatives is what is intended. Numerous statutes have made us familial with instances where public bodies have been entrusted with powers for the benefit of persons specifically indicated, and it is incontestable that no question of exercising the power can arise unless, when the case arises, its exercise is duly applied for by the party, for whose benefit the power is reposed. In Julius v. Lord Bishop of Oxford (1880) 5 A.C. 214, Earl Cairns, L.C., points out that in Macdougall v. Paterson (1815) 11 C.B. 755 : 138 E.R. 672, Chief Justice Jervis stated the rule to be, that when a statute confers an authority to do a judicial act in a certain case, it is imperative on those so authorised to exercise the authority when the case arises and its exercise is duly applied for by a party interested, and having the right to make the application. (P. 224.) 14. Earl Cairns, L.C., himself expresses the idea thus: Where a power is deposited with a public officer for the purpose of being used for the benefit of persons who are specifically pointed out, and with regard to whom a definition is supplied by the Legislature of the conditions upon which they are entitled to call for its exercise, that power ought to be exercised, and the Court will require it to be exercised. (P. 225.) 15. Lord Blackburn deals with the point in the following passages: If the object for which the power is conferred is for the purpose of enforcing a right, there may be a duty cast on the donee of the power, to exercise it, for the benefit of those who have that right, when required on their behalf. (P. 241.) The enabling words are construed as compulsory whenever the object of the power is to effectuate a legal right. It is far more easy to show that there is a right where private interests are concerned than where the alleged right is in the public only, and in fact, in every case cited, and in every case that I know of (where the words conferring a power are enabling only, and yet it has been held that the power must be exercised), it has been, on the application of those whose private rights required the exercise of the power. (P. 244.) 16. In deciding whether the intention of the Legislature is to grant a mere discretion or to impose a positive duty, it is pointed but in the judgments delivered in the case cited, that regard should be had inter alia to the general object of the statute with reference to which the question arises. Similarly, for determining whether a power is reposed in a statutory body for its own benefit or for the benefit of certain specified persons or class of persons, it is of the utmost importance to consider, what the object is which the Legislature may be presumed to have intended. ………” Similarly, Chief Justice Beaumont of Bombay High Court, was required to consider the effect of the expression `may’ used in Section 29 of Code of Criminal Procedure, in Natvarlal Nagindas v. Emperor[3]. Learned Chief Justice has opined as under: “2. Section 29-B, Criminal Procedure Code, lays down that any offence, other than one punishable with death or transporation for life, committed by any person who at the date when he appears or is brought before the Court is under the age of fifteen years may be tried by the class of Magistrates therein referred to including a Magistrate specially empowered by the Local Government to exercise the powers conferred by Section 8 (1), Reformatory Schools Act of 1897. It seems to me that the words "may be tried" are permissive. No doubt, the word "may" is sometimes construed as "shall" but obviously its prima facie effect is merely permissive and not obligatory. It seems to me that under Section 29-B, Criminal Procedure Code, a Magistrate other than one of those particularly referred to in the section before whom an offender under the age of fifteen years is brought was intended to have a discretion. He may deal with the matter under the ordinary provisions of the Code or he may direct that the accused be dealt with under Section 29-B, Criminal Procedure Code, that is to say, be tried by one of the Magistrates specially empowered under the section But, in my view, he is not bound to deal with the case in that way.” A word of caution has been administered so that the courts may not err in rewriting the rules framed by the Executive, in their anxiety to interpret the same, by Justice S.B.Majmudar speaking for the Bench in Madan Lal v. State of Jammu and Kashmir[4] in the following words: 20. It was next vehemently contended by the petitioners that actual practice Would mean that the concerned candidates should have appeared before courts and conducted cases during these two years. It is difficult to accept this contention. A member of the bar can be said to be in actual practice for 2 years and more if he is enrolled as an Advocate by the concerned Bar Council since 2 years and more and has attended law courts during that period. Once the Presiding Officer of the District Court has given him such a certificate, it cannot be said that only because as an advocate he has put in less number of appearances in courts and has kept himself busy while attending the courts regularly by being in the law library or in the bar room, he is not a member of the profession or is not in actual practice for that period. The words 'actual practice' as employed in Rule 9 indicate that the concerned advocate must be whole time available as a professional attached to the concerned court and must not be pursuing any other full time avocation. To insist that the terms 'actual practice' should mean continuous appearances in the court would amount to re-writing the rule when such is not the requirement of the rule…………” It is also appropriate, in this context, to notice how the principles of interpretation have been crystallized by the Constitution Bench of Supreme Court speaking through Koka Subba Rao,J (as the learned Judge then was) i n The State of Uttar Pradesh and others v. Babu Ram Upadhya[5]. “36. The question is whether rule I of para 486 is directory. The relevant rule says that the police officer shall be tried in the first place under chapter XIV of the Criminal Procedure Code. The word "shall" in its ordinary import is "obligatory"; but there are many decisions wherein the courts under different situations construed the word to mean "may". This Court in Hari Vishnu Kamath v. Syed Ahmad Ishaque : [1955]1SCR1104 dealt with this problem at p. 1125 thus : "It is well established that an enactment in form mandatory might in substance be directory and that the use of word "shall" does not conclude the matter." 37. It is then observed : "They (the rules) are well-known, and there is no need to repeat them. But they are all of them only aids for ascertaining the true intention of the legislature which is the determining factor, and that must ultimately depend on the context." 38. The following quotation from Crawford "On the Construction of Statutes", p. 516, is also helpful in this connection : "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...". 39. This passage was approved by this Court in State of U.P. v. Manbodhan Lal Srivastava (1958)IILLJ273SC In Craies on Statute Law, 5th edition, the following passage appears at p. 242 : "No universal rule can be laid down as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. It is the duty of Courts of Justice to try to get at the real intention of the Legislature by carefully attending to the whole scope of the statute to be construed." 40. A valuable guide for ascertaining the intention of the Legislature is found in Maxwell on "The Interpretation of Statutes", 10th edition, at p. 381 and it is : "On the other hand, where the prescriptions of a stature relate to the performance of a public duty and where the invalidation of acts done in neglect of them would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty without promoting the essential aims of the legislature, such prescriptions seem to be generally understood as mere instructions for the guidance and government of those on whom the duty is imposed, or, in other words, as directory only. The neglect of them maybe penal, indeed, but it does not affect the validity of the act done in disregard of them." 41. This passage was accepted by the Judicial Committee of the Privy Council in the case of Montreal Street Railway Company v. Normandin L.R. [1917] A.C.170 and by this Court in State of U.P. v. Manbodhan Lal Srivastava : (1958)IILLJ273SC 42. The relevant rules of interpretation may be briefly stated thus : When a statute uses the word "shall", prima facie, it is mandatory, but the Court may ascertain the real intention of the legislature by carefully attending to the whole scope of the statute. For ascertaining the real intention of the Legislature the Court may consider, inter alia, the nature and the design of the statute, and the consequences which follow from construing it the one way or the other, the impact of other provisions whereby the necessity of complying with the provisions in question is avoided, the circumstance, namely, that the statute provides for a contingency of the non-compliance with the provisions, the fact that the non-compliance with the provisions is or is not visited by some penalty, the serious or trivial consequences that flow therefrom, and, above all, whether the object of the legislation will be defeated or furthered.” I therefore consider it appropriate to bear these legal principles in mind before I pronounce my opinion on the impact of the expression `may’ found in Regulation 10. Regulation 10 provides an opportunity for the bank to order for common proceedings where two or more officer employees are concerned in any case. It is purely an enabling provision. It vested the Bank with the necessary power for ordering any joint or common proceedings where more than one officer is said to have been involved in any case. The very context of its setting does not lend any support to the view that holding of such common proceedings is a mandatory affair. In the absence of a provision for ordering for a common proceeding or joint proceeding, perhaps, it may not be permissible for holding any such joint or common proceeding against more than one officer. Therefore, Regulation10 has provided for an answer for any such contingent situation by making available the necessary authority and power to do so. The disciplinary authorities vary and differ depending upon the rank held by the delinquent officer concerned. For a junior management scale I officer like the petitioner, the Assistant General Manager of the bank is the designated disciplinary authority whereas for other officers occupying higher ranks such as Middle Management Grade scale II or III or Senior Management Grade Scale IV, V and VI, the disciplinary authorities are bound to be different and higher