IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No 7603 of 1999 For Approval and Signature: HON'BLE MR.JUSTICE AKSHAY H.MEHTA ============================================================ 1. Whether Reporters of Local Papers may be allowed : YES to see the judgements? 2. To be referred to the Reporter or not? : YES 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the concerned : NO Magistrate/Magistrates,Judge/Judges,Tribunal/Tribunals? -------------------------------------------------------------- ABDULKADAR GULAMMOHMED MULLA Versus CHIEF MANAGER & DISCIPLINARY AUTHORITY -------------------------------------------------------------- Appearance: 1. Special Civil Application No. 7603 of 1999 MR IS SUPEHIA for Petitioner No. 1 MR NM KAPADIA for Petitioner No. 1 MR KM PATEL for Respondent No. 1-2 -------------------------------------------------------------- CORAM : HON'BLE MR.JUSTICE AKSHAY H.MEHTA Date of decision: 01/04/2004 CAV JUDGEMENT 1. In this petition the petitioner has challenged the order of dismissal from Bank's service without notice with immediate effect dated 5th December, 1997 passed against him by respondent no. 1 and the order-in-appeal dated 30th April, 1998 passed by respondent no. 2 confirming the order of dismissal. 2. The facts of the case in nutshell can be stated as under :- 2.1. The petitioner joined service of the Dena Bank (hereinafter referred to as 'the Bank') as Clerk on 12th May, 1972. At the relevant time he was working as Cashier-cum-Clerk in the Surat Branch of the Bank. In the year 1996 certain acts of misconduct of serious nature came to the notice of the Bank and, therefore, it decided to hold disciplinary inquiry against the petitioner. He was, therefore, served with charge-sheet dated 23rd September, 1996. The charge-sheet contained six charges against him. Briefly stated the charges were - (1) that the petitioner was arrested by the Enforcement Directorate u/S. 35 of the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as 'the FERA') for violation of section 8(1) and 8(2) thereof and when he was produced before the Chief Judicial Magistrate at Surat, he had admitted recovery of foreign currency from his residence on 23rd July, 1987, which was purchased by him illegally for the purpose of selling, (2) that he was detained under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (hereinafter referred to as 'COFEPOSA') in the district jail at Surat on 31st December, 1987 and he was released by the Advisory Board on 25th February, 1988, (3) in the adjudication proceedings held against him for violation of section 8(1) and (2), section 14 and section 9(1) of FERA, the Assistant Director of Enforcement had imposed upon him the total amount of penalty of Rs.86,000/- vide order dated 18th May, 1995, (4) that his residential premises were again searched on 25th March, 1995 as follow up action and various currencies were seized from his house and he was again arrested by Officers of Directorate of Revenue Intelligence on 20th May, 1996, but subsequently released on bail of Rs,.50,000/-, (5) his activities were widely published in the newspaper and so also his association with the Bank, which damaged the image of the Bank and further that he violated the laws of the land and lastly (6) that the aforesaid acts constituted gross misconduct in terms of para. 19.5 (a) and 19.5 (j) of the bipartite settlement dated 19th October, 1966, for which he was liable for appropriate punishment. Para. 19.5 (a) relates to a person engaged in any trade or business outside the scope of duties without written permission of the Bank and/or para. 19.5 (j) doing any act prejudicial to the interest of the Bank. He was called upon to furnish his reply within 7 days from the receipt of the same. Vide order dated 14th October, 1996 respondent no. 1 while exercising power conferred upon him by para. 19.5 (a) of the settlement placed him under suspension from Bank service with immediate effect pending the inquiry. The petitioner made a detailed representation dated 30th November, 1996 against the order of suspension, which according to respondent no. 1, was received by the Bank on 20th December, 1996. The petitioner was thereafter intimated by letter dated 10th January, 1997 by respondent no. 1 that since his explanation in relation to the charges levelled against him was not received within stipulated time, the Bank had appointed one Mr. B.M. Chauhan, the Branch Manager, Bhestan Branch as the Inquiry Officer, but due to the administrative reasons inquiry could not be commenced. His explanation which was received on 12th December, 1996 was not found satisfactory and, therefore, another officer to act as Inquiry Officer, namely Mr. W.P. Parmar in place of Mr. B.M. Chauhan was appointed. Vide said communication the petitioner was also intimated to attend the inquiry proceedings before him and he was also intimated that he could avail the service of the representative of the registered union of the workers of the Bank to defend him at the inquiry. 2.2. The petitioner was represented by one Mr. S.K. Trivedi, a Cashier-cum-Clerk working at Rampura Branch of the Bank. The initial introductory sitting took place on 13th February, 1997 and thereafter the regular hearing commenced. At the end of the recording of the evidence and upon conclusion of the arguments, the inquiry was declared concluded. Both the Presenting Officer and the representative of the petitioner were given opportunity to submit written submissions. The petitioner submitted on 16th May, 1997 what was termed as reply to the charge-sheet wherein he had made certain submissions challenging the charge-sheet and the inquiry based on it and also thereby demanded certain documents and requested the Inquiry Officer to afford to him an opportunity of cross-examining certain persons with whom it was alleged that he had done illegal transactions with regard to foreign exchange and the persons who had acted as Panchas during the seizure Panchnama and the officer who recorded the statements of Jayesh Shah and Suresh Ahuja i.e. the persons with whom he had such dealings. Again on the same day he addressed another communication to the Inquiry Officer raising preliminary objection in respect of the said charge-sheet. Subsequently the Inquiry Officer recorded his findings on the basis of the material placed before it and forwarded report dated 10th September, 1997 to respondent no. 1. The Inquiry Officer had found that all the charges levelled against the petitioner were duly proved. Alongwith the report all the relevant record was also forwarded by the Inquiry Officer to respondent no. 1. 2.3. The petitioner vide letter dated 13th September, 1997 was called upon by respondent no. 1 to make a representation against the findings recorded by the Inquiry officer in respect of the aforesaid charges. He submitted a detailed representation dated 6th October, 1997 challenging the findings of the Inquiry Officer on factual as well as procedural grounds. On receipt of the material from the Inquiry Officer and also the representation submitted by the petitioner and after granting personal hearing to the petitioner on 5th December, 1997, vide order of the same date, respondent no. 1 imposed upon the petitioner the punishment of dismissal from Bank's service without notice with immediate effect. Since the main challenge of the petitioner to this order is on the ground of it being non-speaking order, it is required to be reproduced here in toto :- "Ref: No.SRO/HRD/4678/1997 Dece. 5, 1997 M E M O R A N D U M (1) Shri A.G. Mulla, Cashier-cum-clerk, SG Surat Branch was suspended vide Suspension Order No. SRO/HRD/4726/96 dated 14/10/1996. Subsequently, he was issued chargesheet No. SRO/HRD/4643/96 dated 23/09/1996. It was alleged against him that he was arrested by the enforcement Directorate under Section 35 of FERA Act, 1973 on 24/07/1987 for contravention of Section 8 (1) and Section 8 (2) of FERA 1973. It was also alleged against him that after finalisation of investigation of the case, he was found guilty for contravention of Section 9 (1) and 8 (2) Section 14, Section 9 (1) of FERA Act, 1973 and on adjudication proceedings held against him by the Assistant Director of Enforcement imposed a total amount of penalty of Rs.86,000=00 vide order dated 18/05/1995. (2) Following charges of gross misconduct in terms of para 19.5 (d) 19.5. (j) of bipartite settlement dated 19.10.1986 as amended to :- 19.5. (d) Engaging in any trade or business outside the scope duties without written permission of Bank and/or 19.5. (j) Doing any act prejudicial to the interest of the Bank. (3) Shri W.P. Parmar, Manager was appointed as Inquiry Officer vide Memo No. SRO/HRD/3255/97 dated 9/1/97. Shri H.J. Bhatt was appointed Presenting Officer vide Memo No. SRO/HRD/4920/96 dated 3/12/96. Inquiry was started in 14/2/97 and completed on 16/05/97. After taking into account written argument of Presenting Officer and Defence Representative, Inquiry Officer submitted his findings on 10/09/1997. It's report sent to Shri A.G. Mulla on 13/08/1997 for his submission if any upto 26/09/1997. His submission to inquiry officer report received on 10/10/1997. He was called for personal hearing on 5.12.1997. I have carefully gone through all the inquiry proceedings , Management Exhibits and Defence Exhibits, arguments of Presenting Officer and Defence Representative and Inquiry Officers' report and his submission to IO's report, I find that charges levelled against Shri Mulla proved. Taking into account gravity of allegations and charges levelled against Shri Mulla, which are proved, I in exercise of powers conferred on me pass following order imposing punishment of :- O R D E R "DISMISSAL FROM THE BANK'S SERVICE WITHOUT NOTICE WITH IMMEDIATE EFFECT." sd/ CHIEF MANAGER AND DISCIPLINARY AUTHORITY To, Shri A. G. Mulla, 5/1883, Hathupura, Parsiwad Saiyedpura, Surat." 2.4. The petitioner preferred appeal against the order of penalty dated 5th December, 1997 under para. 19.14 of the settlement on 19th January, 1998. Though in the memorandum of appeal several grounds in detail have been taken by the petitioner to challenge the impugned order, it appears that no challenge has been based on the ground that the impugned order is not a speaking order. 2.5. The Appellate Authority i.e. respondent no. 2 by its detailed order dated 30th April, 1998 drew the conclusions that the inquiry was held in accordance with the prescribed procedure; the findings given by the Inquiry officer holding that the charges levelled against the petitioner were proved were just and proper; that the acts of misconduct were of serious nature and no leniency could be shown to the petitioner. The respondent no. 2 also found that the punishment imposed upon the petitioner was justified and commensurate with the gravity of the proved misconduct. He, therefore, dismissed the appeal. 2.6. Now it is these orders of punishment and dismissal of the appeal are challenged by the petitioner in this petition. 3. Mr. I.S. Supehia, learned advocate appearing for the petitioner has submitted that the order of dismissal from the service passed by respondent no. 1 is a non-speaking order in as much as respondent no. 1 has not given any findings in respect of the contentions raised by the petitioner against the findings of the Inquiry officer and that he has not recorded his reasons for imposing the punishment of dismissal from the service. Such order is not tenable in law and it is required to be quashed and set aside on this ground alone. He has further submitted that since respondent no. 1 while passing the impugned order of punishment has neither assigned reasons nor recorded his findings, that has deprived the petitioner of the opportunity to make effective appeal against it before respondent no. 2 and that would amount to violation of principles of natural justice. According to Mr. Supehia, when the petitioner had challenged the inquiry on the grounds of non-compliance of the procedure as well as for not giving adequate opportunity to defend his interest by not calling upon the Bank to furnish necessary documents demanded by the petitioner and to cross-examine the persons named in his application, his valuable right to adequately defend himself was frustrated. He has further submitted that the inquiry was not at all valid because it was in respect of stale instance and even for the instances wherein the petitioner was released on bail and/or his order of detention was revoked by the Advisory Board. He has further submitted that in respect of the incident where penalty of Rs.85,000/- was imposed upon the petitioner, the appeal preferred by him is pending before the Appellate Authority and the Inquiry Officer had taken the said charge into account prematurely. Lastly he has submitted that the impugned order be quashed and the Bank be directed to reinstate the petitioner. 3.1. As against that, Mr. K.M. Patel, learned advocate appearing for the respondents had submitted that merely because no findings have been given by the respondent no. 1 on the submissions made in the representation by the petitioner, it cannot be said that the order of punishment was bad in law. He has further submitted that the said order makes it very clear what material has been taken into consideration by respondent no. 1 before passing the impugned order. Not only that but the petitioner has also been granted a personal hearing before the punishment was imposed upon him. In such event there was no violation of any principles of natural justice. He has further submitted that unless a serious prejudice is caused to the petitioner on account of respondent not giving its findings, it cannot be interferred with. According to him, neither in the memorandum of appeal nor in the petition any complaint of such nature has been made. He has further submitted that when the Disciplinary Authority is in the total agreement with the findings given by the Inquiry Officer, there is no necessity for him to give his own findings on the strength of the material placed before it. He has also submitted that demand for the documents and the cross-examination of the persons named above has been made by the petitioner after hearing of the inquiry was concluded and it was at a stage when he was only called upon to furnish his written submissions. According to him, neither the said documents were with the Bank nor the said persons were under the control of the Bank. If the petitioner so desired, he himself could obtain copies of the said documents since they were public documents. He has also submitted that during the course of inquiry, except seeking adjournments the petitioner has not done anything and, therefore, at a belated stage also his request could not have been granted. According to Mr. Patel, even if respondent no. 1 has not recorded its findings, the same contentions have been raised in appeal by the petitioner and that have been exhaustively dealt with by the Appellate Authority i.e. respondent no. 2 and, therefore, also there is no prejudice caused to the petitioner. Lastly he has submitted that the petitioner had indulged into serious acts of misconduct, which tarnished the image of the Bank and the punishment that was imposed upon him was just and proper requiring no interference by this Court. 3.2. Both the learned advocates have placed reliance on the decisions of this Court as well as of the Apex Court in support of their submissions and they have also placed reliance on the Regulations, namely Dena Bank Officer Employees (Discipline and Appeal) Regulations, 1976 (hereinafter referred to as 'the Regulations'). 4. Having carefully gone through the record of petition and also having carefully considered the submissions of both the learned advocates, it is clear that there is no dispute that the petitioner at the relevant time worked as Cashier-cum-Clerk with the Bank at its Surat Branch, that charges stated above were levelled against him for which the inquiry was held, that he was placed under suspension during the pendency of the said inquiry, that the inquiry was set up by respondent no. 1 under the provisions of the Regulations and due intimation thereof was given. The petitioner was also given adequate opportunity of submitting his written defence against the charges that were levelled against him. Further it also appears that in the first instance the Inquiry Officer came to be appointed because the reply of the petitioner to the charge-sheet was not received within the stipulated time, but due to some administrative reasons inquiry could not commence. In the meanwhile the petitioner's explanation/representation was received which was taken into consideration, but having found it not satisfactory, another Inquiry Officer was appointed, who commenced the inquiry. It also clearly appears that the petitioner well in advance was intimated that if he so desired he could avail the services of the representative of the registered union of the employee of the Bank and in fact one Mr. S.K. Trivedi, Cashier-cum-Clerk working in Rampura Branch of the Bank remained present all throughout the inquiry on behalf of the petitioner. It also appears that before the commencement of the inquiry or at the stage of adducing the evidence, no request for supply of documents or examination or cross-examination of ay person has been made by the petitioner. At the conclusion of the oral submissions made by the Presenting Officer and the defence representative, the Inquiry Officer declared the inquiry to be concluded and it was at that stage such request was made. He, however, gave further chance of filing written submissions to the Presenting Officer as well as the defence representative. On receiving the same, he in detail, appreciated the material placed before him and gave findings on the strength of such material in connection with each of the charges contained in the charge-sheet and ultimately he came to the conclusion that the charges levelled against the petitioner were duly proved. The Inquiry Officer, upon conclusion prepared the report and submitted it to respondent no. 1 for taking appropriate action thereon alongwith all the relevant material. 4.1. Regulation 6 of the Regulations deals with procedure for imposing major penalty. The said regulation is at page 21 of the Regulations prescribing different stages of the inquiry, which is required to be held before imposing major punishment on a delinquent. The entire procedure prescribed therein appears to have been scrupulously followed by the Inquiry Officer in this case and no lapse is committed by him. This fact is necessary to be stated here because some attempt has been made by the petitioner to challenge the inquiry on the ground of defective procedure. 5. The question that is now required to be considered is whether respondent no. 1 i.e. the Disciplinary Authority was under any legal obligation to reach to his own conclusions/findings on the representation that had been made by the petitioner against the inquiry report after reappreciating the entire material placed before him and to record them in the order of penalty passed by him. Regulation 7 of the Regulations deals with action on the inquiry report. It is as under :- "7. Action on the inquiry report : (1) The Disciplinary Authority, if it is not itself the inquiring authority, may, for reasons to be recorded by it in writing, remit the case to the inquiring authority for fresh or further inquiry and report and the inquiring authority shall thereupon proceed to hold the further inquiry according to the provisions of regulation 6 as far as may be. (2) The Disciplinary Authority shall, if it disagrees with the findings of the inquiring authority on any article or charge, record its reasons for such disagreement and record its own findings on such charge, if the evidence on record is sufficient for the purpose. (3) If the Disciplinary Authority, having regard to its findings on all or any of the articles of charge, is of the opinion that any of the penalties specified in regulation 4 should be imposed on the officer employee it shall, notwithstanding anything contained in regulation 8, make an order imposing such penalty. (4) If the Disciplinary Authority having regard to its findings on all or any of the articles of charge, is of the opinion that no penalty is called for, it may pass an order exonerating the officer employee concerned." Mr. Supehia has specifically referred to clause (3) thereof and has laid stress on his submission by stating that even in accordance with this clause the Disciplinary Authority while taking action on inquiry report was required to record his findings. Though at first glance the submission of Mr. Supehia vis-a-vis this clause appears to be attractive, it cannot be accepted because a conjoint reading of clause (2) and clause (3) and even clause (4) of regulation 7 makes it clear that it is mandatory for the Disciplinary Authority to record his own findings on any charge only when it disagrees with the findings of the inquiring authority on any article of the charge and not otherwise. There is no Regulation which makes it obligatory upon him to record his findings as even when he is in total agreement with findings of the Inquiry Officer. When the Disciplinary Authority taking action on the inquiry report is in total agreement with the findings/conclusions arrived at by the inquiring authority, there is no requirement that it should record its own finding and then impose the punishment in accordance with it. The requirement of clause (3) of regulation 7, therefore, does not envisage that in each and every case the Disciplinary Authority is bound to give its findings. The first limb of this submission of Mr. Supehia, therefore, cannot be accepted. 5.1. Mr. Supehia has submitted that even otherwise the Disciplinary Authority is supposed to give its findings on the strength of the material placed before it including the representation made by the petitioner pursuant to the show cause notice given to him by the Disciplinary Authority on the question of imposition of punishment. He has in support of his contention placed reliance on the decision of the learned Single Judge of this Court [ Coram : H.K. Rathod, J.] dated 10th September, 2003 rendered in Special Civil Application No. 499 of 1999. In the said decision the learned Single Judge has held as under :- "5. After considering and perusing the entire record, the only question remained to be examined by this Court is as to whether the reply filed by the petitioner has been considered by the Respondent authority before passing the punishment order or not. No doubt, it is made clear in the order itself that reply dated 12/9/1998 was received by the Respondent authority and it is made clear in the order that reply of the petitioner is not accepted by the Respondent authority. The said averment is made on page 139, internal page 3 of the punishment order. No reasons have been given by the Respondent authority in respect to not accepting the reply of the petitioner and, why the reply of the petitioner is not accepted, for that also no discussion in the order. It is a duty of the Respondent authority to apply its mind while calling the explanation from the petitioner and while supplying the report of the Inquiry Officer and consider the same with application of mind. Merely 'considering' and saying, 'it is not accepted' is not enough, they should have to give reason in support of the conclusion of not accepting the reply submitted by the petitioner. In absence of the same, the order suffers from non-application of mind. It is also necessary to note that in absence of the reason as to on what basis the authority has rejected the reply submitted by the petitioner, it is also not even known to the Court. Therefore, in such circumstances, it is very difficult to challenge the order of punishment in absence of the reasons passed by the Respondent authority." Again in para. 7 it has been observed as under :- "7. I have considered the observations made by the Apex