THE HON'BLE MR JUSTICE RAMESH RANGANATHAN WRIT PETITION No.19816 of 1996 Dated 06-02-2008 Between: P.Venkateshwar Rao. ..... PETITIONER AND Andhra Bank rep. By its Chairman & Managing Director, Central Office, RBI, Saifabad, Hyderabad and another. .....RESPONDENTS THE HON'BLE MR JUSTICE RAMESH RANGANATHAN WRIT PETITION No.19816 of 1998 O R D E R: Questioning the order of the disciplinary authority dated 05-10- 1995 imposing the punishment of recovery of Rs.90,500/-, as confirmed by the appellate authority in its order dated 30-12-1995, the present writ petition is filed. During the pendency of this writ petition, the petitioner died and his wife was brought on record as his legal representative. Facts, in brief, are that the petitioner, while working as an officer in Middle Management Grade Scale-II with the first respondent-bank, was issued a charge memo, wherein two charges were framed against him. The first charge contained six imputations. An enquiry was held and the enquiry officer held charge No.1 to have been established to the limited extent of the petitioner improperly opening an S.B.Account, not entering in the index register, not taking proper introduction and in not issuing cheque books properly by entering the name and account No. in the cheque book issued register. The enquiry officer held the second charge as not established. A copy of the enquiry officer’s report was sent to the petitioner on 10-05-1995 calling upon him to submit his objections. The petitioner chose not to submit any objections to the enquiry report. Thereafter, with regards charge No.1, the disciplinary authority observed that the enquiry officer had taken a view that the petitioner alone was not responsible for passing of the cheques and some other officers were also involved in passing the cheques. The disciplinary authority differed with the findings of enquiry officer in this regard and held that the petitioner was solely responsible for passing of the cheques by the other officers and that he had, thereby, exposed the bank to financial loss of Rs.90500/-. The disciplinary authority concurred with the findings of the enquiry officer that charge No.2 was not proved. The disciplinary authority ordered recovery of Rs.90,500/- being the financial loss caused to the bank on account of the petitioner’s negligence, treated the period from 03-01-1987 till 11-04-1980 as on suspension, and held that the petitioner was not entitled for payment of back wages or any other service benefits including the increments, that fell due during the period of suspension, except the subsistence allowance, which was already paid to him. Aggrieved thereby, the petitioner preferred an appeal to the General Manager, Andhra Bank, Hyderabad, who, by order dated 30-12-1995, concurred with the findings of the disciplinary authority that the petitioner was solely responsible for passing of the cheques by the other officers and had thereby had exposed the bank to financial loss of Rs.90,500/-. The appellate authority held charge No.1 to have been proved and observed that the minor penalty of recovery of Rs.90,500/- imposed on the petitioner by the disciplinary authority was proper. Aggrieved thereby, the present writ petition. While several contentions have been urged across the bar by Sri D.V.Sitharam Murthy, learned counsel for the petitioner, it would suffice for the purpose of disposal of this writ petition if his contention that the disciplinary authority, before differing with the findings of the enquiry officer, had not put the petitioner on notice, is taken note of. Learned counsel would submit that principles of natural justice would require an employee being put on notice, in cases where the disciplinary authority intends to differ with the findings of the enquiry officer, in as much as he would then be in a position to make his submissions and convince the disciplinary authority that he ought not to differ from the findings recorded by the enquiry officer. Learned counsel would place reliance on Punjab National Bank v. Kunj Behari Misra[1], Yoginath D.Bagde v. State of Maharashtra[2] and State Bank of India v. K.P.Narayanan Kutty[3]. Learned counsel would further submit that, since the petitioner had died during the pendency of the writ petition, this Court, on quashing the impugned order of punishment imposed by the disciplinary authority, ought not to remand the matter back for fresh consideration in view of the fact that the petitioner had passed away and no useful purpose would be served in now permitting the respondent-bank to continue and complete the disciplinary proceedings initiated against him. Dr K.Lakshmi Narasimha, learned standing counsel for the respondent-bank, would take the plea of absence of prejudice. Learned standing counsel would draw attention of this Court to the regulations in this regard to contend that the rules by themselves do not specifically require the disciplinary authority to put the delinquent employee on notice before he differs from the findings of the enquiry officer. Learned standing counsel would submit that the only requirement under the rules is for the disciplinary authority to record reasons as to why he has differed with the findings of the enquiry officer and, since in the present case also, the disciplinary authority had recorded reasons, the requirement of the rules had been complied with. Learned counsel would further contend that the very fact that the petitioner has not even chosen to submit his objections to the enquiry officer’s report despite being given an opportunity to do so and that he did not raise this contention in appeal before the appellate authority would itself show that no prejudice had been caused to the petitioner for failure on the part of the disciplinary authority to put him on notice before differing with the findings of the enquiry officer. Before dealing with the rival contentions, the relevant rules applicable may be taken note of. In exercise of the powers conferred by Section 19 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), the Board of Directors of Andhra Bank in consultation with the Reserve Bank of India, and with the previous sanction of the Central Government, made the Andhra Bank Officer Employees’ (Discipline and Appeal) Regulations, 1981, which came into force on 02-04-1982. Regulation 6 deals with the procedure for imposing major penalties. Regulation 7 relates to action taken on the enquiry report and reads thus: 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 of 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. It is evident from Regulation 7(2) that the disciplinary authority shall, if it disagrees with the findings of the inquiring authority, on any article of charge, record its reasons for such disagreement and record its own findings on such a charge, if the evidence on record is sufficient for the purpose. It is no doubt true, as contended by Dr K.Lakshmi Narasimha, learned standing counsel for the respondent- bank, that the regulations do not specifically require the disciplinary authority to put the delinquent employee on notice before he differs from the findings of the enquiry officer but such a requirement has been read into a similar rule and has been held to be a facet of the principles of natural justice. I n Kunj Behari Misra1, the scope of Regulation 7 of the Punjab National Bank Officer Employees’ (Discipline and Appeal) Regulations, 1977, which is in pari materia with regulation 7 of the Andhra Bank Officer Employees’ (Discipline and Appeal) Regulations, 1981, fell for consideration. The Supreme Court, after considering its earlier judgments in State of Assam v. Bimal Kumar Pandit4, Managing Director, ECIL v. B.Karunakar5 and Union of Inida v. Mohd. Ramzan Khan6, observed thus:- “……..These observations are clearly in tune with the observations in Bimal Kumar Pandit's case and would be applicable at the first stage itself. The aforesaid passages clearly bring out the necessity of the authority which is to finally record an adverse finding to give a hearing to the delinquent officer. If the inquiry officer had given an adverse finding, as per Karunakar's case, the first stage required an opportunity to be given to the employee to represent to the disciplinary authority, even when an earlier opportunity had been granted to them by the inquiry officer. It will not stand to reason that when the finding in favour of the delinquent officers is proposed to be over-turned by the disciplinary authority then no opportunity should be granted. The first stage of the inquiry is not completed till the disciplinary authority has recorded its findings. The principles of natural justice would demand that the authority which proposes to decide against the delinquent officer must give him a hearing. When the inquiring officer holds the charges to be proved then that report has to be given to the delinquent officer who can make a representation before the disciplinary authority takes further action which may be prejudicial to the delinquent officer. When, like in the present case, the inquiry report is in favour of the delinquent officer but the disciplinary authority proposes to differ with such conclusions then that authority which is deciding against the delinquent officer must give him an opportunity of being heard for otherwise he would be condemned unheard. In departmental proceedings what is of ultimate importance is the finding of the disciplinary authority. Under Regulation 6 the inquiry proceedings can be conducted either by an inquiry officer or by the disciplinary authority itself. When the inquiry is conducted by the inquiry officer his report is not final or conclusive and the disciplinary proceedings do not stand concluded. The disciplinary proceedings stand concluded with decision of the disciplinary authority. It is the disciplinary authority which can impose the penalty and not the inquiry officer. Where the disciplinary authority itself holds an inquiry an opportunity of hearing has to be granted by him. When the disciplinary authority differs with the view of the inquiry officer and proposes to come to a different conclusion, there is no reason as to why an opportunity of hearing should not to be granted. It will be most unfair and iniquitous that where the charged officers succeed before the inquiry officer they are deprived of representing to the disciplinary authority before that authority differs with the inquiry 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. This is required to be done as a part of the first stage of inquiry as explained in Karunakar’s case. The result of the aforesaid discussion would be that the principles of natural justice have to be read into Regulation 7 (2). As a result thereof whenever the disciplinary authority disagrees with the inquiry authority on any article of charge then before it records its own findings on such charge, it must record its tentative reasons for such disagreement and give to the delinquent officer an opportunity to represent before it records its findings. The report of the inquiry officer containing its findings will have to be conveyed and the delinquent officer will have an opportunity to persuade the disciplinary authority to accept the favourable conclusion of the inquiry officer. The principles of natural justice, as we have already observed, require the authority, which has to take a final decision and can impose a penalty, to give an opportunity to the officer charged of misconduct to file representation before the disciplinary authority records its findings on the charges framed against the officer………...” (emphasis supplied) The principles of natural justice were read in Regulation 7(2) and the Supreme Court held that where the disciplinary authority disagrees with the findings of the enquiring authority on any article of charge, before it recorded its own findings on such charge, it was required to record its tentative reasons for such disagreement and give to the delinquent officer an opportunity to represent before it arrives at its final conclusion. The aforesaid judgment of the Supreme Court in Kunj Behari Misra1, was followed in Yoginath D.Bagde2, wherein the Supreme Court observed thus:- "…….When the enquiry is conducted by the enquiry officer, his report is not final or conclusive and the disciplinary proceedings do not stand concluded. The disciplinary proceedings stand concluded with the decision of the disciplinary authority. It is the disciplinary authority which can impose the penalty and not the enquiry officer. 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 inequitous 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……." (emphasis supplied) Since Dr K.Lakshmi Narasimha, learned standing counsel for the respondent-bank, has taken the plea of absence of prejudice, it is necessary to refer to the judgments cited by him. I n Bimal Kumar Pandit4, the scope and effect of the provisions contained in Article 311(2) of the Constitution, as it then stood, fell for consideration and the Supreme Court observed thus:- “………….We ought, however, to add that if the dismissing authority differs from the findings recorded in the enquiry report, it is necessary that its provisional conclusions in that behalf should be specified in the second notice. It may be that the report makes findings in favour of the delinquent officer, but the dismissing authority disagrees with the said findings and proceeds to issue the notice under Art. 311(2). In such a case, it would obviously be necessary that the dismissing authority should expressly state that it differs from the finding recorded in the enquiry report and then indicate the nature of the action proposed to be taken against the delinquent officer. Without such an express statement in the notice it would be impossible to issue the notice at all. There may also be cases in which the enquiry report may make findings in favour of the delinquent officer on some issues and against him on other issues. That is precisely what has happened in the present case. If the dismissing authority accepts all the said findings in their entirety it is another matter: but if the dismissing authority accepts the findings recorded against the delinquent officer and differs from some or all of those recorded in his favour and proceeds to specify the nature of the action proposed to be taken on its own conclusions, to would be necessary that the said conclusions should be briefly indicated in the notice. In this category of cases, the action proposed to be taken would be based not only on the findings recorded against the delinquent officer in the enquiry report, but also on the view of the dismissing authority that the other charges not held proved by the enquiring officer are according to the dismissing authority proved. In order to give the delinquent officer a reasonable opportunity to show cause under Art. 311 (2), it is essential that the conclusions provisionally reached by the dismissing authority must, in such cases, be specified in the notice. But where the dismissing authority purports to proceed to issue the notice against the delinquent officer after accepting the enquiry report in its entirety, it cannot be said that the dismissing authority must say that it has so accepted the report. As we have already indicated, it is desirable that even in such cases a statement to that effect should be made. But we do not think that the words used in Art. 311(2) justify the view that the failure to make such a statement amounts to contravention of Art. 311(2). In dealing with this point we must bear in mind the fact that a cony of the enquiry report had been enclosed with the notice, and so reading the notice in a common sense manner, the respondent would not have found any difficulty in realising that the action proposed to be taken against him proceeded on the basis that the appellants had accepted the conclusions of the enquiring officer in their entirety.…....” (emphasis supplied) The aforesaid judgment was rendered prior to the 42nd amendment to the Constitution and required a second show cause to be given to the delinquent employee on the punishment proposed. It is also necessary to note that in Kunj Behari Misra1, the judgment of the Constitution Bench in Bimal Kumar Pandit4 was considered. I n Bank of India v. Degala Suryanarayana7, the question which arose for consideration before the Supreme Court was whether the disciplinary authority had the jurisdiction to record a finding at variance with the one recorded by the enquiry officer, and it is in this context that the Supreme Court observed:- “……..The law is well settled. The disciplinary authority on receiving the report of the enquiry officer may or may not agree with the findings recorded by the latter. In case of disagreement, the disciplinary authority has to record the reasons for disagreement and then to record his own findings if the evidence available on record be sufficient for such exercise or else to remit the case to the enquiry officer for further enquiry and report……..” The question whether the disciplinary authority, before recording a finding at variance with the one recorded by the enquiry officer, is required to put the delinquent employee on notice, did not arise for consideration in Degala Suryanarayana7, I n Canara Bank v. Debasis Das8, the scope and ambit of Regulations 6(18), and 6(21) of the Canara Bank Officer Employees’ (Conduct) Regulations, 1976, fell for consideration. Regulations 6(18) required the inquiring authority, after completion of production of evidence, to hear the presenting officer, if any, appointed and the officer employee, or permit them to file their written briefs of the respective cases. Regulation 6(21) required the inquiring authority, on the conclusion of the inquiry, to prepare a report which was required to contain a gist of the articles of charge, the statement of imputations of misconduct or misbehaviour, a gist of the defence of the officer employee in respect of each article of charge, assessment of the evidence in respect of each article of charge, the findings on each article of charge and the reasons therefor. Regulation 7 of the Canara Bank Officer Employees’ (Conduct) Regulations, 1976, which is in pari materia with Regulation 7 of the Andhra Bank Officer Employees’ (Discipline and Appeal) Regulations, 1981, was considered by the Supreme Court and it was observed thus:- “………….A bare reading of sub-regulation (18) of Regulation 6 makes the position clear that there is no requirement of the employee being granted an opportunity to file written briefs after the Presenting Officer files written briefs. On the contrary, as the provisions postulate, after completion of production of evidence two options are open to the Inquiry Officer. It may hear the Presenting Officer appointed and the concerned employee or in the alternative permit them to file written briefs within 15 days of the date of completion of the production of evidence if they so desire. The written briefs are relatable to the cases of the party concerned; otherwise the expression 'respective case' would be meaningless. In other words, the written briefs must contain what his case is. There is no requirement of filing written briefs one after the other. It is not required that one party has to wait till filing of written briefs by the other. The expression "respectively," means belonging or relating separately to each of several people. It is a word of severance. It is to be further noted that in the appeal before the appellate authority findings of the Inquiry Officer were challenged and, therefore, the question of any prejudice does not arise. Since employee had the opportunity to meet the stand of the Bank, it was to his advantage, and opportunity for personal hearing was also granted, though Regulation 6(18) does not even speak to grant such an opportunity. Keeping in view what was observed in B. Karunakara's case (supra) there was no question of violation of principles of natural justice. Concept of natural justice has undergone a great deal of change in recent years. Rules of natural justice are not rules embodied always expressly in a statute or in rules framed thereunder. They may be implied from the nature of the duty to be performed under a statute. What particular rule of natural justice should be implied and what its context should be in a given case must depend to a great extent on the fact and circumstances of that case, the framework of the statute under which the enquiry is held. The old distinction between a judicial act and an administrative act has withered away. Even an administrative order which involves civil consequences must be consistent with the rules of natural justice. Expression 'civil consequences' encompasses infraction of not merely property or personal rights but of civil liberties, material deprivations, and non-pecuniary damages. In its wide umbrella comes everything that affects a citizen in his civil life. As was observed by this Court we need not go into 'useless formality theory' in detail; in view of the fact that no prejudice has been shown. As is rightly pointed out by learned counsel for the appellants unless failure of justice is occasioned or that it would not be in public interest to dismiss a petition on the fact situation of a case, this Court may refuse to exercise said jurisdiction (see Gadde Venkateswara Rao v. Govt. of A.P. and others, AIR 1966 SC 828). It is to be noted that legal formulations cannot be divorced from the fact situation of the case. Personal hearing was granted by the appellate authority, though not statutorily prescribed. In a given case post-decisional hearing can obliterate the procedural deficiency of a pre-decisional hearing. (See Charan Lal Sahu v. Union of India etc., (AIR 1990 SC 1480)……..” The earlier judgment in Kunj Behari Misra1 was distinguished and the Supreme Court observed thus:- “……. Strong reliance was placed by learned counsel for the employee on a three-Judge Bench of this Court in Punjab National Bank and others v. Kunj Behari Misra. The said decision has no application and is factually distinguishable. That was a case where the Disciplinary Authority differed from the views of the Inquiry Officer. In that context it was held that denial of opportunity of hearing was per se violative of the principles of natural justice. The case at hand is founded on a totally different factual backdrop…….” (emphasis supplied) Since the Supreme Court itself held that the