THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.8032 OF 2008 DATED OCTOBER, 2010 BETWEEN K.V.Anjaneyulu … Petitioner And The Repalle Co-operative Bank Limited, Rep. by its Chairman, Repalle, Guntur District and Others. … Respondents THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.8032 OF 2008 ORDER: Disciplinary proceedings against the petitioner, formerly a Secretary in the Repalle Co-operative Bank Limited, Repalle, Guntur District, culminated in his fresh appointment as a Cashier. The same was confirmed in appeal. Hence, this writ petition. The petitioner entered the service of the Repalle Co-operative Bank Limited, Repalle (for brevity, ‘the Bank’), in the year 1981 as its Secretary/Chief Executive Officer. As per ‘The Service Rules and Regulations of the Repalle Co-operative Bank Limited, No.1365 Repalle’ (for brevity, ‘Service Rules and Regulations’), the said post is categorized under Cadre No.I. He was suspended from service under charge memo-cum-suspension order dated 05.04.2005. He submitted his explanation thereto on 26.04.2005 and also filed Writ Petition No.9727 of 2005 before this Court challenging his suspension. However, the said writ petition was dismissed. Dissatisfied with the petitioner’s explanation dated 26.04.2005, the Chairman of the Bank informed the petitioner under charge memo dated 06.07.2005 that it had been decided to conduct a domestic enquiry into the charges framed against the petitioner, enumerated therein. In all, seven charges. A retired Co-operative Sub-Registrar was appointed as an Enquiry Officer under the proceedings dated 07.07.2005 issued by the Chairman of the Bank. The petitioner, having submitted explanation dated 12.07.2005 to the charge memo dated 06.07.2005, participated in the enquiry. He filed a separate written statement on 02.08.2005 before the Enquiry Officer denying the charges. Upon completion of the enquiry, report dated 26.09.2005 was submitted by the Enquiry Officer holding that six out of the seven charges were established and proved. Thereupon, the Managing Committee of the Bank under Resolution No.169 dated 21.10.2005 decided to dismiss the petitioner from the post of Secretary but keeping in mind the service rendered by him to the Bank, further resolved to appoint him as a Cashier. This decision of the Managing Committee of the Bank was communicated to the petitioner under proceedings dated 21.10.2005 passed by the Chairman of the Bank. The petitioner joined service as a Cashier on 08.11.2005 pursuant to the above proceedings. He filed an appeal on 30.01.2006 assailing the punishment imposed on him. As no action was taken on his appeal in spite of reminders, he approached this Court by way of Writ Petition No.8648 of 2006 challenging the punishment visited on him under the proceedings dated 21.10.2005. However this Court, being mindful of the pendency of the appeal before the Managing Committee of the Bank, dismissed the writ petition by order dated 29.11.2007 directing the appellate authority to dispose of the petitioner’s appeal within a time frame. In consequence, the petitioner was addressed letter dated 02.01.2008 by the Chairman of the Bank informing him of the unanimous decision of the Board of Management (Managing Committee) of the Bank to dismiss his appeal. A copy of Resolution No.88 dated 29.12.2007 passed by the Board of Management of the Bank to this effect along with a separate annexure were also communicated. The annexure reflected that the Board of Management of the Bank was of the opinion that the petitioner had lost his right to challenge the punishment by way of an appeal as he had accepted the fresh appointment offered to him under the self-same punishment order. The Board of Management therefore held that the petitioner’s right to appeal stood extinguished and waived. The proceedings dated 02.01.2008 are subjected to challenge in the present writ petition. Various contentious issues are sought to be raised by the petitioner to attack the disciplinary proceedings instituted against him. It is his case that the enquiry was not held as per norms and in accordance with the principles of natural justice. He claimed that he was denied of an opportunity of cross-examining the witnesses. He further stated that he was not furnished with a copy of the enquiry report in spite of his many entreaties and contended that these lapses vitiated the entire proceedings. The sheet anchor of the petitioner’s challenge however is as to the jurisdictional lapses on the part of the Bank authorities in taking disciplinary action against him. Having perused the material on record and more particularly, the Bank’s Service Rules and Regulations, I find force and merit in the said contention. Admittedly, the post held by the petitioner fell in Cadre No.I as per the categorization of services under Rule 9 of the Service Rules and Regulations. Rule 19.ii details major penalties to mean and include dismissal from the service of the Bank, reduction in rank to a lower grade in service or post on lower time scale and compulsory retirement. In the present case, the punishment visited upon the petitioner, in effect, translates into reduction to a lower post. Hence, it constitutes a major penalty. As per Rule 19.ii the authority to impose a major penalty on an incumbent in a Cadre No.I post is the Staff Committee and the appellate authority is the Managing Committee of the Bank. The ‘Staff Committee’ as defined in Rule 2.f means a Committee appointed by the Board to regulate the service matters of the paid staff and consists of members as specified in the bye-laws of the Bank. Against the imposition of the major penalty by such Staff Committee, an appeal lies to the Managing Committee of the Bank. However in the present case it is not in dispute that the punishment was imposed upon the petitioner by the Managing Committee itself. The defence put forth by the Bank in this regard is that the Staff Committee could not be constituted as none of the local Banks agreed to send their Officers to be on the Board as Members of the Staff Committee. This is cited as the reason why the Managing Committee itself took up the matter and imposed the punishment upon the petitioner. As the Rule provided for an appeal to the Managing Committee against the imposition of punishment by the Staff Committee, the petitioner was effectively denied his substantive right of appeal owing to the intervention of the appellate authority, viz., Managing Committee of the Bank, at the stage of imposition of the punishment itself. The observations of the Supreme Court in SURJIT GHOSH v. CHAIRMAN & MANAGING DIRECTOR, UNITED COMMERCIAL BANK[1], in this regard are apposite: “6. ……… It is true that when an authority higher than the disciplinary authority itself imposes the punishment, the order of punishment suffers from no illegality when no appeal is provided to such authority. However, when an appeal is provided to the higher authority concerned against the order of the disciplinary authority or of a lower authority and the higher authority passes an order of punishment, the employee concerned is deprived of the remedy of appeal which is a substantive right given to him by the Rules/Regulations. An employee cannot be deprived of his substantive right. What is further, when there is a provision of appeal against the order of the disciplinary authority and when the appellate or the higher authority against whose order there is no appeal, exercises the powers of the disciplinary authority in a given case, it results in discrimination against the employee concerned. This is particularly so when there are no guidelines in the Rules/Regulations as to when the higher authority or the appellate authority should exercise the powers of the disciplinary authority. The higher or appellate authority may choose to exercise the power of the disciplinary authority in some cases while not doing so in other cases. In such cases, the right of the employee depends upon the choice of the higher/appellate authority which patently results in discrimination between an employee and employee. Surely, such a situation cannot savour of legality. ………” Though SURJIT GHOSH has been distinguished in later decisions, the above core principle still continues to hold the field. Therefore the action of the appellate authority in stepping into the shoes of the disciplinary authority in the present case cannot be countenanced. Admittedly, no further appeal is provided under the Service Rules and Regulations of the Bank whereby the distinguishing principles applied by the Supreme Court in later decisions would come into play. That being so, the subsequent action of the Managing Committee sitting in appellate jurisdiction and confirming its own decision as a disciplinary authority reeks of arbitrariness and cannot be sustained. All the more so, as the Managing Committee did not even choose to go into the merits of the appeal and baldly dismissed the petitioner’s appeal on the ground of extinguishment and waiver of the right to appeal as he had chosen to abide by its decision and accepted the fresh appointment offered to him. The punishment imposed upon the petitioner under the order dated 21.10.2005 confirmed in appeal under the order dated 02.01.2008 is accordingly set aside. Considering the fact that the petitioner was subjected to disciplinary proceedings on seven charges out of which six were held proved, he cannot obviously be given a clean chit owing to the jurisdictional lapses on the part of the Bank in taking action against him. The petitioner, as stated earlier, sought to attack the disciplinary proceedings on various other grounds. As the disciplinary action taken against the petitioner is tainted by a jurisdictional error, it is not necessary for this Court to enter into these disputed issues at the present stage. It is left open to the Bank to resume and continue the disciplinary proceedings against the petitioner from such stage as it deems fit and in the event the Bank chooses to do so on the basis of the enquiry report already submitted, it shall be open to the petitioner to assail the same if necessary on the grounds urged by him in the present writ petition. It is desirable that the matter be given a quietus expeditiously as it has been kept pending for long enough. The Bank shall therefore take a decision as to whether it wishes to resume the disciplinary proceedings against the petitioner and if so, it shall conduct and complete the same without four (4) months from the date of receipt of a copy of this order. The Writ Petition is accordingly disposed of with the above directions. There shall be no order as to costs. ____________________ SANJAY KUMAR, J. ________ OCTOBER, 2010. VGSR [1] (1995) 2 SCC 474