IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE J.B.KOSHY & THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH TUESDAY, THE 9TH DECEMBER 2008 / 18TH AGRAHAYANA 1930 WA.No. 2052 of 2007 ---------------------------- AGAINST THE JUDGEMENT IN OP.5527/1999 DATED 14/03/2007 .................... APPELLANTS/ RESPONDENTS 1 & 2: ----------------------------------------------------- 1. THE CHAIRMAN, STATE BANK OF INDIA, CORPORATE CENTRE, MADAM CAMA ROAD, MUMBAI-400021. 2. THE CHIEF GENERAL MANAGER, STATE BANK OF INDIA, LOCAL HEAD OFFICE, COLLEGE ROAD, NUGAMBAKKAM, CHENNAI. BY ADV. SRI.GEORGE THOMAS (MEVADA). RESPONDENT/ PETITIONER: ----------------------------------------- MR. JAMES, MAMPILLY HOUSE, EROOR P.O., SOUTH TRIPUNITHURA, ERNAKULAM. BY ADV. SRI.M.A.FIROZ, SRI.C.S.ULLAS. THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 09/12/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: prv. J.B. Koshy & Thomas P.Joseph, JJ. -------------------------------------- W.A. No. 2052 of 2007 --------------------------------------- Dated this the 9th day of December, 2008 Judgment Koshy,J. Writ petitioner (respondent in the appeal) entered the service of Cochin Bank which was later amalgamated with appellant- Bank in the year 1970. He was the branch manager of Quilon branch for the period from February, 1978 to September, 1982. Ext.P2 memo of charges was issued to him on 9.2.1984 stating that when he was the branch manager of Quilon, he committed misconduct such as violation of head office instructions, causing financial loss to the bank, etc. The allegation was that various loans were sanctioned without following the head office instructions in excess of his discretionary powers. He submitted Ext.P3 explanation denying the charges. He also submitted in Ext.P3 explanation that the branch flourished in business during the period he was the manager of the branch as can be seen from the deposit increase from Rs.20 lakhs in 1978 to Rupees One Crore in 1982 and advance increase from Rs.1.5 Crores in 1978 to Rupees Six Crores in W.A. No. 2052/2007 2 1982. He further submitted that all the advances were given on the direction of Shri C.B. Joseph, Director as well as Chairman and periodical statements were given to the head office. No objections were also raised when returns or statements were filed and advances were given in the pattern it was given in the branch earlier as well as in other branches. He pleaded for total exoneration of charges. He also submitted that advances were given in the ordinary course of business in tune with the established practice prevailing in the bank during the time and he complied with all the directions of the Chief Executive. Since the explanation was not found acceptable, an enquiry was conducted. Enquiry officer was a practising advocate in the High Court, Shri C.T.Joseph. Presenting Officer was one Shri Jimmy John, a former advocate and then an officer of the bank who was conversant with legal matters. Petitioner requested by Ext.P4, to be defended by Shri F.B.Chrysostom, an employee of the Syndicate Bank, Mattancherry, Cochin who was the Organising Secretary of All India Confederation of Bank Officers' Organisation. Request was repeated by Ext.P5. The above request was rejected and the bank informed that only a co-employee can defend him. Left with no other option, he continued to participate in the enquiry without any assistance and the operative portion of the findings of the enquiry officer, Ext.P6, is as W.A. No. 2052/2007 3 follows: “6. The charge is confined to the question whether the advance are unauthorized and in violation of Head Office instructions. Explanation of the charge sheeted officer is only a plea of admission and avoidance. There is no specific or categorical denial of the charge. But, he only explains the circumstances, past practices, alleged interferences and involvement of the former Chairman and former Director and the like. There may be or may not be truth in what he says. But those are matters besides the issue. However, I may say that such matters are germane in considering the quantum of punishment by the punishing authority. The allegations in the memo of charges are proved by the evidence of MW1 and the inspection report. The veracity of the inspection report is not challenged any where and there is nothing to disbelieve the evidence of MW1. Suffice to say that the allegations and charges in the memorandum of charges are proved. FINDINGS In the result, I find that the allegations and charges in the memorandum of charge HO/PER/727/84 dated 9.2.1984 are proved and Shri M.J. James is guilty.” (underlining by us) On the basis of the findings of the enquiry officer, he was dismissed by Ext.P7 order dated 18.4.1985. Later, bank went into moratorium and finally it was amalgamated with the appellant Bank. Appeal was filed before the appellant bank. Since appeal was not disposed of, he approached this court and this court directed the appellant to dispose of the appeal. Appeal was W.A. No. 2052/2007 4 considered on merit and it was dismissed on merit. Finally, he approached this Court and the learned single Judge by the impugned judgment allowed the writ petition finding that the enquiry was conducted violating the principles of natural justice. Contention of the appellant that the appeal was time barred, was rejected because there was already a direction from this court, which has become final, directing the appellate authority to consider the appeal on merit, appeal was considered on merit and from that alone the present writ petition was filed. Contention of the appellant bank that the respondent has admitted the guilt is also not correct. In fact, Ext.P3 representation shows that he has denied all the allegations. He also stated that loans were granted as per the established practice in the bank and also with the approval of the Bank's executive and he wanted a complete exoneration of charges. 2. Now, we will come to the crucial point whether principles of natural justice is violated or not and whether principles of natural justice embodied in the written service code were violated? It is true that natural justice may vary from circumstances to circumstances on the facts of each case. Here, natural justice is crystalised by the service code of the Bank of Cochin. Clause ix (a) of Chapter VIII which reads as follows: W.A. No. 2052/2007 5 “ix. The procedure in such cases shall be as follows: (a) An employee against whom disciplinary action is proposed or likely to be taken shall be given a charge sheet clearly setting forth the circumstances appearing against him and a date shall be fixed for an enquiry, sufficient time being given to him to prepare and give his explanation as also to produce any evidence that he may wish to render in his defence. He shall be permitted to appear before the officer conducting the enquiry, to cross examine any witness and produce other evidence in his defence. He shall also be permitted to be defended by a representative of a registered Union/Association of bank employees or with the Bank's permission, by a lawyer. He also be given a hearing as regards the nature of the proposed punishment in case any charge is established against him.” 3. Contention of the appellant bank was that the bank is defined as `Cochin Bank' and therefore, representative of the employees association of that bank (Cochin Bank) alone can represent and the representative should be an employee of the Cochin Bank. Unfortunately, such a meaning cannot be given to the above rule. It clearly provides that a representative of a registered union or representative of association of bank employees or with the Bank's permission, by a lawyer. Absence of the definite article “the” before the words `bank employees' occurring in Clause ix(a) quoted above clearly indicates that the association referred to therein is not W.A. No. 2052/2007 6 the association of the employees of `the bank' (i.e., the Cochin Bank) but the association of bank employees which include the employees of other banks also. Admittedly, the bank did not give permission to the respondent to be represented by a lawyer. He was entitled to be represented by a representative of a union or association of bank employees and therefore, the bank ought to have allowed his prayer to be represented by a union member. Merely because representative of the association or union of bank employees was not employed in the Cochin Bank, the enquiry officer or bank should not have rejected; his request especially when enquiry was conducted by an experienced lawyer and presenting officer was also a lawyer who was conversant with the procedure. There is no allegation of misappropriation by the employee concerned. The contention that no prejudice is caused by not allowing the request of the respondent is only an assertion by the counsel for the bank. When the bank's case was presented by a legally conversant officer and enquiry was conducted by an experienced lawyer who was appointed by the bank to conduct the enquiry, really, the respondent will be prejudiced as he will not be able to defend himself by such an employee. Unlike general principles of natural justice, when principles of natural justice are enshrined in a Regulation, the authorities are bound to obey the rule W.A. No. 2052/2007 7 strictly as held in Wiseman and another v. Borneman and others (1971 A.C. 297). It is well established that when a statute has conferred on anybody the power to make any decisions affecting individuals, court will ensure that the procedural safeguards as mentioned in the rules are followed. It is true that procedural objections are often raised by unmeritorious parties. Judges may then be tempted to refuse relief on the ground that a fair hearing could have made all difference on the result. But, in principle, it is vital that the procedure and the merits should be kept strictly apart, since otherwise the merits may be prejudiced unfairly. In General Medical Council v. Spackman (1943 A.C. 627) it was held by Lord Wright as follows: “If the principles of natural justice are violated in respect of any decision it is, indeed, immaterial whether the same decision would have been arrived at in the absence of the departure from the essential principles of justice. The decision must be declared to be no decision.” As held by the Supreme Court in Hira Nath Misra and others v. Principal, Rajendra Medical College, Ranchi (A.I.R. 1973 S.C. 1260) and Swadeshi Cotton Mills v. Union of India (A.I.R. 1981 S.C. 818) where the statute under which an authority functions provides for the observance of the principles of natural justice in a particular manner, natural justice will have to be observed in that W.A. No. 2052/2007 8 manner. In the often quoted decision of the Supreme Court in RamanaDayaram Shetty v. The International Airport Authority of India and others (A.I.R. 1979 S.C. 1628) it was held as follows: “................. It is a well settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. This rule was enunciated by Mr.Justice Frankfurter in Viterelli v. Seaton (1959) 359 US 535: 3 L Ed. 2d 1012) where the learned Judge said: “An executive agency must be rigorously held to the standards by which it professes its action to be judged .............. Accordingly, in dismissal from employment is based on a defined procedure, even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed ............... This judicially evolved rule of administrative law is now firmly established and, if I may add, rightly so. He that takes the procedural sword shall perish with the sword.” This court accepted the rule as valid and applicable in India in A.S.Ahluwalia v. State of Punjab ((1975) 3 S.C.R. 82): A.I.R. 1975 S.C. 984) and in subsequent decision given in Sukhdev v. Bhagatram ((1975) 3 S.C.R. 619): (A.I.R. 1975 S.C. 1331).” If an authority has not followed a procedure prescribed in a Regulation or Rule, it is for that authority to prove that by violating W.A. No. 2052/2007 9 the above, no prejudice has actually been caused or there is substantial compliance. Apart from the likelihood of prejudice by the procedure adopted by the Bank, on going through the proceedings and findings of the Enquiry Officer, we are convinced that real prejudice has been caused to the respondent. Therefore, learned Judge rightly rejected the contention of the appellant that there is no violation of the principles of natural justice. Learned Judge also noticed that respondent-employee has already retired. Exts.P7 and P11 were quashed. Further, it was also stated that it will still be open to the appellant-bank to continue the disciplinary proceedings against the respondent from the stage it has been invalidated. If rules are not permitting such an enquiry, the only course is that he will get all benefits consequent to the illegal termination. Hence, we dismiss the appeal. J.B.Koshy Judge Thomas P. Joseph Judge vaa W.A. No. 2052/2007 10 J.B. KOSHY AND THOMAS P.JOSEPH,JJ. ------------------------------------- W.A.No. 2052/2007 ------------------------------------- Judgment Date:9th December,2008