R.S.A. No. 5457 of 2003 [1] IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. R.S.A. No. 5457 of 2003 Date of Decision: July 14, 2011 Punjab National Bank and another …..Appellants Vs. Gulzar Singh …..Respondent CORAM: HON’BLE MR. JUSTICE M.M.S. BEDI. -.- Present:- Mr.Santosh Sharma, Advocate for the appellant. Mr.H.S.Sethi, Advocate for the respondent. -.- M.M.S. BEDI, J. The defendant- Bank has preferred this appeal against the judgment passed by the lower Appellate Court reversing the judgment of the trial Court and decreeing the suit of the plaintiff- respondent declaring that the order of removal of plaintiff-respondent from service vide order dated November 10, 1988 is illegal, null and void and against the principles of R.S.A. No. 5457 of 2003 [2] natural justice but at the same time giving liberty to the disciplinary authority to conduct a fresh enquiry in accordance with law by adopting proper procedure and affording ample opportunity of being heard to the plaintiff and pass an appropriate order within a period of six months. In case of no fresh enquiry being initiated within six months from the date of decree, the plaintiff- respondent was held to be entitled to all the benefits attached with the post. Brief facts of the case which are relevant for the decision of the present case is that plaintiff- respondent had filed a suit for declaration to the effect that the order dated November 10, 1988 passed by Deputy General Manager of the Bank removing him from service was illegal, null and void and against the Rules and regulations of the Bank and principles of natural justice and that he was entitled to be reinstated with all arrears of pay, allowances and other benefits. The plaintiff had joined the Hindustan Commercial Bank as Development Officer in the year 1976 and was later on promoted in the month of October 1980. He was posted as Manager in Branch at Village Butter. Some of the officials of the Bank were not happy with him and were bent upon to harm him in one way or the other. The plaintiff- respondent was refused to oblige Mr.B.P.Singal, the Assistant General Manager as such he alongwith Mr.S.K. Sachdeva, Manager, and Sh.S.K.Sharma, Manager started extending threats to him with dire consequences, in case he did not oblige them. His signatures were obtained on certain blank papers. The plaintiff got an FIR registered as FIR No. 22 of March 31, 1982 which annoyed the officials of the bank as a result of R.S.A. No. 5457 of 2003 [3] which they intended to remove him from service by levelling false allegations. To execute their illegal and ill designs Sh.B.P.Singal illegally and against facts suspended the plaintiff vide order dated March 31, 1982 which was received by him on April 6, 1982. Thereafter the plaintiff filed a suit for declaration challenging the suspension order in the Court of Sub Judge, Moga. The order to maintain status quo was passed on April 14, 1982. The plaintiff had filed a criminal complaint against Sh.B.P.Singal, Assistant General Manager, Mr.M.D. Dalal, Chairman, Sh.S.K.Sharma and Sh.S.P.Sachdeva, Managers of Hindustan Commercial Bank. The petition filed by the said persons in the High Court under Section 482 Cr.P.C. for quashing of the FIR was dismissed by the High Court. Thereafter the said officials arrived at a compromise with plaintiff on May 28, 1982. As per the terms of the compromise, the Hindustan Commercial Bank withdrawn suspension order and posted the plaintiff- respondent as Manager (Recovery) at Bathinda. It was agreed that Bank will not proceed with the matter against him and will not take any action against him but the said officers with malafide intentions issued a charge-sheet to the plaintiff when the Reserve Bank of India recommended the case of amalgamation of Hindustan Commercial Bank with National Bank. The charge-sheet was issued to the plaintiff with an intention to get his name included in the schedule of officers whose services were to be created with Hindustan Commercial Bank at the time of preparation of amalgamation scheme. The plaintiff filed a civil suit in the Court of Sub Judge, Ist Class, Bathinda and obtained ad-interim injunction against Hindustan Commercial Bank and its R.S.A. No. 5457 of 2003 [4] officers but despite that fact, his name was included in the specified schedule mentioned in para 10 of the amalgamation scheme. The plaintiff filed a contempt petition against Chairman and other officials of Hindustan Commercial Bank as well as against the Chairman of Punjab National Bank. The Chairman as well as the other officers of the Punjab National Bank felt annoyed and were bent upon to terminate his services by levelling one charge or the other. The plaintiff alongwith other employees of the Hindustan Commercial Bank whose names were included in the specified schedule of officials preferred a writ petition before the Supreme Court which was accepted and the Reserve Bank of India was directed to take their services and that employees including the plaintiff were held to be entitled to the benefits, continuity of services for all purposes including the salary and perks throughout the period. The Supreme Court observed that the transferee Bank was required to look into the matter with an open mind and keep themselves alive to human problems involved. Thereafter the plaintiff submitted his joining report at Delhi but the defendants handed over him suspension order. A fresh charge-sheet dated December 31, 1987 was served upon the plaintiff on the same charges and allegations. The plaintiff submitted reply to the charge-sheet on February 5, 1988. Thereafter an enquiry officer was appointed who submitted his report on October 17, 1988 and vide order dated November 10, 1988 the services of the plaintiff were terminated by the disciplinary authority. The enquiry proceedings, enquiry report dated October 17,1988 and order dated November 10, 1988 passed by the defendant- appellant were challenged by the plaintiff alleging R.S.A. No. 5457 of 2003 [5] that these were against the facts and law, beyond jurisdiction and against the principles of natural justice. The charges levelled against the plaintiff were unfolded in the written statement filed by the bank officials in the Court of Sub Judge, Ist Class, Moga, in a suit filed by the plaintiff but that suit was withdrawn by the plaintiff in view of the compromise with the bank officials. The criminal complaint was also withdrawn by the plaintiff in terms of the compromise and in such circumstances, the charge, if any, stood already waived by the bank officials and no fresh charge-sheet could be issued on the same allegations. The Supreme Court while deciding the writ preferred by the plaintiff and other officials of the Hindustan Commercial Bank also directed to complete the enquiry by October 31, 1988 and the enquiry against the plaintiff was completed on October 17, 1988. But defendants moved a petition before the Supreme Court on October 29, 1988 for extension of time for completion of enquiry though the enquiry had already been completed on October 17, 1988. The plaintiff further alleged in his plaint that the defendant- appellants had adopted pick and chose method and no action had been taken against some of the employees who had committed much more irregularity and offences than those alleged to have been committed by the plaintiff. Only two charges were allegedly proved against the plaintiff i.e. (i) with regard to the guarantee given by him in Tractor loan advanced to Sh.Lachhman Singh as well as the advancement of loan by violating the rules and regulations to Some Nath and Jagga Singh by the plaintiff. The plaintiff claimed that guarantee, if any, was given by the plaintiff much prior to the joining of R.S.A. No. 5457 of 2003 [6] service in Hindustan Commercial Bank whereas the suits for recovery in respect of loans granted to Som Nath and Jagga Singh have already been decided in favour of the Bank. Plaintiff claimed that the allegations alleged to be proved against him were not sustainable. The plaintiff challenged the order of dismissal dated November 10, 1988 on various grounds i.e.— i) Departmental enquiry was not held in accordance with the rules and regulations framed by the bank; ii) The plaintiff was not given an opportunity to defend his case; iii) The enquiry officer did not furnish list of documents as well as the list of witnesses by whom the charges proposed were to be proved; iv) He was not given personal hearing while awarding the punishment of removal; v) The punishment does not commensurate with the gravity of the charges; and vi) that plaintiff was not supplied with the enquiry report which is against the rules and regulations as well as rules of natural justice. The defendants filed a joint written statement taking up preliminary objections regarding the non-maintainability of the suit; availability of alternative remedy in accordance with Punjab National Bank Officers Employment (D&A) Regulation, 1979, (for short the ‘1979 Regulations’). On merits it was admitted that the plaintiff had joined as R.S.A. No. 5457 of 2003 [7] Development Officer in the year 1976. His promotion as Manager in October 1980 was admitted but it was alleged that the work and conduct of the plaintiff was not up to the mark and that he had been misusing his powers. The plaintiff had levelled false and baseless allegations against the officials of the Hindustan Commercial Bank just to save his own skin. He lodged false FIR against the officials of the Bank. It was denied that the officials of the Bank ever threatened him or obtained his signatures on the blank papers. It was highlighted that the plaintiff had been working against the interest of the Bank. On March 16, 1982 Mr.B.P.Singal and other officials were sent by the Bank to Butter Branch for the purpose of audit of accounts where the plaintiff was posted as Branch Manager but he refused to produce the relevant files and account books. The accounts shown by the plaintiff to the said officials were not upto date. It had come to the notice of the auditors that the plaintiff had sanctioned clean over-draft to the extent of ` 2,80,700/- to a party without obtaining any security. Even no sanction had been obtained by the plaintiff from the Head Office for the same. It was detected by the auditing party that cash book was pending for about 8 days. The plaintiff was found to have disbursed crop loan and middle term loan against pumping set and tractors etc. without obtaining any proper security as well as without getting any proper documents executed by the borrowers. It was pleaded in the written statement that apprehending the action by the Bank on the basis of said irregularities pointed out by the auditing party he lodged false FIR just to harass the officials of the Bank. He was placed under suspension vide order dated March 31, 1982. Compromise was R.S.A. No. 5457 of 2003 [8] arrived at in respect of FIR registered against the officials on May 29, 1982 but officials of Bank never agreed that they will not proceed with the matter against the plaintiff or that they will not take any action against him. Even otherwise, Sh.B.P.Singal etc. were not competent to enter into any compromise on behalf of Hindustan Commercial Bank without proper sanction of the Board of Directors. The Audit wing of the Bank audited the accounts of the Butter Branch and furnished a report dated October 16, 1984 to the Bank. The said report revealed that the plaintiff had in an unauthorized manner allowed a clean over-draft of ` 2.80 lacs and ` 2.91 lacs to Som Nath son of Sh.Bhura Mal and Jagga Singh S/o Chanan Singh respectively, during the period February 1982 to march 1982. The aforesaid overdrafts were allowed by the plaintiff without obtaining the adequate security to safeguard bank interest. Both the said loans were advanced by obtaining the guarantee of his father and brother. Even their complete addresses were not supplied to the bank by the plaintiff. The Tractor loan and clean overdrafts were also disbursed to some different persons also. The loan account of his father Lachhman Singh S/o Wadhawa Singh showed an outstanding amount of ` 56646.07/- which was guaranteed by the plaintiff and which had not been adjusted. In the written statement it was averred that the charge-sheet had been served upon the plaintiff in accordance with rules and regulations of the bank. Passing of the order by the Supreme Court was not disputed. It was alleged in the written statement that charge-sheet dated December 31, 1987 was served upon the plaintiff who filed the reply on February 5, 1988 but the reply furnished by him was R.S.A. No. 5457 of 2003 [9] not found to be satisfactory as such the defendants decided to hold an enquiry into the truth of imputations as contained in the charge-sheet in terms of the 1979 Regulations. Maluk Singh, Senior Manager, Punjab National Bank was appointed as enquiry officer who conducted an enquiry, given full opportunity to the plaintiff to defend his case and ultimately submitted his report on October 17, 1988 to the disciplinary authority. After careful scrutiny of the report of enquiry officer dated October 17, 1988, the disciplinary authority decided to impose penalty of removal from service vide order dated November 10, 1988, the copy of which order was sent to the plaintiff alongwith the letter dated November 11, 1988. The enquiry report as well as the order dated November 10, 1988 were claimed to be legal and valid in all respects and that there was no violation of the principles of natural justice while awarding the punishment to the plaintiff. The Supreme Court had directed while disposing of the writ petition, to complete the enquiry by October 31, 1988. As the enquiry had not been completed against all the officials by the date fixed, therefore, an application was moved for extension of time of completion of enquiry. It was denied that any pick and chose method was adopted. The officials were given punishment according to the irregularities committed by them. The enquiry officer had conducted the enquiry proceedings in accordance with the rules and regulations of the bank when the punishment had also been awarded in accordance with the rules and regulations. Prayer was made for dismissal of the suit. R.S.A. No. 5457 of 2003 [10] The plaintiff had reiterated his pleadings in the replication by denying the allegations in the written statement. On the pleadings of the parties, the trial Court framed the following issues:- “1. Whether order dated 10.11.1988 passed by defendant No.2 is illegal, inoperative and against rules and regulations of the bank? OPP. 2. Whether the suit is not maintainable as mentioned in legal objection No.1 of the written statement? OPD. 3. Whether the plaintiff has not exhausted all departmental remedies available to him under the Punjab National Bank Officers Employees (D&A), Regulations, 1979? If so to what effect? OPD. 4. Whether the plaintiff is entitled to the declaration prayed for? OPD. 5. Relief.” Plaintiff himself appeared as a witness as PW3 to prove his case by documents. He produced documents Ex.P-1 to Ex.P.66. He examined Tapishar Singh as PW1 who proved the file. He examined PW2 J.K.Jain, Branch Manager, to prove the attendance register from December 1975 to October 1976, besides producing Ex.P1. Defendants examined DW1 Suresh Kumar Bansal, Senior Manager and produced record regarding appointment of enquiry officer Ex.D1, Charge-sheet Ex.D2, reply of the plaintiff Ex.D3 and signatures of the plaintiff on document Ex.D4 to R.S.A. No. 5457 of 2003 [11] Ex.D7. Sewa Singh was produced as DW2 who deposed regarding inspection of the Branch by audit party and pointed out the irregularities committed by the plaintiff. DW3 Harish Sharma, proved the other contents of the written statement. The trial Court decided issue Nos.1 and 4 against the plaintiff- respondent whereas issue No.3 was decided against the defendants and in favour of the plaintiff. Issue No.2 was not pressed before the trial Court, as such, it was decided against the defendants. The lower Appellate Court decreed the suit of the plaintiff holding that copy of the enquiry report dated October 17, 1988 was not supplied to the plaintiff and that he was not served with any show-cause notice before removal from service vide order dated November 10, 1988. It was held that a prejudice has been caused to the plaintiff- respondent by non-furnishing of the enquiry report and not affording him an opportunity of being heard prior to the passing of the order of dismissal dated November 10, 1988. Reliance was placed on judgment in Alfa Toyo Limited Vs. Sh.Sri Chand Tyagi, 1996 (4) SCT 656, laying down that a delinquent employee is entitled to supply of enquiry report before the disciplinary authority decides to impose a penalty in the nature of dismissal. The finding of the trial Court on issue Nos.1 and 4 was reversed and the said issues were decided in favour of plaintiff- respondent and against the defendant- appellants. The dismissal order dated November 10, 1988 was set aside holding that the plaintiff was entitled to all the benefits pursuant to the setting aside of the said order. However, the disciplinary authority was given liberty to conduct fresh enquiry in accordance with law R.S.A. No. 5457 of 2003 [12] by adopting the proper procedure and affording an ample opportunity of being heard and to pass an appropriate order. It was directed that fresh enquiry be initiated within a period of six months from the date of judgment and decree dated August 4, 2003. The defendant Bank has impugned the said judgment and decree. This Court vide order dated January 19, 2004 had stayed the operation of the judgment of the lower Appellate Court. The admitting Bench had taken into consideration the judgment of Managing Director, E.C.I.C. Vs. B.Karunakar, 1994 (2) SCC (L&S) 1009 wherein it had been laid down that the judgment of the Supreme Court in Union of India Vs. Mohd. Ramzan Khan, (1991) 1 SCC 588 would apply prospectively i.e. w.e.f. November 20, 1990 whereas the order of removal of the plaintiff- respondent was issued on November 10, 1988, two years prior to the specified date. Counsel for the plaintiff- respondent had relied upon Regulations 7, 8 and 9 of 1977 Regulations of P.N. Bank; regulating the service of the plaintiff- respondent. Regulation 9 was also taken into consideration by virtue of which it is provided that the orders made by the disciplinary authority under Regulation 7 or 8 are required to be communicated to the officer/ employee concerned who shall be supplied with copy of the report of enquiry, if any. Admitting Bench had framed the following question of law which was required to be considered:-- “Whether the principle laid down by the Supreme Court in Managing Director, E.C.I.C. Vs. B.Karunakar, 1994 R.S.A. No. 5457 of 2003 [13] (2) SCC (L&S) 1009, fixing the cut of date of 20.11.1990 would be applicable to the present case where the removal was ordered on 11.11.1988?” Operation of the judgment and decree passed by the Additional District Judge was ordered to be stayed. Counsel for the defendant-Bank has placed strong reliance on the judgment in Managing Director, E.C.I.L. Hyderabad Vs,. B.Karunakar-II, 1994 Suppl.(2) SCC 391 in which the judgment of Mohd. Ramzan Khan’s case (supra) had been taken into consideration holding that the law laid down on Mohd. Ramzan Khan’s case (supra) laying down that copy of the enquiry report should be supplied to the charged officer would be obligatory only from the date of the judgment i.e. November 20, 1990, however, it is not necessary to give a notice to the delinquent officer indicating the proposed penalty. It has been contended that the order of dismissal of plaintiff- respondent was passed on November 10, 1988 prior to the cut-off date i.e. November 20, 1990 i.e. the date of decision in Mohd. Ramzan Khan’s case (supra) as such the judgment of lower Appellate Court relying upon the judgment of Mohd. Ramzan Khan’s case (supra) should be set aside being contrary to the law laid down in B.Karunakar’s case (supra) Reliance was also placed on the judgment of State of U.P. Vs. Harendra Arora and another, AIR 2001 SC 2319 wherein respondent No.1 had been dismissed from service by U.P. Public Services.His dismissal order was upheld by the Apex Court on the ground that the respondent had not taken any stand that in the absence of enquiry report, he could not R.S.A. No. 5457 of 2003 [14] submit effective show cause before the dismissal order nor he had raised any point that he could not file any effective show-cause in absence of enquiry report. He had not even stated in the show-cause reply that he had not been served with copy of the enquiry report as such it was held that the respondent had not been prejudiced by non-furnishing of the enquiry report. The order of High Court dismissing the dismissal order was quashed in the circumstances of said case. Reliance was also placed on Debotosh Pal Choudhary Vs. Punjab National Bank, AIR 2002 SC 3276. In the said case the copy of the enquiry report was not given to the delinquent official before imposing punishment of dismissal. In the said case, B.Karunakar’s case (supra) was followed and it was held that the punishment had been imposed upon the petitioner in the said case by disciplinary authority on October 8, 1988 long before the decision of Mohd. Ramzan Khan’s case (supra), decided on November 20, 1990. It was vehemently contended that since no prejudice has been caused to the plaintiff by non-supply of the report of the inquiry officer, the judgment in Mohd. Ramzan Khan’s case (supra) will not be applicable. On the other hand, counsel for the plaintiff- respondent Mr.H.S.Sethi has vehemently contended that in a case of an employee of Punjab National Bank where the enquiry report was not supplied to the delinquent official, it was held that he was entitled to copy of the report of enquiry in order to afford him an opportunity to explain his position and to prove his innocence before imposition of major penalty of removal from service. In the said case, the provisions of 1977 regulations, clauses 6, 7 R.S.A. No. 5457 of 2003 [15] (2), 8 and 9 were taken into consideration holding that removal from service without furnishing the copy of enquiry report and without affording to the delinquent an opportunity to make submission on that report, was not justified. I have taken into consideration the contentions raised by counsel for the defendant- Bank as well as the plaintiff- respondent. It is an admitted fact that the report of the enquiry office dated October 17, 1988 was not furnished to the plaintiff before he was dismissed from service. In this case not only the law laid down in Mohd. Ramzan Khan’s case (supra) would be applicable but the relevant service regulations governing the conditions of service of the plaintiff would also be required to be taken into consideration before forming an opinion whether it is obligatory to supply a copy of the enquiry report in the present case, the incident being prior to the adjudication of Mohd. Ramzan Khan’s case (supra) on November 20, 1990. The provisions of Mohd. Ramzan Khan’s case (supra) and B.Karunakar’s case (supra) in context to the 1977 regulations of Punjab National Bank came up for consideration before the Apex Court in Punjab National Bank and others Vs. K.K. Verma, 2011 (1) SCT 112 in which it was held that the provisions of regulation 7 (2) read with Section 9 of the 1977 Regulations would provide for communicating to the employee the order passed under Regulation 7 apart from providing him a copy of the enquiry report. The 1977 regulations of Punjab National Bank were interpreted to mean that these regulations will have to be read as laid down only with a view to provide an opportunity to the employee