HON’BLE SRI JUSTICE A. GOPAL REDDY AND HON’BLE SRI JUSTICE VILAS V. AFZUL PURKAR WA No. 174/2002 DATE OF ORDER: 4-06-2010 M.A.Majeed ..Appellant V. 1.The appellate authority/Managing Director, State Bank of Hyderabad, Head Officer, Gunfoundry, Hyderabad and others. ..Respondents. The Court made the following: HON’BLE SRI JUSTICE A. GOPAL REDDY AND HON’BLE SRI JUSTICE VILAS V. AFZUL PURKAR WA No.174/2002 JUDGMENT: (Per Hon’ble Sri Justice A. Gopal Reddy) This intra court appeal under clause 15 of the Letters Patent is directed by the writ petitioner aggrieved by the dismissal of the writ petition by the learned single Judge of this Court dt.3-8-2001 made in WP No.16000/1990. For the sake of convenience, the appellant herein will hereinafter be referred to as “the petitioner”, and State Bank of Hyderabad will hereinafter referred to as “the Bank”. The petitioner while working as Branch Manager, Karankota Branch of State Bank of Hyderabad was found to have committed irregularities and was placed under suspension pending enquiry by proceedings No.IV/DPC/10688 dt. 17-11-1984 issued by the disciplinary authority. Subsequently, a charge memo was issued through letter No.DPC/1424 dt.7-9-1985 proposing to enquire into the imputations of misconduct under regulation 68 of the State Bank of Hyderabad (Officers) Service Regulations, 1979 (for short ”SBH Regulations”) and calling upon the explanation of the petitioner, if any, to the charge memo. On petitioner submitting his defence on 23-10-1985, the disciplinary authority, R-3 (General Manager (Operations), State Bank of Hyderabad, Gunfoundry, Hyderabad, by proceedings No.DPC/1843 dt. 19-12-1985 informed the petitioner that his explanation was found to be unsatisfactory and a regular departmental enquiry will be conducted against him. Later, J. V. Subramanyam was appointed as Enquiry Officer to enquire into the allegations of misconduct. On appointing the Enquiry Officer, the Bank appointed Sri B. Someswar Rao as presenting officer. Under Regulation 68(2) (vii) of the SBH Regulations, the delinquent was entitled to take the assistance of the bank Officer to defend him as his defence representative. The petitioner insisted that he should be permitted to engage a lawyer to defend him in the enquiry by his representation dt.31-1-1986. On Enquiry Officer rejecting the request, the petitioner filed WP No.2116/1986. On dismissal of the writ petition, the petitioner filed WA No. 172/1988, which was disposed of on25-2- 1988 permitting the petitioner to appoint one of the two officers ie., T. Madhusudhan Rao, MM-II Officer, Manager’s Department, Head Office, State Bank of Hyderabad, Gunfoundry, Hyderabad or Sri N. R. Seetharam, MM-III Officer, Government Accounts Division, and the Bank should permit one of them to participate and defend the petitioner. The petitioner failed to nominate either of them or any other officer of the bank as his defence representative. Sri B. V. Narsing Rao was appointed as Enquiry Officer in the place of J.V. Subramanyam. While so, on 16-11-1988, the petitioner made another representation to the Enquiry Officer stating that he has been involved in as many as 6 or 7 cases, both civil and criminal, filed by the bank in different courts in Hyderabad and as the competent officers of the Bank are not prepared to assist him in defending the cases, he may be permitted to engage an advocate as his defence counsel in the enquiry proceedings. The Enquiry Officer by his letter dt.20-11-1988 called upon the petitioner to nominate either of the officers as permitted by the Division Bench of High Court of Andhra Pradesh in WA No.172/88. When the petitioner did not cooperate with the enquiry, the enquiry officer closed the enquiry on 30-1-1989. The Enquiry Officer submitted his report on 13-2-1989. The disciplinary authority after considering the report of the enquiry officer recommended to the appointing authority, namely, Chief General Manager (R-2) to impose a penalty of dismissal on the petitioner by proceedings dt.9-8-1989. On receipt of the recommendations of the disciplinary authority, the appointing authority after considering the record, enquiry report and recommendations made by the disciplinary authority imposed a penalty of dismissal from the bank’s service with effect from 29-8-1989 and communicated the same to the petitioner by proceedings No. DPC/721 dt. 21-9-1989. Aggrieved by the orders passed by the appointing authority imposing penalty of dismissal from service, the petitioner preferred an appeal on 11-1-1989 to the appellate authority/Managing Director (R-1). On dismissal of the appeal by the appellate authority by his proceedings dt. 2-5-1990, the petitioner filed the present writ petition contending that several grounds raised by the petitioner in his appeal as enumerated in paras 16.1 to 16.16 were not properly considered by the appellate authority in deciding his appeal and failed to apply his mind to the matter in disposing the appeal. The Chief General Manager is not the appointing authority and not competent to dismiss the petitioner. A detailed counter-affidavit has been filed by the Bank in opposition of the writ petition and answering the various contentions raised in paras 16.1 to 16.16 of the grounds raised before the appellate authority, to which the petitioner has filed a detailed reply affidavit. A learned single Judge of this court while rejecting the contentions of the petitioner that he was appointed by the Executive Committee but the impugned order dismissing the petitioner was passed by the Chief General Manager, who is lower authority to the Executive Committee; charge sheet was issued and enquiry was conducted by General Manager (Operations), whereas proposed punishment was suggested by General Manager (Planning and Development) which is contrary to the provisions of the SBH Regulations and the Enquiry Officer has not conducted the enquiry in a fair and proper way violating the principles of natural justice and offending Arts.14 and 16 of the Constitution of India, dismissed the writ petition. Questioning the same, the present writ appeal has been filed. Sri J.Sudheer, learned counsel for the appellant-writ petitioner contended that General Manager (Operations) who issued charge memo was not nominated as disciplinary authority by the Executive Committee. The resolution of the Executive Committee, if any, designating General Manager (Operations) as disciplinary authority was not communicated to the petitioner. Therefore, framing of charge by the General Manager (Operations) styling himself as disciplinary authority is without authority of law and entire proceedings are liable to be set-aside. Regulation 68 (1)(ii) authorizes that the disciplinary authority or any authority higher than it may impose any of the penalties in Regulation 67 on an officer provided that where the disciplinary authority is lower in rank than the appointing authority in respect of the category of officers to which the officer belongs no order imposing any of the major penalties specified in clause (e), (f), (g) and (h) of Regulation 67 shall be made except by the appointing authority. Regulation 68 (2)(iii) provides where it is proposed to hold an inquiry, the disciplinary authority shall frame charge on the basis of allegations. The petitioner’s request to provide assistance of a lawyer was rejected, and the regulation 68 (2)((vii) imposing a prohibition to the effect that officer shall not engage a legal practitioner is illegal, arbitrary and violative of principles of natural justice, and offends Arts. 14 and 16 of the Constitution. Not appointing the officer chosen by the petitioner as a defence assistant amounts to violation of principles of natural justice. Further the documents required by the petitioner in his letter dt.4-2-1986 were not supplied, the same amounts to violation of principles of natural justice and placed reliance on the judgment of the Supreme Court in STATE OF UTTAR PRADESH V. MOHD.SHARIF[1]. When the regulations provide a particular manner to exercise the power, the same has to be done in the manner so prescribed. Statutory functions conferred on the Executive Committee have to be done by the Executive Committee, but none other than the Executive Committee can do the functions. To substantiate the same, reliance is placed on the judgments of the Apex Court in CIT V. ANJUM M.H.GHASWALA[2]; AJAY GANDHI V. B.SINGH[3] and PRATAP SINGH V. STATE OF JHARKHAND[4]. Under the guise of superintendence, Board of Directors cannot usurp the powers of the Executive Committee, therefore entrusting the matter to the General Manager (Operations), and again entrusting to the General Manager (Planning and Development) is without jurisdiction, and entire proceedings are vitiated and are liable to be set-aside. Reliance is placed on the judgments of the Supreme Court in JASBIR SINGH V. STATE OF PUNJAB[5] and STATE OF UTTARANCHAL V. ALOK SHARMA[6]. He lastly contended that once the petitioner is acquitted by criminal court, punishment imposed has to be reconsidered. Sri M.S. Rama Chandra Rao, learned Standing counsel for the Bank contended that Sections 24,25, 35 of the State Bank of India (Subsidiary Banks) Act, 1959 (for short “Subsidiary Banks Act”) have to be considered harmoniously for effectual function of the bank. Even if the functions of the Executive Committee have been defined, the Board is superior body and is not precluded to exercise such powers and can always nominate the disciplinary authority and its functions. Delegation of powers have been notified on 2-5-1984 entrusting the disciplinary functions to the GM cadre grade officers. The charge memo was signed by G.M. (operations); order was passed by the General Manager (Planning and Development) on 9-8-1989 and after approval final orders were passed by the Chief General Manager under the proceedings dt. 3-7-1989. In that view of the matter, when the actual punishment was imposed by the appointing authority, Chief General Manager, no illegality or infirmity can be discernible in the enquiry conducted into the misconduct. For permission to defend him by engaging a defence counsel, the petitioner is bound by the orders passed by this court in WP No.2116/86 and WA No.172/88.. Merely because the petitioner is exonerated by the criminal court in CC No.13/1989, punishment imposed will not be wiped off as contended by the petitioner, as the charges in criminal case and domestic enquiry are different. He further contended that the petitioner cannot complain non-furnishing of the documents, as he was permitted to verify the documents prior to the enquiry proceedings and the documents were produced during the enquiry proceedings on 25-2-1986, which is evident from the minutes recorded by the enquiry officer. No complaint has been made in WP No.2116/86 about non-supply of the documents. In view of the above submissions, the points that arise for consideration in this appeal are: 1. Whether the General Manager (Operations) who issued charge memo is competent to issue charge memo? 2. Whether non-framing of charge memo by the disciplinary authority would vitiate the enquiry? 3. Whether denying the assistance of a legal practitioner to defend the petitioner amounts to violation of principles of natural justice or not? 4. On acquittal of the petitioner in criminal case, whether punishment imposed has to be re-considered or not? POINT NOS.1 & 2: These points have to be considered in the light of the statutory provisions, which govern the issuance of charge sheet and conducting of enquiry. Regulation 68 of the SBH Regulations, which is relevant, reads as under: 68.(1) (i) The disciplinary authority may itself, or shall when so directed by its superior authority institute disciplinary proceedings against an officer. (ii) The disciplinary authority or any authority higher than it may impose any of the penalties in regulation 67 on an officer. Provided that where the disciplinary authority is lower in rank than the Appointing Authority in respect of the category of officer to which the officer belongs no order imposing any of the major penalties specified in clause (e), (f), (g) and (h) of regulation 67, shall be made except by the Appointing Authority or any authority higher than it on the recommendations of the Disciplinary Authority. (2) (i) to (iv) x x x x (v) The disciplinary authority shall, where it is not the Inquiring Authority forward to the Inquiring Authority: (a) a copy of the articles of charge and statements of imputation of misconduct; (b) a copy of the written statement of defence, if any, submitted by the officer; (c) a list of documents by which and list of witnesses by whom th articles o charge are proposed to b substantiated; (d) a copy of statements of the witnesses, if any; (e) evidence proving the delivery of the articles of charge under clause (iii); (f) a copy of the order appointing the “presenting officer” in terms of clause (vi). Note: The forwarding of the documents referred to in his clause need not necessarily be done simultaneously. (vi) Where the disciplinary authority itself enquiries or appoints an Inquiring Authority for holding an enquiry, the Bank may, by an order, appoint an officer or a public servant to be known as the “Presenting Officer” to present on its behalf the case in support of the articles of charge. (vii) The officer may take the assistance of an officer as defined in clause (i) of regulation 3 (hereinafter referred to as officer’s representative) but shall not engage a legal practitioner for the purpose. Provided that where the presenting officer is a public servant other than an officer of the Bank, the officer may take the assistant of any public servant. Note: The officer shall not take the assistance of any other officer who has two pending disciplinary cases on hand in which he has to give assistance. (viii) to (xxi): x x x x. Regulation 3-G defines ‘Executive Committee’ to mean the Executive Committee of the Board. Regulation 3-P defines “disciplinary authority”, “appellate authority” and “reviewing authority”, to mean respectively the authorities specified as such by the Executive Committee from time to time. Sections 25 and 35 of the Subsidiary Banks Act deal with composition of Board of Directors and executive committee. Section 35 of the Subsidiary Banks Act specifies the Executive Committee and other Committees in respect of a subsidiary bank consisting of such directors as may be prescribed. Sub-section (2) of Section 35 envisages subject to any regulation made under this Act, the Executive Committee may deal with any matter within the competence of the Board of Directors. Whereas sub-section (4) envisages without prejudice to the powers of the executive committee, and subject to any regulations made under this Act, the Board of Directors of a subsidiary bank may constitute such and so many other committees, whether consisting wholly of the directors or wholly of other persons, or partly of the directors and partly of other persons, as it deems fit, to exercise such powers and perform such duties as may, subject to such conditions, if any, as the Board of Directors may impose, be delegated to them by the Board of Directors. Section 63 deals with power of the State Bank to make regulations. Section 63(2) (d) deal with constitution of the executive committee of the subsidiary bank and the conditions and limitations subject to which the executive committee may exercise its powers and the procedure to be followed at the meeting thereof. Whereas sub-section (e) of Section 63 (2) provides the formation of any other committees, whether of the Board of Directors of the subsidiary bank or otherwise, and the delegation of powers and functions of the Board to such committees and the conduct of business in such committees. Exercising the rule making power conferred by section 63 of the Subsidiary Banks Act, the State Bank of India made Subsidiary Banks General Regulations, 1959. Regulation 38 deals with constitution and powers of the Executive Committee in respect of a subsidiary bank. Sub-clause (4) of Regulation 38 defines powers of the Executive Committee as under: “In the exercise of its powers the executive committee shall be bound by such general or special directions as the Board may consistently with the Act and these regulations give from time to time, but subject to any such direction, the executive committee may transact all the current business of the subsidiary bank.” State Bank of Hyderabad (Officers) Service Regulations, 1979 were issued in exercise of the powers conferred by Section 63 of the Subsidiary Banks Act. Under Chapter-XII-Miscellaneous regulations, regulation 73 provides where these regulations require that any matter shall be in accordance with the decision of the Board or the Executive Committee and where such a matter is covered by decisions or instructions of the Board or Executive Committee already taken or given, such decisions or instructions shall continue to be in force to the extent they are not contrary to any provisions of these regulations and until such decisions or instructions as altered by the Board or Executive Committee. Therefore, Board of Directors are not denuded of their powers to issue instructions to the executive committee, and it is competent for the Board to alter decisions or instructions issued by the executive committee. Sub-section (2) of Section 24 of the Subsidiary Banks Act, Board of Directors possess final repository of functions of the Bank and exercise all powers and functions as are done by that Bank. Therefore, it is fallacy to contend that the General Manager (Operations) has not been nominated as disciplinary authority by the Executive Committee. Further, the respondent-Bank in its counter stated that the Executive Committee of the Board of Directors of the Bank at its meeting held on 31-3-1984 approved the revised scheme of delegation of administrative matters as decided by the Board. The revised scheme was communicated as per the Head Office Circular No.OPD/5/84 dt. 2-5-1984. In the said meeting, on item No.19— Delegation of powers, revised scheme of delegation of powers to the various officials of the bank at the administrative offices and at branches, the Board of Directors resolved that for the purpose of regulation 79 of SBH Regulations, it shall be deemed that the authorities specified in the Memorandum shall be the respective authorities empowered to discharge the various functions provided therein, notwithstanding that prior hereto the officers concerned were under the authority of functionaries different from these enumerated in the Memorandum. Annexure-I to the same discloses the disciplinary, appellate and reviewing authorities in respect of officers in Junior Management Grade Scale-I are the General Manager is the disciplinary authority, Executive Director is the Appellate Authority and Managing Director is the Reviewing Authority. The major penalties under Regulation 67 will however be imposed with the approval of the Executive Director, Managing Director. Once it is not disputed the General Manager (Operations) issued charge memo under his signature regulation 68(2)(iii) deemed to have been complied with. It was strenuously contended that under the above delegation of powers, the General Manager is the disciplinary authority but not by the General Manager (Operations). By Circular No.OPD/1 of 1985 dt.13-2-1985 General Manager (Inspection and Finance) has been created in the top management grade scale VI. The powers and functions of General Manager (Operations), General Manager (Planning & Development) and General Manager (Inspection and Finance) have been specifically mentioned in the said circular. As per the said circular, disciplinary proceedings cell is under the control of General Manager (Operations). It is fairly well settled that the charge should be in the name of the punishing authority or with its authority, consent or approval. This would make it an act of punishing authority and not an act of third party. Once Board of Directors which is superior body than the Executive Committee delegated powers and functions stating that it is the General Manager rank who can be the disciplinary authority irrespective of the fact that whatever nomenclature used to describe the officer, it is only for convenience but the officer who initiate disciplinary proceedings should be of the General Manager cadre but not by General Manager alone. Once General Manager has been designated as disciplinary authority for officers in Junior Management Grade Scale and Executive Director and Managing Director as appellate and reviewing authorities and the circular No.OPD/1/85 dt. 13-2-1985 clearly spelt out the disciplinary proceedings cell is under the control of General Manager (Operations), we do not see any merit in the contention of the learned counsel for the petitioner that the charge memo issued by the General Manager (Operations) is not a disciplinary authority who was entrusted with disciplinary proceedings cell alone. It was contended that once regulation provides a particular manner for exercise of power, the same has to be done in accordance with that regulation and not in other manner. For the conclusions reached by us, reliance placed on the judgments of the Supreme Court i n CIT V. ANJUM M.H.GHASWALA (2 supra); AJAY GANDHI V. B.SINGH (3 supra); PRATAP SINGH V. STATE OF JHARKHAND (4 supra); JASBIR SINGH V. STATE OF PUNJAB (5 supra) and STATE OF UTTARANCHAL V. ALOK SHARMA (6 supra) is misplaced to the facts of the present case. Therefore, it is not necessary for us to dilate on the propositions laid down in the above judgments. As already stated, Board of Directors, which has over all superintendence, can modify any of the transactions issued by the executive committee. Under Regulation 73 of the SBH Regulations, the Board of Directors can always alter decisions or instructions issued by the executive committee and if some of the functions are delegated to the executive committee, the Board is not precluded to exercise the same power. Delegations of powers have been notified on 2-5- 1984. When the disciplinary functions are entrusted to the General Manager Grade Officer (GM cadre), charge memo was signed by the General Manger (Operations), subsequent to 13-2-1985 ie., after delegation of powers. Whereas final order was passed by the General Manager (Planning and Development) after approval by the Chief General Manager under proceedings dt. 3-7-1989, whereas actual punishment imposed by the appointing authority (Chief General Manager) satisfy the regulations. In view of the same, we do not see any merit in the contention advanced by the learned counsel and the same is accordingly rejected. Point No.3: Learned counsel for the petitioner strenuously contended that the assistance of legal practitioner to defend the delinquent officer has not been provided, which amounts to violation of principles of natural justice. Further, the documents were not supplied as required by the petitioner in his letter dt. 4-2-1986. The facts in STATE OF U.P. V. MOHD.SHARIF (1 supra) are entirely different from the facts in the present case. It is unnecessary for us to delve deep in to the contention that rejection of permission to defend by engaging a defence counsel violates principles of natural justice. Regulation 68 (2) (vii) provides that the delinquent officer may take the assistance of an officer as defined in clause (j) of regulation 3 (hereinafter referred to as officer’s representative), but shall not engage a legal practitioner for the purpose. Regulation 68 (7) prohibits engaging of a legal Practioner except taking assistance of an officer as defined in clause (j) of regulation 3 (hereinafter referred as officer’s representative). It is now fairly well settled that the law does not concede an absolute right of representation through a lawyer to an employee in domestic enquiries unless the rules or regulation and standing orders specifically recognize such a right and provide for such representation. It is well settled that non-allowing the legal practitioner to defend the delinquent officer does not amount to denial of reasonable opportunity. (STATE OF RAJASTHAN, JAIPUR V. S.K.DUTT SHARMA=1993 (4) SCC Supp.61; N. KALINDI V. M/S.TATA LOCOMOTIVE AND ENGINEERING CO. LTD., JAMSHEDPUR=AIR 1960 SC 914; DUNLOP RUBBER CO. (INDIA) LTD., V. THEIR WORKMEN=AIR 1965 SC 1392; CRESCENT DYES AND CHEMICALS LTD., V. RAM NRESH TRIPATHI=(1993) 2 SCC 115 a n d BHARAT PETROLEUM CORPORATION LTD., MAHARASHTRA GENERAL KAMGAR UNION=(1999) 1 SCC 626). The Supreme Court in INDIAN OVERSEAS BANK V. INDIAN OVERSEAS BANK OFFICERS’ ASSOCIATION[7] while considering the rule restricting assistance of any other employee who has more than two pendency disciplinary cases on hand held that irrespective of the desirability or otherwise of giving the employees facing charges of misconduct in a disciplinary proceeding to ensure that his defence does not get debilitated due to in experience or personal embarrassments, it cannot be claimed as a matter of right and that too as constituting an element of principle of natural justice to assert that a denial thereof would vitiate the enquiry itself. When