STATE BANK OF INDIA & ORS. versus C.K. KARUNAKARAN
[2021] 9 S.C.R. 23, Supreme Court of India, 2021
Outcome: Appeal(s) allowed (Granted)
Segment: Ratio
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STATE BANK OF INDIA & ORS.
v.
C.K. KARUNAKARAN
(Civil Appeal No. 6821 of 2009)
SEPTEMBER 30, 2021
[SANJAY KISHAN KAUL AND M. M. SUNDRESH, JJ.]
Service Law: Minor penalty – Censure – Effect of –
Respondent, employed with appellant-bank, was interviewed for
promotion by the Interview Committee– In the meantime, disciplinary
authority initiated departmental action against the respondent –
His explanation was called for and charge-sheet was issued – In
view of pendency of the disciplinary proceedings, the promoting
authority after considering the recommendations of the Interview
Committee issued a select list but the result of the respondent was
kept in a sealed cover – The charge-sheet subsequently resulted in
a punishment of censure to the respondent and the promotion was
not given effect to – Whether even if there is a minor penalty of the
nature of censure, the sealed cover recommendation of the promoting
authority cannot be given effect to – Held: The earlier judicial
pronouncements do give rise to the conclusion that the censure
having been imposed albeit the least of the minor penalty, a
recommendation of the sealed cover procedure cannot be given
effect to for promotion – This is also in conformity with what the
relevant rules provide as under the State Bank of India (Supervising
Staff) Service Rules ‘censure’ is mentioned as the first ‘minor
penalties’ in s.2 dealing with ‘disciplinary and appeal’ – The staff
Circular No.118 provides that once a
disciplinary proceeding has
been contemplated provided that the prima facie case against the
officer (which is apparent from the ultimate penalty imposed) the
sealed cover procedure should be adopted – However, where the
said departmental proceedings end with the imposition of a minor
penalty even like a censure, the recommendations of the selection
committee in favour of an employee, kept in a sealed cover, will not
be given effect to and his case may be considered only in the next
promotion immediately thereafter – In the instant case, if punishment
would not have been ultimately imposed, the question of giving effect
to the result of the sealed cover procedure would have arisen –
[2021] 9 S.C.R. 23
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SUPREME COURT REPORTS
[2021] 9 S.C.R.
However, the charge-sheet issued resulted in a punishment of censure
and the departmental appeal against the same was dismissed making
that aspect final – The consequence was that the sealed cover was
not given effect in terms of the rules – State Bank of India
(Supervising Staff) Service Rules – Staff Circular No.118.
State of M.P. & Anr. v. I.A. Qureshi (1998) 9 SCC 261;
and Union of India & Ors. v. A.N. Mohanan (2007) 5
SCC 425 : [2007] 5 SCR 279 – relied on.
Case  Law Reference
(1998) 9 SCC 261
relied on
Para 8
[2007] 5 SCR 279  
relied on
Para 8
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6821
of 2009.
From the Judgment and Order dated 17.10.2008 of the High Court
of Kerala at Ernakulum in Writ Appeal being W.A. No. 1571 of 2003.
Sanjay Kapur, Ms. Megha Karnwal, V.M. Kannan, Mrs. Shubhra
Kapur, Advs. for the Appellants.
The following Order of the Court was passed :
O R D E R
The respondent was employed with the appellant-bank in the
Middle Management Grade Scale-II and his promotion to Middle
Management Grade Scale-III came up for consideration in November,
1984 when he was interviewed by the Interview Committee which made
its recommendation to the promoting authority. In the meantime, apparently
the disciplinary authority took a decision to initiate departmental action
against the respondent on 28.1.1985. His explanation was called for on
18.2.1985 and the charge-sheet was issued on 04.11.1985. In view of
the
pendency of these disciplinary proceedings, the promoting authority
after considering the recommendations of the Interview Committee
issued a select list on 23.8.1985 but the result of the respondent was
kept in a sealed cover. The charge-sheet resulted in a punishment of
censure to the respondent on 28.7.1987 and thus the promotion was not
given effect to. The order of the disciplinary authority was assailed by
the respondent in departmental appeal and the same was dismissed on
13.12.1988 which attained finality.
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The grievance of the respondent was that despite the censure,
the sealed cover procedure having been adopted, the same shall have
been given effect to after the period of censure was over. In this behalf
the respondent filed an appeal before the Appellate Authority on
26.11.1990 but the same was rejected and thus Writ Petition being O.P.
No.8947/1992 was filed before the High Court of Kerala at Ernakulam
directing the bank to consider the case of the respondent ignoring the
sealed cover procedure.
The Writ Petition was allowed by the learned Single Judge in
terms of order dated 30.5.2003 opining that the ex-post facto decision of
imposing censure could not be relied upon for denying the benefit of
promotion and since the decision dated 28.1.1985 to take disciplinary
action against the respondent was the only impediment standing in the
way of the respondent, he is entitled to the benefit of promotion. The
appeal was dismissed by a brief order dated 30.5.2003 by the Division
Bench which has been assailed in the present appeal. Interim stay of the
operation of the order was granted on 29.9.2009 while granting leave.
Respondent from the inception has not entered appearance in the present
proceedings.
We may note at the inception that of the impugned order itself
records that the respondent was subsequently granted promotion. Thus
the issue is only as to whether the respondent could be entitled to
promotion from an earlier date. The other factor which has been
pointed
out to us is that the respondent retired in the year 2003 and is stated to
have received all retiral and pensionery benefits.
Learned counsel for the appellant sought to canvas before us that
the appellant bank acted in accordance with its norms of sealed cover
procedure as per staff Circular No.118 (Exhibit P-2). The relevant part
of the Circular is as under:-
“3. Keeping in view the principles of natural justice and with a
view to maintaining uniformity in this regard. It has been decided
to introduce the ‘Sealed Cover Procedure’ in respect of officers
in the Bank with effect from the 1st March 1983 on the lines
followed by the Government and the following guidelines are laid
down for the purpose:
i) The ‘Sealed Cover Procedure’ would be applicable in respect
of promotion/confirmation of the following categories of officers:-
STATE BANK OF INDIA & ORS. v. C.K. KARUNAKARAN
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(a) Officers against whom disciplinary proceedings have been
contemplated provided there is a prima facie case against the
officer
(b) Officers against whom disciplinary proceedings are in progress
and
(c) Officer who have been placed under suspension.”
It is the submission of the learned counsel for the appellant that
the case of the respondent would be covered by sub-clause (a) of Clause
(i) of para 3 as stated aforesaid. As to what would be the consequence
of the same is set out in sub clause (iv) thereafter which is reproduced
hereinunder:-
“iv) Where the department proceedings have ended with the
imposition of a minor penalty, viz. censure, recoveries of pecuniary
loss to the Bank withholding of increments of pay and withholding
of promotion the accommodation of the Selection Committee in
favour of the employees, kept in the sealed cover, will not be
given effect to. But the case of the employees concerned may be
considered at the time of next promotions immediately after the
conclusion of the departmental proceedings, if the employee is
selected for promotion, he may be promoted in the usual manner
alongwith others if the penalty, is that of ‘ensure’ or ‘recovery of
pecuniary loss’. But in the case of employees, who have been
awarded the minor penality of ‘withholding of increments’ or
‘withholding of promotion’, promotion of the officers concerned
can be made only after the expiry of the period of his penalty.”
Learned counsel for the appellant thus contends that the respondent
was imposed with a minor penalty of censure, the sealed cover is not to
be given effect to but his case may be considered at the time of next
promotion immediately after the conclusion of the departmental
proceedings and he may be promoted if otherwise eligible. This is what
appears to have been done since the respondent earned his promotion
subsequently.
Learned counsel for the appellant seeks to refer on two judicial
pronouncements of this Court for the proposition that even if there is a
minor penalty of the nature of censure, the recommendation of the DPC
cannot be given effect to. In State of M.P. & Anr. Vs. I.A. Qureshi1 it
1 1998 (9) SCC 261
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has been opined that once a minor penalty has been imposed on the
employee in departmental proceedings, the directions given in respect of
the relevant circular would be applicable and the sealed cover
recommendation of DPC cannot be opened and the recommendation of
the DPC cannot be given effect to because the employee has not been
fully exonerated when a minor penalty has been imposed. The employee
can only be considered for promotion on prospective basis from the date
after the conclusion of the departmental proceeding. Similarly, in Union
of India & Ors. Vs. A.N. Mohanan2 it has been opined that awarding of
censure is a blame worthy factor and where even such a penalty has
been imposed the findings of the sealed cover are not to be acted upon
and the case for promotion may be considered by the next DPC in the
normal course.
We have examined the aforesaid judicial pronouncements which
do give rise to a conclusion that the censure having been imposed albeit
the least of the minor penalty, a recommendation of the sealed cover
procedure cannot be given effect to for promotion. This is also in
conformity with what the relevant rule provide as under the State Bank
of India (Supervising Staff) Service Rules ‘censure’ is mentioned as the
first ‘minor penalties’ in Section 2 dealing with ‘disciplinary and appeal’
in paragraph 49. The staff Circular No.118, quoted aforesaid, provides
that once a disciplinary proceeding has been contemplated provided that
the
prima facie case against the officer (which is apparent from the
ultimate penalty imposed) the sealed cover procedure should be adopted.
However, where the said departmental proceedings end with the
imposition of a minor penalty even like a censure, the recommendations
of the selection committee in favour of an employee, kept in a sealed
cover, will not be given effect to and his case may be considered only in
the next promotion immediately thereafter.
On the aforesaid principles applying to the facts of the present
case, a recommendation was made to the promoting authority in
November, 1984 but soon thereafter the disciplinary authority took a
decision to initiate departmental action against the respondent on
28.1.1985, before the promoting authority could take a view on the
recommendation of the interview committee, a notice was issued calling
upon the response of the respondent. Before issuance of a charge-sheet,
in contemplation of the aforesaid disciplinary proceedings, the promoting
STATE BANK OF INDIA & ORS. v. C.K. KARUNAKARAN
2 2007 (5) SCC 425
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authority issued a select list on 23.8.1985 keeping the result of the
respondent in a sealed cover. If the punishment would not have been
ultimately imposed, the question of giving effect to the result of the sealed
cover procedure would have arisen. However, the charge-sheet issued
on 04.11.1985 resulted in a punishment of censure on 28.7.1987 and the
departmental appeal against the same was dismissed making that aspect
final. The consequence was that the sealed cover was not given effect
in terms of the aforesaid rules.
In view of the aforesaid position, we are of the view, that the
impugned orders of learned Single Judge dated 30.5.2003 and the Division
Bench dated 17.10.2008 cannot be sustained and are set aside and the
appeal is allowed leaving parties to bear their own costs.
We may only add in the end that the respondent having earned his
promotion albeit belatedly as stated aforesaid, is a possible reason why
he may not have joined the present proceedings.
Devika Gujral
Appeal allowed