Case: Brij Bihari Singh Vs. Bihar State Financial Corporation &amp; Ors.(R-1,4,7)

1. The appellant was working on the post of Assistant General Manager in the Bihar State Financial Corporation (in short,. At the direction of State Government, vide letter dated 20th March, 1993, the Managing Director of the Corporation, who is the Disciplinary Authority, put the appellant under suspension and initiated disciplinary proceedings on the followingHe recommended release of Rs. 4.33 lakhs to M/s. Koshi Jute Mills Pvt. Ltd., Supaul against purchased machines without deducting the stipulated promoters margin money, which is evident from the fact that the promoters margin money was deducted in totality at the time of subsequent release of Rs.7.80 lakhs to the concern on 19.12.90.2. He intentionally and in utter violence of delegated powers released Rs. 7.80 lakhs to the concern (M/s. Koshi Jute Mills Pvt. Ltd., Supaul) on 19.12.90 at his own for which he was not the competent authority for disbursing such amount at his own. This irregular act of his is a grave misconduct for his wrongful gain.3. While making release of Rs. 7.80 lakhs to the concern (M/s. Koshi Jute Mills Pvt. Ltd., Supaul) in utter violation of delegated powers, he did not retain the 15% retention money according to stipulated conditions in the Sanction Order and mutual agreement between the promoter and the machine supplier.4. While making release to the aforesaid concern he deliberately suppressed the facts regarding observations of the Vigilance and Grievance Cell dated 22.12.89 and mentioned that the dealing of machine supplier is genuine whereas observations of Vigilance and Grievance Cell duly approved by the M.D. available in the loan file shows that the machine supplier is not refunded and that of his connivance with the promoter.5. He deliberately ignored the further observations of the Vigilance & Grievance Cell duly approved by M.D. to inspect the site of the machine supplier immediately and made release to the aforesaid concern.6. He deliberately received the payment of Car Allowance for the period from 9.3.88 to 1.10.88 without having a car in his name during aforesaid period.7. He purchased land at Patliputra Colony, Patna from Dr. Bindeshwari Prasad Singh through three different absolute sale deeds (Registered at Calcutta) showing himself as false profession without disclosing the source of fund arranged.After serving the aforesaid memorandum of charges upon the appellant some additional charges were served, which are also set out belowhimself examined the proposal of Delhi based fake promoter of M/s. Divine Cycle (P) Ltd., Industrial Area, Fatwah on promoters personal guarantee and placed the proposal with recommendation before the Board for sanction of loan to the Company when the residential addresses of promoters were incomplete and official address was subsequently found fake. He should have examined the proposal before recommending the case to the Board which he did not do so as a result the promoter managed to grab the fund from the Corporation and left the unit abandoned. Thus due to his negligence of duties in processing of the loan proposal the Corporation has been put to a huge financial loss.He, with an ulterior motive did not inform H.O. after getting the site jointly inspected with BICICO representative in Feb. 83 that the unit was running in a rented premises other than that of mortgaged to the Corporation and deliberately did not take any action against the promoter which proves his connivance with the promoter of the company to cause wrongful loss to the Corporation.It appears that one officer of the State Government on deputation was made Enquiry Officer, who conducted the enquiry in respect of the aforesaid charges and submitted enquiry report holding that the majority of the charges have been proved. Consequently, 2nd show cause notice was given to the appellant which was duly responded. The appellant was then directed to be personally present for hearing and then the Managing Director, instead of passing final order, recommended the Board of Directors of the Corporation for the punishment to be imposed upon the appellant. On receipt of the said recommendation, the Board finally passed an order of dismissal of the appellant from service.4. The appellant assailed the order of dismissal by filing a writ petition being CWJC No.3528 of 1994, which was eventually dismissed by the learned Single Judge of the High Court. The said judgment and order was finally upheld by the Division Bench of the High Court in Letters Patent Appeal No.51 of 1998.

Court's reasoning:
10. In the instant case, the disciplinary proceeding was conducted in gross violation of Regulation 39 of the said Regulations inasmuch as no reasonable opportunity was given to the delinquent to place his case in defence. The Regulation imposed a duty on the Authority to give a personal hearing to the delinquent.11. A right of appeal has been provided by Regulation 40 of the said Regulations against any order passed by the competent Authority. In the instant case as noticed above, the Disciplinary Authority, instead of exercising the power as Disciplinary Authority imposing punishment, referred his recommendations to the appellate authority, namely, Board of Directors for taking a decision and the Board of Directors exercised the power of Disciplinary Authority and imposed punishment of dismissal thereby deprived the appellant from moving the appellate authority against the said order. Such exercise of power is wholly arbitrary and discriminatory.12. Curiously enough, the Managing Director being the disciplinary authority prepared his report and referred the matter to the Board of Directors to consider the draft charges, enquiry report, representation filed by the officer concerned and his finding, for taking an appropriate decision in the case. Not only that, when the case was placed before the Board for taking a final decision, he participated in the said meeting and a decision was taken by the Board of Directors to dismiss the appellant from service. In our considered opinion, such a procedure adopted by the disciplinary authority and the appellate authority is absolutely erroneous in law.After giving our anxious consideration in the matter, we are of the definite view that the procedure adopted by the respondents in removing the appellant from service is erroneous and suffers from serious discrimination and bias. Further, the Enquiry Officer conducted the enquiry without following the procedure and without giving sufficient opportunity to the delinquent to place his case. Enquiry is also vitiated in law.