Pranab Kumar Roy Vs United Bank of India

Dr. Sambuddha Chakrabarti, J.@mdashBy this writ petition the petitioner has, inter alia, prayed for a declaration declaring Regulation 20(3)(iii) of the United Bank of India (Officers'') Service Regulation, 1979 and Regulation 46(2) of the Pension Regulations of the said Bank to be ultra-vires the constitution, a writ in the nature of mandamus commanding the respondents to act and proceed in accordance with law and cancel or withdraw the charge-sheet and other letters as mentioned therein and for other reliefs. The case of the petitioner, inter alia, is that after rendering service for about 38 years only two days before his retirement he was served with a chargesheet, dated October 29, 2011, alleging, inter alia, that it was proposed to hold a disciplinary proceeding against him under Regulation 6 of the United Bank of India Officer Employees'' (Discipline and Appeal) Regulations, 1976 (Service Regulations for short).

2. The charges against the petitioner were that while working as Ex-Deputy General Manager and CRM of UBI and Ex-General Manager of the Southern Region he had committed certain irregularities in sanctioning certain loan amounts and failed to take all possible steps to ensure and protect the interest of the Bank. He was further charged to have sanctioned loans irregularly to different companies. The petitioner had given his reply to the charge-sheet in due time. The Executive Director of the Bank had informed the petitioner that as he had attained the age of superannuation his service would cease on October 31, 2011 but the provisions of Regulation 20(3)(iii) of Discipline Regulations would be applicable as the departmental enquiry was pending against him. He was further intimated that the disciplinary enquiry, however, would continue against him as if he was in service till the conclusion of the disciplinary proceedings and passing of the final order.

3. The petitioner made a representation to the Chairman and Managing Director of the Bank to the effect that if gratuity is not paid within 30 days of the retirement of the petitioner, he is entitled to interest thereon and it was not justified on the part of the bank to withhold the gratuity amount applying the relevant provisions of the Officers'' Regulations.

4. In October 2011 he addressed another letter to the Chairman and Managing Director alleging that about a year had elapsed since he had retired but the domestic enquiry had not been held. In the process a substantial portion of the superannuation dues have not been released to him and his request for leave to apply for employment in other organization had also been turned down by the bank. This letter also went unreplied. In the year 2012-2013 he made yet another representation to the said authority and placed on record his grievances which were not remedied till then. The authority was once again requested to release all retiral benefits with interests to compensate the loss he had suffered.

5. By a letter dated March 1, 2013 the petitioner was informed that since some other irregularities alleged to have been committed by him had in the meantime surfaced a fresh composite charge-sheet incorporating the latest discovery was in contemplation and in view of the pendency of the disciplinary proceedings, he was not entitled to payment of retiral dues except his own contribution to the provident funds. However, in terms of Regulation 46 of the United Bank of India (Employees'') Pension Regulations, 1995 (Pension Regulations, for short) a provisional pension would be paid to him.

6. According to the petitioner, Regulation 20(3)(iii) of the Service Regulations was irrational, arbitrary and unreasonable inasmuch as it allows disciplinary proceedings for indefinite period even after the superannuation of an employee and it further allows a retired employee to be treated as if he was in service.

7. The petitioner has alleged that the Service Regulations are not statutory Regulations. The petitioner is also aggrieved by withholding of the gratuity amount, which is, according to him, entirely illegal and the provisions of Payment of Gratuity Act, 1972 shall prevail over the provisions of the Service Regulations.

8. It has been further alleged by the petitioner that Regulation 4 of Disciplinary Regulations provides for both minor and major penalties which may be imposed on an Officer for acts of misconduct. According to him neither any major nor any minor penalty can be imposed upon him after his superannuation and withholding of gratuity or recovery of any loss by way of an adjustment against admissible gratuity is not one of the punishments as provided in the Discipline Regulations.

9. The petitioner has also assailed Regulation 46(2) of the Pension Regulations. The assailed provisions or the impugned provision of the Pension Regulations have no statutory force and clearly contradicts the relevant provisions of the Payment of Gratuity Act. The continued pendency of the disciplinary proceedings had been interpreted by the petitioner as an effort to fish out new materials against him keeping the disciplinary proceedings pending. He has also assailed the subsequent communications made to him as betraying administrative bias on the part of the authorities concerned. The bank now after his retirement cannot bring his fresh charges against the petitioner as he is no longer under its administrative control.

10. The petitioner''s right to get gratuity has been sought to be taken away by resorting to the provisions contained in these two Regulations and the impugned action of the bank being the outcome of the exercise of power under the said Regulations it is also equally not sustainable and bad in law.

11. A further point taken by the petitioner was that there was enough time for the bank to proceed against the petitioner and to conclude the proceedings before his retirement. Instead, they waited till two days before his retirement and decided to serve a charge sheet just on the eve of his retirement. Thus, the petitioner alleges, the action on the part of the bank smacks of malafide and resorting to harassing procedure.

12. The petitioner further alleges that in spite of the bank having received the reply to the charge sheet on the date of his retirement i.e. October 31, 2011 it has not taken any step so far which, the petitioner interprets, is a pointer that the bank was satisfied with the reply.

13. According to him the charge sheet reveals a close mind and the allegations against him have been expressed in a manner as if finding of fact had already been reached. There is no allegation of causing loss to the bank in the charge sheet. Hence the question of recovery any money from the retiral benefits of the petitioner does not arise.

14. The respondents bank authorities have contested the case by filing affidavit in opposition wherein the respondents have denied the allegations made in the petition.

15. According to the respondents the petitioner during his tenure as the Deputy General Manager and Chief Regional Manager, southern region of the bank, had committed such irregularities while sanctioning loan amount about which the respondents have provided certain details. Thus, the bank authorities contended, the petitioner failed to take all possible steps to ensure and to protect the interest of the respondent bank and discharge his duties in integrity, honesty and devotion. He had acted in violation of the Bank''s Discipline and Appeal Regulations, 1976 which amounted to misconduct. This had necessitated the issue of charge sheet proposing to hold disciplinary proceeding against the petitioner. The respondents have further denied the allegations that the alleged misconduct on the part of the petitioner were condoned by the bank only because he was given a promotion thereafter. The Regulation in question has been framed by the concerned bank in consultation with the Reserve Bank of India in exercise of the power conferred u/s 19(2) read with section 12 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and as such they have a statutory force as has been held by the Supreme Court. This regulation permits continuation of the disciplinary proceedings even after the superannuation of an employee.

16. The respondents have also denied the allegation that the concerned Regulation is unreasonable, arbitrary or irrational or that the Payment of Gratuity Act shall prevail over the provisions of the Service Regulations.

17. A very specific stand of the bank is that it cannot show indulgence to an erring employee when for his acts the bank had suffered huge financial loss. The respondents further contended that the petitioner is not entitled to the payment of retiral benefits till the proceedings are completed and the final order is passed thereon, except his own contribution to the contributory provident funds. The respondents have prayed for a dismissal of the writ petition.

18. The main question raised by the petitioner relates to the validity of Regulation 20(3)(iii) of the Service Regulations and Regulation 46(2) of the Pension Regulations. He alleges them to be ultra vires of the Constitution.

19. Section 46 of the Pension Regulations, inter alia, provides that an employee who has retired and against whom any departmental or judicial proceedings are instituted or where departmental proceedings are continued, a provisional pension, equal to the maximum pension which would have been admissible to him, would be allowed subject to adjustment against final retirement benefits sanctioned to him, upon conclusion of the proceedings. But no recovery shall be made where the pension finally sanctioned is less than the provisional pension or the pension is reduced or withheld either permanently or for a specified period. Regulation 46(2) which has been very specifically assailed here is quoted below:

"In such cases the gratuity shall not be paid to such an employee until the conclusion of the proceedings against him. The gratuity shall be paid to him on conclusion of the proceedings subject to the decision of the proceedings. Any recoveries to be made from an employee shall be adjusted against the amount of gratuity payable."

20. Regulation 20 of the Service Regulations deals with termination of service of an officer of the bank. Regulation 20(3)(iii) says that an officer against whom disciplinary proceedings have been initiated will cease to be in service on the date of superannuation, but the disciplinary "proceedings will continue as if he was in service until the proceedings are concluded and final order is passed in respect thereof. The said concerned officer will not receive any pay and/or allowances after the date of superannuation and he will also not be entitled to the payment of retirement benefits till the proceedings are completed and the final order passed thereon except his own contribution to CPF. According to the petitioner, invocation of Regulation 20(3) has a very sinister possibility unless it gives very wide power to the hands of the respondent to continue with a proceeding for an indefinite long period. The disciplinary proceedings could be initiated and completed long before his retirement.

21. The conduct of the bank has been sought to be further assailed by the petitioner on the ground that initially the bank exercised power under Regulation 20(3) of the Service Regulations. But, after realizing that the payment of gratuity cannot be withheld by taking recourse to the said regulation, they decided to circumvent the provision of the Payment of Gratuity Act by taking recourse to Regulation 46(2) of the Pension Regulations. In this connection, the petitioner has referred to the case of State of M.P. Vs. Mahalaxmi Fabric Mills Limited and others, for a proposition that even the exercise of delegated power can be challenged on the ground that it is highly arbitrary, irrational and confiscatory and would not stand the test of Articles 14 and 19(1)(g) of the Constitution of India.

22. In Jaswant Singh Gill Vs. Bharat Coking Coal Ltd. and Others, a question arose for consideration was whether the provisions of the Payment of Gratuity Act would prevail over the rules framed by the Coal India Limited. The Supreme Court held that the Act was enacted with a view to providing for a scheme for payment of gratuity to employees engaged, inter alia, in mines. The rules framed by the Coal India Limited were not statutory rules, they have been made by the holding company of the respondent No. 1 to the said appeal i.e. Bharat Coking Coal Limited. The provisions of the Act, therefore, prevailed over the rules. The Act provides for a closely knit scheme providing for payment of gratuity. It not only creates a right to payment of gratuity but also lays down the principles for quantification thereof as also the conditions on which an employee may be denied therefrom.

23. The petitioner has further relied on the case of Kerala Samsthana Chethu Thozhilali Union Vs. State of Kerala and Others, where the validity of the rules framed under Akbari Act was questioned. The Supreme Court held that while framing the rules for the purposes of the Act, the legislative policy cannot be abridged and the rules were framed to carry out the purposes of the Act. Based on this, the petitioner has submitted that the impugned regulations being subordinate legislations are only required to be made in conformity with the provisions of the principal Act. According to him, a subordinate legislation cannot be a plenary legislation. Mr. Dutta further submitted that subordinate legislation must also be in conformity with under any other Act and, therefore, it must be in conformity with the provisions of the Payment of Gratuity Act as well. Since the impugned Regulations are not in conformity with sections 4A, 7(3) and 9 of the Payment of Gratuity Act, 1972, they are liable to be struck down. The case of the petitioner, inter alia, is that since the Act of 1972 is a plenary legislation, it must prevail over any other subordinate legislation, irrespective is whether they are statutory or not.

24. The petitioner next relied on the case of The Regional Manager and Another Vs. Pawan Kumar Dubey, where the Supreme Court had held that it is the rule deducible from the application of law to the facts and circumstances of a case which constitutes its ratio decidendi and not some conclusion based upon facts which may appear to be similar. One additional or different fact can make a world of difference between conclusions in two cases even when the same principles are applied to each case of similar facts. Again in the case of the Haryana Financial Corporation and Another Vs. Jagdamba Oil Mills and Another, the Supreme Court reminded that Courts should not place reliance on decision without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are not to be read as Euclid''s theorems nor as provisions of the statute. These observations must be read in the context in which they appear. Judgments of Courts are not to be constituted as statutes. Mr. Dutta further relied on a case of Agarwal Oil Refinery Corporation, Kanpur Vs. The Commissioner of Trade Tax, U.P. Lucknow, where Supreme Court held that the High Court was not correct in relying on a decision which is factually distinguishable.

25. The petitioner has also relied on the case of State of Punjab Vs. V.K. Khanna and Others, and argued that the present charge-sheet calls for an interference by this Court to avoid the harassment and humiliation of a public official like the petitioner.

26. Mr. Dutta further submitted that since no mala fide intention has been imputed against the petitioner by the bank and the allegations pertained only to the procedural steps taken by him, the allegations do not constitute any misconduct. In this connection, the petitioner relied on the case of Union of India (UOI) and Others Vs. J. Ahmed, where the Supreme Court had the occasion to examine the charges leveled against the respondent in the context of the concerned discipline and appeal rules. The Supreme Court observed that competence for the post, capability to hold the same, efficiency requisite for a post, ability to discharge functions attached to the post, are things different from some act or omission of the holder of the post which may be styled as misconduct so as to incur the penalty under the rules. The Supreme Court had further held that it is difficult to believe that lack of efficiency, failure to attend the highest standard of the administrative ability while holding a high post would themselves constitute misconduct. These deficiencies in personal character or personal ability would not constitute misconduct for the purpose of disciplinary proceedings.

27. It was lastly argued by Mr. Dutta that as the charge-sheet refers to several provisions of the concerned Regulations which, in fact, do not exist. It must be taken to be demonstrating a complete non-application of mind. According to him, this infirmity alone vitiates the entire proceeding.

28. Mr. Majumdar argued that since the relevant Regulations of nineteen other nationalised banks have similar provisions as the impugned Regulations, other banks ought to be impleaded as respondents. I do not find much force in this submission. But I find sufficient force in the submissions of the respondents that the relevant Regulations challenged in the writ petition are definitely statutory Regulations. The relevant Regulations, impugned in this writ petition, have been framed in exercise of the powers conferred by section 19(2)(f) of the Banking Companies [Conclusion and Transfer of Undertaking] Act, 1970. Section 19 of the said Act confers powers upon the Board of Directors to make Regulations in consultation with the Reserve Bank of India and with the previous sanction of the Central Government. Section 19 of the said Act further provides that they shall not be inconsistent with the provisions of the Act or any scheme made thereunder. Section 19(2) deals with the matters on which Regulations may be made and I also quite agree with the submissions of Mr. Majumdar that the regulations particularly framed specifically by the Board of Directors meant for both the officers and employees respectively, must be held to be special pieces of subordinate legislations which because of their very special nature, must be given preeminence over the general principle over a general provision of the law enacted. The law is very well settled, as admitted by Mr. Dutta also, that a subordinate legislation cannot either overreach or overstep the principal Act.

29. Mr. Majumdar relied on the case of P. Rajan Sandhi Vs. Union of India (UOI) and Another, where the appellant was a journalist and was associated with a publishing house and was charge-sheeted for making false allegations against the Managing Director of the company and was ultimately dismissed from service. His claim for gratuity was rejected. Before the Supreme Court, on behalf of the appellant, it was contended that since no damage or loss or destruction of property of the employer was alleged or proved against the appellant, nor he was alleged to have committed any riotous act, his claim for gratuity could not have been denied. The appellant before the Supreme Court, as the petitioner in this case, relied on section 4(6) of the Payment of Gratuity Act. For the respondents the sheet anchor was Working Journalists'' and Other Newspaper Employees Condition of Service and Miscellaneous Provisions Act, 1955. The two Acts contain different provisions relating to the release of gratuity. The Supreme Court held that section 5 of the Working Journalists'' Act being a special law, will prevail over section 4(6) of the Payment of Gratuity Act which is a law of general nature. Section 5 of the Working Journalists'' Act was specifically meant for working journalists alone; whereas Payment of Gratuity Act was meant for all charges covered by the Payment of Gratuity Act and was not limited to working journalists.

30. It is a settled principle of law that the special law will always prevail over the general law - Generalia Specialibus non-Derrogent - the oft quoted Latin maxim, meaning the special must prevail over the general.

31. The case, Jaswant Singh Gill (supra), which was so strenuously relied on by Mr. Dutta in support of his contention that the concerned Regulations have no statutory character, is clearly distinguishable. The Supreme Court had very specifically held that the Rules framed by Coal India were not statutory Rules as they were made by the holding company of the respondent No. 1 therein i.e. Bharat Coking Coal. Coal India Rules were made by the authorities of Coal India Ltd. which are certainly binding on the subsidiary companies; but they have no legislative flavour and were not enacted pursuant to the conferment of power as in the present case where the Board of Directors of the bank have exercised power u/s 19 of the Act of 1970 to frame the Regulations upon the matters as enunciated in section 19(2) of the Act. As such merely because the Coal India Rules were held to be non-statutory, the banking Regulations cannot be described as non-statutory. Reference may be made to the case cited by Mr. Dutta himself in the case of Jagdamba Oil Mills (supra) where the Supreme Court had held that reliance cannot be placed on decisions without discussing the factual differences between the two cases or without considering the fact situation of the decision on which reliance is placed.

32. Mr. Majumdar very heavily relied on the case of Ramesh Chandra Sharma Vs. Punjab National Bank and Another, , to the effect that the Service Regulations made for the officers of that bank were framed by the Board of Directors of the Punjab National Bank in consultation with the Reserve Bank of India and also in exercise of the power conferred u/s 19(1) of the Act of 1970 to which reference has already been made. Mr. Majumdar submitted that the impugned Regulation 20(3) (iii) of the United Bank of India is pari materia the Officers'' Regulations of the Punjab National Bank. The Supreme Court had very clearly held that Regulation 20(3)(iii) envisages a continuation of a disciplinary proceedings despite the officer had ceased to be in service on the date of superannuation. For the said purpose a legal fiction has been created providing that the delinquent of the officers will be deemed to be in service until the proceedings are concluded and a final order is passed thereon. This Regulation being statutory in nature should be given full effect. When a legal fiction is created under a statute it must be given its full effect. Mr. Dutta sought to distinguish this judgment on the ground that in that case the Supreme Court was considering whether it was permissible to dismiss an employee who retired on superannuation and whether it was open to the High Court to interfere with the penalty. Both these issues are absent in the present case. This submission is perhaps not borne by the judgment of the Supreme Court itself. One of the points that cropped up for consideration was whether in terms of the relevant rules governing the terms and conditions of the employee of the bank it was permissible for it to continue the disciplinary proceeding despite the fact that the employee had attained the age of superannuation. This issue is also an issue in question in the present case. Mr. Dutta wanted to further distinguish it on the ground that in the case of Punjab National Bank (supra) the employee had retired from service when he was found guilty but here the enquiry had not been concluded. That hardly gives in the separate colour to the nature of authority or makes any distinction. The question is all about the continuance of the disciplinary proceeding after the superannuation of the employee and not on the stage at which the enquiry proceeding is pending. Even if it is factually correct that the legality of Regulation 20(3)(iii) was not challenged in the case of Ramesh Chandra Sharma (supra), the observation made by the Supreme Court must be held to have been in favour of the illegality of the said provision. Otherwise the Court would not have held that the said provision being statutory in nature should be given its full effect.

33. I for one also do not buy the views expressed by Mr. Dutta that the charge sheet issued against the petitioner was to harass him at the fag end of his career and, therefore, must be set aside as a malafide one. The charges against him were the impropriety committed by him while sanctioning loan amounts and this was to the tune of several crores of rupees. If a charge sheet is issued to an officer retired and if the relevant Regulation of the bank permits the continuance of the disciplinary proceedings even after the officer reaches the age of superannuation by creating a legal fiction in the statute and the employer is within its right to invoke the same particularly when it says on oath that on account of acts done by the writ petitioner the bank had had to suffer financial loss. I quite agree with Mr. Dutta''s submission that the bank ought to have been a little more active in proceeding against him after he had given his reply which the bank did not. But that is no reason to set aside the charge sheet as a whole.

34. Merely because no mala fide has been alleged against the petitioner is no defence in favour of a charged employee against the continuance of disciplinary proceeding against him. If the lending norms and the rules of the bank are alleged to have been violated by an employee, it is no defence to him that a disciplinary proceeding is not maintainable merely because no mala fide is charged against him. If the charges relate to the violation of the banking rules and norms then at least for that he remains answerable to his employer. In the case of Disciplinary Authority-cum-Regional Manager and Others Vs. Nikunja Bihari Patnaik, the Supreme Court held that in acting beyond one''s authority is by itself a breach of discipline and a breach of a certain Regulation which constitutes a misconduct within the meaning of Regulation 24. Supreme Court very specifically held that no further proof of loss is really necessary though as a matter of fact there were other findings as well.

35. Mr. Dutta raised an issue that Regulation 24 was not referred to in the charge-sheet. Even if that be so, that hardly makes any difference. The question is whether in absence of any allegation that any act of the petitioner was mala fide a charge-sheet could still be maintained. The Supreme Court had clearly responded to it in the affirmative. The Supreme Court in the last mentioned judgment had very specifically held:

"In the case of a bank-----for that matter, in the case of any other organisation-----every officer/employee is supposed to act within the limits of his authority. If each officer/employee is allowed to act beyond his authority, the discipline of the organisation/bank will disappear; the functioning of the bank would become chaotic and unmanageable. Each officer of the bank cannot be allowed to carve out his own little empire wherein he dispenses favours and largesse. No organisation, more particularly, a bank can function properly and effectively if its officer and employees do not observe the prescribed norms and discipline. Such indiscipline cannot be condoned on the specious ground that it was not actuated by ulterior motives or by extraneous considerations."

36. Discipline of any organisation is the life blood of its proper functioning and if it is alleged that an employee while discharging his duties had done anything against the established norms of that organisation, he is liable to be proceeded against irrespective of whether any particular section is not quoted in the charge-sheet or wrongly quoted or he makes any profit out of it. The act, if proved, will be equally blameworthy.

37. The last submission of Mr. Dutta is that the authorities had referred to certain non-existent provisions in their charge-sheet which renders the entire proceedings vitiated as being hit by the mischief of non application of mind. One wonders how it make a difference in view of the settled principle of law that a wrong quoting of a section or a mistaken reference given is not fatal to the success of a disciplinary proceeding. Merely because some other provisions of law were quoted or the actual provision of law was not quoted or, for that matter, a wrong provision of law was mentioned in the charge-sheet, the charge-sheet is not vitiated and no right accrues in favour of a charged employee to pray for a quashing of the same or declaring it ultra vires the Constitution. The law on the point is well settled. Before considering the scope of charge-sheet, or for that matter, the statements of imputations against an employee, one is only to look at that substance of the imputation of allegation therein contained. The contents of the allegations are all that matters and not the specific form of its expression.

38. Mr. Dutta has taken yet another point that the respondents have decided to issue a composite charge-sheet which is not permissible inasmuch as charges cannot be brought against the petitioner after his superannuation. It cannot be lost sight of that the petitioner was charged with the commission of certain things. Before his superannuation he had given his reply. Even after that date, by a legal fiction, as provided in Regulation 20(3)(iii) of the relevant Regulations, he is deemed to be in employment. If the former employer would now discovers further evidence to any misdeed alleged to have been committed or any wrong action alleged to have been committed by the petitioner, it will be improper to deny the right to the employer to proceed against the petitioner. The employer was to proceed against him by way of bringing a composite charge-sheet. After all, the bank does not propose to proceed against the petitioner separately by issuing a new charge-sheet.

39. Thus, all the points taken by the petitioner fail.

40. It is, however, expected that since the petitioner had superannuated quite sometime back, the bank will conclude the disciplinary proceedings as early as possible and, as prayed for by Mr. Dutta, since the disciplinary proceedings has not considerably proceeded I direct the bank to take all possible steps so that the disciplinary proceedings can be completed within two months from the date of the communication of the order. Mr. Majumder submitted that the petitioner had not given reply to the composite charge-sheet which Mr. Dutta has assured that the petitioner would, if not already done, within a week''s time. Both the bank and the petitioner are directed to cooperate with each other so that the time-frame fixed by this Court can be maintained.

41. Considering the fact that the petitioner had retired from service from November 1, 2011, it is only expected that the bank will gear up and complete the proceedings within the time fixed.

42. Thus, I find no merit in the writ petition and the same is hereby dismissed. There shall be no order as to costs.

Urgent certified photocopy of this order, if applied for, be supplied to the parties to compliance with all requisite formalities.