UCO BANK & ORS. versus RAJENDRA SHANKAR SHUKLA

[2018] 2 S.C.R.

UCO BANK & ORS.

RAJENDRA SHANKAR SHUKLA

(Civil Appeal No. 2693 of 2013)

FEBRUARY 15, 2018

[MADAN B. LOKUR AND DEEPAK GUPTA, JJ.]

Service Law – Dismissal from service after superannuation –Propriety of – Respondent while in charge of extension counter ofappellant-Bank issued cheque in 1991, from his account inCappellant-Bank, for Rs.3 lakhs in favour of his brother while hehad only about Rs.1,000/- in his account – Notwithstanding the‘stop payment’ communication by respondent to the Bank,respondent’s brother presented the cheque and it was temporarilyencashed – Respondent was issued charge sheet in 1998–DRespondent superannuated in January, 1999 but disciplinaryproceedings continued against him and he was dismissed fromservice by order of Disciplinary Authority – High Court quashedthe said order – Held: There was enormous delay of about 7 yearsin issuing charge sheet against respondent, for which there is noexplanation – On this ground itself, charge sheet against respondentEis liable to be set aside – Even if the charge against respondentwas proved, it was an action personal to him and would not amountto misconduct within the purview of the Conduct Regulationsapplicable to bank employees – Further, before the charge sheetwas issued to respondent, he was placed in higher category asFManager and was also allowed to cross the efficiency bar – If theBank was serious about proceeding against respondent formisconduct, they would not have granted him such benefits –Also,the respondent was denied his pension as well as subsistenceallowance which prevented him from effectively participating in thedisciplinary inquiry – On this ground also, the proceedings againstGrespondent are vitiated – Punishment of dismissal could not havebeen imposed on respondent after his superannuation – No reasonto interfere with the judgment of High Court – Costs of Rs. 1 lakhimposed on appellant – UCO Bank (Officers’) Service Regulations,1979 – Regulation 20(3)(iii) – UCO Bank Officer Employees’

(Conduct) Regulations, 1976 – UCO Bank(Employees) PensionRegulations, 1995 – Negotiable Instruments Act, 1881.

Service Law – Subsistence allowance – Entitlement to, duringpendency of departmental enquiry – Discussed – Access to justice.

Dismissing the appeal, the Court

HELD: 1.1 Even if the charge was proved against therespondent, it would not amount to misconduct within thepurview of the Conduct Regulations applicable to bank employeesbut was an action personal to him. Assuming misconduct wasproved, appropriate action could be taken under the UCO Bank(Employees) Pension Regulations, 1995 in accordance with lawand if permissible. The respondent’s direction to ‘stop payment’would perhaps have made him liable for some action by his brotherbut certainly not by the Bank. [Paras 10, 11][641-B-D]

1.2 There is no explanation for the enormous delay of about7 years in issuing charge sheet against the respondent. On thisground itself, the charge sheet against the respondent is liableto be set aside due to the inordinate and unexplained delay in itsissuance. What compounds the default on the part of the Bank isthat the respondent was placed in higher category as Managerin July, 1994. He was also allowed to cross the efficiency bar inAugust, 1996. Surely, if the Bank was serious about proceedingagainst the respondent for misconduct, they would not only havetaken prompt action in issuing charge sheet but would not havegranted him the benefit of being placed in higher category orcrossing the efficiency bar. [Paras 12, 13] [641-E-H]1.3 An employee is entitled to subsistence allowance duringan inquiry pending against him or her but if that employee isstarved of finances by zero payment, it would be unreasonable toexpect the employee to meaningfully participate in departmentalinquiry. Access to justice is valuable right available to everyperson, even to criminal, and indeed free legal representationis provided even to criminal. In the case of departmentalinquiry, the delinquent is at best guilty of misconduct but that isno ground to deny access to pension (wherever applicable) orsubsistence allowance (wherever applicable). The respondent wasdenied his pension as well as subsistence allowance which

Aprevented him from effectively participating in the disciplinaryinquiry. On this ground as well, the proceedings against therespondent are vitiated. The punishment of dismissal could nothave been imposed on the respondent after his superannuation.[Paras 14, 15 and 19][642-C-D, A-B; 643-D]

BUCO Bank and Ors. v. Prabhakar Sadashiv Karvade[Decision dated 20.5.2010 by Supreme Court in CivilAppeal No. 4725 of 2010] ; UCO Bank and Anr. v.Rajinder Lal Capoor 2007 (6) SCC 694 : [2007] 7SCR 543 – relied on.

Case Law Reference

[2007] 7 SCR 543

relied onPara 17

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2693of 2013.

DFrom the Order dated 07.05.2010 of the High Court of Chhattisgarhat Bilaspur in Writ Appeal No.60 of 2007.

P.H. Parekh, Sr. Adv, Rajesh Singh, Vishal Prasad, Shishir Mathur,Viresh B. Saharya, Akshat Agarwal, Advs. for the appearing parties.

The Judgment of the Court was delivered byE

MADAN B. LOKUR, J. 1. This appeal raises an interestingquestion of law on access to justice in departmental inquiry. In ouropinion, the respondent (Rajendra Shankar Shukla) was not given fairopportunity to defend himself by denying him financial resources. Onthe merits of the case also, we are of the view that the impugned judgmentFand order of the High Court does not call for any interference.

2. The allegation against Shukla was that while in charge of theextension counter of the UCO Bank from 3[rd] October, 1987 to 8[th] July,1994 he issued cheque on 25[th ]January, 1991 for an amount of Rs.3lakhs in favour of his brother. At that time, Shukla had only aboutGRs.1,000/- in his account. We are only concerned with this broad allegation.

3. Shukla was issued charge sheet on 20[th] May, 1998 (afterabout 7 years) by the respondent (Bank) under the provisions of theUCO Bank Officer Employees’ (Conduct) Regulations, 1976. Thearticles of charge against Shukla were as follows:-

(I) Shri R.S. Shukla issued/got issued cheque on his joint accountwithout making any arrangement of adequate balance andintention to honour it, only to cause wrongful benefit to hisrelative, at the cost of the Bank. He has thus failed to dischargehis duties with utmost integrity and honesty, which is violativeof Regulation 3 of UCO Bank Officer Employees’ (Conduct)Regulations, 1976 as amended.

(II) Shri Shukla, by making available the official correspondence(exchanged between regional office, Raipur and his branch) tohis son which he later quoted in his proposal for compromise ofTransport Loan availed by him, has not only acted against theinterest of the Bank but also has deliberately divulged informationof confidential nature to person - his son, not entitled to it,which is violative of Regulation 4 of UCO Bank OfficerEmployees’ (Conduct) Regulations, 1976 as amended.

(III) By availing loans and that also frequently, far in excess of thepermissible amount against NSCs and FDRs without payinginterest at the applicable rates, Shri R.S. Shukla has failed todischarge his duties with devotion, honesty and utmost integrity.This act is violative of Regulation 3 of UCO Bank OfficerEmployees’ (Conduct) Regulations, 1976 as amended.

4. Shukla was due to superannuate on 31[st] January, 1999. fewdays prior to his superannuation, the Competent Authority issued letterinvoking Regulation 20(3)(iii) of the UCO Bank (Officers’) ServiceRegulations, 1979 (for short “the Regulations”). Regulation 20(3)(iii)reads as follows:-

“The officer against whom disciplinary proceedings have beeninitiated will cease to be in service on the date of superannuationbut the disciplinary proceedings will continue as if he was in serviceuntil the proceedings are concluded and final order is passed inrespect thereof. The concerned officer will not receive any payand/or allowance after the date of superannuation. He will alsonot be entitled of the payment of retirement benefits till theproceedings are completed and final order is passed thereon excepthis own contributions to CPF.”

A5. In view of the aforesaid Regulation, Shukla ceased to be inservice on 31[st] January, 1999 on attaining his superannuation but thedisciplinary proceedings against him continued. Shukla denied thecharges levelled against him but the Enquiry Officer submitted reportin which Charges 1 and 3 were proved while Charge 2 was not proved.The Disciplinary Authority came to the conclusion that all three chargesBwere proved and as far as Charge 1 is concerned, he passed an order on30[th] June, 1999 dismissing Shukla from service which would ordinarilybe disqualification for future employment.

6. departmental appeal was filed by Shukla. During thependency of the departmental appeal, Shukla filed writ petition in theCMadhya Pradesh High Court. Later, the departmental appeal filed byShukla was dismissed. The writ petition was transferred to theChhattisgarh High Court and by judgment and order dated 21[st]December, 2006 the learned Single Judge allowed the writ petition andquashed the order dated 30[th] June, 1999 passed by the DisciplinaryDAuthority. An appeal filed by the Bank was dismissed by the impugnedjudgment and order dated 7[th] May, 2010 by the Division Bench of theHigh Court. It is under these circumstances that the present appeal wasfiled in this Court.

7. At the outset, we make it clear that the learned senior counselEfor the Bank candidly submitted that he was concerned only with Charge1 and did not seek to justify the correctness of the findings of theDisciplinary Authority in respect of Charge 2 and Charge 3.

8. The learned Single Judge noted few extremely relevant facts.Undoubtedly the cheque was issued by Shukla on 25[th] January, 1991F(although he claimed his wife had signed the cheque) but he directed theBank to ‘stop payment’ by communication dated 6[th] March, 1991.Notwithstanding the ‘stop payment’ communication, his brother presentedthe cheque for encashment on 2[nd] April, 1991 and it was temporarilyencashed.

G9. We have been informed by learned counsel for Shukla that on19[th] July, 1994 he was promoted to higher category as Manager and on12[th] August, 1996 he was permitted to cross the efficiency bar. Theseevents occurred before the charge sheet was issued to Shukla.

10. The learned Single Judge took the view that there was noprohibition in bank employee having an account in the same bank andH

that in case cheque issued by such an employee was dishonoured,action may be taken by the complainant under the provisions of theNegotiable Instruments Act, 1881 but the Bank could not take actionunder the UCO Bank Officer Employees’ (Conduct) Regulations, 1976.In view of this conclusion, the learned Single Judge held that even ifCharge 1 is proved, it would not amount to misconduct within thepurview of the Conduct Regulations applicable to bank employees. Itwas further held that assuming misconduct was proved, appropriate actioncould be taken under the UCO Bank (Employees) Pension Regulations,1995 in accordance with law and if permissible.

11. The Division Bench of the High Court found no error in theview taken by the learned Single Judge and accordingly dismissed theappeal filed by the Bank. The Division Bench held that the action byShukla in issuing cheque for Rs. 3 lakhs when he had only aboutRs. 1,000/- in his account did not amount to misconduct but was anaction personal to him. The High Court also noted that his direction to‘stop payment’ would perhaps have made him liable for some action byhis brother but certainly not by the Bank.

12. We do not find any reason to interfere with the judgment andorder passed by the High Court. However, it is necessary for us tohighlight few facts which were brought to our notice during the courseof submissions made by learned counsel. The first issue of concern isthe enormous delay of about 7 years in issuing charge sheet againstShukla. There is no explanation for this unexplained delay. It appearsthat some internal discussions were going on within the Bank but that ittook the Bank 7 years to make up its mind is totally unreasonable andunacceptable. On this ground itself, the charge sheet against Shukla isliable to be set aside due to the inordinate and unexplained delay in itsissuance.

13. What compounds the default on the part of the Bank is thatShukla was placed in higher category as Manager on 19[th] July, 1994while all these discussions were going on in the Bank. He was alsoallowed to cross the efficiency bar on 12[th] August, 1996 again while thediscussions were going on. Surely, if the Bank was serious aboutproceeding against Shukla for misconduct, they would not only havetaken prompt action in issuing charge sheet but would not have grantedhim the benefit of being placed in higher category or crossing theefficiency bar.

A14. We were also little taken aback to learn from learned counselfor Shukla that after his superannuation on 31[st] January, 1999 Shuklawas paid nothing during the pendency of the disciplinary inquiry.He was not paid his salary because he had superannuated. For somereason he was not paid his pension, perhaps because departmentalinquiry was pending against him. He was also not paid any subsistenceBallowance during the period that the disciplinary inquiry was pendingand even thereafter till 30[th] June, 1999. In other words, Shukla wasmade to face financial crunch and presumably, he did not have fairopportunity of defending himself.

15. An employee is entitled to subsistence allowance during anCinquiry pending against him or her but if that employee is starved offinances by zero payment, it would be unreasonable to expect theemployee to meaningfully participate in departmental inquiry. Accessto justice is valuable right available to every person, even to criminal,and indeed free legal representation is provided even to criminal. In

the case of departmental inquiry, the delinquent is at best guilty of aDmisconduct but that is no ground to deny access to pension (whereverapplicable) or subsistence allowance (wherever applicable). As far asShukla is concerned he was denied his pension as well as subsistenceallowance which prevented him from effectively participating in thedisciplinary inquiry. On this ground as well, the proceedings againstEShukla are vitiated.16. Finally, we may also draw attention to an unreported decisionof this Court in UCO Bank and Ors. v. Prabhakar Sadashiv Karvade.[1]In this decision, the Court considered the provisions of the Regulationsthat we are concerned with and held :F“The sum and substance of these Regulations is that even thougha departmental inquiry instituted against an officer employee beforehis retirement can continue even after his retirement, none of thesubstantive penalties specified in Regulation 4 of 1979 Regulations,which include dismissal from service, can be imposed on an officeremployee after his retirement on attaining the age ofGsuperannuation. Therefore, we have no hesitation to hold that orderdated 12.10.2004 passed by the disciplinary authority dismissingthe respondent from service, who had superannuated on 31.12.1993was ex facie illegal and without jurisdiction and the High Courtdid not commit any error by setting aside the same.”H1C.A. No. 4725 of 2010 decided on 20th May, 2010

17. We may also make reference to another decision of this Courtin UCO Bank and Anr. v. Rajinder Lal Capoor.[2]This decision alsorelated to the very same Regulations that we are concerned with.

18. In dealing with these Regulations, it was observed by the Courtin paragraph 22 of the Report as follows:-

“The respondent, therefore, having been allowed to superannuate,only proceeding, inter alia, for withholding of his pension underthe Pension Regulations could have been initiated against therespondent. Discipline and Appeal Regulations were, thus notattracted. Consequently the charge-sheet, the enquiry report andthe orders of punishment passed by the disciplinary authority andthe appellate authority must be held to be illegal and withoutjurisdiction.”

19. Under the circumstances, we have no hesitation in dismissingthe appeal filed by the Bank also on the ground that the punishment ofdismissal could not have been imposed on Shukla after his superannuation.

20. However, we must observe that the learned Single Judge hadheld against the Bank and the Division Bench also held against the Bank.Notwithstanding this the Bank preferred this appeal. The appeal waspreferred despite at least two decisions delivered by this Court makingthe legal position clear. The Bank would have been well-advised to followthe law laid down by this Court rather than unnecessarily litigate againstan employee who has superannuated. We have no doubt that Shuklamust have spent considerable amount in litigation. Accordingly, whiledismissing the appeal, we impose costs of Rs. 1 lakh which will be paidto Shukla within 4 weeks from today towards his legal expenses.

Divya Pandey

Appeal dismissed.