JUDGMENT
Sardar Ali Khan, J.
1. The Writ Petition is filed with the prayer for issue of an appropriate writ, order or direction declaring Charge Sheet No. R.III.Gr..I/5641, dated 20-10-1982 and all other consequential proceedings including the order No. DPC/499 dated 24-3-1988 of the 2nd respondent and the consequential order of the 1st respondent thereon to be quashed as being illegal, null and void and unconstitutional and against the principles of natural justice and to issue a direction to reinstate the petitioner into service forthwith with all other consequential benefits.
2. When the matter came up for hearing before a learned single Judge (Sri Justice M.N. Rao), the learned single Judge felt that in view of the importance of the matter, involved in the writ petition, and the conflicting decisions thereon, it would be necessary to have a decision of a Division Bench in the matter. Thus, it is by virtue of the order of reference made by the learned single Judge that the matter has been placed before this Division Bench for a pronouncement on the conflicting questions of constitutional importance involved in the writ petition.
3. A brief resume of the facts of the case will not be out of place to arrive at a conclusion in this matter. The petitioner joined the service in the State Bank of Hyderabad on 7-12-1964 as a Clerk and was promoted as Officer Grade-II under Group ‘A’ with effect from 16-10-1976 as per the communication No. PER/PF/1221 dated 12-11-1976 of the Managing Director of the State Bank of Hyderabad. Initially the petitioner was placed under probation for one year and his probation was declared as Officer Grade-II under Group ‘A’ by the Executive Committee. While he was working as Officer Junior Management, Grade Scale-I at Sangareddy Branch, the Regional Manager, Region-I, State Bank of Hyderabad, in his letter dated 24-8-1981, reported certain alleged irregularities committed by the petitioner while he was functioning as Branch Manager at Kulakacherla Branch and directed the petitioner to submit his explanation. The petitioner denied the allegations levelled against him in his letter dt. 19-10-1981. But, he was placed under suspension pending disciplinary action through letter dated 17-5-1982 of the 3rd respondent, viz., the General Manager (Operation), State Bank of Hyderabad. The 3rd respondent initiated disciplinary proceedings against the petitioner under Regulation 50 (4) read with Regulation 66 of the State Bank of Hyderabad (Officers’) Service Regulations, 1979, hereinafter referred to, for short, as ‘the Service Regulations’. In all, three charges were framed against the petitioner, which are as follows:-
(i) The official had sanctioned agricultural term loans of Rs. 2,500/-each to eleven borrowers of Antharam village for the purpose of purchasing milch animals. The borrowers were paid only a sum of Rs. 2,200/- each at the cattle market and the balance amount of Rs. 300/- was withheld and not released to them under the pretext of payment towards insurance premia. The borrowers’ accounts were subsequently debited with a sum a Rs. 87-50 each towards insurance premium, resulting in the borrowers preferring a complaint in the matter. It, therefore, appears that the difference in amount i.e., Rs. 300/- in respect of each borrower has been misappropriated by the official.
(ii) The official had sanctioned loans of Rs. 3,000/- each to three borrowers of Peerampalli village as crop loans but actually released an amount of Rs. 1,500/- only to each borrower at Kosgi Cattle Market through Shri G. Satyanarayana, a Clerk working at Kulakacherla Branch. Subsequently after returning to the village, the employee paid Rs. 100/- each to two borrowers. Thus, the loan amount released to the three borrowers aggregating Rs. 4,700/- as against Rs. 9,000/- sanctioned to them indicating that the official in collusion with Sri G. Satyanarayana, the employee, misappropriated the difference amount of Rs. 4,300/-.
(iii) The official had purchased six cheques drawn by his wife and others, purportedly from some staff members and two other outside parties adopting unfair and dubious practices, with an intention to derive undue benefit for himself, despite being aware of the non-availability of adequate funds in the respective accounts of the drawers of the cheques. Three individuals from whom the cheques were said to have been purchased had denied their discounting of the relative cheques at the Branch. The official himself had subsequently made arrangements to provide funds in the relative drawers accounts to get cheques honoured when presented for payment.
The petitioner submitted a detailed explanation on 16-12-1982 to the charge memo denying all the allegations. Thereafter an Enquiry Officer was appointed on 7-1-1983 to conduct the enquiry proceedings against the petitioner. The Enquiry Officer in his findings found that the charge relating to misappropriation of Rs. 300/- in each of the cases relating to all borrowers was not proved. Similarly, the Enquiry Officer round that the petitioner was not guilty of misappropriation of Rs. 1,500/- from each of the three crop loan accounts as mentioned in the second charge. The Enquiry Officer, however, found that the petitioner was guilty of discounting and purchasing of cheques for his own benefit and held the third charge as proved. Thus, it is seen that while the first two charges were held to be not proved against the petitioner, only the third charge was held to have been proved by the Enquiry Officer. The Disciplinary Authority, after considering the findings of the Enquiry Officer and the material on record, concurred with the findings of the Enquiry Officer on charges 1 and 2. In regard to charge No. 1 the Disciplinary Authority held that the evidence on record is not adequate to hold the serious imputation levelled against the petitioner as established. With regard to the second charge, concurring with the Enquiry Officer, the Disciplinary Authority held that the charge was not proved against the petitioner. As regards charge No. 3 is concerned, the Disciplinary Authority, while concurring with the findings of the Enquiry Officer, held that the petitioner was guilty of the third charge of discounting and purchase of cheques for his own benefit. When the matter was referred to the Appointing Authority, i.e., Chief General Manager, State Bank of Hyderabad, the 2nd respondent herein he disagreed with the findings of the Enquiry Officer and the Disciplinary Authority on the findings with regard to charges 1 and 2 and held that those charges were also established. The Appointing Authority, of course, concurred with the Inquiring Authority and the Disciplinary Authority as far as charge No. 3 is concerned and held that the petitioner was guilty of the charge of discounting and purchase of cheques for his own benefit.
4. The first contention raised by the petitioners is that he has been appointed by the Executive Committee of the Bank and not by the 2nd respondent and, therefore, the 2nd respondent is not competent to impose the punishment against the petitioner. His second contention is that the Appointing Authority while disagreeing with the findings of the Inquiring Authority as well as the Disciplinary Authority with regard to charges 1 and 2 failed to give any notice to the petitioner before passing the order of removal of the petitioner from service. It is further submitted that the enquiry report was not furnished to the petitioner before the order of his removal was passed by the 2nd respondent, who is the Appointing Authority in this case.
5. In so far as the first contention of the petitioner is concerned, the law is well settled on the point that the ‘Appointing Authority’, mentioned in Regulation 68 Explanation (3) (iii) and (iv) of the Service Regulations, is the authority which has been vested with the powers of appointment as such and exercising those powers on the date of passing of the order. It is, therefore, obvious that it need not necessarily be the Appointing Authority which had actually appointed the employee in the past. In Parilal Sharma v. Managing Director, Jammu and Kashmir Industries, Srinagar and Ors., it was held by the Supreme Court that the Appointing Authority subordinate to that by which he was appointed could terminate the service of that employee if that authority terminating the service had the powers of the appointing authority as on the date of termination of service. The principle, therefore, clearly emerging from the above is that to determine as to who is the Appointing Authority for the purpose of issuing the termination order, it is necessary to find out who is the Appointing Authority on the date when the order of termination was passed and not the date on which a particular employee was appointed. In view of the above decision of the Supreme Court, the learned counsel for the petitioner also has not contested the matter to any definite conclusion and, therefore, in so far as that point is concerned we hold in favour of the respondents that the 2nd respondent is competent to pass the order of termination in this case.
6. Another contention raised by the learned counsel for the petitioner is that while disagreeing with the enquiry report no notice or opportunity was given to the petitioner before imposing the penalty of removal. In this connection, it would be necessary to examine the relevant provisions of the State Bank of Hyderabad (Officers’) Service Regulations, 1979. Under Regulation 68, a detailed procedure has been provided for, which is to be followed before imposing any major or minor penalties on a delinquent officer. The relevant portions of Regulation 68, which are necessary for the purpose of this case, are as follows:-
Regulation 68 Explanation 3:
“(i) The Disciplinary Authority, if it is not itself the Inquiring Authority, may, for reasons to be recorded by it in writing, remit the case to the Inquiring Authority, whether the Inquiring Authority is the same or different, for fresh or further inquiry and report, and the Inquiring Authority shall thereupon proceed to hold further inquiry according to the provisions of Sub-regulations (2) as far as may be.
(ii) The Disciplinary Authority shall, if it disagrees with the findings of the Inquiring Authority on any article of charge, record its reasons for such disagreement and record its own findings on such charge, if the evidence on record is sufficient for the purpose.
(iii) If the Disciplinary Authority, having regard to its findings on all or any of the articles of charge, is of the opinion that any of the penalties specified in Regulation 67 should be imposed on the officer, it shall, notwithstanding anything contained in Sub-regulation (4), make an order imposing such penalty:
Provided that where the Disciplinary Authority is of the opinion that the penalty to be imposed is any of the major penalties specified in Clauses (e), (f), (g) and (h) of Regulation 67 and if it is lower in rank to the Appointing Authority in respect of the category of officers to which the officer belongs, it shall submit to the Appointing Authority the records of the enquiry specified in Clauses (xxi)(b) of Sub-regulation (2) together with its recommendations regarding the penalty that may be imposed and the Appointing Authority shall make an order imposing such penalty as it considers in its opinion appropriate.
(iv) If the Disciplinary Authority or the Appointing Authority, as the case may be, having regard to its findings on all or any of the articles of charge, is of the opinion that no penalty is called for, it may pass an order exonerating the officer concerned.”
7. A reading of the above regulation, particularly Clause (ii) thereof, clearly reveals that the Disciplinary Authority shall, if it disagrees with the findings of the Inquiring Authority on any article of charge, record its reasons for such disagreement and records its own findings on such charge if the evidence on record is sufficient for the purpose. It is nowhere stipulated that in case of disagreement with the findings of the Inquiring Authority, a show cause notice is to be given to the petitioner asking him to explain as to why the Disciplinary Authority should not come to its own conclusions disagreeing with the findings of the Inquiring Authority. Therefore, having regard to the provisions of Regulation 68 Explanation 3 (ii), it is evident that no fresh notice is to be given in case the Disciplinary Authority disagrees with any of the findings of the Inquiring Authority thereby affording an opportunity to the delinquent officer to explain as to why the Disciplinary Authority should not disagree with the findings of the Inquiring Authority.
8. The only other contention raised in this writ petition is that it is necessary to furnish a copy of the enquiry report to the petitioner before any penalty is imposed on him by way of removal from service. In answer to this contention, the learned counsel appearing for the respondents has relied upon the decisions of the Supreme Court reported in Union of India v. H.C. Goel, , and Railway Board, New Delhi v. N. Singh, , wherein it was held that the enquiry report is not binding on the Disciplinary Authority as it is only in the nature of a recommendation and the authority imposing the punishment is free to come to its own conclusion. Reliance has also been placed by the learned counsel for the respondents on Kailash Chander v. State of U.P., 1983 (3) SLR 319, wherein it was held that it is not necessary to furnish a copy of the enquiry report to the delinquent officer. Similarly in Mahendra Kumar v. Union of India, , this court held that in a matter which is governed by Article 311 (2) of the Constitution it is futile to furnish a copy of the enquiry report to the delinquent officer as there is no obligation to give a second show cause notice.
9. The learned counsel for the petitioner on the other hand has strongly relied on the observations made in Union of India v. E. Bashyan, AIR 1988 SC 1000 where in the question of supply of a copy of the report of the Enquiry Officer to the delinquent officer before the Disciplinary Authority makes up its mind and records the finding of guilt as against him came up for consideration. The Supreme Court held, inter alia, that the question, being of great importance to the civil servants, deserves to be referred to the larger Bench for expeditious decision. The Supreme Court made a significant observation that it would be a startling proposition to advance that the only authority which really and actually holds a delinquent guilty need not afford any opportunity to the person against whom such a finding of guilt is recorded and the material on which he acts. It went on to observe further that it needs to be highlighted that serving a copy of the enquiry report on the delinquent to enable him to point out anomolies, if any, therein before the axe falls and before finding about guilt is recorded by the Disciplinary Authority is altogether a different matter from serving a second show cause notice. The eventual conclusion which seems to have been arrived at while referring the matter to a larger Bench in the above said case is that the opportunity required to be given to a delinquent must be a reasonable opportunity compatible with principles of natural justice which has not been dispensed with by virtue of amendment of Article 311 (2) of the Constitution. A reference has also been made to a Full Bench decision of the Central Administrative Tribunal (New Bombay Bench) in T.A.No. 2 of 1986 dated 6-11-1987) reported in Shri Premnath K. Sharma v. Union of India and Ors., 1988 (3) All India Service Law Journal 449 which has also taken the view that furnishing of the enquiry report is a necessity in terms of the rules of natural justice and fair play which must govern the scope of the enquiry against a delinquent officer. The Full Bench of the Central Administrative Tribunal arrived at this conclusion on the ground that the enquiry initiated against the delinquent continues till the final order imposing a punishment is made by the Disciplinary Authority and, therefore, furnishing of a copy of the enquiry report is necessary to enable him to put up a defence on his behalf. However, the final seal of authority on this controversy has been put up by the Supreme Court in its judgment reported in Union of India and Ors. v. Mohd. Ramzan Khan, 1990 (4) Judgments Today-Supreme Court 456 wherein it has been held that the 42nd Amendment has not brought about any change in the matter of supply of a copy of the report to the delinquent officer. The Supreme Court held that the 42nd Amendment has deleted the second stage of the enquiry which would commence with the service of a notice proposing one of the three punishments mentioned in Article 311 (1) and the delinquent officer would represent against the same and on the basis of such representation and/or oral hearing granted the Disciplinary Authority decides about the punishment. Deletion of this part from the concept of reasonable opportunity in Article 311 (2) does not bring about any material change in regard to requiring the copy of the report to be provided to the delinquent. It would be in the fitness of things to re-produce here para 17 of the judgment of the Supreme Court which lays down the proposition of law that the enquiry report has to be furnished to the delinquent officer before the imposition of any penalty on him. Para 17 of the judgment of the Supreme Court in the above case is in the following terms :
“There have been several decisions in different High Courts which, following the Forty-Second Amendment, have taken the view that it is no longer necessary to furnish a copy of the inquiry report to delinquent officers. . Even on some occasions this Court has taken that view. Since we have reached a different conclusion (he judgments in the different High Courts taking the contrary view must be taken to be no longer laying down good law. We have not been shown any decision of a co-ordinate or a larger Bench of this Court taking this view. Therefore, the conclusion to the contrary reached by any two-judge Bench in this Court will also no longer be taken to be laying down good law, but this shall have prospective application and no punishment imposed shall be open to challenge on this ground.”
In the matter on hand it is not in dispute that the enquiry report has not been furnished to the petitioner and applying the principle laid down by the Supreme Court in the above case, we have no hesitation in holding that the impugned order deserves to be get aside as having been passed in violation of the rules of natural justice. However, while setting aside the order it is made clear that the authorities are not precluded from proceeding with the enquiry after furnishing a copy of the enquiry report to the petitioner and to take action against him in accordance with law. The petitioner will be entitled to all the benefits consequent upon his reinstatement in service.
10. With the above observations, the Writ Petition is allowed, but, in the circumstances, without costs.