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TMI Blog1998 (8) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... e the retirement benefits to the respondents. - C.A. 1884 OF 1993 - - - Dated:- 19-8-1998 - B. N. KIRPAL, J. JUDGMENT In these two appeals the common question which arises for consideration is that when the inquiry officer, during the course of disciplinary proceedings, comes to a conclusion that all or some of the charges alleging misconduct against an official are not proved than can the disciplinary authority differ from the tan give a contrary finding without affording any opportunity to the delinquent officer. The respondents in these two appeal, namely, Shri Kunj Behari Misra and Shri Shanti Prasad Goel were working in the appellant bank in the Hazratganj Branch, Lucknow, as Assistant Managers. On 10th November, 1981 on physical verification of the currency chest a shortage of ₹ 1 lac currency notes was found. Thereafter first information report was lodged and disciplinary proceedings were initiated by the appellant bank against both the respondents, who were also placed under suspension. Six charges were framed against Misra while the charge sheet served on Goel Contained seven charges. The disciplinary authority did not conduct the inquiry itself an i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary authority, who had chosen to disagree with the conclusions arrived at by the inquiry officer, could not have come to adverse conclusions without giving them an opportunity of being heard and the orders passed against them were liable to be quashed. This contention found favour with the High Court wh, while allowing Misra's writ petition vide its judgment dated 20th February, 1990, quashed the order imposing penalty and directed the appellants to release the retirement benefits including provident fund and gratuity. Following the aforesaid decision the Writ petition filed by Goel was allowed by the High Court on 10th January, 1995 and a similar direction was issued for the release of the retirement benefits like provident fund and gratuity etc. to the said respondent. These appeals by special leave came up for hearing before a bench of two judges of this Court. While the appellants placed reliance on the decision in State Bank of India, Bhopal Vs. S. S. Koshal [1994 Suppl. (2) SCC 468], the counsel for the respondents placed reliance on two other Two-Judge Bench decision of this Court in Institute of Chartered Accountants of India Vs. L. K. Ratna and Ors. [(1986) 4 SCC 53 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for any other good and sufficient reason. The procedure for imposing the minor penalties is set out in Regulation 8. It provides that where it is proposed to impose such a penalty the employee concerned has to be informed in writing of the imputations of lapses against him and an opportunity is given to him to submit his written statement. Regulation 8(2) provides that where the disciplinary authority is satisfied that an inquiry is necessary, then it shall follow the procedure for imposing a major penalty as laid down in Regulation -6. Regulation-6, to the extent it is relevant in the present case, reads as follows: 6. Procedure for imposing major penalties; (2) whenever the Disciplinary Authority is of the opinion that there are grounds for inquiring into the truth of any imputation of misconduct or misbehavior against an officer employee, it may itself enquire into or appoint any other public servant (hereinafter referred to as the inquiring authority) to enquire into truth thereof. Explanation: when the Disciplinary Authority itself holds the inquiry any reference in sub regulation (8) to sub regulation (21) to the inquiring authority shall be construed as a referen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atement of defence, if any, submitted by the officer employee referred to in sub-regulation (15); (c) the oral and documentary evidence produced in the course of the inquiry; (d) written briefs referred to in sub-regulation (18), if any; and (e) the orders, if any, made by the disciplinary authority and the inquiring authority in regard to the inquiry. What action has to be taken on the submission of the inquiry report is provided by Regulation-7 which reads as follows: 7. Action on the inquiry report: (1) The Disciplinary Authority, if it is not itself the Inquiry Authority, may, for reasons to be recorded by it in writing, remit the case to the Inquiring Authority for fresh or further inquiry and report and Inquiring Authority shall thereupon proceed to hold the further inquiry according to the provisions of regulation 6 as far as may be. (2) 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 n record is sufficient for the purpose. (3) If the Disciplinary Authority, having regard to its f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.S. Koshal's case (supra). In that case the disciplinary authority disagreed with the findings of the inquiry officer which was favourable to the delinquent. A question arose whether the disciplinary authority was required to give a fresh opportunity of being heard. At page 470 a Division Bench (Coram: BP Jeevan Reddy and BL Hanasria, JJ) while coming to the conclusion that fresh opportunity was not required observed as follows: So far as the second ground is concerned, we are unable to see any substance in it. N such fresh opportunity is contemplated by the regulations nor can such a requirement be deduced from the principles of natural justice. It may be remembered that the inquiry officer's report is not binding upon the disciplinary authority and that it is open to the disciplinary authority to come to its own conclusion on the charges. It is not in the nature of an appeal from the inquiry officer to the disciplinary authority. It is one and the same proceeding. It is open to a disciplinary authority to hold the inquiry himself. It is equally open to him to appoint an inquiry officer to conduct the inquiry and place the entire record before hm with or without his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The report constitutes the material to be considered by the council. The Council will take into regard the allegations against the member, his case in defence, the recorded evidence and the conclusions expressed by the Disciplinary Committee. Although the member has participated in the inquiry, he has had no opportunity to demonstrate the fallibility of the conclusions of the disciplinary Committee. It is material which falls within the domain of consideration by the Council. It should also be open to the member, we think, to point out to the Council any error in the procedure adopted by the Disciplinary Committee which could have resulted in vitiating the inquiry. Section 21(8) arms the council with power to record oral and documentary evidence, and it is precisely to take account of that eventuality and to repair the error that this power seems to have been conferred. It cannot, therefore, be denied that even though the member has participated in the inquiry before the Disciplinary Committee, there is a range of consideration by the Council on which he has not been heard. He is clearly entitled to an opportunity of hearing before the council finds him guilty of misconduct. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply here. The Court observed at Page 10 as follows:- We ought, however, to add that if the dismissing authority differs from the findings recorded in the enquiry report, it is necessary that its provisional conclusions in that behalf should be specified in the second notice. It may be that the report makes findings in favour of the delinquent officer, but the dismissing authority disagrees with the said findings and proceeds to issue the notice under Article 311 (2). In such a case, it would obviously be necessary that the dismissing authority should expressly state that it differs from the findings recorded in the enquiry report and then indicate the nature of the action proposed to be taken against the delinquent officer. Without such an express statement in the notice, it would be impossible to issue the notice at all. There may also be cases in which the enquiry report may make findings in favour of the delinquent officer on some issues and against him on some other issues. That is precisely what has happened in the present case. If the dismissing authority accepts all the said findings in their entirety, it is another matter: but if the dismissing authority accepts the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inquiry report before the disciplinary authority took the final decision as to whether to impose a penalty or not. Explaining the effect of 42nd amendment the Constitution Bench at page 755 observed that All that has happened after the Forty-second Amendment of the Constitution is to advance the point of time at which the representation of the employee against the enquiry officer's report would be considered. Now, the disciplinary authority has to consider the representation of the employee against the report before it arrives at its conclusion with regard to his guilt or innocence of the charges. The Court explained that the disciplinary proceedings break into two stages. The first stage ends when the disciplinary authority arrives at its conclusions on the basis of the evidence, inquiry officer's report and the delinquent employee's reply to it. the second stage begins when the disciplinary authority decides to impose penalty on the basis of its conclusions. It is the second right which was taken away by the 42nd Amendment but the right of the charged officer to receive the report of the inquiry officer was an essential part of the first stage itself. This was expr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons. Both the dictates of the reasonable opportunity as well as the principles of natural justice, therefore, require that before the disciplinary authority comes to its own conclusions, the delinquent employee should have an opportunity to reply to the enquiry officer's findings. the disciplinary authority is then required to consider the evidence, the report of the enquiry officer and the representation of the employee against it. These observations are clearly in tune with the observations in Bimal Kumar Pandit's case (supra) quoted earlier and would be applicable at the first stage itself. the aforesaid passages clearly bring out the necessity of the authority which is to finally record an adverse finding to give a hearing to the delinquent officer. If the inquiry officer had given an adverse finding, as per Karunakar's case (supra) the first stage required an opportunity to be given to the employee to represent to the disciplinary authority, even when an earlier opportunity had been granted to them by the inquiry officer. It will not stand to reason that when the finding in favour of the delinquent officers is proposed to be over-turned by the disciplinary auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id discussion would be that the principles of natural justice have to be read into Regulation 7(2). As a result thereof whenever the disciplinary authority disagrees with the inquiry authority on any article of charge then before it records its own findings on such charge, it must record its tentative reasons for such disagreement and give to the delinquent officer an opportunity to represent before it records its findings. The report of the inquiry officer containing its findings will have to be conveyed and the delinquent officer will have an opportunity to persuade the disciplinary authority to accept the favorable conclusion of the inquiry officer. The principles of natural justice, as we have already observed, require the authority, which has to take a final decision and can impose a penalty, to give an opportunity to the officer charged of misconduct to file a representation before the disciplinary authority records its findings on the charges framed against the officer. The aforesaid conclusion, which we have arrived at, is also in consonance with the underlying principle enunciated by this Court in the case of Institute of Chartered Accountants (supra). While agreeing wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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