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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 6975 OF 2009

Jagdish Lal Gambhir           ....Appellant

Versus

Punjab National Bank & Ors.               …Respondents

J U D G M E N T

Madan B. Lokur, J.

1. This appeal is directed against the judgment and order dated

24th July, 2006 passed by the Division Bench of the High Court at

Calcutta in FMA No.388 of 2001.

2. The issue for consideration is whether the termination of the

services of the appellant Gambhir was in any manner vitiated.  In

our opinion, the question requires to be answered in the negative

and we uphold  the  judgment  and order  of  the  Division Bench

confirming the dismissal of the writ petition filed by Gambhir.  

3. Gambhir was working as an Assistant General Manager in the

Hindustan  Commercial  Bank  Limited.   This  bank  was

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amalgamated with the Punjab National Bank on 19th December,

1986.  On amalgamation, the services of 28 or 29 officials of the

Hindustan Commercial Bank including Gambhir were not taken

over by the Punjab National Bank (for short the ‘PNB’).  It may be

stated that two other banks were similarly amalgamated with the

Canara  Bank  and  the  State  Bank  of  India,  but  we  are  not

concerned with them.  

4. Several  officers  whose  services  were  not  taken over  by  the

PNB and other  banks filed a writ  petition in this  Court  under

Article  32  of  the  Constitution  challenging  the  failure  of  the

transferee banks in not  taking over  their  services.   This  Court

decided  the  writ  petition  and  the  decision  is  reported  as  K.I.

Shephard v. Union of India1.  It was held by this Court that the

transferee banks could not refuse to take over the services of the

officials  of  the  transferor  banks.   Consequently,  the  PNB  was

obliged to  take  over  the  officials  of  the  Hindustan Commercial

Bank including Gambhir.  It was also directed if there was any

necessity of initiating disciplinary proceedings against any of the

transferred employees, the transferee banks including PNB were

1  (1987) 4 SCC 431

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at liberty to do so.

5. As far as Gambhir is concerned, while he was working with

the Hindustan Commercial Bank, he was issued a charge-sheet

on  3rd February,  1983  alleging  irregularities  in  sanctioning  of

loans to the customers of the bank and a failure to take follow up

steps.  Gambhir  replied  to  the  charge-sheet  and  was  thereafter

administered a ‘caution’  and was asked to be more discreet in

respect of granting advances and management of credit portfolio.

Thereafter in 1986 another set of allegations were made against

Gambhir  but  no  final  decision  was  taken  by  the  Hindustan

Commercial Bank until its amalgamation with the PNB.

6. In  view  of  the  above,  the  PNB  issued  a  charge-sheet  to

Gambhir on 28th November, 1987 in which it was alleged that he

had  deliberately  flouted  the  bank  lending  norms  and

accommodated some parties unauthorisedly thereby putting huge

funds of the bank at stake.

7. Feeling  aggrieved  by  the  initiation  of  departmental

proceedings against him, Gambhir preferred W.P. (C) No. 121 of

1988 in this Court under Article 32 of the Constitution.  By an

order dated 22nd April, 1988 this Court declined to entertain the

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writ  petition  but  expressed  the  view  that  the  inquiry  against

Gambhir should be completed quickly.   Thereafter, the inquiry

was conducted and by a report dated 22nd September, 1988 the

Inquiry Officer held that the charges against Gambhir were proved

and  that  he  had  failed  to  discharge  his  duties  with  utmost

integrity,  honest  devotion  and  diligence  thereby  putting  huge

funds of the bank at stake.

8. In the meanwhile,  Gambhir preferred a writ  petition in the

Calcutta High Court being C.M.No.11992 (W) of 1988 challenging

the charge-sheet issued to him and the inquiry proceedings.

9. It  appears  that  during  the  pendency  of  the  writ  petition

Gambhir was dismissed from service with effect from 2nd August,

1989.

10. Be  that  as  it  may  the  writ  petition  was  dismissed  by  the

learned Single Judge by judgment and order dated 7th December,

2000.   

11. Before  the  learned  Single  Judge,  Gambhir  raised  three

contentions.  It was firstly contended that the charge-sheet was

issued to him by an officer of the same rank, that is, an Assistant

General Manager and this was not permissible in law.  Therefore,

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since the issuance of the charge-sheet was itself vitiated the entire

departmental proceedings against him were null and void.  The

learned  Single  Judge  rejected  this  contention  by  referring  to

Clause 12 of the scheme of amalgamation whereby the PNB was

entitled to classify and categorize the employees of the Hindustan

Commercial Bank whose services were being taken over.  As far as

Gambhir  is  concerned,  even  though  he  may  have  been  an

Assistant General Manager in the Hindustan Commercial Bank,

he  was  placed  as  a  Scale-III  officer  in  the  PNB.   This  is  an

admitted position and Gambhir did not make any grievance about

this at any stage.  The charge-sheet was no doubt issued by an

Assistant General Manager of the PNB but he was placed higher

than a Scale-III  officer  in  the  hierarchy and under  the  Punjab

National  Bank  Officer  Employees  (Discipline  and  Appeal

Regulations),  1977  the  Assistant  General  Manager  was  the

disciplinary authority for officers placed in  Scale-III.

12. The  second  contention  urged  by  Gambhir  was  that  the

allegations  against  him  were  already  the  subject  matter  of  an

inquiry by the Hindustan Commercial Bank and thus could not

be reopened by the PNB merely because of a change of employer.

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This  contention was  also  rejected  by  the  learned  Single  Judge

holding that what was sought from Gambhir by the Hindustan

Commercial  Bank  was  an  explanation  with  regard  to  certain

transactions which indicated an irregular  conduct  on his  part.

However,  no formal  disciplinary proceedings  had been initiated

against Gambhir and that did not preclude the PNB from looking

into those alleged irregularities and holding a formal inquiry into

them.  

13. The third  contention urged by Gambhir  before  the  learned

Single Judge was that Inquiry Report was not supplied to him

before  his  dismissal  with  effect  from  2nd August,  1989.   This

contention was rejected by the learned Single Judge by holding

that the requirement of supplying the Inquiry Report arose out of

a decision of  this Court in  Union of India v. Mohd. Ramzan

Khan2. However that decision was rendered by this Court (on 20th

November, 1990) after Gambhir was dismissed from his service.

That  decision  had  only  prospective  effect.   Subsequently,  the

Constitution  Bench  in  Managing  Director,  ECIL  v.  B.

Karunakar3  made  it  clear  that  orders  of  punishment  passed

2  (1991) 1 SCC 588 3  (1993) 4 SCC 727

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prior to the decision in Mohd. Ramzan Khan without furnishing

the  report  of  the  Inquiry  Officer  should  not  be  disturbed.

Therefore, Gambhir had no right to a copy of the Inquiry Report

prior to his dismissal.

14. At  this  stage  it  may  be  mentioned  that  Gambhir  has  not

challenged  the  merits  of  the  inquiry  at  any  stage  or  the

punishment  awarded to  him.   In  that  sense Gambhir  was not

prejudiced by the failure to supply him with a copy of the Inquiry

Report.

15. Feeling  aggrieved  by  the  decision  rendered  by  the  learned

Single  Judge,  Gambhir  preferred an appeal  before  the  Division

Bench but that was dismissed by the impugned judgment and

order dated 24th July, 2006.

16. Before the Division Bench Gambhir raised five contentions.

These were noted by the Division Bench as follows:-

“(i) Gambhir was entitled to be appointed in terms of  the order of the Apex Court in K.I. Shephard (supra).  He was to be fitted in the appropriate post which he was holding earlier which was not done. (ii)The disciplinary authority who issued the charge-sheet was nor  properly  authorized  to  act  as  such  under  the  service rules. (iii) No copy of the inquiry report was given to him.  As a result  he  could  not  defend  himself  in  the  proceeding  by

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offering his explanation to the disciplinary authority pointing out the illegality and irregularity crept in the enquiry report. (iv) No second show cause notice was issued to him. (v) The  charges  were  stale  and  could  not  be  proceeded

with.” 17.  As far as the first contention is concerned it has already been

mentioned that Gambhir was posted as a Scale–III officer in the

PNB upon the amalgamation of the Hindustan Commercial Bank

with the PNB.  No grievance was made by Gambhir at any point

of time regarding his placement.  The Division Bench therefore

rejected his contention and held that he was appropriately placed

in the PNB as a Scale-III officer.  The Division Bench held that

that apart since the Hindustan Commercial Bank was a much

smaller  bank  than  the  PNB,  Gambhir’s  designation  as  an

Assistant General Manager in the Hindustan Commercial Bank

could not be equated with the corresponding designation in the

PNB.  In any event, there was no loss of pay as far as Gambhir

was concerned.   

18.   The second contention urged by Gambhir was also rejected

by the Division Bench relying principally upon the decision of the

learned  Single  Judge.   Additionally,  it  was  held  that  when

Gambhir preferred W.P.(C) No. 121 of 1988 in this Court, it was

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observed that the inquiry against Gambhir should be expedited.

The Division Bench was of the view that this was an indication

that  this Court did not  find any procedural  irregularity in the

issuance of the charge-sheet against Gambhir.

19.   The  third  contention  urged  by  Gambhir  was  rejected  in

view  of  the  decisions  rendered  in  Mohd.  Ramzan  Khan  and

Karunakar.  Additionally, it was noted that Gambhir had been

supplied with a copy of the Inquiry Report but had not raised any

issue on the merits of the allegations made against him and the

findings arrived at by the Inquiry Officer.

20.   The  fourth  contention  was  also  rejected  by  the  Division

Bench on the ground that there was no requirement of issuing a

second show cause notice to Gambhir.

21.   The last  contention urged by  Gambhir  was  also  rejected

since  the  PNB  was  entitled  to  look  into  any  final  irregularity

committed by the employees of the Hindustan Commercial Bank

whose services were taken over by the PNB.  On this basis, the

Division  Bench  dismissed  Gambhir’s  appeal  by  the  impugned

judgment  and order  dated 24th July,  2006.   It  is  under  these

circumstances that Gambhir is now before us.

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22.   The contentions urged by learned counsel for Gambhir are

merely  repetitions  of  the  contentions  urged  either  before  the

learned Single Judge or before the Division Bench of the High

Court.

23.   As far as the principal ground urged by learned counsel that

the charge-sheet could not have been issued to Gambhir by the

Assistant General Manager in the PNB is concerned, we find no

merit in the contention.  The admitted position is that Gambhir

was a Scale-III officer in the PNB while the rank of the Assistant

General  Manager  in  the  PNB is  Scale-V.   Gambhir  could only

have been placed in Scale–III in terms of his responsibilities and

keeping in mind the corresponding scale upon the amalgamation

of the Hindustan Commercial Bank with the PNB. Clause 12 of

the scheme of amalgamation as sanctioned by the Government of

India clearly states as follows:-

“The transferee bank shall, on the expiry of a period not longer  than  three  years  from the  date  on  which  this scheme is sanctioned, pay or grant to the employees of the  transferor  bank  the  same  remuneration  and  the same terms and conditions of service as are applicable to the employees of corresponding rank or status of the transferee  bank  subject  to  the  qualifications  and experience of the said employees of the transferor bank being the same as or equivalent to those of such other

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employees of the transferee bank.”

24.   There is no allegation by Gambhir at any point of time that

he  was  either  reduced  in  rank  or  that  his  placement  was

incorrect or any similar grievance.  That being the position, it is

now  too  late  in  the  day  for  Gambhir  to  contend  that  his

placement in the PNB was erroneous and therefore the issuance

of the charge-sheet by the Assistant General Manager in the PNB

was vitiated in any manner.

25.   We are in agreement with the view of the High Court that the

rules  applicable  to  Gambhir  were  the  Punjab  National  Bank

Officer Employees (Discipline and Appeal) Regulations, 1977. In

terms of these Regulations, as discussed by the High Court, the

disciplinary  authority  of  Gambhir  was  the  Assistant  General

Manager (P).  That being the position, merely because Gambhir

was an Assistant General Manager in the Hindustan Commercial

Bank does not mean that the Regulations of 1977 would not be

applicable to him or that the Assistant General Manager (P) in the

PNB could not have issued a charge-sheet to Gambhir.

26.   At  this  stage,  it  may  be  mentioned  that  in  Chairman,

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Canara Bank, Bangalore v.  M.S. Jasra4 an employee of  the

Lakshmi Commercial Bank (which had amalgamated with Canara

Bank  at  the  same  time  when  Hindustan  Commercial  Bank

amalgamated with the PNB) the contention of the employee was

that  the  age  of  retirement  (60  years)  in  Lakshmi  Commercial

Bank could not be varied to his disadvantage (58 years) on the

amalgamation  of  that  Bank  with  the  Canara  Bank.   This

contention was rejected by holding that the employee became an

employee of the Canara Bank and was, therefore, entitled to the

rights given to employees of the Canara Bank.

27.   Applying this principle to the facts of this case, it is clear

that Gambhir became an employee of the PNB and was subject to

the  discipline  of  all  its  rules  and  regulations,  including  those

pertaining to misconduct.

28.   It  is also contended that the allegations against Gambhir

had  already  been  inquired  into  by  the  Hindustan  Commercial

Bank and therefore the PNB could not reopen issues relating to

the alleged misconduct and hold an inquiry into them.  We do not

find  any  merit  in  this  submission  also.   There  were  a  large

4  (1992) 2 SCC 484

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number of transactions which were alleged to be irregular and in

which Gambhir was said to be involved.  It is possible that there

may have been an overlap in respect of some of them (although no

such overlap has been shown to us) but that is not an indication

that the alleged irregularities committed by Gambhir in respect of

other  transactions  were  condoned.   In  fact,  Gambhir  has  not

pointed out which were the transactions which were the subject

matter of concern in the Hindustan Commercial Bank and which

were the transactions which were the subject matter of inquiry by

the PNB.  This would have certainly given us a far clearer picture.

However, on a random consideration of the allegations made, it

does appear that there were certain transactions particularly the

transactions  pertaining  to  R.K.  Tandon  &  Co.  which  were  not

inquired  into  by  the  Hindustan  Commercial  Bank.  It  may  be

recalled  that  it  is  the  admitted position that  in  respect  of  one

alleged  irregular  transaction,  the  Hindustan  Commercial  Bank

could  not  take  any  decision  one  way  or  the  other  due  to  the

amalgamation of that Bank with the PNB.  We have not found any

duplication in the allegations and are not inclined to carry out any

investigation in this regard at this stage.

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29.   In view of the above, we find no reason to interfere with both

the judgments delivered by the Calcutta High Court. The appeal is

dismissed.  

……………………………J                      (Madan B. Lokur)

…………………………..J New Delhi;                        (R.K. Agrawal) October 6, 2015

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