Non-Reportable

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL   No  .22970    of   2017

(Arising out of S.L.P. (Civil) No.25040 of 2012)

STATE BANK OF INDIA & ORS. .... Appellants

         Versus B.R. SAINI             …. Respondent

J U D G M E N T

L. NAGESWARA RAO, J.

Leave granted.  2. The  Respondent  who  was  working  in  the

Appellant-Bank  was  removed  from  service.   The  order  of

removal was set aside by a Single Judge of the High Court of

Punjab  &  Haryana  at  Chandigarh.   The  judgment  of  the

learned Single Judge was affirmed by a Division Bench.  The

correctness of the judgment of the High Court is challenged

in this Appeal.

3. Articles  of  Charges  framed  against  the  Respondent

when he was working as an Officer MMGS-II are as follows:  

“CHARGE   No  . 1 You  availed  Demand  Loans  fraudulently  under fake signatures of the depositors/ owners of the STDRs.

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CHARGE   No  . 2 You closed certain Demand Loans granted at the branch  before  the  date  of  inspection  and reopened the same on the same day with a view to  avoid  inspection  of  securities  charged  to Demand Loans.   

CHARGE   No  . 3 Certain fraudulent Demand Loans availed by you, were  liquidated  out  of  proceeds  of  cheques purchased  by  you,  drawn  on  your  personal Savings Bank A/c No. 01190077112 maintained at Sector  22,  Chandigarh  branch  through  the account of Shri Sant Ram.

CHARGE   No  . 4 You  availed  ACC  Loans  fraudulently  under  take signatures  and  without  supporting  revenue records to justify quantum of loan.  

CHARGE   No  . 5 Certain fraudulent ACC Loan availed by you, were liquidated out of proceeds of cheques purchased by you, drawn on your savings Bank Account No. 01190077112  maintained  at  Sector  22, Chandigarh Branch, through the accounts of Shri Hira Pal,  a  part  time Sweeper,  who has alleged that  he  has  not  requested  for  purchase  of  any cheque in  DD and further  alleged that  you got blank cheques signed by him drawn on his CC SBF A/c No.48.

CHARGE   No  . 6 You got purchased your personal cheques in DD at  Karnal  Branch,  without  keeping  sufficient balance in your account.   

CHARGE   No  . 7 You purchased cheques of heavy amount drawn on your personal savings Bank A/c in the accounts of Shri Hira Pal, a part time sweeper and Shri Sant Ram Sharma, without keeping sufficient balance in your account.  Further you exercised financial

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powers  not  vested  with  you.   You  also  caused delay in payment of these DDs.

CHARGE   No  . 8 Your  account  shows  transactions  of  heavy amounts,  which  are  much  above  your  known sources of income.   

You have thus violated Rule 50 (3)  & 50 (4)  of State Bank of India Officers Service Rules. ”  

4. Shri A.K. Sharma, SMGS-IV was appointed as an Inquiring

Authority in terms of Rule 68 (2) (ii) of the State Bank of India

Officers Service Rules (for short “the Rules”).  A detailed Inquiry

was held and the Inquiring Authority concluded that the Charge

Nos. 1, 2, 4, 5 and 7 were proved, Charge No. 6 was partly proved

and  Charge  Nos.  3  and  8  were  not  proved.   The  Disciplinary

Authority disagreed with the findings of the Inquiring Authority

qua Charge Nos. 6 and 8.  A copy of the Report of the Inquiring

Authority along with reasons for the disagreement was forwarded

to the Respondent.  The Respondent submitted his explanation to

the findings of the Inquiring Authority as well as the disagreement

of the Disciplinary Authority regarding Charge Nos. 6 and 8.

5. The Disciplinary Authority was not empowered to impose

a  major  penalty  as  per  Rule  66  (3)  (iii)  of  the  Rules.   He

transmitted the entire record which contained the findings of the

Inquiring  Authority,  reasons  of  disagreement  regarding  Charge

Nos. 6 and 8, the explanation submitted by the Respondent and

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the bio-data of the Respondent to the Appointing Authority.  The

Appointing  Authority  by  an  Order  dated  22nd January,  2000

considered  the  entire  material  which  was  sent  to  him  and

imposed a penalty of “removal from service” on the Respondent.

6. The Respondent filed a Writ Petition in the High Court of

Punjab & Haryana at Chandigarh questioning the legality of the

order  of  dismissal.   A  learned  Single  Judge  of  the  High  Court

allowed the Writ Petition relying upon the judgment of this Court

in  State Bank of India & Ors. v.  Ranjit Kumar Chakraborty

& Anr.1 wherein it was held that even when the Rule does not

contemplate issuance of a notice before imposing a punishment,

principles of natural justice would require an opportunity to be

given  to  the  delinquent  employee  as  per  the  judgment  cited

supra.   The Appellants filed a Letters Patent Appeal which was

dismissed by a Division Bench of the High Court in which it was

held  that  an  order  of  removal  cannot  be  passed  without  a

show-cause  notice  against  the  proposed  punishment.   The

Appellant-Bank is in appeal challenging the judgments of the High

Court in this Appeal.

7. Rule  68  (3)  of  the  State  Bank  of  India  Officers  Service

Rules is as under: “68.(3)(i)  The Disciplinary  Authority,  if  it  is  not itself the Inquiring Authority, may, for reasons to be recovered by it in writing, remit the case to

1  (2009) 7 SLR 347

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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-rule (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  rule  67 should  be imposed on the officer,  it  shall,  not-with-standing  anything contained  in  sub-rule  (4),  make  an  order imposing such penalty.  

(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.”    

8. As stated above, the Disciplinary Authority after supplying

the Report of the Inquiring Authority had given an opportunity to

the Respondent to submit his explanation, which he did.  In view

of the disability of the Disciplinary Authority in passing an “order

of removal” under Rule 68 (2), the entire record was sent to the

Appointing Authority  who examined the matter  and passed an

“order of removal”.

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9. In State Bank of India v.  Ranjit Kumar Chakraborty

(supra) which is the basis of the judgment of the High Court, it

was held that the Appointing Authority could not pass an order

imposing a major penalty.  In that case, the Disciplinary Authority

sent the Records to the Appointing Authority who passed order of

“dismissal from service”.  It is not clear from the judgment as to

whether the delinquent officer in that case was given a notice by

the  Disciplinary  Authority  before  the  records  were  sent  to  the

Appointing Authority.  This Court held that even in the absence of

any Rule requiring a notice to be given, the principles of natural

justice would require an opportunity to the delinquent employee.

It  was  not  held  in  the  said  judgment  that  even  if  the  Inquiry

Report  was  furnished  and  an  opportunity  was  given  to  the

delinquent there is a further requirement of another opportunity

before  imposing  the  penalty.   This  Court  found  that  before

imposition of a major penalty the delinquent was entitled for an

opportunity of being heard.  The High Court was wrong in holding

that the delinquent employee is entitled for a notice before the

penalty is imposed.   

10. Though Article 311 (2) of the Constitution of India, 1951 is

not applicable to the Officers of the Appellant-Bank; in Managing

Director,  ECIL v.  B.  Karunakar2 ,  this  Court  held  that

2  (1993) 4 SCC 727

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Government  servants  as  well  as  others  are  governed  by  their

service rules and that whenever an Inquiry is conducted and a

punishment is awarded, a delinquent employee is entitled to a

copy of Report of the Inquiring Authority and an opportunity to

submit his explanation.  The absence of any rule providing for an

opportunity  to  be  given  to  a  delinquent  employee  before

imposition  of  a  penalty  cannot  be  taken  advantage  of  by  the

employer.  However, there is no requirement of a second show

cause notice before imposition of a penalty.   

11. In this case, the Respondent had sufficient opportunity to

respond  to  the  Report  of  the  Inquiring  Authority  and  to  the

findings  of  the  Disciplinary  Authority  disagreeing  with  the

Inquiring Authority regarding Charge Nos. 6 and 8.   He is not

entitled  to  any  further  notice  before  imposition  of  a  penalty.

Apart from the requirement of a second show-cause notice before

imposition of penalty no other point was raised in this Appeal.   

12. For  the  aforementioned  reasons,  the  Appeal  is  allowed

and the judgment of the High Court is set aside.      

              ........................................J.                 [S.A. BOBDE]

               ..……................................J.                                                            [L. NAGESWARA RAO]

New Delhi; December 15,  2017

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