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REPORTABLE

IN THE SUPREME COURT OF INDIA  CIVIL APPELALTE JURISDICTION

CIVIL APPEAL NO.  5128  OF 2013  (Arising out of SLP (C) No. 39105 of 2012)

S.P. Malhotra                                …Appellant

Versus

Punjab National Bank & Ors.                   …Respondents

O R D E R    

1. Leave granted.

2. This appeal has been preferred against the impugned judgment  

and order dated 25.9.2012 passed by the High Court of Punjab and  

Haryana at Chandigarh in L.P.A.No. 2028 of 2011, by way of which it  

has reversed the judgment and order of the learned Single Judge dated  

20.5.2011 passed in Writ Petition No. 1201 of 1988, by which and  

whereunder the learned Single Judge had awarded the relief  to the  

appellant herein on the ground that in case the Disciplinary Authority  

does not agree with the findings recorded by the Enquiry Officer in  

disciplinary   proceedings,  the  Disciplinary  Authority  must  record

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reasons for disagreement and communicate the same to the delinquent  

and seek his response and only after considering the same, he could  

pass the order of punishment.    

3. Facts and circumstances giving rise to this appeal are that:

A. The appellant was appointed as Clerk/Cashier in the respondent  

Bank in the year 1969 and was promoted as Accountant in the year  

1977, and further promoted as Assistant Manager in the year 1981.  

The Disciplinary Authority put him under suspension in November,  

1982  for  certain  delinquencies  and  in  respect  of  the  same,  a  

chargesheet  dated  7.2.1983  was  served  upon  him  containing  four  

charges namely:

(i) Tampering with official record to the detriment of the    Bank’s  

interest;  

(ii)  Indulging in un-authorized business against the interest of  the  

Bank;

(iii)   Mis-utilising  official  position  to  benefit  relatives  and  friends  

against the interest of the Bank; and  

(iv) Concealment of facts from the authorities.  

B. The appellant submitted his reply to the said charges in July,  

1983 denying all the allegations and further submitting that it was the  

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Branch Manager who had sanctioned all the loans and advances and  

all  the  entries  had  been  made  at  his  behest.   As  the  Disciplinary  

Authority was not satisfied with the reply submitted by the appellant,  

an Enquiry Officer was appointed to examine the charges.  

C. After  conducting  and  concluding  the  enquiry,  the  Enquiry  

Officer submitted report dated 27.2.1985 exonerating the appellant on  

all the charges and in support of the findings sufficient reasons had  

been given on each charge.  

D. The Disciplinary Authority partly agreed with the findings on  

charge Nos. (ii) and (iii), but disagreed with the findings qua charge  

Nos.  (i)  and  (iv),  and  vide  order  dated  27.4.1985  imposed  the  

punishment of dismissal from service.  

E. Aggrieved, the appellant preferred the appeal against the said  

order  under  Regulation  17  of  the  Punjab  National  Bank  

Officers/Employees  (Discipline  and  Appeal)  Regulation  1977  

(hereinafter  referred  to  as  the  ‘Regulations),  and  the  appeal  was  

dismissed vide order dated 14.8.1985 by the Appellate Authority.  The  

Appellate Authority also concurred with the findings on two charges  

recorded by the Enquiry Officer.  

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F. Being aggrieved of  the order of the Appellate Authority,  the  

appellant filed review petition under Regulation 18 of the Regulations  

and  the  said  review  petition  was  also  dismissed  vide  order  dated  

19.8.1987.  

G. The  appellant  challenged  the  said  orders  of  punishment  by  

filing a  Writ  Petition No.  1201 of  1988 before  the High Court  of  

Punjab  and  Haryana  at  Chandigarh.  The  said  writ  petition  was  

contested by the respondent Bank. The learned Single Judge allowed  

the  said  writ  petition  vide  judgment  and  order  dated  20.5.2011,  

holding  that  in  case  the  Disciplinary  Authority  disagrees  with  the  

findings recorded by the Enquiry Officer, he must record reasons for  

the  dis-agreement  and  communicate  the  same  to  the  delinquent  

seeking  his  explanation  and  after  considering  the  same,  the  

punishment could be passed.  In the instant case, as such a course had  

not been resorted to, the punishment order stood vitiated.  

H. Aggrieved,  the  respondent  Bank  preferred  LPA  before  the  

Division Bench which has  been allowed taking a  view that  as  the  

punishment  had  been  imposed  prior  to  the  date  of  judgment  in  

Managing Director, ECIL, Hyderabad, etc.etc. v. B. Karunakar  

etc.etc.,  AIR 1994 SC 1074,  i.e.  20.11.1990,  and as  there was  no  

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requirement  of  issuing  a  second  show  cause  notice  before  the  

punishment  was  imposed,  the  question  of  serving  the  copy  of  the  

reasons recorded for dis-agreement to the delinquent would not arise.  

Hence, this appeal.  

4. Mr.  P.S.  Patwalia,  learned  senior  counsel  appearing  for  the  

appellant has submitted that the Division Bench has not examined the  

case in correct perspective and failed to appreciate that the judgment  

in ECIL (supra) had no application in the instant case. The matter was  

squarely covered by the judgment of this court in  Punjab National  

Bank & Ors. v. Kunj Behari Misra, AIR 1998 SC 2713, and the  

ratio thereof had correctly been applied by the learned Single Judge.  

Thus, the appeal deserves to be allowed.  

5. Per contra, Mr. Rajesh Kumar, learned counsel appearing for  

the respondent Bank has defended the judgment of the Division Bench  

contending  that  there  was  no  requirement  of  serving  the  recorded  

reasons  for  dis-agreement  by  the  Disciplinary  Authority  to  the  

delinquent if such a decision was taken prior to the date of decision of  

ECIL (supra)  i.e.  20.11.1990,  and  therefore,  no  interference  is  

required in the appeal.  

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6. We  have  considered  the  rival  submissions  made  by  learned  

counsel for the parties and perused the record.  

7. In view of the rival submissions made by the learned counsel  

for the parties, two separate issues are involved in the instant case,  

namely, (a) requirement of issuing a second show cause notice by the  

Disciplinary  Authority  to  the  delinquent  before  imposing  the  

punishment; and (b) serving the copy of the reasons recorded by the  

Disciplinary Authority disagreeing with the findings recorded by the  

Enquiry Officer.  

In the case of  ECIL (supra), only the first issue was involved  

and in the facts of  this case,  only second issue was involved.  The  

second issue was examined and decided by a three-Judge Bench of  

this Court in  Kunj Behari Misra (supra), wherein the judgment of  

ECIL (supra) has not only been referred to, but extensively quoted,  

and it  has  clearly  been stipulated  that  wherein  the second  issue  is  

involved,  the order of  punishment  would stand vitiated in case the  

reasons so recorded by the Disciplinary Authority for dis-agreement  

with the Enquiry Officer  had not been supplied to the delinquent and  

his explanation had not been sought.  While deciding the said case, the  

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court  relied upon the earlier  judgment of  this  court  in  Institute of  

Chartered Accountants of India v. L.K. Ratna, AIR 1987 SC 71.  

8. Kunj  Behari  Misra (supra)  itself  was  the  case  where  the  

Disciplinary Authority  disagreed with the findings recorded by the  

Enquiry Officer on 12.12.1983 and passed the order on 15.12.1983  

imposing the punishment, and immediately thereafter, the delinquent  

officers therein stood superannuated on 31.12.1983. In Kunj Behari  

Misra (supra), this court held as under:  

“19. The result of the aforesaid 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  enquiry   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  enquiry  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  favourable   conclusion  of  the  enquiry  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.”                  (Emphasis added)

The Court further held as under:  

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“21. Both  the  respondents  superannuated  on  31-12- 1983. During the pendency of these appeals, Misra died   on 6-1-1995 and his legal representatives were brought   on record.  More than 14 years have elapsed since the   delinquent officers had superannuated. It will, therefore,   not be in the interest of justice that at this stage the cases   should be remanded to the disciplinary authority for the   start of another innings.”

9. The  view  taken  by  this  Court  in  the  aforesaid  case  has  

consistently  been  approved  and  followed  as  is  evident  from  the  

judgments in Yoginath D. Bagde v. State of Maharashtra & Anr.,  

AIR 1999 SC 3734; State Bank of India & Ors. v. K.P. Narayanan  

Kutty,  AIR 2003 SC 1100;  J.A. Naiksatam v. Prothonotary and  

Senior Master, High Court of Bombay & Ors., AIR 2005 SC 1218;  

P.D. Agrawal v. State Bank of India & Ors., AIR 2006 SC 2064;  

and Ranjit Singh v. Union of India & Ors., AIR 2006 SC 3685.

10. In  Canara Bank & Ors. v. Shri Debasis Das & Ors.,  AIR  

2003 SC 2041, this Court explained the ratio of the judgment in Kunj  

Behari  Misra (supra),  observing  that  it  was  a  case  where  the  

disciplinary authority differed from the view of the Inquiry Officer.  

“In that context, it was held that denial of opportunity of hearing was  

per se  violative of the principles of natural justice.”

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11. In  fact,  not  furnishing  the  copy  of  the  recorded  reasons  for  

disagreement from the enquiry report itself causes the prejudice to the  

delinquent  and  therefore,  it  has  to  be  understood  in  an  entirely  

different  context  than  that  of  the  issue  involved  in  ECIL (supra).

12. The learned Single Judge has concluded the case observing as  

under:  

“The  whole  process  that  resulted  in  dismissal  of  the  petitioner is flawed from his inception and the order of  dismissal cannot be sustained.  I am examining this case  after nearly 23 years after its institution and the petitioner  has also attained the age of superannuation. The issue of  reinstatement or giving him the benefit of his wages for  during  the  time  when  he  did  not  serve  will  not  be  appropriate.  The impugned orders of dismissal  are set  aside and the petitioner shall be taken to have retired on  the date when he would have superannuated and all the  terminal benefits shall be worked out and paid to him in  12  weeks  on  such  basis.  There  shall  be,  however,  no  direction for payment of any salary for the period when  he did not work.”

13. As the case is squarely covered by the judgment of this court in  

Kunj Behari Misra (supra), we do not see any reason to approve the  

impugned judgment rendered by the Division Bench.   

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Thus, in view of the above, the appeal is allowed. The judgment  

and order of the Division Bench is set aside and that of the learned  

Single Judge is restored. No costs.   

              …….………………….…J.                                     (Dr. B.S. Chauhan)

                          ………………………….J.                  (S.A. Bobde)

New Delhi,       

July 4, 2013

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