Heard Shri Gulrez Khan, learned counsel for the petitioner and Shri P.N. Tripathi, learned counsel for the respondents.
This writ petition has been filed by the petitioner, praying for quashing for the punishment order dated 30.11.1998, passed by respondent no.2, Regional Manager/ Disciplinary Authority, Allahabad Bank, Regional Office, District Hamirpur and appellate order dated 16.03.1999, passed by the respondent no.1, Assistant General Manager, Allahabad Bank, Swaroop Nagar, District Kanpur.
The facts of the petition are that the petitioner, while being posted as Clerk-cum-Cashier in Allahabad Bank at Banda Branch was charge sheeted on 02.11.1995, on the ground that he came to office 30 minutes late and when on his asking Sri Y.K.Gupta, Officer of the Bank, did not give him cheques, instruments and documents for depositing at State Bank of India, Banda Branch, for clearing, he misbehaved with him. For submitting reply to the charge sheet, the petitioner demanded 3 documents, including complaint of Sri Y.K.Gupta on 18.11.1995, but it was not provided to him. The petitioner sought representation before the enquiry officer through Advocate, as per Clause- 19.12 (a) (iii) of First Bipartite Settlement dated 19.10.1966 but it was rejected. However the petitioner submitted his reply to the charge sheet stating that he was not performing the duty of clearing and had not come to the Bank late by 30 minutes and therefore, there was no question for demanding any cheques, etc., from Sri Y.K.Gupta and misbehaving with him. The enquiry officer submitted his enquiry report dated 27.02.1998 with the finding that the petitioner was not performing the duty of clearing nor he came late nor demanded papers from Sri Y.K.Gupta for clearing but he misbehaved with Sri Gupta. The enquiry officer also recorded the finding that Sri Gupta has admitted in his cross- examination that the petitioner had not misbehaved with him, but he observed that the petitioner has committed misconduct mentioned in Clause -21 (iv) (d) of Sixth Bipartite Settlement dated 14.02.1995. A second show cause notice dated 27.02.1998 was issued to the petitioner enclosing therewith the findings of the enquiry officer and the petitioner submitted his reply dated 08.10.1998 thereto. The disciplinary authority without considering his reply to the findings of the enquiry officer, imposed the major penalty of stoppage of 3 future stagnation increments of petitioner with cumulative effect. The petitioner preferred an Appeal under Clause-19.14 of the First Bipartite Settlement dated 19.10.1966 against the punishment order and also requested for personal hearing but without considering the grounds raised in the appeal and the evidence in support of the petitioner's case and also without granting him opportunity of personal hearing, his appeal was dismissed by the order dated 16.03.1999.
The respondents have filed Counter Affidavit stating that the service record of the petitioner was not clean since he was earlier awarded punishment of dismissal on 04.10.1990 which was converted into censure by the appellate authority vide its order dated 05.01.1991. On the complaint of Sri Y.K. Gupta, charge sheet was issued to the petitioner and on the basis of the findings of enquiry officer, petitioner was punished by the disciplinary authority and being findings of fact, this Court need not interfere with the same. The complaint of Sri Y.K. Gupta was provided to the petitioner during course of enquiry. The prayer for representation through Advocate as per the Clause- 19.12 (a) (iii) of the Settlement dated 19.10.1966 was not justified. The services of Advocate as defence representative could have only been provided to the delinquent employee when the presenting officer of the Bank was also an Advocate. Enquiry officer found second part of the charge about misbehaviour with Sri Y.K. Gupta, Officer, by the petitioner proved. Sri Y.K. Gupta had not admitted in his cross examination that petitioner has not misbehaved with him. The findings of the enquiry officer are absolutely correct and based on material on record. The appeal of the petitioner preferred against the punishment order was also considered and decided by the appellate authority in accordance with the settlement.
The learned Counsel for the petitioner has argued that entire disciplinary proceedings from issuance of charge sheet to passing of punishment and appellate orders are illegal, arbitrary and malafide. The very genesis of incident dated 22.09.1995 was false and concocted and was neither proved nor accepted by the enquiry officer. The reason for misbehaviour by the petitioner with Shri Y.K. Gupta, mentioned in the charge, was that he was performing the duty of clearing and came to the Bank late by 30 minutes and demanded documents for clearing from Sri Y.K.Gupta, who informed that since he has come late, documents for clearing have been taken away by Sri Ram Swaroop Singh and then, it was alleged, that the petitioner caught hold of collar of Sri Gupta and dragged him to the Chamber of the Manager. The enquiry officer found that the petitioner was not on clearing duty rather he was deputed for predating arrears of Smt. Shanti Devi and had come to the Bank at 10.00 A.M. Therefore, there was no occasion for the petitioner to misbehave with Sri Gupta. However enquiry officer concluded that petitioner misbehaved with Sri Gupta, when Sri Gupta admitted before enquiry officer that he was never manhandled by petitioner. The disciplinary authority did not agreed with the first part of the finding of enquiry officer regarding the genesis of the incident and without issuing notice and hearing the petitioner, arrived at the conclusion that the second part of the alleged incident stands proved. He has further argued that even if it is accepted that petitioner's behaviour was unsatisfactory and matter was subsided, his case would be covered at the most by Clause- 19.7(J) of the first bipartite settlement dated 19.10.1966 and only a minor penalty of awarding warning and censure would have been imposed. The punishment and appellate orders are non speaking and have been passed without considering the points raised by petitioner and considering evidence on record and therefore deserve to be set aside. The petitioner has been denied promotion on account of the major penalty imposed on him and his arrears of salary have not been paid. The punishment order is without jurisdiction since appointing authority/disciplinary authority of the petitioner is the Assistant General Manager, A.G.M. Office, Lucknow. The respondent no.2 being a subordinate officer has no power to punish petitioner in violation of Article 311(1) of the Constitution of India. The penalty of stopping stagnation increments of petitioner is not provided under the Rules. It is altogether a different monitory benefit provided to the employees after every 4 years of service and has nothing to do with normal yearly increments. Therefore the punishment awarded to the petitioner is against the Bipartite Settlements and without jurisdiction and is liable to be quashed.
The learned Counsel for the respondents has argued that the enquiry against the petitioner was in accordance with the procedure and he was also afforded personal hearing on 07.10.1998 by disciplinary authority before passing the punishment order. His written submissions dated 08.10.1998 were accepted and considered in detail before passing of the punishment order. As per Clause- 19.14 of the First Bipartite Settlement dated 19.10.1966, personal hearing by appellate authority is not provided. The disciplinary authority has nowhere disagreed with the findings of the enquiry officer and there was no reason for issuing show cause notice to the petitioner. The charge proved against the petitioner is covered by the expression "Gross Misconduct" defined under Clause- 19.5 (c) and (j) of the settlement. Since the petitioner was riotous and committed indecent behaviour in the Bank causing prejudice to the interest and reputation of the Bank therefore he was rightly punished under Clause- 21 (iv) (d) of the Sixth Bipartite Settlement dated 14.02.1995. Regarding the dispute of promotion the petitioner has filed another writ petition which is pending.
Before proceeding to consider the rival contentions made on behalf of the parties, it is necessary to go through the relevant provisions of First Bipartite Settlement, 19.10.1966, which are as follows:-
"19.5.By the expression "gross misconduct" shall be meant any of the following acts and omissions on the part of an employee:
(a) engaging in any trade or business outside the scope of his duties except with the written permission of the bank;
(b) unauthorised disclosure of information regarding the affairs of the bank or any of its customers or any other person connected with the business of the bank which is confidential or the disclosure of which is likely to be prejudicial to the interests of the bank;
(c) drunkenness or riotous or disorderly or indecent behaviour on the premises of the bank;
(d) wilful damage or attempt to cause damage to the property of the bank or any of its customers;
(e) wilful insubordination or disobedience of any lawful and reasonable order of the management or of a superior;
(f) habitual doing of any act which amounts to "minor misconduct" as defined below, '''habitual" meaning a course of action taken or persisted in notwithstanding that at least on three previous occasions censure or warnings have been administered or an adverse remark has been entered against him;
(g) wilful slowing down in performance of work;
(h) gambling or betting on the premises of the bank;
(i) speculation in stocks, shares, securities or any commodity whether on his account or that of any other persons;
(j) doing any act prejudicial to the interest of the bank or gross negligence or negligence involving or likely to involve the bank in serious loss;
(k) giving or taking a bribe or illegal gratification from a customer or an employee of the bank;
(l) abetment or instigation of any of the acts or omissions above-mentioned.
19.6. An employee found guilty of gross misconduct may :
(a) be dismissed without notice; or
(b) be warned or censured, or have an adverse remark entered against him; or
(c) be fined; or
(d) have his increment stopped; or
(e) have his misconduct condoned and be merely discharged.
19.7.By the expression "minor misconduct" shall be meant any of the following acts and omissions on the part of an employee:
(a) absence without leave or overstaying sanctioned leave without sufficient grounds;
(b) unpunctual or irregular attendance;
(c) neglect of work, negligence in performing duties;
(d) breach of any rule of business of the bank or instruction for the running of any department;
(e) committing nuisance on the premises of the bank;
(f) entering or leaving the premises of the bank except by an entrance provided for the purpose:
(g) attempt to collect or collecting moneys within the premises of the bank without the previous permission of the management or except as allowed by any rule or law for the time being in force;
(h) holding or attempting to hold or attending any meeting on the premises of the bank without the previous permission of the management or except in accordance with the provisions of any rule or law for the time being in force;
(i) canvassing for union membership or collection of union dues or subscriptions within the premises of the bank without the previous permission of the management or except in accordance with the provisions of any rule or law for the time being in force;
(j) failing to show proper consideration, courtesy or attention towards officers, customers or other employees of the bank, unseemly or unsatisfactory behaviour while on "duty;
(k) marked disregard of ordinary requirements of decency and cleanliness in person or dress;
(l) incurring debts to an extent considered by the management as excessive.
19.8. An employee found guilty of minor misconduct may :
(a) be warned or censured; or
(b) have an adverse remark entered against him; or
(c) have his increment stopped for a period not longer than six months.
19.9. A workman found guilty of misconduct, whether gross or minor, shall not be given more than one punishment in respect of any one charge.
19.10. In all cases in which action under Clauses 19.4, 19.6 or 19.8 may be taken, the proceedings held shall be entered in a book kept specially for the purpose, in which the date on which the proceedings are held, the name of the employee proceeded against, the charge or charges, the evidence on which they are based, the explanation and the evidence, if any, tendered, by the said employee, the finding or findings, with the grounds on which they are based and the order passed shall be recorded with sufficient fullness, as clearly as possible and such record of the proceedings shall be signed by the officer who holds them, after which a copy of such record shall be furnished to the employee concerned if so requested by him in writing.
19.11. When it is decided to take any disciplinary action against an employee such decision shall be communicated to him within three days thereof.
19.12. The procedure in such cases shall be as follows :--
(a) An employee against whom disciplinary action is proposed or likely to be taken shall be given a chargesheet clearly setting forth the circumstances appearing against him and a date shall be fixed for enquiry, sufficient time being given to him to enable him to prepare and give his explanation so also to produce any evidence that he may wish to tender in his defence. He shall be permitted to appear before the Officer conducting the enquiry, to cross-examine any witness on whose evidence the charge rests and to examine witness and produce other evidence in his defence. He shall also be permitted to be defended--
(i) (x) by a representative of a registered trade union of bank employees of which he is a member on the date first notified for the commencement of the enquiry.
(y) where the employee is not a member of any trade union of bank employees on the aforesaid date, by a representative of a registered trade union of employees of the bank in which he is employed:
OR
(ii) at the request of the said union by a representative of the state federation or all India Organisation to which such union is affiliated;
OR
(iii) with the Bank's permission, by a lawyer. He shall also be given a hearing as regards the nature of the proposed punishment in case any charge is established against him.
(b) Pending such inquiry he may be suspended, but if on the conclusion of the enquiry it is decided to take no action against him he shall be deemed to have been on duty and shall be entitled to the full wages and allowances and to all other privileges for the period of suspension; and if some punishment other than dismissal is inflicted the whole or a part of the period of suspension, may, at the discretion of the management, be treated as on duty with the right to a corresponding portion of the wages, allowance, etc.
(c) In awarding punishment by way of disciplinary action the authority concerned shall take into account the gravity of the misconduct, the previous record, if any, of the employee and any other aggravating or extenuating circumstances, that may exist. Where sufficiently extenuating circumstances exist the misconduct may be condoned and in case such misconduct is of the "gross" type he may be merely discharged, with or without notice or on payment of a month's pay and allowances, in lieu of notice. Such discharge may also be given where the evidence is found to be insufficient to sustain the charge and where the bank does not, for some reason or other, think it expedient to retain the employee in question any longer in service. Discharge in such cases shall not be deemed to amount to disciplinary action.
(d) If the representative defending the employee is an employee of the same bank at an outstation branch within the same State, he shall be relieved on special leave (on full pay and allowances) to represent the employee and be paid one return fare. The class of fare to which he will be entitled would be the same as while travelling on duty. In case of any adjournment at the instance of the bank, he may be asked to resume duty and if so, will be paid fare for the consequential journey. He shall also be paid 50% of the halting allowance for the period he stays at the place of the enquiry defending the employee as also for the days of the journeys which are undertaken at the bank's cost
(e) enquiry need not be held if--
(i) the misconduct is such that even if proved the bank does not intend to award the punishment of discharge or dismissal; and
(ii) the bank has issued a show cause notice to the employee advising him of the misconduct and the punishment for which he may be liable for such misconduct; and
(iii) the employee makes a voluntary admission of his guilt in his reply to the aforesaid show cause notice.
However, if the employee concerned requests a hearing regarding the nature of punishment, such a hearing shall be given, 19.13. Where the provisions of this Chapter conflict with the procedures or rules in force in any bank regarding disciplinary action, they shall prevail over the latter. There may, in such procedures or rules, exist certain provisions outside the scope of the provisions contained in this Chapter enabling the bank to dismiss, warn, censure, fine an employee or have his increment stopped or have an adverse remark entered against him. In all such cases also the provisions set out in Clauses 19.10 and 19.11 above shall apply.
Sixth Bipartite Settlement
21. Disciplinary Action and Procedure Therefor
(i) The following shall be added as sub-clause (f) in Clause 19.12 of the First Bipartite Settlement dated 19th October, 1966 and in Clause 6 of paragraph 521 of the Sastry Award as applicable to State Bank of India :-
(f) For a misconduct which occurred prior to the promotion of the employee to officers' cadre, disciplinary action shall be in terms of the rules applicable to workmen employees.
(ii) The following sub-clauses shall respectively be added as (p), (q) and (r) under ''Gross Misconduct' in Clause 19.5 of the First Bipartite Settlement dated 19.10.1966 and as (q), (r) and (s) in Clause 4 of paragraph 521 of the Sastry Award as applicable to State Bank of India:-
(p/q) Remaining unauthorisedly absent without intimation continuously for a period exceeding 30 days.
(q/r) Misbehaviour towards customers arising out of bank's business.
(r/s) Contesting election for parliament/ legislative assembly/ legislative council/ local bodies/ municipal corporation/ panchayat, without explicit written permission of the bank.
(iii) The following shall be added as sub-clauses (n) and (o) under ''Minor Misconduct' in clause 19.7 of the First Bipartite Settlement dated 19th October, 1966 and in clause 6 of paragraph 521 of the Sastry Award as applicable to State Bank of India:-
(n) Refusal to attend training programmes without assigning sufficient and valid reasons.
(o) Not wearing, while on duty, identity card issued by the bank.
(iv) In supersession of clause 19.6 of the Settlement dated 19.10.1966 between IBA and AIBEA, para 521(5) of the Sastry Award and para 18.28 of the Desai Award, Clause 17.6 of the Settlement between IOB and AIOBEU dated 14.12.1966 and Clause 19.6 of the Settlement between BoB and AIBOBEF dated 23.12.1966 and Clause IX(3) of the Settlement dated 31st October, 1979, an employee found guilty of gross misconduct may :-
(a) be dismissed without notice; or
(b) be compulsorily retired/removed from service/ discharged with superannuation benefits as would be due otherwise at that stage and without disqualification from future employment; or
(c) be brought down to lower stage in the scale of pay upto a maximum of two stages; or
(d) have his increment stopped; or
(e) have his special allowance withdrawn; or
(f) be warned or censured, or have an adverse remark against him; or
(g) be fined;
The first point for consideration in this case is whether inspite of the enquiry officer not finding the first part of the charge, regarding misbehaviour with Sri Y.K. Gupta on account of non furnishing of cheques, etc., for clearing to the petitioner since he was doing the job of clearing, proved, he was justified in recorded a finding that the petitioner misbehaved with Sri Y.K. Gupta for some reason. No reason was specified by the enquiry officer for the misbehaviour of the petitioner with Sri Y.K.Gupta nor he found the petitioner to be late on the date of incident. He has recorded clear finding that the charge against the petitioner is only partly proved, regarding his unsatisfactory behaviour in the Bank premises.
However the argument of the learned Counsel for the petitioner that in case the disciplinary authority differed with the first part of the findings of the enquiry officer exonerating him of part of the charges, he should have noticed and heard the petitioner prior to accepting the second part of the finding to be correct, is not borne from the material on record. A perusal of the punishment order passed by the disciplinary authority shows that he has not disagreed with the first part of the finding regarding the charge against the petitioner recorded by the enquiry officer, but has passed the punishment order only on the basis of second part of the charge regarding unsatisfactory behaviour of the petitioner within the Bank premises. Since the finding regarding the first part of the charge was not reversed by the disciplinary authority, he was not required to issue any notice to the petitioner and the argument in this regard is fallacious and turned down.
The second submission of the learned counsel for the petitioner that when the basis of the charge, i.e. misbehaviour with Sri Y.K. Gupta on account of non-furnishing of cheques, etc., for performing his duty of clearing, was not found proved, there was no reason as to why the petitioner would misbehave with Sri Y.K. Gupta.
The submission of the learned counsel for the petitioner that the inquiry officer has not recorded any finding regarding the reason for misbehaviour with Sri Y.K. Gupta, when he has found that the petitioner was not performing the duty of clearing and he was also not late for duty, which may have compelled to Sri Y.K. Gupta to allot the work of clearing to another employee. Sri Y.K. Gupta has also denied any misbehaviour of the petitioner with him and therefore, the finding that the petitioner misbehaved with Sri Y.K. Gupta, without recording any reason cannot be sustained. The learned counsel for the respondent bank also could not point out any reason on record, which may have compelled the petitioner to misbehave with Sri Y.K. Gupta. Therefore, the finding of the disciplinary inquiry that the petitioner misbehaved with Sri Y.K. Gupta is based on false allegation like the genesis of the charge, that the petitioner was performing the duty of clearing and when he came late his job was assigned to another employee whereon the petitioner got infuriated and misbehaved with Sri Y.K. Gupta. It is clear that the charge was framed against the petitioner on first ground of dereliction of duty in discharge of his official duties as clearing staff. Therefore, the finding recorded by the disciplinary authority regarding Charge No.1 cannot be sustained.
Third submission of the learned counsel for the petitioner is that in the charge-sheet dated 02.11.1995 issued to the petitioner, he was charged only for minor misconduct under Clause 19.7 (b) (e) and (j) of the First Bipartite Settlement. Therefore, there was no occasion for the disciplinary authority to pass major punishment of stopping stagnation increment of the petitioner with cumulative effect. There is no justification on behalf of the respondents on record to justify this illegality committed by the respondents in the disciplinary proceedings against the petitioner.
A perusal of the First Bipartite Settlement shows that the petitioner was charged with only minor punishment but after disciplinary proceedings he has been punished by way of major penalty, which has effected his entire career and also the post retiral benefits.
The fourth submission of the learned counsel for the petitioner is that the disciplinary authority did not consider the objection of the petitioner raised in his reply dated 28.9.1998 to the second show cause notice/notice of proposed punishment.
Learned counsel for the respondent has argued that the entire objections raised by the petitioner in his aforesaid reply were considered by the bank and reasoned findings have been recorded in support thereof and the argument of the petitioner is misconceived.
A perusal of the punishment order dated 30.11.1998, passed by the respondent no.2 shows that he has not considered any of the objections raised by the petitioner in his reply dated 28.09.1998 to the second show cause notice/notice of proposed punishment dated 12.9.1998 and has only considered the findings of the enquiry officer and the material relied upon by him in support of his findings. The requirements of Clause- 19.12(a) regarding the grant of opportunity to the proposed punishment, in case any charge is established against the delinquent employee, were required to be complied by the punishing authority. The petitioner was clearly granted an opportunity to object against the proposed punishment by the punishing authority by the show cause notice dated 12.09.1998, but the reply of the petitioner thereto dated 28.09.1998, discussed above, was not considered by the enquiry officer. The requirements of Clause- 19.12(a) of the First Bipartite Settlement was not just a formality or ritual to be observed before passing the punishment order after giving notice of the proposed punishment to the petitioner. It it a procedure provided in accordance with Article-14 of the Constitution of India for providing an opportunity to the delinquent employee to object against any arbitrary proposal of punishment based on wrong appreciation of the findings of the enquiry officer against the delinquent employee. Therefore, the requirements of the Clause-19.12(a) of the First Bipartite Settlement, regarding objection to the nature of the proposed punishment by the disciplinary authority, requires consideration of the objection of the delinquent employee to the findings/omissions on the part of the enquiry officer and recording of reasons for its conclusions before confirming the proposed punishment against the delinquent employee. In the present case, this has not been done and this Court has not hesitation to hold that the punishment order dated 30.11.1998 is not in accordance with the requirements of Clause- 19.12(a) of the First Bipartite Settlement, 1966. The Apex Court in the case of S. N. Mukherjee Vs. Union of India reported in (1990)4 4 Supreme Court Cases 594 has stressed upon the disclosure of reasons for passing an order as follows :
"20. In India the matter was considered by the Law Commission in the 14th Report relating to reform in Judicial Administration. The Law Commission recommended:
"In the case of administrative decisions provision should be made that they should be accompanied by reasons. The reasons will make it possible to test the validity of these decisions by the machinery of appropriate writs." (Vol. II P. 694).
21. No laws has, however, been enacted in pursuance of these recommendations, imposing a general duty to record the reasons for its decision by an administrative authority though the requirement to give reasons is found in some statutes.
22. The question as to whether an administrative authority should record the reasons for its decision has come up for consideration before this Court in a number of cases.
23. In Harinagar Sugar Mills Ltd. v. Shyam Sundar Jhunjhunwala [1962] 2 SCR 339, a Constitution Bench of this Court. while dealing with an order passed by the Central Government in exercise of its appellate powers under Section 111(3) of the Companies Act, 1956 in the matter of refusal by a company to register the transfer of shares, has held that there was no proper trial of the appeals before the Central Government since no reasons had been given in support of the order passed by the Deputy Secretary who heard the appeals. In that case it has been observed:
"If the Central Government acts as a tribunal exercising judicial powers and the exercise of that power is subject to the jurisdiction of this Court under Article 136 of the Constitution we fail to see how the power of this Court can be effectively exercised if reasons are not given by the Central Government in support of its order." (P. 357)
24. In Madhya Pradesh Industries Ltd. V. Union of India [1966] 1 S.C.R. 466 the order passed by the Central Government dismissing the revision petition under Rule 55 of the Mineral Concession Roles, 1960, was challenged before this Court on the ground that it did not contain reasons. Bachawat, J., speaking for himself and Mudholkar, J., rejected this contention on the view that the reason for rejecting the revision application appeared on the face of the order because the Central Government had agreed with the reasons given by the State Government in its order. The learned Judges did not agree with the submission that omission to give reasons for the decision is of itself a sufficient ground for quashing it and held that for the purpose of an appeal under Article 136 orders of courts and tribunals stand on the same footing. The learned Judges pointed out that an order of court dismissing a revision application often gives no reasons but this is not a sufficient ground for quashing it and likewise an order of an administrative tribunal rejecting a revision application cannot be pronounced to be in-valid on the sole ground that it does not give reasons for the rejection. The decision in Hari Nagar Sugar Mills case (supra) was distinguished on the ground that in that case the Central Government had reversed the decision appealed against without giving any reasons and the record did not disclose any apparent ground for the reversal. According to the learned Judges there is a vital difference between an order of reversal and an order of affirmance. Subba Rao, J., as he then was, did to concur with this view and found that the order of the Central Government was vitiated as it did not disclose any reasons for rejecting the revision application. The learned Judge has observed:
"In the context of a welfare State, administrative tribunals have come to stay. Indeed, they are the necessary concomitants of a Welfare State. But arbitrariness in their functioning destroys the concept of a welfare State itself. Self-discipline and supervision exclude or at any rate minimize arbitrariness. The least a tribunal can do is to disclose its mind. The compulsion of disclosure guarantees consideration. The condition to give reasons introduces clarity and excludes or at any rate minimizes arbitrariness; it gives satisfaction to the party against whom the order is made; and it also enables an appellate or supervisory court to keep the tribunals within bounds, A reasoned order is a desirable condition of judicial disposal." (P. 472).
"If tribunals can make orders without giving reasons, the said power in the hands of unscrupulous or dishonest officer may turn out to be a potent weapon for abuse of power. But, if reasons for an order are given, it will be an effective restraint on such abuse, as the order, if its discloses extraneous or irrelevant considerations, will be subject to judicial scrutiny and correction. A speaking order will at its best be a reasonable and at its worst be at least a plausible one. The public should not be deprived of this only safeguard." (P. 472).
"There is an essential distinction between a court and an administrative tribunal. A Judge is trained to look at things objectively, uninfluenced by considerations of policy or expediency; but an executive officer generally looks at things from the standpoint of policy and expediency. The habit of mind of an executive officer so formed cannot be expected to change from function to function or from act to act. So it is essential that some restrictions shall be imposed on tribunals in the matter of passing orders affecting the rights of parties; and the least they should do is to give reasons for their orders. Even in the case of appellate courts invariably reasons are given, except when they dismiss an appeal or revision in limine and that is because the appellate or revisional court agrees with the reasoned judgment of the subordinate court or there are no legally permissible grounds to interfere with it. But the same reasoning cannot apply to an appellate tribunal, for as often as not the order of the first tribunal is laconic and does not give any reasons." (P. 472-73).
25. With reference to an order of affirmance the learned Judge observed that where the original tribunal gives reasons, the appellate tribunal may dismiss the appeal or the revision, as the case may be, agreeing with those reasons and that what is essential is that reasons shall be given by an appellate or revisional tribunal expressly or by reference to those given by the original tribunal.
26. This matter was considered by a Constitution Bench of this Court in Bhagat Raja case (supra) where also the order under challenge had been passed by the Central Government in exercise of its revisional powers under Section 30 of the Mines and Minerals (Regulation and Development Act, 1957 read with rules 54 and 55 of the Mineral Concession Rules, 1960. Dealing with the question as to whether it was incumbent on the Central Government to give any reasons for its decision on review this Court has observed:
"The decisions of tribunals in India are subject to the supervisory powers of the High Courts under Art. 227 of the Constitution and of appellate powers of this Court under Art. 136. It goes without saying that both the High Court and this Court are placed under a great disadvantage if no reasons are given and the revision is dismissed curtly by the use of the single word "rejected, or "dismissed". In such a case, this Court can probably only exercise its appellate jurisdiction satisfactorily by examining the entire records of the case and after giving a hearing come to its conclusion on the merits of the appeal. This will certainly be a very unsatisfactory method of dealing with the appeal." (P. 309).
27. This Court has referred to the decision in Madhya pradesh Industries case (supra) and the observations of Subba Rao, J., referred to above, in that decision have been quoted with approval. After taking note of the observations of Bachawat, J., in that case, the learned Judges have held: "After all a tribunal which exercises judicial or quasi-judicial powers can certainly indicate its mind as to why it acts in a particular way and when important rights of par- ties of far-reaching consequences to them are adjudicated upon in a summary fashion, without giving a personal hearing when proposals and counter proposals are made and examined, the least that can be expected is that the tribunals shall tell the party why the decision is going against him in all cases where the law gives a further right of appeal." (P.315).
28. Reference has already been made to Som Datt Datta's case (supra) wherein a Constitution Bench of this Court has held that the confirming authority, while confirming the findings and sentence of a Court-Martial, and the Central Government, while dealing with an appeal under Section 165 of the Act, are not required to record the reasons for their decision and it has been observed that apart from any requirement imposed by the statute or statutory rule either expressly or by necessary implication, it could not be said that there is any general principle or any rule of natural justice that a statutory tribunal should always and in every case give reasons in support of its decision. In that case the Court was primarily concerned with the interpretation of the provisions of Act and the Army Rules, 1954. There is no reference to the earlier decisions in Harinagar Sugar Mills case (supra) and Bhagat Raja case (supra) wherein the duty to record reasons was imposed in view of the appellate jurisdiction of this Court and the supervisory jurisdiction of the High Court under Articles 136 and 227 of the Constitution of India respectively.
29. In Travancore Rayon Ltd. V. Union of India [1970] 3 SCR 4(1) this Court has observed:
"The Court insists upon disclosure of reasons in support of the order on two grounds; one, that the party aggrieved in a proceedings before the High Court or this Court has the opportunity to demonstrate that the reasons which persuaded the authority to reject his case were erroneous; the other, that the obligation to record reasons operates as a deter- rent against possible arbitrary action by the executive authority invested with the judicial power."
30. In Mahabir Prasad Santosh Kumar v. State of U.P reported in (1969) 3 SCC 868, the District Magistrate had cancelled the licence granted under the' U.P Sugar Dealers' Licensing Order, 1962 without giving any reason and the State Government had dismissed the appeal against the said order of the District Magistrate without recording the reasons. This Court has held:
"The practice of the executive authority dismissing statutory appeal against orders which prima facie seriously preju- dice the rights of the aggrieved party without giving reasons is a negation of the rule of law."
"Recording of reasons in support of a decision on a disputed claim by a quasi-judicial authority ensures that the decision is reached according to law and is not the result of caprice, whim or fancy or reached on grounds of policy or expediency. A party to the dispute is ordinarily entitled to know the grounds on which the authority has rejected his claim. If the order is subject to appeal, the necessity to record reasons is greater, for without recorded reasons the appellate authority has no material on which it may determine whether the facts were properly ascertained, the relevant law was correctly applied and the decision was just."
31. In Woolcombers of India Ltd. case (supra) this Court was dealing with an award of an Industrial Tribunal. It was found that the award stated only the conclusions and it did not give the supporting reasons. This Court has observed:
"The giving of reasons in support of their conclusions by judicial and quasi-judicial authorities when exercising initial jurisdiction is essential for various reasons. First, it is calculated to prevent unconscious unfairness or arbitrariness in reaching the conclusions. The very search for reasons will put the authority on the alert and minimise the chances of unconscious infiltration of personal bias or unfairness in the conclusion. The authority will adduce reasons which will be regarded as fair and legitimate by a reasonable man and will discard irrelevant or extraneous considerations. Second, it is a well-known principle that justice should not only be done but should also appear to be done. Unreasoned conclusions may be just but they may not appear to be just to those who read them. Reasoned conclusions, on the other hand, will have also the appearance of justice. Third, it should be remembered that an appeal generally lies from the decision of judicial and quasi- judicial authorities to this Court by special leave granted under Article 136. A judgment which does not disclose the reasons, will be of little assistance to the Court."
32. In Siemens Engineering & Manufacturing Co. of India Limited case (supra) this Court was dealing with an appeal against the order of the Central Government on a revision application under the Sea Customs Act, 1878. This Court has laid down:
"It is now settled law that where an authority makes an order in exercise of a quasi-judicial function it must record its reasons in support of the order it makes. Every quasijudicial order must be supported by reasons." (P 495) "If courts of law are to be replaced by administrative authorities and tribunals, as indeed, in some kinds of cases, with the proliferation of Administrative Law they may have to be so replaced, it is essential that administrative authorities and tribunals should accord fair and proper hearing to the persons sought to be affected by their orders and give sufficiently clear and explicit reasons in support of the orders made by them. Then along administrative authorities and tribunals, exercising quasi-judicial function will be able to justify their existence and carry credibility with the people by inspiring confidence in the adjudicatory process. The rule requiring reasons to be given in support of an order is, like the principle of audi alteram partera, a basic principle of natural justice which must inform every quasi-judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law."
33. Tarachand Khatri v. Municipal Corporation of Delhi & Others, [1977] 2 SCR 198 was a case where an inquiry was conducted into charges of misconduct and the disciplinary authority, agreeing with the findings of the Inquiry Officer, had imposed the penalty of dismissal. The said order of dismissal was challenged on the ground that the disciplinary authority had not given its reasons for passing the order. The said contention was negatived by this Court and distinction was drawn between an order of affirmance and an order of reversal. It was observed:
" ..... while it may be necessary for a disciplinary or administrative authority exercising quasi-judicial functions to state the reasons in support of its order if it differs from the conclusions arrived at and the recommendations made by the Inquiry Officer in view of the scheme of a particular enactment or the rules made thereunder, it would be laying down the proposition too broadly to say that even an ordi- nary concurrence must be supported by reasons."
34. In Raipur Development Authority and Others v. Chokhamal Contractors and Others, [1989] 2 S.C.C. 721 a Constitution Bench of this Court was considering the question whether it is obligatory for an arbitrator under the Arbitration Act, 1940 to give reasons for the award. It was argued that the requirement of giving reasons for the decision is a part of the rules of natural justice which are also applicable to the award of an arbitrator and reliance was placed on the decisions in Bhagat Raja case (Supra) and Siemens Engineering Co. case (Supra). The said contention was rejected by this Court. After referring to the decisions in Bhagat Raja case (Supra); Som Datt Datta case (Supra) and Siemens Engineering Co. case (Supra) this Court has observed:
"It is no doubt true that in the decisions pertaining to Administrative Law, this court in some cases has observed that the giving of reasons in an administrative decision is a rule of natural justice by an extension of the prevailing rules. It would be in the interest of the world of commerce that the said rule is confined to the area of Administrative Law ..... But at the same time it has to be borne in mind that what applies generally to settlement of disputes by authorities governed by public law need not be extended to all cases arising under private law such as those arising under the law of arbitration which is intended for settlement of private disputes."
35. The decisions of this Court referred to above indicate that with regard to the requirement to record reasons the approach of this Court is more in line with that of the American Courts. An important consideration which has weighed with the Court for holding that an administrative authority exercising quasi-judicial functions must record the reasons for its decision, is that such a decision is subject to the appellate jurisdiction of this Court under Article 136 of the Constitution as well as the supervisory jurisdiction of the High Courts under Article 227 of the Constitution and that the reasons, if recorded, would enable this Court or the High Courts to effectively exercise the appellate or supervisory power. But this is not the sole consideration. The other considerations which have also weighed with the Court in taking this view are that the requirement of recording reasons would (i) guarantee consideration by the authority; (ii) introduce clarity in the decisions; and (iii) minimize chances of arbitrariness in decision making. In this regard a distinction has been drawn between ordinary Courts of law and tribunals and authorities exercising judicial functions on the ground that a Judge is trained to look at things objectively uninfluenced by considerations of policy or expediency whereas an executive officer generally looks at things from the standpoint of policy and expediency.
36. Reasons, when recorded by an administrative authority in an order passed by it while exercising quasi-judicial functions, would no doubt facilitate the exercise of its jurisdiction by the appellate or supervisory authority. But the other considerations, referred to above, which have also weighed with this Court in holding that an administrative authority must record reasons for its decision, are of no less significance. These considerations show that the re- cording of reasons by an administrative authority serves a salutary purpose, namely, it excludes chances of arbitrariness and ensures a degree of fairness in the process of decision-making. The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. In our opinion, therefore, the requirement that reasons be recorded should govern the decisions of an administrative authority exercising quasijudicial functions irrespective of the fact whether the decision is subject to appeal, revision or judicial review. It may, however, be added that it is not required that the reasons should be as elaborate as in the decision of a Court of law. The extent and nature of the reasons would depend on particular facts and circumstances. What is necessary is that the reasons are clear and explicit so as to indicate that the authority has given due consideration to the points in controversy. The need for recording of reasons is greater in a case where the order is passed at the original stage. The appellate or revisional authority, if it affirms such an order, need not give separate reasons if the appellate or revisional authority agrees with the reasons contained in the order under challenge.
37. Having considered the rationale for the requirement to record the reasons for the decision of an administrative authority exercising quasi-judicial functions we may now examine the legal basis for imposing this obligation. While considering this aspect the Donoughmore Committee observed that it may well be argued that there is a third principle of natural justice, namely, that a party is entitled to know the reason for the decision, be it judicial or quasi-judicial. The committee expressed the opinion that "there are some cases where the refusal to give grounds for a decision may be plainly unfair; and this may be so, even when the decision is final and no further proceedings are open to the disappointed party by way of appeal or otherwise" and that "where further proceedings are open to a disappointed party, it is contrary to natural justice that the silence of the Minister or the Ministerial Tribunal should deprive them of the opportunity." (P 80) Prof. H.W.R. Wade has also ex- pressed the view that "natural justice may provide the best rubric for it, since the giving of reasons is required by the ordinary man's sense of justice." (See Wade, Administrative Law, 6th Edn. P. 548). In Siemens Engineering Co. case (Supra) this Court has taken the same view when it observed that "the rule requiring reasons to be given in support of an order is, like the principles of audi alteram parlem, a basic principle of natural justice which must inform every quasi-judicial process." This decision proceeds on the basis that the two well-known principles of natural justice, namely (i) that no man should be a Judge in his own cause and (ii) that no person should be judged without a hearing, are not exhaustive and that in addition to these two principles there may be rules which seek to ensure fairness in the process of decision-making and can be regarded as part of the principles of natural justice. This view is in consonance with the law laid down by this Court in A. K. Kraipak v. Union of India [1970] 1 SCR 457, wherein it has been held:
"The concept of natural justice has undergone a great deal of change in recent years. In the past it was thought that it included just two rules namely (i) no one shall be a Judge in his own cause (nemo dabet esse judex propria causa) and (ii) no decision shall be given against a party without affording him a reasonable hearing (audi alteram partem). Very soon thereafter a third rule was envisaged and that is that quasi-judicial enquiries must be held in good faith, without bias and not arbitrarily or unreasonably. But in the course of years many more subsidiary rules came to be added to the rules of natural justice." (P. 468-69).
38. A similar trend is discernible in the decisions of English Courts wherein it has been held that natural justice demands that the decision should be based on some evidence of probative value. (See: R. v. Deputy Industrial Injuries Commissioner ex P. Moore, [1965] 1 Q.B. 456; Mahon v. Air New Zealand Ltd., [1984] A.C. 648.
39. The object underlying the rules of natural justice "is to prevent miscarriage of justice" and secure "fairplay in action." As pointed out earlier the requirement about re- cording of reasons for its decision by an administrative authority exercising quasi-judicial functions achieves this object by excluding chances of arbitrariness and ensuring a degree of fairness in the process of decision-making. Keep- ing in view the expanding horizon of the principles of natural justice, we are of the opinion, that the requirement to record reason can be regarded as one of the principles of natural justice which govern exercise of power by administrative authorities. The rules of natural justice are not embodied rules. The extent of their application depends upon the particular statutory framework whereunder jurisdiction has been conferred on the administrative authority. With regard to the exercise of a particular power by an administrative authority including exercise of judicial or quasi- judicial functions the legislature, while conferring the said power, may feel that it would not be in the larger public interest that the reasons for the order passed by the administrative authority be recorded in the order and be communicated to the aggrieved party and it may dispense with such a requirement. It may do so by making an express provision to that affect as those contained in the Administrative Procedure Act, 1946 of U.S.A. and the Administrative Decisions (Judicial Review) Act, 1977 of Australia whereby the orders passed by certain specified authorities are excluded from the ambit of the enactment. Such an exclusion can also arise by necessary implication from the nature of the subject matter, the scheme and the provisions of the enactment. The public interest underlying such a provision would outweigh the salutary purpose served by the requirement to record the reasons. The said requirement cannot, therefore, be insisted upon in such a case.
40. For the reasons aforesaid, it must be concluded that except in cases where the requirement has been dispensed with expressly or by necessary implication, an administrative authority exercising judicial or quasi-judicial functions is required to record the reasons for its decision.
Therefore, the impugned punishment order was clearly passed without application of mind to the objection of the petitioner in violation of Clause-19.12(a) and 19.12(c) of the Settlement and without recording reasons for sustaining such an order. Clause-19.12(c) of the Settlement provides that in awarding punishment by way of disciplinary action, the authority concerned shall take into account the gravity of misconduct, the previous record, if any, of the employee or any other aggravating and extenuating circumstances, that may exist. A perusal of the impugned punishment order shows that the disciplinary authority has not complied with any of the above requirements and has only stated that the petitioner was given sufficient opportunity of hearing and there are no extenuating circumstances brought by him to his notice.
The merits of the appellate order have also been assailed by the Counsel for the petitioner on the ground that it has not considered the points raised by the petitioner in his memorandum of appeal dated 31.12.1998. A perusal of the memorandum of the appeal of the petitioner shows that he has taken 19 grounds pointing out the defects in the disciplinary enquiry and in the punishment order and the appellate authority has turned down all the grounds without discussion and consideration referring to the findings of the enquiry officer and the disciplinary authority without testing the findings in the light of the objections/ grounds raised by the petitioner in the memo of his appeal. Therefore the appellate order can not be considered to be a well considered order in accordance with law.
The last submission of the Counsel for the petitioner is that the punishment order dated 30.11.1998 is illegal being beyond the powers of the punishing authority since the punishment provided in the Bipartite Settlement do not include any punishment regarding stoppage of 3 stagnation increments with cumulative effect.
Similarly, the VIth Bipartite Settlement dated 14.02.1995, which superseded Clause- 19.6 of the settlement dated 19.10.1966, noted above provides for the following gross misconducts, "(a). be dismissed without notice; or
(b). be compulsorily retired/ removed from service/discharged with superannuation benefits as would be due otherwise at that stage and without disqualification from future employment; or
(c). be brought down in lower stage in the scale of pay upto a maximum of two stages; or
(d). have his increment stopped; or
(e). have his special allowances withdrawn; or
(f). be warned or censured, or have an adverse remark against him; or
(j). be fined. "
A perusal of the aforesaid Clauses of the settlements shows that the punishment awarded to the petitioner i.e., stoppage of 3 stagnation increments stopped with cumulative effect is not provided anywhere in the settlements. There is force in the submission of the Counsel for the petitioner that stagnation increment is different from the annual increments granted to an employee. Stagnation increment is granted to the employee when he is not promoted on account of non availability of promotional avenues or for declining offer of promotion with transfer to the different place. It is paid after every four year to eligible employee of the respondent bank, as admitted by the respondents in their counter affidavit.
The argument of the Counsel for the petitioner that even if for the sake of argument it is accepted that the petitioner indulged in a conduct which was prejudicial to the interest of the Bank, it was at the most a minor misconduct defined under Clause- 19.7 (c) and (j) of the First Bipartite Settlement and therefore, some minor punishment should have been awarded to the petitioner. The Counsel for the respondent Bank has opposed this argument of the Counsel for the petitioner on the ground that the petitioner had committed major misconduct of riotous behaviour in the Bank and therefore, he was rightly awarded the major punishment defined under Clause- 21 (iv) of the VIth Bipartite Settlement dated 14.09.1995. Since the provisions of Clause-21(iv) of the aforesaid Settlement do not provide for the punishment awarded to the petitioner, as discussed above, and he has not charge-sheeted for major punishment, the argument of the Counsel for the respondent can not be accepted.
The Apex Court in the case of Vijay Singh Vs. State of U.P. and others, JT2012 (4) SC 105 has held that thus, the order of punishment being outside the purview of the statutory rules is a nullity and cannot be enforced against the appellant.
In view of the above consideration, it is clear that the disciplinary authority has not recorded any reason for considering the second part of the charge against the petitioner proved when the basis of the charge in the first part was not found true, the petitioner was charge-sheeted only for minor misconduct, but was awarded major misconduct, his objection to the notice of proposed punishment dated 28.12.1998 was not considered and the punishment awarded to him is not in accordance with Sixth Bipartite Settlement dated 14.2.1995, the impugned punishment and appellate orders passed by the respondent Nos. 2 and 1 cannot be sustained and are, hereby, quashed.
During the pendency of this writ petition, the petitioner has retired from service and therefore, the remand of the case for reconsideration of the punishment awarded to the petitioner would not be justified under the facts and circumstances of the case. The respondent no.2 is directed to recompute the salary of the petitioner from the date of the punishment order and after adding the 3 stagnation increments to his salary, he shall be paid the arrears of his salary till the date of his superannuation on 30.06.2013. The post retiral dues of the petitioner shall be calculated accordingly and paid to him. The denial of promotion to the petitioner on account of the impugned punishment order shall be compensated by the respondents by way of notional promotion from the date any of his junior was promoted on a promotional post and the benefits of notional promotion shall be paid to the petitioner. The interest on the dues of difference of salary and the post retiral dues are being denied to the petitioner on the ground that the remand of the case for consideration of award of minor punishment by the disciplinary authority is not possible after his retirement from service.
The writ petition is allowed. No order as to costs.
Order Date :- 30.04.2018 Ruchi Agrahari