JUDGMENT Vineet Saran, J.
1. The petitioner was a Cashier working with the respondent-Bank. On the basis of a complaint made by one Noor Mohammad on 29.9.1987, the respondent-Bank issued a charge sheet to the petitioner on 22.3.1988. The charge against the petitioner was of temporary embezzlement of a certain amount which was said to have been handed over to the petitioner by the complainant and had been deposited by him, not on the date when it was handed over but, on a subsequent date. Relying on the enquiry report, on 19.1.1990, the disciplinary authority passed an order imposing the punishment of removal of the petitioner from service. The appellate authority rejected the appeal of the petitioner on 23.4.1990. Against the said orders, the petitioner preferred Writ Petition No. 13242 of 1990. On the ground that while rejecting the appeal no reasons had been assigned by the appellate authority, this Court allowed the writ petition vide judgment and order dated 17.5.1993. The matter was thus remanded back to the appellate authority for deciding the same afresh by a reasoned order, after giving opportunity of hearing to the petitioner. By order dated 14.2.1994 the appellate authority again rejected the representation/appeal of the petitioner on the same grounds by which the earlier appeal had been rejected. Aggrieved by the said order of the appellate authority, the petitioner filed Writ Petition No. 15263 of 1994. By judgment and order dated 26.4.2004, this Court again allowed the writ petition. After summarizing the contentions of the petitioner, for the second time, the matter was remanded back to the appellate authority to be decided afresh. The relevant concluding paragraphs of the judgment and order dated 26.4.2004 passed in Writ Petition No. 15263 of 1994 are quoted below:-
"It is contended on behalf of the petitioner that since the entire enquiry proceedings were vitiated on the following grounds: (a) the complainant was not examined, as is mandatory under Circular dated 20th June, 1987 wherein it is provided that cross examination of the complainant is must (b) petitioner was permitted by the enquiry officer to cross examine the witness including witness MW-1 on the next date vide order dated 19thSeptember, 1988 however on 26th October, 1988 when the petitioner refused to cross examine the MW-2 which according to the petitioner, is totally misconceived and contrary of the earlier order passed by the enquiry officer. The right of the petitioner to cross examine the witness MW-1 could not be taken away, (c) the 2nd notice before imposition of the penalty had not been issued to the petitioner, which is mandatory (d) the punishment imposed is not commensurate to the charges levelled against the petitioner.
It is not necessary for this Court to go into the said questions raised on behalf of the petitioner. The matter is being remanded to the appellate authority to decide the appeal afresh strictly in the light of the order of this Court dated 17th May, 1993 after affording opportunity of hearing to the petitioner and after looking into the record in the presence of the petitioner. It is clarified that the contention raised by the petitioner, as noticed by this Court, shall necessarily be dealt with by the appellate authority while deciding the said appeal individually by means of the reasoned order. It will be open to the petitioner to raise such order pleas as he may be so advised. Since the matter is old, the said exercise may be undertaken by the appellate authority within three months from the date a certified copy of this order is produced before the Board of Directors.
With the observations, referred to above, this petition is allowed. No order as to costs."
2. After the decision of the aforesaid writ petition, the petitioner submitted his representation before the appellate authority, alongwith the copy of the judgment. By the letter dated 10.9.2004, the decision of the Board of Directors (appellate authority) dated 23.7.2004 was communicated to the petitioner, whereby the appeal of the petitioner had again been rejected. The punishment imposed on the petitioner was "REMOVAL FROM SERVICES WHICH SHALL NOT BE A DISQUALIFICATION FOR FUTURE EMPLOYMENT". Aggrieved by the aforesaid orders of the respondent-Bank, the petitioner has filed this writ petition with the following prayers:-
"a. to issue a writ, order or direction in the nature of certiorari quashing the order dt. 19.1.90 (Annexure No. 4) and order dt. 2.7.04 (23.7.04) communicated vide letter dt. 10.9.04 (Annexure No. 1); and/or, b. to issue a writ, order or direction in the nature of mandamus commanding the respondents to reinstate the petitioner in service by maintaining his continuity in service and with all consequential benefits; and/or, c. to issue a writ, order or direction in the nature of mandamus commanding the respondents to pay the back wages to the petitioner with interest @ 18% p.a.; and/ or, d. to issue any other writ, order or direction which may appear just & proper in the facts of the case; and/or, e. to award cost of the petition to the petitioner."
3. I have heard Sri Rakesh Bahadur, learned counsel for the petitioner and Sri J.N. Tiwari, Senior Counsel assisted by Sri A.K. Saxena, learned counsel appearing for the respondent-Bank and have perusal the record.
4. The respondent Bank is a Regional Rural Bank established under the Regional Rural Banks Act, 1976. The functioning of the Bank, as well as its management and staff, are to be governed by the provisions of the said Act. To give effect to the provisions of the Act, Section 30 gives power to the Board of Directors of the concerned Regional Rural Bank to frame regulations (with the previous sanction of the Central Government). Under the said provisions, the respondent-Bank has framed Aligarh Gramin Bank (Staff) Service Regulations, 1981 (for short 'Regulations of 1981') which deal with the terms relating to the conditions of service of its staff. Having been framed under the Act of 1976, the Regulations of 1981 would thus have statutory force. The regional rural banks established under the Act of 1976 are also governed by the instructions and circulars of the National Bank for Agriculture and Rural Development (NABARD).
5. By its circular dated 20th June, 1987 the NABARD had issued certain instructions to all the regional rural banks. The said circular was to be treated as guidelines for conduct of the disciplinary proceedings against the employees of the regional rural banks. The provisions of the said circular shall be referred to while dealing with the issues raised in this writ petition.
6. Sri Tiwari urged that the circular or the guidelines of the NABARD would not be binding on the respondent as the bank has its own Service Regulations of 1981 which would govern the disciplinary proceedings initiated against the staff and employees of the bank. Sri Rakesh Bahadur, however, disputed the same and submitted that the circular would be binding on the Bank in so far as the said instructions were not inconsistent with the Regulations of 1981. In this regard reliance has been placed on a decision of the Apex Court in the case of State of U.P. v. Chandra Mohan Nigam AIR 1977 S.C. 2411. In the said case the Court was dealing with a case of compulsory retirement and the question was as to whether the instructions issued by the Ministry of Home Affairs would have status of statutory rules or not. In this background, the Apex Court held that "It is sufficient for our purpose that these instructions do not violate any provision of the Act or of the rules. Rule 16(3), being a rigorous rule, vis-a-vis a Government servant not himself willing to retire under Rule 16(2), has to be invoked in a fair and reasonable manner. Since Rule 16(3) itself does not contain any guidelines, directions or criteria, the instructions issued by the Government furnish an essential and salutary procedure for the purpose of securing uniformity in application of the rule. These instructions really fill up the yawning gaps in the provisions, and are embedded in the conditions of service. These are binding on the Government and cannot be violated to the prejudice of the Government servant (see also Sant Ram Sharma v. State of Rajasthan, (1968) 1 SCR 111: (AIR 1967 SC 1910) and Union of India v. K.P. Joseph, (1973) 2 SCR 752 : (AIR 1973 SC 303)."
7. It is not disputed that by the Regulations of 1981, no proper procedure or guidelines for the conduct of enquiry and disciplinary proceedings has been laid down. For the purpose of securing uniformity in application, certain directions and guidelines have been given by the circular dated 20th June, 1987 by the NABARD. In my view, the said directions/guidelines issued by the circular dated 20th June, 1987 are not inconsistent with the Regulations of 1981 as they only fill in the gaps left out by the said Regulations. Thus the provisions of the circular would be binding to that extent, as they do not clash with the Regulations of 1981.
8. The grounds of challenge to the impugned orders and the enquiry proceedings are summarized below:
(1) Prejudice was caused to the petitioner as he was not allowed to engage an outside defence representative and accordingly the entire enquiry would vitiate.
(2) Since the enquiry officer did not examine the complainant (Noor Mohammad), the petitioner was deprived of his right of cross-examining the complainant, and thus as per the NABARD circular dated 20th June 1987, without examining the complaint, the enquiry officer erred in holding that the complaint was proved.
(3) The complaint could not have been proved merely on the statement of MW1 Kailash Chandra, especially when the petitioner was not allowed to cross-examine the said witness. Thus no reliance could have been placed on the complaint, which was not properly proved and had also been subsequently withdrawn by the complainant himself.
(4) No show cause notice had been given to the petitioner before imposition of penalty as was mandatorily required.
(5) The punishment of removal from service was totally disproportionate to the charge levelled against the petitioner.
9. The Regulations of 1981 are silent with regard to the first issue, as to whether the petitioner ought to have been allowed to engage an outside defence representative or not. The NABARD circular dated 20th June, 1987 provides that if an employee is charged for serious misconduct alongwith criminal offences such as fraud, embezzlement of money, forgery, theft etc. and he requests for representation through advocate in any enquiry, then despite the restriction contained in sub-regulation (3) of Regulation 30 of the Staff Regulations, the Enquiry Officer/Disciplinary Authority shall consider such request in the facts and circumstances of the case and shall consider permitting the delinquent employee to be represented through legal practitioner or any outsider, as per his choice. On the request having been made by the petitioner for engaging an outside representative, the enquiry officer rejected the same on the ground that it was not required as the petitioner has already been permitted to have a departmental representative to represent him. The petitioner has not been able to establish that by having been denied the opportunity of being represented by an outside representative, any prejudice has been caused to him, after the opportunity of being represented by a departmental representative had been actually availed by the petitioner. Thus, in my view, in the present circumstances, merely because of disallowing the petitioner to engage an outside defence representative, the disciplinary proceedings would not vitiate.
10. As regards the second issue, which relates to non-examination of the complainant, the Regulations of 1981 are again silent about the same. While dealing with this issue, the appellate authority has quoted the NABARD circular dated 20th June, 1,987 and mentioned that the said circular only states that the complainant's witness "may have to be examined during the enquiry." The English translation of the relevant extract of the circular is quoted below:-
"The disciplinary proceeding in all matters of misconduct commences from complaint or report of some person, which usually forms the basis of charge-sheet. Such complaints are treated as important evidence and such persons, who lodge the complaint are important witnesses, who can testify the facts and incidents or may prove or deny any particular fact or may support certain statements. These witnesses shall have to be examined in course of enquiry proceeding."
11. In my view, the NABARD circular has been totally misread and misinterpreted by the appellate authority. In no way can the said circular be said to mean that the complainant may be examined as a witness during the enquiry. It is the positive direction/instruction of the NABARD that in cases where disciplinary proceedings are based on some complaint, the complainant shall have to be examined as a witness. Reasons for the same have also been given therein which are quite logical.
12. Learned counsel for the respondent then submitted that since the petitioner had not denied the charges levelled against him in the charge-sheet and had accepted that he had made some delay in depositing the amount handed over to him by the complainant and thus, in such circumstances, the burden of proof of proving that the petitioner had not temporarily misappropriated certain amount would lie on the petitioner and not on the Bank. Therefore the examination of the complainant was not essential.
13. The said submission is not supported by the facts on record. In the charge-sheet dated 22.3.1988 it is mentioned that the petitioner was handed over a sum of Rs. 1,000/- by the complainant Noor Mohammad in the first week of August, 1987 to be deposited in the loan account of the complainant and then again a sum of Rs. 4500/-in the second week of August, 1987 and that the petitioner had given a receipt of Rs. 5498/- to the complainant on 20th August, 1987, whereas only an amount of Rs. 4500/- had been deposited in his account on 12.8.1987 and his loan account still showed that a sum of Rs. 998/- remained due, which amount was deposited by the petitioner only on the day after the complaint had been lodged.
14. In his reply (filed as Annexure-C.A.1 to the counter affidavit), it has been stated by the petitioner that a sum of Rs. 4500/- had been given by the said Noor Mohammad to the part time messenger (PTM) for being deposited in his account, which was deposited. Thereafter another sum of Rs. 1,000/- had been given to the petitioner in the morning of 30.9.1987 which was also duly deposited by the petitioner on the said date itself. Besides this, it has been explained that on 20th August, 1987, prior to banking hours at 9:40 A.M., the complainant had handed over a sum of Rs. 5498/- to be deposited in his loan account but on examining the loan account of the complainant, the petitioner found that Rs. 5498/- was not due as a sum of Rs. 4500/- had already been deposited earlier. In such circumstances, the petitioner explained that he had returned the entire amount of Rs. 5498/- to the complainant Noor Mohammad. However, it was alleged that it was only on the instigation of certain persons that the complaint was lodged against him and on realizing his mistake, the complainant withdrew the complaint. As such, in his reply, the petitioner explained that he had never kept any money with himself in an unauthorized or illegal manner. Accordingly, his reply could not be read as admission of the charges levelled against him.
15. It is nobody's case that any attempt was made by the respondent-Bank to call the complainant and that he refused to appear. Merely stating that the complainant was not under the control of the Bank and as such he was not called, would not be sufficient. It would have been a different case had the Bank made attempts to call the complainant and despite such efforts, the complainant had not appeared as a witness. On the contrary, in the present case, the complainant had admittedly withdrawn the complaint and still the bank continued to proceed against the petitioner and framed charges against him on the basis of the complaint, which had already been withdrawn.
16. The question of shifting of the burden of proof to show that the petitioner had not actually temporarily misappropriated any amount has to be seen in the light of the aforesaid facts. The ratio of the decision of the Apex Court in Orissa Mining Corporation v. Ananda Chandra Prusty (1997) 1 ESC 148 would not be applicable to the present case. As I have already discussed above, in his reply, the petitioner has merely explained that the amount, which was handed over to him on 20th August, 1987 had been returned to the complainant. His reply cannot be construed to mean that he had admitted the changes levelled against him. This fact is also not disputed that the complainant had subsequently withdrawn his complaint, on the basis of which the disciplinary proceedings had been initiated against the petitioner. The burden of proof could thus not shift on the petitioner, as he had never admitted to the charges of temporary embezzlement. It remained to be proved as to whether the amount which was said to have been handed over to the petitioner on 20th August, 1987 had been returned to the complainant or not. It is also not disputed that on 20th August 1987, the amount which remained payable by the complainant to the Bank in his loan accounts was not Rs. 5498/- but only Rs. 998/-. The explanation of the petitioner that the said balance amount of Rs. 998/- had been deposited by him on 30th September, 1987 when it was actually handed over by the complainant to him and not any amount which was handed over by the complainant earlier, had to be proved before the enquiry officer and then only the petitioner could be held guilty of temporary embezzlement. In the absence of the examination of the complainant as a witness, as was required in such cases by the NABARD circular dated 20th June, 1987, the charge could thus not be said to have been proved.
17. As regards the third ground raised by the petitioner, which relates to not permitting him to cross examine the star witness of the management MW1 Kailash Chandra, on the basis of which the complaint is said to have been proved, the circumstances do reveal that no proper opportunity of cross-examining the said witness was afforded to the petitioner. On the date when the said witness MW1 was examined, although the petitioner was present, his defence representative was absent. Thus, since the petitioner could not himself cross-examine the witness, he sought for some time. On subsequent date (as would be clear from the proceedings that have been filed as Annexure-18 to the writ petition), the enquiry officer has recorded on 26.6.1998 that there was no justification for the charge-sheeted employee to now cross-examine the witness. Earlier the petitioner had been informed (as recorded in the proceedings filed as Annexure-13 to the writ petition) that on a future date, the petitioner would be permitted to cross-examine the witnesses already examined, for which the petitioner was agreeable, but instead, the enquiry officer permitted another witness MW2 to be examined, before allowing the petitioner to cross-examine the earlier witness MW1. Merely because the petitioner did not want to cross examine the second witness MW2, it could not be presumed that he had given up his right to cross examine the first witness MW1, on whose evidence alone the enquiry officer had held that the complaint stood proved. Being, denied cross-examination of MW1 thus prejudiced the petitioner.
18. The next point relates to the non-issuance of show cause notice and non-supply of the enquiry report before imposing the punishment. The contention of the petitioner is that before imposing punishment, the petitioner ought to have been- issued a show cause notice informing him of the proposed punishment and should also have been supplied a copy of the enquiry report. Admittedly no copy of the enquiry report had been supplied to the petitioner. The NABARD circular clearly provides that after determination of the punishment, the disciplinary authority shall issue show cause notice to the concerned employee. It further provides that the notice should communicate the reasons, on which basis the authority had arrived at the conclusion that the employee was guilty, and should also ask him to show cause why the proposed punishment be not awarded to him. Alongwith it, he should also be communicated that his explanation be submitted within a specified period (say 15 days), and that on failure to do so, the disciplinary authority would proceed with, after assuming that the employee has nothing to say against the proposed punishment. The copy of competent authority's conclusion should be provided to the employee alongwith the copy of the enquiry report. It thus clearly provides that the delinquent employee shall be issued notice, with direction to file his objection to the proposed punishment, if any.
19. In the present case, the observation of the Board of Directors (appellate authority) in the impugned order with regard to this issue is that the petitioner had been issued a notice dated 6.1.1990 (filed as Annexure-16 to the writ petition). A perusal of the same would go to show that the petitioner had been intimated that 'he had been found guilty of the charges mentioned in the charge sheet dated 22nd March, 1988 and that the disciplinary authority proposes to impose penalties under Regulation 30 of the Regulations of 1981'. The petitioner was required to appear before the disciplinary authority on 16.1.1990. It is not denied that the enquiry report, as required by the NABARD circular, had not been supplied to the petitioner. No opportunity for submitting his explanation within a period specified, i.e. 15 days or so, had been afforded. The proposed punishment was also required to be specified and merely stating that the disciplinary authority proposed to impose penalty under Regulation 30 would not suffice. Regulation 30 provides for all possible punishments which could be awarded, such as reprimand; delay or stoppage of increments or promotion; degradation to lower post; recovery from pay; removal from service which shall not be a disqualification for future employment; and dismissal from service. What particular punishment was proposed to be imposed had not been specified. Such vague notice cannot be termed as a show cause notice required under the Circular or sufficient opportunity given to the petitioner before imposing penalty.
20. Now I come to the last issue as to whether the punishment awarded is commensurate to the charges levelled against the petitioner. Although not so, but even if it is presumed that the charge against the petitioner stood proved, then too, in my view, the punishment of removal from service would be totally disproportionate to the said charge as in no way can it be said that the Bank was put to any loss because of the alleged conduct of the petitioner. Sri Tiwari has submitted that banking and financial institutions run basically on trust and any conduct of its employee which raise any doubt about his integrity would amount to losing trust with the Bank, and the same cannot be condoned. The said proposition cannot be disputed. In case if the petitioner were found guilty of such conduct, he would certainly be liable to the severest punishment permissible. In the present case, the evidence as well as the enquiry report do not inspire confidence to show that the charges against the petitioner stood proved. The enquiry report cannot be said to be based on any concrete evidence. In the absence of the complainant having been examined as a witness or the star witness of the management MW 1 having not been permitted to be cross examined by the petitioner, it is not understood as to how the charge against the petitioner stood proved.
21. The Apex Court in the case of A.K. Mohan v. Labour Court and Ors. S.C. 1986(52) F.L.R. 487 has held that "an enquiry report in a quasi-judicial must show the reasons for the conclusion. It cannot be an ipse dixit of the enquiry officer. It has to be a speaking order in the sense that the conclusion is supported by reasons". In the present case, as I have already observed above, the enquiry report does not give any cogent reason to show that the charges against the petitioner stood proved.
22. It is true that normally this Court should not substitute its own conclusion on penalty and impose some other penalty. However, in the case of B.C. Chaturvedi v. Union of India and Ors. A.I.R. 1996 Supreme Court 484, the Supreme Court observed as under:-
"A review of the above legal position would establish that the disciplinary authority, and on appeal the appellate authority, being fact-finding authorities have exclusive power to consider the evidence with a view to maintain discipline. They are invested with the discretion to impose appropriate punishment keeping in view the magnitude or gravity of the misconduct. The High Court/Tribunal, while exercising the power of judicial review, cannot normally substitute its own conclusion on penalty and impose some other penalty. If the punishment imposed by the disciplinary authority or the appellate authority shocks the conscience of the High Court/Tribunal, it would appropriately mould the relief, either directing the disciplinary/appellate authority to reconsider the penalty imposed, or to shorten, the litigation, it may itself, in exceptional and rare cases, impose appropriate punishment with cogent reasons in support thereof."
23. In view of the discussions made hereinabove and on the facts of this case, the present case does fall in the category of cases where this Court should interfere with the punishment, specially when the petitioner had approached this Court twice earlier and each time his writ petitions had been allowed. Even in this third innings, while dismissing his appeal, the appellate authority has again not given any concrete or sufficient reasons for imposing the ultimate penalty of removal from service. In the facts and circumstances of the case, at best it could be said that the petitioner has admitted to having accepted a sum of Rs. 5498/- from the complainant on 20th August, 1987 for which he had issued a receipt before the banking hours, but on finding that the said amount was not found due to be payable by the complainant, the petitioner returned the money. The complaint has already been withdrawn. At the most, the petitioner can be said to have committed some irregularity in having issued the receipt for such amount and instead of depositing the same in his account, for good reasons, returned it to the complainant. The explanation given by the petitioner was sufficient, except that he ought to have been more careful and ought not to have issued any receipt before having deposited any amount with the Bank. However, no loss was caused to the bank and the petitioner cannot also be held guilty of breach of trust. For such conduct, the punishment of removal from service could not have been awarded and at best, a warning ought to have been issued to the petitioner.
24. In the given circumstances, the impugned orders dated 19.1.1990 and 23.7.2004 deserve to be set aside and are hereby quashed. The petitioner shall be entitled to reinstatement in service, which shall be done within six weeks from the date of production of a copy of this order before respondent No. 2. He shall be warned that in future he shall be more careful and an entry to that effect may be made in his service record.
25. As regards the payment of back wages, the petitioner has been out of employment for about 15 years. There is no assertion in the petition to the effect that the petitioner was not gainfully employed during the said period. Although the petitioner can be denied payment of back wages on the principle of 'no work no pay', but keeping in view that the petitioner has certainly suffered because of the orders passed against him, which have all been quashed, in my view, in the circumstances of this case, it would be just and fair if the petitioner is paid only 25% of his back wages, and accordingly it is being so directed. However, he shall be given benefit of continuity of service for all other purposes.
26. This writ petition, accordingly, stands allowed. No order as to costs.