1. Heard, Sri Ashok Shukla, learned counsel for the petitioner and Sri Rakesh Kumar Nigam, learned counsel for the respondent nos. 3 and 4 and learned Standing Counsel for respondent-State.
2. The present writ petition has been filed by the petitioner challenging the order dated 26.06.2008 passed by the opposite party no.5, by means of which the petitioner has been dismissed from service. He has further prayed for a direction to the opposite parties to produce the orders passed by the District Magistrate/ Administrator of the District Cooperative Bank Ltd. Barabanki and the order passed by the U.P. Cooperative Institutional Service Board, opposite party no.6 for according the approval for dismissal of the petitioner and further to quash the same.
3. Brief facts of the case for adjudication of the case in hand are that the petitioner was appointed as a Clerk in the lower grade Assistant Cadre in the District Cooperative Bank Limited, Barabanki on 27.11.1981, which is a central society within the meanings of the U.P. Cooperative Societies Act, 1965. Subsequently, he was promoted in the clerical cadre and posted as a Clerk-cum-Cashier in the main branch of the District Cooperative Bank, Barabanki at Nawabganj. While the petitioner was working as a Clerk/Cashier in the Nawabganj branch, a chargesheet dated 14.10.2004 was issued and served on the petitioner. The charge levelled against the petitioner was for being responsible in the embezzlement alleged to have been committed by Sri Udit Narain Verma, the then Branch Manager of the Bank at Nawabganj Branch for taking loans in his and in the name of his family members on various dates between the year 1999-2000 to 2002-2003. The petitioner submitted an application dated 27.10.2004 bringing in knowledge of the enquiry officer that the chargesheet was not accompanied by the relevant documents and prayed for making available the relevant documents to him. The relevant documents were not made available to the petitioner and under compelling circumstances, he had to submit his reply on 10.12.2004 in which the petitioner had denied the allegations levelled against him.
4. The enquiry was conducted and Sri K.K. Mishra, the Deputy General Manager of the Bank submitted his enquiry report on 10.01.2005. The authorities of the Bank did not agree with the enquiry report and therefore appointed another Deputy General Manager(Administration/Accounts) of the Bank, namely, Sri Praveen Kumar as the enquiry officer. The enquiry officer required the petitioner to submit his case before him within 15 days by means of the letter dated 29.08.2005. The petitioner was also required to submit his defence and if he wanted to tender evidence or present any witness, he should do so by presenting himself before the opposite party no.4/5 at 12 o'clock on 05.09.2005. The petitioner appeared on 05.09.2005 before the Enquiry officer and submitted his reply denying the charges and his involvement in the loans taken by Sri Udit Narain Verma and his family members. He had also made prayer for making available relevant documents to him in his reply. The request of the petitioner was not acceded to by the enquiry officer. Thereafter the enquiry officer without holding any enquiry, without fixing any date, time and place and examining any evidence/witness produced against the petitioner submitted the enquiry report dated 08.11.2005.
5. The enquiry report was considered by the Sanchalak Mandal, which did not accord its approval and constituted a three members committee consisting of its Directors for examining the matter. The three members committee submitted its report dated 27.07.2006, in which the committee found that there was violation of principles of natural justice, as the documents were neither got inspected to the petitioner nor the copies were provided to him. The Committee further recorded that most of the amount, alleged to have been embezzled by way of loans, has been deposited. Therefore it recommended for holding the enquiry in compliance of the principles of natural justice and the petitioner may be reinstated provisionally. The Sanchalak Mandal considered the report dated 27.07.2006 in its meeting held on 04.11.2006 and by an unanimous resolution No. 24 provided that the enquiry was conducted in utter violation of the principles of natural justice and the law and the loan taken by Sri Udit Narain Verma and his family members was paid back by his family members in its entirety and it also recorded that the possibility of involvement of the officer of the Bank including the Deputy General Manager (Adminstration/Accounts) who conducted the enquiry(the present Secretary / General Manager of the Bank) in the matter is not ruled out and therefore Sri O.P. Jaiswal, who was appointed as the Branch Manager, was also not allowed to join. It resolved that the petitioner be reinstated provisionally and enquiry be conducted after affording opportunity to the petitioner and the enquiry report be submitted before the Sanchalak Mandal. It further resolved that a request be made to the Registrar Cooperative Societies, U.P. , Lucknow and the Cadre authority of the U.P. Cooperative Banks to hold enquiry for taking effective action against all the concerned officers posted since 1998.
6. Immediately thereafter the then Secretary/ Joint Manager, District Cooperative Socieites, Barabanki, who was enquiry officer and who had submitted report against the petitioner, sought directions from the Chairman, District Cooperative Bank under Rule 130 as he was of the view that the decision taken by the Sanchalak Mandal is against the Rules and the bye laws. It appears that the lettter written by the Secretary/General Managar of the Bank did not find favour with the President of the Sanchalak Mandal as according to him the resolution did not violate any statutory provision. Therefore the Secretary/General Manager of the Bank in exercise of his purported power under Rule 130 of the U.P. Sahkari Samiti Niyamawali, 1968, referred the matter to the Joint Registrar, Cooperative Socieites, Faizabad Mandal, Faizabad for his appropriate action under Section 128 of the U.P. Sahkari Samiti Adhiniyam, 1965 as according to him, the resolution No.24 dated 04.11.2006 was not in the interest of the Bank. It appears from the letter dated 11.11.2006 of the Secretary/General Manager of the Bank that it did not inform that the enquiry report submitted by him was not accepted by the Sanchalak Mandal of the Bank on the ground that the enquiry proceedings were conducted without following the Rules and in violation of the principles of natural justice.
7. However, the Secretary/General Manager did not dispute the authority of the Sanchalak Mandal to refer the matter to the Registrar Cooperative Society and the Cadre Authority of Cooperative Banks contracted services for appropriate enquiry and effective action against the officers of the Bank. The Joint Registrar, Cooperative Societies, Faizabad Mandal, Faizabad passed an order dated 07.12.2006 remitting the resolution No.24 dated 04.11.2006 to the Sanchalak Mandal for re-consideration and till then he stayed the entire resolution no.24 dated 04.11.2006. In pursuance thereof, the Sanchalak Mandal, in its meeting held on 14.12.2006, considered the matter and took a decision for reinstatement of the petitioner, as an interim measure. In pursuance thereof, no decision was taken by the Secretary/General Manager of the Bank as provided under Rule 130 of the U.P. Sahkari Samiti Niyamawali, 1968 and after a lapse of more than 4 months and 15 days, he again approached to the Joint Registrar, i.e., opposite party no. 2 by means of the letter dated 30.04.2007 for seeking directions in the matter of interim reinstatement of the petitioner, annexing a copy of the resolution of the Sanchalak Mandal, referring to the Case Crime No. 896 of 2004 against the petitioner.
8. In pursuance thereof, the Joint Registrar passed an order on 13.06.2007 to the effect that it would be appropriate for taking further action in the matter of reinstatement of the petitioner. The Secretary/General Manager of the Bank placed the letter dated 16.06.2007 before the Sanchalak Mandal in its meeting held on 09.07.2007. The Sanchalak Mandal considered the matter in its entirety and passed a resolution that the petitioner has been found guilty of an embezzlement of Rs.73,990/- alongwith late Sri Udit Narayan, the then Branch Manager jointly, therefore, after deposit of 50% of the said amount, the petitioner be reinstated into service as an interim measure. The Secretary/General Manager of the Bank, without referring the resolution of the Sanchalak Mandal, vide his letter dated 24.08.2007 approached to the President of the Bank for consideration of interim reinstatement of the petitioner and one Smt. Mati Misra. The President on 25.08.2007 required the Secretary/General Manager of the Bank to put up the relevant files with his comments before him.
9. The Secretary/General Manager of the Bank under purported exercise of his power under Rule 130 of the U.P. Sahkari Samiti Niyamavali, 1968, vide his letter No. 2025 dated 06.10.2007, after lapse of 2 months and 26 days, made a reference to the Joint Registrar, Cooperative Societies, U.P. Faizabad Mandal, Faizabad for his orders under Section 128 of the U.P. Cooperative Societies Act, 1965, which was, in fact, for stay of the interim reinstatement of the petitioner. In pursuance thereof, the Joint Registrar passed an order dated 03.11.2007 to reconsider the resolution dated 09.07.2007 passed by the Sanchalak Mandal within 15 days and the same was stayed during the said period.
10. The opposite party nos. 4/5 issued a show cause notice dated 30.11.2007 to the petitioner informing that the Prashashak of the Bank has ordered for petitioner's presence in connection with the proceedings under Regulation No. 84(a) of the U.P. Cooperative Societies Employees Regulations, 1973 for his dismissal from service. The petitioner, due to his ailment, was unable to appear and the same was informed to the Secretary/General Manager. Therefore, the opposite party nos. 4/5 issued a letter dated 31.12.2007 affording last opportunity to the petitioner to submit reply to the show cause notice upto 08.01.2008, but due to depression and suffering from trauma, the petitioner could not submit his reply. In the meantime, the U.P. Cooperative Institutional service Board wrote a letter to the respondent nos. 4/5.
11. It appears that in the meantime the opposite party nos. 4/5 sought approval of the Sanchalak Mandal on the dismissal of the petitioner. Therefore, he was asked to appear before it on 17.04.2008 at 3:00 p.m. In the meantime, the petitioner also received a copy of the said notice endorsed to the petitioner. In pursuance thereof, the petitioner submitted his reply on 28.04.2008 and the supplementary reply dated 01.05.2008. After submission of the replies, the petitioner did not receive any order or communication from the opposite party no. 6 and the petitioner has been dismissed from service by means of the order dated 26.06.2008, which has been challenged by the petitioner in the present writ petition.
12. Submission of learned counsel for the petitioner is that the petitioner was working as Clerk-cum-Cashier at the relevant point of time when certain loans were taken by the then Branch Manager, Sri Udit Narain Verma and his family members. The petitioner under his duty as Clerk-cum-Cashier was bound to pay the amount sanctioned by the Branch Manager. Therefore, the petitioner had no option except to pay the amount of loan sanctioned by the Branch Manager. But without considering it and affording any opportunity, the petitioner was suspended and charge sheet was issued against the petitioner levelling the allegation of collusion in embezzlement by the then Branch Manager. The relevant documents were not provided to the petitioner despite the demand made by the petitioner and neither any enquiry was held fixing any date, time and place nor the petitioner was afforded any opportunity for cross examination, as such, the charge was never proved. It is further submitted that the enquiry was conducted in utter disregard to the principles of natural justice as well as the law laid down by this Court as well as the Hon'ble Apex Court, which has been admitted by the Sanchalak Mandal.
13. After submission of the enquiry report, the matter was considered by the Sanchalak Mandal, which did not find its favour. Therefore a three member Committee was appointed to examine the matter. The Committee gave its report in favour of the petitioner. Considering the same, a decision was taken by the Sanchalak Mandal vide resolution no.24 dated 04.11.2006 that the petitioner be reinstated provisionally and enquiry be held in accordance with law and principles of natural justice. It had also recommended for action against the officers of the Bank including the then Deputy General Manager who was posted as Secretary/General Manager at that time. Therefore he did no comply the repeated decisions of Sanchalak Mandal and managed to get the petitioner dismissed by placing misleading facts before the Chairman/Administrator and the Joint Registrar, Cooperative Societies and concealing that the enquiry report was not approved by the Sanchalak Mandal.
14. He further submitted that the aforesaid enquiry could not have been held because there is no provision for holding another enquiry under the service regulation or bye laws of the Bank after the enquiry report has been submitted by the Enquiry Officer therefore the first enquiry report could not have been rejected and another enquiry officer could not have been appointed. But Sri Praveen Kumar, the then Deputy General Manager (Administration/Accounts) was appointed as an Enquiry Officer, who with predetermined mind to punish the petitioner, conducted the enquiry as well as passed the punishment order, misleading the higher authorities as he had become the Secretary/General Manager of the Bank by that time. Therefore, the apprehension of the Sanchalak Mandal regarding the involvement of the Secretary/General Manager in the alleged irregularities of the branch in question also cannot be ruled out.
15. On the basis of above, learned counsel for the petitioner submitted that the respondent nos. 4/5 were bent upon to take strict action against the petitioner in pursuance of his enquiry report in which he succeeded, therefore, the impugned order of dismissal passed against the petitioner is nothing but an arbitrary, illegal and colourable exercise of power. Therefore it is not sustainable in the eyes of law and is liable to be quashed and the writ petition allowed.
16. Per contra, learned counsel for the respondents no.3 and 4 submitted that the petitioner was posted as clerk-cum-cashier at the relevant point of time when the Branch Manager of the Nawabganj Branch of District Cooperative Societies Bank took loans in his name and his family members amounting to several lakhs of rupees which was disbursed by the petitioner, but no action was taken by him. Therefore, collusion of the petitioner is apparent because he had never raised any voice or made any complaint against it. Therefore, even if the charge of embezzlement has not been found proved against the petitioner, the irregularity committed by the petitioner cannot be denied. He further submitted that more than one loans were disbursed on one and the same property/security. However, he could not dispute that the clerk-cum-cashier had to abide by the orders of the Branch Manager and he cannot defy the same. But he submitted that the petitioner could have made complaint to the higher officers in this regard. He further submitted that the Regulation 85 provides the manner in which the disciplinary proceedings are to be conducted and the enquiry has been conducted in accordance with the procedure prescribed under the Regulation so there is no illegality or infirmity in the same.
17. On the basis of above, learned counsel for the respondent submitted that the action has rightly been taken against the petitioner and he has been dismissed from service after approval by the Chairman/Administrator and the Sanchalak Mandal. There is no illegality or infirmity in the punishment order passed against the petitioner and the writ petition is liable to be dismissed with costs.
18. I have considered the submission of learned counsel for the parties and perused the material available on record.
19. The petitioner was initially appointed on the post of clerk in the lower grade Assistant Cadre in the District Cooperative Bank Limited, Barabanki and in due course of time promoted to the post of Clerk-cum-Cashier and posted in the main branch at Nawabganj. While the petitioner was working as a Clerk-cum-Cashier in the Nawabganj branch, a chargesheet dated 14.10.2004 was issued and served on the petitioner. The charges levelled against the petitioner were for being responsible in the embezzlement alleged to have been committed by Sri Udit Narain Verma, the then Branch Manager. The charge sheet was not accompanied by the relevant documents so the petitioner by means of an application dated 27.10.2004 prayed for making available the relevant documents to him. The relevant documents were not made available to the petitioner and under compelling circumstances, he had to submit his reply on 10.12.2004 in which the petitioner had denied the charges levelled against him. After conducting the enquiry, the then Enquiry officer Sri K.K. Mishra submitted his enquiry report on 10.01.2005. It appears that the clear findings were not recorded by the enquiry officer, therefore the authorities of the Bank did not agree with the enquiry report and appointed another Enquiry Officer, Sri Praveen Kumar, the then Deputy General Manager (Administration/Accounts) of the Bank.
20. Therefore the argument of the learned counsel for the petitioner that since there is no provision in the Regulations or bye laws of the bank for holding another enquiry after submission of the enquiry report it could not have been rejected and another enquiry officer could not have been appointed is mis-conceived because if the first enquiry officer has not held the enquiry in accordance with law and recorded any finding in regard to the charges then the principles of natural justice demands that the enquiry should be held in due observance of the same. Therefore the disciplinary authority cannot be said to be incompetent to order for fresh re-enquiry in the matter.
21. The Enquiry Officer required the petitioner to submit his case before him by means of the letter dated 29.08.2005 fixing 05.09.2005 for presence of the petitioner. The petitioner appeared and submitted his reply denying the charges and his involvement in the matter. He also prayed for making available relevant documents but the same was not accepted and the enquiry officer without holding any enquiry and without fixing any date, time and place and examining any evidence/witness submitted the enquiry report dated 08.11.2005 which was placed before the Sanchalak Mandal. The enquiry report was not accepted and a three member Committee was appointed for examining the matter.
22. The Committee submitted its report dated 27.07.2006 after examining the entire matter, inter alia, stating that the enquiry was held in complete violation of principles of justice and loan disbursed may be irregular, but that does not come in the category of embezzlement. The Committee has also recorded in its enquiry report that no allegation can be levelled that the petitioner has not cooperated in the enquiry. The report further recorded that the cashier is bound to follow the orders of the Branch Manager and the regular reports were being submitted and reviewed at the level of the head of the department, but no action was taken, on account of which, the irregular disbursement of loans flourished in the branch. Therefore, the then Senior Branch Manager/ Deputy General Manager (Accounts/Administration) i.e. the present Secretary/General Manager are responsible for it and due to which Sri O.P. Jaiswal, who was appointed on the post of Branch Manager, was also not allowed to join.
23. Considering the report, resolution No. 24 dated 04.11.2006 was passed by the Sanchalak Mandal holding that the enquiry was not held in accordance with the principles of natural justice therefore petitioner be reinstated provisionally and enquiry be held after affording complete opportunity of hearing to the petitioner. It also observed that the responsibility of the officers of the Bank including Deputy General Manager (Administration/Accounts), who conducted the enquiry in the matter and was posted on the post of Secretary/General Manager by that time, cannot be ruled out and, therefore, referred the matter to the Registrar, Cooperative Societies for effective action against them.
24. Therefore it is apparent that the enquiry has not been held in accordance with law and principles of natural justice. It has been accepted in the resolutions passed by the Sanchalak Mandal repeatedly. It is also apparent that despite repeated demands by the petitioner the Inquiry Officer had not provided the documents mentioned in the charge sheet.The three Member inquiry Committee and the Sanchalak Mandal have found that the inquiry has not been conducted in accordance with law. The conduct of the Inquiry Officer indicates that he has not acted fairly and impartially.
25. The Enquiry Officer is a quasi judicial authority and he is required to act fairly and impartially because an Enquiry Officer in that capacity is not an employee of the department. This view is supported by a Division Bench of this Court in the case of P.N. Srivastava versus State of U.P. and others; 1999 (17) LCD 24. The relevant paragraph 10 is reproduced as under:
10. In the matter of disciplinary enquiries against delinquent employees, the authorities are required to act fairly, as the enquiries are of quasi-judicial nature and principles of natural Justice have to be kept in mind. The delinquent official, is required to be afforded reasonable opportunity to cross-examine the witness and produce the witness in his defence. This is the minimum requirement of principle of natural justice. An enquiry officer is not entitled to collect the material against the delinquent official at his back. In Chandrama Tewari v. Union of India, AIR 1988 SC 117, the Apex Court has ruled that the principles of natural justice require that the delinquent official is furnished with the copies of the documents relied upon against him and he should be given full opportunity to cross-examine the witnesses and to produce his own defence. Besides, the enquiry officer cannot collect evidence behind the delinquent official and in case the enquiry officer relies upon such evidence, the enquiry stands vitiated and is ab initio void and liable to be set aside. Admittedly. In this case the petitioner gave names of 19 persons to be examined in the enquiry but none of them was summoned by the enquiry officer on 17.10.1997 when the petitioner was summoned to appear in the enquiry before him. In Shyam Swarup Gangwar u. U. P. Co-operative Institutional Service Board. Lucknow, 1997 ALJ 2158, it is held that if the delinquent official wants to adduce evidence, the disciplinary authority has no alternative but to allow him to adduce evidence. In Matiesh Kumar Pandey v. Upper Pradhan Prabandhak, U.P.S.R.T.C., 1997 ALJ 1501, it has been observed :
"Right of defence which is guaranteed to a Government servant under Article 311 of the Constitution and to other citizens under Articles 14 and 21 as also by the rules of natural Justice is a substantive right which has to be full and complete. Mere opportunity to admit or deny a particular factual allegation amounting to a charge of misconduct alone is not the defence which is envisaged by the Constitution and rules of the natural justice."
26. The Hon'ble Apex Court in the case of State of Uttar Pradesh versus Saroj Kumar Sinha; (2010) 2 SCC 772 has held that the Enquiry Officer being a quasi judicial authority is in a position of an independent adjudicator and is not supposed to be representative of the department/disciplinary authority/Government and by virtue of Article 311 (2) of the Constitution of India the departmental enquiry had to be conducted in accordance with the rules of natural justice. The relevant paragraphs 27,28 and 29 are reproduced as under:
"27.A bare perusal of the aforesaid sub-rule shows that when the respondent had failed to submit the explanation to the charge-sheet it was incumbent upon the inquiry officer to fix a date for his appearance in the inquiry. It is only in a case when the government servant despite notice of the date fixed failed to appear that the inquiry officer can proceed with the inquiry ex parte. Even in such circumstances it is incumbent on the inquiry officer to record the statement of witnesses mentioned in the charge-sheet. Since the government servant is absent, he would clearly lose the benefit of cross-examination of the witnesses. But nonetheless in order to establish the charges the Department is required to produce the necessary evidence before the inquiry officer. This is so as to avoid the charge that the inquiry officer has acted as a prosecutor as well as a judge.
28. An enquiry officer acting in a quasi judicial authority is in the position of an independent adjudicator. He is not supposed to be a representative of the department/ disciplinary authority/Government. His function is to examine the evidence presented by the department, even in the absence of the delinquent official to see as to whether the unrebutted evidence is sufficient to hold that the charges are proved. In the present case the aforesaid procedure has not been observed. Since no oral evidence has been examined the documents have not been proved, and could not have beentaken into consideration to conclude that the charges have been proved against the respondents.
29. Apart from the above by virtue of Article 311(2) of the Constitution of India the departmental inquiry had to be conducted in accordance with rules of natural justice. It is a basic requirement of rules of natural justice that an employee be given a reasonable opportunity of being heard in any proceeding which may culminate in a punishment being imposed on the employee."
27. Adverting to the facts of the case the inquiry report shows that no date, time and place was fixed for holding the inquiry and recording the statement of the witnesses and proving the charge. The only date fixed was 05.09.2005 for personal hearing, which cannot be accepted as compliance of principles of natural justice because unless the charges are proved before the inquiry officer in presence of the delinquent, he cannot be asked to disprove the charge, therefore, fixing of date for personal hearing was nothing but merely an eye wash.
28. Learned counsel for the respondents has submitted that the inquiry has been held in accordance with Regulation 85 of the U.P. Cooperative Societies Employees Service Regulations, 1975 and there was no violation of regulations and accordingly principles of natural justice. Regulation 85,on reproduction reads as under:-
"85. Disciplinary Proceedings.-
(i) The disciplinary proceedings against an employee shall be conducted by the Inquiring Officer (referred to in clause (iv) below) with due observance of the principles of natural justice for which it shall be necessary -
(a) The employee shall be served with a charge-sheet containing specific charges and mention of evidence in support of each charge and he shall be required to submit explanation in respect of the charges within reasonable time which shall not be less than fifteen days;
(b) Such an employee shall also be given an opportunity to produce at his own cost or to cross-examine witnesses in his defence and shall also be given an opportunity of being heard in-person, if he so desires;
(c) If no explanation in respect of charge sheet is received or the explanation submitted is unsatisfactory, the competent authority may award him appropriate punishment considered necessary.
(ii)(a) Where an employee is dismissed or removed from service on the ground of conduct which has led to his conviction on a criminal charge; or
(b) Where the employee has absconded and his whereabouts are not known to the society for more than three months; or
(c) Where the employee refuses or fails without sufficient cause to appear before the Inquiring Officer when specifically called upon in writing to appear; or
(d) Where it is otherwise (for reasons to be recorded) not possible to communicate with him, the competent authority may award appropriate punishment without taking or continuing disciplinary proceedings.
(iii) Disciplinary proceedings shall be taken by the society against the employee on a report made to this effect by the inspecting authority or an officer of the society under whose control the employee is working.
(iv) The inquiring officer shall be appointed by the appointing authority or by an officer of the society authorised for the purpose by the appointing authority:
Provided that the officer at whose instance disciplinary action was started shall not be appointed as an inquiring officer nor shall the inquiring officer be the appellate authority.
29. Regulation 85(i) provides that the disciplinary proceedings against an employee shall be conducted by the inquiring officer with due observance of the principles of natural justice. Therefore, the inquiry was to be held in due compliance of the principles of natural justice as has been held by this Court as well as by the Apex Court in several decisions.
30. The Hon'ble Apex Court in the case of Sher Bahadur Singh(dead) versus State of U.P.; 2009(27) LCD 1412 has held in paragraph 4 as under:
4. Now, it is well settled that Departmental enquiry means service of chargesheet with opportunity to delinquent employee to submit a reply, thereafter it shall be necessary to record oral evidence to prove the allegations contained in chargesheet. In case the delinquent employee does not cooperate even then it shall be incumbent upon the enquiry officer to proceed exparte and record oral evidence in support of allegations contained in the chargesheet. Thereafter, it shall be necessary to provide the opportunity to the delinquent employee to lead evidence in defence coupled with opportunity of personal hearing. After receipt of report from enquiry officer it shall be necessary for the punishing authority to serve a show cause notice alongwith copy of enquiry report and thereafter pass appropriate order in accordance with law vide M.V.Bijlani Vs. Union of India and others (2006) 5 SCC 88, Sher Bahadur Vs. Union of India and others (2002) 7 SCC 142, B.P. Chaurasia Vs. State of U.P. and others 1983 (1) LCD 169, Onkar Singh Vs. State of U.P. and others 1984(2) LCD 396, Hardwari Lal Vs. State of U.P. and others (2001) 1 UPLBEC 331 and Radhey Kant Khare Vs. U.P. Cooperative Sugar Factories Fedration Ltd. 2003 (21) LCD 610.
31. The Hon'ble Apex Court in the case of Radhey Kant Khare versus U.P.Cooperative Sugar Factories Federation Ltd. has held in paragraphs 8,9 and 10 as under:-
"8. After a charge-sheet is given to the employee, an oral enquiry is a must, whether the employee requests for it or not. Hence, a notice should be issued to him indicating him the date, time and place of the enquiry. On that date the oral and documentary evidence against the employee should first be led in his presence vide, A.C.C. Ltd. v. Their Workmen, (1963) U LLJ 396 (SC). Ordinarily, if the employee is examined first, it is illegal vide Anand Joshi v. M.S.F.C., 1991 LIC 1666 (Bom) ; S.D. sharma v. Trade Fair Authority of India, (1985) II LLJ 193 and Central Railway v. Raghubir Saran, (1983) II LLJ 26. No doubt, in certain exceptional cases, the employee may be asked to lead evidence first, vide Firestone Tyre and Rubber co. Ltd. v. Their Workmen, AIR 1968 SC 236, but ordinarily the rule is that first the employer must adduce his evidence. The reason for this principle is that the charge-sheeted employee should not only know the charges against him but should also know the evidence against him so that he can properly reply to the same. Where no witnesses were examined and no exhibit or record is made but straightaway the employee was asked to produce his evidence and documents in support of his case it is Illegal vide P. C. Thomas v. Mutholi Co-operative Society Ltd.. 1978 LIC 1428 (Ker) and Meengles Tea Estate v. Their Workmen, AIR 1963 SC 1719.
9. It is also necessary that ordinarily the statement of all the witnesses of the employer should be recorded in presence of the employee unless there are compelling reasons to act otherwise vide Kesoram Cotton Mills v. Gangadhar, AIR 1964 SC 708 and Central Bank of India v. Prakash Chand, AIR 1969 SC 983, etc. If the witnesses are examined in the absence of the employee and their recorded statements were also not supplied to him this procedure is illegal vide Tata Oils Mills Co. Ltd. v. Their Workmen, (1963) II LLJ 78 ; India General Navigation and Rly. Co. Ltd. v. Its Employees, (1961) II LLJ 372 (SC) ; Bharat Sugar Mills Co. Ltd. v. Jai singh, (1961) II LLJ 644 (SC) : Sur Enamel and Stamping Works Ltd. v. Their Workmen AIR 1963 SC 1914 and Vysya Bank v. N. M. Pat, 1994 LIC 1429 (Kant) etc.
10. In Meenglas Tea Estate v. Their Workmen: AIR 1963 SC 1719, the Supreme Court observed "It is an elementary principle that a person who is required to answer the charge must know not only the accusation but also the testimony by which the accusation is supported. He must be given a fair chance to hear the evidence in support of the charge and to put such relevant questions by way of cross-examination as he desires. Then he must be given a chance to rebut the evidence led against him. This is the barest requirement of ah enquiry of this character and this requirement must be substantially fulfilled if the result of the enquiry can be accepted.
32. The Hon'ble Apex Court considering the same Regulation 85, applicable in the present case, held in the case of Chamoli District Cooperative Bank Limited and Another Versus Raghunath Singh Rana and others;(2016) 12 SCC 204 that when the inquiry officer was appointed conducting of inquiry was mandatory and the disciplinary proceedings shall be conducted with due observance of the principles of natural justice and recorded its conclusions in paragraph 22 regarding the manner of conducting the inquiry. The relevant paragraphs 18, 19 and 22 are reproduced as under:-
"18. It is also relevant to note that after submission of reply dated 04.02.1993, Disciplinary Authority issued a show-cause notice on 04.05.1993 asking the employee/respondent No.1 to submit his reply. When the Inquiry Officer was appointed, conducting of the inquiry was mandatory and without conducting of an inquiry and without any inquiry report having been served on the employee/respondent No.1, Disciplinary Authority could not have proceeded to impose any punishment. The compliance of principles of natural justice by the appellant-Bank is not a mere formality, more so when the statutory provisions specifically provides that disciplinary proceedings shall be conducted with due observations of the principles of natural justice.
19. The compliance of natural justice in domestic/disciplinary inquiry is necessary has long been established. This Court has held that even there are no specific statutory rule requiring observance of natural justice, the compliance of natural justice is necessary. Certain ingredients have been held to be constituting integral part of holding of an inquiry. The Apex Court in Sur Enamel and Stamping Works Pvt. Ltd. v. Their Workmen reported in (1964) 3 SCR 616 has laid down following:-
"... An enquiry cannot be said to have been properly held unless, (i) the employee proceeded against has been informed clearly of the charges levelled against him, (ii) the witnesses are examined - ordinarily in the presence of the employee - in respect of the charges, (iii) the employee is given a fair opportunity to cross-examine witnesses, (iv) he is given a fair opportunity to examine witnesses including himself in his defence if he so wishes on any relevant matter, and (v) the inquiry officer records his findings with reasons for the same in his report."
22. From the proposition of law, as enunciated by Apex Court as noted above, and the facts of the present case, we arrive at the following conclusions:-
22.1. After service of charge sheet dated 16.01.1993 although the petitioners submitted his reply on 04.02.1993 but neither Inquiry Officer fixed any date of oral inquiry nor any inquiry was held by the Inquiry Officer.
22.2. Mandatory requirement of a disciplinary inquiry i.e. is holding of an inquiry when the charges are refuted and serving the inquiry report to the delinquent has been breached in the present case.
22.3. The employee/respondent No.1 having not been given opportunity to produce his witnesses in his defence and having not been given an opportunity of being heard in person, the statutory provisions as enshrined in Regulation 85 (i)(b), have been violated.
22.4 The Disciplinary Authority issued show case notice dated 04.05.1993 to the employee/respondent No.1 without holding of an inquiry and subsequent resolution by Disciplinary Authority taken in the year 2000 without their being any further steps is clearly unsustainable. The High Court has rightly quashed the dismissal order by giving liberty to the bank to hold de-novo inquiry within a period of six months, if it so desires.
22.5. The Bank shall be at liberty to proceed with the disciplinary inquiry as per directions of the High Court in para 1 of the judgment. The High Court has already held that the petitioner shall be deemed to be under suspension and shall be paid suspension allowance in accordance with the rules."
33. The Hon'ble Apex Court in the case of State of Utranchal & Ors. versus Kharak Singh; (2008) 8 SCC 236 had occasion to examine various contours of natural justice which need to be specified in a departmental enquiry and noticing earlier judgments,where principles were laid down as to how enquiry is to be conducted elaborated in paragraph 15, which is reproduced as under:-
15. From the above decisions, the following principles would emerge:
i) The enquiries must be conducted bona fide and care must be taken to see that the enquiries do not become empty formalities.
ii) If an officer is a witness to any of the incidents which is the subject matter of the enquiry or if the enquiry was initiated on a report of an officer, then in all fairness he should not be the Enquiry Officer. If the said position becomes known after the appointment of the Enquiry Officer, during the enquiry, steps should be taken to see that the task of holding an enquiry is assigned to some other officer.
(iii) In an enquiry, the employer/department should take steps first to lead evidence against the workman/delinquent charged and give an opportunity to him to cross-examine the witnesses of the employer. Only thereafter, the workman/delinquent be asked whether he wants to lead any evidence and asked to give any explanation about the evidence led against him.
(iv) On receipt of the enquiry report, before proceeding further, it is incumbent on the part of the disciplinary/punishing authority to supply a copy of the enquiry report and all connected materials relied on by the enquiry officer to enable him to offer his views, if any."
34. The respondent no.5, who had conducted the enquiry against the petitioner being Deputy General Manager (Accounts/Administration) had become the Secretary/General manager of the Bank by that time and since there were findings by the three members Committee as well as Sanchalak mandal that his involvement also cannot be ruled out, therefore it appears that he managed to get the petitioner dismissed and passed an order of dismissal of the petitioner himself after seeking approval from the Chairman/Administrator, Joint Registrar Cooperative Societies and Sanchalak Mandal by placing misleading facts and concealing that the enquiry report was not accepted.
35. Despite repeated decisions by the Sanchalak Mandal for provisional reinstatement of the petitioner and holding enquiry after affording complete opportunity to the petitioner, he did not comply the same and on one or the other pretext, he placed the matter before the Joint Registrar Cooperative Societies, who in turn, without looking into the records and the entirety of the matter passed the orders and did not allow the petitioner to join as per wishes of the Secretary/General Manager and ultimately the Sanchalak Mandal and the Chairman/Administrator also accorded approval, which could not have been done in view of it's earlier decisions
36. In view of above, this court is of the considered opinion that the inquriy against the petitioner has been held in flagrant violation of the principles of natural justice and the respondent no.5 who was the Inquiry Officer and against whom the observations were made by the three Member Committee as well as Sanchalak Mandal that his involvement in the irregularities in the Bank cannot be ruled out, got the petitioner dismissed by misleading the Sanchalak Mandal, the Joint Registrar Cooperative Societies as well as the Chairman/Administrator, therefore, the impugned order is not sustainable at all and is liable to be quashed.
37. The writ petition is, accordingly, allowed. The impugned order dated 26.06.2008 is hereby quashed with all consequential benefits of service, to be accorded to the petitioner within three months. However, liberty is granted to the respondent-bank to hold inquiry afresh in accordance with law/regulations, if so advised. In case the enquiry is held, the same shall be concluded within three months and in such case the consequential benefits shall depend on the outcome of enquiry.
38. No order as to costs.