JAGDISH LAL GAMBHIR Vs. PUNJAB NATIONAL BANK & ORS.
Supreme Court of India (Division Bench (DB)- Two Judge)
Appeal (Civil), 6975 of 2009, Judgment Date: Oct 06, 2015
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6975 OF 2009
Jagdish Lal Gambhir ....Appellant
Versus
Punjab National Bank & Ors. …Respondents
J U D G M E N T
Madan B. Lokur, J.
1. This appeal is directed against the judgment and order dated 24th
July, 2006 passed by the Division Bench of the High Court at Calcutta in
FMA No.388 of 2001.
2. The issue for consideration is whether the termination of the
services of the appellant Gambhir was in any manner vitiated. In our
opinion, the question requires to be answered in the negative and we uphold
the judgment and order of the Division Bench confirming the dismissal of
the writ petition filed by Gambhir.
3. Gambhir was working as an Assistant General Manager in the Hindustan
Commercial Bank Limited. This bank was amalgamated with the Punjab
National Bank on 19th December, 1986. On amalgamation, the services of 28
or 29 officials of the Hindustan Commercial Bank including Gambhir were not
taken over by the Punjab National Bank (for short the ‘PNB’). It may be
stated that two other banks were similarly amalgamated with the Canara Bank
and the State Bank of India, but we are not concerned with them.
4. Several officers whose services were not taken over by the PNB and
other banks filed a writ petition in this Court under Article 32 of the
Constitution challenging the failure of the transferee banks in not taking
over their services. This Court decided the writ petition and the decision
is reported as K.I. Shephard v. Union of India[1]. It was held by this
Court that the transferee banks could not refuse to take over the services
of the officials of the transferor banks. Consequently, the PNB was
obliged to take over the officials of the Hindustan Commercial Bank
including Gambhir. It was also directed if there was any necessity of
initiating disciplinary proceedings against any of the transferred
employees, the transferee banks including PNB were at liberty to do so.
5. As far as Gambhir is concerned, while he was working with the
Hindustan Commercial Bank, he was issued a charge-sheet on 3rd February,
1983 alleging irregularities in sanctioning of loans to the customers of
the bank and a failure to take follow up steps. Gambhir replied to the
charge-sheet and was thereafter administered a ‘caution’ and was asked to
be more discreet in respect of granting advances and management of credit
portfolio. Thereafter in 1986 another set of allegations were made against
Gambhir but no final decision was taken by the Hindustan Commercial Bank
until its amalgamation with the PNB.
6. In view of the above, the PNB issued a charge-sheet to Gambhir on
28th November, 1987 in which it was alleged that he had deliberately
flouted the bank lending norms and accommodated some parties unauthorisedly
thereby putting huge funds of the bank at stake.
7. Feeling aggrieved by the initiation of departmental proceedings
against him, Gambhir preferred W.P. (C) No. 121 of 1988 in this Court under
Article 32 of the Constitution. By an order dated 22nd April, 1988 this
Court declined to entertain the writ petition but expressed the view that
the inquiry against Gambhir should be completed quickly. Thereafter, the
inquiry was conducted and by a report dated 22nd September, 1988 the
Inquiry Officer held that the charges against Gambhir were proved and that
he had failed to discharge his duties with utmost integrity, honest
devotion and diligence thereby putting huge funds of the bank at stake.
8. In the meanwhile, Gambhir preferred a writ petition in the Calcutta
High Court being C.M.No.11992 (W) of 1988 challenging the charge-sheet
issued to him and the inquiry proceedings.
9. It appears that during the pendency of the writ petition Gambhir was
dismissed from service with effect from 2nd August, 1989.
10. Be that as it may the writ petition was dismissed by the learned
Single Judge by judgment and order dated 7th December, 2000.
11. Before the learned Single Judge, Gambhir raised three contentions.
It was firstly contended that the charge-sheet was issued to him by an
officer of the same rank, that is, an Assistant General Manager and this
was not permissible in law. Therefore, since the issuance of the charge-
sheet was itself vitiated the entire departmental proceedings against him
were null and void. The learned Single Judge rejected this contention by
referring to Clause 12 of the scheme of amalgamation whereby the PNB was
entitled to classify and categorize the employees of the Hindustan
Commercial Bank whose services were being taken over. As far as Gambhir is
concerned, even though he may have been an Assistant General Manager in the
Hindustan Commercial Bank, he was placed as a Scale-III officer in the PNB.
This is an admitted position and Gambhir did not make any grievance about
this at any stage. The charge-sheet was no doubt issued by an Assistant
General Manager of the PNB but he was placed higher than a Scale-III
officer in the hierarchy and under the Punjab National Bank Officer
Employees (Discipline and Appeal Regulations), 1977 the Assistant General
Manager was the disciplinary authority for officers placed in Scale-III.
12. The second contention urged by Gambhir was that the allegations
against him were already the subject matter of an inquiry by the Hindustan
Commercial Bank and thus could not be reopened by the PNB merely because of
a change of employer. This contention was also rejected by the learned
Single Judge holding that what was sought from Gambhir by the Hindustan
Commercial Bank was an explanation with regard to certain transactions
which indicated an irregular conduct on his part. However, no formal
disciplinary proceedings had been initiated against Gambhir and that did
not preclude the PNB from looking into those alleged irregularities and
holding a formal inquiry into them.
13. The third contention urged by Gambhir before the learned Single Judge
was that Inquiry Report was not supplied to him before his dismissal with
effect from 2nd August, 1989. This contention was rejected by the learned
Single Judge by holding that the requirement of supplying the Inquiry
Report arose out of a decision of this Court in Union of India v. Mohd.
Ramzan Khan[2]. However that decision was rendered by this Court (on 20th
November, 1990) after Gambhir was dismissed from his service. That
decision had only prospective effect. Subsequently, the Constitution Bench
in Managing Director, ECIL v. B. Karunakar[3] made it clear that orders of
punishment passed prior to the decision in Mohd. Ramzan Khan without
furnishing the report of the Inquiry Officer should not be disturbed.
Therefore, Gambhir had no right to a copy of the Inquiry Report prior to
his dismissal.
14. At this stage it may be mentioned that Gambhir has not challenged the
merits of the inquiry at any stage or the punishment awarded to him. In
that sense Gambhir was not prejudiced by the failure to supply him with a
copy of the Inquiry Report.
15. Feeling aggrieved by the decision rendered by the learned Single
Judge, Gambhir preferred an appeal before the Division Bench but that was
dismissed by the impugned judgment and order dated 24th July, 2006.
16. Before the Division Bench Gambhir raised five contentions. These
were noted by the Division Bench as follows:-
“(i) Gambhir was entitled to be appointed in terms of the order of the
Apex Court in K.I. Shephard (supra). He was to be fitted in the
appropriate post which he was holding earlier which was not done.
(ii)The disciplinary authority who issued the charge-sheet was nor properly
authorized to act as such under the service rules.
(iii) No copy of the inquiry report was given to him. As a result he could
not defend himself in the proceeding by offering his explanation to the
disciplinary authority pointing out the illegality and irregularity crept
in the enquiry report.
(iv) No second show cause notice was issued to him.
(v) The charges were stale and could not be proceeded with.”
17. As far as the first contention is concerned it has already been
mentioned that Gambhir was posted as a Scale–III officer in the PNB upon
the amalgamation of the Hindustan Commercial Bank with the PNB. No
grievance was made by Gambhir at any point of time regarding his placement.
The Division Bench therefore rejected his contention and held that he was
appropriately placed in the PNB as a Scale-III officer. The Division Bench
held that that apart since the Hindustan Commercial Bank was a much smaller
bank than the PNB, Gambhir’s designation as an Assistant General Manager in
the Hindustan Commercial Bank could not be equated with the corresponding
designation in the PNB. In any event, there was no loss of pay as far as
Gambhir was concerned.
18. The second contention urged by Gambhir was also rejected by the
Division Bench relying principally upon the decision of the learned Single
Judge. Additionally, it was held that when Gambhir preferred W.P.(C) No.
121 of 1988 in this Court, it was observed that the inquiry against Gambhir
should be expedited. The Division Bench was of the view that this was an
indication that this Court did not find any procedural irregularity in the
issuance of the charge-sheet against Gambhir.
19. The third contention urged by Gambhir was rejected in view of the
decisions rendered in Mohd. Ramzan Khan and Karunakar. Additionally, it was
noted that Gambhir had been supplied with a copy of the Inquiry Report but
had not raised any issue on the merits of the allegations made against him
and the findings arrived at by the Inquiry Officer.
20. The fourth contention was also rejected by the Division Bench on
the ground that there was no requirement of issuing a second show cause
notice to Gambhir.
21. The last contention urged by Gambhir was also rejected since the
PNB was entitled to look into any final irregularity committed by the
employees of the Hindustan Commercial Bank whose services were taken over
by the PNB. On this basis, the Division Bench dismissed Gambhir’s appeal
by the impugned judgment and order dated 24th July, 2006. It is under
these circumstances that Gambhir is now before us.
22. The contentions urged by learned counsel for Gambhir are merely
repetitions of the contentions urged either before the learned Single Judge
or before the Division Bench of the High Court.
23. As far as the principal ground urged by learned counsel that the
charge-sheet could not have been issued to Gambhir by the Assistant General
Manager in the PNB is concerned, we find no merit in the contention. The
admitted position is that Gambhir was a Scale-III officer in the PNB while
the rank of the Assistant General Manager in the PNB is Scale-V. Gambhir
could only have been placed in Scale–III in terms of his responsibilities
and keeping in mind the corresponding scale upon the amalgamation of the
Hindustan Commercial Bank with the PNB. Clause 12 of the scheme of
amalgamation as sanctioned by the Government of India clearly states as
follows:-
“The transferee bank shall, on the expiry of a period not longer than three
years from the date on which this scheme is sanctioned, pay or grant to the
employees of the transferor bank the same remuneration and the same terms
and conditions of service as are applicable to the employees of
corresponding rank or status of the transferee bank subject to the
qualifications and experience of the said employees of the transferor bank
being the same as or equivalent to those of such other employees of the
transferee bank.”
24. There is no allegation by Gambhir at any point of time that he was
either reduced in rank or that his placement was incorrect or any similar
grievance. That being the position, it is now too late in the day for
Gambhir to contend that his placement in the PNB was erroneous and
therefore the issuance of the charge-sheet by the Assistant General Manager
in the PNB was vitiated in any manner.
25. We are in agreement with the view of the High Court that the rules
applicable to Gambhir were the Punjab National Bank Officer Employees
(Discipline and Appeal) Regulations, 1977. In terms of these Regulations,
as discussed by the High Court, the disciplinary authority of Gambhir was
the Assistant General Manager (P). That being the position, merely because
Gambhir was an Assistant General Manager in the Hindustan Commercial Bank
does not mean that the Regulations of 1977 would not be applicable to him
or that the Assistant General Manager (P) in the PNB could not have issued
a charge-sheet to Gambhir.
26. At this stage, it may be mentioned that in Chairman, Canara Bank,
Bangalore v. M.S. Jasra[4] an employee of the Lakshmi Commercial Bank
(which had amalgamated with Canara Bank at the same time when Hindustan
Commercial Bank amalgamated with the PNB) the contention of the employee
was that the age of retirement (60 years) in Lakshmi Commercial Bank could
not be varied to his disadvantage (58 years) on the amalgamation of that
Bank with the Canara Bank. This contention was rejected by holding that
the employee became an employee of the Canara Bank and was, therefore,
entitled to the rights given to employees of the Canara Bank.
27. Applying this principle to the facts of this case, it is clear that
Gambhir became an employee of the PNB and was subject to the discipline of
all its rules and regulations, including those pertaining to misconduct.
28. It is also contended that the allegations against Gambhir had
already been inquired into by the Hindustan Commercial Bank and therefore
the PNB could not reopen issues relating to the alleged misconduct and hold
an inquiry into them. We do not find any merit in this submission also.
There were a large number of transactions which were alleged to be
irregular and in which Gambhir was said to be involved. It is possible
that there may have been an overlap in respect of some of them (although no
such overlap has been shown to us) but that is not an indication that the
alleged irregularities committed by Gambhir in respect of other
transactions were condoned. In fact, Gambhir has not pointed out which
were the transactions which were the subject matter of concern in the
Hindustan Commercial Bank and which were the transactions which were the
subject matter of inquiry by the PNB. This would have certainly given us a
far clearer picture.
However, on a random consideration of the allegations made, it does appear
that there were certain transactions particularly the transactions
pertaining to R.K. Tandon & Co. which were not inquired into by the
Hindustan Commercial Bank. It may be recalled that it is the admitted
position that in respect of one alleged irregular transaction, the
Hindustan Commercial Bank could not take any decision one way or the other
due to the amalgamation of that Bank with the PNB. We have not found any
duplication in the allegations and are not inclined to carry out any
investigation in this regard at this stage.
29. In view of the above, we find no reason to interfere with both the
judgments delivered by the Calcutta High Court. The appeal is dismissed.
……………………………J
(Madan B. Lokur)
…………………………..J
New Delhi; (R.K. Agrawal)
October 6, 2015
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[1] (1987) 4 SCC 431
[2] (1991) 1 SCC 588
[3] (1993) 4 SCC 727
[4] (1992) 2 SCC 484