SURJEET SINGH BHAMRA Vs. BANK OF INDIA & ORS.
Supreme Court of India (Division Bench (DB)- Two Judge)
Appeal (Civil), 5038 of 2009, Judgment Date: Feb 08, 2016
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.5038 OF 2009
Surjeet Singh Bhamra ……Appellant(s)
VERSUS
Bank of India & Ors. ……Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1) This appeal is filed against the final judgment and order dated
09.05.2007 passed by the High Court of Madhya Pradesh at Jabalpur in
Writ Appeal No. 171 of 2006 whereby the Division Bench of the High
Court dismissed the appeal filed by the appellant preferred against
the judgment and order dated 20.04.2006 of the Single Judge of the
High Court in Writ Petition No. 3842 of 2002 by which the Single Judge
dismissed the writ petition of the appellant wherein the challenge was
to the order dated 20.03.2001 passed by the Chief Manager, Bank of
India (respondent No.3 herein) imposing the punishment of reduction of
his basic pay by five stages on the appellant.
2) In order to appreciate the issue involved in this appeal, it is
necessary to set out the relevant facts in brief infra.
3) The appellant was an employee of the Bank of India. He was
posted as Branch Manager, Panagar Branch, Jabalpur Region from
04.07.1996 to 26.05.1999. According to the appellant, during his
tenure, the profits of the said Branch were increased from 2 lakhs to
30 lakhs, deposits were increased from 6 crores to 11 crores and
advances were increased from 2 crores to 4 crores. The appellant also
claimed that the NPA of the Branch fell down from 57 lakhs to 20
lakhs. The appellant claimed that due to his good performance, his
Branch won the award of Best Branch of the Year.
4) On 08.09.2000, a memo was issued by the Chief Regional Manager,
Bank of India, Jabalpur to the appellant mentioning therein that
during his tenure as Manager of Panagar Branch, certain
irregularities/lapses were reported in disbursement of loans. The
details of several irregularities alleged to have been committed by
the appellant were mentioned in the memo. The appellant was asked to
submit his reply. On 18.10.2000, the appellant submitted his reply to
the Chief Regional Manager, Jabalpur.
5) On 01.11.2000, the respondent-Bank announced Voluntary
Retirement Scheme, 2000 (in short ‘Scheme’) with a view to lay off
approx. 6000 extra employees. Accordingly, offers were made to the
staff in general for opting voluntary retirement pursuant to the
Scheme on or before 31.12.2000.
6) In response to the said Scheme, the Bank received 7600
applications as against 6000. The appellant also applied for
voluntary retirement on 16.11.2000. The appellant on 05.01.2001 was
informed that his application is in the process.
7) On 02.03.2001, the appellant was served with the charge-sheet.
The charges were in relation to the irregularities which were
mentioned in the memo dated 08.09.2000.
8) The appellant filed his reply on 13.03.2001 to the charge-sheet
and accepted all the charges contained therein unconditionally.
9) By order dated 20.03.2001, the Chief Manager, Dewas Branch and
Disciplinary Authority, passed an order awarding the consolidated
penalty of reduction in the pay of the appellant by five stages in the
time scale for a period of 3 years and on the expiry of such period,
the reduction was to have the effect of postponing the future
increments of his pay to the extent in terms of Regulation No.4(1) of
Bank of India Officer Employees’ (Discipline & Appeal) Regulations,
1976 ( in short “the Regulations”).
10) After passing of the order of punishment, the Chief Regional
Manager accepted the appellant’s application for voluntary retirement
by letter dated 19.06.2001. In this way, the appellant stood retired
from the services of Bank w.e.f. 19.06.2001.
11) Being aggrieved by the said order of punishment, the appellant
preferred a departmental appeal before the Zonal Manager, Bank of
India, Ujjain Zone. By order dated 21.06.2002, the Appellate
Authority dismissed the appeal.
12) Challenging the said order, the appellant preferred writ
petition being W.P. No.3842 of 2002 before the High Court. The Single
Judge of the High Court by order dated 20.04.2006, dismissed the writ
petition.
13) Against the order of the Single Judge, the appellant filed an
intra court appeal being W.A. No. 171 of 2006 before the High Court.
The Division Bench of the High Court by impugned order dated
09.05.2007 dismissed the appeal and upheld the findings of the Single
Judge.
14) Aggrieved by the said order, the appellant-employee has
preferred this appeal by way of special leave before this Court.
15) Heard Mr. Mehul M. Gupta, learned counsel for the appellant and
Mr. S. Gopakumaran Nair, learned senior counsel for the respondents.
16) Mr. Mehul M. Gupta, learned Counsel for the appellant-employee
while assailing the legality and correctness of the impugned order
urged many-fold submissions. In the first instance, learned counsel
contended that the High Court erred in dismissing the appellant's writ
petition and his intra court appeal thereby erred in upholding the
punishment order dated 20.03.2001 passed by the Bank.
17) It was his submission that once the appellant applied for
voluntary retirement by ensuring compliance of the requirements of the
Scheme then it was obligatory on the part of the Bank to have passed
an order either by accepting or rejecting the appellant’s application
on or before 31.12.2000 as prescribed in the Scheme.
18) Learned counsel pointed out that since the Bank failed to pass
any order on the appellant's application on or before 31.12.2000, its
effect was that the appellant's application was deemed accepted by
“deeming fiction” and as a consequence thereof, the appellant stood
retired from the services of the Bank on 31.12.2000.
19) Learned counsel contended that in these circumstances, the
relationship of employer and employee between the appellant and the
Bank came to an end on 31.12.2000 and, therefore, the Bank had no
right to take any action against the appellant much less to serve any
charge-sheet and hold an inquiry into those charges and impose a
punishment by passing order dated 20.03.2001.
20) Learned counsel further urged that though the order of voluntary
retirement was issued by the Bank on 19.06.2001 yet according to him
such order was deemed to have been passed on 31.12.2000 because in
terms of the Scheme, an order of acceptance or relieving or rejection
of voluntary retirement was required to be passed by the Bank on or
before 31.12.2000. In other words, the submission was that since the
compliance of several clauses of the Scheme was mandatory for the Bank
and, therefore, if the Bank failed to pass any order on the
application by 31.12.2000, it only meant that either the application
stood automatically allowed on 31.12.2000 or the order passed on
19.06.2001 by which the appellant’s application had been accepted was
deemed to have been passed on 31.12.2000. In either way, therefore,
the appellant’s retirement, according to learned counsel, came into
force w.e.f. 31.12.2000 and not from 19.06.2001.
21) Learned counsel then submitted that the punishment imposed on
the appellant is not legally sustainable because the disciplinary
proceedings which culminated in passing the punishment order were
initiated by the Bank after 31.12.2000, i.e. on 02.03.2001, when the
relationship of employee and employer between the parties had already
ceased due to acceptance of appellant’s application for voluntary
retirement on 31.12.2000 and hence the Bank had no right to initiate
any disciplinary proceedings on and after 31.12.2000 against the
appellant.
22) Learned counsel lastly submitted that since on assurance of the
Bank, the appellant admitted the charges and, therefore, the Bank
ought not to have imposed any punishment on acceptance of appellant’s
application for voluntary retirement. It was also urged that in any
case, looking to the past performance and unblemished career of the
appellant and having regard to the gravity of the charges, the
punishment inflicted on the appellant is excessive and, therefore,
liable to be quashed.
23) In reply, learned counsel for the respondent (Bank) while
supporting the impugned order urged that no interference in the
impugned order is called for and the grounds on which punishment was
upheld by the High Court deserve to be upheld by this Court and
lastly, the grounds urged by the learned counsel for the appellant in
support of this appeal also have no merit.
24) Learned counsel elaborated his submission by contending that
the reading of the Scheme as a whole would go to show that firstly,
the appellant was not eligible for consideration because disciplinary
proceedings were in contemplation against him and later initiated also
and even if, he was held eligible to apply pursuant to the Scheme yet
according to learned counsel, the Bank was within their rights to pass
orders on his application made for voluntary retirement only on
conclusion of disciplinary proceedings and which the Bank also
rightly passed by accepting the application on 19.06.2001.
25) Learned Counsel further pointed out that the Scheme did not
provide any consequence in case if the applications submitted by
employees remain pending on 31.12.2000. It was urged that in the
absence of any specific consequences not being provided in the Scheme
in relation to pending applications on 31.12.2000, there could be no
deemed acceptance of such applications on 31.12.2000 as was urged by
the learned counsel for the appellant. It was more so as the learned
counsel pointed out that the Scheme had provided that no voluntary
retirement of any employee would come into force unless an order is
passed by the Bank on his application. In other words, the submission
was that every application made by the employee was required to be
disposed of by passing an order by the Bank and, therefore, so long as
the order had not been passed, the applications would remain pending.
26) Learned counsel urged that the Scheme was directory in its
compliance insofar as the Bank was concerned and, therefore, the Bank
was within its rights to decide the pending applications even after
31.12.2000 regardless of any time constraint on the Bank in deciding
such applications. Learned counsel urged that the principle of
“deeming fiction” in these circumstances had no application to the
Scheme for want of any specific clause in the Scheme providing such
fiction.
27) Learned counsel further pointed out that since the appellant was
in services of the Bank till 19.06.2001, the Bank was within their
rights to issue charge-sheet and conclude the disciplinary proceedings
before 19.06.2001 and which the Bank did when it served the charge-
sheet on the appellant on 02.03.2001 and passed the punishment order
on 20.03.2001 on the basis of admission made by the appellant
admitting the charges leveled against him.
28) Lastly, learned counsel submitted that in the light of his above-
mentioned submissions coupled with the fact that there was no
challenge to the order dated 19.06.2001 by which the appellant’s
application for voluntary retirement was accepted, no case is made out
by the appellant for quashing the punishment order dated 20.03.2001
which was rightly confirmed by the Appellate Authority, Writ Court and
lastly by the Division Bench.
29) Having heard the learned counsel for the parties and on perusal
of the record of the case, we find no substance in the submissions of
learned counsel for the appellant.
30) In our considered opinion, the fate of the appeal largely
depends upon answering three questions, viz., firstly, whether the
Scheme in question and, in particular, its relevant clauses are
mandatory or directory for ensuring their compliance by the appellant
and the Bank; Secondly, what is the effect of the Scheme on the rights
of the appellant and the Bank for deciding the legality of the
punishment order impugned in these proceedings; and lastly, whether
any case is made out to set aside the punishment order.
31) At the outset, we may state that the appellant did not challenge
the order dated 19.06.2001 passed by the Bank, by which his
application for voluntary retirement was accepted but confined his
challenge in these proceedings only to the order dated 20.03.2001 by
which he was awarded punishment of reduction of his basic salary in
five stages in time scale for a period of 3 years and its
consequential effect in pay fixation as detailed in the order.
32) Since the learned counsel for the parties have extensively
referred to the various clauses of the Scheme to show its object and
effect for deciding the legality of the punishment order, we consider
it apposite to refer to these clauses infra:
“BANK OF INDIA VOLUNTARY RETIREMENT SCHEME-2000
A. ELIGIBILITY:
All permanent employees of the Bank with 15 years of
service or 40 years of age, as on 01.11.2000.
The following employees are not eligible for Voluntary
Retirement under the Scheme:-
a) Specialists Officers/Employees who have executed service
bonds and have not completed it, Employees/Officers serving
abroad under Special Arrangements/Bonds, will not be eligible
for VRS (the Board of Directors may however waive this, subject
to fulfillment of this bond/other requirements).
b) Employees against whom disciplinary proceedings are
contemplated/pending or are under suspension.
c) Employees appointed on contract basis.
d) Any other category of employees as may be specified by the
Board.
F) The Competent Authority may accept or reject the
application of an employee for voluntary retirement keeping in
view the organizational requirements or any administrative
reason and the decision of the Competent Authority shall be
final. No voluntary retirement shall come into effect unless the
Competent Authority has passed orders accepting the application
of the employees to retire voluntarily under the Scheme.
G) Acceptance and Relieving/Rejection:
On acceptance of the application for voluntary Retirement
of an employee by the Competent Authority, the acceptance as
well as the date of relieving shall be communicated to the
employee through for controlling office/s. the employee shall
stand relieved on the date stipulated in the above
communication. The entire process of acceptance and relieving
shall be concluded not later than 31.12.2000.
In case, the application for voluntary Retirement of an
employee is rejected by the Competent Authority, an order giving
reasons for the same shall be passed by the Competent Authority
and communicated to the employee through the controlling office,
on or before 31.12.2000.
I. EFFECTIVE DATE:
The Scheme will be effective from 15.11.2000 and will be in
operation for a period of 1 month i.e. up to 14.12.2000 and can
be withdrawn at the discretion of the Bank at any time without
assigning any reason.
J. RIGHT TO AMEND/ALTER :
The Bank reserves the right to alter and/or amend the above
conditions of the Scheme. The applications made under the Scheme
will be irrevocable and the employees will not have the right to
withdraw the application once submitted.”
33) Mere perusal of the afore-quoted clauses would go to show that
the application for voluntary retirement was to be filed by the
employee on or before 14.12.2000 and on such application being filed,
the employee had no right to withdraw the application. The Scheme
provided that any employee against whom some disciplinary proceedings
are contemplated or pending or if he is under suspension then he is
not eligible to apply for voluntary retirement under the Scheme. The
Scheme further provided that the Bank is required to pass orders on
the application (accepting or rejecting) and complete all proceedings
arising therefrom on or before 31.12.2000. The Scheme also provided
that no voluntary retirement of an employee would come into effect
unless the Bank passes an order on the application.
34) Before we examine the questions arising in the case, it is
necessary to see the law, which applies to the case in hand.
35) A three-Judge Bench of this Court in Balwant Singh & Ors. vs.
Anand Kumar Sharma & Ors., (2003) 3 SCC 433 while examining the
provisions of Bihar Buildings (Lease, Rent and Eviction) Control Act
explained as to under what circumstances, the duty cast upon a private
party is said to be mandatory and why it is said to be directory for
any public functionary. This is what was held in paragraph 7 of this
decision:
“7. Yet there is another aspect of the matter which cannot be
lost sight of. It is a well-settled principle that if a thing is
required to be done by a private person within a specified time,
the same would ordinarily be mandatory but when a public
functionary is required to perform a public function within a
time-frame, the same will be held to be directory unless the
consequences therefor are specified. In Sutherland’s Statutory
Construction, 3rd Edn., Vol. 3, at p. 107, it is pointed out
that a statutory direction to private individuals should
generally be considered as mandatory and that the rule is just
the opposite to that which obtains with respect to public
officers. Again, at p. 109, it is pointed out that often the
question as to whether a mandatory or directory construction
should be given to a statutory provision may be determined by an
expression in the statute itself of the result that shall follow
non-compliance with the provision. At p. 111 it is stated as
follows:
“As a corollary of the rule outlined above, the fact that
no consequences of non-compliance are stated in the
statute, has been considered as a factor tending towards a
directory construction. But this is only an element to be
considered, and is by no means conclusive.”
36) Later, a question arose in the case of Visitor, AMU & Ors. vs.
K.S. Misra, (2007) 8 SCC 593 as to whether a clause in a Statute of
the Benaras Hindu University which inter alia provided for doing
certain act within a specified time by the party concerned, if it is
not done within the time specified in a particular clause of the
Statute then whether such clause would be construed as being directory
or mandatory in nature and secondly, what would be the effect if the
Statute did not provide for any consequence to accrue in the event of
non compliance of such clause or when the Statute provided for some
consequence in the event of non-compliance.
37) Justice GP Mathur speaking for the Bench examined the issue in
the light of the aforementioned principle laid down in the case of
Balwant Singh (supra) and after quoting the principle in paragraph 12
applied the same to examine the relevant clause of the case and held
as under:
“12. A three-Judge Bench in Balwant Singh v. Anand Kumar Sharma
has explained in what circumstances the duty cast upon a private
party can be said to be mandatory and para 7 of the Report reads
as under: (SCC p. 436, para 7)
………..“Principle quoted”…………………………
Therefore, in accordance with the law laid down in the
above authority, the provisions of Statutes 61(6)(iv)(b) and (c)
should be treated as mandatory as it is a private party who has
to do a particular act within a specified time.”
38) When we apply the aforesaid principle of law for interpreting
the clauses of the Scheme in question then we find that the Scheme is
partly mandatory and partly directory. In other words, it is mandatory
in compliance of some clauses so far as the employee is concerned,
whereas it is directory in compliance of some clauses so far as the
Bank is concerned.
39) This is clear when we see the clause, which provides for filing
an application by the employee by a particular date. This clause is
mandatory in its compliance for the employee because if an employee
does not file the application before the due date then he has no right
to file the application thereafter, whereas the clause which requires
a Bank to pass the orders on the application by a specified date and
complete all the formalities, it is directory in its compliance.
40) In other words, it is not mandatory for the Bank to necessarily
complete all the formalities before the due date specified in the
clause and if the Bank fails to do it within the time but completes
the formalities after the specified date, it would be permissible for
the Bank to do so and the act so done would be regarded as being in
conformity with the requirement of the Scheme.
41) This we say for several reasons. Firstly, the Scheme does not
provide any consequence as to what would follow, if the Bank does not
ensure compliance within the time fixed in the clause. Secondly, the
appellant being a private individual, if he is required to do some act
within a specified time prescribed in the Scheme then it is mandatory
for him to do so within the time specified. Thirdly, the Bank being a
public functionary is required to perform public functions and hence
while discharging such functions, if the Scheme has not provided any
consequence for non-compliance of the act within time, then the Scheme
would not be construed as mandatory but it would be construed as
directory insofar as the Bank is concerned. Fourthly, since the
Scheme has not provided for accrual of any benefit in employee's
favour by "deeming fiction” in the event of non-compliance on the part
of the Bank then no such benefit can accrue in favour of an employee
automatically by fiction as a result of any non-compliance. In other
words, in order to enable an employee to claim any benefit by "deeming
fiction" on account of non-compliance of any act by the Bank under the
Scheme, it is necessary for the employee to show that the Scheme
contains a clause for conferral of such benefit on the employee by
“deeming fiction”. There is no such clause in the Scheme and lastly,
when the Scheme has provided that the voluntary retirement of any
employee would come into effect only when the order is passed on the
application of an employee then there is no question of any
application being accepted by "deeming fiction". In other words, when
the Scheme has provided passing of a specific order by the Bank for
accepting the application for voluntary retirement then the
application cannot be held as accepted by “deeming fiction”.
42) In view of foregoing reasons, we are of the considered opinion
that the Scheme in question is partly mandatory for its compliance so
far as the employee (appellant) is concerned whereas it is directory
for its compliance so far as the Bank (respondent) is concerned.
There can be no dispute for the legal proposition that the Scheme can
be partially mandatory and partially directory.
43) In the light of what we have held above, we find from the facts
of this case that on 08.09.2000, the Bank issued a memo to the
appellant wherein the Bank set out the irregularities alleged to be
committed by the appellant. They were replied by the appellant on
18.10.2000. The Scheme, however, came into force on 01.11.2000 which,
inter alia, provided that the application for voluntary retirement can
be made before 14.12.2000. The cut-off date for the Bank for
completing all the formalities was 30.12.2000.
44) The appellant applied for voluntary retirement on 16.11.2000
whereas he was served with the charge-sheet on 02.03.2001. He,
however, admitted the charges on 13.03.2001. This resulted in
imposition of punishment on the appellant on 20.03.2001. It was
followed by acceptance of his application for voluntary retirement by
the Bank on 19.06.2001.
45) In our considered opinion, the Bank was within its rights to
issue a charge-sheet to the appellant on 02.03.2001 because firstly,
on 02.03.2001, the appellant was in the employment of the Bank and,
therefore, he could be subjected to face disciplinary proceedings as
per the Rules. Secondly, since the memo was served on the appellant
prior to introduction of the Scheme, the disciplinary proceedings were
rightly initiated by serving a charge-sheet on the appellant after
coming into force of the Scheme on 01.11.2000. Thirdly, in terms of
the Scheme, the appellant's application could be considered only after
conclusion of disciplinary proceedings and, therefore, the Bank was
right in considering the application and eventually accepting it on
19.06.2001. Fourthly, the relationship of employee and employer
between the appellant and the Bank continued till 19.06.2001 and,
therefore, the Bank was within its rights to take any action under the
service rules against the appellant up to 19.06.2001. It is not in
dispute that the Bank took all the disciplinary actions prior to
19.06.2001 and then accepted the application for voluntary retirement
on 19.06.2001. Such action, in our view, was just, legal and proper.
46) In the light of foregoing reasons, we cannot accept the
submission of learned counsel for the appellant when he contended that
the appellant stood deemed retired on 31.12.2000 because no order was
passed or/and communicated to him by the Bank on or before 31.12.2000
on his application for voluntary retirement and, therefore, the Bank
had no right to initiate any disciplinary proceeding and pass the
punishment order against the appellant after 31.12.2000. This
submission is devoid of any merit and is accordingly rejected.
47) Coming to the next question as to whether the punishment imposed
on the appellant was legal or not. Learned counsel for the appellant
was not able to point out any illegality or perversity in the
disciplinary proceedings or in the punishment order dated 20.03.2001.
48) As a matter of fact, since the appellant admitted the charges
leveled against him in the charge-sheet, there was no need for the
Bank to have held any inquiry into the charges. When the charges stood
proved on admission of the appellant, the Bank was justified in
imposing punishment on the appellant as prescribed in the Rules. We,
therefore, find no ground to interfere in the punishment order as we
also find that having regard to the nature and gravity of the charge,
the punishment imposed on the appellant appears to be just and proper,
calling no interference therein.
49) The next submission of the learned counsel for the appellant
that since the appellant had unblemished career throughout in his
service period, the disciplinary proceedings initiated against the
appellant were not called for and deserve to be quashed also have no
substance.
50) Suffice it to say, once the appellant admitted the charges,
appropriate punishment as prescribed in the Rules could be inflicted
on him. It was for the Appointing Authority to have taken into
account the seriousness of the charge and overall performance of the
appellant while imposing punishment. It was done by the authorities
concerned in this case as would be clear from mere perusal of the
punishment order. The relevant para of the punishment order reads as
under:
“The acts of misconduct committed by you are serious in
nature but keeping in view facts and circumstances of the case,
I have decided to take a lenient view in the matter and to
impose upon you Consolidated Major Penalty of reduction in pay
by five stages in a time scale for a period of three years with
the further direction that you will not earn your normal
increments of pay during the period of such reduction and
reduction will have the effect of postponing your future
increments to that extent in terms of clause 4(f) of Bank Of
India Officer Employees’ [Discipline and Appeal] Regulations,
1976.
I have considered your past record and all other
extenuating/mitigating circumstances of the case. After a
careful consideration, I find that the ends of justice would
meet by imposition of the aforesaid consolidated penalty on you.
I order accordingly.”
51) In the light of foregoing, the submission of the learned counsel
for the appellant on the question of imposition of punishment and on
the issue of quantum has no substance and is accordingly rejected.
52) In view of the foregoing discussion, all the three questions
framed above are answered against the appellant and in favour of the
Bank.
53) The appeal thus fails and is accordingly dismissed. As a
consequence, the impugned order is upheld though on reasons other than
the one given by the High Court. No costs.
.……...................................J.
[J. CHELAMESWAR]
………..................................J.
[ABHAY MANOHAR SAPRE]
New Delhi,
February 08, 2016.
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