D.R.P. Sundharam vs Canara Bank

K. Venkataraman, J.—The petitioner has come forward with the present Writ Petition challenging the charge memo issued by the

respondent in his proceedings dated 28.6.2007, for quashing the same, and consequently directing the respondent to disburse all retirement

benefits with interest for the delayed period as well as regularise the period of suspension and pay full pay and allowances with all benefits.

The facts which are necessary for the disposal of the present Writ Petition are as follows:

(a) The petitioner had joined the service of the Canara Bank as Officer on Contract on 6.4.1970 and thereafter promoted as Deputy General

Manager in the respondent-bank. In December 2004, the respondent issued a memorandum to the petitioner in respect of certain minor

irregularities said to have occurred while the petitioner was working as Assistant General Manager in the Regional Office of the bank at

Coimbatore. The petitioner immediately submitted his explanation on 22.12.2004 followed by a further letter dated 15.4.2005. Thereafter, no

action was taken in pursuant to the said memorandum.

(b) In April 2005, the petitioner applied for appointment as General Manager in Tamil Nadu Mercantile Bank Ltd, a private sector bank and also

got an appointment order on 11.5.2005. Thereafter, the petitioner applied for V.R.S. with the Canara Bank on 18.5.2005. The petitioner''s action

in seeking new employment had angered the respondent-management and in the result, resurrecting the earlier show cause notice, the respondent

gave the letter dated 13.7.2005 stating that certain disciplinary proceedings were contemplated against the petitioner and therefore, it is not

possible to relieve the petitioner from service.

(c) Thereafter, on 23.7.2005, a letter was issued in respect of some irregularities said to have been committed while the petitioner was working at

Coimbatore. The petitioner immediately replied the same on 9.8.2005. The petitioner was not promoted as General Manager when eligibility came

in June 2006. Thereafter, on 12.6.2006, a further memorandum was issued in respect of certain irregularities and immediately a reply was given by

the petitioner on 27.6.2006. At that time, the petitioner was working as Deputy General Manager, New Delhi and was transferred from New

Delhi to Bangalore in July 2006.

(d) Thereafter, on 30.12.2006, yet another memorandum was issued to the petitioner in respect of some irregularities said to have taken place

while the petitioner was working at New Delhi from 23.12.2003 to 15.7.2006. The petitioner immediately replied on 16.1.2007. In the

meanwhile, the petitioner had been suspended from service by an order dated 23.11.2006.

(e) The petitioner was due to retire from service on 31.5.2007 and therefore, the respondent passed an order on 19.5.2007 permitting the

petitioner to retire from service and also stated that in terms of Regulation 20(3)(iii) of the Canara Bank (Officers) Service Regulations, 1979

[hereinafter referred to as ""the Regulation""], disciplinary proceedings will continue as if he was in service of the bank until the proceedings are

concluded and final orders are passed in respect thereof. It is further stated in the said proceedings that the petitioner will not receive and pay and

allowance after the date of superannuation and he will not be entitled for any retirement benefits till the disciplinary proceedings are completed and

final orders passed, except his own contribution to the provident fund. Thereafter, the respondent issued the impugned charge memo dated

28.6.2007 initiating disciplinary proceedings against him.

Aggrieved over the issuance of the said charge memo, the petitioner has come forward with the present Writ Petition on the following grounds:

(i) After the date of superannuation of the petitioner, the respondent would not have any jurisdiction in law to initiate any disciplinary proceedings

again him.

(ii) Rule 20(3)(iii) of the said Regulations will not apply to the facts and circumstances of the case, inasmuch as no disciplinary proceeding was

initiated against the petitioner prior to the date of his retirement on superannuation and the respondent cannot proceed with the enquiry in

pursuance of the said charge memo.

Counter affidavit has been filed by the respondent wherein it has been pointed out that disciplinary proceedings have been initiated against the

petitioner in view of certain irregularities committed by the petitioner. The petitioner was also placed under suspension by proceedings dated

23.11.2006, having regard to the seriousness of the lapses/irregularities committed and also the huge financial risk involved. Since the petitioner

reached the age of superannuation on 31.5.2007, the petitioner was permitted to retire by the competent authority vide proceedings dated

19.5.2007 invoking the provision of 20(3)(iii) of the said Regulations in order to continue the disciplinary proceedings against the petitioner as if he

is still in service until the disciplinary proceedings are concluded and the final orders passed thereon. Thereafter, the petitioner had been issued with

the charge memo dated 28.6.2007. Since the charge memo has been issued to the petitioner in pursuance of Regulation 20(3)(iii) of the said

Regulations, the Writ Petition is liable to be dismissed.

The crux of the counter affidavit is to the following effect:

(a) In view of certain irregularities committed by the petitioner, the petitioner had been placed under suspension vide proceedings dated

23.11.2006 and thereafter by proceedings dated 19.5.2007, the petitioner had been permitted to retire from service, since the petitioner reached

the age of superannuation on 31.5.2007. Regulation 20(3)(iii) of the said Regulations empowers the bank to continue the disciplinary proceedings

even after the petitioner attained the age of superannuation and hence, the petitioner cannot raise a huge cry that after the petitioner attained the age

of superannuation, the disciplinary proceedings cannot be continued against him.

(b) Since the petitioner had already been placed under suspension on 23.11.2006, it is deemed that the disciplinary proceedings have been

initiated against the petitioner and hence, the claim of the petitioner that the disciplinary proceeding has been initiated against him subsequent to his

attaining the age of superannuation on 31.5.2007 is absolutely incorrect.

Mr.Vijay Narayan, the learned senior counsel appearing for the petitioner and Mr.P.R.Raman, the learned Counsel appearing for the

respondent, placed their respective contentions basing on the affidavit and the counter affidavit of the petitioner and the respondent respectively.

The main contentions raised by Mr.Vijay Narayan, the learned senior counsel appearing for the petitioner, are as follows:

(a) The petitioner attained the age of superannuation on 31.5.2007 and the respondent has no jurisdiction in law to initiate any disciplinary

proceedings subsequent to the said date. Since the charge memo has been issued on 28.6.2007, after the petitioner retired from service on

attaining the age of superannuation, the same is non est in law.

(b) Regulation 20(3)(iii) of the said Regulations will not apply to the facts and circumstances of the case, inasmuch as no disciplinary proceeding

was initiated prior to the date of superannauation. In that view of the matter, the respondent has no power or right to initiate disciplinary

proceedings after the date of his superannuation.

(c) It is a settled proposition that disciplinary proceedings can be initiated only by issuance of a charge memo. In the case on hand, the charge

memo was not issued prior to the petitioner''s attending the age of superannuation, but it was issued only later to his retirement, that is, it was issued

only on 28.6.2007 and hence, the respondent cannot invoke the Regulation referred to above. Hence, the charge memo issued by the respondent

is illegal and without any authority of law.

Per contra, Mr.P.R.Raman, the learned Counsel appearing for the respondent, mainly contended as follows:

(a) Since the petitioner had already been suspended by proceedings dated 23.11.2006, having regard to the seriousness of the lapses committed

by him and also the huge financial risk involved, it is deemed that the disciplinary proceedings have already been initiated against the petitioner.

(b) Regulation 20(3)(ii) of the said Regulations clearly states that an Officer against whom disciplinary proceedings has been initiated will cease to

be in service on the date of superannuation, but the disciplinary proceedings will continue as if he was in service until the proceedings are

concluded and final orders are passed in respect thereof. In view of the said position made through the Regulation referred to above, there is no

justification on the part of the petitioner to contend that the disciplinary proceeding has been initiated against the petitioner after he attained the age

of superannuation on 31.5.2007.

On the backdrop of the matter in issue and also on the submission made by the learned senior counsel for the petitioner as well as the learned

Counsel for the respondent, now it has to be seen ""whether the charge memo issued to the petitioner dated 28.6.2007, after the petitioner''s

attaining the age of superannuation on 31.5.2007 is liable to quashed or not.

The basic facts which are not in dispute are that the petitioner was placed under suspension by the proceedings of the respondent-bank dated

23.11.2006, that by the proceedings dated 19.5.2007 invoking Regulation 20(3)(iii) of the said Regulations, the competent authority has passed

the order that the petitioner will cease to be in service of the bank on 31.5.2007 and the disciplinary proceedings will continue as if he is in service

of the bank until the disciplinary proceedings are concluded and the final orders are passed in respect thereof, and that charge memo has been

issued to the petitioner dated 28.6.2007 listing certain charges against him.

The case of the petitioner is that when once the petitioner has been allowed to retire on his attaining the age of superannuation on 31.5.2007,

the respondent has no power or jurisdiction to issue the charge memo dated 28.6.2007. Regulation 20(3) of the said Regulations reads as follows:

(i) An Officer against whom disciplinary proceedings are pending shall not leave/discontinue or resign from his service in the bank without the prior

approval in writing of the competent authority and any notice or resignation given by such an Officer before or during the disciplinary proceedings

shall not take effect unless it it is accepted by the Competent Authority.

(ii) Disciplinary proceedings shall be deemed to be pending against any employee for the purpose of this Regulation if he has been placed under

suspension or any notice has been issued to him to show cause why disciplinary proceedings shall not be instituted against him and will be deemed

to be pending until final orders are passed by the competent Authority.

(iii) The officer against whom disciplinary proceedings have been initiated will cease to be in service on the date of superannuation but the

disciplinary proceedings will continue as if he was in service until the proceedings are concluded and final order is passed in respect thereof. The

concerned officer will not receive any pay and/or allowance after the date of superannuation. He will also not be entitled for payments of retirement

benefits till the proceedings are completed and final order is passed thereon except his own contributions to CPF.

By pointing out the said Regulation, Mr.Vijay Narayan, the learned senior counsel appearing for the petitioner, submitted that initiation of

disciplinary proceeding means that charge memo should be pending before the petitioner attains the age of superannuation. In this connection, the

learned senior counsel appearing for the petitioner, has drawn my attention to the decision reported in 2007 (4) S.C.C. 474 (U.C.O. Bank v.

Rajinder Lal Capoor) and submitted that the Honourable Apex Court has clearly held that the departmental proceeding is ordinarily said to be

initiated only when a charge sheet is issued. The Apex Court in the above pronouncement has dealt with the Regulations in respect of U.C.O.

Bank. The learned senior counsel for the petitioner submitted that the Regulations of the U.C.O. Bank and the Regulations of the Canara Bank, the

respondent herein, are one and the same, which is not being disputed by the learned Counsel appearing for the respondent. It is useful to refer

paragraphs 17 to 23 of the said judgment which is reproduced as follows:

The High Court, therefore, may not correct in arriving at its opinion. However, as would appear from the discussions made hereinafter,

initiation of the departmental proceedings itself, in our considered opinion, was wholly illegal and without jurisdiction.

18.The fact that charge-sheet was issued only on 13.11.98 was not in dispute. It also stands admitted that the respondent attained the age of

superannuation on or before 1.11.1996. Disciplinary Proceedings admittedly were initiated against the respondent in terms of Regulation 20(3)(iii)

of UCO Bank Officer Employees Services Regulations, 1979 which reads as under:

The officer against whom disciplinary proceedings have been initiated will cease to be in service on the date of superannuation but the disciplinary

proceedings will continue as if he was in service until the proceedings are concluded and final order is passed in respect thereof. The concerned

officer will not receive any pay and/or allowance after the date of superannuation. He will also not be entitled for the payment of retirement benefits

till the proceedings are competed and final order is passed thereon except his own contributions to CPF.

A bare perusal of the said provision would clearly show that by reason thereof a legal fiction has been created. We are not oblivious of the

legal principle that a legal fiction must be given full effect but it is equally well-settled that the scope and ambit of a legal fiction should be confined

to the object and purport for which the same has been created.

In Dilip S. Dahanukar Vs. Kotak Mahindra Co. Ltd. and Another, , it was observed:

Legal fiction, it is well-settled, must be construed having regard to the purport of the statue. [See Sadashiv Dada Patil Vs. Purushottam Onkar

Patil (D) by LRs., ; M.P. State Electricity Board Vs. Union of India (UOI) and Others, ; Maruti Udyog Ltd. Vs. Ram Lal and Others, ; Bharat

Petroleum Corporation Ltd. Vs. P. Kesavan and Another, .

The aforementioned Regulation, however, could be invoked only when the Disciplinary Proceedings had clearly been initiated prior to the

respondent''s ceases to be in service. The terminologies used therein are of seminal importance. Only when a disciplinary proceeding has been

initiated against an officer of the bank despite his attaining the age of superannuation, can the disciplinary proceeding be allowed on the basis of the

legal fiction created thereunder, i.e., continue ""as if he was in service"". Thus, only when a valid departmental proceeding is initiated by reason of the

legal fiction raised in terms of the said provision, the delinquent officer would be deemed to be in service although he has reached his age of

superannuation. The departmental proceeding, it is trite law, is not initiated merely by issuance of a show cause notice. It is initiated only when a

charge sheet is issued (See Union of India Vs. K.V. Jankiraman, etc. etc., . This aspect of the matter has also been considered by this Court

recently in Coal India Ltd. and Others Vs. Saroj Kumar Mishra, wherein it was held that date of application of mind on the allegations levelled

against an officer by the Competent Authority as a result whereof a charge sheet is issued would be the date on which the disciplinary proceedings

said to have been initiated and not prior thereto. Pendency of a preliminary enquiry, therefore, by itself cannot be a ground for invoking Clause 20

of the Regulations. Albeit in a different fact situation but involving a similar question of law in Coal India Ltd. (supra) this Court held:

It is the case of the appellants that pursuant to or in furtherance of the complaint received by the vigilance department, the competent authority

had arrived at a satisfaction as is required in terms of the said circulars that a charge sheet was likely to be issued on the basis of a preliminary

enquiry held in that behalf or otherwise.

The circular letters issued by the appellants put restrictions on a valuable right of an employee. They, therefore, are required to be construed

strictly. So construed there cannot be any doubt whatsoever that the conditions precedent contained therein must be satisfied before any action can

be taken in that regard.

It was further more observed that:

A departmental proceeding is ordinarily said to be initiated only when a charge sheet is issued."" (See also Union of India v. Sangram Keshari

Nayak 2007 (6) SCALE 348).

Respondent, therefore, having been allowed to superannuate, only a proceeding, inter alia, for withholding of his pension under the Pension

Regulations could have been initiated against the respondent. Discipline and Appeal Regulations were, thus not attracted. Consequently the

chargesheet, the enquiry report and the orders of punishment passed by the Disciplinary Authority and the Appellate Authority must be held to be

illegal and without jurisdiction.

An order of dismissal or removal from service can be passed only when an employee is in service. If a person is not in employment, the

question of terminating his services ordinarily would not arise unless there exists a specific rule in that behalf. As Regulation 20 is not applicable in

the case of the respondent, we have no other option but to hold that the entire proceeding initiated against the respondent became vitiated in law.

Per contra, Mr.P.R.Raman, the learned Counsel appearing for the respondent, submitted that in the above referred case, the Honourable

Apex Court was dealing with an employee who has been served with a show cause notice before retirement and not an order of suspension and

hence, the present case on hand could be distinguished. But, I am unable to accept the said contention of the learned Counsel for the respondent

for the simple reason that Regulation 20(3)(ii) deals with not only show cause notice, but also deals with the case of suspension. Thus, it can be

seen that before an employee of the bank could retire from service on attaining the age of superannuation, if show cause notice or an order of

suspension has been passed, the same will not clothe the bank to proceed with the said employee after he attains the age of superannuation by

issuing a charge memo subsequent to his retirement.

Yet another submission that has been made by the learned senior counsel appearing for the petitioner is that since the Honourable Apex court,

while considering the other issues, had incidentally touched upon the Regulations in that case, the interpretation of the said Regulation was not the

issue involved in the said case. Regulation 20(3)(ii) of the said Regulations, according to the learned Counsel for the respondent, specifically states

that the disciplinary proceedings shall be deemed to be pending against the employee if the employee is placed under suspension or any show

cause notice has been issued. This issue never came for consideration before the Honourable Supreme Court in the above referred case, was the

contention of the learned Counsel appearing for the respondent.

The learned Counsel appearing for the respondent in this connection relied on the judgment of the Honourable Apex court reported in State of

Orissa and Others Vs. Md. Illiyas, . The relevant passage relied on by the learned Counsel for the respondent is found in paragraph 12 of the said

judgment, which is extracted hereunder:

When the allegation is of cheating or deceiving, whether the alleged act is wilful or not depends upon the circumstances of the case concerned and

there cannot be any straitjacket formula. The High Court unfortunately did not discuss the factual aspects and by merely placing reliance on an

earlier decision of the Court held that prerequisite conditions were absent. Reliance on the decision without looking into the factual background of

the case before it, is clearly impermissible. A decision is a precedent on its own facts. Each case presents its own features. It is not everything said

by a Judge while giving judgment that constitutes a precedent. The only thing in a Judge''s decision binding a party is the principle upon which the

case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decidendi. According to the well-settled theory

of precedents, every decision contains three basic postulates; (i) findings of material facts, direct and inferential. An inferential finding of facts is the

inference which the Judge draws from the direct, or perceptible facts; (ii) statements of the principles of law applicable to the legal problems

disclosed by the facts; and (iii) judgment based on the combined effect of the above. A decision is an authority for what it actually decides. What is

of the essence in a decision is its ratio and not every observation found therein nor what logically flows from the various observations made in the

judgment. the enunciation of the reason or principle on which a question before a court has been decided is alone binding as a precedent. (See The

State of Orissa Vs. Sudhansu Sekhar Misra and Others, and Union of India (UOI) and Others Vs. Dhanwanti Devi and Others, . A case is a

precedent and binding for what is explicitly decides and no more. The words used by Judges in their judgments are not to be read as if they are

words in an Act of Parliament. In Quinn v. Leathem 1901 A.C. 495 the Earl of Halsbury, L.C. observed that every judgment must be read as

applicable to the particular facts proved or assumed to be proved, since the generality of the expressions which are found there are not intended to

be the exposition of the whole law but governed and qualified by the particular facts of the case in which such expressions are found and case is

only an authority for what it actually decides.

I am unable to accept the said contention of the learned Counsel appearing for the respondent for more than one reason. While dealing with

the Regulations of the U.C.O. Bank, more particularly, Regulation 20(3)(iii), the Honourable Apex Court has clearly laid down that the

departmental proceeding is ordinarily said to be initiated only when a charge sheet is issued. In that particular case, the charge memo has been

issued to the employee of the bank after he has attained the age of superannuation. The Honourable Apex Court dealt with the Regulations in

extensio and came to the conclusion that unless and otherwise the charge memo has been issued to the concerned person before he could retire

from service, the disciplinary proceeding cannot be proceeded with. Thus, the categorical pronouncement has been made by the Honourable Apex

Court that the disciplinary proceeding is said to be initiated only when a charge sheet is issued. While so, to contend that the Honourable Apex

Court did not touch the issue whether disciplinary proceeding could be initiated against a person after his retirement by issuing charge memo after

the retirement of the concerned official, is totally unacceptable. It is also far fetching to contend that interpretation of Regulation was not the issue

involved in the said case and that interpretation of Regulation 20(3)(ii) did not come up for consideration before the Honourable Apex Court.

Thus, summing up the entire issue revolved in the present case on hand, it is to be answered in the following manner. The charge memo issued

to the petitioner dated 28.6.2007 subsequent to the petitioner''s attaining the age of superannuation on 31.5.2007 is totally not permissible. Hence,

the issuance of the charge memo dated 28.6.2007 by the respondent is liable to be quashed and accordingly, quashed. The Writ Petition is

therefore allowed. Consequently, the connected Miscellaneous Petitions are closed. However, there is no order as to costs.