H.N. Wadhwa vs New Bank of India and Others

Manju Goel, J.—The petitioner has challenged the order dated 10.6.1991 removing him from service, the order dated 19.11.1991 rejecting

his appeal against the decision of the Disciplinary Authority dated 10.6.1991 and the order dated 25.9.1992 rejecting his application for review of

the order of the Appellate Authority.

The petitioner was working as a Manager of respondent No. 1 Bank and during the period of 21.8.1985 to 27.11.1986 was posted at

Bhadohi, U.P. on three different occasions. He was served with a memorandum No. HRD; 88;1947 dated 2.4.1988 stating that in contemplation

of disciplinary proceedings against him the competent authority had placed him under suspension with immediate effect. The charges for which the

disciplinary proceedings were initiated related to allegedly fraudulent claim of TA and DA bills by submitting 15 fake hotel bills of the period during

which the petitioner was posted at Bhadohi. These hotel bills were issued under the name and style of ''Seth Lodging and Boarding'', Gyanpur

Road, Bhadohi. The petitioner submitted a reply to the detailed charge-sheet refuting the allegations made therein denying that the bills were fake

and contending that he did stay in the guest house of exporter B.K. Seth run under the name and style of ""Seth Lodging and Boarding"". The

Explanation was not found satisfactory and, Therefore, respondent No. 3 was appointed as the Inquiry Officer. The CBI also registered a case as

No. 48/A/88 on 28.9.1988 and the CBI also submitted a report on the investigation made by it relating to the allegations mentioned in the charge-

sheet. Following this the respondent No. 2 was appointed the Inquiry Officer in place of respondent No. 3. Mr. P.L. Sharma, Assistant Manager,

H.R. Department was appointed as the Presenting Officer in place of the earlier Presenting Officer. At this juncture the services of the Investigating

Officer of CBI Mr. V.P. Arya was also made available to the Presenting Officer for assistance for various purposes. Vide a letter dated 24.9.1990

the statement of allegations, Annexure-II to the charge-sheet dated 7.4.1988 was modified by adding one more allegation thereto. The

proceedings hithertofore was adopted by the new Inquiry Officer and the proceedings continued thereafter. The inquiry resulted into finding against

the petitioner. The petitioner alleges that the inquiry proceedings are vitiated as the petitioner was not given the CBI report which was demanded

by him, that certain other documents demanded by the petitioner were not given on the excuse that they were not relevant, that the petitioner''s

request for assistance of a lawyer in view of assistance of a CBI officer given to the Presenting Officer was declined, that one document being an

affidavit sworn by B.K. Seth addressed to the CBI was not taken on record by the Inquiry Officer on the excuse that the same was a photocopy,

that two valuable witnesses of the petitioner could not be examined because the petitioner''s request for holding the inquiry at Bhadohi was

declined, that on 11.12.1990 the Inquiry Officer proceeded ex parte on the false pretext that the petitioner had refused to participate in the inquiry

proceedings and subsequently refused to recall the witness MW1 who could not be examined because of the ex parte proceedings, that the

petitioner was not given an opportunity to cross-examine MW2, that the petitioner was refused the permission to leave station to go to Bhadohi to

bring his witnesses and that B.K. Seth who should have been a management witness was not produced for fear of exposure.

Petition is opposed by respondent No. 1. In the counter it is submitted that the petitioner was given full opportunity to submit his list of

documents and produce witnesses during the proceedings and that the petitioner himself has defaulted in availing of the opportunities given to him.

Similarly it is denied that opportunity to cross-examine witnesses was not given and it is contended that the petitioner himself did not avail of the

opportunity. Similarly it is contended that the Inquiry Officer conceded to the petitioner''s prayer for more time to produce witnesses with

permission to leave station but the petitioner failed to produce his defense witnesses. Refusal to allow assistance by a legal practitioner is justified

on the ground that there was no circumstances warranting representation by a legal counsel. Coming to the merits, it is contended that there was no

guest house of the name of Seth Lodging and Boarding at Bhadohi which itself establishes that the bills of that guest house were false. Coming to

the CBI report, it is disclosed that the CBI endorsed that the petitioner had submitted 11 bills supported by the hotel receipts issued by B.K. Seth

and also that certain loans to B.K. Seth had been sanctioned by the petitioner. The CBI also recommended departmental action for major penalty.

It is contended by the respondent that non-supply of the report of the CBI has not caused any prejudice to the petitioner. Modification of the

charge-sheet, as alleged by the petitioner, is admitted. Similarly, the respondents defend the decision of the Inquiry Officer in refusing to hold an

inquiry at Bhadohi and in refusing the petitioner''s prayer for summoning MW1 and MW2 for further cross-examination and other decisions.

At the time of hearing, learned Counsel for the petitioner was at pains to explain that the petitioner while being asked to work at Bhadohi was

required to have some temporary place of stay and there being no place available for stay, he lived in the private guest house of B.K. Seth of the

Seth Carpets and, Therefore, the petitioner did not make any fake claim towards TA and DA. The function of this Court is not to sit in appeal over

the decision of the Inquiry Officer. In a process of judicial review the Court can only examine the process of the inquiry and not the opinion of the

Inquiry Officer. If the Inquiry Officer''s report is perverse based on no evidence whatsoever, this Court can interfere in the finding of the Inquiry

Officer and the consequent decision of the Disciplinary Authority.

The major stress during the argument, however, was that the amendment to the charge-sheet subsequently made was not followed by the

prescribed procedure for holding disciplinary proceedings for major penalty. The petitioner was served with the charge-sheet on 7.4.1984 with the

following imputations:

Shri H.N. Wadhwa while functioning as Manager on deputation at Branch Office, Bhadoi (U.P.) fraudulently claimed payment of TA/DA bills

from the bank during the period 27.2.1986 to 27.11.1986, by submitting 15 fake hotel bills for Rs. 21,257.20, purportedly to have been issued by

Seth Lodging & Boarding, Gyanpur Road, Bhadoi, whereas there is no hotel at Bhadoi, under the name & style of Seth Lodging and Boarding,

Gyanpur Road, Bhadoi.

Subsequently, there was an addition to the charges in the following language:

Being fully aware of the fact that Shri B.K. Seth is one of the partners of M/s Seth Carpets which was granted certain credit facilities by Shri

Wadhwa, Shri Wadhwa by misusing his official status obtained from Shri B.K. Seth, the abovementioned fake hotel bills thereby deriving

pecuniary gain for himself from the bank in an irregular manner.

The attention of the Court is drawn to the Regulation 6 of New Bank of India Officer Employees (Discipline and Appeal) Regulations, 1982

which prescribes procedure for imposing major penalties. Sub-regulation (1) of Regulation 6 prescribes that no order imposing any major penalty

shall be made except after an inquiry in accordance with this regulation. Sub-regulation (3) prescribes that definite and distinct charges would have

to be framed on the basis of allegations against the charged officer and the articles of charge together with the statement of allegations on which

they are based should be communicated in writing to the officer and that the officer would be required to submit within 15 days a written statement

of his defense. Further Sub-regulation 5 prescribes that the Disciplinary Authority would forward to the Inquiring Authority the copy of the articles

of charges and the statements of imputations of misconduct or misbehavior, a copy of the written statement of defense if any submitted by the

officer or employee, list of all documents by which and the list of witnesses by whom the articles of charge are proposed to be substantiated, a

copy of the statement of the witnesses if any, evidence proving the delivery of articles of charge under Sub-regulation 3 and a copy of the order

appointing the Presenting Officer in terms of Sub-regulation 6. It is contended on behalf of the petitioner that when the charge was amended and an

additional paragraph of allegation was added, the petitioner was not given an opportunity to file any written statement of his defense. Further it is

submitted that all the documents and the list of witnesses by which the added paragraph was to be proved was also not given to the petitioner. In

reply it is contended on behalf of the respondents that the petitioner was given due opportunity to make his submissions in respect of the added

paragraph. The attention of the Court is drawn to the inquiry proceedings dated 25.9.1990 when the petitioner was asked whether he admitted the

charge leveled against him after the modification. The petitioner in his statement denied the modification and alleged that the same was fabricated

and baseless. He also denied that he was aware of the fact that Mr. B.K.Seth of M/s Seth Carpets had been granted any credit facility by him. It is

contended that the petitioner, Therefore, was given full opportunity to deny the amended charge and that had he asked for an opportunity to give a

written statement to the amended charge, he would also have been given that opportunity. The question here is not whether the petitioner failed in

his duty to ask for an opportunity. The fact remains that the respondents while amending the charge and thereby adding one paragraph with more

serious allegations than those contained in the first paragraph did not follow the procedure prescribed in the aforesaid regulations.

It is also to be noted that admittedly the new paragraph was added on the basis of a report obtained from the CBI and that despite petitioner''s

request, the copy of the CBI''s report was not given to the petitioner. On behalf of the respondents it is contended that even if an opportunity to

give a written reply was given to the petitioner and the copy of the CBI report had been given to him, things would not have changed in any way as

the petitioner continued to participate in the inquiry and submitted all that he wanted to submit in his defense. It is further submitted on behalf of the

respondents that the petitioner did not raise the issue of there being any failure of justice on account of non-compliance of the aforesaid regulations.

Neither in the appeal against the order of the Disciplinary Authority nor in the application for review the petitioner stated anything about any failure

of justice caused by the non-compliance of the aforesaid regulation. The plea was raised for the first time on 27.1.2003 when the petitioner filed his

rejoinder to the counter affidavit. It is contended that the proceedings took place sometimes in the year 1991 while the writ petition was filed in

1993 and till 27.1.2003 the petitioner never raised any plea in this regard. Mr. Rao says that if after this long gap of 12 years the clock is set back

the same would not be in the interest of justice. However, the petitioner repeatedly asked for the copy of the CBI''s report and also denied the

amended charge. There was no delay on the part of the petitioner in taking the plea that the inquiry was vitiated on this ground. Therefore, it cannot

be said that the petitioner never raised the question of failure of justice on account of non-compliance with the rules of natural justice.

From the two parts of the charge-sheet quoted in paragraph 3, it is clear that two parts of the charge were based on distinct allegations. The first

allegation was only that the TA/DA bills were fake inasmuch as there was no hotel by the name of ''Seth Lodging and Boarding'' in Bhadohi. The

second paragraph imputes serious misconduct by alleging that the petitioner had obtained those fake bills from Mr. B.K. Seth, partner of Seth

Carpets, a firm which had received credit facilities from the respondent bank through the petitioner. The allegations are distinct and, Therefore, the

second allegation can be taken as a new charge altogether. If the rules were followed, the inquiry could not have commenced unless the petitioner

was communicated by the Disciplinary Authority in writing about the article of charge together with the statement of allegation and was thereafter

given time to submit a written statement of his defense. The Inquiry Officer could proceed with the inquiry only after the Disciplinary Authority had

sent to the Inquiry Officer the charge, the imputations as well as the written statement of the petitioner. Admittedly, this opportunity was not given

to the petitioner. The respondents'' simple case is that the Inquiry Officer asked the petitioner as to whether he admits the charge and he denied the

same and thereafter participated in the inquiry and, as such, there was no prejudice caused to him on account of the non-compliance with the rules.

Mr. V.K. Rao has also cited certain judgments in support of his plea that the non-compliance with disciplinary regulations do not necessarily vitiate

an inquiry unless prejudice is shown to have been caused.

The rules of natural justice further prescribe that the charged officer is provided with all documents which he may require for his defense. In the

present case the charged officer repeatedly asked for the copy of the report of the CBI. The CBI, admittedly has not filed any charge-sheet against

the petitioner in any court. The CBI has exonerated the petitioner. Nonetheless, the second part of the charge-sheet is based on the report of the

CBI. The report of the CBI, Therefore, was an important document which the petitioner could have used in his defense. The case of the

respondents is that the CBI recommended disciplinary action but did not proceed to prosecute the petitioner. In this situation the document could

have had facts or evidence which could have gone in favor of the petitioner. It is true that the Disciplinary Authority/Presenting Officer did not rely

upon the report of the CBI. Since the respondents did not rely upon the report of the CBI, it was not mandatory for the Disciplinary Authority to

send to the Inquiry Officer the copy of the documents along with the articles of charge or the statement of allegations. Nonetheless, since it was a

document required for the defense, the Disciplinary Authority should have supplied the same to the petitioner in compliance with the rules of natural

justice.

The non-compliance of the statutory rule, namely, an opportunity to file the written statement in defense before the inquiry was to begin, has to

be seen together with the failure to provide the copy of the CBI report. It is difficult to say that the petitioner was in no way prejudiced on account

of non-supply of the report or that the inquiry would have proceeded the same way even if the petitioner had been granted a copy of the report.

Mr. V.K. Rao further submitted that the report of the CBI, at best, was like a report of a preliminary inquiry and that of a preliminary inquiry

report which was not relied upon in the inquiry was not necessary to be supplied. He cited in his support the judgment in the case of

Superintendent, Govt. T.B. Sanatorium and Another Vs. J. Srinivasan, . In that case there was no rule that the copy of the preliminary inquiry be

given. When the non-supply of the copy of the preliminary inquiry was raised as a ground by the delinquent officer in the proceedings before the

Court, the Supreme Court held, that unless any prejudice was shown, the Court should not have interfered with the finding of the Inquiry Officer.

The question here is not whether the report of the preliminary inquiry is required to be given to the Inquiry Officer along with other documents and

consequently also to the charged officer. The question here is whether the delinquent officer is entitled to the report if he wants to use it for his own

defense. In State of U.P. Vs. Shatrughan Lal and Another, an inquiry was found to be vitiated when the copies of the statement of witnesses

recorded during the preliminary inquiry was not supplied to the charged employee despite his demand for the same. A similar case is that of Tirlok

Nath v. Union of India and Ors. 1967 SLR 759 in which a delinquent police officer was proceeded with departmentally despite allegations of

criminal offence for which he was not being prosecuted. He asked for copies of the first information report and the statements recorded by the

investigating officer which were not not supplied to him. The Supreme Court held that non-supply of these documents must be held to have caused

prejudice to the charged officer in making his defense at the inquiry. These two judgments have been strongly relied upon by the petitioner''s

counsel, Mr. Ashok Bhalla. In my opinion this is not a simple case of failure to supply copy of the preliminary inquiry report. This is a failure to

supply an important document which could be used in defense. Accordingly, non-supply of this document has caused prejudice.

This prejudice has to be coupled with the prejudice caused by the failure of the Disciplinary Authority to provide an opportunity to file a written

statement before the commencement of inquiry. In my opinion, these failures are serious and have vitiated the inquiry to the extent of the second

part of the charge-sheet.

The question now is what should be the relief to be given to the petitioner. So far as the first part of the charge is concerned, the same has also

been held to have been proved by the Inquiry Officer by his report dated 23.3.1991. There is no allegation of failure of justice or prejudice or of

non-compliance of any rules, statutory or of natural justice, in respect of this part of the Inquiry Officer''s report. Therefore, the Disciplinary

Authority would be entitled to inflict some punishment on the petitioner. However, since the more serious part of the charge now fails in view of the

above discussion, the earlier order of punishment cannot hold good. The order of punishment in this case has been passed keeping in view the

entire charge. Since the more serious part of the charge is gone, a rethinking in the matter of punishment is also called for.

The matter, Therefore, has to be remanded to the Disciplinary Authority for the purpose of imposing a penalty commensurate with the charge

proved. Here the Disciplinary Authority will have to keep in mind the defense raised by the petitioner that he did stay in the private guest house of

M/s Seth Carpets and paid Mr. B.K. Seth the charges equivalent to his entitlement. Mr. B.K. Seth issued the receipts although under the name of

''Seth Lodging and Boarding'' which was, in fact, non-existent. The extent of the misconduct of the petitioner has to be viewed accordingly and the

punishment has to be commensurate therewith. The petitioner, in the meantime, has reached the age of superannuation.

In view of the above, the petition succeeds in part. The impugned order of punishment dated 10.6.1991 is set aside and the order of the

Appellate Authority dated 19.11.1991 is hereby quashed. The Disciplinary Authority will now pass a fresh order of punishment within two months

hereof. The petitioner will be entitled to his pay and allowances and other benefits treating the order of punishment to be non est except to the

extent the petitioner is deprived of these benefits on account of the punishment order which may be imposed by the Disciplinary Authority.

Application CM No. 1188/2002 for interim relief also stand disposed of.