Lakhbir Singh vs Co-operative Societies, Haryana, Chandigarh and other

V.K. Bali, J.—Challenge herein is to charge-sheet served upon the petitioner Lakhbir Singh, a clerk in the Kurukshetra Urban Co-operative Bank Ltd., Kurukshetra and subsequent proceedings in pursuance of the charge-sheet.

The facts on which the relief aforesaid is sought to rest, reveal that the petitioner is, working as a Clerk in the Kurukshetra Urban Co-operative Bank Ltd., Kurukshetra. It is the case of the petitioner that respondent No. 7 Amrit Lal was working as a Clerk and Shri Mool Chand, respondent No. 6 is the Chairman of the said Bank since its incorporation. On July 14, 1997 the Board of Directors of the Bank was issued a show cause notice for removal and also placed under suspension by the Deputy Registrar, Co-operative Societies as respondents 6 and 1 had allegedly embezzled lakhs of rupees of the Bank. This was done on the basis of an inquiry conducted into the complaint of Shri Bhupinder Singh, member of the Bank. This order of suspension was challenged in a writ petition filed in this Court primarily on the ground that the Registrar primari cannot suspend the Board without prior approval of the Reserve Bank of India. The said writ petition has been admitted and suspension orders have been stayed. It is further the case of the petitioner that on the basis of an enquiry got conducted by the Deputy Commissioner, Kurukshetra from the Additional Deputy, Commissioner, Kurukshetra, an FIR No. 31 dated October 8, 1997 was registered against respondents 6 and 7. From the post of Clerk, an incumbent is promoted as Junior Accountant, then as Senior Accountant and then as Assistant, Executive Officer. Thereafter, he is made the Chief Executive Officer. However, respondent No. 6, in order to have his own man, gave the officiating charges as Manager to respondent No. 7 who is merely a Clerk and drawing his salary as a Clerk. In fact, the resolution was to consider the opening of new bank account in other banks but later on an insertion had been made in the resolution. It is, thus, the case of petitioner that respondent No. 7 is not a legally or validly appointed Manager/Chief Executive Officer. During the course of inquiry by the Additional Deputy Commissioner as well as by the Inspector, Co-operative Societies, the petitioner along with another Clerk Shri Mian Singh had to give the record of the Bank on April 27, 1998. Respondents 6 and 7 are on bail in the case arising out of the FIR, reference whereof has been made above. With a view to take revenge that petitioner had given record of the Bank during enquiry against respondents 6 and 7, a charge-sheet was issued to him by respondent No. 7 alleging himself to be the Chief Executive Officer. Respondent No. 7 is stated to have appointed himself as an Inquiry Officer on May 14, 1998. That being so, petitioner made a representation and also wrote to the Deputy Registrar, Co-operative Societies, Kurukshetra. Thereafter, one Ram Pal Sharma, who was never elected as a Director of the Bank, was appointed as an Inquiry Officer on May 25, 1998. Petitioner protested against him appointment also as he was not the Director of the Bank and petitioner wanted an independent agency to hold the enquiry against him. The Deputy Registrar wrote a letter to respondent No. 7 to inform him as to when Shri Ram Pal was elected as a Director of the Bank and it was further ordered that till then no action should be taken in this regard. On June 11, 1998 petitioner was informed by the Assistant Registrar, Co-operative Societies, Kurukshetra, that he has been appointed as an Inquiry Officer by the Deputy Registrar. The petitioner was happy that an independent agency is holding an inquiry. However, on June 20, 1998, petitioner was surprised to receive a letter from respondent No. 6 that he had been appointed as an Inquiry Officer by respondent No. 7 and petitioner was directed to appear before him on June 26, 1998. Petitioner again protested against this as the inquiry was not being conducted by an independent agency. However, respondent No. 6 fixed the date to be June 29, 1998 and then July 7, 1998 when he is alleged to have recorded ex parte evidence. It is further the case of the petitioner that intention of respondents 6 and 7 is to dismiss him from service as according to them, he was instrumental in getting the FIR registered against them.

On the facts, as have been detailed above, Mr. Sharma, learned counsel for the petitioner vehemently contends that under the bye-laws, which have been framed by the general body of the Society, which is superior body, the competent authority to appoint and punish the petitioner is the sub-committee consisting of the Chairman, Chief Executive Officer and three Directors to be elected by the Board of Directors of the Bank and the charge-sheet has not been issued by the competent authority as also that the enquiry officer has not been appointed by the competent authority. It has further been argued that respondent No. 7 is only a Clerk as he has never been appointed as Chief Executive Officer and, therefore, he is not a competent authority to issue the charge-sheet. In the alternative, it has been argued that even if it is assumed for the sake of argument that respondent No. 7 was appointed as Officiating Manager, even then he could not have issued the charge-sheet and appointed Enquiry Officer as the, officiating officer is not competent to issue charge-sheet under any provision of law. The last contention of learned counsel for the petitioner is that once the Deputy Registrar, Co-operative Societies was seized of the matter and had appointed the Assistant Registrar as Enquiry Officer, respondent No. 7 could not have appointed Shri Mool Chand, Chairman of the Bank as Enquiry Officer. Charge-sheet issued to the petitioner has also been challenged on the ground of mala fades of respondent Nos. 6 and 7.

Pursuant to notice issued by this Court, respondents have entered defence and contested the claim of the petitioner. In the written statement filed on behalf of respondents 4 to 7, it has been pleaded by way of preliminary objections that pursuant to the disciplinary proceedings initiated against the petitioner vide charge-sheet dated April 27, 1998 a regular enquiry has already been concluded and the Enquiry Officer has submitted his report dated July 11, 1998 in which charges like misappropriation of the Bank funds as also causing huge financial loss to the bank have been proved against the petitioner. Pursuant to the said enquiry report, a show cause notice under Rule 29(a) of the Kurukshetra Urban Co-operative Staff Services Rules, 1990 has also been issued to the petitioner vide memo dated July 16, 1998 and" a copy of the enquiry report has also been sent to him along with the said show cause notice. The writ petition is stated to be premature inasmuch as whatever grievance the petitioner can have against the initiation of disciplinary proceedings or against the conclusion arrived at by the enquiry officer, he can raise the same in reply to the show cause notice. It is further the case of respondents that the present petition is not maintainable in view of the fact that the competent authority i.e. the Board of Directors have not yet taken a final decision in the matter. On submission of the reply by the petitioner, if any, to the show cause notice, the entire matter would be placed before the Board of Directors which will take final decision in the matter with regard to imposing any punishment upon him or for exonerating him of the charges. The present petition is an attempt to pre-empt the competent authority from taking any decision in the matter. It is further the case of the respondents that the present petition is also not maintainable for the reason that the petitioner will have an effective alternative remedy of appeal to the Registrar, Co-operative Societies, Haryana against the order, if any, passed by the Board of Directors imposing punishment upon him. The right to make an appeal is expressly provided under Rule 30 read with Rule 32 of the 1990 Service Rules. It is further the case of respondents that with a view to prejudice the mind of this Court, petitioner has made reckless and irresponsible allegations of mala fades against respondent No. 6 who is the Chairman of the Bank. Since the Chairman of the Bank had acted as an Inquiry Officer in this matter, he shall not participate in the proceedings of the Board of Directors when the agenda item for taking decision on disciplinary proceedings initiated against the petitioner shall be taken up. One of the Directors of the bank, namely, Shri Ram Pal Sharma, who also initially acted as an Enquiry Officer, had also decided to abstain from the proceedings of the Board of Directors when agenda item regarding taking decision in the matter of disciplinary proceedings against the petitioner shall be taken up. It is also the case of respondents that petitioner has not levelled any allegations whatsoever against other Board of Directors of the Bank and that being so, he should be relegated to the competent authority, i.e., the Board of Directors for a final decision in the matter which shall only be taken in accordance with law.

With a view to controvert the assertions of the petitioner that action is being taken in the matter by an officer who is not competent to do the same, it has been pleaded by the respondents that appointing authority in respect of all the posts in the bank is the Board of Directors. The Board is also competent and empowered to appoint a Staff Committee which can enjoy the delegated powers regarding selection/appointment/promotion/training/disciplinary proceedings etc. in respect of the employees of the Bank. Respondents have relied upon bye-laws 36(xv to xvii) which read as under :

"36(xv) To consider proposals for creating posts of officers and Junior and other staff of the bank''s establishment for filling the vacancies either by direct recruitment or by promotion from the existing members of the staff and fix their qualifications, scales of pay and other allowances.

(xvi) To appoint a Chief Executive Officer for efficient conduct of the bank''s business and to fix his remuneration and to frame rules governing the disciplinary action against erring employees, including the Chief Executive Officer of the Bank.

(xvii) To appoint a staff committee every year consisting of the Chairman, the Chief Executive Officer and 3 other Directors for disposal of all matters concerning the paid staff of the Bank such as selection, appointment, promotions, training, disciplinary action and punishment."

It is further pleaded that Chief Executive Officer has been defined under bye-law 4 (viii) to mean the Managing Director appointed by the Board of Directors and if a. Managing Director is not appointed, then the General Manager or Manager or Secretary appointed by the Board of Directors of the Bank will be the Chief Executive Officer. Bye-law 40 lays down powers and duties of the Chief, Executive Officer, who will be responsible to the Board of Directors. Some of the powers and duties laid down for the Chief Executive Officer under bye-law 40 are as under :

"40(i) to take action on the resolution and decisions taken by the General Body and Board of Directors;

(xii) to allot work amongst the bank staff and supervise their work;

(xiii) to take disciplinary action against the bank''s staff in accordance with the service rules.

(xiv) to issue orders of transfer of staff whenever necessary.

(xv) to pass orders on leave applications, travelling allowance bills, medical bills and other permissible bills of the staff''.

On the basis of the provisions, referred to above, it is the case of the respondents that Chief Executive Officer need not be sanctioned as a "post" in the Bank. Rather it is an "authority" prescribed in the bye-laws of the Bank to implement the decisions of the Board of Directors and to execute all the decisions of the Board taken from time to time. Bye-laws 4(viii) and 36 (xvi) have to be read together and if that is done, there remains no manner of doubt that the Board of Directors may appoint any person as Chief Executive Officer of the bank on the fixed remuneration for the efficient conduct of the bank''s business. Respondent No. 7 has always been senior to the petitioner even while working as Clerk in the bank. The assertion of the petitioner that respondent No. 7 was not appointed as Chief Executive Officer, has been denied. The Board of Directors in their meeting held on January 19, 1998 vide agenda item No. 4 considered the matter for appointment of a Chief Executive Officer in the Bank as repeated communications were being received from the Reserve Bank of India for appointment of CEO by the respondent Bank. The matter was considered by the Board at length and it unanimously resolved to appoint respondent No. 7 as CEO on regular basis and an intimation to this effect was also sent to the Reserve Bank of India. The allegations of mala fides have been denied. It is further pleaded that taking action against the petitioner and charge-shecting him cannot be styled as an act of vengeance as a perusal of the charge-sheet would show that the charges are based upon official record of the respondent Bank maintained in due course of business. None of the charges can be said to have been concocted against the petitioner. It is then pleaded that the petitioner being guilty of the charges, wants to adopt delaying tactics by making irresponsible and wild allegations. The charges against the petitioner have already been proved beyond any doubt by the Enquiry Officer though the same are yet to be accepted or rejected by the Board of Directors, i.e., the competent authority. Respondent No. 7 could well charge-sheet the petitioner and appoint an enquiry officer as he has been designated as CEO of the Bank and, therefore, can exercise all the powers and duties conferred upon the CEO under bye-law 40 of the Bye-laws. Moreover, the decision to charge-sheet the petitioner on account of serious charges was taken by the Board of Directors and not by the CEO. It is further the case of respondents that the Board of Directors in their meeting held on January 19, 1998 vide agenda item No. 7 considered the complaints received against considered Mian Singh, Junior Accountant and the petitioner and it was unanimously resolved to take disciplinary action against both these employees for which the CEO was directed to issue charge-sheet, to hold regular enquiry, to appoint Enquiry Officer etc. A copy of the decision taken by the Board of Directors has been annexed as Annexure R4/3.

We have given our thoughtful consideration to the contrary inter se parties. Inasmuch as the petitioner came complaining in the Court only on the issuance of charge-sheet, even though during the pendency of the petition, enquiry officer has submitted the report, we find merit in the preliminary objection raised by the respondents that the writ is premature and all the points raised by the petitioner in this writ could well be taken up by him before the Board of Directors, who have to ultimately pass order after hearing the petitioner pursuant to the report submitted by the Enquiry Officer. Though such is our opinion, the contention of learned counsel for the petitioner with regard to enquiry having been ordered by an incompetent officer could well be gone into. On that issue, we have examined the records of the case and the relevant rules. We are of the view that it is not a case where the petitioner has been proceeded against by an authority which had no power or jurisdiction to make enquiry against the petitioner. The proceedings of the meeting of Board of Directors of Kurukshetra Urban Co-operative Bank, Annexure R4/3, vide agenda item No. 7 i.e., to consider the complaints received against Mian Singh, Jr. Accountant and Lakhbir Singh, petitioner, decided that according to the bank bye-laws and Service Rules, the Chief Executive Officer is competent to initiate disciplinary proceedings against any employee of the Bank. Even that was so i.e., the CEO was competent, the Board of Directors, empowered Shri Amrit Lal Gupta, to take action whatever may be, such as issuing charge-sheet, get regular enquiry conducted, to appoint enquiry officer, to take legal action initiate disciplinary proceedings and whatever action is required in view of the situation in connection with the complaints received against Mian Singh and the petitioner. Shri Amrit Lal Gupta, respondent No. 7 herein has, thus, been authorised to take disciplinary action against the petitioner by the Board of Directors. A perusal of the averments made in the written statement would also show that Despondent No. 7 was appointed as Chief Executive Officer on regular basis by the Board of Directors. The provisions of relevant bye-law that empower the CEO to take action, have already been detailed above. It is clear from the facts as have been mentioned above, that disciplinary action, i.e., charge-sheeting the petitioner, and proceedings of disciplinary enquiry against the petitioner have been initiated by a competent authority. Insofar as allegations of mala fide are concerned, the respondents in all their fairness, have stated that those members of the Board against whom, the petitioner had made complaint, will not participate in any of the deliberations concerning the case of the petitioner.

In view of what has been said above, we find no merit in this petition and dismiss the same in limine. No order as to costs.