P.S. Dhanwal vs State Of Madhya Pradesh And Others

Sanjay Yadav, J

With the consent of learned counsel for the parties, the matter is finally heard.

This intra-court appeal under Section 2 (1) of Madhya Pradesh Uchcha Nyayalya (Khand Nyayapeeth Ko Appeal) Adhiniyam, 2005, takes exception

to the order dated 1.5.2020 passed in Writ Petition No. 15632/2019.

In the writ petition the challenge was to an order dated 24.7.2019; whereby, the appellant/petitioner was placed under suspension for alleged

financial misappropriation of One Crore Sixty Nine Lacs Ninety Three Thousand Eight Hundred and Two. The challenge was on the sole ground that

it was beyond the competence of the authority concerned being In-charge Managing Director to suspend the Appellant/Petitioner, a Class I Officer.

The appellant/ petitioner relied on the proposition of law laid down by the Full Bench of this High Court inG irja Shankar Shukla v. Sub Divisional

Officer, Harda and others [1973 MPLJ 411] to substantiate the contention.

These contentions were contradicted by the State of Madhya Pradesh and the Madhya Pradesh State Co-operative Bank. It was urged that the

Authority concerned being appointed by the State Government under Section 49 E of the Madhya Pradesh Co-operative Societies Act, 1960 was

within his jurisdiction to have placed the Appellant/Petitioner under suspension. Reliance is also placed on the decision in Gopalji Khanna v. Allahabad

Bank and others [(1996) (3) SCC 538] to support the contentions that it was within the jurisdiction and competence of the Authority concerned to

suspend the appellant.

Learned Single Judge vide impugned order upheld the suspension. It held:

“4. Now let us examine the question in light of the aforesaid judgment. Petitioner has been suspended vide impugned order dated 24.07.2019. The

said order has been signed by Shri Pradeep Neekhra Incharge Managing Director. Now let us examine the source of power. Shri Pradeep Neekhra

was Joint Commissioner Co-operatives Bhopal Division, Bhopal. He was appointed on deputation as In-charge Managing Director, Madhya Pradesh

State Cooperative Bank Bhopal. He had been delegated powers by Circular of State Government dated 6.02.2019 to take all actions and to do duties

of Managing Director from the date of his joining i.e. on 8.2.19. As per Rule 52.1 of M. P. Rajya Sahkari Bank Maryadit, Bhopal Ke Sevayukt Ke

Niyojan, Nibandhan tatha Karyasthithi Sevaniyam if an employee of bank works contrary to the service rules or his conduct is contrary to the rules

and he has done irregularities and if such facts comes in cognizance of bank management and he is prima facie found guilty then bank management

can suspend him. Bank management has been defined in rule 2.8. As per the said rules bank management means Board of Directors of Bank, Special

Officer Group Committee, Staff Samiti, Vishisht Adhikari Samooh Samiti, any other committee, President, Managing Director or any other person,

who has been vested with powers with competent authority. In the present case, in charge of Managing Director has been vested with the power of

managing director. He has been appointed on deputation. He is not a person who is officiating on a higher rank. Though he is In-charge Managing

Director but he has been delegated power of Managing Director by the State Government and therefore as per the full bench judgment of Girja

Shankar Shukla Vs Sub-Divisional Officer, Harda and others Managing Director can suspend the petitioner.â€​

While questioning the correctness of the impugned order, the contention raised before learned Single Judge are reiterated. Whereas, the

respondents have supported the impugned order.

Heard the learned counsel for the parties and perused the record.

Sub-section (1) (a) of Section 49 E of the Act, 1960 contemplates that “(1) (a) Notwithstanding anything contained in this Act, or rules or

byelaws made thereunder, for every apex society where the State Government has contributed to its share capital or has given loans or financial

assistance or has guaranteed the repayment of loans granted in any other form, or the society does Government sponsored business or undertakes an

activity as a representative or agent of the Central or State Government and the turnover of the above two business, together or separately, constitutes

50 percent or more of its total business, there shall be a Managing Director not below the rank of Class I Officer, who shall be appointed by the State

Government.â€​

Thus, imperative it is that the Managing Director of the Bank shall not be below the rank of Class I Officer and has to be appointed by the State

Government.

Furthermore, Rule 6.1.2 of Madhya Pradesh Sahakari Bank Maryadit, Bhopal Ke Sevayukt Ke (Sevayukton ke Niyojan, Nibandhan Tatha

Karyastithi) Sevaniyam stipulates that the Managing Director can be appointed on deputation. It stipulates:

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That, Rule 52.1.1 of the Rules provides for that the Bank Management can place an employee under suspension.

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The expression “Bank Prabandhan†is defined in Rule 2.8 of the Rules and includes Managing Director. Furthermore, Managing Director is

defined in Rule 2.9 to be an appointee under Section 49 E:

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In the case at hand the State Government exercising its powers under Section 49 E of 1960 Act appointed Shri Pradeep Nikhra, Joint

Commissioner, Co-operative (Legal), Bhopal Division, on deputation, as In-charge Managing Director, M.P. State Co-operative Bank Ltd., Bhopal by

order No. 1-1/2019/15-2 dated 6.2.2019. Though it is contended that the appointment of Shri Nikhra was as In-charge Managing Director and was

thus not a full fledged Managing Director as could have discharged the function and powers of the Managing Director, the fact, however, remains is

that said Shri Nikhra was Class I Officer and the appointment was by the State Government under Section 49 E of 1960 Act, and was thus competent

to have exercised the powers and functions of Managing Director. In Gopalji Khanna (supra) dwelling on the issue as to whether the power of review

available to the Chairman and Managing Director of the Allahabad Bank under Regulation 18 of the Allahabad Bank Officer Employees (Discipline

and Appeal) Regulations, 1976 could have been exercised by the Executive Director who in the absence of the Chairman and Managing Director was

entrusted with the current charge of the duties of offices of the Chairman and Managing Director, held:

“7. With respect to the second contention, it was submitted by the learned counsel that the power of review is conferred by Regulation 18. Only the Chairman and

Managing Director are specified as reviewing authorities. This statutory power, therefore, can be exercised by Chairman and Managing Director only as they are the

named authorities under the statutory provision and cannot be validly delegated to any subordinate authority. Shri Wadhwa, therefore, could not have validly

exercised that power. There is no substance in this submission. It is really misconceived. Though the Regulations have been framed in exercise of the powers

conferred by Section 19 the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, by the Board of Directors, they cannot be equated with a

statute. What the Board of Directors have done by making those Regulations is to regulate the power of taking disciplinary action against the employees of the bank.

Moreover, this is not a case where the power of Chairman or the Managing Director came to be exercised by a subordinate official as a result of delegation of that

power. Shri Wadhwa while exercising the power of review was really discharging the functions of Chairman and Managing Director as he was then placed in charge

of those offices and was therefore entitled to perform all the duties and functions of those offices. He did not exercise that power on the basis that it was delegated to

him. Therefore, the decisions in Barnard Vs. National Dock, Labour Board, Krishna Kumar Vs. Divisional Assistant Electrical Engineer and Marathwada University

Vs. Seshrao Balwant Rao Chavan, relied upon by the learned counsel in support of his contention that statutory power can be exercised by the named authority only

and cannot be further delegated, require no further consideration. So also, Ramakant Shripad Sinai Advalpalkar Vs. Union of India and State of Haryana Vs. S.M.

Sharma cited by the learned counsel have no relevance. The question which arose for consideration in those cases was whether an officer who substantively holds a

lower post and is asked to discharge the duties of a higher post can be considered as promoted to that higher post. This Court held that entrustment of current duties

charge of a higher post does not amount to promotion and in such cases the person continues to hold his substantive lower post and only discharges the duties of

higher post essentially as a stop gap arrangement.

It was next submitted that when a person is entrusted with charge of current duties of a higher post, he can exercise only those powers and perform those

functions which are available to the person holding the higher post under executive orders and not those which are conferred by statutory provisions. In support of

this submission the learned counsel relied upon the decision of this Court in Ajaib Singh Vs. State of Punjab. In that case what had happened was that the Additional

District Magistrate, Amritsar was invested with powers of a District Magistrate under Section 10(2) of the Code of Criminal Procedure, 1898 and was also put in

charge of the office of the District Magistrate Amritsar, who was transferred. No order appointing him as a District Magistrate under Section 10 (1) was passed. While

in charge of the office of the District Magistrate, he passed an order of detention under the Defence of India Act and Rules, 1962.

That order was challenged on the ground that as the Additional District Magistrate was not appointed as District Magistrate under Section 10 (1) he did not have the

power to pass a detention order and, therefore, the order passed by him was without any authority of law and liable to be set aside. This Court after considering the

relevant provisions of the Defence of India Act and the Rules, 1962 and the drastic nature of the power and the consequences following from it, observed that the

power of detention could only be exercised by the State Government or an officer or authority to whom it was delegated and that the said power could be delegated

to an officer or authority who was not lower in rank than the District Magistrate. It was then held that even though the Additional District Magistrate was exercising

the powers of the District Magistrate on there being a vacancy in the office of the District Magistrate, he was still not the District Magistrate as he was not appointed

as such under Section 10(1) of the Code and therefore, he had no power to pass the order of detention. Even though invested with the powers of a District Magistrate

he did not become an officer of the rank of a District Magistrate. In this case we are not concerned with such a provision and therefore are not required to consider

whether Executive Director of the Bank when entrusted with the charge of duties of the offices of Chairman and Managing Director became an officer of the rank of

Chairman and Managing Director. Moreover the power of the employer to take disciplinary action against his employee including the power to review an order of

penalty, has to be distinguished from the statutory power to detain a person. Therefore, on the basis of this decision it cannot be held that the Executive Director

who was merely entrusted with the charge of duties of the offices of Chairman and Managing Director could not have exercised the power of reviewing the order of

penalty passed by the disciplinary authority.

… On the contrary this Court has observed therein that the confirmed holder of a substantive post would be discharging the functions attached to

the post and when some one is placed in that very post in an officiating capacity or directed to hold charge of the post, he would be required to

perform the duties and discharge the functions of the post rendering identical service. In paragraph 10 of the judgment it is further observed as under :

( SCC p.273)

…....it may be that the confirmed holder of the post may be away and not in a position to discharge the duties and some one may be appointed in an officiating

capacity or may be directed to hold charge but nonetheless such holder of the post will have to perform duties and discharge functions attached to the post."" 1

12.After considering the above decisions and Regulations 2(n) and 18, we are of the opinion that as the Executive Director Shri Wadhwa was

entrusted with the charge of the offices of Chairman and Managing Director he became entitled to exercise all the executive powers, perform duties

and discharge functions attached to those offices and, therefore, the order of penalty passed by him was legal and valid.â€​

The decision in Girja Shankar (supra) relied by the Appellant/Petitioner is of no assistance as the same was, as is evident from the observation in

paragraph 16 thereof, “in situation like those under Article 311 (1) of the Constitution, which mandates that “No person who is a member of a

civil service of the Union or an all India service or a civil service of a State or holds a civil post under the Union or a State shall be dismissed or

removed by a authority subordinate to that by which he was appointed.†Being trite it is that the suspension is not a punishment, the

Appellant/Petitioner is not benefited by the decision in Girja Shankar (supra).

Having thus considered, we do not perceive that the suspension of the appellant was by an incompetent Authority. In view whereof there is no

error in the impugned order, as would warrant an indulgence.

Consequently, the appeal fails and is dismissed. No costs.