UCO Bank & Ors. vs Rajendra Shankar Shukla

This appeal raises an interesting question of law on access to justice in a departmental inquiry. In our opinion, the respondent (Rajendra Shankar

Shukla) was not given a fair opportunity to defend himself by denying him financial resources. On the merits of the case also, we are of the view

that the impugned judgment and order of the High Court does not call for any interference.

The allegation against Shukla was that while in charge of the extension counter of the UCO Bank from 3rd October, 1987 to 8th July, 1994 he

issued a cheque on 25th January, 1991 for an amount of Rs. 3 lakhs in favour of his brother. At that time, Shukla had only about Rs. 1,000/- in his

account. We are only concerned with this broad allegation.

Shukla was issued a charge sheet on 20th May, 1998 (after about 7 years) by the respondent (Bank) under the provisions of the UCO Bank

Officer Employees? (Conduct) Regulations, 1976. The articles of charge against Shukla were as follows:-

(I) Shri R.S. Shukla issued/got issued a cheque on his joint account without making any arrangement of adequate balance and intention to

honour it, only to cause wrongful benefit to his relative, at the cost of the Bank. He has thus failed to discharge his duties with utmost

integrity and honesty, which is violative of Regulation 3 of UCO Bank Officer Employees? (Conduct) Regulations, 1976 as amended.

(II) Shri Shukla, by making available the official correspondence (exchanged between regional office, Raipur and his branch) to his son

which he later quoted in his proposal for compromise of Transport Loan availed by him, has not only acted against the interest of the Bank

but also has deliberately divulged information of a confidential nature to a person - his son, not entitled to it, which is violative of Regulation

4 of UCO Bank Officer Employees? (Conduct) Regulations, 1976 as amended.

(III) By availing loans and that also frequently, far in excess of the permissible amount against NSCs and FDRs without paying interest at the

applicable rates, Shri R.S. Shukla has failed to discharge his duties with devotion, honesty and utmost integrity. This act is violative of

Regulation 3 of UCO Bank Officer Employees? (Conduct) Regulations, 1976 as amended.

Shukla was due to superannuate on 31st January, 1999. A few days prior to his superannuation, the Competent Authority issued a letter

invoking Regulation 20(3)(iii) of the UCO Bank (Officers?) Service Regulations, 1979 (for short ""the Regulations""). Regulation 20(3)(iii) reads as

follows:-

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 of the payment

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

In view of the aforesaid Regulation, Shukla ceased to be in service on 31st January, 1999 on attaining his superannuation but the disciplinary

proceedings against him continued. Shukla denied the charges levelled against him but the Enquiry Officer submitted a report in which Charges 1

and 3 were proved while Charge 2 was not proved. The Disciplinary Authority came to the conclusion that all three charges were proved and as

far as Charge 1 is concerned, he passed an order on 30th June, 1999 dismissing Shukla from service which would ordinarily be a disqualification

for future employment.

A departmental appeal was filed by Shukla. During the pendency of the departmental appeal, Shukla filed a writ petition in the Madhya Pradesh

High Court. Later, the departmental appeal filed by Shukla was dismissed. The writ petition was transferred to the Chhattisgarh High Court and by

a judgment and order dated 21st December, 2006 the learned Single Judge allowed the writ petition and quashed the order dated 30th June, 1999

passed by the Disciplinary Authority. An appeal filed by the Bank was dismissed by the impugned judgment and order dated 7th May, 2010 by

the Division Bench of the High Court. It is under these circumstances that the present appeal was filed in this Court.

At the outset, we make it clear that the learned senior counsel for the Bank candidly submitted that he was concerned only with Charge 1 and

did not seek to justify the correctness of the findings of the Disciplinary Authority in respect of Charge 2 and Charge 3.

The learned Single Judge noted a few extremely relevant facts. Undoubtedly the cheque was issued by Shukla on 25th January, 1991 (although

he claimed his wife had signed the cheque) but he directed the Bank to `stop payment'' by a communication dated 6th March, 1991.

Notwithstanding the `stop payment'' communication, his brother presented the cheque for encashment on 2nd April, 1991 and it was temporarily

encashed.

We have been informed by learned counsel for Shukla that on 19th July, 1994 he was promoted to higher category as Manager and on 12th

August, 1996 he was permitted to cross the efficiency bar. These events occurred before the charge sheet was issued to Shukla.

The learned Single Judge took the view that there was no prohibition in a bank employee having an account in the same bank and that in case a

cheque issued by such an employee was dishonoured, action may be taken by the complainant under the provisions of the Negotiable Instruments

Act, 1881 but the Bank could not take action under the UCO Bank Officer Employees? (Conduct) Regulations, 1976. In view of this conclusion,

the learned Single Judge held that even if Charge 1 is proved, it would not amount to a misconduct within the purview of the Conduct Regulations

applicable to bank employees. It was further held that assuming misconduct was proved, appropriate action could be taken under the UCO Bank

(Employees) Pension Regulations, 1995 in accordance with law and if permissible.

The Division Bench of the High Court found no error in the view taken by the learned Single Judge and accordingly dismissed the appeal filed

by the Bank. The Division Bench held that the action by Shukla in issuing a cheque for Rs. 3 lakhs when he had only about Rs. 1,000/- in his

account did not amount to misconduct but was an action personal to him. The High Court also noted that his direction to `stop payment'' would

perhaps have made him liable for some action by his brother but certainly not by the Bank.

We do not find any reason to interfere with the judgment and order passed by the High Court. However, it is necessary for us to highlight a

few facts which were brought to our notice during the course of submissions made by learned counsel. The first issue of concern is the enormous

delay of about 7 years in issuing a charge sheet against Shukla. There is no explanation for this unexplained delay. It appears that some internal

discussions were going on within the Bank but that it took the Bank 7 years to make up its mind is totally unreasonable and unacceptable. On this

ground itself, the charge sheet against Shukla is liable to be set aside due to the inordinate and unexplained delay in its issuance.

What compounds the default on the part of the Bank is that Shukla was placed in a higher category as a Manager on 19th July, 1994 while all

these discussions were going on in the Bank. He was also allowed to cross the efficiency bar on 12th August, 1996 again while the discussions

were going on. Surely, if the Bank was serious about proceeding against Shukla for misconduct, they would not only have taken prompt action in

issuing a charge sheet but would not have granted him the benefit of being placed in a higher category or crossing the efficiency bar.

We were also little taken aback to learn from learned counsel for Shukla that after his superannuation on 31st January, 1999 Shukla was paid

nothing during the pendency of the disciplinary inquiry. He was not paid his salary because he had superannuated. For some reason he was not

paid his pension, perhaps because a departmental inquiry was pending against him. He was also not paid any subsistence allowance during the

period that the disciplinary inquiry was pending and even thereafter till 30th June, 1999. In other words, Shukla was made to face a financial

crunch and presumably, he did not have a fair opportunity of defending himself.

An employee is entitled to subsistence allowance during an inquiry pending against him or her but if that employee is starved of finances by zero

payment, it would be unreasonable to expect the employee to meaningfully participate in a departmental inquiry. Access to justice is a valuable

right available to every person, even to a criminal, and indeed free legal representation is provided even to a criminal. In the case of a departmental

inquiry, the delinquent is at best guilty of a misconduct but that is no ground to deny access to pension (wherever applicable) or subsistence

allowance (wherever applicable). As far as Shukla is concerned he was denied his pension as well as subsistence allowance which prevented him

from effectively participating in the disciplinary inquiry. On this ground as well, the proceedings against Shukla are vitiated.

Finally, we may also draw attention to an unreported decision of this Court in UCO Bank and Ors. v. Prabhakar Sadashiv Karvade, C.A. No.

4725 of 2010 decided on 20th May, 2010. In this decision, the Court considered the provisions of the Regulations that we are concerned with

and held :

The sum and substance of these Regulations is that even though a departmental inquiry instituted against an officer employee before his

retirement can continue even after his retirement, none of the substantive penalties specified in Regulation 4 of 1979 Regulations, which

include dismissal from service, can be imposed on an officer employee after his retirement on attaining the age of superannuation. Therefore,

we have no hesitation to hold that order dated 12.10.2004 passed by the disciplinary authority dismissing the respondent from service, who

had superannuated on 31.12.1993 was ex facie illegal and without jurisdiction and the High Court did not commit any error by setting aside

the same.

We may also make reference to another decision of this Court in UCO Bank and Anr. v. Rajinder Lal Capoor, (2007) 6 SCC 694. This

decision also related to the very same Regulations that we are concerned with.

In dealing with these Regulations, it was observed by the Court in paragraph 22 of the Report as follows:-

The 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 charge-sheet, 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.

Under the circumstances, we have no hesitation in dismissing the appeal filed by the Bank also on the ground that the punishment of dismissal

could not have been imposed on Shukla after his superannuation.

However, we must observe that the learned Single Judge had held against the Bank and the Division Bench also held against the Bank.

Notwithstanding this the Bank preferred this appeal. The appeal was preferred despite at least two decisions delivered by this Court making the

legal position clear. The Bank would have been well-advised to follow the law laid down by this Court rather than unnecessarily litigate against an

employee who has superannuated. We have no doubt that Shukla must have spent a considerable amount in litigation. Accordingly, while

dismissing the appeal, we impose costs of Rs. 1 lakh which will be paid to Shukla within 4 weeks from today towards his legal expenses.