Holding

The cancellation of the offer of appointment was valid because the respondent had not obtained the requisite vigilance clearance, integrity certificate, or a valid discharge from his employer, rendering the High Court's direction erroneous.

Summary

Ashok Dubey, a Canara Bank officer, was selected by the UPSC for the post of Assistant Provident Fund Commissioner and was offered appointment contingent on a valid discharge from his bank, vigilance clearance and an integrity certificate. While his resignation was pending, the bank informed the appointing authority that disciplinary proceedings were ongoing, preventing acceptance of his resignation. Consequently, the appointing authority cancelled the offer. The Patna High Court directed that his resignation be accepted and the appointment granted, without giving the appellant a chance to be heard. On appeal, the Supreme Court held that the cancellation was lawful because the required clearances and a discharge order were absent, and the High Court had erred in its direction. The appeal was allowed, setting aside the High Court judgment.

Issues considered

Whether the cancellation of the offer of appointment was valid in view of pending disciplinary proceedings and lack of vigilance clearance and integrity certificate.
Whether the High Court erred in directing acceptance of the respondent's resignation and appointment without affording the appellant an opportunity to be heard.
Whether the offer of appointment was limited to a nine‑month period and whether that limitation is enforceable.
Whether a No Objection Certificate issued by the bank suffices in lieu of a valid discharge order for appointment.
Whether the appointing authority can lawfully withhold appointment pending completion of disciplinary proceedings and issuance of required clearances.

Subjects

appointmentvigilance clearanceintegrity certificatedisciplinary proceedingsresignationno objection certificatepublic service recruitmentemployees provident fundoffer of appointmentcancellationhigh court error

Judgment

A CENTRAL PROVIDENT FUND COMMISSIONER AND OTHERS
v.
ASHOK DUBEY AND OTHERS

DECEMBER 8, 1992

B L.M.SHARMA
[M.H. KANIA, CJ., S. MOHAN AND S.P. BHARUCHA, JJ.J

Selection for appointment-Post of Assistant Provident Fund commis-
sione~ffer of appointment-Can4idate working in Bank-Not relieved be-
cause of pending departmental proceedings which later culminated in
C punishment-vigilance clearance and integrity certificates not forth-com-
ing--Cancellation of offe1'-Whether valid.

The first respondent was an officer in Canara Bank. He was one of
the candidates recommended by the U.P.S.C. for the post of Assistant
Provident Fund Commissioner in the appellant-organisation. An offer was
D made for the said post and he accepted the same. However, he requested
three months' time for joining as lie had to give 3 months' notice to the
Bank, where he was employed. Thereafter the respondent sent his notice
of resignation and reqµested the Bank for No Objection Certificate to
enable him to join the new post. The a~pellant-Organisation requested the
E Bank to waive the condition of 3 months' notice in respect of the Respon-
dent whose services were urgently required by it. Tht; Respondent was
already found fit on medical examination and his antecedents were cleared
on Police verification. When Vigilance Clearance Certificate was called
from the Bank, it informed the appellant that some disciplinary proceed-
ings initiated against the Respondent were pending and so his resignation
F could not be accepted. Consequently the offer of appointment made to the
Respondent was cancelled.

Aggrieved against the cancellation of the offer of appointment, the
Respondent filed a Writ Petition before the High Court. It was 'directed
G by the High Court that the Respondent's resignation should be accepted,
and he should be permitted to join the new post in the appellant-organisa-
tion. Being aggrieved by the High Court's judgment, the appellant-or-
ganisation preferred the present appeal.

On behalf ofthe appellant it was contended that the Writ Petition was
H disposed of on merits without affording an opportunity to the appellant, that
·428
C.P.F. COMMR v. ASHOK DUBEY 429

the offer of appointment was valid only for a period of9 months; thatthe offer A
of appointment was clear that the Respondent would be allowed to join only
on valid discharge from the Bank; that Vigilance clearance and Integrity
Certificate were absolutely necessary and in the absence of these formalities,
the appellant was justified in cancelling the offer of appointment.

The Respondent contended that since the appellant did not file any B
counter affidavit despite ample opportunity afforded, he could not make
any grievance at this stage; that in view of the appellant's letter informing
the Respondent that his appointment is with held till that final decision is
talcen by the disciplinary authority of the Bank, the appellant was
precluded from cancelling the offer of appointment after the finalisation C
of the disciplinary proceedings; that he was never informed that the offer
of appointment was valid only for 9 months; and that the No Objection
Ce~ificate issued by the Bank was sufficient evidence of the Respondent's
integrity.

Allowing the appeal, this Court D
HELD: 1. It is clear that though the respondent was selected and an
offer of appointment was made as Assistant Provident Fun.d ComQiis-
sioner, because of his failure to obtain vigilance clearance certificate and
the integrity certificate, and in the absence of a relief order from the
employer the appellant was not in a position to issue the order of appoint- E
ment. The High Court had completely misdirected itself in this regard.
(435 C,DJ
(
2.1. Trust and confidence constitute the hallmark of a banking

-
institution. The respondent had been subject to disciplinary proceedings F
and they were pending at that time. The relief order had not been issued
by the Bank. Hence the order cancelling the offer of appointment came to
be passed. The appellant had every right to do so. (435 ·E]

2.2. No doubt subsequently the departmental proceedings had come to G
an end, but the respondent was awarded the punishment of withholding one
increment with cumulative effect as also the recovery of loss caused. to the
Bank. Though his original punishment was later on modified as withholding
of one increment with cumulative effect and no recovery ofloss to be made yet
there is no reason why the appointment order be issued for a Grade I post to
a person who has suffered the penalty from the Bank. Even if the resignation H
430 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A is now accepted or directed to be accepted the appellant need not suffer a·
person who does not have good antecedents. The integrity certificate would
certainly contain this blot of punishment, namely, withholding of one incer-
ment with cumulative effect.
(436 C, E]
B 3. A valid discharge of relief order had not come from the Bank. Time
and again, the respondent was informed of this. While forwarding a copy of
the letter addressed to the Bank dated U.9.90 the respondent was specifical-
ly informed of this. He replied on 16.9.90 that he was taking up the matter for
the early acceptance of his resignation from the Bank. Therefore, he was fully
C aware of the reason for not issuing the order ofappointment. The High Court
was not at ali justified in saying that the respondent was never afforded any
opportunity before the issue of the cancellation order. [435 G, H, 436-A]

4. The No Objection Certificate does not advance the case of the
respondent. Apart from the fact that having been issued at the request of
D the employee, the relief is stated to be subject to the rules and regulations
of the Bank. Hence, even on that day the respondent had not been relieved
from his former employment. [437 B, C]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5284 of
1992.
E
From the Judgment and Order dated 12.9.1991 of the Patna High
Court in C.WJ.C. No. 3050of1991.

D.P. Gupta, Solicitor General, T.C. Sharma and Mrs. Anil Katiyar
for the Appellant.
F
S.B. Upadhyay for the Respondents.

The Judgment of the Court was delivered by

MOHAN, J. Leave granted.
G
Thi.s appeal by special leave is directed agai,nst the judgment and
order dated 12.9.91 of the High Court of Patna in C.W.J.C. 3050 of 1991.

The short facts leading to this appeal are as follows:

H The respondent, Shri Ashok Dubey was an Officer in Canara Bank.
C.P.F. COMMR v. ASHOK uutlEY [MOHAN, J.] 431

He was one of the candidates recommended by the Union Public Service A
Commission by its letter dated 20th June, 1990 for -the post of Assistant
Provident Fund Commissioner in the Employees Provident Fund Organisa-
tion. The scale of pay was Rs.2200-4000. On 25th of June, 1990 an offer of
appointment was made setting out the terms and conditions of appointment.
He was called upon to communicate his acceptance within 15 days from the
date of receipt of the offer of appointment. It was accepted by the respondent B
on 5th of July, 1990. On 11.7.90, the respondent requested the Provident
Fund Department for extension of his joining time for 3 months. This was
because he had to give 3 months' notice to the Bank where he was working,
from which service he had to be relieved after acceptance of his resignation.
He also requested that, should the Provident Fund Department so desire he C
could be allowed to join and the respondent would persuade the Bank to
waive the stipulated period of notice of 3 months.

On 25.6.90, the respondent sent his notice of resig0ation to the
General Manager, Canara Bank. The respondent actually resigned by his
letter dated 10th of July, 1990 and stated that it would be effective from D
6th of September, 1990. He requested the Bank to issue a No Objection
Certificate to enable him to join the post of Assistant Provident Fund
Commissioner. On 26th of July, 1990, the Bank enquired of the respondent
whether any outstanding liability was due to which he replied in the
negative.
E
On 19th July, 1990, the Provident Fund Department (the appellant
herein) requested the Bank to waive the condition of 3 months' notice for
resignation since the services of the respondent were urgently required as
Assistant Provident Fund Commissioner. The respondent was medically
examined and found fit for the post of Assistant Provident Fund Commis- F
sioner. A police verification was made and his antecedents were cleared.

While completing the pre-appointment formalities vigilance
clearance certificate was called from the Canara Bank. Thereupon, the
Bank informed the appellant that some disciplinary proceedings had been
initiated against the respondent and were pending against him. Therefore, G
the Bank was not in a position to accept the resignation of the respondent.
As it came to light, the three memoranda of charges had been issued
against the respondent and the enquiries were in progress, the offer of
appointment was reviewed. On such review, the offer of appointment was
cancelled by a letter dated 8/9.4.91. H
"
432 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A ~- Aggrieved by this cancellation, he moved the High Court of Patna in
-C.W.J.C. No.3050of1991. Even before the counter affidavit could be filed
on behalf of the appellant it was directed by the High Court by the
impugned judgment dated 12th September, 1991 that the respondent would
be '.permitted to join the post of Assistant ProVident Fund Commissioner
since the departmental proceeding was over and there was no financial
B liability any more to be discharged by him. It was further directed that his
resignation submitted to Canara Bank on 25th June, 1990 should be ac-
cepted. On such acceptance, the appointment letter shall be issued afresh
subject to fulfilling the conditions required for that purpose and the
respondent shall fulfill all the requirements which he will be asked to be
C fulfilled. The Bank was directed to supply such necessary documents which
may be required for fulfilling the terms and conditions as envisaged ac-
c:ording to the terms of appointment. It is under these circumstances this
appeal by special leave has come to be preferred.

Lell!ned counsel for the appellant urges the following.
D
The High Court without affording an opportunity to the appellant
disposed of the petition on merits. Had only an opportunity to file counter
been afforded, it could have been brought to the notice of the High Court
that because of the pendency of disciplinary proceedings the resignation of
E the respondent was not accepted. It was for this reason the offer of
appointment was cancelled. It could have also been brought to the notice
of the High Court that the offer of appointment was valid only for a period
of 9 months from the date of the offer.

Where, in the offer of appointment dated 25th June, 1990, it was
F made clear that he would be allowed to join only on the production of valid
discharge certificate from the present employer, in the absence of any such
relief order, the appellant was justified in cancelling the offer of appoint-
ment.

For issuing an order of appointment vigilance clearance and integrity
G certificate are absolutely necessary. Therefore, the Hjgh Court was wrong
in allowing the respondent to join the post during the pendency of discipli-
nary proceedings. In the absence of non-availability of integrity certificate
the appellant was well within his jurisdiction to cancel the offer of appoint-
ment. By a letter dated 12th of September, 1990, the respondent was
H categoriCally informed that unless and until the outcome of the final
I

C.P.F. COMMR v. ASHOK DUBEY [MOHAN, J.] 433

decision pending against him was known the appellant could not issue the A
order of appointment irrespective of 'bis claim that the charges are trivial
of frivolous.

·. When the candidature of the respondent was recommended by the
Union Public Service Commission it was subject to ensuring compliance of
the availability of the viligatice clearance and integrity certificate and B
proper relief ordttr from the present employer. These formalities have not
been complied With at all. Therefore, the order of the High Court Is wholly
unsupportable in law and it requires to the interfered with.

In opposition to this, learned counsel for the respondent would urge
that where the appellant did not file any counter despite ample opportunity C
afford~d he cannot make a grievance now,

The order passed by the High Court is just and proper because the .
departmental proceedings which were of minor nature had come to an end..
Where by a letter dated 28th of August, 1990 it was stated by the appellant D
that the appointment of the respondtmt will be withheld till final decision·
is taken by .disciplinary authority of the Bank, the Department was
precluded from cancelling the appointment after the finalisation of the
disciplinary proceedings.

The respondent was never informed that the offer of appointment E
was valid only for 9 months.

· The present.employer of the respondent had issued a No Objection
Certificate on 7th of October, i991. This certificate was sufficient evidence
of the integritr of the respondent. Hence, there was no impediment in
appointing the respondent. Therefore, 'looked at from any point of view, F
no exception could be taken to the order of the High Court. ·

We Will now proc:..ed to consider the <;0rtectness of the above
submissions made on the respective sides.

A list of 70 candidates was recommended by the Union Public G
Service Commission for appointment to the post of Assistant Provident
Fund Commissioner (Grade I) in Employees Provident Fund Organisation.
The respondent was admittedly one of the candidates so. recommended.
He was offered, by a m~morandum dated 25th of June, 1990 a tempor~
post of Assistant Provident F.un{j Commis$ioner (Grade I) in the H
434 SUPREME COURT REPORTS (1992] SUPP. 3 S.C.R.

A Employees Provident Fund Organisation, a statutory body under the ad-
ministrative control of Ministry of Labour, in: the scale of pay of Rs.2200-
75-2800-EB- 100-4000. The terms of appointment inter alia stated that the
candidate would be allowed to join the post only on production of a valid
discharge certificate from the present employer. This offer of appointment
was accepted by the respondent on 5th of July, 1990. Thereafter, he wrote
B to the appellant that since he was working in Canara Bank he had to resign
his post from the Bank, 3 month~' notice period would be required for
acceptan,ce ofresignation.,It was further stated by him that he had already
·· sent .a notice to the Bank to accept his resignation with effect from 6th
·. September, 1990. Further, it was added that should his services be required
c. even earlier, the appellant might take up the matter with the controlling
authority to have this 3 months' period waived.

The appellant wrote to Canara Bank on 19th of July, 1990 requesting
the Bank to forward the personal file of the respondent containing medical
fitness certificate, police verification certificate and performance assess-
·o ment report in order to enable the appellant to issue the order of appoint-
ment for the post for which he had been selected. The respondent wanted
to know as to what had happened to the issue of appointment order. The
appellant informed on 11th August, 1990 that his integrity certificate from
the Bank was awaited but in the meanwhile he was directed to contact the
E office of the appellant at Patna for medical examination by the Medical
Board. On 12th September, 1990, again the Bank was reminded to take
early action as to the acceptance of the resignation of the respondent which
was getting delayed due to the pendency of disciplinary proceedings against
him a,nd a final decision may be taken at the earliest. .
. F
While forwarding the copy of that letter the respondent was specifi-
. ~y informed that unless and until the. outcome of the final decision was
·· taken by Canara Bank on the disciplinary proceediiigs pending against him
it was not possible for, the appellant to issue the order of appointment
irrespective of his claim· that the· charges were trivial or frivolous.
G
On 28th of August; 1990, the appellant informed the Union Public
Service Commission that because of the pendency of vigilance proceedings
against the respondent and the non-issue of vigilance clearance and in-
tegrity certificate by the Head Office of Canara Bank at.Bangalore, it had
H been decided to withhold the appointment of the individual till final
•
C.P.F. COMMR v. ASHOK DUBEY [MOHAN; J.] 435

conclusion of the decision being t•~ken by the disciplinary authority, · A

Then comes the ultimate letter dated 8/9.4.91 in which the stand of
the appellant is reiterated, namely, that Canara Bank,. the present employer
of the respondent. had intimated .to the office of the appellant that some
disciplinary proceedings have been initiated/pending against him and hence
his resignation had not been accepted. In the previous letter dated B
27.2.1991 also it had been stated by the Bank that the inquiry in respe.ct of
some charge-sheets had not been· completed. It is U.nder these ciicum.stan-
ces the offer of ~ppointment was cancelled: < ·
. /'
From the above nai:ratfon, it is dear that though the respondent was . C
selecied and an, .offer of app~intme~t wa~ made as Assistant Provident
Fund Commissio~i:; ~ec,apseof the failure to obtain' a~ance clearance
certificate and the integrity certificate, the ~PP€?llant·w~.not in a pos~tion
to issue order of .appointment in. the absence of a .relief order from the·
employer of the 'respondent. We are of the view that the High Court had D
completely misdirected itself fu passing the impugned order. ~. ..

Trust and c0nfidence eonstitute the hallni'ark of a banking institutio~.
The respondent had been subject to disciplinary proceedings and they were
pending at that time. The relief order had not. been issued by the Bank.
Hence the impugned ·order came· to be passed. The appellant had every E
right to do so. In 'this connection it is ·worthwhile to remember that in the
terms of offer of appointment. it was categorically stated that:

"The candidate will be allowed to join the post only on
production of valid discharge certificate from the present
F
employer."

In the instant case, a valid discharge or relief order had not come
from the Bank. Time and ~gain, the respondent was informed of this. We
have already seen in the narration of facts that while forwarding a copy of
the letter addreS5ed to the Bank dated 12.9.90 the respondent was specifi- G
cally informed of this. He replied on 16.9.90 that he was taking up the
matter for the early acceptance of his resignation from the Bank. There-
fore, he was fully aware of the reason for not having been issued an order
of appointment. Therefore, the High Court was not at all justified in saying

-
the the respondent was never afforded any opportunity before the issue of H
436 SUPREME COURT REPORTS· (1992) SUPP. 3 S.C.R.

A the cancellation order dated 8/9.4.91. Even assuming that an opportunity
is to be.afforded, what is the purpqse? It was not the case of the respondent
that there were no disdplinary proceedings pending against him. His only
case was that the charges were .trivial or frivolous in nature.. Irrespective of
the nature of charges the relief order from.the Bank was not forthcoming.
_B The vigilance certificate and integrity certificate were ~ot made available
by tlie respondent. Therefore, the appellant could not issue the order of.
appointment: The matter is simple enough;

1:'he -second reasoning of the impugned judgment sounds strange,
namely, that the departmental proceedings against the respondent had
C come to an· end and there was rto financial liability any more to be
discharged by him. No doubt the departmental proceedings had come to
art end, but, with what result? The respondent was awarded the punishment
of withholding one increment with cumulative effect as also the recovery
of loss caused to the Bank. Though his original punismnent was later on
D modified as withholding of one increment with cumulative effect and no
recovery~ loss to be made yet, sholild the <l:ppointment order be issued
for a Grade I post for a person who h~ suffered penalty from the Bank?
That is the most important aspect which has to be borne in mind. Even if
the resignation is now accepted or directed to be accepted why should the
E appellant suffer a person who. does not have good antecedents? How then
could a fresh appointment letter be issued su~ject to fulfilling the condi-
tions required for the purpose? Certainly, the requirement· in relation to
integrity certificate will contain this blot of punishment, namely, withhold-
ing of one increment with cumulative effect.

F
. Much was made of the fact that on 7th October, 1991 No Objection
Certificate was issued. That certificate reads: . · -

. . "' .
"This is to certify that Sri Ashok Dubey {43936) Officer,
presently working at Customer Service Section, Circle Of-
G fice, Patna, has been in the services of the Bank since 16.-11-
1983..

This certificate is jssued a~ the request of the employee for ·
the purpose of joining to the post of Assistant Provident
H Fund .Commissioner in your organisation..
..
,,.
7
C.P.F. COMMR v. ASHOK DUBEY [MOHAN, J.] 437

However, his relief will be subject to rules and regulations A
of the Bank. ·

sd/-
. For Deputy General Manager"

This certificate in our considered opinion does not advance the case B
of the respondent. Apart from the fact that having been issued at the
re.quest of the employee, the relief is stated to be subject to the rules and
-regulations of the Bank. Hence even on· that day the. respondent had not
1

been relieved from his former employment. There is still that umbilical
cord. Thus, looked at from any point of view the judgment of the High
Court is wholly unsupportable in law and betrays a lack of comprehension C
of the entire factual background. Since we have decided the case on merit
we are not going to the other questions whether the appellant had an
.opportunity to meet the case effectively in the Hig~ Court by· filing a
counter or again whether offer of appointment would enure only for a
period of 9 months. · D
In the result, we have no hesitation in setting aside the impugned
judgment and allowing the appeal. Accordingly the appeal will stand
allowed with costs.

G.N. Appeal allowed.