JAGDISH LAL GAMBHIRversusPUNJAB NATIONAL BANK & ORS.

                   [2015] 12 S.C.R. 435


               JAGDISH LAL GAMBHIR                             A
                              v.
            PUNJAB NATIONAL BANK & ORS.
              (Civil Appeal No. 6975 of 2009)
                                                                B
                     OCTOBER 6, 2015
     [MADAN B. LOKUR AND R.K. AGRAWAL, JJ.]

      Service Law- Dismissal- Tran sfer of official (Assistant
General Manager) of one Bank to another Bank, on                c
amalgamation of the two Banks~ The transferred official was·
placed as a Scale Ill officer in the transferee Bank- Initiation
of departmental proceedings against the official by the
transferee Bank - Charge-sheet issued by the Assistant
General Manager of the tra_nsferee Bank ~ Subsequently D
dismissal from service - Dismissal whether vitiated - Held:
The charge-sheet was issued as per the rules and regulation
of the transferee Bank and the same would be applicable to
the transferred official - The transferee Bank was justified in
initiating disciplinary proceedings in respect of alleged E
irregular transaction because the erstwhile Bank could not
take any decision in respect of the alleged irregularity, due
to amalgamation of the Banks - Thus, the dismissal order
was not vitiated - Punjab National Bank Officer Employees
(Discipline and Appeal Regulations), 1977.                       F

       Dismissing the appeal, the Court

     HELD: 1. The admitted position is that the appellant
was a Scale-Ill officer in the respondent/transferee Bank G
while the rank of the Assistant General Manager in the
respondent Bank is Scale-V. The appellant could only
have been placed in Scale-Ill in terms of his
responsibilities and keeping in mind the corresponding
                                                                H
                             435
436      SUPREME COURT REPORTS              [2015] 12 S.C.R.

A scale upon the amalgamation of the erstwhile Bank with
  the respondent Bank. [Para 23] [444-C]

        2. There is no allegation by the appellant that he
  was either reduced in rank or that his placement was
B incorrect or any similar grievance. That being the
  position, the appellant cannot contend that his
  placement in the respondent Bank was erroneous and
  therefore the issuance of the charge-sheet by the
  Assistant General Manager in the respondent Bank was
C vitiated in any manner. [Para 24] [444-G-H]

        3. The rules applicable to the appellant were the
  Punjab National Bank Officer Employees (Discipline and
  Appeal) Regulations, 1977. In terms of these Regulations,
o the disciplinary authority of the appellant was the
  Assistant General Manager (P). That being the position,
  merely because the appellant was an Assistant General
  Manager in the erstwhile Bank does not mean that the
  Regulations of 1977 would not be applicable to him or
E that the Assistant General Manager (P) in the respondent-
  Ban k could not have issued a charge-sheet. The
  appellant became an employee of the respondent Bank
  and was subject to the discipline of all its rules and
  regulations, including those pertaining to misconduct.
F [Paras 25 and 27] [445-A-C; F]

       4. It cannot be said that the allegations against the
  appellant had already been inquired into by the erstwhile
  Bank and therefore the respondent-Bank could not
G reopen issues relating to the alleged misconduct and
  hold an inquiry into them. There were a large number of
  transactions which were alleged to be irregular and in
  which the appellant was said to be involved. The
  appellant has not pointed out which were the
H
JAGDISH LAL GAMBHIR v. PUNJAB NATIONAL BANK &              437
                    ORS.

transactions which were the subject matter of concern A
in the erstwhile Bank and which were the transactions
which were the subject matter of inquiry by the
respondent-Bank. It is the admitted position that in
respect of one alleged irregular transaction, the erstwhile
Bank could not take any der.ision one way or the other B
due to the amalgamation of that Bank with the
respondent-Bank. [Para 28] [445-G-H; 446-A,C,E]

     Chairman, Canara Bank, Bangalore v. M. S. Jasra
     (1992) 2 SCC 484: 1992 (2) SCR 68- relied on.         C

     K. I. Shephard v. Union of India (1987) 4 SCC 431:
     1988 (1) SCR 188 ; Union of India v. Mohd.
     Ramzan Khan(1991) 1SCC588:1990 (3) Suppl.
     SCR 248; Managing Director, ECIL v. B.                D
     Karunakar (1993) 4 SCC 727: 1993 (2) Suppl.
     SCR 576 - referred to.

                    Case Law Reference

1988 (1) SCR 188                 referred to.    Para 4    E

1990 (3) Suppl. SCR 248         referred to.     Para 13

1993 (2) Suppl. SCR 576         referred to.     Para 13
                                                           F
1992 (2) SCR 68                 relied on.       Para 26

     CIVIL APPELLATE JURISDICTION: Civil Appeal No.
6975 of 2009

     ·Fram the Judgment and Order dated 24. 07 .2006 of the G
High Court at Calcutta in F. M.A. No. 388 of 2001

     Dinesh Dwivedi, Bhaskar Prasad Gupta, Rajesh Kumar,
Gaurav Kumar Singh, Rakesh Chaurasiya (for Mitter & Mitter
Co.), K. K. Mohan, Krishnan Mishra, Manish Shankar H
438            SUPREME COURT REPORTS              [2015] 12 S.C.R.


A Srivastava, Nishant Singh, Dipak Kumar Jena, Minakshi Ghosh
  Jena, P. P. Nayak for the appearing parties.

              The Judgment of the Court was delivered by

B           MADAN B. LOKUR, J. 1. This appeal is directed against
      the judgment and order dated 24 1h July, 2006 passed by the
      Division Bench of the High Court at Calcutta in FMA No.388
      of 2001.

         2. The issue for consideration is whether the termination
C of the services of the appellant Gambhir was in any manner
  vitiated. In our opinion, the question requires to be answered
  in the negative and we uphold the judgment and order of the
  Division Bench confirming the dismissal of the writ petition
D filed by Gambhir.

         3. Gambhir was working as an Assistant General
  Manager in the Hindustan Commercial Bank Limited. This
  bank was amalgamated with the Punjab National Bank on 191h
  December, 1986. On amalgamation, the services of 28 or 29
E officials of the Hindustan Commercial Bank including Gambhir
  were not taken over by the Punjab National Bank (for short the
  'PNB'). It may be stated that two other banks were similarly
  amalgamated with the Canara Bank and the State Bank of
F India, but we are not concerned with them.

        4. Several officers whose services were not taken over
  by the PNB and other banks filed a writ petition in this Court
  under Article 32 of the Constitution challenging the failure of
  the transferee banks in not taking over their services. This
G Court decided the writ petition and the decision is reported as
  K.I. Shephard v. Union of lndia 1. It was held by this Court
  that the transferee banks could not refuse to take over the


H     1
          (1987) 4 sec 431
JAGDISH LAL GAMBHIR v. PUNJAB NATIONAL BANK & 439
           ORS. [MADAN B. LOKUR, J.]

services of the officials of the transferor banks. Consequently, A
the PNB was obliged to take over the officials of the Hindustan
Commercial Bank including Gambhir. It was also directed if
there was any necessity of initiating disciplinary proceedings
against any of the transferred employees, the transferee banks
including PNB were at liberty to do so.                          B

       5. As far as Gambhir is concerned, while he was working
with the Hindustan Commercial Bank, he was issued a cliarge-
sheet on 3rd February, 1983 alleging irregularities in sanctioning
of loans to the customers of the bank and a failure to take C
follow up steps. Gambhir replied to the charge-sheet and was
thereafter administered a 'caution' and was asked to be more
discreet in respect of granting advances and management of
credit portfolio. Thereafter in 1986 another set of allegations
were made against Gambhir but no final pecision was taken D
by the Hindustan Commercial Bank until its amalgamation with
thePNB.

      6. In view of the above, the PNB issued a charge-sheet
to Gambhir on 281h November, 1987 in which it was alleged        E
that he had deliberately flouted the bank lending norms and
accommodated some parties unauthorisedly thereby putting
huge funds of the bank at stake.

      7. Feeling aggrieved by the initiation of departmental F
proceedings against him, Gambhir preferred W.P. (C) No. 121
of 1988 in this Court under Article 32 of the Constitution. By
an order dated 22nd April, 1988 this Court declined to entertain
the writ petition but expressed the view that the inquiry against
Gambhir should be completed quickly. Thereafter, the inquiry G
was conducted and by a report dated 22nd September, 1988
the Inquiry Officer held that the charges against Gambhir were
proved and that he had failed to discharge his duties with
utmost integrity, honest devotion and diligence thereby putting.
huge funds of the bank at stake.                                  H
440          SUPREME COURT REPORTS                  [2015] 12 S.C.R.


A           8. In the meanwhile, Gambhir preferred a writ petition in
      the Calcutta High Court being C.M.No.11992 (W) of 1988
      challenging the charge-sheet issued to him and the inquiry
      proceedings.
B         9. It appears that during the pendency of the writ petition
      Gambhir was dismissed from service with effect from 2nd
      August, 1989.
            10. Be that as it may the writ petition was dismissed by
      the learned Single Judge by judgment and order dated 71h
C     December, 2000.

              11. Before the learned Single Judge, Gambhir raised
      three contentions. It was firstly contended that the charge-sheet
      was issued to him by an' officer of the same rank, that is, an
D     Assistant General Maoager and this was not permissible in
      law. Therefore, since the issuance of the charge-sheet was
      itself vitiated the entire departmental proceedings against him
      were null and void. The learned Single Judge rejected this
      contention by Feferring to Clause 12 of the scheme of
E     amalgamation whereby the PNB was entitled to classify and
      categorize the employees of the Hindustan Commercial Bank
      whose services were,being taken over. As far as Gambhir is
      concerned, even though he may have been an Assistant
      General Manager in the Hindustan Commercial Bank, he was
F     placed as a Scale-Ill officer in the PNB. This is an admitted
      position and Gambhir did not make any grievance about this
      at any stage. The charge-sheet was no doubt issued by an
      Assistant General Manager of the PNB but he was placed
      higher than a Scale-Ill officer in the hierarchy and under the
G     Punjab National Bank Officer Employees (Discipline and
      Appeal Regulations), 1977 the Assistant General Manager
      was the disciplinary authority for officers placed in Scale-I II.

        12. The second contention urged by Gambhirwas that
H the allegations against him were already the subject matter of
    JAGDISH LAL GAMBHIR v. PUNJAB NATIONAL BANK &                441
               ORS. [MADAN B. LOKUR, J.]

an inquiry by the Hindustan Commercial Bank and thus could A
not be reopened by the PNB merely because of a change of
employer. This contention was also rejected by the learned
Single Judge holding that what was sought from Gambhir by
the Hindustan Commercial Ban~ was an explanation with regard
to certain transactions which indicated an irregular conduct B
on his part. However, no formal disciplinary proceedings had
been initiated against Gambhir and that did not preclude the
PNB from looking into those alleged irregularities and holding
a formal inquiry into them.
                                                                 c
      13. The third contention urged by Gambhir before the
learned Single Judge was that Inquiry Report was not supplied
to him before his dismissal with effect from 2°d August, 1989.
This contention was rejected by the learned Single Judge by
holding that the requirement of supplying the Inquiry Report D
arose out of a decision of this Court in Union ofIndia v. Mohd.
Ramzan Khan 2• However that decision was rendered by this
Court (on 2Q1h November, 1990) after Gambhir was dismissed
from his service. That decision had only prospective effect.
Subsequently, the Constitution Bench in Managing Director, E
ECIL v. B. Karunakar3 made it clear that orders of
punishment passed prior to the decision in Mohd. Ramzan
Khan without furnishing the report of the Inquiry Officer should
not be disturbed. Therefore, Gambhir had no right to a copy F
of the Inquiry Report prior to his dismissal.

      14. At this stage it may be mentioned that Gambhir has
not challenged the merits of the inquiry at any stage or the
punishment awarded to him. In that sense Gambhir was not
prejudiced by the failure to supply him with a copy of the Inquiry G
Report.

2
    (1991) 1 sec 588
' (1993) 4 sec 727                                                H
442         SUPREME COURT REPORTS                  [2015] 12 S.C.R.


A          15. Feeling aggrieved by the decision rendered by the
      learned Single Judge, Gambhir preferred an appeal before
      the Division Bench but that was dismissed by the impugned
      judgment and order dated 241h July, 2006.

B           16. Before the Division Bench Gambhir raised five
      contentions. These were noted by the Division Bench as
      follows:-

           "(i) Gambhir was entitled to be appointed in terms of the
c          order of the Apex Court in K.I. Shephard (supra). He
           was to be fitted in the appropriate post which he was
           holding earlier which was not done.

           (ii) The disciplinary authority who issued the charge-sheet
           was nor properly authorized to act as such under the
D
           service rules.

          (iii) No copy of the inquiry report was given to him. As a
          result he could not defend himself in the proceeding by
          offering his explanation to the disciplinary authority .
E         pointing out the illegality and irregularity crept in the
          enquiry report.

           (iv) No second show cause notice was issued to him.

F         (v) The charges were stale and could not be proceeded
          with."

          17. As far as the first contention is concerned it has
  already been mentioned that Gambhir was posted as a Scale-
G Ill officer in the PNB upon the amalgamation of the Hindustan
  Commercial Bank with the PNB. No grievance was made by
  Gambhir at any point of time regarding his placement. The
  Division Bench therefore rejected his contention and held that
  he was appropriately placed in the PNB as a Scale-Ill officer.
H The Division Bench held that that apart since the Hindustan
JAGDISH LAL GAMBHIR v. PUNJAB NATIONAL BANK &                      443
           ORS. [MADAN B. LOKUR, J.]

Commercial Bank was a much smaller bank than the PNB, A
Gambhir's designation as an Assistant General Manager in
the Hindustan Commercial Bank could not be equated with
the corresponding designation in the PNB. In any event, there
was no loss of pay as far as Gambhir was concerned.
                                                                B
      18. The second contention urged by Gambhir was also
rejected by the Division Bench relying principally upon the
decision of the learned Single Judge. Additionally, it was held
that when Gambhir preferred W.P.(C) No. 121 of 1988 in this
Court, it was observed that the inquiry against Gambhir should c
be expedited. The Division Bench was of the view that this
was an indication that this Court did not find any procedural
irregularity in the issuance of the charge-sheet against
Gambhir.
                                                                D
      19. The third contention urged by Gambhirwas rejected
in view of the decisions rendered in Mohd. Ramzan Khan
and Karunakar. Additionally, it was noted that Gambhir had
been supplied with a copy of the Inquiry Report but had not
raised any issue on the merits of the allegations made against E
him and the findings arrived at by the Inquiry Officer.

     20. The fourth contention was also rejected by the Division
Bench on the ground that there was no requirement of issuing
a second show cause notice to Gambhir.                             F

      21. The last contention urged by Gambhir was also
rejected since the PNB was entitled to look into any final
irregularity committed by the employees of the Hindustan
Commercial Bank whose services were taken over by the PNB. G
                                                                         .,
On this basis, the Division Bench dismissed Gambhir's appeal
by the impugned judgment and order dated 241h July, 2006. It
is under these circumstances that Gambhir is now before us.

     22. The contentions urged by learned counsel for Gambhir
                                                                   H
444       SUPREME COURT REPORTS                 [2015] 12 S.C.R.


A are merely repetitions of the contentions urged either before
  the learned Single Judge or before the Division Bench of the
  High Court.

        23. As far as the principal ground urged by learned
B counsel that the charge-sheet could not have been issued to
  Gambhir by the Assistant General Manager in the PNB is
  concerned, we find no merit in the contention. The admitted
  position is that Gambhirwas a Scale-Ill officer in the PNB while
  the rank of the Assistant General Manager in the PNB is Scale-
C V. Gambhir could only have been placed in Scale-Ill in terms
  of his responsibilities and keeping in mind the corresponding
  scale upon the amalgamation of the Hindustan Commercial
  Bank with the PNB. Clause 12 of the scheme of amalgamation
  as sanctioned by the Government of India clearly states as
D follows:-

         "The transferee bank shall, on the expiry of a period not
         longer than three years from the date on which this
         scheme is sanctioned, pay or grant to the employees of
E        the transferor bank the same remuneration and the same
         terms and conditions of service as are applicable to the
         employees of corresponding rank or status of the
         transferee bank subject to the ·qualifications and
         experience of the said employees of the transferor bank
F        being the same as or equivalent to those of such other
         employees of the transferee bank."

         24. There is no allegation by Gambhir at any point of
  time that he was either reduced in rank or that his placement
G was incorrect or any similar grievance. That being the position,
  it is now too late in the day for Gambhir to contend that his
  placement in the PNB was erroneous and therefore the
  issuance of the charge-sheet by the Assistant General Manager
  in the PNB was vitiated in any manner.
H
JAGDISH LAL GAMBHIR v. PUNJAB NATIONAL BANK &                       445
           ORS. [MADAN B. LOKUR, J.]

       25. We are in agreement with the view of the High Court A
that the rules applicable to Gambhir were the Punjab National
Bank Officer Employees (Discipline and Appeal) Regulations,
1977. In terms of these Regulations, as discussed by the High
Court, the disciplinary authority of Gambhir was the Assistant
General Manager (P). That being the position, merely because B
Gambhir was an Assistant General Manager in the Hindustan
Commercial Bank does not mean that the Regulations of 1977
would not be applicable to him or that the Assistant General
Manager (P) in the PNB could not have issued a charge-sheet
to Gambhir.                                                    C

       26. At this stage, it may be mentioned that in Chairman,
Canara Bank, Bangalore v. M.S. Jasra 4 an employee of the
Lakshmi Commercial Bank (which had amalgamated with.
Canara Bank at the same time when Hindustan Commercial D
Bank amalgamated with the PNB) the contention of the
employee was that the age of retirement (60 years) in Lakshmi
Commercial Bank could not be varied to his disadvantage (58
years) on the amalgamation of that Bank with the Canara Bank.
This contention was rejected by holding that the employee E
became an employee of the Canara Bank and was, therefore,
entitled to the rights given to employees of the Canara Bank.

      27. Applying this principle to the facts of this case, it is
clear that Gambhir became an employee of the PNB and was F
subject to the discipline of all its rules and regulations, including ·
those pertaining to misconduct.

      28. It is also contended that the allegations against
Gambhir had already been inquired into by the Hindustan G
Con1mercial Bank and therefore the PNB could not reopen
issues relating to the alleged misconduct and hold an inquiry
into them. We do not find any merit in this submission also.

• (1992) 2   sec 484                                                 H
446          SUPREME COURT REPORTS               [2015] 12 S.C.R.

A There were a large number of transactions which were alleged
  to be irregular and in which Gambhir was said to be involved.
  It.is possible that there may have been an overlap in respect
  of some of them (although no such overlap has been shown to
  us) but that is not an indication that the alleged irregularities
B committed by Gambhir in respect of other transactions were
  condoned. In fact, Gambhir has not pointed out which were
  the transactions which were the subject matter of concern in
  the Hindustan Commercial Bank and which were the
  transactions which were the subject matter of inquiry by the
C PNB. This would have certainly given us a far clearer picture.

        However, on a random consideration of the allegations
  made, it does appear that there were certain transactions
  particularly the transactions pertaining to R.K. Tandon & Co.
D which were not inquired into by the Hindustan Commercial
  Bank. It may be recalled that it is the admitted position that in
  respect of one alleged irregular transaction, the Hindustan
  Commercial Bank could not take any decision one way or the
  other due to the amalgamation of that Bank with the PNB. We
E have not found any duplication in the allegations and are not
  inclined to carry out any investigation in this regard at this
  stage.

          29. In view of the above, we find no reason to interfere
F · with both the judgments delivered by the Calcutta High Court.
    The appeal is dismissed.

      Kalpana K. Tripathy                          Appeal dismissed.