STATE BANK OF INDIA AND ORS.versusD.C. AGGARWAL AND ANR.

A                    STATE BANK OF INDIA AND ORS.
                                  v.
                        D.C. AGGARWAL AND ANR.

                               OCTOBER 13, 1992'
B
             {S. RATNAVEL PANDIAN AND R.M. SAHAI, JJ.)

          State Bank of lnditi (S11pel'l'isory Staff) Service RulerRu/e 50(5) and
    52.

C        Service Lilw: Employee-Chmge-shm-£~dalion of
  Central Vigil1111ce Comlllission-lleliance by Disciplinary Authority-But
  tklinquelll employee not S11pplied repott of Cen11111 Vigilance Commissi~
  lmposidon ofpunishment-'£/fect of-Held Discip/intuy Authority cannot act
  on material neither shown 110r supplied to delinquent employee-Re/ianr.e on
D such matelifll held violadve ofprocedural saf~ and contrary to fair and
  just enquiry.

          The respondent, a Bank Olllcer, was dlarp-sheetc4. The Eaqulry
    Ollker recommended that the respondent shoukl be _.-ated as Diiiy
    two charges were round to be proved against him aad they too were minor
E   and of procedural nature. However, the Enquiry Ollker rorwankd Its
    Report to the Ceutral Vigilance Commlssloo which disagreed with the
    Enquiry ont<er and found many charges proved and accordiDllY advised
    lmposldon of major penalty. 'The Disciplinary Authority agmcl on each
    cfuuile which the Central Vigilante Commission had round against the
F   respondent but disagreed on the quantum or punlshllletlt. Accordlngly, It
    passed an order against the respondent. Respondent's departmental ap-
    peal qi>lnst this order was dismissed. However· oa appeal, the order was
    quashed by a Single Judge of the Pnnjab & ffarJana HIP Court oa the
    llfODlld the It was In vloladon or the principles or audi alteram paitem
    Inasmuch as the report or the Centnll Vigilance Commission relied on by
G   tile Disciplinary ·Authority was not supplied to the respondents. 'The
    Dlvlllon Bench dismissed the Bank's appeal summarily.

         In the Bank's appeal to this Court on the quesdon whether the
   Disciplinary Authority, while lmposiug punlsbllletlt, can act on material
H' which Is neither supplied nor shown to the delinquent employee.
                                        956
               STATE BANK v. O.C.AGGARWAL[SAIW,J.]                      957

        Dismissing the appeal, this Court,                                     A
      HELD : 1. Imposition or punishment to an employee, on material
which Is not only not supplied but not disclosed to him, has not been
countenanced by this Court. Procedural fairness Is as much essence of
right aild liberty as the substanti\>e law Itself. (959-G]
                                                                               B
      2, 'lbe _order is vitiated not because or mechanical exercise of power
or ror non·supply or the Inquiry report but for relying aud acting on
material which was not only lrrelewnt but could not have been looked Into.
Purpose of supplying document Is to contest Its veracity or give explana;
lion. Non-supply of eve recommendation which was prepared behind the           C
back or respondent. without bis partlclpatloo,. and one does not know on
what material which was not only sent to the Disciplinary Authority but
was examined and relied, was. certainly violative of procedural safeguard
and contrary to fair and Just enquiry. (960 E-F)

      3. Taking action against an employee on confidential document            D
wblch Is the fonndatlon of order exhibits complete misapprehension about
the procedure that Is required lo be (oliowed by the Discjpllnary Authority.
May be that the Dlsdpll•ry Authority bas recorded Its own Dodlngs and
II may be coincidental that reasoning and basis or returning the finding or
guilt are same u In the eve report bat It being a material obtained behind
back or die respondent without bis knowledge or supplying of any copy to E
him the High Court did not commit aay error In quashing the order.
                                                         (960-H, 961 A-BJ
        CML APPELLATE JURISDICTION : Civil Appeal No.4213 of
1992.
                                                                               F
     From the Judgment and Order dated 15.5.19'.11 of the Punjab and
Haryana High Court in L.P.A. No.443 of 19'.11.

     Altaf Ahmad, Addi. Solicitor General and A. V. Rangam for the
Appellants.
                                                                               G
        Respondent appeared in person.

        The Judgment of the Court was delivered by

      R.M. SARAI, J. Can Disciplinary Authority while imposing punish-
ment, major or minor, act on material which is neither supplied nor shown H
    958                   SUPREME COURT REPORTS [1992] SUPP. 1 S.C.R.

A to the delinquent is the only issue, of substance, which arises for considera- .
    lion in this ~ppeal, filed by the State Bank of India against the judgment
    and order of the High Court of Punjab and Haryana.

         Even though more than ten years have elapsed since the respondent
  was charge sheeted the proceedings have not achieved finality as yet.
B Partial responsibility for the delay was of the respondent, as well, who on
  every minor issue rushed to the courts including this Court. At one stage
  the inquiry had been closed ex-parte against him. But it was directed to be
  re-opened by this Court in 1984 with direction to contitiue it from the stage
  it was closed and permission to the bank to produce material including
C examination of witnesses subject to cross examination. The Court further
  directed the Central Vigilance Commission to appoint another Inquiry
  Officer. In pursuance of this direction an IAS officer of the Tamil Nadu
  cadre was appointed. Out of the thirteen charges framed against the
  respondent the Inquiry Officer found charges I(l) and II(l) only to have
D been proved. Remaining were found not to have been proved. Consequent-
  ly the Inquiry Officer recommended for exonerating the resp~ndent as the
  charge found to be proved were minor and of procedural natural. Instead
  of acting on this recommendation the Bank appears to have directed the
  Inquiry Officer to submit the report through the CVC. Under what
  provision this was done is not clear. In fact at one stage the learned
E Additional SoliCitor General stated that the Bank itself was aggrieved by
  this conduct of the Inquiry Officer in sending its recommendation to CVC.
  But it appears he was not properly instructed as the finding, recorded by
  the High Court that the inquiry Officer submitted his report to the CVC
  on the direction of the Bank in contravention of the order passed by this
  Court remained uncontroverted. From rule 52 of the State Bank of India
F
  (Supervisory Staff) Service Rules part of Chapter VI dealing with Dis-
  cipline and Appeal it does appear that the Bank is empowered, 'to consult
  the Central Vigilance Commission, wherever necessary, in respect of all
  disciplinary cases having vigilance angle'. The fact of the matter is that the
  CVC examined the inquiry report and recorded its own findings on each
G of the charges and sent its recommendations running into nearly fifty pages
  to the Bank. The CVC not only disagreed with the Inquiry Officer and
  found charges I, II, Ill, IV, VIII, XI to XIII to have been proved, but it
  advised, 'imposition of a major penalty not less than removal from service'.

H         Both the Inquiry Report and recommendations of the CVC were sent
              STATE BANK v. D.C. AGGARWAL [SAHA!, J.]                  959

  to the Disciplinary Authority who passed an elaborate order recording A
. finding against the respondent, and coincidentaliy, agreeing on each charge
  on which eve had found against him but disagreeing on quantum of
  punishment. It was observed:

         "While the wrongful acts indulged in by the oflki:il are no
         doubt grave, the facts brought out during the enquiry do            B
         not show that bank sustained any monetary loss thereby.
         There is- also no conclusive proof that the official in all
         the transactions for procurement of steel, fans, etc. had
         misappropriated bank's funds or obtained pecuniary gains
         for himself. Considering the totality of the circumstances,         C
         therefore, in my opinion the imposition of the extreme
         penalty of cessation of service as advised by the Central
         Vigilance Commission would be too harsh."

 The departmental appeal against that order was die.missed. But the order
 was quashed by the learned Single Judge of the High Court, as it was in     D
 violation of the principle of audi alteram paltem It was found that the
 report of the eve having not been supplied to the respondent it could not
 furnish basis for the order passed by the Disciplinary Authority. Punish-
 ment was also found to be disproportionate. The Division Bench dismissed
 the appeal summarily.                                                       E

         Although correctness of the order passed by the High Court was
 assailed from various aspects, including the power of the High Court to
 interfere on quantum of punishment, in writ jurisdiction, but we propose
 to confine only to the question of effect of non-supply of eve recommen-
 dations as if the order was invalid and void on this score only it is not F
 necessary to decide any other issue. Law on natural justice is so well settle
 for series of decisions of this Court that it leaves one bewildered, at times,
 that such bodies _like State Bank of India, who are assisted by hierarchy of
 law officers, commit such basic and fundamental procedural errors that
 courts are left with no option except to set aside such orders. Imposition G
 of punishment to an employee, on material which is not only not snpplied
 but not disclosed to him, has not been countenanced by this Court. Proce-
 dural fairness is as much essence of right and liberty as the substantive law
 itself.

       Reliance was placed on Sub-rule 5 of Rule 50 which reads as under:    H
                            SUPREME COURT REPORTS [1992) SUP!>. 1 S.C.R.

 A             '(5) Orders made by the Disciplinary Authority or the
               Appointing Authority as the case may be under sub-rules
               (3) and (4) shall be communicated to the employee con-
               cerned, who shall also be supplied witb a copy of the
               report of inquiry, if any.'
 B
      It was urged that copy of the inquiry report having been supplied to the
      respondent the rule was complied with and the High Court committed an
      error in coming to conclusion that principle of natural justice was violated.
      Learned Additional Solicitor General urged that the principle of natural
      justice having been incorporated and the same having been observed the
· C Court was not justified in misinterpreting the rule. The learned counsel
      urged that the Bank was very fair to the r~spondent and the Disciplinary
      Authority after application of mind and careful ·analysis of the material on
      record on its own evaluation, uninfluenced by the CVC recommendation
      passed the order. It was emphasised that if the exercise would have been
  D mechanical thi: Disciplinary Authority would not have disagreed with CVC
      recommendations on punishment. Learned counsel submitted that, in any
      case, the Disciplinary Authority having passed detailed order discussing
      every material on record and the respondent having filed aJ>Peal there was
      no prejudice caused to him. None of these submissic;ns are of any help.
      The order is vitiated not because of mechanical exercise of power or for
  E non-supply of the inquiry report but for relying and acting on material
      which was not only irrelevant but could not have been looked into. Purpose
      of supplying document is to contest its veracity or give explanation. Effect
      of non-supply of the report of Inquiry Officer before imposition of punish-
      ment need not be gone into nor it is necessary to consider validity of rule
  F . 5. But non-supply of CVC recommendation which was prepared behind
      the back of respondent without his participation, and one does not know
    . on what material which was not only sent to the Disciplinary Authority but
      was examined and relied, was certainly violative of procedural safeguard
      and contrary to fair and just inquiry. From letter produced by the respon-
      dent, the authenticity of which has been verified by the learned Additional
  G Solicitor General, it appears the Bank turned down the request of the
      respondent for a copy of eve recommendation as, 'The l:Orrespondence
      with the Central Vigilance Commission is a privileged communication and
      cannot be forwarded as the order passed by the Appointing Authority deals
      with the recommendation to the CVC which is considered sufficient'.
  H Taking action against as employee on confidential document which is the
              STATE BANK v. D.C.AGGARWAL[SAHA!,J.]                     961

foundation of order exhibits complete misapprehension about the proce- A
dure that is required to be followed by the Disciplinary Authority. May be
that the Disiciplinary Authority has recorded its own findings and it may
be coincidental that the reasoning and basis of returning the finding of guilt
are same as in the eve report but it being a material obtained behind back
of the respondent without his knowledge or supplying of any copy to him B
the High Court in our opinion did not commit any error in quashing the
order. Non- supply of the Vigilance report was one of the ground taken in
appeal. But that was so because the respondent prior to service of the
order passed by the Disciplinary Authority did not have any occasion to
know that eve had submitted some report against him. The submission
of the learned Addi. Solicitor General that CVC recommendations are C
confidential copy, of which, could not be supplied cannot be accepted.
Recommendations of Vigilance prior to. initiation of proceedings are dif-
ferent that eve recommendation which was the basis of the order passed
by the Disciplinary Authority.

      Even the submission of non prejudice is not well founded. The D
respondent was a very senior officer of the bank. He was promoted to the
top executive grade in August 1980. We have refrained from entering into
merits but once the Disciplinary Authority found that the action of the
respondent did not cause any harm to the bank nor the respondent gained
out of it the High Court cannot be said to have misdirected itself in E
quashing the order for procedural error.

      In the result the appeal fails and is dismissed with costs.

T.N.A.                                                    Appeal dismissed.