UCO BANK & ORS.versusRAJENDRA SHANKAR SHUKLA

636                      [2018]REPORTS
               SUPREME COURT    2 S.C.R. 636              [2018] 2 S.C.R.


A                            UCO BANK & ORS.
                                       v.
                     RAJENDRA SHANKAR SHUKLA
                        (Civil Appeal No. 2693 of 2013)
B                            FEBRUARY 15, 2018
            [MADAN B. LOKUR AND DEEPAK GUPTA, JJ.]
             Service Law – Dismissal from service after superannuation –
      Propriety of – Respondent while in charge of extension counter of
      appellant-Bank issued a cheque in 1991, from his account in
C
      appellant-Bank, for Rs.3 lakhs in favour of his brother while he
      had only about Rs.1,000/- in his account – Notwithstanding the
      ‘stop payment’ communication by respondent to the Bank,
      respondent’s brother presented the cheque and it was temporarily
      encashed – Respondent was issued charge sheet in 1998–
D     Respondent superannuated in January, 1999 but disciplinary
      proceedings continued against him and he was dismissed from
      service by order of Disciplinary Authority – High Court quashed
      the said order – Held: There was enormous delay of about 7 years
      in issuing charge sheet against respondent, for which there is no
      explanation – On this ground itself, charge sheet against respondent
E     is liable to be set aside – Even if the charge against respondent
      was proved, it was an action personal to him and would not amount
      to misconduct within the purview of the Conduct Regulations
      applicable to bank employees – Further, before the charge sheet
      was issued to respondent, he was placed in a higher category as
F     Manager and was also allowed to cross the efficiency bar – If the
      Bank was serious about proceeding against respondent for
      misconduct, they would not have granted him such benefits –Also,
      the respondent was denied his pension as well as subsistence
      allowance which prevented him from effectively participating in the
      disciplinary inquiry – On this ground also, the proceedings against
G     respondent are vitiated – Punishment of dismissal could not have
      been imposed on respondent after his superannuation – No reason
      to interfere with the judgment of High Court – Costs of Rs. 1 lakh
      imposed on appellant – UCO Bank (Officers’) Service Regulations,
      1979 – Regulation 20(3)(iii) – UCO Bank Officer Employees’
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                                     636
   UCO BANK & ORS. v. RAJENDRA SHANKAR SHUKLA                           637


(Conduct) Regulations, 1976 – UCO Bank(Employees) Pension               A
Regulations, 1995 – Negotiable Instruments Act, 1881.
     Service Law – Subsistence allowance – Entitlement to, during
pendency of departmental enquiry – Discussed – Access to justice.
      Dismissing the appeal, the Court
                                                                        B
      HELD: 1.1 Even if the charge was proved against the
respondent, it would not amount to a misconduct within the
purview of the Conduct Regulations applicable to bank employees
but was an action personal to him. Assuming misconduct was
proved, appropriate action could be taken under the UCO Bank
(Employees) Pension Regulations, 1995 in accordance with law            C
and if permissible. The respondent’s direction to ‘stop payment’
would perhaps have made him liable for some action by his brother
but certainly not by the Bank. [Paras 10, 11][641-B-D]
      1.2 There is no explanation for the enormous delay of about
7 years in issuing a charge sheet against the respondent. On this       D
ground itself, the charge sheet against the respondent 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 the respondent was placed in a higher category as a Manager
in July, 1994. He was also allowed to cross the efficiency bar in
                                                                        E
August, 1996. Surely, if the Bank was serious about proceeding
against the respondent 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. [Paras 12, 13] [641-E-H]
                                                                        F
      1.3 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        G
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). The respondent was
denied his pension as well as subsistence allowance which
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638             SUPREME COURT REPORTS                           [2018] 2 S.C.R.


A     prevented him from effectively participating in the disciplinary
      inquiry. On this ground as well, the proceedings against the
      respondent are vitiated. The punishment of dismissal could not
      have been imposed on the respondent after his superannuation.
      [Paras 14, 15 and 19][642-C-D, A-B; 643-D]
B           UCO Bank and Ors. v. Prabhakar Sadashiv Karvade
            [Decision dated 20.5.2010 by Supreme Court in Civil
            Appeal No. 4725 of 2010] ; UCO Bank and Anr. v.
            Rajinder Lal Capoor 2007 (6) SCC 694 : [2007] 7
            SCR 543 – relied on.
C                               Case Law Reference
            [2007] 7 SCR 543               relied on               Para 17
            CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2693
      of 2013.

D            From the Order dated 07.05.2010 of the High Court of Chhattisgarh
      at Bilaspur in Writ Appeal No.60 of 2007.
            P.H. Parekh, Sr. Adv, Rajesh Singh, Vishal Prasad, Shishir Mathur,
      Viresh B. Saharya, Akshat Agarwal, Advs. for the appearing parties.
            The Judgment of the Court was delivered by
E           MADAN B. LOKUR, J. 1. 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
F     and order of the High Court does not call for any interference.
            2. 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
G     Rs.1,000/- in his account. We are only concerned with this broad allegation.
             3. 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:-
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   UCO BANK & ORS. v. RAJENDRA SHANKAR SHUKLA                                  639
               [MADAN B. LOKUR, J.]

    (I) Shri R.S. Shukla issued/got issued a cheque on his joint account       A
         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)
                                                                               B
         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         C
         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     D
          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.
                                                                               E
      4. 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:-
                                                                               F
      “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
                                                                               G
      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.”

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640            SUPREME COURT REPORTS                          [2018] 2 S.C.R.


A            5. 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
B
      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.
              6. A departmental appeal was filed by Shukla. During the
      pendency of the departmental appeal, Shukla filed a writ petition in the
C     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
D     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.
             7. At the outset, we make it clear that the learned senior counsel
E     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.
            8. The learned Single Judge noted a few extremely relevant facts.
      Undoubtedly the cheque was issued by Shukla on 25th January, 1991
F     (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.

G            9. 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.
            10. The learned Single Judge took the view that there was no
      prohibition in a bank employee having an account in the same bank and
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   UCO BANK & ORS. v. RAJENDRA SHANKAR SHUKLA                               641
               [MADAN B. LOKUR, J.]

that in case a cheque issued by such an employee was dishonoured,           A
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
                                                                            B
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.
       11. The Division Bench of the High Court found no error in the
view taken by the learned Single Judge and accordingly dismissed the        C
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        D
his brother but certainly not by the Bank.
       12. 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       E
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   F
issuance.
       13. 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    G
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.                                                             H
642                SUPREME COURT REPORTS                         [2018] 2 S.C.R.


A             14. 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
B
      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.
              15. An employee is entitled to subsistence allowance during an
C     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
D
      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
E     Shukla are vitiated.
              16. Finally, we may also draw attention to an unreported decision
      of this Court in UCO Bank and Ors. v. Prabhakar Sadashiv Karvade.1
      In this decision, the Court considered the provisions of the Regulations
      that we are concerned with and held :
F             “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
G             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.”
H     1
          C.A. No. 4725 of 2010 decided on 20th May, 2010
       UCO BANK & ORS. v. RAJENDRA SHANKAR SHUKLA                                 643
                   [MADAN B. LOKUR, J.]

       17. We may also make reference to another decision of this Court           A
in UCO Bank and Anr. v. Rajinder Lal Capoor.2 This decision also
related to the very same Regulations that we are concerned with.
       18. 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,        B
          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       C
          the appellate authority must be held to be illegal and without
          jurisdiction.”
      19. 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.         D
       20. 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         E
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.
                                                                                  F

Divya Pandey                                                  Appeal dismissed.




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2
    (2007) 6 SCC 694
                                                                                  H