TMI Blog2007 (5) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 of 2007 - - - Dated:- 18-5-2007 - S.B. Sinha and Markandey Katju, JJ. JUDGMENT: S.B. SINHA, J : 1. Leave granted. 2. This appeal is directed against a Judgment and order dated 08.09.2006 passed by a Division Bench of the High Court of Punjab and Haryana at Chandigarh in Letters Patent Appeal No. 174 of 2006, affirming the Judgment and Order dated 11.07.2006 passed by a learned Single Judge of the said Court in CWP No. 1902 of 2001 whereby the Writ Petition filed by the respondent herein challenging the correctness or otherwise of the orders dated 27.09.1999 and 01.12.2000 passed by the Disciplinary Authority and the Appellate Authority respectively, was allowed in part by converting the punishment of removal from the service of the respondent into compulsory retirement with effect from the date of superannuation i.e. 01.11.1996. 3. The basic fact of the matter is not in dispute. Appellant No.1 herein is a Nationalised Bank. It framed several regulations in exercise of its power conferred upon it under Section 19 (2) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, inter alia, UCO Bank Officer Employees Services Regulations, 1979. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the loans under the PMRY Scheme, a show cause notice was issued upon him on 24.10.1996. On the eve of his retirement i.e. on 30.10.1996, another show cause notice was issued to him purported to be in connection with the irregularities committed by him in sanctioning and disbursing loans under the said Scheme, while working as Branch Manager at Kohara Branch of the appellant-Bank in 1996. Admittedly he was allowed to superannuate on 1.11.1996. He was however, not paid his retiral benefits. He made a representation therefor. Inter alia, on the premise that a sum of Rs. 1 lac could not be recovered from the two borrowers, the retiral benefits were not disbursed. The Regional Office of the appellant-bank, however, recommended grant of terminal benefits in favour of the respondent, by a letter dated 14.05.1998 addressed to the Zonal Office of the appellant bank stating: "In respect of the irregularities committed by Sh. Capoor vide our show cause notice dated 30.10.1996 served on Sh. Capoor had since been replied and in view of his request dt. 8.5.97 to keep Rs.50,000/- out of his terminal benefits as security against the loan advanced to Sh. Satinder Singh (PMRY case) and the lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Proved 2(f) Not proved 2(g) Not proved 2(h) Not proved Second part Not proved Allegation No.3 Not proved Allegation No.4 Not proved Charge No.1 The CSOE had failed to discharge his duties with utmost integrity, honesty, devotion and diligence which is violation of Regulation 3(1) of UCO Bank Officer Employees (Conduct) Regulation, 1976 as amended. Proved as per discussions under allegations 1 2 Charge No.2 The CSOE in exercise of powers conferred on him acted otherwise than in his best judgment which is Violative of Regulation 3(3) of UCO Bank Officer Employees (Conduct) Regulation, 1976 as amended. Proved as per discussions under allegations 1 2 Charge No.3 The CSOE failed to take all possible steps to ensure the integrity and devotion to duty of all persons under his control and authority which is violative of Regulation 3(4) of the UCO Bank Officer Emp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Patnaik, [(1996) 9 SCC 69]; Bank of India Anr. v. Degala Suryanarayana, [(1999) 5 SCC 762]; Chairman and Managing Director, United Commercial Bank Ors. v. P.C. Kakkar, [(2003) 4 SCC 364], Damoh Panna Sagar Rural Regional Bank and Anr. v. Munna Lal Jain, [JT 2005 (1) SC 70] and [(2006) 10 SCC 572]. 13. Mr. Deepak Sibbal, learned counsel appearing on behalf of the respondent, on the other hand, contended : (i) The appellant bank having not suffered any financial loss, the purported irregularities committed by the respondent were trivial in nature. (ii) A target having been fixed to be achieved by the Appellant-Bank in respect of the PMRY Scheme and emphasis was laid upon every Branch Manager to achieve the same, it cannot be said that the respondent exceeded his jurisdiction in the matter of sanctioning and disbursing the loans. (iii) Only because the purpose for grant of loan was changed and recommendation of the Task Force Committee was not strictly adhered to, cannot by itself be a ground for imposition of such a harsh punishment, particularly when no ill will or motive on his part was alleged or established. 14. It is evident from the report of the Enquiry Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion must be given full effect but it is equally well-settled that the scope and ambit of a legal fiction should be confined to the object and purport for which the same has been created. 20. In Dilip S. Dahanukar v. Kotak Mahindra Co. Ltd. and Anr. [2007 (5) SCALE 452], it was observed : "46.Legal fiction, it is well-settled, must be construed having regard to the purport of the statue. {See Sadashiv Dada Patil vs. Purushottam Onkar Patil (D) By Lrs. [2006 (10) SCALE 21]; M.P. State Electricity Board vs. Union of India Ors. [2006 (9) SCALE 194]; Maruti Udyog Ltd. vs. Ram lal Ors. [(2005) 2 SCC 638]; Bharat Petroleum Corpn. Ltd. vs. P. Kesavan Anr. [(2004) 9 SCC 772]}" 21. The aforementioned Regulation, however, could be invoked only when the Disciplinary Proceedings had clearly been initiated prior to the respondent s ceases to be in service. The terminologies used therein are of seminal importance. Only when a disciplinary proceeding has been initiated against an officer of the bank despite his attaining the age of superannuation, can the disciplinary proceeding be allowed on the basis of the legal fiction created thereunder, i.e., continue "as if he was in service". ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Disciplinary Authority and the Appellate Authority must be held to be illegal and without jurisdiction. 23. An order of dismissal or removal from service can be passed only when an employee is in service. If a person is not in employment, the question of terminating his services ordinarily would not arise unless there exists a specific rule in that behalf. As Regulation 20 is not applicable in the case of the respondent, we have no other option but to hold that the entire proceeding initiated against the respondent became vitiated in law. 24. We are not oblivious of the peculiar legal position obtaining in this case. A gross illegality has been committed by the appellant in initiating a departmental proceeding against the respondent but he did not question the same. The learned Single Judge of the High Court held him guilty of commission of some irregularities. He did not question the correctness or otherwise of the said order also. 25. However, the legal effect of the order passed by the learned Single Judge could be that he became entitled to receive all retiral benefits. Thus, in our opinion, it is permissible for him to raise all contentions in support of the order passed ..... 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