TMI Blog1983 (10) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... ated:- 4-10-1983 - MUKHARJI, SABYASACHI, CHANDRACHUD, Y.V. ((CJ), AND PATHAK, R.S., JJ. For the Appellant : R.K. Garg with Pramod Swaroop For the Respondents: P.R. Mridul, O.C. Mathur, S. Sukumaran, Miss. Meera Mathur and S.S. Sharma JUDGMENT: SABYASACHI MUKHARJI, J. Shri K.L.Tripathi, the appellant herein joined the State Bank of India in 1955. At the relevant time, he was working as Branch Manager, State Bank of India, Deoria. Certain complaints were received about his conduct from Gorakhpur Branch Manager, Shri R.S. Kapoor, Staff Officer Grade II, who reported to the Head Office on 5th May, 1974 that, from the information given to him by some members of the staff of Deoria Branch, namely, Shri M.R. Sharma, Head Clerk, M.S. Gupta, Field Officer and from other enquiries made by him he found that the bills negotiated by the Gorakhpur Branch under a Revolving Letter of Credit No. 20/1 dated 21st March, 1974 established by the Deoria Branch on Gorakhpur Branch for Rs. 2 lakhs at a time subject to maximum of Rs. 17 lakh had remained unpaid to the extent of Rs. 12 lakhs and that the openers of the Letter of Credit, M/s Jamuna Prasad Munni Lal Jaiswal, Deoria wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot exceeding Rs. 2 lakhs "at a time" subject to a maximum of Rs. 17 lakhs was established by me after obtaining the permission of the Regional Manager over telephone. The other Letter of Credit No. 20/2 dated the 3rd April, 1974 for a sum not exceeding Rs. 50,000/- "per day" subject to a maximum of Rs. 10 lakhs was established in good faith which was within my power. In so far as compilation of a regular opinion report on the firm is concerned, I may submit that the required particulars had already been collected by the Branch Head Cashier and before issuing the aforesaid Letters of Credit, I had made my own assessment of the firm s credit-worthiness means and their ability to meet their commitments in this regard. In this connection, I remember to have informed Shri B. D. Sharma, the Investigating Officer that the words "per day" instead of "at a time" were substituted at the instance of Shri A. K. Chatterjee, Manager, S. I. B. Division. Gorakhpur Branch at the material time which I reiterate. It was not my intention to issue clean letter of credit and to this end I used the words "accompanied by once used and unidentified plant lubricating oil in 200 liters each drum". I regr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 1,02,000 and I had called the proprietor of the firm on that day for depositing sufficient funds in their account so that the bills could be retired by debit to firm s account and it was on his assurance that the payment advice was signed by me in good faith and handed over to Shri S. S. Srivastava, Officer Grade II for delivery to the Corporation s representative only when the required transactions had been put through in the books of the Branch. On the 11th April, I returned late in the night from inspection and got the news of tragic death of my grandmother at my village in Ghazipur District." Thereafter he stated that he was mentally disturbed and he left for the village and in conclusion stated as follows in respect of this:- "However, I am sorry for the fact that the full details of the above transaction were not advised to Head Office in time. I sincerely regret for this circumstantial omission on my part and assure, Sir, that there was hardly any motive or fraudulent intention behind it." In the end he did not deny the factual basis stated to him as mentioned in the report of Shri Sharma or challenge the veracity or the correctness of any of these facts or the mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to Gorakhpur Branch LBCs. Nos. 31, 32 and 33 (vide item No. 5 above) after having been entered in the Schedule 8 Book and after having been referred to jointly by Shri S.S. Srivastava, Officer Grade II and Shri S.N. Singh, Branch Accountant, in the presence of Shri M.S. Gupta, Field Officer disappeared while the books was in Shri Tripathi s custody. (8) The Gorakhpur Branch Manager was advised by him that Gorakhpur Branch LBC No. 30 had been paid on 20.3.1974 whereas it was actually paid on 2.4.1974 and that the Branch s LBCs No. 34, 35 and 36 had been paid on 9.4.1974, whereas these had not been paid at all. (9) Although a number of bills negotiated by Gorakhpur Branch under the letter of credit had been outstanding no efforts were made by Shri Tripathi for recovering the Bank s dues. (10) Telegrams from Gorakhpur Branch advising Deoria Branch of the negotiations done under the letter of credit were received at the Branch but were not attended to although huge sums were involved. (11) The letter of credit No. 20/2 was opened by him on 3.4.1974 irrespective of the fact that a large sum of money was already due from the drawees who were unable to pay promptly. (12) Five ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... your integrity and bonafides; and (d) had wilfully and knowingly furnished incorrect particulars, concealed/withheld information/particulars to/from Gorakhpur Branch (negotiating Branch)/controlling authority and flagrantly violated Bank s rules and instructions with a view to cover up your attempts to misappropriate Bank s money and/or to defraud the Bank. It is thus evident that as the Branch Manager you had failed miserably to safeguard the Bank s interest; on the contrary, you had wilfully/knowingly committed gross irregularities in the opening of the aforesaid Letters of Credit and payment of bills drawn thereunder and attempted to defraud the Bank. Your actions, which have seriously jeopardised the Bank s interests and exposed the Bank to grave financial risks, cast grave doubts on your integrity and bonafides. It is, therefore, proposed to proceed against you in terms of Rule 49 read with Rule 50 of the State Bank of India (Officers Assistants) Service Rules. You are, therefore, required to submit to us your written statement in defence in terms of Rule 50 (2) ibid in respect of the aforesaid charges within 15 days of the receipt hereof; also, if you so desire, you ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was handled by the branch accountant and it was not possible or necessary for him, because of his preoccupation to attend to these telegrams personally. In spite of making allegations against some officers, he did not ask to cross-examine any of these officers in respect of the matters stated against him. He merely asked for personal hearing. He wanted an opportunity to expose the conspiracy. It may be stated, however, that the appellant was given a personal hearing. Even in respect of the matters of conspiracy, he did not ask any opportunity to cross examine the officials. The appellant did not ask for any opportunity in the reply to lead evidence in support of his defence. He admitted, however, in his reply that the facts he was stating had already been explained to Shri Sharma during his preliminary investigation. Thereafter on 1st May, 1976, the appellant received a letter from the Chief General Manager intimating to him that in accordance with the independent investigation conducted under Rule 50(1) of the State Bank of India (Officers Assistants) Service Rules governing the appellant s service in the Bank, the statement of charges served dated 19 th June, 1975 and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been recorded during the course of enquiry but while recording those statements the appellant was never informed nor any statement was taken in presence of the appellant. The statements were not signed in his presence. Thereafter he made allegations of bias of certain officers. The appellant further stated that so far as the report of the enquiry officer regarding the opinion report of the firm, M/s Jamuna Prasad Jaiswal was concerned, the appellant had not committed any breach of the rules as he had obtained permission on telephone from the competent authority and this fact was brought to the notice of the enquiry officer during the investigation. He also mentioned that the fact that trunk call was booked appears from the register. He stated that he was not guilty of the charges. The main grievance was that the enquiry officer only took the statement of the appellant and none of the statements on which reliance was placed was recorded in the presence of the appellant. The appellant prayed that the penalty proposed may not be imposed. His explanation along with other necessary papers was forwarded to the Executive Committee of the Central Board and the Central Board in its meeti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce or who knowingly did anything detrimental to the interests of the Bank or in conflict with its instructions or committed any breach of discipline or was guilty of any other acts of misconduct would be liable for the penalty of, inter alia, dismissal. Sub-rule (1) of Rule 50 of the said rules mentioned above postulates that the Managing Director, if he is satisfied that there was a prima facie case for proceeding against an employee, may investigate the case himself or appoint any other investigating officer and submit an independent report in writing. Sub-rule (2) of Rule 50 envisages that brief statement of the charges together with the grounds on which the charges are based should be communicated in writing to the employee. The employee should be required to submit a written statement in defence and given an opportunity to be heard in person if desired by him, and he shall also be given facilities for access to the records of the Bank for the purpose of preparing his written statement. The Managing Director for the reasons to be recorded in writing, may refuse such access if in his opinion such records were not strictly relevant or it was not desirable in the interests of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that infraction of this procedure under the rules will make the investigation bad as basic fundamental requirement of an opportunity was implied in the rule. The impugned order should be struck down as having been passed in violation of the principles of natural justice. We are of the opinion that Mr. Garg is right that the rules of natural justice as we have set out hereinbefore implied an opportunity to the delinquent officer to give evidence in respect of the charges or to deny the charges against him. Secondly, he submitted that even if the rules had no statutory force and even if the party had bound himself by the contract, as he had accepted the Staff Rule, there cannot be any contract with a Statutory Corporation which is violative of the principles of natural justice in matters of domestic enquiry involving termination of service of an employee. We are in agreement with the basic submission of Mr. Garg in this respect, but we find that the relevant rules which we have set out hereinbefore have been complied with even if the rules are read that requirements of natural justice were implied in the said rules or even if such basic principles of natural justice were implie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stice are to apply: nor as to their scope and extent. Everything depends on the subject-matter, the application of principles of natural justice, resting as it does upon statutory implication, must always be in conformity with the scheme of the Act and with the subject matter of the case. In the application of the concept of fair play there must be real flexibility. There must also have been some real prejudice to the complainant; there is no such thing as a merely technical infringement of natural justice. The requirements of natural justice must depend on the facts and the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject-matter to be dealt with, and so forth. The basic concept is fair play in action administrative, judicial or quasi-judicial. The concept fair play in action must depend upon the particular lis, if there be any, between the parties. If the credibility of a person who has testified or given some information is in doubt, or if the version or the statement of the person who has testified, is, in dispute, right of cross-examination must inevitably form part of fair play in action but where there is no lis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... every stage of preliminary investigation upon which the charges were based and upon which proposed action against him has been taken, In that view of the matter, we are of the opinion, that it cannot be said that in conducting the enquiry or framing of the charges or arriving at the decision, the authorities concerned have acted in violation of the principles of natural justice merely because the evidence was not recorded in his presence or that the materials, the gist of which was communicated to him, were not gathered in his presence. As we have set out hereinbefore, indeed he had accepted the factual basis of the allegations. We have set out hereinbefore in extenso the portions where he had actually admitted the factual basis of these allegations against him, where he has not questioned the veracity of the witness of the facts or credibility of the witnesses or credibility of the entries on records. Indeed he has given explanation namely, he was over-worked, he had consulted his superiors and sought their guidance, his conduct has not actually, according to him caused any financial risk or damage to the Bank concerned. Therefore, in our opinion, in the manner in which the invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Its Workmen, where it would appear from the facts set out at page 1113 of the report that the delinquent had no opportunity of asking questions to the witnesses after knowing what they had said against him. In this case as we have mentioned hereinbefore, the appellant was communicated the gist of what had been gathered in his absence and even then he did not deny these informations nor did he ask any opportunity to cross-examine the witnesses either regarding the veracity of the material that was gathered against him or on the credibility of the persons who had given evidence. Reliance was also placed on the observations in the decision of this Court in Khem Chand v. The Union of India and others. That however, was a case dealing with the requirements under Article 311(2) of the Constitution. In that decision, the Court was concerned with the expression reasonable opportunity of showing cause under Article 311(2) of the Constitution . The facts of that case were entirely different from the facts of the instant case. However, Das C.J., dealing with opportunity to show cause explained at pages 1096-97 of the report the position under the said Article as follows:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucted, the procedure mentioned above has been followed. Here also the appellant was allowed to show that the evidence against him was not worthy of credence or consideration. The evidence was discussed. His explanation was sought for and recorded. The materials and other records were shown to him. He did not ask for any chance to cross-examine the witness or to examine himself or any other witness in support of his defence. Indeed, as we have noted before, he admitted the facts. He was also given in addition an opportunity of showing that he has not been guilty of any such misconduct as to merit the particular punishment proposed to be meted out to him. This opportunity was given. He gave his explanation and that was considered. He asked for a personal hearing which, we have noted in this case, was duly given to him. We are, therefore, of the opinion that the aforesaid passage relied on behalf of the appellant would not be of any assistance to the appellant in this case. It is true that all actions against a party which involve penal or adverse consequences must be in accordance with the principles of natural justice but whether any particular principle of natural justice would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there has been in the facts and circumstances of the case, no infraction of any principle of natural justice by the absence of a formal opportunity of cross-examination Neither cross-examination nor the opportunity to lead evidence by the delinquent is an integral part of all quasi judicial adjudications. Another aspect of the violation of the principles of natural justice that was urged before us on behalf of the appellant was that the final order did not contain reasons. In this connection reliance was placed on the observations of this Court in the case of Siemens Engineering Manufacturing Co. of India v. Union of India Anr. Where this Court observed that if courts of law were to be replaced by administrative authorities and tribunals were essential then administrative authorities and tribunals should afford fair and proper hearing to the persons sought to be affected by the orders and give sufficiently clear and explicit reasons in support of the orders made by them. The Court, further, observed, that the rule requiring reasons to be given in support of an order is like the principle of audi alteram partem, a basic principle of natural justice which must inform every q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant company, on the ground that the Board was of the opinion that there were circumstances suggesting that the business of the appellant company was being conducted with intent to defraud its creditors, members or any other persons and that the persons concerned in the management of the affairs of the company having connection therewith were guilty of fraud, misfeasence and other misconduct towards the company and its members. Bachawat, J., at page 342 of the report was of the opinion that in view of the circumstances disclosed therein, without more, could not reasonably suggest that the business of the company was being conducted to defraud the creditors, members and other persons or that the management was guilty of fraud towards the company and its members. From the observations of Shelat J. in that decision, it appears that he was also inclined to take the same view. The facts of the instant case are, however, different. It has to be emphasised that the appellant was not charged for defrauding the Bank. He was charged mainly for the conduct which suggested that he acted improperly and in violation of the principles on which sound banking business should be conducted. The ch ..... X X X X Extracts X X X X X X X X Extracts X X X X
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