TMI Blog2008 (5) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... oposed penalty ? Whether the Appointing Authority ought to have communicated the advice/recommendation of the Chief Vigilance Officer to the respondent and given him an opportunity to show cause before imposing punishment? - Appeal (civil) 4243-4244 of 2004 - - - Dated:- 2-5-2008 - H. K. Sema R. V. Raveendran, JJ JUDGMENT: R.V. RAVEENDRAN, J. Theses appeals by special leave are filed by a defendant-employer (State Bank of India) against the judgment dated 11.12.2003 of the Punjab Haryana High Court in R.S.A. No.4184 of 2002. 2. A charge-sheet dated 28.4.1994 was issued by the Appellant Bank to the respondent alleging that when he was posted as the Branch Manager of appellant's Kalanwali Branch, Sirsa, Haryana, he had received cash payments tendered by two customers of the Bank, for being credited to their loan accounts, and temporarily misappropriated such amounts and had belatedly deposited them to the borrowers' accounts (after about five months in one case and two and half months in another). The said acts amounted to a misconduct, violative of Rule 50(4) of the State Bank of India Officers Service Rules ('Service Rules' for short). A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ointing Authority had agreed with the said recommendation on 18.1.1995. According to the trail court, the said order was a final order of punishment by the Appointing Authority; and the Appointing Authority had thereafter sought the advice of the Bank's Chief Vigilance Officer, and acting on such advice, had changed his earlier decision and imposed a higher punishment by way of removal from service, by order dated 3.5.1995 (communicated on 30.6.1995). The trial court was of the view that the second order imposing penalty was passed by the Appointing Authority on extraneous reasons after taking advice of the Chief Vigilance Officer , and that rendered the order of removal illegal, null and void. The trial court therefore set aside the order of removal dated 30.6.1995 as also the orders dated 29.11.95 and 27.11.1996 of the Appellate Authority and reviewing authority affirming the order of removal. It directed the appellant Bank to reinstate the respondent with continuity of service and all consequential benefits except back-wages. The Trial Court reserved liberty to the appellant to pass a fresh order imposing appropriate penalty on the respondent, other than the penalty of dism ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of removal after taking the advice of the Chief Vigilance Officer. The first appellate court held that the Appointing Authority imposed the penalty of removal on the recommendations of the Chief Vigilance Officer. But the High Court observed that 'on the directions of the Chief Vigilance Commissioner of the Bank, the punishment was converted to that of dismissal'. This observation contains three errors firstly the penalty of removal was read as dismissal; secondly the communication from the Chief Vigilance Officer, termed as advice/recommendation by the courts below, was wrongly read as 'directions'; and thirdly, the Chief Vigilance Officer of the Bank was wrongly referred to as the Chief Vigilance Commissioner. The High Court also erroneously assumed that plaintiff (respondent herein) had pleaded that the Appointing Authority had placed certain material which was never put to him (the plaintiff), before the Chief Vigilance Commissioner and as such the order of punishment was violative of principles of natural justice. There was no such plea, nor did the courts below record a finding on any such plea. 8. We also find that the High Court completely missed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the merits of the matter, we may briefly refer to the scope of second appeals as also the procedure for entertaining them, as laid down in section 100 of the Code of Civil Procedure. What is a substantial question of law? 9.1) Second appeals would lie in cases which involve substantial questions of law. The word 'substantial' prefixed to 'question of law' does not refer to the stakes involved in the case, nor intended to refer only to questions of law of general importance, but refers to impact or effect of the question of law on the decision in the lis between the parties. 'Substantial questions of law' means not only substantial questions of law of general importance, but also substantial question of law arising in a case as between the parties. In the context of section 100 CPC, any question of law which affects the final decision in a case is a substantial question of law as between the parties. A question of law which arises incidentally or collaterally, having no bearing in the final outcome, will not be a substantial question of law. Where there is a clear and settled enunciation on a question of law, by this Court or by the High Court concer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvolve any such questions of law. The Appellant cannot urge any other ground other than the substantial question of law without the leave of the court. (e) The High Court is at liberty to reformulate the substantial questions of law or frame other substantial question of law, for reasons to be recorded and hear the parties or such reformulated or additional substantial questions of law. 9.3) It is a matter of concern that the scope of second appeals and as also the procedural aspects of second appeals are often ignored by the High Courts. Some of the oft-repeated errors are : (a) Admitting a second appeal when it does not give rise to a substantial question of law. (b) Admitting second appeals without formulating substantial question of law. (c) Admitting second appeals by formulating a standard or mechanical question such as whether on the facts and circumstances the judgment of the first appellate court calls for interference as the substantial question of law. (d) Failing to consider and formulate relevant and appropriate substantial question/s of law involved in the second appeal. (e) Rejecting second appeals on the ground that the case does not inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor declare that the contract of employment subsists nor grant the consequential relief of reinstatement. The three well recognized exceptions to this rule are: (i) where a civil servant is removed from service in contravention of the provisions of Article 311 of the Constitution of India (or any law made under Article 309); (ii) where a workman having the protection of Industrial Disputes Act, 1947 is wrongly terminated from service; and (iii) where an employee of a statutory body is terminated from service in breach or violation of any mandatory provision of a statute or statutory rules. There is thus a clear distinction between public employment governed by statutory rules and private employment governed purely by contract. The test for deciding the nature of relief damages or reinstatement with consequential reliefs is whether the employment is governed purely by contract or by a statute or statutory rules. Even where the employer is a statutory body, where the relationship is purely governed by contract with no element of statutory governance, the contract of personal service will not be specifically enforceable. Conversely, where the employer is a non-statuto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Authority had approved the recommendation made by the Disciplinary Authority for imposition of penalty of removal, without application of mind and without giving him a hearing. He alternatively contended that the punishment imposed was severe and disproportionate to the gravity of the proved charge. But there was absolutely no plea with reference to the advice/recommendation of the Chief Vigilance Officer of the Bank. However, during the examination of the Bank's witness DW-1 (T.S. Negi, Deputy Manager) it was elicited that on 18.1.1995, the Disciplinary Authority had put up a recommendation to impose the penalty of reduction of pay by four stages by taking a lenient view; that the Appointing Authority had by his note dated 18.1.1995 accepted the said recommendation; that subsequently, on 2.2.1995, the Appointing Authority had informed the Chief Vigilance Officer of the Bank about the enquiry and proposed punishment; and that after receiving the comments of the Chief Vigilance Officer, the Appointing Authority on the recommendations of the disciplinary authority had reconsidered the question of punishment and imposed the penalty of removal. The respondent plaintiff did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hose provisions and if any new ground becomes available on the basis of information secured by discovery, a party can amend his pleadings and introduce new facts and grounds which were not known earlier. The difficulty in securing relevant material or ignorance of existence of relevant material will not justify introduction of such material at the stage of evidence in the absence of pleadings relating to a particular aspect to which the material relates. If a party should be permitted to rely on evidence led on an issue/aspect not covered by pleadings, the other side will be put to a disadvantage. For example, in this case, if there had been a plea and issue on the question whether extraneous material was taken into account, the Bank could have examined the Appointing Authority to explain the context in which he informed the Chief Vigilance Officer about the matter or explain how his decision was not dependant upon any extraneous material. Therefore, the courts below committed a serious error in holding that the order of removal was based on an extraneous material (the advice/recommendation of Chief Vigilance Officer) and therefore, invalid. 15. Where the enquiry was found to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which a judgment is formally recorded by court after it has been given. 18. It is true that once an Authority exercising quasi judicial power, takes a final decision, it cannot review its decision unless the relevant statute or rules permit such review. But the question is as to at what stage, an Authority becomes functus officio in regard to an order made by him. P. Ramanatha Aiyar's Advance Law Lexicon (3rd Edition, Vol.2 Pages 1946-47) gives the following illustrative definition of the term 'functus officio' : Thus a Judge, when he has decided a question brought before him, is functus officio, and cannot review his own decision. Black's Law Dictionary (Sixth Edition Page 673) gives its meaning as follows : Having fulfilled the function, discharged the office, or accomplished the purpose, and therefore, of no further force or authority . 19. We may first refer to the position with reference to civil courts. Order XX of Code of Civil Procedure deals with judgment and decree. Rule 1 explains when a judgment is pronounced. Sub-rule (1) provides that the Court, after the case has been heard, shall pronounce judgment in an open court either at once, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en he signed the note on dated 18.1.1995. 20. Let us next consider whether the decision taken on 18.1.1995 is a final decision. A careful examination shows that the order dated 18.1.1995 was intended only to be tentative and not final. Firstly, the said decision was not communicated to the respondent, nor was any letter or order issued to the respondent imposing the penalty mentioned in the order dated 18.1.1995. Secondly, the Appointing Authority by letter dated 2.2.1995 (Ex.P23) informed the Chief Vigilance Officer of the Bank about the enquiry against respondent, his decision accepting the findings of the Enquiry Officer, and the proposal to show leniency by imposing only a punishment of reduction of pay by four stages. The Chief Vigilance Officer sent a reply dated 7.2.1995 (Ex.D2) wherein he observed that by pocketing the money of the customers Sri Goyal has exposed the Bank's faith reposed in him and there was no ground for showing leniency. He also expressed the view that the respondent deserved a more severe punishment and requested the appointing authority to re-examine whether respondent should be continued in the post. Thereafter the Disciplinary Authority recon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are enclosed for your perusal and record : (i) Chargesheet issued to the official (ii) Enquiry proceedings (iii) Findings of the Inquiring Authority (iv) Tabular statement showing the charges leveled against the official, findings of the Inquiring Authority, official's submissions on the findings and Disciplinary Authority's comments thereon. (v) Note put up by the Disciplinary Authority to the Appointing Authority viz., the Chief General Manager. (vi) Bio-data of the Official. 3. In view of the seriousness of the charge proved against Shri S.N. Goyal, Officer JMGS I, he deserves a severe punishment. The Disciplinary Authority is, however, inclined to take a lenient view in the matter considering the length of service put in by the official in the Bank and also to provide him a chance to reform himself. The Disciplinary Authority is of the view that the ends of justice will be met if the official is brought down by four stages in his time scale in terms of Rule 67 (e) of State Bank of India Officers Service Rules to which I concur in the capacity as the Appointing Authority of the official. Yours faithfully, Chief General Manager. 23. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent guilty of the charge on consideration of the evidence. The finding of guilt was accepted by the Disciplinary Authority and the Appointing Authority. This is not a case where any evidence or other material was sent to the vigilance department seeking their decision or views on the question of guilt of the respondent. The issue relating to the respondent's guilt was neither referred to the Vigilance Department nor did the Vigilance Department give any finding on the question of guilt. When the Disciplinary Authority and the Appointing Authority accepted the finding of guilt recorded by the Enquiry Officer on examining the facts, even before the matter was informed to Vigilance Department, it cannot be said that the said decision was influenced by any extraneous advice from Vigilance Department. The issue on which the Vigilance Department made its comment was on the limited ground whether any leniency should be shown in imposing punishment. No additional facts or material were placed by the Appointing Authority before the Vigilance Department for this purpose. Further the Vigilance Department merely expressed the view that the gravity of the charge did not warrant leniency ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercise their power and what punishment they should impose on the delinquent officer. This Court also held that the Finance Ministry directive that a punishment lesser than what was recommended by the CVC could not be imposed, was without jurisdiction and contrary to the statutory regulations governing disciplinary matters. The said decision is of no assistance in this case, as there is no directive that the recommendation of the Vigilance Department is mandatory and should be followed while imposing punishment; nor has the Vigilance Department directed the punishing authority to impose any specific punishment; nor has the appointing authority acted on the dictates of the Vigilance Department. 26.2) The next decision relied upon by the respondent is the decision rendered by this Court in State Bank of India vs. D.C. Aggarwal [1993 (1) SCC 13]. In that case, the Enquiry Officer recommended exoneration of the employee. Instead of acting on the recommendation, the Bank directed the Enquiry Officer to submit the report through CVC. The CVC disagreed with the finding of the Enquiry Officer and recorded a finding of guilt and recommended the imposition of major penalty of removal. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty was vitiated on account of the same being influenced by some extraneous material in the form of adverse comments of the Accounts Officer. That is not the case here. 27. The learned counsel for respondent submitted that as the order of removal was set aside and as the employer's second appeal was rejected, he should be permitted to support the decision of the courts below by demonstrating that the Enquiry Officer had violated the principles of natural justice and therefore, the order of removal deserves to be set aside. This is not permissible. Though in the suit, the respondent had challenged the enquiry as being opposed to principles of natural justice, and the finding guilt recorded by the Enquiry Officer as being erroneous, he gave up those contentions before the first appellate court, and restricted the challenge to the quantum of punishment and non-grant of back wages. He cannot therefore be permitted to revive the contention that the Enquiry Officer violated the principles of natural justice in conducting the enquiry. 28. At the relevant point of time the respondent was functioning as a Branch Manager. A Bank survives on the trust of its clientele and constituent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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