1. Departmental enquiry penalty enhancement — Challenge to review power exercised by an officer holding current charge of the Chairman and Managing Director under service regulations. (Para 2 , 3 )
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1996 Supreme(SC) 475
1996(4) Supreme 421
SUPREME COURT OF INDIA
S.C. Agrawal and G.T. Nanavati, JJ.
Gopalji Khanna -Appellant
versus
Allahabad Bank & Ors. -Respondents
Civil Appeal No. 3895 of 1996
(Arising out of SLP (C) No. 10567 of 1989)
Decided on 27-2-1996
Important Points
An officer entrusted with the current charge of a higher office is entitled to exercise all executive powers and discharge all functions attached to that office, including reviewing disciplinary penalties under internal regulations, as they are discharging the functions of that office rather than exercising delegated power.
Subject
Employment Law - Disciplinary Action
Act Referred
BANKING COMPANIES ACQUISITION AND TRANSFER OF UNDERTAKINGS ACT: S.19
SERVICE LAW: .
SERVICE LAW: .
Headnote
Service Law-Allahabad Bank Officer Employees (Discipline and Appeal) Regulations, 1976-Regulation 18-Power of review under-Exercise of-Executive Director entrusted with current charge of offices of Chairman and Managing Director-Whether power of review available to the Chairman and Managing Director of the Bank could have been exercised by the Executive Director ?-(Yes)-Executive Director while exercising power of review was really discharging functions of Chairman and Managing Director-He did not exercise that power on the basis that it was delegated to him-Order of penalty passed by him was legal and valid.
Held that till 23.6.1987 Shri R. Srinivasan was the Chairman and Managing Director of the Allahabad Bank. As he was appointed Chairman and Managing Director of Bank of India by Notification dated 23.6.1987, he was directed to hand over current charge of duties of the post which he was holding to the Executive Director Shri R.L.Wadhwa. Pursuant to the said Notification Shri Srinivasan handed over and Shri Wadhwa took over the charge of the posts of Chairman and Managing Director on 24.6.1987. The resultant position was that thereafter Shri Wadhwa continued to hold substantively the post of Executive Director and at the same time was also holding charge of the offices of the Chairman and Managing Director. Subsequently, on 29th April, 1988 Shri Wadhwa was appointed as Managing Director and also as Chairman of the Bank. (Para 5)
The learned counsel drew our attention to the order-cum-show cause notice dated 30.12.1987 and the impugned order dated 5.2.1988. Both are signed by Shri Wadhwa as Executive Director. However, we find that, in both these orders it is stated that they were being passed by him in terms of Regulation 18. That would mean that while passing those orders, Shri Wadhwa was discharging the functions of Chairman and Managing Director. Shri Wadhwa was only holding charge of the offices of the Chairman and Managing Director and, therefore, he could not have signed those orders as Chairman and Managing Director. Since he was then holding substantively the post of Executive Director he rightly described himself, while signing those orders, as Executive Director. The appellant also understood the show cause notice as one issued by a person discharging the functions of Chairman and Managing Director as can be seen from his representation made pursuant thereto. In it he has referred to Shri Wadhwa as Executive Director and reviewing authority. (Para 6)
Further held : Though the Regulations have been framed in exercise of the powers conferred by Section 19 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, by the Board of Directors, they cannot be equated with a statute. What the Board of Directors have done by making those Regulations is to regulate the power of taking disciplinary action against the employees of the bank. Moreover, this is not a case where the power of Chairman or the Managing Director came to be exercised by a subordinate official as a result of delegation of that power. Shri Wadhwa while exercising the power of review was really discharging the functions of Chairman and Managing Director as he was then placed incharge of those offices and was therefore entitled to perform all the duties and functions of those offices. He did not exercise that power on the basis that it was delegated to him. (Para 7)
Legal Category Hierarchy
Table of Contents
2. Whether review power specified for the Chairman and Managing Director can be exercised by an Executive Director holding current charge of the said office. (Para 4 )
3. Regulations for disciplinary action are not statutes; an officer holding current charge of an office discharges its functions and exercises its executive powers. (Para 6 , 7 , 8 )
4. An officer entrusted with the current charge of a higher office is entitled to exercise all executive powers and discharge functions attached to that office. (Para 9 )
5. Appeal dismissed. (Para 10 )
6. Can an officer holding current charge of a higher office exercise the powers of that office?
Yes, an officer entrusted with the current charge of an office is entitled to exercise all executive powers, perform duties, and discharge functions attached to that office. (Para 9 )
7. Are service regulations framed by a Board of Directors equivalent to statutes regarding the non-delegation of power?
No, regulations framed to regulate disciplinary action against employees, even if framed under a statutory Act, cannot be equated with a statute. (Para 7 )
8. Does the exercise of power by an officer holding current charge constitute a delegation of statutory power?
No, when an officer is placed in charge of an office, they are discharging the functions of that office and are not exercising power on the basis of delegation to a subordinate. (Para 7 )
9. Is the power to review a disciplinary penalty comparable to drastic statutory powers like detention or property requisition?
No, the power of an employer to take disciplinary action or review a penalty is distinct from drastic statutory powers that affect fundamental rights, such as detention or requisition. (Para 8 )
JUDGMENT
Nanavati, J.-Leave granted.
2. The short question that arises for consideration in this appeal is whether the power of review available to the Chairman and Managing Director of the Allahabad Bank under Regulation 18 of the Allahabad Bank Officer Employees (Discipline and Appeal) Regulations, 1976 could have been exercised by the Executive Director who, in absence of the Chairman and Managing Director, was entrusted with current charge of the duties of offices of the Chairman and Managing Director.
3. The appellant is an employee of the Allahabad Bank. A departmental enquiry was instituted against him for certain acts of misconduct. By an order dated June 30, 1987, the disciplinary authority, by way of penalty, reduced him to a lower stage in the time scale of his pay. As the penalty imposed upon the appellant was found to be inadequate by the Executive Director who was then holding charge of the posts of Chairman and Managing Director, he passed an order dated 30th December, 1987 setting aside the said order of penalty and proposing to impose major penalty of reduction from MMG Scale II to JMG Grade Scale I and to fix his pay in the JMG Scale I at the minimum of that scale. By that order the appellant was called upon to submit his representation as to why the proposed enhanced penalty should not be imposed upon him. After considering the representation made by the appellant the Executive Director by order dated 5.2.1988 imposed penalty of reduction from MMG Scale II to JMG Scale I and fixed the pay of the appellant at the minimum of that scale. The appellant challenged that order by filing a writ petition in the Allahabad High Court. It was dismissed as the High Court did not find any substance in any of the contentions raised before it.
4. Two contentions have been raised before us. Firstly, it was contended that the order enhancing the penalty was passed by Shri Wadhwa in his capacity as the Executive Director and as the Executive Director is not specified in the Regulations as the reviewing authority, the order passed by him should be regarded as null and void. Secondly, and in the alternative, it was contended that under the Regulations, only the Chairman and Managing Director are specified as reviewing authorities and, therefore, Shri Wadhwa who was the Executive Director and was merely holding current charge of duties of the posts of chairman and Managing Director could not have reviewed the order of penalty passed by the disciplinary authority.
5. Before we consider these contentions it may be stated that till 23.6.1987 Shri R. Srinivasan was the Chairman and Managing Director of the Allahabad Bank. As he was appoined Chairman and Managing Director of Bank of India by Notification dated 23.6.1987, he was directed to hand over current charge of duties of the post which he was holding to the Executive Director Shri R.L.Wadhwa. Pursuant to the said Notification Shri Srinivasan handed over and Shri Wadhwa took over the charge of the posts of Chairman and Managing Director on 24.6.1987. The resultant position was that thereafter Shri Wadhwa continued to hold substantively the post of Executive Director and at the same time was also holding charge of the offices of the Chairman and Managing Director. Subsequently, on 29th April, 1988 Shri Wadhwa was appointed as Managing Director and also as Chairman of the Bank.
6. In support of his first contention the learned counsel drew our attention to the order-cum-show cause notice dated 30.12.1987 and the impugned order dated 5.2.1988. Both are signed by Shri Wadhwa as Executive Director. However, we find that, in both these orders it is stated that they were being passed by him in terms of Regulation 18. That would mean that while passing those orders, Shri Wadhwa was discharging the functions of Chairman and Managing Director. Shri Wadhwa was only holding charge of the offices of the Chairman and Managing Director and, therefore, he could not have signed those orders as Cha
