Important Point
When the enquiry officer, during the course of disciplinary proceedings, comes to a conclusion that all or some of the charges alleging misconduct against an official of (P.N. Bank) are not proved than the disciplinary authority can differ from that and give a contrary finding but only after affording an opportunity to the delinquent officer.

Headnote:Punjab National Bank Officer Employees (Discipline and Appeal) Regulations, 1977-Regulations 6 and 7(2)-Procedure for imposing major penalties and action on the enquiry report-Charges based on shortage in cash against two Asstt. Managers of Bank-Enquiry officer finding in favour of employees-Disciplinary authority disagreeing-Giving contrary findings and imposing penalty of withholding retiring benefits to recover shortage-No opportunity given to delinquent officers-High Court setting aside orders imposing penalty and directed Bank to release retirement benefits -Whether correct? (Yes)-Contrary finding without affording any opportunity is bad in law-Appeal dismissed.
       Held : On behalf of the respondents it was submitted that even if there was no provision in the regulations nevertheless it was incumbent upon the punishing authority to give notice to the respondents if the said authority desired to differ with a favourable finding recorded by the inquiry officer. (Para 9)
       The controversy in the present case, however, relates to the case where the disciplinary authority disagrees with the findings of the inquiring authority and acts under Regulation-7(2). The said sub-regulation does not specifically state that when the disciplinary authority disagrees with the findings of the inquiring authority and is required to record its own reason for such disagreement and also to record its own finding on such charge, it is required to give a hearing to the delinquent officer. (Para 11)
       If the inquiry officer had given an adverse finding, as per Karunakar’s case (supra) the first stage required an opportunity to be given to the employee to represent to the disciplinary authority, even when an earlier opportunity had been granted to them by the inquiry officer. It will not stand to reason that when the finding in favour of the delinquent officers is proposed to be over-turned by the disciplinary authority then no opportunity should be granted. The first stage of the inquiry is not completed till the disciplinary authority has recorded its findings. The principles of natural justice would demand that the authority which proposes to decide against the delinquent officer must give him a hearing. When the inquiry officer holds the charges to be proved then that report has to be given to the delinquent officer who can make a representation before the disciplinary authority takes further action which may be prejudicial to the delinquent officer. When, like in the present case, the inquiry report is in favour of the delinquent officer but the disciplinary authority proposes to differ with such conclusions then that authority which is deciding against the delinquent officer must give him an opportunity of being heard for otherwise he would be condemned unheard. In departmental proceedings what is of ultimate importance is the finding of the disciplinary authority. Under Regulation 6 the inquiry proceedings can be conducted either by an inquiry officer or by the disciplinary authority itself. When the inquiry is conducted by the inquiry officer his report is not final or conclusive and the disciplinary proceedings do not stand concluded. The disciplinary proceedings stand concluded with decision of the disciplinary authority. It is the disciplinary authority which can impose the penalty and not the inquiry officer. Where the disciplinary authority itself holds an inquiry an opportunity of hearing has to be granted by him. When the disciplinary authority differs with the view of the inquiry officer and proposes to come to a different conclusion, there is no reason as to why an opportunity of hearing should not be granted. It will be most unfair and iniquitous that where the charged officers succeed before the inquiry officer they are deprived of representing to the disciplinary authority before that authority differs with the inquiry officer’s report and, while recording a finding of guilt, imposes punishment on the officer. In our opinion, in any such situation the charged officer must have an opportunity to represent before the Disciplinary Authority before final findings on the charges are recorded and punishment imposed. This is required to be done as a part of the first stage of inquiry as explained in Karunakar’s case (supra). The result of the aforesaid discussion would be that the principles of natural justice have to be read into Regulation 7(2). As a result thereof whenever the disciplinary authority disagrees with the inquiry authority on any article of charge then before it records its own findings on such charge, it must record its tentative reasons for such disagreement and give to the delinquent officer an opportunity to represent before it records its findings. The report of the inquiry officer containing its findings will have to be conveyed and the delinquent officer will have an opportunity to persuade the disciplinary authority to accept the favourable conclusion of the inquiry officer. The principles of natural justice, as we have already observed, require the authority, which has to take a final decision and can impose a penalty, to give an opportunity to the officer charged of misconduct to file a representation before the disciplinary authority records its findings on the charges framed against the officer. The aforesaid conclusion, which we have arrived at, is also in consonance with the underlying principle enunciated by this Court in the case of Institute of Chartered Accountants (supra). While agreeing with the decision in Ram Kishan’s case (supra), we are of the opinion that the contrary view expressed in S.S. Koshal and M.C. Saxena’s cases (supra) do not lay down the correct law. Both the respondents superannuated on 31st December, 1983. During the pendency of these appeals Misra died on 6th January, 1995 and his legal representatives were brought on record. More than 14 years have elapsed since the delinquent officers had superannuated. It will, therefore, not be in the interest of justice that at this stage the cases should be remanded to the disciplinary authority for the start of another innings. We, therefore, do not issue any such directions and while dismissing these appeals we affirm the decisions of the High Court which had set aside the orders imposing penalty and had directed the appellants to release the retirement benefits to the respondents. There will, however, be no order as to costs. (Paras 17 to 21)

Judgment

Kirpal, J.-In these two appeals the common question which arises for consideration is that when the inquiry officer, during the course of disciplinary proceedings, comes to a conclusion that all or some of the charges alleging misconduct against an official are not proved then can the disciplinary authority differ from that and give a contrary finding without affording any opportunity to the delinquent officer.

2. The respondents in these two appeals, namely, Shri Kunj Behari Misra and Shri Shanti Prasad Goel were working in the appellant bank in the Hazratganj Branch, Lucknow, as Assistant Managers. On 10th November, 1981 on physical verification of the currency chest a shortage of Rs. 1 lac currency notes was found. Thereafter first information report was lodged and disciplinary proceedings were initiated by the appellant bank against both the respondents, who were also placed under suspension. Six charges were framed against Misra while the charge sheet served on Goel contained seven charges. The disciplinary authority did not conduct the inquiry itself and an inquiry officer was appointed to hold the inquiry.

3. The inquiry officer gave the respondents opportunity of being heard. In his report submitted in connection with the inquiry against Misra, he found him guilty only of one charge, namely, that he did not sign the relevant register from 20th October, 1981 to 9th November, 1981 but exonerated him of charges two to six. As far as Goel is concerned the inquiry officer, in his report, found him not guilty of any of the charges and exonerated him.

4. On the receipt of the reports from the inquiry officer the disciplinary authority, namely, the Regional Manager of the appellant bank, to whom the reports were submitted, did not agree, in the case of Misra, with the findings of the inquiry officer in respect of charges two to six and by a short order dated 12th December, 1983 passed an order holding that it was an undisputed position that Misra being Assistant Manager was in the joint custody of the keys of the currency chest and he had personal responsibility towards the safe custody of the cash and that no material had been placed during the inquiry proceedings to establish that he had discharged his duties in the manner expected of him. The disciplinary authority accordingly held Misra to be responsible for the shortage in question and held that a minor penalty of proportionate recovery ought to be imposed on the respondent for the loss of Rs. 1 lac caused to the bank due to negligence on his part in the discharge of his duties. Similarly in the case of Goel the disciplinary authority did not agree with the inquiry report and passed an order dated 15th December, 1983 directing proportionate recovery of the loss of Rs. 1 lac caused to the bank by him. It may here be noticed that during the pendency of these disciplinary proceedings both Misra and Goel superannuated on 31st December, 1983. The disciplinary authority accordingly directed the recovery of the money from the bank’s contribution to the provident fund of the respondent officers.

5. The respondents then filed appeals to the appellate authority but they were unsuccessful. Thereupon Misra filed Civil Writ Petition No. 3197 of 1984 before the Lucknow bench of the Allahabad High Court while Goel filed Civil Writ Petition No. 1192 of 1984 in the High Court at Allahabad. The main contention of the respondents in the said writ petitions was that the disciplinary authority, who had chosen to disagree with the conclusions arrived at by the inquiry officer, could not have come to adverse conclusions without giving them an opportunity of being heard and the orders passed against them were liable to be quashed. This contention found favour with the High Court who, while allowing Misra’s writ petition vide its judgment dated 20th February, 1990, quashed the order imposing penalty and directed the appellants to release the retirement benefits including provident f

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1998 Supreme(SC) 835

Cases Referred (6)