IMPORTANT POINT
Imposition of dismissal of the delinquent officer from service when he has already reached the age of superannuation would not be wholly impermissible in law.

Headnote:Service Law – Dismissal – The question of imposition of dismissal of the delinquent officer from service when he has already reached the age of superannuation would not ordinarily arise – However, as the consequences of such an order is provided for in the service rule imposition of such a punishment would not be wholly impermissible in law.(Para 11)
       (1996) 9 SCC 69; (1998) 8 SCC 52; AIR 1987 SC 943; 2006(11) SCALE 322 – Relied upon.
       National Bank Officer Employees (Discipline & Appeals) Regulations, 1977 – Regulation 20(3)(iii) – The said Regulation, statutory in nature, clearly envisages continuation of a disciplinary proceeding despite the officer ceasing to be in service on the date of superannuation – By a legal fiction the delinquent officer would be deemed to be in service until the proceedings are concluded and final order is passed thereon – It should be given full effect – Bank was justified in continuing with the disciplinary proceedings relying on or on the basis of Regulation 20(3)(iii). (Paras 12 and 14)
       1951 (2) All E.R. 587; (1998)2 SCC 544; 2007(4) SCALE 595 – Relied upon.
       AIR 1996 SC 1656; (1999)3 SCC 666 – Referred to.
       Punjab National Bank Employees’ (Pensions) Regulations, 1995 – Regulations 43 and 48(1) – Pension Regulation is meant to be applicable where pension is required to be paid – Regulation 43, if read in its entirety, clearly shows that an officer would not qualify for pensionary benefits if he is dismissed from services – If an officer is removed or dismissed from service under Regulation 4 of the (Discipline & Appeal) Regulations, the Bank need not take recourse to Regulation 48 of the Pension Regulations as Regulation 22 thereof would be attracted – Therefore High Court committed a manifest error in substituting the order of dismissal by the order of withholding all retiral benefits. (Paras 16 and17)
       AIR 2005 SC 3272 – Relied upon.
       (2003)8 SCC 1 – Distinguished.
       Facts of the case :
       Punjab National Bank is a nationalized bank constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. While Ramesh Chandra Sharma was working in the capacity of a Manager in the Bank’s Latouche Road, Kanpur Branch, a disciplinary proceeding was drawn against him.
       By an order dated 13.11.1997 the Disciplinary Authority while holding the appellant guilty of the proved charges decided to impose upon him a major penalty of dismissal from Bank’s service.
       Findings of the Court :
       Bank was justified in continuing with the disciplinary proceedings, even after retirement of the delinquent officer, relying on or on the basis of Regulation 20(3)(iii) of the Discipline and Appeal Regulations.
       High Court committed a manifest error in substituting the order of dismissal by the order of withholding all retiral benefits.

Judgement Key Points

Certainly. Based on the provided legal document, here are the key points:

The imposition of dismissal from service on a delinquent officer who has already reached the age of superannuation is not wholly impermissible in law, especially when the service rules provide for such a consequence (!) (!) .
Disciplinary proceedings can be continued even after the employee's retirement or reaching superannuation age, due to statutory regulations that create a legal fiction deeming the officer to be in service until the proceedings are concluded and a final order is passed (!) (!) .
Statutory regulations governing the service conditions of bank employees, such as Regulation 20(3)(iii), explicitly envisage the continuation of disciplinary proceedings despite the employee being outside active service, and these regulations must be given full effect (!) (!) .
The legal fiction created by such regulations requires that the consequences, including the potential loss of pension benefits, be fully recognized and enforced in accordance with the statutory provisions (!) .
An employee who is dismissed or removed from service under statutory regulations forfeits their pension rights, and the relevant pension regulations specify that pension benefits can be withheld or recovered if the employee is found guilty of grave misconduct or negligence, with proper procedural safeguards (!) (!) .
The continuation of disciplinary proceedings after superannuation does not violate principles of natural justice or legal provisions when the regulations explicitly allow for such continuation, and the proceedings are conducted in accordance with statutory procedures (!) (!) .
The authority to impose punishment, including dismissal, is within the jurisdiction of the disciplinary authority, and courts generally refrain from interfering with the quantum of punishment unless it is wholly illegal or disproportionate (!) (!) .
The loss of confidence in an employee, especially in cases involving grave misconduct impacting the organization, justifies the imposition of severe penalties, including dismissal, and reinstatement is not warranted where trust has been fundamentally breached (!) (!) .
The legal framework ensures that disciplinary actions and pension rights are governed by clear statutory regulations, and any deviation or misinterpretation by courts or authorities can lead to manifest errors that require correction (!) (!) .
In summary, the law permits disciplinary proceedings to continue beyond the date of superannuation when statutory regulations provide for such, and penalties including dismissal are valid and enforceable, with pension benefits being subject to forfeiture in cases of grave misconduct.

JUDGMENT

S. B. SINHA, J.—

1.These two appeals arising out of the common judgment and order were taken up together for hearing and are being disposed of by this common judgment.

2.Before embarking upon the question involved in these matters, we may notice the fact of the matter.

3.Punjab National Bank (hereinafter referred to as the ‘Bank’) is a nationalized bank constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (1970 Act). While Ramesh Chandra Sharma (hereinafter referred to as the ‘appellant’) was working in the capacity of a Manager in the Bank’s Latouche Road, Kanpur Branch, a disciplinary proceeding was drawn against him.

The following charges were levelled against him:

“ARTICLE - I

He acted negligently as also deliberately with improper motive while granting credit facility to various borrowers to the detriment of the interest of the Bank and thereby exposed huge funds of the Bank to jeopardy.

ARTICLE - II

He did not discharge his duties with utmost integrity by unauthorisedly associating outsiders through which he affected disbursement of the loan to various borrowers overlooking the fact that entire proceeds of the loan has not been received by the borrowers.

ARTICLE - III

He did not ensure to keep limitation alive in borrowal accounts, thereby exposing Bank’s funds to jeopardy, as also incurred expenses beyond his vested financial powers.”

Charge No. I was sub-divided into 24 sub-charges and Charge No. III was sub-divided into two sub-charges. All these charges were proved. A disciplinary proceeding was initiated in relation thereto.

4.The Enquiry Officer submitted a report to the Disciplinary Authority. By an order dated 13.11.1997 the Disciplinary Authority while holding the appellant guilty of the proved charges decided to impose upon him a major penalty of dismissal from Bank’s service which shall ordinarily be a disqualification for future employment in terms of clause 4(j) of Punjab National Bank Officer Employees (Discipline & Appeals) Regulations, 1977. It was, however, stated that the terminal dues of the respondent would be settled.

An appeal preferred thereagainst by the appellant was dismissed by the Appellate Authority by an order dated 21.10.1998.

5.Aggrieved by and dissatisfied therewith the appellant filed a writ petition before the High Court of Judicature of Allahabad.

One of the contentions in the writ petition was that the appellant having allowed to superannuate on his reaching the age of superannuation on 31.1.1997, continuation of the disciplinary proceedings was bad in law. The High Court negatived the said contention. In its judgment, reliance, inter alia, was placed on a decision of this Court in Disciplinary Authority-cum-Regional Manager and others vs. Nikunja Bihari Patnaik,1 [1996 (9) SCC 69]. It was held thus:

“We must mention that Shri V.A. Mohta, the learned counsel for the respondent, stated fairly before us that it is not possible for him to sustain the reasoning and approach of the High Court in this case. His only submission was that having regard to the age of the respondent (37 years) and the facts and circumstances of the case, this Court may substitute the punishment awarded to the respondent by a lesser punishment. The learned counsel suggested that any punishment other than dismissal may be imposed by this Court. We considered this request with the case it deserves, but we regret that we are unable to accede to it. The learned counsel for the Bank, Shri V.R. Reddy, Additional Solicitor General, also stated, on instructions of the Bank, that it is not possible for the Bank to accommodate the respondent in its service in view of his conduct.”

6.Before the High Court, it appears, a copy of a Circular dated 5.3.1999 was placed for the purpose of raising a contention that the order of the Appellate Authority would be relevant to determine the controversy even if the same was issued subsequent to the order imposing punishment. The High Court observed thus

Click Here to Read the rest of this document

2007 Supreme(SC) 817

IMPORTANT POINTImposition of dismissal of the delinquent officer from service when he has already reached the age of superannuation would not be wholly impermissible in law.

Cases Referred (10)

IMPORTANT POINT
Imposition of dismissal of the delinquent officer from service when he has already reached the age of superannuation would not be wholly impermissible in law.