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1990 Supreme(Ker) 431
Judges : RADHAKRISHNA MENON
Gopalakrishna Prabhu - Appellant
Versus
Central Bank - Respondent
Case No : O.P.No. 5798 of 1986
Decided On : 12/14/1990
Advocates Appeared :
M.R. Rajendran Nair For Petitioner C.M. Devan For Respondents
The judgment establishes that vague clauses in employment agreements can lead to subjective evaluation and arbitrariness, violating constitutional principles of fairness and equality.
Headnote:
Misconduct - Bank Employee - First and Second Bipartite settlements - Para. 19.5 - Charges of misconduct - Vagueness of clause 'doing any act prejudicial to the interest of the bank' - Arbitrariness in disciplinary proceedings - Maintainability of Original Petition
Fact of the Case:
The petitioner, a bank officer, was served with a charge memo alleging various misconducts. The disciplinary authority concurred with some charges and differed on others, leading to a proposed punishment and subsequent dismissal of appeal. The petitioner challenged these orders in an Original Petition.
Finding of the Court:
The court found that the charges did not constitute misconduct within the meaning of 'any act prejudicial to the interest of the bank'. It also held the disciplinary proceedings to be arbitrary, violating Article 14 of The Constitution, and thus maintained the Original Petition.
Issues: The issues revolved around the interpretation of the vague clause 'doing any act prejudicial to the interest of the bank', the arbitrariness in the disciplinary proceedings, and the maintainability of the Original Petition.
Ratio Decidendi: The court emphasized that the vague clause 'doing any act prejudicial to the interest of the bank' exposed employees to subjective evaluation, leading to arbitrariness. It held that arbitrariness in State action violates Article 14 of The Constitution, making the Original Petition maintainable.
Final Decision: The court quashed the orders and ruled in favor of the petitioner, entitling them to all benefits as if they had not been charge sheeted. No costs were awarded.
Petitioner is now working at Kathiar office of the Bank as an officer. While working as a clerk in the Divisional Office, Cochin, the Chief Manager who is also the disciplinary authority, served on him a charge memo containing the following (vide Ext. P3):
1) for having allegedly received Rs. 100/- from one Mr. Balakrishna Bhat for purchase of shares of a Company but not remitted to the Bank for the said purpose.
ii) for having issued a cheque bearing No. 937996 dt. 25-8-82 for Rs. 2.500/- in his overdraft account and another cheque hearing No. 488309 dt.18-10-82 for Rs.75,000/- drawn on the same overdraft account without required drawing power and hence returned unpaid and a withdrawal for Rs. 15,000/- in his HSS account without maintaining sufficient balance and hence returned unpaid.
iii) for having not utilised the second instalment of housing loan sanctioned to him on 24-10-1981 even after a period often months from the said availment.
iv) for having availed an advance of Rs. 1,500 against leave fare concession for a proposed tour in October, 1982, on the strength of his own declaration but submitted a final bill only for Rs.30.30 ps. (Rs. Thirty and paise thirty only) and that too after the stipulated period meant for submission of such bills by which there is every reason to believe that he has not utilised the advance for the purpose for which it was allowed by the Bank".
The Inquiring Officer, the petitioner submits, considered his defence and submitted the report Ext.P4 to the disciplinary authority. The Inquiring Officer had exonerated the petitioner from charges 1 and 4. The disciplinary authority concurred with the finding as regards charges 1, 2 and 3 and differed from the finding as regards charge No.4. Accordingly a notice proposing the punishment was served on the petitioner. The petitioner submitted his explanation. The disciplinary authority was not satisfied with the explanation and consequently passed Ext. P10 order. The appeal taken therefrom has been dismissed by Ext. P 13. Exts.P 10 and P13 are under challenge in this Original Petition.
2. The charges, according to the management, constitute the misconduct within the meaning of para. 19.50) of Chapter XIX, captioned, 'Disciplinary Action and Procedure thereof, of the First and Second Bipartite settlements between Indian Bank's Association and All India Bank Employees Association. It reads: -
"19.5. By the expression 'gross misconduct' shall be meant any of the following acts and omissions on the part of an employee;
XX XX XX XX
0) doing any act prejudicial to the interest of the bank or gross negligence or negligence involving or likely to involve the bank in serious loss".
Only the first limb of this clause namely, 'doing any act prejudicial to the interest of the bank' is relevant here.
3. The learned counsel for the petitioner argues that this clause is vague and of a general nature and hence what act of an employee can be said to be prejudicial to the interest of the bank may vary with individuals, exposing the employee to vagaries of subjective evaluation.
4. The learned counsel for the management however submits that 'doing an act prejudicial to the interest of the bank' is one of the enumerated misconducts and therefore the question as to whether the same is vague or ambiguous does not arise at all. It is for the management to say, taking into account the materials before it, whether a specified commission or omission of an employee constitutes a misconduct within the meaning of the clause'doing any act prejudicial to the interest of the bank'. If once the management finds that the specified act is prejudicial to the interest of the bank and the said finding is supported by materials then it is a misconduct within the meaning of this clause. The scope of interference with the said finding under Art.226 of The Constitution of India is very little. Yet another argument advanced by the counsel is that if the delinquent is aggrieved by any such find
