ORDER :- The petitioner entered service in 1941 as a cashier in the former Imperial Bank of India. The undertaking of the Bank was in 1955, transferred to the State Bank of India as it was constituted by the provisions of the State Bank of India Act, 1955. Section 43 of this Act empowers the State Bank to appoint its officers, advisers and employees and determine the terms and conditions of their appointment and service. The petitioner was taken over into the service of the State Bank and was in 1958 appointed as head cashier under an agreement for service entered into on 12-8-1958 with it. Clause 1 of the agreement provided that the petitioner

"shall be and continue to be the head cashier of Virudhunagar branch of the bank from 27-7-1958 at a monthly salary of Rs. 182 only rising, subject to approved service, by such, increments as may be granted by the bank at its absolute discretion, such service being determinable on either side by two calendar months notice to that effect subject as hereinafter provided".

With effect from 1-1-1959, the State Bank of India brought into force the State Bank of India (Sub-accountants and head cashiers) Service Rules which admittedly govern the petitioner. Whether these rules are statutory is one of the questions to be considered at the appropriate place. Rule 14 makes provision for termination of the service of a head cashier by giving him such notice or such amount in lieu of notice as may be prescribed in his agreement for service with the bank.

Chapter 6 of these Rules deals with conduct and discipline of the banks employees and the rules contained in this chapter are somewhat peculiar to the nature of the work and conduct in relation to the banking business. Rule 33 particularly lays down a code of conduct for the bank employees and Rule 36 forbids an employee from overdrawing his account with the Bank against security or otherwise without the previous sanction in writing of the specified officers. An employee who falls into debt is required by Rule 37 to disclose his position at once to the bank and indicate how he proposes to rectify his position. Any employee who does not comply with Rule 37 or makes a false statement of his position or is unable to liquidate his debts within a reasonable time shall by Rule 38 render himself liable to dismissal from, service. The next rule prescribes six modes of penalties ranging from censure to dismissal, which can be inflicted on an employee who commits a breach of discipline or is guilty of any act of misconduct. Rule 40 indicates the procedure to be followed for imposing any of the penalties. In case of a dismissal, this rule requires a second opportunity to be given to an employee to show cause against the proposed penalty which is more or less analogous to the familiar procedure under Art. 311(2) of the Constitution.

In July 1961, when the petitioner was working as head cashier at the Periakulam branch of the bank, the Deputy Secretary and Treasurer at the local head office of the bank at Madras framed four charges against him alleging that while he was serving at the Madurantakam branch he was having dealings with money-lenders, had taken loans from the banks constituents at Madurantakam, and had issued cheques in full awareness of the fact that the balance at credit of his account at the Madurantakam branch was insufficient to meet the cheques on the date of drawal; and the two cheques he had issued in June 1961 upon the Madurantakam branch of the bank had been dishonoured for want of sufficient credit to his account. The memorandum of charges stated that the conduct of the petitioner was in breach of Rules 33(1) and 36 of the said Service rules and was unbecoming of a bank employee and called upon him to submit his written statement in defence within a specified time. On 10-8-1961 he submitted his explanation and on 25-8-1961 he was given an oral hearing. Eventually was served on the petitioner an order of the State Bank of Madras dated