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Sbi And Others v. Arvind K. Shukla .
Factual and Procedural Background
An internal disciplinary enquiry was initiated by the State Bank of India (SBI) against one of its officers on Charges 1(a), 1(b), 1(c), 1(d), 2 and 3. The Enquiry Officer found Charge 1(c) fully proved and the remaining charges partly proved. Upon receipt of the report, the Disciplinary Authority disagreed with the Enquiry Officer on Charges 1(a), 1(b), 1(d), 2 and 3, treating them as fully proved and recommending a major penalty under Rule 49(g) of the State Bank of India (Supervisory Staff) Service Rules. Acting under Rule 68(3)(iii), the Appointing Authority terminated the officer’s services.
The officer’s statutory appeal was dismissed, prompting a writ petition before the Madhya Pradesh High Court. A learned Single Judge allowed the petition, holding that the Disciplinary Authority’s failure to furnish reasons for disagreeing with the Enquiry Officer vitiated the punishment. SBI’s intra-court appeal (LPA No. 358 of 1996) was dismissed by a Division Bench. SBI then appealed to the Supreme Court.
Legal Issues Presented
- Whether, when a Disciplinary Authority disagrees with an Enquiry Officer’s findings on specific charges, it must first record its tentative reasons for the disagreement and supply them to the delinquent officer, affording an opportunity to respond before finalising its decision.
Arguments of the Parties
Appellant (State Bank of India)
- Asserted that there was no real “disagreement” with the Enquiry Officer; rather, the Disciplinary Authority drew different conclusions on accepted findings by applying the Service Rules, so no further opportunity to the officer was required.
Respondent (Delinquent Officer)
This information was not available in the provided opinion.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Punjab National Bank v. Kunj Behari Misra (1998) 7 SCC 84 | A Disciplinary Authority that disagrees with an Enquiry Officer must record tentative reasons and give the employee an opportunity to respond before imposing punishment. | Treated as binding; formed the decisive basis for dismissing SBI’s appeal. |
| Institute of Chartered Accountants case (1986) 4 SCC 537 | Endorsed the requirement of notice and opportunity when higher authority disagrees with the enquiry findings. | Cited to reinforce the principle accepted in Punjab National Bank. |
| Ram Kishan case (1995) 6 SCC 157 | Same principle of prior notice upon disagreement with enquiry findings. | Relied upon as supporting authority. |
| S.S. Koshal 1994 Supp (2) SCC 468 | Earlier view that no such notice was necessary. | Expressly held not to lay down the correct law. |
| M.C. Saxena (1998) 3 SCC 385 | Earlier contrary view. | Also held not to state the correct law. |
| Union Bank of India v. Vishwa Mohan (1998) 4 SCC 310 | Concerned the effect of not supplying the enquiry report to the employee. | Distinguished; Court noted that the precise question in the present case was not involved there. |
| Managing Director, ECIL v. B. Karunakar (1993) 4 SCC 727 | Established principle that failure to supply the enquiry report prejudices the employee. | Referenced while distinguishing Union Bank of India. |
Court's Reasoning and Analysis
The Supreme Court examined the Enquiry Officer’s report alongside the Disciplinary Authority’s findings and concluded that the Disciplinary Authority did, in fact, disagree with the Enquiry Officer on Charges 1(a) and 1(d). Because such disagreement existed, the Court applied the rule laid down in Punjab National Bank v. Kunj Behari Misra, which mandates that the Disciplinary Authority:
- Record its tentative reasons for disagreement, and
- Provide those reasons to the delinquent officer and allow a representation before finalising punishment.
No contrary three-Judge Bench decision was shown to the Court. The cases of S.S. Koshal and M.C. Saxena were reaffirmed as incorrect on this point, and Union Bank of India v. Vishwa Mohan was found inapposite because it dealt only with non-supply of the enquiry report. Applying the binding precedent, the Court held that the failure to supply tentative reasons fatally tainted the dismissal order. Consequently, the High Court was correct in setting aside the termination.
Holding and Implications
APPEAL DISMISSED.
By dismissing SBI’s appeal, the Supreme Court reaffirmed that when a Disciplinary Authority departs from an Enquiry Officer’s findings, it must disclose its tentative reasons and provide the employee an opportunity to respond. The immediate effect is that the officer’s dismissal remains quashed, and the principle in Punjab National Bank v. Kunj Behari Misra continues to govern similar disciplinary proceedings; no new precedent was created, but an important safeguard for employees was reinforced.
Order
1. State Bank of India is in appeal against the judgment of the Division Bench of the Madhya Pradesh High Court in LPA No. 358 of 1996. By the said judgment, the Division Bench has affirmed the decision of the learned Single Judge and refused to interfere with the same. It is not necessary to narrate the facts in detail. Suffice it to say that an enquiry was conducted against the delinquent, an officer of the Bank in respect of Charges 1(a), 1(b), 1(c), 1(d) and Charges 2 and 3. On the basis of the materials produced, the enquiring officer came to the conclusion that Charge 1(c) is fully proved but so far as other charges are concerned, it came to the conclusion that charges have been partly proved. On receipt of the findings of the enquiring officer, the disciplinary authority re-examined the materials and did not agree with the conclusion of the enquiring officer on Charges 1(a), 1(b), 1(d), 2 and 3. The disciplinary authority, on the other hand, came to the conclusion that Charges 1(a), 1(b) and 1(d) must be held to have been fully proved, and taking into account the gravity of the charges, the disciplinary authority recommended the case to the appointing authority for infliction of a major punishment. This he was entitled to under Rule 49(g) of the State Bank of India (Supervisory Staff) Service Rules. The appointing authority ultimately terminated the service of the delinquent servant in exercise of his power under Rule 68(3)(iii) of the said Service Rules. The delinquent then preferred an appeal under the statutory rule, but being unsuccessful therein, preferred a writ petition. The learned Single Judge came to the conclusion that non-furnishing of the reasons, which weighed with the disciplinary authority to differ with the findings of the enquiring officer to the delinquent is fatal, and vitiates the ultimate order of punishment inflicted upon, and therefore the learned Single Judge allowed the writ petition. The Bank assailed the said order by preferring an appeal, but the Division Bench having dismissed the same, the Bank has preferred this appeal before this Court. The only question that arises for our consideration is whether in a case where the disciplinary authority disagrees with the enquiring officer on certain articles of charges, then before it records its findings of such charge, it is duty-bound to record its tentative reasons for such disagreement and give the same to the delinquent officer, an opportunity to represent before it ultimately records its findings.
2. Mr Sundaravardan, the learned Senior Counsel appearing for State Bank of India contended before us that in the case in hand, in fact, there has been no disagreement with the findings of the enquiring officer by the disciplinary authority, and on the other hand, the disciplinary authority on the accepted findings of the enquiring officer has recorded his conclusion differently on the basis of the relevant provisions of the Rules, and therefore the question of giving an opportunity to the delinquent at that stage does not arise. To appreciate this contention, we have been taken through the findings of the enquiring officer and Charges 1(a) and 1(d) as well as the reasonings and ultimate conclusion of the disciplinary authority on those two charges. On examining the same, we are not persuaded to accept the submission of the learned counsel and in our view, the disciplinary authority has disagreed with the conclusion and findings arrived at by the enquiring officer. The next question therefore is, as has been formulated earlier, whether the disciplinary authority was required to record its tentative reasons for disagreement and give to the delinquent officer an opportunity to represent before it recorded its ultimate findings. This question is concluded by a three-Judge Bench decision of this Court in the case of Punjab National Bank v. Kunj Behari Misra (1998) 7 SCC 84. The Bench in the aforesaid case relied upon the earlier decision in Institute of Chartered Accountant case (1986) 4 SCC 537, (1986) 1 ATC 714 as well as Ram Kishan case (1995) 6 SCC 157, (1995) 31 ATC 475 and came to hold that the view expressed in S.S Koshal 1994 Supp (2) SCC 468, (1994) 27 ATC 834 and M.C Saxena (1998) 3 SCC 385 cases do not lay down the correct law. Mr Sundaravardan, however, brought to our notice yet another three-Judge Bench decision in the case of Union Bank of India v. Vishwa Mohan (1998) 4 SCC 310 and contended that a different view has been taken in the aforesaid cases. But on examining the aforesaid decision in Union Bank of India case (1998) 4 SCC 310 we find that the question which arose for consideration in Punjab National Bank case (1998) 7 SCC 84 was not really there before the Court and the Court was examining the question as to what would be the effect, if copy of the enquiry report is not furnished to the delinquent employee. The Court obviously relied upon the Constitution Bench decision of this Court in Managing Director, ECIL v. B. Karunakar (1993) 4 SCC 727, (1993) 25 ATC 704. In the absence of any contrary decision of a three-Judge Bench decision on the question in issue, we are bound by the earlier judgment of this Court in Punjab National Bank case (1998) 7 SCC 84 necessarily, therefore we do not find any merit in this appeal, which stands dismissed.
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