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Smart Summary

Factual and Procedural Background

The respondent, serving as a Cashier-cum-Clerk in the appellant Bank, was discovered in January 1994 to have misappropriated funds by entering fictitious credits and manipulating ledger balances. Upon detection, he admitted the fraud in writing on 3-3-1994 and repaid the defalcated sum of Rs 14,000. A departmental charge-sheet was served, but the respondent failed to file a reply. An internal enquiry was scheduled for 15-11-1994, adjourned twice due to his non-appearance, and ultimately proceeded ex parte on 14-12-1994 when he again remained absent. The enquiry officer recorded management evidence, found the respondent guilty, and the disciplinary authority dismissed him from service after furnishing the enquiry report and hearing his representation. The respondent’s departmental appeal was rejected. He then raised an industrial dispute; the Central Government Industrial Tribunal-cum-Labour Court set aside the dismissal on grounds of procedural unfairness and ordered reinstatement with full back wages on 6-11-1998. The Bank’s writ petition was dismissed by the High Court of Uttarakhand on 8-8-2008, affirming the Tribunal’s award. The present appeal challenges that High Court judgment.

Legal Issues Presented

  1. Whether the domestic enquiry against the respondent violated principles of natural justice, thereby vitiating the dismissal order.
  2. Whether the Industrial Tribunal and the High Court erred in directing reinstatement with full back wages despite the respondent’s admitted misconduct.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Supreme Court found both reasons relied upon by the Industrial Tribunal to declare the enquiry defective as “completely untenable.”

  • Failure to verify adjournment request: The Tribunal held that the enquiry officer should have ascertained from the bank whether the respondent’s alleged adjournment letter (claiming injury) had been received. The Court ruled that natural justice cannot be stretched so far as to stall internal proceedings indefinitely; after two prior unexplained absences, the enquiry officer was justified in proceeding when the respondent again failed to appear without prior intimation.
  • No opportunity for rebuttal evidence: Given the respondent’s multiple written and oral admissions of guilt, the Court considered it unnecessary to grant a further opportunity to adduce defence evidence. Requiring such a step would serve no practical purpose and undermine expeditious disciplinary proceedings.
  • The Court emphasized that even “three barren dates” in an internal enquiry constitute undue delay and endorsed the need for prompt conclusion of in-house disciplinary matters.
  • Because the Bank had not reserved liberty to lead evidence before the Tribunal, the Court assessed the validity of the original enquiry itself and found it fair and compliant with natural justice.

Holding and Implications

APPEAL ALLOWED; the judgments of the High Court and the award of the Industrial Tribunal are set aside. No order as to costs.

Consequently, the respondent’s dismissal from service stands reinstated, and the directions for reinstatement with back wages are vacated. The decision resolves the dispute between the parties but sets no new precedent beyond reaffirming limits on the extension of natural justice principles in domestic enquiries.

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    State Bank Of India v. Hemant Kumar .

    Aftab Alam, J.— Delay condoned. Leave granted. This appeal is directed against the judgment and order dated 8-8-2008 passed by the High Court of Uttarakhand. By the impugned judgment, the High Court dismissed the writ petition filed by the appellant before it and affirmed the award dated 6-11-1998 made by the Central Government Industrial Tribunal-cum-Labour Court, Pandu Nagar, Kanpur, directing reinstatement of the respondent in the service of the appellant Bank with full back wages.

    2. The respondent worked in the appellant Bank as Cashier-cum-Clerk. In January 1994 it was discovered that the respondent had been indulging in misappropriation of money by making fictitious entries and manipulations in the bank's ledgers. On his malfeasance coming to light, the respondent not only admitted his guilt in writing vide memo dated 3-3-1994 but also deposited the amount of Rs. 14,000 to make good the amount earlier defalcated by him.

    3. The respondent was given a charge-sheet detailing his various acts of omission and commission to which he did not give any reply. Nevertheless, before the enquiry officer in course of the preliminary enquiry he expressed the intent to defend himself in the enquiry. The enquiry was first fixed on 15-11-1994 but on that date the respondent did not appear without giving any intimation to the enquiry officer. Due to his non-appearance the enquiry was adjourned to 28-11-1994. On that date, once again, he did not come to participate in the enquiry proceedings but sent a request for adjournment on the ground that his mother-in-law was seriously ill at Agra.

    4. The enquiry was once again adjourned and it was fixed for 14-12-1994. The respondent was intimated about the next date fixed in the enquiry through registered post as well as hand delivery letters dated 15-11-1994 and 28-11-1994 respectively. On 14-12-1994 the respondent was once again absent and there was no intimation from him.

    5. In those circumstances and having regard to the fact that the witness intended to be examined by the management in support of the charge had come in connection with that enquiry from Delhi to Dehradun for the third time, the enquiry officer decided to proceed with the enquiry and examine him ex parte.

    6. PW 1 happened to be the Branch Manager where the respondent was posted at the material time and where the misappropriation was committed by him. In the course of his evidence, in reply to the question what action was taken by him when the fraudulent entry came to light, the witness stated as follows:

    “PW 1: Shri Hemant Kumar (EPA) confessed having made a fraudulent entry of Rs. 14,000 dated 26-9-1993 in Account No. 1287 of Miss Shivani and also confessed to having balanced Ledger No. 10 by manipulating the total on pp. 2 and 3 of Ext. P-2. Hemant Kumar (EPA) gave a confession letter, Ext. P-4 probably on 10-2-1994 and he was asked to deposit Rs. 14,000. Shri Hemant Kumar (EPA) deposited Rs. 14,000 in the account of Miss Shivani on 11-2-1994 vide credit voucher, Ext. P-3 which has been written in the hand of Hemant Kumar.”

    7. After recording his evidence, the enquiry officer closed the enquiry and submitted his report holding the respondent guilty of all the charges. A copy of the enquiry report was sent to the respondent along with a letter telling him that it was tentatively decided to dismiss him from service and asking him to show cause and to appear for a personal hearing. The respondent gave his reply to the enquiry report and after hearing him in person, the disciplinary authority passed the order of his dismissal from service.

    8. The respondent preferred an appeal against the order passed by the disciplinary authority, and during the pendency of the appeal he submitted yet another letter admitting his guilt in writing, presumably hoping that a lenient view would be taken in the appeal. In the memo dated 10-12-1986 addressed to the Manager, State Bank of India, the respondent stated as follows:

    “Dear Sir,
    Subject: Entry dated 26-9-1993 for Rs. 14,000.
    With reference to above, I committed a fraud by wrong crediting Rs. 14,000 on 26-9-1993 which was Sunday in SB Account No. 1287 of Shivani and Lt. Col. G.G Agrawal and I was closing the wrong balancing of Ledger No. 10 … months. For which I am extremely sorry and shameful. I beg you to … for this shameful act and I promise you not to do such thing in future.”

    9. His appeal was, however, dismissed and then the respondent raised an industrial dispute which was referred for adjudication before the Central Government Industrial Tribunal-cum-Labour Court. The Industrial Tribunal found and held that the domestic enquiry held against the respondent suffered from violation of the principles of natural justice.

    10. The Tribunal further noted that in the written statement filed by the appellant Bank, the plea was not reserved to make good the charges by leading evidence before the Tribunal in case the domestic enquiry was held to be defective. The Tribunal, accordingly, set aside the order of dismissal and directed for the respondent's reinstatement with full back wages.

    11. The Tribunal has assigned two reasons for holding that the departmental enquiry held in the case was in violation of the principles of natural justice. First, it held that the respondent had sent an application through post for adjournment of the enquiry on 14-12-1994 on the ground that he had sustained injuries and even though this application had not reached the enquiry officer it was his duty to find out from the bank whether or not such a letter was received and secondly, even after examining PW 1 ex parte the enquiry officer should have given another opportunity to the respondent to lead evidence in rebuttal. In this connection, the Tribunal made the following observations:

    “In the instant case I find that after 14-12-1994 the witness of the management were (sic was) examined but no opportunity was given for adducing evidence in defence. Apart from this I find that the workman concerned had applied through post and (sic for) adjournment on 14-12-1994 on the ground that he had sustained injuries. Before this Tribunal workman concerned has adduced evidence to prove that fact that he had applied for adjournment through post. O.P Chaudhary, PW 1, Enquiry Officer has stated that he had not received any such application. However, he had admitted in cross-examination that the mail is received in the office of the bank premises. It appears that from the bank this letter was not handed over to the enquiry officer. In any case it is held that application was sent by post and in this way there is a presumption that such application would have reached the addressee. Hence, the workman concerned had applied for adjournment. There was no inordinate delay in holding of enquiry as it was only third date of hearing hence it cannot be said that the workman concerned had adopted dilatory tactics.”

    12. We are of the view that both the reasons assigned by the Tribunal for condemning the departmental enquiry as defective are completely untenable. The principles of natural justice cannot be stretched to a point where they would render the in-house proceedings unworkable. Admittedly, the respondent had not appeared for the enquiry on two earlier dates. On the third date too he was absent and there was no intimation from him before the enquiry officer, yet the Tribunal insists that it was the duty of the enquiry officer to find out from the department concerned of the bank whether any intimation or application was received from the respondent.

    13. Let us take a case where the enquiry is not being held in the bank premises or even in the same town, where the branch of the bank concerned is located. In such a situation, it may take hours or even a day or two to find out whether any letter or intimation from the person facing the enquiry was received in the bank and for all that time the Enquiry Committee would remain in suspended animation. The Tribunal's observation that it was only the third date of hearing and hence, it could not be said that the respondent had adopted dilatory tactics can only be described as unfortunate.

    14. We completely reject the notion that three barren dates in an in-house proceeding do not amount to delay. Let the in-house proceedings at least be conducted expeditiously and without any undue loss of time.

    15. The second reason assigned by the Tribunal that the enquiry officer should have allowed the respondent the opportunity to lead evidence in rebuttal is also without substance in the overall facts of the case. The respondent had already tendered two admissions of guilt in writing and one orally before PW 1 and there was hardly anything that could be said on his behalf to repel the charges.

    16. We are, therefore, satisfied that the Tribunal's findings are wholly unreasonable and perverse and fit to be set aside. The High Court, unfortunately, did not consider the matter as it should have, in light of the discussions made above. The High Court's order is equally unsustainable. We, accordingly, set aside the order passed by the High Court and the award made by the Tribunal. The appeal is allowed but with no order as to costs.

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    Comments

    State Bank Of India v. Hemant Kumar .
    (Apr 6, 2011)