State Bank Of India v. Ch. Hanumantha Rao

Jeevan Reddy, J.:— This writ appeal W.A No. 141/86, is preferred by the State Bank of India against the judgment of learned single Judge allowing the writ petition No. 5509/84. The learned single judge has declared the order dismissing the writ petitioner (respondent in this writ appeal) as incompetent and invalid and has further directed that the writ petitioner shall be given an opportunity to set out his defence before the enquny officer which the enquiring authority was directed to consider along with other material before him and to submit a fresh report to the competent authority.

2. For the sake of convenience we shall refer to the parties as arrayed in the writ petition.

3. The writ petitioner was promoted as Grade-i Officer on 1.4.73 by the Executive Committee of the Central Board of State Bank of India, In 1979 he was posted as the Manager of Nellikuctyru branch in Warangal Distt. In respect of certain alleged acts of mis-feasance or mal-feasance, the petitioner was suspended pending enquiry into charges on 17.8.81 On 4.5.82 a memo of charges was communicated to the petitioner by the Chief General Manager. The petitioner submitted his explanation whereupon enquiry officer was appointed. A prosecuting officer was also appointed to conduct the case against the petitioner. On 14.10.1982 the prosecuting officer issued a notice to the petitioner to appear before the nquiry officer on 24.10.82 The notice stated that the petitioner should appear for preliminary enquiry before the enquiry officer. To this the petitioner replied saying that he has already submitted his explanation and that there is no question of any further preliminary enquiry at that stage. He said that the enquiry can proceed. On 21.10.1982 another identical notice was sent to him by the prosecuting officer calling upon the petitioner to appear for preliminary enquiry on 28.1.1983 before the enquiry officer. To this again the petitioner sent an identical reply. Thereafter the enquiry officer submitted his report on the basis of which the Chief General Manager of the State Bank of India, Local Head Office, Hyderabad dismissed the petitioner by his order dated 7.1.1984 Thereupon the petitioner approached this Court by way of writ Petition No. 5509/84 from which this writ appeal arises. The petitioner urged two contentions before the learned singla Judge, viz (1) Inasmuch as he has been appointed by the Executive Committee of the Central Board of Directors of the Bank, his dismissal by the Chief General Manager, who is lower in rank to the Executive Committee is contrary to Rule 50(1) of State Bank of India (Supervising Staff) Service Rules, 1975. (2) That the petitioner could not participate in the enquiry and could not present his (defence also before the enquiry officer because he was misled by the two notices issued by the prosecuting officer saying that a preliminary enquiry was to be held by the enquiry officer. The petitioner did not know that the said notices were in connection with the regular enquiry. Since he has been misled by the notices issued by the prosecuting officer and could not properly defend himself before the enquiry officer, a fresh enquiry should now be held and he should be given proper opportunity to defend himself at such enquiry.

4. The learned single Judge agreed with the petitioner on the first contention and declared the dismissal order to be void and incompetent. On the second contention the learned single Judge was of the opinion that though the petitioner may have been misled by the notices issued by the prosecuting officer saying that preliminary enquiry is going to be held by the enquiry officer the petitioner is also partly responsible for his non-participation in the enquiry. The attitude adopted by the petitioner is not proper. In the circumstances the learned single Judge thought it fit to give only a limited opportunity to the petitioner viz., he was permitted to set out his defence and the appointing authority was directed to consider the same alongside the enquiry officer's report and pass a final order.

5. In this writ appeal it is contended by Sri K. Srinivasa Murthy, the learned counsel for the State Bank of India that on the language of Rule 50(1) of the State Bank of India (Supervising Staff) Service Rules, 1975 the learned Judge was not right in holding that the order of dismissal passed by the Chief General Manager is incompetent or void Counsel contended that the language of Rule 50(1) is altogether different and distinct from the language of Clause (1) of Art. 311 of the Constitution of India and that therefore the decisions rendered under Art. 311(1) are not relevant thereon. He submitted that the proviso to sub-rule (1) of Rule 50 speaks of appointing authority not with respect to particular officer but in relation to a particular category of employees. If so, the learned counsel contended notwithstanding the fact that the petitioner has been appointed by the Executive Committee, the Chief General Manager was competent to dismiss him because the Chief General Manager is the authority competent to make appointments to the Category of Grade-I Officers, to which the petitioner belongs. He also brought to our notice the Staff Circular No. 59 dated 8.7.1977 whereunder the Chief General Manager is designated as the disciplinary authority for Grade-I officers for the purpose of Rule 50(1) of the said rules. On the other hand Sri P.R Prasad, the learned counsel for the writ petitioner supported the reasoning and conclusion of the learned single Judge, The learned counsel submitted further that the learned single Judge was not justified in not affording a full and proper opportunity to the petitioner to participate in the enquiry and limiting the said right to an almost inconsequential participation. He submitted that once the learned Judge held, rightly, that the petitioner was misled by the notices issued by the prosecuting officer and could not therefore participate in the enquiry before the inquiry officer, the proper course was to order a fresh enquiry allowing the petitioner a full participation therein. The counsel submitted that, he has filed cross-objections seeking the said relief.

6. Section 43 of the State Bank of India Act, 1955 empowers the State Bank to appoint such number of officers advisers and employees as it considers necessary or desirable for the efficient performance of its functions and to determine the terms and conditions of their appointment in service. Section 49 confers upon the Central Government the power to make rules to give effect to the provisions of the Act. Sub-section (2) of Section 49 specifies the heads in respect of which rules can be made None of the heads specified says that rules can be made relating to service conditions of the employees of the Bank section 50 comers upon Central Board of Directors of the State Bank of India the power to make regulations to give effect to the provisions of the Act. However this power is subject to certain limitations. This power can be exercised only after consultation of the Reserve Bank and with the previous sanction of the Central Government. Such regulations shall not also be inconsistent with the rules made under Section 49. Sub section (2) of Section 50 specifies the heads in respect of which regulations can be made. Again here, there is no particular clause empowering the Central Board to make regulations governing the service conditions of its employees. Clause (4) in sub-section (2) empowers the regulations to be made for the establishment and maintenance of superannuation funds and other terminal benefits of the bank employees but no further. Sub-section (3) of Section 50 says that the first regulations under Section 50 shall be made by the Reserve Bank with the previous sanction of the Central Government and that the regulation so made shall be deemed to be the regulations made by the Central Board of the State Bank of India and shall have force accordingly until they are amended or repealed.

7. The first set of regulations called State Bank of India General Regulations, 1955” were made by the Reserve Bank of India under Sub-section (3) of Section 50, with the previous sanction of the Central Government. These regulations have been amended from time to time by the Central Board of State Bank of India by making regulations under sub-section (1) of Section. 50. The only relevant regulation for our purposes is Regulation No. 55 and even here sub-regulation (2) thereof. To be more precise it is clause (a) of sub-regulation (2) which is really relevant for our purposes. We may, however, set out the entire Regulation 55 which reads as follows:—

“55.(1) Save as provided in sub-regulation (2), and may be directed by the Central Board, a Local Board may exercise all the powers of the State Bank in respect of the staff serving in the areas in its jurisdiction.

(2) (a) The initial appointments and promotions to various categories of employees in the Bank shall be made:

(i) in the case of officers and employees starting on a pay lower than the starting pay in the scale application for the time being to Officers Grade II, by such authorities in the State Bank as may be specified, where the appointment or promotion is for service in the Circle, by the (Chief General Manager) concerned, and where the appointment or promotion is for service in or under Central Office, by the Managing Director;

(ii) in the case of Officers Grade II and Grade I and of other employees to whom the Rules of Service applicable to Officers Grade II or Grade I generally apply with or without modifications, by the (Chief General Manager) concerned or the Managing Director according as the appointment or promotion is for service in the Circle or in or under Central Office;

(iii) in the case of Staff Officers of various grades and of other employees to whom the Rules of Service applicable to Staff Officers generally apply with or without modifications by the Managing Director;

(iv) in the case of Senior Staff Appointments and of employees to whom Rules of Service applicable to Senior Staff Appointments generally apply with or without modifications, by the Executive Committee;

Such officers or employees shall not be dismissed from service of the State Bank by an authority lower than the appointing authority.

(b) The salary and other emoluments to be granted to Officer and other employees with a starting pay equivalent to or higher than the starting pay in the scale applicable for the time being to Officers Grade II, shall be as laid down in Rules of Service approved by the Central Board where no such rules have been laid down, as fixed by the Executive Committee.

(c) xxxx

(d) The power to grant pensions to officers and other employees leaving the service of the State Bank, other than pensions provided for under the rules of the pension funds respectively applicable to them, shall be reserved to ???

(e) The grant of gratuities or other financial assistance, either temporary or permanent, to widows, children or other dependants of deceased officers or other employees shall be made by the Executive Committee of the Central Board except where the grant of any such gratuity or financial assistance is authorised by any general direction given by the Central Board.”

8. It would be appropriate to mention, at this stage itself, the manner in which Regulation 55(2)(a) came to be amended from time to time. In 1967, Regulation 55(2)(a) read thus:—

“The initial appointment of officers of all categories shall be made by the Executive Committee, Such Officers shall not be dismissed from the service of the State Bank except by the Executive Committee.”

9. In 1971 i.e, by virtue of the amendment effected in the meeting of the Central Board held on 18.8.1971, Regulation 55(2)(a) as in its present shape came into being. The only difference is that at that time the designation of the Chief General Manager was Secretary and Treasurer. By virtue of a resolution dated 29.3.1974 which was brought into force with effect from 1.7.1974, the expression Chief General Manager was substituted whereas the expression “Secretary and Treasurer” occurred in the said clause (a).

10. A reading of Regulation No. 55(2)(a), both before and after the amendment in 1971, discloses the following position. Prior to 1971, appointment of Officers of all categories could be made only by the Executive Committee. Therefore Regulation No. 55(2)(a) stated that such officers shall not be dismissed from service except by the Executive Committee. In 1971 however, the Bank thought it appropriate to designate different authorities as appointing authorities for different categories. The Executive Committee remained the appointing authority only with respect to Senior Staff appointments. In the case of Officers Grade II and Grade I, the power of appointment came to be. vested in the Secretary and Treasurer (who in 1974 was designated as Chief General Manager). In other words for Grade-I officers, with which category alone we are concerned here; the appointing authority was the Chief General Manager. The proviso in Regulation 55(2)(a) now stated that such Officers or employees shall not be dismissed from service by an authority, lower than the appointing authority. It is evident that when the Executive Committee was the only appointing authority, the regulation stated that the officers shall not be dismissed from service by anyone except the Executive Committee but when the power of appointment came to be vested in several authorities in relation to different categories, the proviso stated that such officers shall not be dismissed by art authority lower than the appointing authority. This aspect is important and has a bearing upon the facts of this case as we shall presently show. But before we proceed further, it is necessary to refer to the relevant provisions in the State Bank of India (Supervising Staff) Service Rules, 1975. Indeed these rules superseded the 1955 rules but to which no reference is necessary in this appeal. There can be little doubt that these rules are not statutory in nature. They are made by the State Bank of India as contemplated by Section 43(1) of the Act. Whereas the regulations made under Section 50, being delegated legislation, have statutory force, the rules made as contemplated by Section 43 do not constitute delegated legislation and do not therefore has statutory force. At the same time it must be said, the said rules being rules of general application and being the only rules governing the service conditions of the Bank employees, have to be followed and are binding upon both the bank and its employees.

11. Now coming to the Rules, they are applicable to all the officers and other employees who are in the service of the Bank on 30.6.1955 either as officers or as assistants. Rule 3 defines certain expressions. Clause (f) defines the expression ‘appointing authority’. In relation to Officers of Grade-I serving in the Circle, it means the Chief General Manager concerned. The expression ‘disciplinary authority’ is defined in Clause (w) to mean such authority as is specified by the Executive Committee from time to time. Rule 50 deals with the authority competent to initiate disciplinary proceedings, the authority competent to impose punishment and also the procedure to be followed in holding disciplinary enquiries. For our purposes sub-rule (1) of Rule 50 alone is relevant. It reads as follows:—

“50(1)(i) The Disciplinary Authority may itself, or shall when so directed by its superior authority, institute disciplinary proceedings against an employee.

(ii) The Disciplinary Authority or any authority higher than it may impose any of the penalties in rule 49 on an employee.

Provided that where the Disciplinary Authority is lower in rank than the Appointing Authority in respect of the category of employees to which the employee belongs no order imposing any of the major penalties specified in clauses (e), (f), (g) and (h) of rule 49 shall be made except by the Appointing Authority or any authority higher than it on the recommendations of the Disciplinary Authority.”

12. According to Rule 50(1), the initiation of disciplinary proceedings has to be done by the disciplinary authority. (As already stated the Bank has designated Chief General Manager as the Disciplinary Authority in the case of Grade-I Ofjficers). The sub-rule further says that the Disciplinary Authority or any authority higner than it may impose any of the penalties mentioned in Rule 49 on an employee. (The penalties mentioned in Rule 49 includes the penalty of dismissal. The proviso to sub-rule (1) upon wmcn a good amount of discussion took place before us, provides for the situation where “the Disciplinary Authority is lower in tank than the appointing authority in respect of the Category of employees to which the employee belongs.” In such a case, it says, the major penalties specified in clauses (e), (f), (g),’(h) of Rule 49 (and which includes the penalty of dismissal) shall not be made by anyone excepting the appointing authority or any authority higher to it”.

13. Before the learned single Judge and for some time before us as well, the arguments proceeded on the assumption that at the time the petitioner was promoted as Grade-I Officer, the authority competent to appoint him to that post was the Executive Committee and that only at a later point of time the Chief General Manager was empowered and designated as the appointing authority. We however, found, on verification, that this assumption is not correct. As pointed out here-in-before, even in 1971 the Secretary and Treasurer of the concerned Circle was designated as, the appointing authority for Grade-I Officers. All that happened in 1974 was that the Secretary and Treasurer of the concerned circle was re-designa-ted as the Chief General Manager of the Circle. Now the petitioner herein was appointed to Grade-I Officer by promotion on 1.4.1973 On that date the Secretary and Treasurer/Chief General Manager was the appointing authority for the said post. But what actually happened was that the appointment of the petitioner was made not by the Secretary and Treasurer/Chief Generejl Manager, but by the Executive Committee. We may also state Here that though the order of appointment relating to the petitioner has not been placed before us, it is conceded by Sri Srinivasamurthy, the learned counsel for the Bank that the petitioner was indeed appointed to Grade-I Officer by the Executive Committee. The learned counsel for the petitioner has placed before us an order of the Executive Committee dated 12.8.1974 extending the petitioner's probation by six months with effect from 1.4.1974 This proceeding reinforces the ptitioner's assumption that he was appointed to Grade-I by the Executive Committee.

14. Another fact which we must mention at this stage is that no reference appears to have been made to Regulation 55(2) before the learned single Judge. Even before us the regulation was referred to only at a later stage of arguments. On hearing the parties fully, we have come to the conclusion that the said regulation has a significant bearing upon the facts and fate of this case. The entire judgment of the learned single Judge is based upon Rule 50(1) of the Service Rules which the learned Judge likened to Article 311(1) of the Constitution and applied the principle of the decisions rendered thereunder to the facts of the case. We may briefly refer to the controversy. Rule 50(1) reads thus:—

“50(1)(i) The Disciplinary Authority may itself, or shall when so directed by its superior authority, institute disciplinary proceedings against an employee.

(ii) The Disciplinary Authority or any authority higher than it may impose any of the penalties in rule 49 on an employee.

Provided that where the Disciplinary Authority is lower in rank than the Appointing Authority in respect of the category of employees to which the employee belongs no order imposing any of the major penalties specified in clauses (e), (f) and (h) of rule 49 shall be made except by the Appointing Authority or any authority higher than it on the recommendations of the Disciplinary Authority.”

15. A close reading of the proviso makes it clear that only where the Disciplinary Authority specified by the Executive Committee as such for a particular category is lower than the appointing authority for that category, does the proviso come into operation. Where the Disciplinary Authority is the same as the appointing authority for that category of employees to which the delinquent belongs as in the present case there is no occasion to resort to, or refer to, the said proviso. Even otherwise the question is when the said proviso says “no order imposing any of the major penalties shall be made except by the appointing authority”, does it mean appointing authority for the delinquent concerned or does it mean the appointing authority for the category of employees to which the delinquent employee belongs? While the learned counsel for the petitioner says that the expression “appointing authority” means the appointing authority vis-a-vis the particular delinquent employee, the counsel for the Bank says that the said expression ‘appointing authority’ must be construed in the same manner and in the same sense in which it occurs in the first part of the proviso. While we find good amount of force in the contention of Mr. Srinivasa Murthy and in the interpretation suggested by him, we do not think it necessary to express a final opinion on the said question since there is a more important provision, viz., Regulation 55(2)(a), with reference to which the rights of the parties herein have to be decided. As pointed out hereinbefore, while the Service Rules have no statutory force the Regulations are statutory in character. In other words, the Regulations stand on higher footing than the Rules. There is no dispute before us that the Regulations also apply to, and must be taken into account while deciding the question at issue herein.

16. Now, according to Regulation 55(2)(a), the appointing authority for Grade-I Officers is the Secretary and Treasurer/Chief General Manager, from 1971. Had the appointment of the petitioner been made by Secretary and Treasurer/Chief General Manager, there is no question that the impugned order passed by the Chief General Manager would have been a valid order passed by a competent authority. But, in this case, the appointment of the petitioner was made not by the Secretary and Treasurer/Chief General Manager, but by the Executive Committee. The question is whether in such a case the Chief General Manager can dismiss him? The proviso to Regulation 55(2)(a) specifically says that “such officers or employees shall not be dismissed from service of the State Bank by an authority lower than the appointing authority”. It is clear that the guarantee is to the officers or the employees concerned, and to each of them. The guarantee is that they shall not be dismissed by an authority lower than the authority which appointed them. In this case, the authority that appointed the petitioner is the Executive Committee. It is not in dispute that the Chief General Manager is lower in rank than the Executive Committee, if so, dismissal by the Chief General Manager is violative of the guarantee contained in the proviso to Regulation 55(2)(a). Mr. Srinivasa Murthy contended that we should not look to the particular authority which appointed the petitioner but we must look to the category of Grade-I Officers and see who is the appointing authority for such category, and once it is found that the authority who passed the dismissal order is the appointing authority for that category, that should be held to be sufficient compliance with the proviso. We are not inclined to agree. It is true that Regulation 55(2)(a) as amended in 1971 designated the Secretary and Treasurer of the concerned Circle as the appointing authority for Grade-I Officers; but that does not mean that such appointments cannot be made by the Executive Committee. The Executive Committee is not deprived of its power to make such appointment even in the case of Grade-I Officers. The correctness of this position is accepted and affirmed by Mr. Srinivasa Murthy. In fact, he could not say otherwise, since in such a case the very appointment of the petitioner would become void and invalid. Indeed, Mr. Srinivasa Murthy expressly stated before us that all the appointments of Grade-I Officers, between the years 1971 to 1975 were made only by the Executive Committee, and not by the Secretary and Treasurer/Chief General Manager, notwithstanding Regulation 55(2), and that they are ail valid appointments. This means that appointment of Grade-I Officers could be made either by the Executive Committee, or the Chief General Manager (called Secretary and Treasurer, until 1974). Both were competent appointing authorities for Grade-I Officers. In such a case, we have to decide whether it wold be reasonable and appropriate to say that where an officer has been appointed by the Executive Committee, he can be dismissed by the Chief General Manager, who is admittedly an authority lower than the Executive Committee, on the ground that he too is an appointing authority for the category to which he belongs. We think not. For, holding so would ineffectuate the guarantee in Regulation 55(2)(a). We may reiterate that this is not a case where the appointing authority is substituted after the appointment of the employee; this is a case where even at the time of the petitioner's appointment to this category, the Chief General Manager (Secretary and Treasurer) was empowered to make appointment to this category but he did not make the appointment; it was made by the Executive Committee, another authority - a higher authority - competent to make such appointment. We are of the opinion that in such a situation the guarantee contained in Regulation 55(2)(a), extended as it is to the employees, must be construed as referring to the appointing authority who actually appointed the particular employee. The guarantee is that he will not be dismissed by an authority lower in rank than the authority which appointed him. This is a peculiar situation not dealt with in any of the decisions cited before us. A brief reference to them would however be appropriate at this stage.

17. The first decision cited by the writ-petitioner is of the Supreme Court in Krishna Kumar v. Divisional Assistant E.E, Central Railway, (1979) 4 SCC 289 : AIR 1979 SC 1912. In this case, the appellant, Krishna Kumar, was appointed as a Train Lighting Inspector by the Chief Electrical Engineer. He was removed from service by the Divisional Asstt. Engineer. It was challenged by him by way of a writ petition in High Court. On the writ petition being dismissed, the matter was carried to Supreme Court. The contention raised by the appellant was examined with reference to Art. 311(1) of the Constitution, which says “no person who is a member of a civil service of the Union or of an All India Service, or a civil service of a State, or holds a civil post under the Union or a State, shall be dismissed or removed by an authority subordinate to that by which he was appointed”. It was found that the Divisional Asstt. Engineer who rempved the appellant, was subordinate in rank to the Chief Electrical Engineer; but, it was also found that on the date of removal, Divisional Asstt. Engineer was the appointing authority for Train Lighting Inspectors, inasmuch as that power was delegated to him a few years earlier to the impugned order of removal. For the Railways it was argued that inasmuch as the Divisional Asstt Engineer has been given the power to make appointment to the posts of Train Lighting Inspectors, he has also the power to remove any person from that post. This argument was rejected in the following words:

“We cannot accept this contention. Whether or not an authority is subordinate in rank to another has to be determined with reference to the state of affairs existing on the date of appointment. It is at that point of time that the constitutional guarantee under Art. 311(1) becomes available to the person holding, for example, a civil post under the Union Government that he shall not be removed or dismissed by an authority subordinate to that which appointed him. The subsequent authorisation made in favour of respondent 1 (Divisional Asstt. Engineer) in regard to making appointment to the post held by the appellant cannot confer upon respondent 1 the power to remove him. On the date of the appellant's appointment as a Train Lighting Inspector, respondent 1 had no power to make that appointment. He cannot therefore have the power to remove him.

Besides, the delegation of the power to make a particular appointment does not enhance or improve the hierarchical status of the delegate. An officer subordinate to another will not become his equal in rank by reason of his coming to possess some of the powers of that another. The Divisional Engineer, in other words, does not cease to be subordinate in rank to the Chief Electrical Engineer merely because the latter's power to make appointments to certain posts has been delegated to him……”

18. On the above reasoning, the order of removal was held to be incom petent and invalid. Mr. K. Srinivasa Murthy sought to distinguish this decision on the ground that whereas the guarantee in Art. 311(1) is to each employee, which is evident from the words “no person shall be dismissed or removed by an authority subordinate to that by which he was appointed”, the guarantee, if at all so-called in Rule 50(1) of the Service Rules is not a guarantee to each employee, but to each category of employees as such. He, therefore, submitted that so long as the person removing an employee is an appointing authority for that category, it is sufficient. But, as we have pointed out above, whatever may be said about the position under Rule 50(1) of the Service Rules, the position under Regulation 55(2)(a) is entirely different. The language employed in the proviso to Rule 55(2)(a) equally constitutes a guarantee to each employee, since it says “such officers or employees shall not be dismissed from the service of the State Bank by an authority lower than the appointing authority”. There is a distinction in the language employed in the proviso to sub-rule (1) of Rule 50 of the Service Rules and the language employed in the proviso to sub-Regulation (2) of Regulation 55. While the distinction sought to be drawn by Mr. K. Srinivasa Murthy may be valid in respect of the proviso to Rule 50(1), it is not relevant in the case of the proviso to Regulation 55(2)(a). Of course, there is another distinction, viz., that in the case before the Supreme Court, while on the date of appointment of the appellant the Chief Electrical Engineer was the appointing authority, by the date of his removal the power of appointment was delegated to the Divisional Asstt. Engineer. It is, however, not clear whether by such delegation the Chief Electrical Engineer was denuded of the said power of appointment, or not. In any event, since, the removal was effected by an authority lower in rank to the authority which appointed the appellant therein, the removal was held to be bad. In our opinion, the principle of the decision is clearly applicable herein, inasmuch as the language of the proviso to Regulation 55(2)(a) is, in substance, the same as that of clause (1) of Art. 311 of the Constitution.

19. Mr. K. Srinivasa Mutiny placed strong reliance upon the judgment of a learned single Judge of the Gujarat High Court in G.S Bhambhani v. State Bank Of India ., Ahmedabad, (1984) 25 (2), Gujarat Law Reporter, 870. In that case too it was contended by the petitioner, an employee of the State Bank of India that inasmuch as he was appointed by the local Board, i.e, the Executive Committee, his removal by the Chief General Manager is incompetent. Reliance was placed upon the decision ‘of the Supreme Court in Krishna Kumar's case, (1979) 4 SCC 289 : AIR 1979 SC 1912. The learned Judge distinguished the decision saying that it was one rendered” under Art. 311 of the Constitution, which is not applicable to Bank employees. He ascribed the petitioner's argument to a misconception that just because the Bank is a ‘State’ within the meaning of Art. 12, the petitioner is presuming that all the Articles of the Constitution are applicable to him. The learned Judge held that inasmuch as Art. 311 is not applicable to the petitioner therein, the argument based upon the said decision is liable to be rejected. We do not find any reference to Regulation 55(2)(a) in the said decision and, therefore, we cannot treat it as an authority supporting the petitioner's contention.

20. Reliance is then placed upon the decision of the Supreme Court in Krishna Mohan v. Secretary & Treasurer, S.B.I, 1983 (1) Labour Law Journal, 228 and in particular paragraph 12 thereof. On a perusal of the judgment, however, we do not think that the point decided therein has any relevance on the question herein.

21. Counsel for the writ-petitioner (respondent in the Writ Appeal) relied upon certain, decisions to which a brief reference would be in order. In Mysore State v. M.K Ali, 1977 (1) SLR 237, it was held that the employees concerned therein having been appointed by the Superintendent of the Traffic Department of the erstwhile State of Hyderabad, could be dismissed, after Reorganisation, only by an authority equal in rank to the said authority. In that case, the order of dismissal was actually made by an authority lower in rank to the General Manager of the Transport Department of the Mysore Government. It was found that only the General Manager is equal in rank to the Superintendent of the Traffic Department of the erstwhile Hyderabad State. For that reason, the dismissal was held to be bad. Of course, this is again a case under Art. 311(1). This was so held notwithstanding the fact that the General Manager was the appointing authority for the said category of employees in the Mysore State on the date of dismissal.

22. In Gwalior District Cooperative Central Bank Ltd. v. Ramesh Chandra Mangal, 1985 (1) LLJ 523, the Supreme Court held that where the Board of Directors of a District Central Cooperative Bank was superseded by the Registrar and the powers thereof vested in one of the employees of the Bank who was appointed as the Chief Executive Officer, such officer cannot be delegated the power to dismiss the employees, which power vested in the Board of Directors.

23. We do not think it necessary to refer to other decisions cited by the parties, since we do rot find them to be relevant on the question at issue.

24. Accordingly, we agree with the conclusion of the learned single Judge that the order of dismissal passed by the Chief General Manager is incompetent and invalid, being violative of the guarantee contained in the proviso to Regulation 55(2)(a) of the State Bank of India General Regulations, 1955.

25. Now coming to cross-objections, we must say that they have become infructuous inasmuch as it is stated today by the counsel for the writ-petitioner that, the writ-petitioner died day-before-yesterday, i.e, on 24.11.1987 Indeed, the hearing of this and other connected matters had begun, on 23.11.1987 and only yesterday the said fact was intimated to us. On account of the death of the writ-petitioner it is unnecessary for us to go into the merits of the contentions urged by way of cross-objections. There is no question of any enquiry or further enquiry hereafter. We may mention in this connection that the learned counsel for the petitioner (respondent in this Writ Appeal) offered to file a petition to bring on record the legal representatives of the deceased writ-petitioner as respondents in this Writ Appeal since, according to him, they would be entitled in any event to claim the monetary benefits flowing from the orders of this Court. Now that we have agreed with the learned single Judge that the order of dismissal was incompetent and invalid, we direct that the writ-petitioner shall be treated to be under suspension pending enquiry till 24.11.1987 and all the monetary benefits that he is entitled to on that basis, including the arrears of suspension allowance, shall be paid over to his legal representatives. Mr. Prasad will file the legal-representatives petition within two weeks from today. Post this Writ Appeal for orders after two weeks.

26. The Writ Appeal, accordingly, fails and is dismissed; but, in the circumstances, without costs.

27. Mr. K. Srinivasa Murthy, the learned counsel for the appellant, makes an oral request for grant of leave to appeal to the Supreme Court under Art. 133 of the Constitution. We are, however, not satisfied that this case involves a substantial question of law of general importance which in our opinion needs to be considered by the Supreme Court. The oral application is, accordingly, rejected. However, we direct that the judgment of this Court shall remain suspended for a period of three months from today.

W.P No. 194 of 1983.

28. The facts in this writ petition are almost identical to the facts in W.A 141 of 1986 in so far as the question of law raised therein is concerhed. Here too, the petitioner was appointed as a Probationary Officer (Grade-I Officer) on 7.12.1971 by the Executive Committee and confirmed in that post. In pursuance of a disciplinary enquiry held against him, he was dismissed from service by the order dated 22.12.1982 passed by the Chief General Manager. For the reasons given in our judgment in W.A No. 141 of 1986, the said order is liable to be set aside on the only ground that the Chief General Manager was not competent to pass the said order of dismissal and that only the Executive Committee could have passed such an order.

29. The learned Counsel for the petitioner raised several contentions with respect to the conduct of enquiry against the petitioner. He submitted that the enquiry has been held in violation of principles of natural justice; that it is vitiated by bias; that undue influence was exercised over the witnesses for both sides and also that certain relevant documents asked for by the petitioner were not supplied which has handicapped the writ petitioner in defending himself properly and effectively. We are of the opinion that this is not the appropriate stage or forum for going into the said grievances. If and when a final order is passed against him, he has got a right of appeal where he can, urge all these contentions. Having said this, however we must point out as to what happened in this case as a act. Against the order of dismissal, the petitioner filed an appeal as provided by Rule 51 of the State Bank of India (Supervising Staff) Service Rules. Rule 51(2) provides the manner in which the Appellate Authority shall deal with and dispose of the appeal. It says:

“The Appellate Authority shall consider whether the findings are justified and/or whether the penalty is excessive or inadequate and pass appropriate orders. The Appellate Authority may pass an order confirming enhancing reducing or setting aside the penalty or remitting the case to the authority which imposed the penalty or to any other authority with such directions as it deems fit in the circumstances of the case.”

30. We find on a perusal of the appellate order in this case that, it is not in conformity with the requirements of the Rule. The appellate order is very brief and reads thus:

“With reference to your appeal dated the 14th September, 1982 against the orders passed by the Chief General Manager and Disciplinary Authority, the Local Board and the Appellate Authority at their meeting held on the 16th December, 1982, after due consideration of the entire matter, resolved as follows:

“Resolved that after considering the appeal of Shri S. Vijaya kumar, formerly Branch Manager of TadikaJapudi Branch, in all its aspects, the Local Board is of the opinion that there is no justification for interfering with the orders passed by the Disciplinary Authorty. The appeal accordingly stands dismissed.

2. Please acknowledge this letter on the duplicate hereof.”

31. It would be immediately evident that the appellate authority has not considered the correctness or otherwise of any of the findings recorded against the petitioner nor has it examined the justifiability or otherwise of the penalty. In this connection we may refer t° the decision of the Supreme Court in A.L Kalra v. Project and Equipment Corp., 1984 (2) SLR page 446 rendered with reference to Rule 35 of Project and Equipment of India Ltd. Employees (Conduct Discipline and Appeal) Rules, which Rule is precisely in the same terms as Rule 51(2) of the State Bank of India (Supervising Staff) Service Rules. In Para 30 of the judgment, the Supreme Court ruled thus:

“Sub-rule (ii) of Rule 35 provides amongst others that the Appellate Authority shall consider whether the findings are justified or whether the penalty is excessive or inadequate and pass appropriate orders within three months of the date of appeal. In order to ascertain whether the rule is complied with the order of the appellate authority must show that it took into consideration the findings the quantum of penalty and other relevant considerations. There is no material for showing that the appellate authority acted in consonance with its obligation under Rule 35. However, in paras 5, 14 to 17 of the counter-affidavit, it was stated that full inquiry report with annexure can be shown to the court at the time of hearing, if desired. If the respondent was anxious to sustain its action, it was obligatory upon it to disclose the full inquiry report. Nothing was shown to us nor any attempt to show the proceedings of the appellate authority to disabuse our mind that the appellate authority was guilty of utter non-application of mind and discharged its duty under Rule 35.”

32. There is yet another decision of the Supreme Court rendered with reference to a similar Rule. In R.P Bhatt v. Union of India, (1986) 2 SCC 651 : A.I.R 1986 S.C page 1040, the decision is rendered with reference to Rule 27(2) of the Central Civil Services (Classification, Control and Appeal) Rules (1965). Rule 27(2) reads as follows:

“27(2). In the case of an appeal against an order imposing any of the penalties specified in Rule 11 or enhancing any penalty imposed under the said Rules, the appellate authority shall consider:

(a) whether the procedure laid down in these rules has been complied with and if not whether such non-compliance has resulted in the violation of any provisions of the Constitution of India or in the failure of justice;

(b) whether the findings of the disciplinary authority are warranted by the evidence on the record; and

(c) whether the penalty or the enhanced penalty imposed is adequate, inadequate or severe;

and pass orders—

(i) confirming, enhancing, reducing or setting aside the penalty; or

(ii) remitting the case to the authority which imposed or enhanced the penalty or to any other authority with such direction as it may deem fit in the circumstances of the case.”

33. A comparison of Rule 27(2) with Rule 51(2) concerned herein would show that, of the three clauses Rule 27(2), only clause (i) is not present in our Rule, but clauses (ii) and (iii) are practically the same. The Supreme Court observed that the word ‘consider’ in Rule 27(2) implies due application of mind’, and further that the appellate authority is required to consider, inter alia, whether the findings of the disciplinary Authority are warranted by the evidence on record and whether the penalty imposed is adequate. It is only thereafter that it shall pass orders confirming, enhancing, etc., the penalty, or remitting back the case to the original authority. Inasmuch as the order of the appellate authority did not show that the appellate authority had kept the above factors in mind or that the order was made in compliance with the said requirement, the order was held to be bad.

34. We have set out the above principles more by way of guidance to the appellate authority. Indeed, we have merely reiterated what the Supreme Court has already said in similar situations. We hope and trust that the appellate authority shall keep the above principles in mind in disposing of the appeals in such matters. They must remember that this Court does not go into the correctness or otherwise of findings of fact recorded in such a proceeding, and that this Court is concerned only with the procedural violations and the errors of law, if any. The final authority to decide upon the factual issues is the appellate authority. The appellate authority, we are sure, will realize this significance of its jurisdiction and power and dispose of appeals according to law as indicated hereinbefore.

35. The order of dismissal dated 22.12.1982 passed by the Chief General Manager is, accordingly, quashed on the ground that he was, not competent to pass the said order. It is, however, open to the Executive Committee now to consider the entire material and take appropriate decision in the matter. In case the petitioner feels aggrieved by such a decision, it is always open to him to avail of the remedy of appeal provided by Rule 51 of the Rules. Mr. K. Srinivasa Murthy, learned Standing Counsel for the Bank stated that as on today no authority is prescribed as the Appellate Authority against the orders passed by the Executive Committee. Even if the submission is factually correct, we think it is the duty of the Bank to designate such an Appellate Authority, because according to Regulation 55(2)(a), the Executive Committee still continues to be the only punishing authority for senior staff members. It would not be proper to say that where the Executive Committee pases the order of punishment, the right of appeal conferred by Rule 51 will not be available to concerned employees. We are sure that the Bank would designate an appropriate authority as the Appellate Authority under Rule 51 against the orders passed by the Executive Committee.

36. The Writ Petition is accordingly allowed. No costs.

37. Order accordingly..