B.S. Patil, J.
1. In this writ petition, the petitioner is challenging the order dated 13-1-1998 passed by the Disciplinary Authority removing the petitioner from service and the order of the Appellate Authority dated 12-5-1998 rejecting the appeal and confirming the penalty imposed.
2. Petitioner is an officer of the respondent-Bank who has retired from service on attaining the age of superannuation on 31-10-1995. On certain allegations of misconduct, just prior to the date of retirement, the petitioner was placed under suspension by order dated 7-10-1995. A charge-sheet dated 30-10-1995 alleging that the petitioner has committed certain acts of misconduct was served on him on 31-10-1995. The charges pertained to several acts of omission and commission on the part of the petitioner while working as Chief Manager of the Jayanagar 5th Block Branch, Bangalore. An additional charge-sheet dated 31-10-1995 came to be issued which was served on the petitioner on 3-11-1995. The additional charge-sheet also dealt with similar allegations pertaining to the act of omission and commission on the part of the petitioner while working in the Jayanagar 5th Block Branch as Chief Manager. The respondent-Bank passed an order dated 4-11-1995 ordering that the petitioner will cease to be in the services of the respondent-Bank after his superannuation on 31-10-1995 without prejudice to the disciplinary proceedings initiated against him in respect of the charge-sheet dated 30-10-1995. Petitioner denied the charges. An enquiry was held under the provisions of the Indian Overseas Bank Officer Employees' Discipline and Appeal Regulations, 1976. The Enquiry Officer submitted a report holding that all the charges in the charge-sheet dated 30-10-1995 and the additional charge-sheet dated 31-10-1995 except charge No. 6(c) of the charge-sheet dated 30-10-1995 and first part of Charge No. IV(i) of the additional charge-sheet dated 31-10-1995 stood proved. The Disciplinary Authority issued notice dated 4-1-1997 enclosing copy of the Enquiry Officer's report and calling upon the petitioner to offer his explanation regarding the findings of the Enquiry Officer. The petitioner submitted a reply dated 29-1-1997. The Disciplinary Authority passed an order dated 13-1-1998 accepting the findings of the Enquiry Officer and imposing penalty of removal from service in terms of Regulation 4(g) of the Discipline and Appeal Regulations. Petitioner filed an appeal before the Appellate Authority. By order dated 12-5-1998, the Appellate Authority dismissed the appeal fil by the petitioner and confirmed the order of the Disciplinary Authority. Aggrieved by the order passed by the Disciplinary Authority, as confirmed by the Appellate Authority, the petitioner has presented this writ petition.
3. Learned Counsel appearing for the petitioner Sri P.S. Rajagopal, has advanced the following contentions:
(i) That the petitioner was not paid the provisional pension payable to him every month soon after his retirement and during the period when the enquiry was conducted. The petitioner was also not paid any other allowance and was therefore deprived of his means and source of livelihood resulting in deprivation of a reasonable opportunity to defend himself. In this regard, the learned Counsel has placed reliance on various decisions of this Court and the Apex Court. He has placed reliance on Motor Industries Company Limited v Presiding Officer, Additional Labour Court, Bangalore, 1987(2) Kar. L.J. 110, to highlight that a starving workman cannot defend himself properly. He has also relied on the decision in the case of K.S. Vasudeva Tatachar v State Bank of Mysore, Head Office, Bangalore and Anr., 2002(5) Kar. L.J. 437. Inviting the attention of the Court to paragraphs 7 and 8, learned Counsel has submitted that provisional pension is necessary to keep the body and soul together and non-payment of the same has resulted in the enquiry being vitiated. He has also placed reliance on the decision in Capt. M. Paul Anthony v. Bharat Gold Mines Limited and Anr., : (1999)ILLJ1094SC . Drawing the attention of the Court to the observations made in paragraph 29, he contends that suspension notwithstanding, non-payment of subsistence allowance is an inhuman act which has an unpropitious effect on the life of an employee. It is further contended by the learned Counsel in this connection that the petitioner was constrained to approach this Court by filing W.P. 6131 of 1997, DD: 5-3-1997, seeking for a direction for payment of petitioner's own contribution to CPF and for payment of provisional pension. This Court directed notice to the respondent-Bank on 21-3-1997. Thereafter, the respondent-Bank submitted that arrears of provisional pension was credited to the account of the petitioner on 12-6-1997. But the Bank did not pay the petitioner's own contribution to Provident Fund and finally this Court, passed an order dated 16-3-1998 allowing the writ petition insofar as the claim for provisional pension and the pensioner's own contribution to PF were concerned. In this background, the petitioner submits that the entire disciplinary proceedings have been vitiated as the petitioner was driven to starvation condition by denying the statutory payment that he was entitled to receive.
(ii) The next contention of the petitioner is that the disciplinary proceedings are initiated under the Bank's Conduct, Discipline and Appeal Regulations which have come into effect from 1-10-1976. The entire proceedings initiated under these regulations are without authority of law and are vitiated lacking in jurisdiction and competency is what is contended by the petitioner's learned Counsel. He draws the attention of this Court to Regulation 2 to contend that the regulations in question apply to 'Officer employee' as defined in Regulation 2(i). Regulation 2(i) states that an Officer employee means a person who holds supervisory, administrative or managerial post in the Bank or other person who has been appointed and is functioning as an Officer of the Bank and he thus contends that what is important to make these regulations applicable is that the Officer concerned must be holding the post or functioning as such. If the Officer is no longer in service or has retired from service, he does not fall within the purview of the definition of Officer employee is what is contended. Referring to Regulation 4 which provides for the nature of penalties to be imposed, the learned Counsel states that even in Regulation 4, the penalties which may be imposed are referable to an officer employee for his acts of misconduct or for any other good and sufficient reasons. The penalty of removal which is specified as one of the major penalties in Regulation 4(i) can only be imposed on an Officer employee as defined under the regulations is what is contended by the petitioner. As regards imposition of penalty, drawing the attention of the Court to Regulation 7, learned Counsel submits that action on the report of the enquiry submitted by the Enquiry Officer can be taken as per Sub-Clause (3) of Regulation 4. Thus, the learned Counsel submits that the entire proceedings having been initiated under the Discipline and Conduct Regulations which can be made applicable only to officer employees, no penalty could be imposed against the retired employee under these regulations. Hence, he contends that the impugned orders are vitiated. In this regard, elaborating his contention as to how the term 'Officer employee' has to be understood, learned Counsel has placed reliance on the decision of Food Corporation of India v Bant Singh and Anr., : (1997)IILLJ825SC . Reliance is also placed on an unreported judgment of this Court in B. Ramesh v Vijaya Bank, W.P. No. 19998 of 2001, DD: 20-7-2001.
(iii) It is next contended by the learned Counsel that the other set of Rules namely the Indian Overseas Bank (Officers') Services Regulations, 1979 (for short, 'Officers Service Regulations') which also provides for termination of service of an employee are inapplicable to the instant case. He draws the attention of the Court to Clause (3) of Regulation 20 which provides for continuation of a disciplinary proceedings even after the retirement of an officer. Learned Counsel submits that there is no provision in these regulations to impose any penalty. It is his submission that though Sub-Clause (3)(iii) of Regulation 20 provides that an Officer against whom disciplinary proceedings have been initiated ceased to be in service on the date of superannuation but the disciplinary proceedings will continue as if he was in service until the proceedings are concluded and final order is passed in respect thereof without receiving any pay and allowance after the date of superannuation including the payment of retiral benefits till the proceedings are completed and final order is passed thereon excepting his own contributions to CPF that there is no provision made in these regulations to disallowing the benefits payable to the petitioner after his retirement by way of penalty. Hence, he submits that the continuation of the disciplinary enquiry and the penalty imposed against the petitioner cannot also be justified with reference to the regulations.
(iv) It is next contended by the learned Counsel that the other set of regulations, namely, the Indian Overseas Bank (Employees') Pension Regulation, 1995 which have come into effect 29-9-1995 cannot also be invoked by the Bank for the purpose of justifying its action. In this regard, the learned Counsel brings to the notice of this Court Regulation 41 in Chapter VIII and Regulations 42 to 50 in Chapter IX. Placing particular emphasis on Regulation 43, learned Counsel submits that withholding or withdrawing pensions and part thereof whether permanently or for a specified period is permissible only if the officer is found guilty of grave misconduct. Regulation 45 provides that before passing an order holding that the pensioner is guilty of 'grave misconduct', the Competent Authority has to follow the procedures specified in the Discipline and Appeal Regulations, 1976. So far as the expression 'grave misconduct' is concerned learned Counsel for the petitioner referring to Sub-clause (b) of Regulation 46 contends that 'grave misconduct' includes communication or disclosure of any secret official code or password or any sketch, plan, model, article, note, as mentioned in Section 5 of the Official Secrets Act, 1923 which was obtained while holding office in the Bank so as to prejudicially affect the interest of the general public or the security of the State. Though the definition of the expression 'grave misconduct' is an inclusive definition, the learned Counsel submits that what amounts to grave misconduct has to be understood with reference to what has been referred to in Sub-clause (b), of Regulation 46 and if so understood it can only be such acts of misconduct which are akin to the one's that are mentioned in the inclusive definition of Sub-clause (b) of Regulation 46. If it is so understood, the Counsel submits the allegations made against the petitioner do not amount to 'grave misconduct' and therefore no proceedings under these regulations can be initiated for withdrawing or withholding the pensionary benefits. Relying on Regulation 46 of the Pension Regulations, the learned Counsel submits that even if disciplinary proceedings are instituted, provisional pension equal to the maximum pension which would have been admissible to him should have been allowed subject to adjustment against final retirement benefits upon conclusion of the proceedings as provided under Regulation 46(1). By placing reliance on Regulation 48, learned Counsel contends that for the purpose of imposing penalty of withholding or withdrawing the pension or part thereof upon the pensioner being found guilty of grave misconduct or negligence or criminal breach of trust or forgery or acts done fraudulently during the period of service, the authority shall have to consult the Board before any final order is passed. In the instant case, the Board having not been consulted before the final orders are passed, the impugned order is vitiated, being in contravention of first proviso of Regulation 46 is what is strongly contended by the learned Counsel for the petitioner. Yet another aspect canvassed is that even if the Pension Regulations are made applicable the only penalty that could be imposed is under Regulation 48, of withholding the pension or withdrawal of the same that too in consultation with the Board. No penalty of removal could be imposed as per these regulations. Hence, the impugned order imposing the punishment of removal is unsustainable is what is contended. He further contends that there is no finding by the Disciplinary Authority to hold the petitioner guilty of 'grave misconduct'. He states that the penalty that can be imposed against retired employees cannot be dismissal or removal from service. Substantiating his contention as to what penalties can be imposed against the retired employees, learned Counsel for the petitioner relies on upon the following judgments:
(1) State of Uttar Pradesh v Brahm Datt Sharma and Anr. : 2SCR444 .
(2) State of Maharashtra v M.H. Mazumdar, : (1988)IILLJ62SC .
(3) High Court of Punjab and Haryana v Amrik Singh, 1995Supp. (1) SCC 32.1. : 1995 SCC (Land S) 471 : 1995-11 -LLJ-656 (SC).
(4) Bhagirathi Jena v Board of Directors, O.S.F.C. and Ors., : (1999)ILLJ1236SC .
(5) B.D. Luthra v Chairman and Managing Director, PNB, 2004 Lab. I.C. 3332.
Taking support from all these judgments, the learned Counsel submits that once the employee retires from service, there is no serving relationship between the employer and the employee and the relationship that survives is only with regard to the payment of pension and other retirement benefits and therefore the question of imposing penalty of removal from service was wholly impermissible.
(v) Learned Counsel for the petitioner lastly contends that the Disciplinary Authority has not acted independently while imposing penalty. It has acted on the dictates of the Central Vigilance Commission (for short, 'CVC'). The major penalty of the removal from service is imposed only at the instance of CVC is what the learned Counsel contends. The CVC directives were not made available to the petitioner. Therefore, the procedure followed and the power exercised in this regard is vitiated is what is contended. In this regard, the learned Counsel relies on the decision of this Court in W.P. No. 22155 of 1998, DD: 14-12-2004. Court's attention is drawn to paragraphs 10, 11 and 12 of the said judgment.
4. Learned Counsel for the respondent submits that though the charge-sheet is issued under the Discipline and Appeal Regulation, the deeming provisions in the Pension Regulations will enable the Bank to proceed with the enquiry as per the provisions contained in the Discipline and Appeal Regulations. She placed reliance, in this regard, on Clause (3) of Regulation 20 of the Officers Regulations to contended that the provisions contained in the Discipline and Appeal Regulations and the other regulations, namely the Officers Regulations and the Pension Regulations are not mutually exclusive but are complimentary to each other. As regards the non-payment of provisional pension and the contention that the petitioner was deprived of fair and reasonable opportunity to defend himself in the enquiry, the learned Counsel for the respondent submits that this is a case where the petitioner has fully participated in the enquiry; that the petitioner is on officer who retired as a Senior General Manager of the Bank and that he has never raised any objection regarding the continuance of the enquiry without payment of provisional pension. It is thus contended by the respondent that no prejudice whatsoever is caused to the petitioner nor it is a case where the petitioner is deprived of his right to contest the matter on account of non-payment of subsistence allowance. Meeting the contention urged regarding the assertion that only in respect of 'grave misconduct' the proceedings under the Pension Regulations can be initiated and the pensionary benefits can be withheld or withdrawn, learned Counsel contends that the misconduct alleged in the instant case is grave and severe.
5. It is further contended by the learned Counsel that all the three sets of Regulations have to be read together particularly because there is no contradiction between these regulations. The definition 'Officer employee' as used in Conduct Regulations has to be read with Clause (3) of Regulation 20 of the Officer Employees' Regulations, 1979 and if so done, even a retired employee against whom disciplinary enquiry is instituted will be included in the term 'Officer employee'. It is further contended by the Counsel appearing for the respondent-Bank that soon after attaining the age of superannuation, the petitioner ceased to be in service for the purpose of claiming the benefit of any pay and allowance but so far as the continuance of the disciplinary proceedings is concerned, he will be deemed to be in service until the disciplinary proceedings are concluded. During this period, the petitioner will not be entitled to anything except his own contribution of CPF. Regarding the claim for non-payment of provisional pension, learned Counsel for the respondent-Bank contends that the claim for payment of provisional pension rests under the Pension Regulations. The action being disciplinary action initiated under the Discipline and Appeal Regulations and the penalty of removal having been imposed on the petitioner under Regulation 4(i) of the Indian Overseas Bank Officer Employees' Discipline and Appeal Regulations, the question of payment of provisional pension would not arise. It is further contended that the penalty is not imposed on the employee under the Pension Regulations and therefore the payment of provisional pension does not arise. Reliance is also placed on Regulation 20(3)(iii) to contend that petitioner is not entitled to payment of any subsistence allowance since the said service regulations provide for payment of employee's contribution to CPF only. For the same reason, the learned Counsel would point out that since the disciplinary proceedings were not initiated under Pension Regulations, the requirement to consult the Board of Directors before passing final order did not arise. Imposition of penalty being under the Discipline and Appeal Regulations, 1976, removal of the petitioner from service is justified is what is contended.
6. As regards the contention raised pertaining to the intervention by the CVC and the Competent Authority acting under the dictates of the Commission and regarding non-furnishing of copies of the recommendations of the CVC, the learned Counsel has submitted that the CVC will advice the Bank to proceed with the disciplinary action or choose to entrust the matter to external agency. As per Regulation 19 of the Officer Employees' Discipline and Appeal Regulations, the Bank has to consult Central Vigilance Commission when any case involves vigilance angle. The Central Vigilance Commission has to be consulted with regard to quantum of punishment on which CVC makes recommendations to the Bank whereupon the Disciplinary Authority may take an independent decision. In the instant case, the Disciplinary Authority has independently applied its mind to the facts and evidence on record and has arrived at its own conclusion before imposing the punishment and that the petitioner is not entitled to receive copies of the recommendations made by the CVC unless the same are relied on the referred to in the order of the Disciplinary Authority and that there is absolutely no prejudice caused to the petitioner in this regard is what is contended. Learned Counsel for the respondent has relied on the following judgments in support of her contentions.
(1) Gopichander M.L. v. Andhra Bank, 2002-III-LLJ-306;
(2) Indra Bhanu Gaur v. Committee of Management of M.M. Degree College and Ors., : AIR2004SC248 ;
(3) Syndicate Bank, Manipal v G. Venkataramani, 2000(9) Kar. L.J. 21 : 2001 II-LLJ-483 (Kar.);
(4) Disciplinary Authority-cum-Regional Manager and Ors. v. Nikunja Bihari Patnaik, : (1996)IILLJ379SC ;
(5) Ghanshyam, Das Shrivastava v. State of Madhya Pradesh, : (1973)ILLJ411SC ;
(6) State Bank of India v. C.B. Dhall, : (1999)ILLJ1367SC .
7. As regards the non-payment of provisional pension, Counsel for the respondent has further contended that for the first time the contention is taken up in this regard before the Appellate Authority and in this writ petition. No such contention was taken up before the Enquiry Officer and the petitioner has participated in the enquiry fully without raising any objection in this regard. The learned Counsel further submits that the earlier writ petition bearing W.P. No. 6131 of 1997 was filed by the petitioner on 5-3-1997 seeking payment of provisional pension and contribution to provident fund by which time the enquiry was over and the second show-cause notice was issued on 4-1-1997 itself.
8. Having heard the learned Counsels for the parties, first let me take up the contention urged by the petitioner regarding the competency of the proceedings initiated and the validity of the penalty imposed under the provisions of the Officer Employees' Discipline and Appeal Regulations, 1976. It is contended by the petitioner that the petitioner having retired from service, he is not an Officer employee as defined under Regulation 2(i) of the Discipline and Appeal Regulations. Therefore, the penalty of removal imposed against the petitioner is impermissible and incompetent being beyond the jurisdiction and power of the Disciplinary Authority. The term 'Officer employee' as denned in Regulation 2(i) means 'person who holds supervisory, administrative or managerial post in the Bank or the person who is functioning as an Officer of the Bank by the whatever designation called'. The initiation of the Departmental Enquiry in the instant case has taken place on 30-10-1995 when the first charge-sheet was issued. Petitioner attained the age of superannuation on 31-10-1995. It is thus clear that before he retired from service, disciplinary proceedings were initiated against him. It is also relevant to note here that he was placed under suspension by order dated 7-10-1995 pending enquiry. Regulation 20 of the Indian Overseas Bank (Officers') Service Regulations, 1979 (hereinafter referred to as 'Officers' Service Regulations') deals with termination of service of Officers. Clause (3) of the said Regulations is relevant. Sub-clauses (ii) and (iii) of Clause (3) of Regulation 20 introduces deemed pendency of disciplinary proceedings against a retired employee and deemed continuance of his service until the proceedings are concluded. These two sub-clauses can be usefully extracted as under:
'(ii) Disciplinary proceedings shall be deemed to be pending against any employee for the purpose of this regulation if he has been placed under suspension or any notice has been issued to him to show cause why disciplinary proceedings shall not be instituted against him and will be deemed to be pending until final orders are passed by the Competent Authority.
(iii) The Officer against whom disciplinary proceedings have been initiated will cease to be in service on the date of superannuation but the disciplinary proceedings will continue as if he was in service until the proceedings are concluded and final order is passed in respect thereof. The concerned officer will not receive any pay and/or allowance after the date of superannuation. He will also not be entitled for the payment of retirement benefits till the proceedings are completed and final order is passed thereon except his own contributions to CPF'.
9. In the instant case, the petitioner is placed under suspension on 7-10-1995. Therefore, the disciplinary proceedings shall be deemed to be pending against him since the date of his suspension. As per Sub-clause (iii) of Clause (3) of Regulation 20, when the disciplinary proceedings are initiated against an officer though the officer ceases to be in service on the date of superannuation the disciplinary proceedings will continue as if he was in service until the proceedings are concluded and a final order is passed in respect thereof. The Officer however will not receive any pay and allowance after the date of superannuation and will also not be entitled for payment of retirement benefits till the proceedings are completed except his own contribution to CPF. Thus, the employee in this case continued to be in service for the purpose of the completion of the disciplinary proceedings and was not entitled for the payment of retirement benefits till the proceedings are completed.
10. The 3rd set of rules which are found in Indian Overseas Bank (Employees') Pension Regulations, 1995 (hereinafter referred to as 'Pension Regulations) in Chapter IX provide certain conditions regarding the payment of pension, withholding of the same or its withdrawal. Regulation 48 provides that the Competent Authority may withhold or withdraw pension permanently or for a specified period if in any departmental or judicial proceedings the pensioner is found guilty of 'grave misconduct' etc. For this purpose, the first proviso to Regulation 48 imposes a condition that the Board shall be consulted before any final order is passed. However, the second proviso to Regulation 48 makes it clear that where departmental proceedings were initiated while the employee was in service, then, after retirement of the employee, they shall be deemed to be proceedings under the pension regulations and shall be continued and conducted by the authority by which they were commenced in the same manner as if the employee had continued in service.
11. The question that requires to be addressed is which set of Rules are applicable to the case on hand. What is the effect, purport and intent of the provisions contained in these three sets of Regulations in their application to a fact situation like the present one.
12. If the Pension Regulations are the full and complete answer for initiating and taking action against the retired employee, then no penalty can be imposed after the retirement of an employee if the allegations for which he has been proceeded against cannot be described as 'Grave Misconduct' or if the employee is not punished for serious crime. A question that would then arise is, only because the misconduct is detected at the fag end of his career and the penalty is imposed after his retirement, is he entitled to be exonerated because the allegations are such that may not amount to 'Grave Misconduct' or he is not punished for a serious crime. It is one thing to say that he cannot be visited with the penalty of removal and another to say that no penalty can be imposed unless he is found guilty of 'Grave Misconduct'. Regulation 48 deals with both categories of inquiries initiated, namely, post retiral and pre-retiral. In case of Post Retiral Inquiry, Clause (1) provides for withholding, withdrawing of pension and ordering recovery from pension of any pecuniary loss caused to the Bank, once the pensioner is found guilty of 'Grave Misconduct' or negligence or criminal breach of trust - or forgery or acts done fraudulently during the period of his service provided the Board is consulted before any final orders are passed. But the second proviso to Regulation 48 deals with departmental proceedings initiated prior to retirement which after his retirement - shall be deemed to be proceedings under these regulations and shall be continued and concluded by the authority by which they were commenced in the same manner as if the employee had continued in service.
13. What is the effect of the second proviso to Regulation 48? The deeming fiction introduced in the first part of the second proviso to Regulation 48 would suggest that the departmental proceedings though do not fall within the purview of the Pension Regulations, they shall be deemed to be proceedings under the Pension Regulations. In which event all the provisions particularly of Chapter IX including the requirement spelt out in Regulation 43 that if the pensioner shall be found guilty of Grave Misconduct as defined in Explanation (b) to Regulation 46 before he could be visited with the penalty of withholding or withdrawal of pension have to be satisfied. If this is so, then for all disciplinary enquiries initiated for any other misconduct other than 'Grave Misconduct', no penalty under the pension rules can be initiated. Consequently, though they are found guilty of any other misconduct, they cannot be punished. Prior consultation with the Board also becomes a must. This will introduce a dichotomy and runs counter to the provisions of Regulation 20(3)(iii) of the Officers' Service Regulations as the said provision mandates that the proceedings will continue as if he was in service until they are concluded. If the deeming provision is applied in the manner referred to herein above, the proceedings cannot be concluded unless they are initiated for 'Grave Misconduct'. This dichotomy and ambiguity in the rules gets removed to a large extent if we examine the effect of the latter portion of the second proviso to Regulation 48(1) which reads 'and shall be continued and concluded by the authority by which they were commenced in the same manner as if the employee had continued in service'. The continuation and the completion of the enquiry in the same manner as if the employee had continued in service would show that even after retirement, the Officer shall be deemed to be in service, in terms of what is stated in Regulation 20(3)(iii) of the Officers' Service Regulations and the enquiry can be continued and completed in accordance with the Discipline and Appeal Regulations and for the purpose of recovery of pecuniary loss caused to the Bank and for withholding or withdrawal of pension, they shall be deemed to be proceedings under the Pension Regulations though not initiated for the 'grave misconduct' as provided under Regulation 46(b). The 'grave misconduct' as provided under Regulation 46(b). The 'grave misconduct' referred to herein refers to those who have already retired and against whom proceedings are initiated after retirement. The second proviso of Regulation 48(1) which by a legal fiction treats even the proceedings initiated while the Officer was in service as proceedings under the Pension Regulations cannot be construed to require satisfaction of all the pre-requisites or qualifications prescribed under Chapter IX. of the Pension Regulations to be characterised as proceedings under those Regulations. Even though they do not satisfy these pre-requisites, they shall be deemed to be proceedings under the Pension Regulations is how it has to be understood. That is the effect of the deeming provision. This further gets clarified in the latter part of the second proviso to Regulation 48(1) which envisages the continuation and completion of the enquiry by the authority by which they were commenced in the same manner as if the employee had continued in service. The conclusion of any enquiry takes place when the departmental enquiry initiated gets terminated either in the delinquent being held guilty or getting exonerated. Therefore, the proceedings in the instant case have been completed and the delinquent is found guilty. There is no need for complying with the requirements of Regulation 48(1) or for that matter the requirement prescribed in the first proviso to Regulation 48(1) requiring consultation with the Board before passing the order. If the rules are not so understood in a harmonious manner, as to effectuate their object and purpose by reading them conjointly, it will result in anomalous and absurd results, as pointed out hereinabove. This approach will also not render Regulation 20(3)(iii) unnecessary or unworkable.
14. The next question is whether the allegations made and the findings recorded tantamount to grave misconduct. For this purpose, it is necessary to refer to the nature of the charges levelled.
15. A perusal of the charge-sheet dated 30-10-1995 and the statement of imputations would disclose that the following allegations are made:
'Statement of Imputations:
While working as Chief Manager of our Jayanagar V Block Branch, Bangalore Region you had committed the following irregularities:
(1) You had dishonestly and fraudulently sanctioned a Miscellaneous Cash Credit limit of Rs. 50 lacs on 5-1-1994 to M/s. M.C. Bopanna. You did not have any power to sanction the advance. You had not even referred the fact of sanction information/confirmation to Higher Authorities. Necessary precautions like pre-sanction inspection of properties offered as security, calling for all relevant papers for detailed appraisal of the project were not done by you. Personal guarantee of three property owners is obtained only for the advance value and not for the entire property value. Properties taken as security are not reflected in the assets and liabilities statements of the three guarantors. None of the growers' properties were taken as security. Creation of mortgage is defective and the end use of advance was not verified by you. You had made cash payment of Rs. 4 lacs to Mr. Mallu, one of the guarantors and the reasons for such a huge payment is not ascertained. All these show that you have willfully and deliberately flouted the Bank's lending norms and conferred undue pecuniary advantage to the parties unmindful of the loss that may be suffered by the Bank.
(2) You had disbursed a Miscellaneous Cash Credit Limit of Rs. 42 lacs to M/s. Sierra Property Developers (Private) Limited, without ensuring the following.--
a. You did not even conduct pre-sanction inspection of property offered for mortgage as security;
b. Lease-cum-sale Agreement referred to in the Conditional Sale Deed was not called for;
C. Most of the properties offered as collateral security belong to third party;
d. Their relationship with the promoters and reasons for these third parties offering their properties as securities were not scrutinised by you in detail and found acceptable.
(3) You had dishonestly purchased in March 1995, two cheques amounting to Rs. 18.94 lacs for the account of M/s. Sierra Property Developers (Private) Limited, which was returned unpaid. To adjust this, an 16-4-1995 you had purchased another cheque for Rs. 42.17 lacs and this was also returned unpaid. The said cheques were purchased without any power vested in you. You had thus caused wrongful loss to the Bank and conferred undue pecuniary gain to the party.
(4) You had sanctioned a loan of Rs. 1.50 lacs to Mr. Subramanian, without conducting the pre-sanction inspection of the property offered as security. It turned out that the documents to the property were either forged or defective and the Bank has been put to wrongful loss.
(5) You had sanction a Miscellaneous Cash Credit Limit of Rs. 15 lacs and Term loan of Rs. 40 lacs on 6-9-1994 to M/s. S.V.S. Consultants by exceeding the discretionary powers vested in you, with the following irregularities.--
a. You did not refer the matter to RO/CO for their confirmation;
b. Value of the property was inflated;
c. Mortgage is defective and incomplete;
d. Registration of the property purchased out of the advance amount in the name of the Company was not done and the same was deposited with the Bank, as security;
e. Credit Appraisal was not done properly by you.
(6) You had disbursed Rs. 50 lacs to M/s. Megacity (Bangalore) Developers (Private) Limited by way of Misc. Cash Credit with the following irregularities:
a. You had not conducted pre-sanction inspection of properties offered as security;
b. Value of property was inflated;
c. Mortgage is defective and incomplete;
d. Registration of the property purchased out of the advance amount in the name of the company was not done and the same was not deposited with the Bank as security.
It is thus charged that you failed to ensure and protect the interest of the Bank and discharge your duties with utmost honesty, integrity, devotion, and diligence. You acted otherwise than in your best judgment in the exercise of powers conferred on you and in the performance of your official duties as Chief Manager of the Branch'.
16. The additional charge-sheet issued on 31-10-1995 contains the following charges:
'State of Imputations:
While working as Chief Manager of our Jayanagar V Block Branch, you had committed the following irregularities.--
I. In respect of the Miscellaneous Cash Credit limit sanctioned to M/s. M.C. Bopanna, you had committed the following irregularities.--
1. You had failed to obtain supplemental narration as and when enhancement of credit limits were made;
2. You had failed to obtain approved plan or estimates for the property offered as security;
3. You had failed to obtain credit report from Bank of Baroda with whom the borrower was banking previously and the project report from the borrower;
4. You had failed to obtain the property to be developed as security for the credit limits. You had also not obtained letter of Undertaking from the borrower to sell the collateral security of the share in case where interest for two consecutive quarters remained unpaid;
5. You had knowingly allowed a fraudulent person to impersonate Mr. Mallu, one of the guarantors and to deposit title deeds relating to property owned by Shri Mallu mortgaged as security for the above credit.
II. In respect of the Miscellaneous Cash Credit limit sanctioned to M/s. Sierra Property Developers (Private) Limited, you had committed the following irregularities.--
1. You had failed to verify the genuineness of the mortgagor of the property offered as security for the above credit facility, resulting in an impersonator depositing title deeds in the name of Shri V. Munusamy;
2. You had also failed to verify the genuineness of the documents deposited with the branch resulting in fictitious title deed being deposited with the Bank.
III. In respect of the Cheque Purchase Facility, granted to M/s. Sierra Property Developers (Private) Limited, you had committed the following irregularities.--
1. You had failed to note that four out of the thirteen owners of the property offered as security for the above facility had not signed in the Power of Attorney issued favouring Shri H. Subramanian to deposit the title deed as security to the Bank;
2. The Cheque purchase facility had not been specifically covered by the security;
3. Further legal opinion on whether Agricultural lands mainly used for cultivation could be utilised for House Construction had not been obtained.
IV. In respect of credit limits sanctioned to M/s. S.V.S. Consultants, you had committed the following irregularities.--
1. You had failed to obtain credit report from Canara Bank with whom the borrowers were previously banking. You had also not ascertained in depth the need for approaching our Bank for finance and you did not insist for closure of their account with Canara Bank;
2. You had failed to ensure that the borrowers brought in funds for Rs. 25 lacs for the purchase of the property, resulting in the Bank financing the entire cost of property amounting to Rs. 65 lacs;
3. With utter disregard for the Miscellaneous Cash Credit limit of Rs. 15 lacs, you had passed cheques in the unauthorised miscellaneous Cash Credit account. Further Term loan instalment of Rs. 3.20 lacs had been debited to the Miscellaneous Cash Credit account.
It is thus charged that you failed to ensure and protect their interest of the Bank and discharge your duties with utmost honesty, integrity, devotion and diligence. You acted otherwise than in your best judgment in the exercise of powers conferred on you and in the performance of your official duties as Chief Manager of the branch'.
17. The findings and conclusion arrived at by the Disciplinary Authority are to the following effect:
'All the charges in the charge-sheets dated 30-10-1995 and 31-10-1995 except charge No. 6 (c) of charge-sheet dated 30-10-1995 and first part of charge No. IV(i) of charge-sheet dated 31-10-1995 relating to non-abstention of credit report from Canara Bank, and a portion of charge No. 1 of charge-sheet dated 30-10-1995 relating to not reporting the fact of sanction information to higher authorities are proved.
In view of the proved charges, I hold that the CSO failed to ensure and protect the interest of the Bank and discharge his duties with utmost honesty, integrity, devotion and diligence. He had acted otherwise than in his best judgment in exercise of powers conferred on him and in the performance of his official duties as Manager of the Branch. Thus the CSO has contravened Regulation 3(1) and 3(3) of Indian Overseas Bank Officer Employees' (Conduct) Regulations, 1976, a breach of which would amount to misconduct in terms of Regulation 24 thereof.
18. The Apex Court in the case of Disciplinary Authority-cum-Regional Manager, has held that acting beyond one's authority amounts to misconduct. It was observed as follows.--
'The findings of the Inquiry Officer which have been accepted by the Disciplinary Authority, and which have not been disturbed by the High Court, clearly show that in a number of instances the respondent allowed overdrafts or passed cheques involving substantial amounts beyond his authority. True, it is that in some cases, no loss has resulted from such acts. It is also true that in some other instances such acts have yielded profit to the Bank but it is equally true that in some other instances, the funds of the Bank have been placed in jeopardy; the advances have become sticky and irrecoverable. It is not a single act; it is a course of action spreading over a sufficiently long period and involving a large number of transactions. In the case of a Bank for that matter, in the case of any other organisation every officer/employee is supposed to act within the limits of his authority. If each officer/employee is allowed to act beyond his authority the discipline of the organization/Bank will disappear, the functioning of the Bank chaotic and unmanageable. Each officer of the Bank cannot be allowed to carve out his own little empire wherein he dispenses favours and largesse. No organisation, more particularly, a Bank can function properly and effectively if its officers and employees do not observe the prescribed norms and discipline. Such indiscipline cannot be condoned on the specious ground that it was not actuated by ulterior motives or by extraneous considerations. The very act of acting beyond authority -- that too a course of conduct spread over a sufficiently long period and involving innumerable instances is by itself a misconduct. Such acts, if permitted, may bring in profit in some cases but they may also lead to huge losses. Such adventures are not given to the employees of Banks which deal with public funds. If what we hear about the reasons for the collapse of Baring Bank is true, it is attributable to the acts of one of its employees. Nick Leeson, a minor officer stationed at Singapore, who was allowed by his superiors to act far beyond his authority. As mentioned hereinbefore, the very discipline of an organisation and more particularly, a Bank is dependent upon each of its employees and officers acting and operating within their allotted sphere. Acting beyond one's authority is by itself a breach of constitutes misconduct within the meaning of Regulation 24. No further proof of loss is really necessary'.
19. The allegations made and the charges proved in the instant case do establish grave and gross misconduct on the part of the petitioner. It is not possible to agree with the learned Counsel for the petitioner that the 'grave misconduct' alleged must be akin to those mentioned in the inclusive definition found in Sub-clause (b) of Regulation 46 of the Pension Regulations. The intention of this inclusive definition is to ensure that what is listed there in shall be included in the term grave misconduct along with all others that may be characterised as such. They are not to be used to restrict the connotation of the term 'Grave Misconduct by applying the rule of noscitur a sociis'.
20. Yet another contention that the learned Counsel for the petitioner has strongly urged is that the petitioner having not been paid provisional pension during the period when the enquiry was in progress, was deprived of his basic resources to sustain himself and was thus denied a fair and reasonable opportunity to defend himself in the disciplinary enquiry. Number of decisions are cited by the Counsel for the petitioner in this regard. It is to be noticed here that the disciplinary enquiry was continued after the retirement of the petitioner. The petitioner was working as a Senior General Manager of the respondent-Bank. He participated in the enquiry without raising any objection regarding non-payment of provisional pension. Nothing prevented the petitioner, if really he was struggling hard to sustain himself during the period when he was facing the enquiry, to urge before the authorities that he shall be paid provisional pension so as to enable him to effectively defend himself in the enquiry. He has participated in the proceedings without raising any such objection. Therefore, it is obvious that no prejudice as such can be inferred due to non-payment of provisional pension. The decisions relied upon by the petitioner which mainly pertain to non-payment of subsistence allowance during the pendency of the disciplinary enquiry against the serving employee under different fact situations cannot be made applicable to the facts of the present case which present a different picture altogether. The question of non-payment of provisional pension is raised by the petitioner for the first time before the Appellate Authority. Though he has filed a writ petition before this Court seeking a direction to the respondent-authorities to pay provisional pension, the said writ petition is presented after the conclusion of the enquiry. It is to be noticed in this context that the departmental enquiries came to be initiated on 30-10-1995 when the first charge-sheet was issued. The petitioner attained the age of superannuation on 31-10-1995. He was placed under suspension earlier by order dated 7-10-1995 pending enquiry. After the completion of the enquiry, the second show-cause notice was issued to the petitioner on 4-1-1997. It is only thereafter on 5-3-1997 that the petitioner has filed the writ petition seeking payment of provisional pension. Therefore, it cannot be said, in the facts and circumstances of this case that the petitioner was prejudiced in effectively defending himself in the departmental enquiry on account of the non-payment of provisional pension. Reliance placed by the Counsel for the respondent on the decision in the case of Indra Bhanu Gaur, is well-founded. It is laid down in the said decision that once the employee participated in an enquiry and defended himself, no prejudice can be inferred due to non-payment of subsistence allowance. Thus, in my considered view, non-payment of provisional pension in the instant case, having regard to the position held by the petitioner and his full participation in the enquiry without any demur, cannot be raised by the petitioner.
21. The next contention urged by the petitioner is regarding non-furnishing of copy of the correspondence/recommendation made by the CVC. It is the stand of the respondent-Bank that the Bank has independently applied its mind to all the facts and circumstances of the case before coming to the conclusion that the punishment of removal was required to be inflicted on the petitioner. It has specifically contended that the disciplinary authority is not guided by any recommendation or correspondence made in this regard by the CVC. The learned Counsel for the respondent-Bank has also made available records pertaining to the correspondence made between the Bank and the CVC in this regard. A perusal of the same does not disclose anything to conclude that the Disciplinary Authority has followed the dictates of the CVC and has not formed its own independent opinion after evaluating the facts and circumstances as presented in the case. The allegations and assertions made in this regard have no basis. Question of furnishing copies of the correspondence that have taken place between the Bank and the CVC does not arise as the Bank has not placed any reliance on any such correspondence while imposing the punishment.
22. The next question that will immediately arise in this context is whether the penalty of removal from service imposed on the petitioner is sustainable. Question of removal would arise only if the petitioner was in service at the time when the penalty was imposed. Regulation 20(3)(iii) of the Officers' Service Regulations makes it clear that the Officer against whom disciplinary proceedings have been initiated will cease to be in service on the date of superannuation but the disciplinary proceedings will continue as if he was in service until proceedings are concluded and final order is passed. The rule makes it clear that the officer will not receive any pay and/or allowance after superannuation. The fictional continuation of service as per Regulation 20(3)(iii) is only to authorise completion of enquiry. For all other practical purposes, the services of the officer have come to an end. There is no other act required to terminate the services of the petitioner except completion of enquiry. Any order terminating the services of an employee presupposes continued existence of the employee in service. The order of termination brings about causation of service with effect from the date of termination. Even according to Regulation 20(3)(iii), the services of the petitioner have came to an end on the date petitioner attained superannuation. Date of superannuation is not postponed until the date of completion of enquiry. All other indicia of continued existence of service tenure such as payment of salary and/or allowance etc., that are the necessary concomitance of the service have reached and terminal point on the date of superannuation. Hence, the penalty of removal of the employee from service could not have been imposed. Therefore, having found the petitioner guilty of misconduct, the only course open for the authorities was to initiate action for withholding or withdrawing the benefits due to the petitioner as per the Pension Regulations. This is what is intended by the second proviso to Regulation 48 of the Pension Regulations when it states that the disciplinary enquiry initiated against an Officer before his retirement shall be deemed to be proceedings under the Pension Regulations subject however to the condition that the departmental proceedings shall be continued and completed by the same authority who had initiated it as if the petitioner had continued in service. Therefore, while holding that the penalty of removal from service imposed on the Officer is untenable, it has to be held that the finding of guilt as stood established shall stand undisturbed.
In the result, I pass the following: