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IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 02/03/2006
Coram
The Hon'ble Mr. Justice Elipe DHARMA RAO
W.P. No.39127 of 2005
to 39131 of 2005
M. Anbu .... Petitioner
-Vs-
1. The Reserve Bank of India
Rajaji Salai
Chennai 600 001
2. The Lakshmi Vilas Bank Limited
rep. by its Chairman
No.2 Salem Road
Kathaparai
Karur 639 006
3. The Disciplinary Authority
Human Resources Development Dept.
The Lakshmi Vilas Bank
No.2, Salem Road
Kathaparai
Karur 639 006
4. Mr. T. Vasu Deva Sarma
Enquiry Officer
HRD Department, Administrative Office
Kathaparai
Karur 639 006 .... Respondents
Petitions under Art.226 of the Constitution praying for a Writ of Certiorarified Mandamus to call for the records relating to the proceedings of the Disciplinary Authority, the third respondent herein, bearing Ref. No.CGS(E)/16/2005/295/2005-06 dated 10-11-2005 and quash the same and consequently direct the Disciplinary Authority to permit the petitioner to engage a lawyer to assist him in the Departmental Enquiry on the charge sheet dated 24-6-2005.
For Petitioner :: Mr. N.G.R. Prasad
for Mr. R. Sathiyamohan
For Respondents :: Mr. Jayesh Dolia for
M/s. Aiyar & Dolia
:COMMON ORDER
Aggrieved by the order of interim injunction dated 5-12-2005, restraining the respondents from proceeding with the departmental enquiry initiated against the petitioner, the respondents have filed the petitions to vacate the interim injunction. When the petitions to vacate the interim injunction were taken up for hearing, learned counsel appearing on either side agreed that the main writ petition themselves may be taken up for final hearing and disposal.
2. The facts, in brief, are as follows:
Petitioner is working as the Chief Manager in the Administrative Office of the second respondent bank and recently posted as Faculty in the Staff Training College of the second respondent bank at Karur. Petitioner claims that he has put in 25 years of unblemished service and by virtue of his hard work, sincerity and honesty, he has risen to the position of Faculty in the second respondent bank.
While so, the petitioner was served with five charge-sheets dated 30
-4-2005, 24-6-2005, 25-6-2005, 4-8-2005 and 16-8-2005, alleging that he had committed certain lapses while extending credit facility to M/s. Sri Priyalakshmi Garments while he was working as Manager in Tiruppur Branch during the period between 1995 and 1999; that he had committed certain lapses in the matter of extending credit facilities to M/s. Balapattabhi and M/s.R.S.L. Industries while he was working as the Manager of Coimbatore branch during the period between 2000 and 200 1; that he had committed certain irregularities in providing credit facilities to M/s.Hy-Luck Fashions when he was working as Manager of Coimbatore Branch; and that he had committed eight different acts of irregularities when he was working as the Divisional Manager at the Divisional Office at Karur.
The petitioner submitted his explanation to the above said charge sheets.
The second respondent bank, not satisfied with the explanation offered by the petitioner, initiated departmental enquiry against the petitioner in respect of all the said five different charge memos and appointed the third respondent as the Enquiry Officer and one N. Kavirajan as the Presenting Officer.
The petitioner gave a representation dated 8-11-2005 requesting the Enquiry Officer to permit him to engage a legal practitioner to defend his case in the Departmental Enquiry. The Disciplinary Authority, by communication dated 11-11-2005, rejected the request of the petitioner. Aggrieved against the same, the petitioner has filed the present writ petitions.
The writ petitions were admitted by this Court on 5-12-2005 and by the order of interim injunction, the respondents were restrained from proceeding with the departmental enquiry. The respondents have filed the petitions to vacate the interim injunction granted by this court.
As stated above, with consent of parties, the main writ petitions themselves were taken up for final hearing and disposed of by this common order and learned counsel for the parties submitted their arguments in the main writ petitions themselves.
3. In sum and substance, the grievance of the petitioner appears to be the denial of his request to engage a lawyer as defence representative in the departmental enquiry initiated against him by the second respondent.
4. Shri N.G.R. Prasad, learned counsel for the petitioner submitted that the petitioner has put in more than 25 years of unblemished service in the second respondent bank and by virtue of his hard work, sincerity and integrity has risen to the position of Faculty. All of a sudden, the second respondent issued five different charge sheets, within a span of 100 days, against the petitioner alleging various acts of commission and omission in extending credit facilities, incurring expenditure without substantiating proof, falsification of records, suppression of facts, etc. The charges levelled against the petitioner, on the face of it, were not sustainable as they are false and foisted against the petitioner with a deliberate intention of harassing and victimising him and maligning his blemishless record of service.
5. Learned counsel further submitted that though the petitioner submitted his explanation to the charge memos, the second respondent bank chose to reject the same and initiated the disciplinary enquiry by appointing the third respondent as the Enquiry Officer and one Kavirajan as the Presenting Officer. The said Kavirajan was earlier working in the Disciplinary Action Cell of the Canara Bank and after his joining the second respondent bank he has acted as Presenting Officer in many departmental enquiries and as such he is having the vast and immense experience in the filed of domestic enquiries. The petitioner, in order to defend his case in a proper and effective manner, sent a representation dated 9-1-2005 requesting permission to have the assistance of a legal practitioner as defence representative in the departmental enquiry. The second respondent bank, by the impugned communication rejected the request of the petitioner on the ground that the Presenting Officer is not a legal practitioner and not qualified in law.
6. Learned counsel for the petitioner assailed the the impugned order as arbitrary and unsustainable in law. Referring to Regulation 6( vii) of the second respondent bank Officers' (Discipline and Appeal) Regulation, 1993 (in short 'the Regulation'), he argued that as per the said regulation, the charge-sheeted officer may be permitted to engage a legal practitioner if the presenting officer appointed is a legal practitioner or if the circumstances of the case so require. In the facts and circumstances of the present case though the presenting officer is not a legal practitioner, by virtue of his vast experience in the Disciplinary Action Cell and having acted as Presenting Officer in many departmental enquiries, he is a legally trained person. Further taking into consideration the gravity of the charges levelled against the petitioner and the far-reaching consequences, if the said alleged allegations are proved against the petitioner in the departmental enquiry, the second respondent bank ought to have permitted the petitioner to have the assistance of a lawyer as defence representative in the domestic enquiry. Learned counsel also dubbed the impugned order as one passed without application of mind and in breach of principles of natural justice.
7. In support of his contentions, learned counsel relied on the judgments in PUSHPA IYENGAR v. INDIAN AIRLINES CORPORATION AND ANOTHER (1985 I LLJ 385); VENKATRAMAN SAMBAMURTHY v. UNION OF INDIA AND ANOTHER (1986 I LLJ
62); C.L. SUBRAMANIAM v. COLLECTOR OF CUSTOMS, COCHIN (1972 I LLJ 465); CHAIRMAN & MANAGING DIRECTOR, HINDUSTAN TELEPRINTERS LTD. v. RAJAN ISAAC (2005 I TLNJ 378).
8. Learned counsel for the respondents, at the out set, raised a preliminary objection regarding maintainability of the writ petitions. According to the learned counsel, the second respondent bank is a private bank and, therefore, they are neither a 'State' nor an ' instrumentality or agency of the State' nor a company which is financed and owned by the State within the meaning of Art.12 of the Constitution of India.
9. Learned counsel further submitted that in so far as the matters relating to the service conditions, maintenance and enforcement of discipline among the officers and staff, the second respondent bank is having its own Disciplinary Rules and Regulations. The subject matter of the writ petitions is with reference to the disciplinary proceedings initiated against the petitioner under the Regulation, the Reserve Bank of India has no role to play in the matter. Reserve Bank of India has been impleaded as a party respondent obviously with a view to clothe the jurisdiction under Art.226 of the Constitution.
10. Learned counsel, relying on the decisions in FEDERAL BANK LTD. v. SAGAR THOMAS AND OTHERS (2003 AIR SCW 4995) and PITCHUMANI v. MANAGEMENT OF SRI CHAKRA TYRES LTD. (2004 (3) CTC 1) and also an unreported decision of this Court in W.P. No.8004 of 2004 (B. Gurunathan v. Lakshmi Vilas Bank) delivered on 24-6-2004, submitted that no writ will lie against any private bank and therefore the writ petitions are liable to be dismissed in limine as not maintainable.
11. On the merits of the case, learned counsel for the respondents submitted that Regulation 6(vii) provides that the delinquent employee may have the assistance of a legal practitioner only in cases where the Presenting Officer appointed by the Disciplinary Authority is a legal practitioner. In the present case, since the Presenting Officer is neither a legal practitioner nor a person qualified in law, the petitioner's request was rightly rejected in terms of Regulation 6( vii). Learned counsel further submitted that the petitioner himself is a person well-versed in the departmental proceedings as he himself acted as Enquiry Officer in many departmental proceedings and therefore he is familiar with the procedures involved in the departmental enquiry.
12. Learned counsel, relying on the decisions in BHARAT PETROLEUM CORPORATION LTD. v. MAHARASHTRA GENERAL KAMGAR UNION (AIR 1999 SC 401) and CHAIRMAN AND MANAGING DIRECTOR, HINDUSTAN TELEPRINTERS v. RAJAN ISAAC (2005) II LLJ 610 Mad.; submitted that a delinquent has no right to be represented in the departmental proceedings by a lawyer unless the service rules and regulations provide for the same. Learned counsel submitted that the present writ petitions have been filed only with an intention to protract the departmental proceedings. Learned counsel, therefore, submitted that the writ petitions are liable to be dismissed.
13. In reply to the above preliminary objection, learned counsel for the petitioner submitted that not only the banking operations of the second respondent bank, but its internal management and affairs relating to its officers and staff is under the direct supervision and control of the Reserve Bank of India. The rules and regulations regarding the service conditions of the officers and staff are given effect to only after the approval by the Reserve Bank of India.
14. Learned counsel further submitted that even assuming that the second respondent bank is a private bank, there are well recognised exceptions to the general rule that no writ will lie against a private person, viz. when there is a non-compliance or violation of a statutory provision; where the impugned action patently suffers from jurisdictional error or ex facie arbitrary and illegal or affects the Fundamental Rights of the petitioner or not in conformity with the principles of natural justice, etc. In a departmental enquiry full and adequate opportunity should be given to the delinquent employee to put forth his defence in an effective and proper manner and for that purpose he could even seek the assistance of a qualified legal practitioner to defend his case and denial of such opportunity, if sought for, is nothing but breach of principles of natural justice. Learned counsel further argued that when Regulation 6(vii) of the Regulations specifically provides for such assistance, denial of such assistance to the petitioner is illegal and arbitrary.
15. Learned counsel stretched his arguments further to submit that taking into consideration the number of charges alleged against the petitioner and the gravity thereof and the vast experience of the Presenting Officer in the field of Departmental Enquiries, if the petitioner could not defend his case in an effective and proper manner by having the assistance of a legal practitioner, the consequences would be far-reaching and have the effect of affecting the petitioner's livelihood. Learned counsel therefore submitted that for all these reasons, the present case is undoubtedly an exception to the general rule that no writ will lie against a private/scheduled bank.
16. Heard the learned counsel for the parties and perused the records. The questions that arise for consideration are:
1.Whether the writ petitions are maintainable in law and on facts?
2.Whether the second respondent bank, in the facts and circumstances of the case, is justified in denying the petitioner's request to have the assistance of a legal practitioner to defend his case in the departmental enquiry?
17. On the question of maintainability, learned counsel submitted that not only the banking operations but even the internal management and affairs of the bank including the service conditions of the officers and staff of the second respondent bank come under the direct supervision and control of the first respondent Reserve Bank of India and, therefore, the present writ petitions are maintainable.
18. Learned counsel further vehemently argued that it is now a well settled law that a writ petition is maintainable even against a private body when the impugned action of such private body infringes the petitioner's Fundamental Rights guaranteed under Art.21 of the Constitution of India. On the backdrop of this premise, learned counsel submitted that by the impugned order the petitioner is deprived of the assistance of a legal practitioner to defend his case in the departmental enquiry and if the petitioner could not defend his case effectively and properly for want of assistance of a legal practitioner, the results would be far reaching and may have the effect of affecting his livelihood, which is now recognised by the Courts as Fundamental Right under Art.21 of the Constitution of India.
19. The contentions of the learned counsel for the petitioner, in the facts of the present case, are not sustainable in law and on facts. The contention of the learned counsel that even though the second respondent bank is a private bank, it comes under the direct control and supervision of the first respondent bank is wholly unsustainable. True it is, the second respondent bank, though a private bank, its' banking operations in strict sense such as lending operations, maintenance of statutory liquidity ratio, maintenance of cash reserve, rate of interest on loans, maintenance of accounts, periodical audit, etc. are controlled by the statutory rules and regulations and the guidelines issued by the Reserve Bank of India from time to time. However, the internal matters such as maintaining and enforcing the discipline among the officers and staff, the second respondent bank has its own rules and regulations. The said rules and regulations, though required to be approved by the Reserve Bank of India, are distinct and independent. The impugned order has been passed under Regulation 6(vii) of the second respondent bank Officers' (Discipline and Appeal) Regulations, 1993. Therefore, there is no question of breach of any statutory provision or any of the rules or regulations or even any guideline issued by the Reserve Bank of India. In such circumstances, the impleadment of the first respondent Reserve Bank of India as a party respondent to the writ petitions is unnecessary and, as rightly contended by the learned counsel for the respondents, Reserve Bank of India has been ingenuously impleaded as a party only with a view to circumvent the maintainability hurdle.
20. The second limb of argument that the impugned order has the potential and possibility of affecting the livelihood of the petitioner and thereby infringes his Fundamental Right guaranteed under Art.21 is too stretched argument and, in the facts of the present case, such a wide-stretched argument cannot be accepted.
21. In FEDERAL BANK LIMITED v. SAGAR THOMAS AND OTHERS (2003[10] SCC
733) the question whether the appellant bank is a private body or falls within the definition of the State or local or other authorities under the control of the Government within the meaning of Art.12 came up for consideration. The facts of the said case are more or the less similar nay identical. In the said case, a dismissed employee of the private bank challenged the order of dismissal by filing a writ petition before the High Court. A preliminary objection regarding maintainability of the writ petition against the private bank was raised. The High Court on the ground that the bank is performing a public duty and a positive obligation towards its employees and customers exists held that the writ petition is maintainable, which finding was upheld by the Division Bench. While upsetting the orders passed by the High Court, the Supreme Court, on the question of maintainability, observed as follows: "Private companies would normally not be amenable to the writ jurisdiction under Art.226 of the Constitution. But in certain circumstances a writ may be issued to such private bodies or persons as there may be statutes which need to be complied with by all concerned including private companies. For example, Wages Act, the Factories Act or for maintaining proper environment, say the Air (Prevention and Control of Pollution) Act, 1981 or the Water (Prevention and Control of Pollution) Act, 1974, etc. or statutes of like nature which fasten certain duties and responsibilities statutorily upon such private bodies which they are bound to comply with. If they violate such a statutory provision a writ would certainly be issued for compliance with those provisions. For instance, if a private employer dispenses with the service of its employee in violation of the provisions contained under the Industrial Disputes Act, in innumerable cases the High Court has interfered and issued a writ to private bodies and companies in that regard. But the difficulty in issuing a writ may arise where there may not be any non-compliance with or violation of any statutory provision by the private body. In that event even a writ may not be issued at all. Other remedies, as may be available, may have to be resorted to." (emphasis supplied) The Supreme Court further observed:
"Merely because Reserve Bank of India lays the banking policy in the interest of the banking system or in the interest of monetary stability or sound economic growth having due regard to the interests of depositors, etc. as provided under Sec.5(c)(a) of the Banking Regulations Act does not mean that private companies carrying on the business or commercial activity of banking, discharge any public function or public duty. These are all regulatory measures applicable to those carrying on commercial activity in banking and these companies are to act according to these provisions failing which certain consequences follow as indicated in the Act itself. ... ... ... Therefore, a private company carrying on banking business as a scheduled bank, cannot be termed as an institution or a company carrying on any statutory or public duty. ... ... ... Merely regulatory provisions to ensure that commercial activity carried on by private bodies work within a discipline, neither confer any status upon the company nor put any obligations upon it which may be enforced through issuance of a writ under Art.226. ... ... ... Present is a case of disciplinary action being taken against its employees by the appellant Bank. The respondent's service with the Bank stands terminated. The action of the Bank was challenged by the respondent by filing a writ petition under Art.226. The respondent is not trying to enforce any statutory duty on the part of the Bank."
The Supreme Court again by its recent decision in BINNY LIMITED v. SADASIVAN (AIR 2005 SC 3202), following its earlier decision in Federal Bank case, cited supra, held that writ petition against the termination of service of an employee of a private company is not maintainable as no public law element is involved. A learned single Judge of this Court, following the above said decisions of the Supreme Court, dismissed the writ petition (W.P. No.8004 of 2004 order dated 24-6-2004) filed challenging the disciplinary proceedings initiated against him by the very same second respondent bank, as not maintainable.
22. The second contention of the learned counsel that the impugned order has been passed in utter breach of the principles of natural justice cannot be countenanced. In CRESCENT DYES AND CHEMICALS LTD. v. RAM NARESH TRIPATHI (1993[2]SCC 115), the Supreme Court held:
"The requirement of the rules of natural justice insofar as the delinquent's right of hearing is concerned, cannot and does not extend to a right to be represented through counsel or agent."
23. It also cannot be stated that the imugned order has been passed without jurisdiction as Regulation 6(vii) of the second respondent bank' Officers' (Discipline and Appeal) Regulations confers powers on the Disciplinary Authority to entertain or reject the request of the delinquent.
24. It is not shown before this Court that the second respondent bank while passing the impugned order has failed to comply with or violated any of the statutory provisions. Therefore, considering the facts and circumstances of the present case in the light of the authoritative pronouncement of the Supreme Court in Federal Bank Limited case, cited supra, I am of the view that the writ petitions are liable to be dismissed in limine on the question of maintainability.
25. Coming to the merits of the case, learned counsel for the petitioner citing a number of authorities of the Supreme Court as well this Court, more particularly the decision in the case of C.L. Subramaniam, cited supra, vehemently argued that the term "legal practitioner" occurring in Regulation 6(vii) of the Regulations should not be construed in a strict sense only to mean the persons qualified in law and the legal practitioners. The said term should be interpreted to mean and include not only the persons qualified in law and legal practitioners in strict sense of the term but also legally trained persons. Learned counsel submitted that the Presenting Officer appointed by the second respondent bank, by virtue of his vast experience of his working in the Disciplinary Action Cell of a Nationalised Bank and having successfully presented the case of the Management in many departmental enquiries, is undoubtedly a legally trained person and, therefore, he will an upper advantage vis-a-vis the petitioner who is not familiar with the procedures and formalities of the departmental enquiry.
26. I have carefully gone through the decision in Subramaniam's case, cited supra, on which heavy reliance was placed by the learned counsel for the petitioner. In the said case, the delinquent, who was a member of the civil service of the Union of India, was removed from service, which is a major penalty. The procedure for imposing major penalties is prescribed in Rule 15 of the Central Civil Services ( Classification, Control and Appeal) Rules, 1957, a rule framed under Art.309 of the Constitution and sub-rule (5) of that rule provided that the Government servant may present his case with the assistance of any Government servant approved by the disciplinary authority but may not engage a legal practitioner for the purpose unless the person nominated by the disciplinary authority as aforesaid was a legal practitioner or unless the disciplinary authority, having regard to the circumstances of the case, so permits. The delinquent sought permission to engage a counsel to appear on his behalf and defend him during the enquiry. The request was rejected on the ground that though the Presenting Officer was a legally trained, he was not a legal practitioner. The departmental enquiry proceeded and ultimately the delinquent was removed from service. On the delinquent's challenge to the said order by way of writ petition, the High Court dismissed the writ petition. In the appeal before the Supreme Court, the delinquent raised the main contention that since he was not given a reasonable opportunity to present case, there was a violation of Rule 15(5) and consequently the impugned order was liable to be struck down. Allowing the appeal, the Supreme Court held that the delinquent was a member of the civil services of the Union of India and in view of Art.311 of the Constitution, he could not be removed from service except after enquiry in which reasonable opportunity was given to him and breach of this procedural guarantee vitiated the enquiry. The relevant observations of the Supreme Court are as follows: "From the facts set out above, it is clear that the enquiry officer did not afford the appellant necessary facility to have the assistance of another Government servant in defending him which assistance he was entitled to under the rule. He was deprived of that assistance solely because of the indifferent attitude adopted by the enquiry officer. Therefore, we have no hesitation in coming to the conclusion that the enquiry officer had clearly breached Rule 15(5)." (emphasis supplied)
27. The dicta laid down by the Supreme Court in the said decision is not applicable to the facts and circumstances of the present case. That was a case concerning the dismissal of a Government servant, and being a member of the Civil Service, his service conditions were governed by the rules and regulations framed under Art.309 of the Constitution of India and in view of Art.311 of the Constitution, he could not be removed from service except after enquiry in which he had been given a reasonable opportunity of being heard; though he had initially sought for the assistance of a legal practitioner, later he requested the disciplinary authority to permit him to engage the assistance of another Government servant, which he was entitled to under the relevant rule, and that he was deprived of that assistance solely because of the indifferent attitude adopted by the enquiry officer. Therefore, the impugned order was quashed by the Supreme Court not on the ground that the delinquent was not permitted to engage a legal practitioner but on the ground that the delinquent was deprived of the assistance of another Government servant which he was entitled to under the relevant rule. In the present case, the impugned order has been passed rejecting the claim of the petitioner to engage the legal practitioner and there was no claim made by the petitioner to take the assistance of a co-employee. If the petitioner wants to take the assistance of the co-employee, the respondent bank have no objection. Therefore, the decision has no bearing on the facts and circumstances of the present case.
28. Under Regulation 6(vii) of the second respondent Officers' ( Discipline and Appeal) Regulations a charge-sheeted officer facing the departmental enquiry may take the assistance of any other officer of the bank but may not engage a legal practitioner for the purpose unless the Presenting Officer appointed by the Disciplinary Authority is a legal practitioner. The Presenting Officer appointed by the respondent bank is not a legal practitioner and, therefore, in terms of the said regulation, the petitioner is not entitled to ask of the assistance of a legal practitioner to defend him in the departmental enquiry. In Crescent Dyes and Chemicals Limited case, cited supra, on the question of right of representation by a counsel or an agent of delinquent's choice, the Supreme Court observed as follows: "Ordinarily it is considered desirable not to restrict the delinquent's right to be represented by counsel or an agent of his choice, but it is a different thing to say that such a right is an element of the principles of natural justice and denial thereof would invalidate the enquiry. The right to be represented through counsel or agent unless can be restricted, controlled or regulated by statutes, rules and regulations or standing orders. A delinquent has no right to be represented through counsel or agent unless the law specifically confers such a right. The requirement of rules of natural justice in so far as the delinquent's right of hearing is concerned, cannot and does not extend to a right to be represented through counsel or agent." ( emphasis supplied) The Supreme Court further observed:
"The object and purpose of such provisions are to ensure that the domestic enquiry is completed with despatch and is not prolonged endlessly. Secondly, when the person defending the delinquent is from the department or establishment in which the delinquent is working he will be well conversant with the working of that department and the relevant rules and would, therefore, be able to render satisfactory service to the delinquent. Thirdly, not only would the entire proceedings be completed quickly but also inexpensively. It is, therefore, not correct to contend that the standing order or Section 22(ii) conflicts with the principles of natural justice."
29. Further, in their counter-affidavits, the second respondent bank as well as the Disciplinary Authority, while denying the claim of the petitioner that he has no experience in departmental enquiries submitted that the petitioner himself has been appointed as Enquiry Officer in many departmental proceedings initiated by the bank and that the enquiries were conducted successfully by him and, therefore, the petitioner is well versed with the procedures involved in the departmental proceedings.
30 For the reasons stated above , I am of the considered view that the writ petitions are devoid of merits and are liable to be dismissed.
31. The writ petitions are, therefore, dismissed. No costs. Interim order shall stand vacated. Connected W.P.M.P. Nos.2685 to 2689 of 2 005 and W.V.M.P. Nos.41904 to 41908 of 2005 are closed.