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CASE NO.: Appeal (civil)  7058 of 2002

PETITIONER: Ganesh Santa Ram Sirur                                               

RESPONDENT: State Bank of India & Anr.                                           

DATE OF JUDGMENT: 17/11/2004

BENCH: K.G.Balakrishnan & Dr. AR. Lakshmanan  

JUDGMENT: J U D G M E N T

Dr. AR. Lakshmanan, J.

This appeal is directed against the final judgment and order dated 7th  November, 2001 passed by the High Court of Judicature at Bombay in Writ  Petition No. 540 of 1996 filed by the appellant herein to quash and set aside  the order dated 10.5.1995 and for a writ of Mandamus directing the  Respondent-Bank to reinstate the respondent with back wages and with  arrears of service and all other service benefits which are consequential to  reinstatement in service and for other incidental and ancillary relief.   The  Division Bench of the High Court dismissed the writ petition filed by the  appellant herein for the reasons recorded therein.    The appellant in this  appeal questioned the order of removal from service by the Appellate  Authority.

The appellant joined the services of the Bank as a clerk in 1963.  He  was chargesheeted for such irregularities committed by him while working  as Branch Manger of Konkan Bhavan Branch of the Bank from 1982-1984.    There were total seven charges imputed against him.   The Enquiry Officer  appointed by the Disciplinary Authority conducted an enquiry and submitted  his report to the Disciplinary Authority.   In his report, the Enquiry Officer  dropped one charge out of seven charges and out of remaining six charges  five charges had not been proved.  The Enquiry Officer held that only charge  No. 5 pertaining to grant of advance by the appellant to his wife was proved.   This Enquiry Report did not contain any recommendation regarding  punishment.  According to the appellant, this report was not communicated  to him for more than two years.  On 24.4.1991, the Disciplinary Authority  sent the report of the Enquiry Officer to the appellant and he was asked to  make his representation on the report.   The Disciplinary Authority  recommended to the Punishing/Appointing Authority of the appellant the  punishment of reduction in substantive salary at one stage from Rs. 4020 to  Rs. 3900 in the terms of Rule 49(e) of the Rules.  The Punishing Authority  who was the appointing Authority of the appellant relied on the  recommendations of the disciplinary authority and imposed the punishment  accordingly.

The appellant preferred an appeal against the order of punishment  dated 21.10.1991 before the Appellate Authority and pleaded that the  punishment imposed upon him was too severe and in fact of the case that  only one charge out of seven was proved.   The appellate Authority,  however, proposed to enhance the penalty imposed upon the appellant to an  order of dismissal.   He ordered the punishing authority/appointing authority  to issue a notice to the appellant under Rule 69(2) of the State Bank of India  Officer’s Services Rules 1992 (hereinafter called the "Rules) to show cause  why the penalty should not be enhanced as proposed.   By this time new  Rules of 1992 had come into force to regulate the service conditions of the

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Bank Officers.  The appointing authority communicated the above order to  the appellant asking him to submit his contentions.   The appellant submitted  his detailed reply against the proposed order of dismissal.   On 10.5.1995 the  appellate Authority decided to enhance the penalty inflicted from reduction  in basic pay by one stage to removal from service instead of dismissal as  earlier proposed on 24.5.1995.    The disciplinary authority communicated  the above order to the appellant.  The appellant through his advocate made  an attempt for justice to the Chairman requesting for review in his case.   It  was replied that Rule 69(3) of the Rules does not provide it mandatory for  the Reviewing Authority to make review of each and every order passed by  the competent authority.    Being aggrieved by the imposition of penalty the  appellant filed a writ petition before the High Court and the High Court vide  its order dated 7.11.2001 dismissed the writ petition filed by the appellant  accepting that the appellate Authority had rightly exercised its power in  enhancing the punishment.   Thus the Special leave petition.   Leave was  granted by this Court on 28.10.2002.

We heard Mr. K. Ramamurthy, learned senior counsel for the  appellant and Mr. Harish Salve, learned senior counsel for the respondent- bank.

Mr. K. Ramamurthy, learned senior counsel appearing for the  appellant submitted before us three contentions:- 1.That the appeal was considered by the Appellate  Authority although it was time barred.

2. That the Appellate Authority considered the charge  which had not been proved while coming to the conclusion that  the punishment was required to be enhanced to one of removal  from ser vice and

3. That the order of removal from service could not be  sustained as no personal hearing was given to the appellant  before the enhancement of punishment even though personal  interview was specifically asked for.   According to the  appellant he had faced the enquiry in unfortunate circumstances  as his wife, who was also a bank officer had committed suicide  on 26.7.1988, during the pendency of the enquiry against the  appellant.

Mr. K. Ramamurthy in support of his contention relied on the  following judgments: 1.      Ram Chander vs. Union of India & Ors. AIR 1986 SC 1173 2.      Ram Niwas Bansal vs. State Bank of Patiala & Anr. !998 (4)   SLR 711 3.      Makeshwar Nath Srivastava vs. The State of Bihar and Ors.  1971 (1) SCC 662 4.      Bhagat Ram vs. State of Himachal Pradesh & Ors.1983 (2)  SCC 442 5.      Ranjit Thakur vs. Union of India & Ors. 1987 (4) SCC 611 6.      Dev Singh vs. Punjab Tourism Development Corporation Ltd.  & Anr. 2003 (8) SCC 9 7.      State of Madras Vs. Gopala Iyer  AIR 1963 Madras 14 8.      Kailash Nath Gupta vs. Enquiry Officer (R.K. Rai) Allahabad  Bank and Ors., 2003 (9) SCC 480 9.      Union of India and Ors.  vs. M.A. Jaleel Khan, 1999 SCC (L &  S) Cases 637 Mr. Harish Salve, learned senior counsel for the respondent-bank  submitted that the order passed by the Appellate Authority was just and  proper and it was passed in accordance with the service Rules.   He  submitted that although the cheque granting loan to appellant’s wife in her  maiden name had not been encashed by her, the intention of the appellant  was clear that there was no extenuating factor to reduce the punishment  imposed on the appellant.  Mr. Salve further contended that Rule 69(2) of

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the Service Rules provided that no employee should grant on behalf of the  Bank any loan or advance to himself or to his spouse and that the appellant  had deceitfully granted such a loan to his wife in her maiden name in order  to prevent the offence come into light.   He also submitted that the loan was  sanctioned by the appellant to his wife in her maiden name under a Scheme  called SEEUY, (Scheme for Educated Unemployed Youth), which clearly  reveal the evil intention of the appellant to grant the loan which is meant  only for Educated Unemployed Youth.   Mr. Salve contended that dishonest  intention of the appellant is clear and therefore will not be continued in  service of the Bank as he was holding a responsible position of Bank  Manger.   Adverting to Rule 34(3)(1) Mr. Salve submitted that this is a rule  of integrity and when it is breached the Bank cannot have an officer like the  appellant in their bank as Manager. Mr. Salve in support of his submission relied on the following  judgments:- 1.      Disciplinary Authority-cum-Regional Manager and Others vs.  Nikunja Bihari Patnaik, (1996) 9 SCC 69 2.      Union of India & Anr. Vs. Jesus Sales Corporation, 1996 (4)  SCC 69 3.      State Bank of Patiala & Ors. vs. S.K. Sharma, 1996(3) SCC 364 4.      Regional Manager, U.P. SRTC. Etawah & Ors. vs. Hoti Lal &  Anr.2003 (3) SCC 605

As already noticed, the Enquiry Officer found the appellant guilty of  Charge No. 5 alone.   However, appellate Authority while proposing to  enhance the punishment has also relied on charge No.1.   Therefore, we shall  consider the arguments advanced by the learned senior counsel for the  appellant on Charge No.1 and Charge No.5 with reference to the pleadings  and records and the judgments cited above at the Bar.          The findings of the disciplinary authority show that the bank had  found guilty of only one charge, which had been established against him that  namely he had granted loan under the scheme meant for Educated  Unemployed Youth to his wife.   Although the cheque for the loan which  was sanctioned, had not been encashed, the intention of the appellant to  disburse the same in a dishonest way to his wife was amply proved.   Rule  34(3)(1) reads as follows:

       "34(3)(1) \026 No employee shall grant on behalf of the State  Bank any loan or advance to himself or his spouse, a joint Hindu  Family of which he or his spouse is a member or a partnership with  which he or his spouse is connected in any manner or a trust in  which he or his spouse is trustee, or a private or public limited  Company, in which he or his spouse hold substantial interest."

       Charge No. 5 relate to the sanction of loan by the appellant to his wife  which reads as follows:- "You granted loan under SEEUY scheme to your spouse  thereby violating Rule No. 34(3) of the State Bank of India  (Supervising Staff) Services Rules."

       Since the Appellate Authority had considered charge No. 1 also while  proposing to enhance punishment, we extract herein below charge No.1:- "You while working as Branch Manager, Konkan Bhavan  Branch, fraudently received excess amounts on account of double  payments of T.E. Bills.   You acted dishonestly and in a manner  unbecoming of the Bank’s Official.  You have violated Rule No.  32(4) of the State Bank of India (Supervising Staff) Service Rules."

       It is also pertinent to notice that the appellant in his appeal before the  Appellate Authority admitted that he had committed misconduct of  disbursing the loan to his wife in a Scheme, which is meant for Educated  Unemployed Youth.   Mr. Ramamurthy submitted that the appeal filed by

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the appellant should not have been considered as the same was time barred  and cannot in our opinion be accepted.   The appeal was required to be filed  within 45 days of the date of receipt of the order appealed against.   The  order of the Disciplinary Authority is dated 23.10.1991 and the appeal was  filed by the appellant on 10.1.1992.   The appellant was well aware while  filing the appeal that his appeal was not filed within the period of limitation  as provided under Rule 51(2) of the Service Rules.  The appellant having  filed the appeal cannot now go around and say that the appeal should have  been dismissed on the ground of limitation.    The reason is obvious.   We,  therefore, do not find any merit or substance in the submission in regard to  the consideration of the appeal on merits even though it is time barred.   It  has to be presumed, that delay, if any, was condoned by the Appellate  Authority while entertaining the appeal and decide the same on merits.    Rule 69(5) expressly provides that the authority competent thereunder may,  for good and sufficient reasons or if sufficient cause is shown, extend the  time specified thereunder for anything required to be done thereunder or  condone any delay.  This rule is corresponding to Rule 51(2) of the old Rule.

       In regard to the second contention that the consideration of the charge  which had not been proved by the appellate authority, Mr. Ramamurty  submitted that the appellate authority had considered the charges which were  not proved while enhancing the punishment.  According to Mr.  Ramamurthy, the appellate authority was mere concerned with charge No. 5  regarding disbursement of loan to the wife of the appellant in violation of  Rule 33(1) of the Service Rules and that the Order of the Appellate  Authority does not in any manner disclose that the same was passed by  considering the circumstances germane to the charge against the appellant  which had been proved.  Even accepting the contention of Mr. Ramamurthy  on Charge No.1, the appellant cannot come out of the charge No. 5, which is  more serious and grave in nature.  However, we observe that the  observations made by the Appellate Authority on Charge No.1 while  considering charge No.5, should be treated only as a passing observation and  at the same time we cannot ignore or close our eyes in regard to the finding  of the appellate authority on Charge No. 5 which is more serious and grave  in nature.   The appellate authority had enhanced the punishment imposed by  following the procedure laid down in the service Rules and we see no reason  to interfere with the same.   As already noticed, the appellant had himself  admitted his misconduct and therefore, there is no reason why the appellate  authority’s finding on charge No. 5 should not be accepted.

       The third contention relate to non-grant of personal hearing to the  appellant before the enhancement of the punishment.  Mr. Ramamurthy  submitted that personal interview was not given to the appellant though it  has been expressly asked for in his reply to the proposal for the enhancement   of penalty.  According to him, if a personal interview/hearing was given, the  appellant would perhaps be able to express more and convince the appellate  authority on the proposal for enhancement of penalty.   He further submitted  that the penalty imposed on the appellant is not justified without affording  an opportunity of personal hearing to the appellant at the enquiry and at the  time of recommending for punishment granted to him.  The imposition of  penalty of removal from service is not just considering the nature of facts  and that an order of enhancement of punishment by the appellate authority is  not just when it is not recommended by the disciplinary authority/appointing  authority and that too in the appeal filed by the delinquent employee.   It is  the contention of Mr. Ramamurthy that the High Court failed to appreciate  that the enquiry and imposition of penalty cannot stand in the eyes of law as  there is no opportunity given to the appellant to explain his stand during the  enquiry or before the penalty was imposed on the appellant by the  appointing authority.   It is his further submission that the High Court has  failed to appreciate that penalty as enhanced by the appellate authority for  reduction in scale to removal from service is not just according to the nature  of offence.   It is submitted that though there were seven charges framed  against the appellant, out of which, only one was proved by the enquiry  officer that is an offence committed under Rule 34(3)(1) of the Service Rule,  1972.  The imposition of penalty of removal was unwarranted, therefore, he

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submitted that the bank cheque issued by the appellant was not encashed, it  was only an attempt, which has been found to be proved by the Enquiry  Officer against the appellant and there has been no loss caused to the Bank.    This apart, the appellate authority for imposing the enhanced punishment  relied on the reasons, which were not part of the charge of the enquiry.   Winding up his arguments Mr. Ramamurthy contended that the impugned  actions of the Bank are arbitrary, unreasonable, unfair and violative of the  statutory rights as also the principles of natural justice and moreover, no loss  whatsoever accrued to the Respondent Bank as no disbursal of the relevant  loan took place. He pleaded that the punishment of removal be set aside and  the punishment imposed by the disciplinary authority be restored and justice  rendered to the appellant.

       It is true that the appellate authority has proposed to enhance the  punishment and imposed the penalty of dismissal on the appellant.   However, the appellate authority was convinced with regard to the  explanation submitted by the appellant and reduced the penalty further  considering the adverse family circumstances, which could be seen from the  following observation in the appellate order:-         "I, therefore, direct that the earlier penalty of reduction in  basic pay by one stage imposed on him by the Appointing Authority  be enhanced to removal from service in terms of Rule 67(g) of the  State Bank of India Officers Service Rules.   The tentative decision  taken while serving the show cause notice was to dismiss Shri Sirur  from service.  Although, considering the acts of misdemeanour of  the appellant, this was the appropriate penalty, I have taken a lenient  view of the matter because of his adverse family circumstances.    Removal from service would enable him to draw higher terminal  benefits as compared to dismissal.   The removal will take effect  from the date of communication of this order and the intervening  period will be treated as under suspension.   I order accordingly."

       We shall now advert to the decision cited by the learned senior  counsel for the appellant.   R.P. Bhatt vs. Union of India & Ors.  1986(2)  SCC 651.  This decision was cited by the learned senior counsel to the effect  the rules casting the duty on the appellate authority to consider the relevant   factors set-forth in Rule 27(2) of the Rules  which are relevant in the above  case :- (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;"

Ram Chander vs. Union of India and Ors. AIR 1986 SC 1173.   This case was cited for the proposition that an opportunity should be given  to the delinquent officer to exonerate himself from the charge by showing  that the evidence adduced at the enquiry is not worthy of credence or  consideration or that the charges proved against him are not of such a  character as to merit the extreme penalty of dismissal or removal or  reduction in rank and that any of the lesser punishments ought to have been  sufficient in his case.   This Court observed as follows: "\005..such being the legal position, it is of utmost importance  after the Forty-Second Amendment as interpreted by the majority in  Tulsiram Patel’s case that the Appellate Authority must not only  give a hearing to the Government servant concerned but also pass a  reasoned order dealing with the contentions raised by him in the  appeal.   We wish to emphasize that reasoned decisions by tribunals  such as the Railway Board in the present case, will promote public  confidence in the administrative process.   An objective  consideration is possible only if the delinquent servant is heard and

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given a chance to satisfy the Authority regarding the final orders  that may be passed on his appeal.  Considerations of fair-play and  justice also require that such a personal hearing should be given."

In Ram Niwas Bansal vs. State Bank of Patiala and Anr.  1998(4)  SLR 711, this Court held:- "14. Under Regulation 70 of the Regulations wide power and  discretion has been vested in the appellate authority.   The appellate  authority is under obligation to consider \026 (a)     whether the findings are justified or not; (b)      whether the penalty is excessive or inadequate; and  (c)      it may pass any order confirming, enhancing,  reducing or setting aside the penalty or remitting the case to the  authority, which imposed the punishment, or any other  authority,  as it may deem fit in the circumstances of the case.

20. Although there are no positive words in the statute  requiring that the party shall be heard, yet the justice of the  common law will supply the omission of the legislature.  The  principle of audi alterm partem, which mandates that no one shall  be condemned unheard is part of the rules of natural justice.         Natural justice is a great humanising principle      intended to invest law with fairness and to secure justice and over  the years it has grown into a widely pervasive rule affecting large  areas of administrative action.   The inquiry must always be does  fairness in action demand that an opportunity to be heard should be  given to the person affected?         The law must now be taken to be well settled that  even in an administrative proceeding, which involves civil  consequences, the doctrine of justice must  be held to be  applicable."

       In this case the Court has further observed the personal hearing would  be a necessary facet of the principle of natural justice before the appellate  authority.   (Emphasis provided).

       Makeshwar Nath Srivastava vs. The State of Bihar and Ors. (1971  (1) SCC 662).  This judgment was cited that the appellate authority in an  appeal by the aggrieved party may either dismiss his appeal or allow it either  wholly or partly and uphold or set aside or modify the order challenged in  such appeal.   It cannot surely impose on such an appellant a higher penalty  or condemn him to a position worse than the one he would be in if he had  not hazarded to file an appeal.         Yoginath D. Bagde vs. State of Maharashtra and Anr.  (1999 (7)  SCC 739).  Referring to Para 29 and 30 of the above judgment it was argued  that the Service Rules enables the disciplinary authority to disagree with the  findings of the enquiring officer or any article of charge.  The only  requirement is that it shall record its reasoning for such disagreement.  It is  again observed:         "It will be most unfair and iniquitous that where the charged  officers succeed before the enquiry officer, they are deprived of  representing to the disciplinary authority before that authority  differs with the enquiry officer’s report and while recording a  finding of guilt, imposes punishment on the officer.   In our  opinion, in any such situation, the charged officer must have an  opportunity to represent before the disciplinary authority before  final findings on the charges are recorded and punishment  imposed."

       Bhagat Ram vs. State of Himachal Pradesh and Ors.  (1983(2)  SCC 442).  This judgment was cited in regard to the contention that the  punishment was excessive:

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       "12. In the facts and circumstances of this case herein threadbare  discussed, we are of the opinion that the appellant was not afforded a  reasonable opportunity to defend himself and accordingly the  enquiry and consequential order of removal from service are  vitiated.         13. That conclusion poses another question as to what relief we  should give in this appeal.  Ordinarily where the disciplinary enquiry  is shown to have been held in violation of principle of natural justice  the enquiry would be vitiated and the order based on such enquiry  would be quashed by issuance of a writ of certiorari.   It is sell  settled that in such a situation, it would be open to the Disciplinary  Authority to hold the enquiry afresh.   That would be the normal  consequence.         15. We may adopt the same approach.   Keeping in view the nature  of misconduct, gravity of charge and no consequential loss, a penalty  of withholding his increments with future effect will meet the ends  of justice.    Accordingly, two increments with future effect of the  appellant be withheld and he must be paid 50 per cent of the arrears  from the date of termination till the date of reinstatement."

In Ranjit Thakur vs. Union of India and Ors. 1987(4) SCC 611 , it is  again observed as under :-         "In Bhagat Ram vs. State of Himachal Pradesh, this Court  held :         It is equally true that the penalty imposed must be  commensurate with the gravity of the misconduct, and that any  penalty disproportionate to the gravity of the misconduct would be  violative of Article 14 of the Constitution.          The point to note, and emphasise is that all powers have  legal limits."

       In Dev Singh vs. Punjab Tourism Development Corporation Ltd.  and Anr. 2003 (8) SCC 9, this Court held: "Applying the said principles laid down by this Court in the cases  noted hereinabove, we see that in this case the appellant has been  serving the respondent Corporation for nearly 20 years with  unblemished service, before the present charge of misconduct was  levelled against him.   The charge itself shows that what was alleged  against the appellant was misplacement of a file and there is no  allegation whatsoever that this file was either misplaced by the  appellant deliberately or for any collateral consideration.   A reading  of the charge-sheet shows that the misplacement alleged was not  motivated by any ulterior consideration and at the most could be an  act of negligence, consequent to which the appellant was unable to  trace the file again.   The disciplinary authority while considering the  quantum of punishment came to the conclusion that the misconduct  of the nature alleged against  the appellant should be viewed very  seriously to prevent such actions in future, whereby important and  sensitive records could be lost or removed or  destroyed by the  employee under whose custody the records are kept.   Therefore, he  was of the opinion that a deterrent punishment was called for,  forgetting for a moment that no such allegation of misplacing of  important or sensitive record was made in the instant case against the  appellant and what he was charged of was misplacement of a file,  important or sensitiveness of which was not mentioned in  the  charge-sheet.   Therefore, in our opinion, the disciplinary authority  was guided by certain facts which were not on record, even  otherwise, we are of the opinion that when the Service Bye-Laws  applicable to the Corporation under Service Bye-law 17 provide  various minor punishments, we fail to appreciate why only  maximum punishment available under the said Bye-laws should be  awarded on the facts of the present case.   We think the punishment  of dismissal for mere misplacement of a file without any ulterior  motive is too harsh a punishment which is totally disproportionate to  the misconduct alleged and the same certainly shocks our judicial

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conscience.   Hence, having considered the basis on which the  punishment of dismissal was imposed on the appellant and the facts  and circumstances of this case, we think to avoid further  prolonged  litigation it would be appropriate if we modify the punishment  ourselves.   On the said basis, while upholding the finding of  misconduct against the appellant, we think it appropriate that the  appellant be imposed a punishment of withholding of one increment  including stoppage at the efficiency bar in substitution of the  punishment of dismissal awarded by the disciplinary authority.   We  further direct that the appellant will not be entitled to any back  wages for the period of suspension.   However, he will be entitled to  the subsistence allowance payable up to the date of the dismissal  order."

       In Kailash Nath Gupta vs. Enquiry Officer (R.K. Rai), Allahabad  Bank and Ors. (2003 (9) SCC 480), this Court held:         "In the background of what has been stated above, one thing is clear  that the power of interference with the quantum of punishment is  extremely limited.   But when relevant factors are not taken note of,  which have some bearing on the quantum of punishment, certainly  the Court can direct reconsideration or in an appropriate case to  shorten litigation, indicate the punishment to be awarded.   It is  stated that there was no occasion in the long past service indicating  either irregularity or misconduct of the appellant except the charges  which were the subject-matter of his removal from service.   The  stand of the appellant as indicated above is that though small  advances may have become irrecoverable, there is nothing to  indicate that the appellant had misappropriated any money or had  committed any act of fraud.   If any loss has been caused to the Bank  (which he quantifies at about Rs.46,000) that can be recovered from  the appellant.  As the reading of the various articles of charges go to  show, at the most there is some procedural irregularity which cannot  be termed to be negligence to warrant the extreme punishment of  dismissal from service."

       In Union of India and Ors.  vs. M.A. Jaleel Khan, (1999 SCC (L &  S) Cases 637), this Court held:         "5. The learned counsel appearing for the respondent  submitted that the act of the appellate authority in enhancing the  punishment without giving a reasonable opportunity to the  respondent cannot be sustained.   He also submitted that for refusing  to vacate the accommodation allotted to the railway servant, the  authorities cannot invoke the Service Rules.         6. We have considered the submission of the counsel on both  sides and also appreciated the facts of this case.  We have seen  earlier that the respondent had given a solemn undertaking to vacate  the premises when the main allottee vacated the same.    Notwithstanding such solemn undertaking, the refusal to vacate the  premises when the main allottee vacated the accommodation cannot  be appreciated or encouraged.   The authorities are, therefore, right  in initiating disciplinary proceedings on the facts of this case.   However, the punishment imposed by the appellate authority by  issuing notice to enhance the punishment given by the disciplinary  authority requires some consideration.   The disciplinary authority,  after taking into consideration the facts and circumstances  concerning the charge, has imposed the punishment as noticed  above.   The appellate authority in the appeal filed by the respondent  has issued notice for enhancing the punishment. No doubt the  appellate authority has jurisdiction to issue such a notice but the  question is whether the facts and circumstances of the case warrant  such enhancement of the punishment.   On the facts, we are of the  view that the enhanced punishment given by the appellate authority  dismissing the respondent is too harsh and, therefore, we set aside  the order of the appellate authority to that extent and restore the  punishment imposed by the disciplinary authority."

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       Thus Mr. Ramamurthy, submitted in view of the plethora of decisions  cited as above, the punishment ought not to have been enhanced without  offering an opportunity of personal hearing/interview and that such an  enhancement of punishment imposed without considering the adequacy or  inadequacy is wholly illegal and is therefore be set aside.   He further  submitted that the appellant joined Bank as a clerk in the year 1963 and had  to his credit 26 years of meritorious service and therefore, the bank should  consider the above service and the family background and must take a  lenient view in the peculiar facts and circumstances of the case and order  reinstatement and also by restoring the penalty imposed by the disciplinary  authority.   Concluding his submissions he said that the appellate authority  has gravely erred in enhancing the punishment, when it is not warranted in  the facts of this case.

       Mr. Salve invite our attention to the pleadings and also the statement  made by the appellant in Annexure P-4 at page 36 wherein he has    stated  that the total amount which was to be reimbursed to the appellant aggregated  to 6,000/- and there was no response to personal or official requests and that  since he had no money to pay income-tax as per the instructions he debited  the suspense account of the Branch and took part amount while working in  Madras Circle.  The above statement was stated in his own appeal.   Inviting  our attention to the show cause notice by the appellate authority, he  submitted that the charge that had been held as established by the enquiry  authority is that the appellant granted loan to his wife in her Maiden name  and also disbursed term loan of Rs. 25,000/- to her and also obtained the  subsidiary for the said loan and therefore it was submitted that the gravity of  the charge is enormous and the intention to sanction the loan to his wife is  clear and proved.   He had also further submitted that as regards Charge No.  1 that the appellant had freely debited suspense account and credited his  personal account on the plea of non-payment of certain official claims.   The  claims were admissible to him under the Service Rules and therefore it is  evident that the appellant exercised his official position and took excess  amount on account of payment of T.A. Bills.   According to Mr. Salve, the  charge proved against the appellant is that the appellant has a propensity to  misuse the official position to the detriment of the bank.  The appellant  sanctioned the loan by using wife’s maiden name, and such a tendency on  the part of the Manager of the Bank must be treated firmly.  Therefore, he  submitted that the decision to enhance the punishment imposed on the  appellant and decided to dismiss the appellant from service in place of  reduction in basic pay by one stage as already decided is not improper.   Mr.  Salve also submitted that in terms of Rule 69(2) second proviso, the  appellate authority has ordered that the show-cause notice be issued to the  appellant as to why the enhanced penalty should not be imposed upon him.    Mr. Salve also invited our attention to the detailed explanation submitted by  the appellant to the proposal of the appellate authority to enhance the penalty  and also the order passed by the appellate authority imposing the punishment  of removal from service.  Mr. Salve cited some decisions in order to show  the current trend of cases on natural justice in disciplinary proceedings.   He  said the appellate authority has considered the detailed representation and  for the reasons recorded has reduced the penalty of dismissal to the removal.    It is also his contention that the appellant has not challenged the rule 69(2)  and Rule 69(5).  A reading of the above rule show that the appellate  authority shall give a show cause notice to the officer as to why the  enhanced penalty should not be imposed upon him and shall pass final order  after taking into account the representation, if any, submitted by the officer  and that this rule does not provide for a personal hearing or a personal  interview.   Mr. Salve is right in his above submissions.   A reading of the  show-cause notice and the final order passed by the appellate authority  clearly go to show that the appellate authority has thoroughly considered the  detailed submissions made by the appellant and has reached its conclusion  on the facts and circumstances of the case and has modified the proposed  penalty of dismissal to that of the penalty of removal.   There is total  application of mind on the part of the appellate authority in arriving at the  conclusion in regard to punishment.

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       Union of India and Anr. vs. Jesus Sales Corporation (1996(4) SCC  69).   The above judgment was cited for the proposition as to taking into  consideration the facts and circumstances of each case to exercise discretion.  and that it does not flow from the rule that before exercising such discretion  the appellate authority should hear the appellant and that this discretion can  be exercised by the appellate authority as the said authority may deem think  proper.   He further contended that whenever a statute vest discretion in an  authority to exercise the statutory power, such authority can exercise the  same in an unfettered manner and that whenever an unfettered discretion has  been exercised, courts have refused to countenance the same.  He also  invited our attention to para 5 of the above judgment which is to the  following effect:-         "\005.The courts cannot insist that under all circumstances and  under different statutory provisions personal hearings have  to be  afforded to the persons concerned.   If this principle of affording  personal hearing is extended whenever statutory authorities are  vested with the power to exercise discretion in connection with  statutory appeals, it shall lead to chaotic conditions.   Many statutory  appeals and applications are disposed of by the competent authorities  who have been vested with powers to dispose of the same.  Such  authorities which shall be deemed to be quasi-judicial authorities are  expected to apply their judicial mind over the grievances made by  the appellants or applicants concerned, but it cannot be held that  before dismissing such appeals or applications in all events the  quasi-judicial authorities must hear the appellants or the applicants,  as the case may be.  When principles of natural justice require an  opportunity to be heard before an adverse order is passed  on any  appeal or application, it does not in all circumstances mean a  personal hearing.  The requirement is complied with by affording an  opportunity to the person concerned to present his case before such  quasi-judicial authority who is expected to apply his judicial mind to  the issues involved."

       Mr. Salve invited our attention to Para 17 of the Judgment in State  Bank of Patiala & Ors. vs. S.K. Sharma, 1996(3) SCC 364, which deals  with the opinion of the House of Lords in United Kingdom.   He also drew  our attention to S.L. Kapoor  vs. Jagmohan, 1980) (4) SCC 379 and  Managing Director ECIL vs B. Karunakar’s, 1993 (4) SCC 727 in para  25, 26 and 28. The decisions relied on and cited above make one thing clear  namely principles of natural justice cannot be reduced to any hard and fast  formulae and as said in Russel v. Duke of Norfold (1949) 1 All ER 109,  these principles cannot be put in a strait jacket.   Their applicability depends  upon the context and the facts and circumstances of each case.   The  objective is to ensure a fair hearing, a fair deal to a person whose rights are  going to be affected.  In our opinion, the approach and test adopted in  Karunakar’s case  (supra) should govern all cases where the complaint is  not that there was no hearing, no notice, no opportunity and no hearing) but  one of not affording a proper hearing that is adequate or a full hearing or  violation of a procedural rule or requirement governing the enquiry.              On proportionately of punishment imposed, Mr. Salve cited  Chairman and Managing Director, United Commercial Bank & Ors. vs.  P.C. Kakkar,  2003(4) SCC 364.  In the above case it was observed:-         "In B.C. Chaturvedi vs. Union of India, 1995(6) SCC 749,  it was observed :

       18. A review of the above legal position would establish that  the disciplinary authority, and on appeal the Appellate Authority,  being fact-finding authorities have exclusive power to consider the  evidence with a view to maintain discipline.   They are invested  with the discretion to impose appropriate punishment keeping in  view the magnitude or gravity of the misconduct.  The High  Court/Tribunal, while exercising the power of judicial review,

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cannot normally substitute its own conclusion on penalty and  impose some other penalty. If the punishment imposed by the  disciplinary authority or the Appellate Authority shocks the  conscience of the High Court/Tribunal, it would appropriately  mould the relief, either directing the disciplinary/appellate authority  to reconsider the penalty imposed, or to shorten the litigation, it  may itself, in exceptional and rare cases, impose appropriate  punishment with cogent reasons in support thereof."

       The learned senior counsel also relied on para 14 of the above  judgment.        Replying on the above passage, Mr. Salve submitted that the  appellant, the Branch Manger of a Bank is required to exercise higher  standards of honesty and integrity when he deals with the money of the  depositors and the customers and, therefore, he is required to take all  possible steps to protect the interest of the bank and to discharge his duties  with utmost integrity, honesty, devotion and diligence and to do nothing  which is unbecoming of the bank Officer.  According to Mr. Salve, good  conduct and discipline are inseparable for the functioning of every officer,  Manager or employee of the Bank, who deals with public money and there is  no defence available to say that there was no loss or profit resulted in the  case, when the manager acted without authority and contrary to the rules and  the scheme which is formulated to help the Educated Unemployed Youth.    Mr. Salve’s above submissions is well merited acceptance and we see much  force in the said submission.

       The Bank Manager/Officer and employees and any Bank  nationalised/or non-nationalised are expected to act and discharge their  functions in accordance with the rules and regulations of the Bank.   Acting  beyond one’s authority is by itself a breach of discipline and Trust and a  misconduct.    In the instant case Charge No. 5 framed against the appellant  is very serious and grave in nature.    We have already extracted the relevant  rule which prohibits the Bank Manager to sanction a loan to his wife or his  relative or to any partner.   While sanctioning the loan the appellant do not  appear to have kept this aspect in mind and acted illegally and sanctioned the  loan.   He realized the mistake later and tried to salvage the same by not  encashing the draft issued in the maiden name of his wife though the draft  was issued but not encashed.    The decision to sanction a loan is not an  honest decisions.   The Rule 34(3)(1) is a rule of integrity and therefore as  rightly pointed out by Mr. Salve, the respondent Bank cannot afford to have  the appellant as Bank Manager.  The punishment of removal awarded by the  Appellate Authority is just and proper in the facts and circumstances of the  case.  Before concluding, we may usefully rely on the judgment Regional  Manager, U.P. SRTC. Etawah & Ors. vs. Hoti Lal & Anr. reported in  2003(3) SCC 605.   Wherein this Court has held as under:-

"If the charged employee holds a position of trust where honesty and  integrity are inbuilt requirements of functioning, it would not be  proper to deal with the matter leniently.   Misconduct in such cases  has to be dealt with iron hands.  Where the person deals with public  money or is engaged in financial transactions or acts in a fiduciary  capacity, the highest degree of integrity and trustworthiness is a must  and unexceptionable.  Judged in that background, conclusions of the  Division Bench of the High Court do not appear to be proper.   We  set aside the same and restore order of the learned Single Judge  upholding the order of dismissal."

We entirely agree with the above observations made in the above  judgment.

       We have, therefore, no hesitation in dismissing the appeal filed by the  appellant and confirming the order passed by the Division Bench of the High  Court.  However, we make it clear that in the peculiar facts and  circumstances of the case the appellant will be entitled to full pension and  gratuity irrespective of his total period of service.  No costs.

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