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PETITIONER: GOPALJI KHANNA

       Vs.

RESPONDENT: ALLAHABAD BANK AND OTHERS

DATE OF JUDGMENT:       27/02/1996

BENCH: NANAVATI G.T. (J) BENCH: NANAVATI G.T. (J) AGRAWAL, S.C. (J)

CITATION:  1996 AIR 1729            1996 SCC  (3) 538  JT 1996 (3)    84        1996 SCALE  (2)621

ACT:

HEADNOTE:

JUDGMENT:                           JUDGMENT NANAVATI, J.      Leave granted.      The short  question that  arises for  consideration  in this appeal  is whether the power of review available to the Chairman and  Managing Director  of the Allahabad Bank under Regulation 18  of  the  Allahabad  Bank  Officer  Employees’ (Discipline and  Appeal) Regulations,  1976 could  have been exercised by  the Executive  Director who, in absence of the Chairman and  Managing Director,  was entrusted with current charge of the duties of offices of the Chairman and Managing Director.      The appellant  is an  employee of the Allahabad Bank. A departmental enquiry  was instituted against him for certain acts of  misconduct. By  an order  dated June  30, 1987, the disciplinary authority,  by way of penalty, reduced him to a lower stage  in the  time scale  of his  pay. As the penalty imposed upon the appellant was found to be inadequate by the Executive Director  who was then holding charge of the posts of Chairman  and Managing Director, he passed an order dated 30th December,  1987 setting aside the said order of penalty and proposing  to impose major penalty of reduction from MMG Scale II  to JMG Grade Scale I and to fix his pay in the JMG Scale at  the minimum  of that  scale.  By  that  order  the appellant was called upon to submit his representation as to why the proposed enhanced penalty should not be imposed upon him.  After  considering  the  representation  made  by  the appellant the  Executive Director  by order  dated  5.2.1988 imposed penalty  of reduction from MMG Scale II to JMG Scale I and  fixed the pay of the appellant at the minimum of that scale. The  appellant challenged that order by filing a writ petition in  the Allahabad  High Court.  It was dismissed as the High  Court did  not find  any substance  in any  of the contentions raised before it.      Two contentions have been raised before us. Firstly, it

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was contended  that the  order  enhancing  the  penalty  was passed by  Shri Wadhwa  in his  capacity  as  the  Executive Director and  as the  Executive Director is not specified in the Regulations as the reviewing authority, the order passed by him should be regarded as null and void. Secondly, and in the  alternative,   it  was   contended   that   under   the Regulations, only  the Chairman  and Managing  Director  are specified as  reviewing  authorities  and,  therefore,  Shri Wadhwa who was the Executive Director and was merely holding current charge  of duties  of  the  posts  of  Chairman  and Managing Director  could not  have  reviewed  the  order  of penalty passed by the disciplinary authority.      Before we  consider these  contentions it may be stated that till  23.6.1987 Shri R. Srinivasan was the Chairman and Managing Director of the Allahabad Bank. As he was appointed Chairman  and   Managing  Director   of  Bank  of  India  by Notification dated  23.6.1987, he  was directed to hand over current charge of duties of the post which he was holding to the Executive  Director Shri  R.L. Wadhwa.  Pursuant to  the said Notification  Shri  Srinivasan  handed  over  and  Shri Wadhwa took  over the  charge of  the posts  of Chairman and Managing Director  on 24.6.1987.  The resultant position was that thereafter  Shri Wadhwa continued to hold substantively the post of Executive Director and at the same time was also holding charge  of the  offices of the Chairman and Managing Director. Subsequently,  on 29th April, 1988 Shri Wadhwa was appointed as  Managing Director  and also as Chairman of the Bank.      In support  of his first contention the learned counsel drew our  attention to the order-cum-show cause notice dated 30.12.1987 and  the impugned  order dated 5.2.1988. Both are signed by  Shri Wadhwa  as Executive  Director. However,  we find that,  in both these orders it is stated that they were being passed  by him  in terms  of Regulation 18. That would mean that  while  passing  those  orders,  Shri  Wadhwa  was discharging the functions of Chairman and Managing Director. Shri Wadhwa  was only  holding charge  of the offices of the Chairman and  Managing Director and, therefore, he could not have signed  those orders as Chairman and Managing Director. Since  he   was  then  holding  substantively  the  post  of Executive  Director  he  rightly  described  himself,  while signing those  orders, as  Executive Director. The appellant also understood  the show  cause notice  as one  issued by a person discharging  the functions  of Chairman  and Managing Director  as  can  be  seen  from  his  representation  made pursuant thereto.  In it  he has  referred to Shri Wadhwa as Executive Director  and reviewing  authority. Therefore, the first contention  raised by  the learned  counsel has  to be rejected.      With respect to the second contention, it was submitted by the learned counsel that the power of review is conferred by Regulation  18. Only  the Chairman  and Managing Director are  specified  as  reviewing  authorities.  This  statutory power, therefore,  can be exercised by Chairman and Managing Director only  as they  are the  named authorities under the statutory provision  and cannot  be validly delegated to any subordinate authority.  Shri Wadhwa,  therefore,  could  not have validly  exercised that power. There is no substance in this submission.  It  is  really  misconceived.  Though  the Regulations have  been framed  in  exercise  of  the  powers conferred  by   Section  19   of   the   Banking   Companies (Acquisition and Transfer of Undertakings) Act, 1970, by the Board of  Directors, they  cannot be equated with a statute. What the  Board of  Directors  have  done  by  making  those Regulations is  to regulate the power of taking disciplinary

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action against  the employees of the bank. Moreover, this is not a  case where  the power  of Chairman  or  the  Managing Director came to be exercised by a subordinate official as a result of  delegation  of  that  power.  Shri  Wadhwa  while exercising the  power of  review was  really discharging the functions of  Chairman and  Managing Director as he was then placed incharge  of those offices and was therefore entitled to perform all the duties and functions of those offices. He did not  exercise that  power  on  the  basis  that  it  was delegated to  him. Therefore,  the decisions  in Barnard Vs. National Dock,  Labour Board  (1953 (1)  All England  Report 1113), Krishna  Kumar Vs.  Divisional  Assistant  Electrical Engineer (1979  (4) SCC  289) and  Marathwada University Vs. Seshrao Balwant  Rao Chavan  (1989 (3) SCC 132), relied upon by the  learned counsel  in support  of his  contention that statutory power can be exercised by the named authority only and  cannot   be  further   delegated,  require  no  further consideration. So  also, Ramakant  Shripad Sinai Advalpalkar Vs. Union  of India  (1991 Suppl.  (2) SCC 733) and State of Haryana Vs.  S.M. Sharma  (1993 Suppl. (3) SCC 252) cited by the learned  counsel have  no relevance.  The question which arose for  consideration  in  those  cases  was  whether  an officer who substantively holds a lower post and is asked to discharge the  duties of  a higher post can be considered as promoted  to   that  higher   post.  This  Court  held  that entrustment of  current duties  charge of a higher post does not amount  to  promotion  and  in  such  cases  the  person continues to  hold  his  substantive  lower  post  and  only discharges the  duties of higher post essentially as a stop- gap arrangement.      It was  next submitted  that when a person is entrusted with charge  of current  duties of  a higher  post,  he  can exercise only those powers and perform those functions which are available  to the  person holding  the higher post under executive orders  and  not  those  which  are  conferred  by statutory provisions.  In support  of  this  submission  the learned counsel  relied upon  the decision  of this Court in Ajaib Singh  Vs. State of Punjab (1965 (2) SCR 845). In that case what  had happened  was that  the  Additional  District Magistrate, Amritsar  was invested with powers of a District Magistrate under  Section 1012)  of  the  Code  of  Criminal Procedure, 1898  and was also put in charge of the office of the District  Magistrate Amritsar,  who was  transferred. No order appointing  him as a District Magistrate under Section 10(1) was  passed. While  in charge  of the  office  of  the District Magistrate,  he passed  an order of detention under the Defence  of India  Act and  Rules, 1962.  That order was challenged on  the ground  that as  the Additional  District Magistrate was  not appointed  as District  Magistrate under Section 10(1)  he did not have the power to pass a detention order and,  therefore, the  order passed  by him was without any authority  of law and liable to be set aside. This Court after considering  the relevant provisions of the Defence of India Act and the Rules, drastic nature of the power and the consequences following  from its  observed that the power of detention could only be exercised by the State Government or an officer  or authority  to whom  it was delegated and that the said power could be delegated to an officer or authority who was  not lower  in rank than the District Magistrate. It was then  held that  even  though  the  Additional  District Magistrate  was   exercising  the  powers  of  the  District Magistrate on  there being  a vacancy  in the  office of the District  Magistrate,   he  was   still  not   the  District Magistrate as  he was  not appointed  as such  under Section 10(1) of the Code and therefore, he had no power to pass the

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order of  detention. Even though invested with the powers of a District  Magistrate he  did not  become an officer of the rank of  a District  Magistrate, In  this case  we  are  not concerned with  such  a  provision  and  therefore  are  not required to  consider whether Executive Director of the bank when entrusted  with the  charge of duties of the offices of Chairman and Managing Director became an officer of the rank of Chairman and Managing Director. Moreover the power of the employer to  take disciplinary  action against  his employee including the power to review an order of penalty, has to be distinguished from the statutory power to detain a person. Therefore, on  the basis  of this decision it cannot be held that the  Executive Director  who was  merely entrusted with the charge of duties of the offices of Chairman and Managing Director could not have exercised the power of reviewing the order of penalty passed by the disciplinary authority.      In Hari  Chand Aggarwal  Vs. The Batala Engineering Co. Ltd. (AIR  1969 SC  483) also  a question had arisen whether the Additional  District Magistrate  who was  entrusted with all the  powers of  the District  Magistrate  under  Section 10(2) of the Code of Criminal Procedure could have exercised the  power  delegated  by  the  Central  Government  to  the District  Magistrate   to  requisition  the  property  under Section 29  of the  Defence of  India Act,  1962. This Court held as under :           "The powers  of requisitioning      are of  a very  drastic nature  and      involve the  fundamental rights  in      respect  of   property   guaranteed      under  Article   19(1)(f)  of   the      Constitution.      The      Central      Government   while    making    the      delegation  of   its  power   under      Section  29   of   the   Act   must      ordinarily be  presumed to be fully      conscious of  this  aspect  of  the      matter and  it is  for that  reason      that an officer or authority of the      high   status    of   a    District      Magistrate  in   the  district  was      empowered to exercise that power.           The scheme  of Section  10  of      the Code  leaves no  room for doubt      that the  District  Magistrate  and      the Additional  District Magistrate      are two  and  distinct  authorities      and even  though the  latter may be      empowered under  sub-section (2) to      exercise all  or any  of the powers      of a  District Magistrate but by no      stretch   of   reasoning   can   an      Additional District  Magistrate  be      called  the   District   Magistrate      which are  the  words  employed  in      sub-section (1) of Section 10."      This  decision,   therefore,  does   not  support   the contention raised on behalf of the appellant.      In State of Madhya Pradesh Vs. Shri Sheo Narayan Yadav, this Court  was required to interpret Rule 3(b) framed under the  Madhya   Pradesh  Local   Authorities  School  Teachers (Absorption in  Government Service)  Act, 1963 which read as follows :      "3(b) -  For absorption on the post      of  Head   Master/Principal  of   a      High/Higher Secondary  School,  the

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    person concerned should possess the      post-graduate  degree   and  should      have  worked  on  the  post  for  a      minimum period  of 7  years in  the      same institution and should have 10      years’ teaching  experience in  any      recognized  institution  of  Madhya      Pradesh."      It was  contended by the respondent that working on the post for  a minimum  period of 7 years would for the purpose of computation  of 7  years include service even as incharge Head Master/Principal or officiating service in the post. On the other  hand it  was contended  by  the  State  that  the teacher claiming  to be  absorbed as  Head  Master/Principal should have worked as a confirmed Head Master/Principal in a substantive post  for the full period of 7 years. This Court held that  the period during which the teacher had worked as incharge Head Master/Principal ought to have been taken into account by  the State Government for computing the period of 7 years. It is difficult to appreciate how this decision can lend any  support to  the contention raised on behalf of the appellant. On  the contrary  this Court has observed therein that the  confirmed holder  of a  substantive post  would be discharging the functions attached to the post and when some one is  placed in  that very post in an officiating capacity or directed to hold charge of the post, he would be required to perform  the duties  and discharge  the functions  of the post rendering  identical service.  In paragraph  10 of  the judgment it is further observed as under :      "It  may   be  that  the  confirmed      holder of  the post may be away and      not in  a position to discharge the      duties  and   some   one   may   be      appointed   in    an    officiating      capacity or may be directed to hold      charge but  nonetheless such holder      of the  post will  have to  perform      duties  and   discharge   functions      attached to the post."      After considering  the above  decisions and Regulations 2(n) and  18, we  are of  the opinion  that as the Executive Director Shri  Wadhwa was  entrusted with  the charge of the offices of Chairman and Managing Director he became entitled to exercise  all the  executive powers,  perform duties  and discharge  functions   attached  to   those   offices   and, therefore, the  order of penalty passed by him was legal and valid.      This appeal,  therefore, fails  and  is  dismissed.  No order as to costs.