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PETITIONER: NAGARAJ SHIVARAO KARJAGI

       Vs.

RESPONDENT: SYNDICATE BANK HEAD OFFICE MANIPAL AND ANR.

DATE OF JUDGMENT30/04/1991

BENCH: SHETTY, K.J. (J) BENCH: SHETTY, K.J. (J) YOGESHWAR DAYAL (J)

CITATION:  1991 AIR 1507            1991 SCR  (2) 576  1991 SCC  (3) 219        JT 1991 (2)   529  1991 SCALE  (1)832

ACT:      Banking   Companies   (Acquisition  and   Transfer   of Undertakings) Act, 1970: Section 8-Policy matters-Directions to   Banks-Disciplinary   matters-Awarding  punishment    to delinquent officers-Uniform policy-Feasibility  of-Directive issued to comply with Central Vigilance Commission’s advice- Whether within jurisdiction-Whether contrary to  Regulations governing such matters.      Syndicate   Bank  Officer  Employees  (Disciplinary   & Appeal) Regulations, 1976:      Regulations   3,   4,  5,  6,  7,   10-Punishment   for misconduct-Consultation with Central  Vigilance  Commission- Advice   tendered  by  the  Commission-Whether  binding   on disciplinary authorities.      Central  Vigilance Commission Manual: Articles  22  and 23-Guidelines  for  Banks-Major  penalty  cases-Consultation with   Commission-Advice   tendered-Acceptance    of-Whether obligatory upon disciplinary authority.

HEADNOTE:      The  appellant was a Manager in one of the branches  of the  Respondent-Bank.   In 1985, there  was  a  departmental enquiry  against  him on the charges that  he  discounted  a cheque for Rs.50,000 drawn in the name of some other  person to  accommodate  one of his colleagues and when  the  cheque returned  unpaid, he retained the same for about two  months without  taking  action for realisation of the  amount.   An enquiry  was  conducted by the  Commissioner  for  Vigilance Inquiry from the Central Vigilance Commission, following the procedure   prescribed   by  the  Syndicate   Bank   Officer Employees’ (Disciplinary & Appeal) Regulations.  The Inquiry Officer  submitted his report holding that the charges  were proved against the appellant.  The Respondent-Bank  referred the  matter to the Central Vigilance Commission  for  advice and the Commission recommended the punishment of  compulsory retirement.      After   considering  the  Inquiry  Report   and   after affording  opportunity  to the appellant,  the  Disciplinary Authority imposed on him the                                                        577 penalty of compulsory retirement.  On appeal, the  appellate

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authority  concurred  with  the findings  recorded  and  the punishment  imposed.   The appellant filed a  Writ  Petition before   the  High  Court  challenging  the  order  of   his compulsory retirement.  The High Court declined to interfere with the order.  Hence the present appeal, by special leave.      The  appellant also filed a Writ Petition  before  this Court  challenging  the  validity  of  the  direction  dated 21.7.1984  issued by the Finance Ministry,  following  which the  Respondent-Bank  has  imposed on  him  the  penalty  of compulsory retirement.      On behalf of the appellant/petitioner it was  contended that  the advice given by the Central  Vigilance  Commission was  blindly followed by the Respondent-Bank as it was  made binding  on  it by virtue of the  directions  dated  21.7.84 issued  by the Ministry of Finance and in that  process  the merits  of the case and the statutory regulations  governing departmental inquiries were ignored.  It was also  contended that  the subject matter of the inquiry was  only  regarding irregularities in banking practice and since the interest of the Bank was not affected as he had the money recovered  and credited  to  the Bank with interest  thereon,  the  alleged misdemeanour   did  not  warrant  any  major  penalty   like compulsory   retirement,   which  even  according   to   the Respondent-Bank, was too harsh.      On behalf of the Respondent-Bank it was contended  that it  had  independently  considered the  material  on  record notwithstanding  the advice given by the  Central  Vigilance Commission  and  since  the  orders did  not  refer  to  the circulars or to the advice of Central Vigilance  Commission, the  punishment imposed on the appellant/petitioner was  not vitiated by extraneous influences.      Allowing the matters, this Court      HELD:  1.  The  Respondent-Bank itself  felt  that  the compulsory  retirement recommended by the Central  Vigilance Commission   was   too   harsh   and   excessive   on    the appellant/petitioner  in view of his  excellent  performance and  unblemished  antecedent  service.  The  Bank  made  two representations,  one  in 1986 and another in  1987  to  the Central  Vigilance Commission for taking a lenient  view  of the  matter  and to advise lesser  punishment.   Apparently, those  representations were not accepted by the  Commission. The  disciplinary  authority  and  the  appellate  authority therefore  had no choice in the matter.  They had to  impose the  punishment of compulsory retirement as advised  by  the Central Vigi-                                                        578 lance Commission.  The advice was binding on the authorities in  view of the directive of the Ministry of Finance  issued on  21.7.1984,  followed  by two  circulars  issued  by  the successive  Chief Executives of the Bank.  The  disciplinary and  appellate  authorities might not have referred  to  the directive of the Ministry of Finance or the Bank  circulars. They  might not have stated in their orders that  they  were bound  by the punishment proposed by the  Central  Vigilance Commission.   But it is reasonably foreseeable and needs  no elaboration  that they could not have ignored the advice  of the  Commission.   They  could not  have  imposed  a  lesser punishment  without  the  concurrence  of  the   Commission. Indeed, they could have ignored the advice of the Commission and imposed a lesser punishment only at their peril.  [586F- H; 587 A-C]      2.1  But  for the Finance  Ministry’s  directive  dated 21.7.1984,  the  advice tendered by  the  Central  Vigilance Commission  is  not binding on the Bank  or  the  punishment authority; it is not obligatory upon the punishing authority

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to  accept the advice of the Central  Vigilance  Commission. [588C]      2.2  The  Ministry of Finance has  no  jurisdiction  to issue  such  a  directive  to  Banking  institutions.    The Government may regulate the Banking institutions within  the power  located under the Banking Companies (Acquisition  and Transfer of Undertakings) Act, 1970.  Even though Section  8 thereof  empowers  the  Government to  issue  directions  in regard  to  matters of policy, there cannot be  any  uniform policy  with  regard to different disciplinary  matters  and much  less there could be any policy in awarding  punishment to   the  delinquent  officers  in  different  cases.    The punishment  to be imposed depends upon the nature  of  every case  and  the  gravity  of  the  misconduct  proved.    The authorities  have  to  exercise  their  judicial  discretion having  regard to the facts and circumstances of each  case. They cannot act under the dictation of the Central Vigilance Commission  or of the Central Government in the exercise  of their  power  and  the  imposition  of  punishment  on   the delinquent officer.  Therefore the directive of the Ministry of  Finance is wholly without jurisdiction and  contrary  to the statutory Regulations governing disciplinary matters and is quashed. [588D-H; 589A]      A.N.D’silva  v.  Union of India, [1962]  Suppl.  S.C.R. 968, relied on.      De  Smith’s Judicial Review of  Administrative  Action, 4th Edn. p. 309, referred to.                                                        579      3.  the Chairman of the Respondent-Bank is directed  to withdraw  the circular letters dated 27.7.1984 and  8.9.1986 issued  in furtherance of the Finance  Ministry’s  directive dated 21.7.1984. [589C]      [Setting aside the orders of the disciplinary authority and  the  appellate  authority,  this  Court  directed   the disciplinary authority to dispose of the case in  accordance with law and observations made in the judgment.]

JUDGMENT:      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2123  of 1991.      From  the  Judgment and Order dated 20.12.1988  of  the Bombay High Court in Appeal No. 1649 of 1988.                             WITH      WRIT PETITION NO. 1287 OF 1989.      (Under Article 32 of the Constitution of India).      Rajinder Sachhar, R.K. Agnihotri and S.C. Paul for  the Appellant/Petitioner.      K.N.  Bhat,  Vineet Kumar, Lalit Bhasin  and  Ms.  Nina Gupta for the Respondents.      The Judgment of the Court was delivered by      K. JAGANNATHA SHETTY, J. Nagaraj Shivarao Karjagi,  the petitioner  in  SLP  No. 4415 of  1989  has  challenged  his compulsory retirement and in Writ Petition No. 1287 of  1989 he  has  questioned the validity of the direction  dated  21 July  1984  issued by the Finance  Ministry,  Government  of India.   Since  the questions raised in both the  cases  are inter looked, we grant special leave in the SLP and  proceed to dispose of the same along with the writ petition.      The  events  leading  to these  cases  may  briefly  be stated.   In  1982,  the petitioner was  a  Manager  of  the Syndicate  Bank (‘the Bank’) at East Patel Nagar  Branch  at New Delhi.  He discounted a cheque of the sum of Rs.  50,000 drawn  on Punjab National Bank, Madras, after obtaining,  by

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phone  prior approval of the Regional Divisional Manager  of the Bank.  The cheque was sent for realisation to the Punjab National  Bank at Madras, but it was returned  unpaid.   The petitioner did not take prompt action to recover the  amount from  the person in whose favour he discounted  the  cheque. He kept the cheque                                                        580 with  him even without reporting to the higher  authorities. In  1983, the Assistant General Manager of the  Bank  called upon him to explain why the amount due under the  discounted cheque has not been recovered.  The petitioner in his  reply explained  the  circumstances  under which  the  cheque  was discounted.  He has stated that the credit was given to  the account  of  one  Dr.  N.  Ramakrishnan  who  was  a  Senoir Scientist  in Indian ‘Agricultural Research  Institute,  New Delhi but the amount was withdrawn by another person  called A.  Chandrashekhar  who is an officer of the Bank.   He  has further  stated that A. Chandrashekhar has promised  to  pay the  amount  and therefore, he has retained  the  instrument with  him  hoping that A. Chandrashekhar would keep  up  his promise.  On 6 July 1984 a sum of Rs.52,167.15 was deposited with the Bank.  A sum of Rs.36,000 towards principal sum and Rs.16,167.15 towards interest.  A suit was filed to  recover a  sum of Rs.14,000 out of the principal amount.  And  later on, this principal amount was also recovered and credited to the Bank.      However,  in  1985  there was  a  departmental  inquiry against  the  petitioner.  The  Commissioner  for  Vigilance Inquiry from the Central Vigilance Commission conducted  the inquiry.   The first charge against the petitioner was  that when he was functioning as Manager, he discounted under  his discretionary  jurisdiction a cheque for Rs.50,000 drawn  in the  name of Dr. N. Ramakrishnan in order to accommodate  A. Chandrashekhar  an  officer of the Bank or others  known  to him.   The second charge framed against him, related to  the retention  of  the  discounted  instrument  with  him   from December,  1982 till January 1984 without taking/causing  to be  taken  any action to realise the amount  due  under  the unpaid cheque.  It was also alleged that the petitioner made available undue financial accommodation to A. Chandrashekhar or others to the detriment of the interests of the Bank.  He was charged with lack of the integrity, honesty devotion  to duty, diligence and conduct unbecoming of the status of Bank Officer  in  contravention  of Regulation No.  3(1)  of  the Syndicate  Bank  Officer Employees’  (Conduct)  Regulations, 1976.      The inquiry was held as per the procedure prescribed by Syndicate  Bank  Officer Employees’  (Discipline  &  Appeal) Regulations, 1976, (‘the Regulations’).  On 16 October 1986, the  Inquiry Officer submitted his report holding  that  the charges  were  proved against the petitioner.  He  has  held that  the petitioner has failed to take any effective  steps for  recovery  of  the  amount  paid  under  the  discounted instrument.   He  has kept the instrument with  himself  for unduly long period without even surrendering the same to the custody of the Bank.  It was                                                        581 Only  after the Additional General Manager reminded  him  by letter  dated 15 December 1983, the petitioner  assured  him that  he would return the cheque which he finally did on  18 January 1984. The Inquiry Officer has finally concluded that the transaction connected with the unpaid instrument was  of an   accommodative   nature  with  a  view  to   assist   A. Chandrashekhar by using another person as benami and it  was in clear violation of the rules of the Bank.

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    It  is  said  and indeed not  disputed  that  the  Bank referred the matter to the Central Vigilance Commission  for advice   and  the  Commission  has  recommended   that   the petitioner  may be compulsorily retired from service by  way of punishment.      The   disciplinary  authority  after  considering   the inquiry   report  and  affording  an  opportunity   to   the petitioner passed an order dated 7 October 1987 imposing  on the  petitioner the penalty of compulsory  retirement.   The petitioner  appealed to the General Manager challenging  the punishment.  On 27 August 1988 the General Manager dismissed the  appeal  concurring with the findings recorded  and  the punishment  imposed  by  the  disciplinary  authority.   The petitioner thereupon moved the Bombay High Court for  relief under  Article 226 of the Constitution.  The High Court  has also  dismissed the writ petition.  He has now  appealed  to this Court.      THE CONTENTIONS OF THE PETITIONER      The petitioner has been complaining throughout and also before us that the punishing authorities did not apply their mind  and  did not exercise their power in  considering  the merits of his case. They have imposed on him the penalty  of compulsory  retirement  in obedience to the  advice  of  the Central Vigilance Commission which has been made binding  on them  by  the  direction dated 21 July 1984  issued  by  the Ministry of Finance, Department of Economic Affairs (Banking Division).   They have blindly followed the advice given  by the  Central  Vigilance  Commission without  regard  to  the merits   of  the  matter  and  contrary  to  the   statutory Regulations  governing  the  departmental  inquiries.    The subject matter of inquiry was only regarding  irregularities in the banking practice and the action complained of has not affected  the interests of the Bank.  The petitioner by  his own efforts has recovered the money due under the discounted cheque and credited the same with interest to the Bank.  The findings  recorded  by the Inquiry Officer  on  the  alleged misdemeanour  does  not warrant any major penalty  like  the compulsory retirement.  Reference was also                                                        582 made  to certain representations said to have been  made  by the Bank to the Central Vigilance Commission for approval to impose  a  lesser  punishment.   It is said  that  the  Bank pleaded  in  the  representations  that  the  punishment  of compulsory  retirement  advised by the  Commission  was  too harsh. SYNDICATE  BANK OFFICER EMPLOYEES’ (DISCIPLINE  AND  APPEAL) REGULATION 1976      These  Regulation have been framed under Section 19  of the    Banking   Companies   (Acquisition    and    Transfer Undertakings)  Act, 1970.  They were framed by the Board  of Directors  of  the Syndicate Bank in  consultation with  the Reserve Bank of India and with the previous sanction of  the Central  Government. Regulation 4 prescribes  penalties  for acts  of misconduct.   Regulation 5 specifies the  authority to institute disciplinary proceedings and impose  penalties. Regulation   6  lays  down  procedure  for  imposing   major penalties  and  Regulation  7 provides  for  action  on  the inquiry   report.   Regulation  7  confers  power   to   the disciplinary authority either to agree or disagree with  the findings of the inquiry authority on any article of  charge. The  disciplinary authority may reach its own conclusion  on the  material  on record and impose any  penalty  prescribed under  Regulation  4.  Or if it is of the  opinion  that  no penalty should be imposed on the delinquent officer, it  may pass   an   order  exonerating   the   delinquent   officer.

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Regulation  17  provides  for  appeals  against  the   order imposing  any  of the penalties specified in  Regulation  4. The appellate authority has been given the power to pass any order  of penalty or remitting the case to the  disciplinary authority  or  to any other authority  for  fresh  disposal. Regulation  19  provides for consultation with  the  Central Vigilance Commission.  It states that "that  the Bank  shall consult the Central Vigilance Commission wherever necessary, in  respect  of all disciplinary cases  having  a  vigilance angle."  There is no other Regulation requiring consultation with  Central  Vigilance Commission, or providing  that  the advice  given by the Commission is binding on the  punishing authorities.      The  Central Vigilance Commission, however, appears  to have  framed guidelines for Banks to consult the  Commission in respect of cases where major penalty is prescribed  under the  Regulation.   Article  22  of  the  Central   Vigilance Commission Manual reads :          "The Scheme of consultation with the Commission  in          respect  of major penalty cases pertaining to  such          officers envisages consultation with the Commission          at two stages.                                                      583          The   first  stage  of  consultation  arises   when          initiating   disciplinary  proceedings  while   the          second  consultation is taken at the conclusion  of          the proceedings."          Article 23.2 of the C.V.C. Manual Chapter 10 reads:          "In  all cases where C.V.C. advises  initiation  of          major   penalty  proceedings,  it  also   nominates          simultaneously  a  Commissioner  for   Departmental          Inquiries to whom the inquiry should be entrusted." THE  DIRECTION  OF THE MINISTRY OF  FINANCE,  DEPARTMENT  OF ECONOMIC AFFAIRS (BANKING DIVISION)      On 21 July  1984 Joint Secretary, Ministry of  Finance, Department  of  Economic  Affairs  (Banking  Division)   has written a letter to all Banking Institution thus :          "Recently  a  case been reported where a  bank  has          revised  the punishment awarded to an officer in  a          disciplinary  case  contrary to the advice  of  the          Central Vigilance Commission.  The case has figured          in  the Annual Report of the CVC as a case of  non-          consultation  with the Commission and thus  created          an  embarrassing situation.  You will, perhaps,  be          aware  of  the  Annual Reports of  the  CVC,  which          contain  cases where the  disciplinary  authorities          had  not  accepted its recommendations or  had  not          consulted  it, are laid on the Tables of  both  the          Houses  of  Parliament.  This  may,  thereafter  be          discussed  in the Parliament also.  You will  agree          that  under no circumstances the advice of the  CVC          should   be   modified  except   with   the   prior          concurrence  of the commission and  this  Ministry.          I   may mention here that revision of  the  penalty          imposed  on a delinquent officer as a result of  an          appeal filed by him before the  appellate authority          against  the decision of the original  disciplinary          authority  also  amounts  to  non-consultation/non-          acceptance of the advice of the CVC and is included          in CVC’s Annual Report.                Kindly  circulate these instructions  to  the          concerned   officers  in  your  bank   for   strict          compliance.   The receipt of this D.O.  letter  may          please be acknowledged.  A copy of this D.O. letter          is being marked to CVO in your bank separately."

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                                                      584 CIRCULARS OF THE BANK      On 27 July 1984, A. Krishna Rao, Chairman and  managing Director  of the Bank, issued a circular to all branches  of the Bank as follows :          "I am enclosing herewith a photostat copy of the DO          letter No.41/3/84-Vig. dated 21.7.1984 received  by          me from Shri Ashok Kumar, joint Secretary, ministry          of   Finance,  Department  of   Economic   Affairs,          (Banking  Division), Vigilance Cell, New Delhi,  in          the  above connection for strict compliance of  the          instructions contained therein.          As  the  advice in vigilance  cases  received  from          Central Vigilance commission is communicated to the          authorities   concerned  by  the  Chief   Vigilance          Officer,   I  advise,  that  the  Chief   Vigilance          Officer’s advice, as explained in my above referred          to DO letter, should be complied with.          Even  when a revision of the penalty imposed  on  a          delinquent  officer  at  the advice  of  the  Chief          Vigilance  Officer  by  of  Original   Disciplinary          Authority  were to be considered as a result of  an          appeal  filed  by  him  before  the  appellate/high          authorities,  such revision shall be effected  only          after consulting the Chief Vigilance Officer.          Please  acknowledge  receipt  of  this  and  ensure          compliance of the instructions contained herein."      On  8  September  1986 P.S.V.  Mallya,  the  succeeding Chairman  and Managing Director of the  bank issued  another circular letter to all branches of the bank in the following terms:          "All   vigilance   cases   in   bank   are    being          investigated/  processed at Vigilance Cell  at  the          HO,  under the administrative control of the  Chief          Vigilance Officer, who is reporting directly to me.          After  processing of the reports is concluded,  the          cases are referred to Central Vigilance  Commission          as  per  the  existing  procedure  and  the  advice          received from the commission is being  communicated          to  the  Disciplinary/Appellate  Authority  by  the          Chief Vigilance Officer.                                                        585                If  the advice tendered by the Commission  is          not  accepted/acted  upon, it will amount  to  non-          acceptance of the advice of the Commission and such          instance  will figure in the Annual Report  of  the          Central  Vigilance  Commission  placed  before  the          Parliament.                This  apart the non-acceptance of the  advice          in   vigilance  cases  is  likely  to  lead  to   a          situation,  in which, different types of  decisions          are possible to be taken in similar cases, which is          sure  to  result in a  voidable  complications  and          injustice    to    certain    sections    of    the          Officers/employees  community.   Again  in  such  a          situation, ensuring uniform stantards in finalising          action  on vigilance cases will also become a  very          difficult  phenomenon,  which is  not  a  desirable          trend  and  does  not augur well  for  the  healthy          functioning of the vigilance machinery in the Bank.                I   therefore,   advice   all    Disciplinary          /Appellate  Authorities to see that they  refer  as          hitherto  all  vigilance cases to  Chief  Vigilance          Officer and consult him on such cases and act  upon          his advice.

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         xxxxx     xxxxx     xxxxx     xxxxx          If for any reasons, the authorities concerned  feel          that  the  advice  needs to  be  reconsidered or  a          departure  is called for, they may refer  back  the          matter    to    Chief   Vigilance    Officer    for          reconsideration of the advice, with the reasons for          such  disagreement and the Chief Vigilance  Officer          will   see   whether  and  to  what   extent   such          reconsideration  is desirable or feasible and  will          tender advice again on reconsideration.                If  the  authority  concerned  is  still  not          disposed  to act on the advice, the  disinclination          on the part of the authority concerned will have to          be brought to my notice and the advice given by  me          in respect of such cases shall be treated as final.          It is also necessary that the authorities concerned          should  for  obvious  reasons keep  the  advice  in          strict confidence and see that no reference thereof          is made in any of the correspondence communication,          whether emanating from their end."                                                        586      The  petitioner  being aware of the directions  of  the Ministry of Finance and the circulars issued by the Bank has in  his memo of appeal before the appellate authority  inter alia complained that the system and procedure adopted by the Bank in dealing with vigilance cases, is totally against the principles of natural justice.  The Bank has no control over such  cases.   The  Disciplinary  Authority  and   Appellate Authority  are required to carry into effect the  punishment advised by the Central Vigilance commission without  change. He has also pointed out that his appeal could be nothing but an empty formality as the appellate authority would be  also bound  by the decision of the Central Vigilance  commission. The petitioner has also added post script to his appeal Memo stating  thus "This appeal has been filed without  prejudice to my contention that this appeal is an exercise in futility as  the  appellate  authority  also  is  not  the   deciding authority  and  this  appeal also will  be  decided  by  the CVO/CVC,  who  has  already decided and  whose  decision  is binding  on  you.  There is in fact no  effective  right  of appeal."      Counsel   for   the   Bank   however,   submits    that notwithstanding   the  advice  of  the   Central   Vigilance Commission  and  the  directive dated 21 July  1984  of  the Ministry  Finance,  Department of Economy  Affairs  (Banking Division),  the  case  of the petitioner  has  received  the fullest    consideration   from   the    disciplinary    and appellate  authorities. They have  independently  considered the  material on record both on the articles of charges  and also on the appropriate punishment of compulsory  retirement imposed on the petitioner.  The orders of the authorities do not  refer  to  the  circulars  of  the  Bank,  nor  to  the punishment proposed by the Central Vigilance Commission.  It is  therefore, illegitimate, to contend that the  punishment imposed  on the petitioner has been vitiated  by  extraneous influences.      We are not even remotely impressed by the arguments  of counsel  for  the Bank.  Firstly, the Bank itself  seems  to have felt as alleged by the petitioner and not denied by the Bank   in  its  counter  that  the   compulsory   retirement recommended  by  the Central Vigilance  Commission  was  too harsh  and  excessive  on  the petitioner  in  view  of  his excellent  performance and unblemished  antecedent  service. The  Bank appears to have made two representations;  one  in 1986 and another in 1987 to the Central Vigilance Commission

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for taking a lenient view of the matter and to advise lesser punishment    to   the   petitioner.    Apparently,    those representations  were not accepted by the  Commission.   The disciplinary authority and the appellate authority therefore have  no  choice  in the matter.  They  had  to  impose  the punishment of com-                                                        587 puslory  retirement  as  advised by  the  Central  Vigilance Commission.   The advice was binding on the  authorities  in view  of  the  said directive of the  Ministry  of  Finance, followed  by  two circulars issued by the  successive  Chief Executive  of  the  Bank.  The  disciplinary  and  appellate authorities might not have referred to the directive of  the Ministry  of Finance or the Bank circulars.  They might  not have  stated  in their orders that they were  bound  by  the punishment  proposed  by the Central  Vililance  Commission. But  it is reasonably foreseeable and needs  no  elaboration that  they  could  not  have  ignored  the  advice  of   the Commission.  They could not have imposed a lesser punishment without  the  concurrence of the Commission.   Indeed,  they could have ignored the advice of the Commission and  imposed a lesser punishment only at their peril.      The power of the punishing authorities in  departmental proceedings   is  regulated  by  the  statutory Regulations. Regulation 4 merely prescribes diverse punishment which  may be imposed upon delinquent officers.  Regulation 4 does  not provide  specific  punishments for  different  misdemeanours except  classifying  the  punishments  as  minor  or  major. Regulations  leave  it to the discretion  of  the  punishing authority to select the appropriate punishment having regard to the gravity of the misconduct proved in the case.   Under Regulation  17,  the appellate authority may pass  an  order confirming, enhancing, reducing or completely setting  aside the  penalty imposed by the disciplinary authority.  He  has also  power  to express his own views on the merits  of  the matter   and  impose  any  appropriate  punishment  on   the delinquent  officer.    It is quasi-judicial  power  and  is unrestricted.   But it has been completely fettered  by  the direction  issued by the Ministry of Finance.  The Bank  has been  told  that  the  punishment  advised  by  the  Central Vigilance   Commission   in  every  case   of   disciplinary proceedings  should  be strictly adhered to and  not  to  be altered  without prior concurrence of the Central  Vigilance Commission and the Ministry of Finance.      We  are indeed surprised to see the impugned  directive issued  by the Ministry of Finance, Department  of  Economic Affairs  (Banking Division). Firstly, under the  Regulation, the Bank’s consultation with Central Vigilance Commission in every  case is not mandatory.   Regulation 20 provides  that the  Bank  shall consult the  Central  Vigilance  Commission wherever  necessary,  in respect of all  disciplinary  cases having a vigilance angle.  Even if the Bank has made a  self imposed rule to consult the Central Vigilance Commission  in every disciplinary matter, it does not make the Commission’s advice binding on the punishing authority.  In this context, reference may be made to Article                                                        588 320(3)  of  the  Constitution.  The  Article  320  (3)  like Regulation 20 with which we are concerned provides that  the Union   Public  Service  Commission  or  the  State   Public Commission,  as the case may be, shall be  consulted-on  all disciplinary  matters  affecting a civil  servant  including memorials or petitions relating to such matters.  This Court in A.N. D’Silva v. Union of India,   [1962] Suppl; 1 SCR 968 has  expresed  the view that the  Commission’s  function  is

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purely advisory.  It is not an appellate authority over  the inquiry  officer or the disciplinary authority.  The  advice tendered by the Commission is not binding on the Government. Similarly, in the present  case, the advice tendered by  the Central  Vigilance Commission is not binding on the Bank  or the  punishing  authority.  It is not  obligatory  upon  the punishing  authority  to accept the advice  of  the  Central Vigilance Commission.      Secondly, the Ministry of Finance, Government of  India has  no  jurisdiction  to issue the  impugned  directive  to Banking  institutions.   The  government  may  regulate  the Banking  institutions  within the power  located  under  the banking Companies (Acquisition and Transfer of Undertakings) Act,   1970.  So far as we could see, Section 8 is the  only provision   which  empowers  to  the  Government  to   issue directions.  Section 8 reads:          "Every   corresponding  new  bank  shall,  in   the          discharge  of  its  function,  be  guided  by  such          directions in regard to matters of policy involving          public  interest  as the Central  Government   may,          after consultation with the Governor of the Reserve          bank, give."      The corresponding new bank referred to in Section 8 has been defined under Section 2(f) of the Act to mean a banking company  specified in column 1 of the First Schedule of  the Act and includes the Syndicate Bank.  Section 8 empowers the Government to issue direction in regard to matters of policy but  there  cannot  be any uniform  policy  with  regard  to different disciplinary matters and much less there could  be any policy in awarding punishment to the delinquent officers in  different cases.  The punishment to be  imposed  whether minor or major depends upon the nature of every case and the gravity  of the misconduct proved.  the authorities have  to exercise  their  judicial discretion having  regard  to  the facts and circumstances of each case.  They cannot act under the dictation of the Central Vigilance Commission or of  the Central  Government.   No  third  party  like  the   Central Vigilance Commission or the Central Government could dictate the disciplinary authority or the appellate authority as  to how they should exercise                                                        589 their  power and what punishment they should impose  on  the delinquent  officer.  (See: De Smith’s  Judicial  Review  of Administrative   Action,  Fourth  Edition,  p.   309).   The impugned directive of the Ministry of Finance, is therefore, wholly  without  jurisdiction, and plainly contrary  to  the statutory Regulations governing disciplinary matters.      For the foregoing reasons, we allow the appeal and  the writ  petition quashing the directive issued by the  Finance Ministry, Department of Economic Affairs, (Banking Division) dated  21  July  1984.  We also issue  a  direction  to  the Chairman  of  the Syndicate Bank to  withdraw  the  circular letters  dated  27  July 1984 and  8  September  1986.    We further  set aside the impugned orders of  the  disciplinary authority  and appellate authority with a direction  to  the former  to  dispose of the petitioner’s case  in  accordance with law and in the light of the observation made.      The  petitioner is entitled to costs which we  quantify in both  the cases at Rs. 15,000 which shall be paid by  the Central Government. G.N.                            Appeal and petition allowed.                                                        590