REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2693 OF 2013

UCO Bank & Ors.                          ....Appellants

versus

Rajendra Shankar Shukla                       ...Respondent

J U D G M E N T

Madan B. Lokur, J.

1. This  appeal  raises  an  interesting  question  of  law  on  access  to

justice  in  a  departmental  inquiry.   In  our  opinion,  the  respondent

(Rajendra Shankar Shukla) was not given a fair opportunity to defend

himself by denying him financial resources.  On the merits of the case

also, we are of the view that the impugned judgment and order of the

High Court does not call for any interference.

2. The  allegation  against  Shukla  was  that  while  in  charge  of  the

extension counter of the UCO Bank from 3rd October, 1987 to 8th July,

1994 he issued a cheque on 25th  January, 1991 for an amount of Rs.3

lakhs  in  favour  of  his  brother.  At  that  time,  Shukla  had  only  about   

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Rs.1,000/-  in  his  account.   We  are  only  concerned  with  this  broad

allegation.

3. Shukla was issued a charge sheet on 20th May, 1998 (after about 7

years) by the respondent (Bank) under the provisions of the UCO Bank

Officer Employees’ (Conduct) Regulations, 1976.  The articles of charge

against Shukla were as follows:-

(I) Shri  R.S.  Shukla  issued/got  issued  a  cheque  on  his joint  account  without  making  any  arrangement  of adequate balance and intention to honour it,  only to cause wrongful benefit to his relative, at the cost of the Bank.  He has thus failed to discharge his duties with utmost integrity and honesty, which is violative of  Regulation  3  of  UCO  Bank  Officer  Employees’ (Conduct) Regulations, 1976 as amended.

(II) Shri  Shukla,  by  making  available  the  official correspondence  (exchanged  between  regional  office, Raipur  and  his  branch)  to  his  son  which  he  later quoted in his  proposal  for  compromise of  Transport Loan availed by him, has not only acted against the interest of the Bank but also has deliberately divulged information of a confidential nature to a person - his son, not entitled to it, which is violative of Regulation 4  of  UCO  Bank  Officer  Employees’  (Conduct) Regulations, 1976 as amended.

(III) By  availing  loans  and  that  also  frequently,  far  in excess of the permissible amount against  NSCs and FDRs without paying interest at the applicable rates, Shri  R.S.  Shukla  has  failed  to  discharge  his  duties with devotion, honesty and utmost integrity.  This act is  violative  of  Regulation  3  of  UCO  Bank  Officer Employees’ (Conduct) Regulations, 1976 as amended.

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4. Shukla was due to superannuate on 31st January, 1999.  A few days

prior  to  his  superannuation,  the  Competent  Authority  issued  a  letter

invoking  Regulation  20(3)(iii)  of  the  UCO  Bank  (Officers’)  Service

Regulations,  1979 (for  short  “the Regulations”).   Regulation  20(3)(iii)

reads as follows:-

“The  officer  against  whom disciplinary  proceedings  have been  initiated  will  cease  to  be  in  service  on  the  date  of superannuation  but  the  disciplinary  proceedings  will continue as if  he was in service until  the proceedings are concluded and final order is passed in respect thereof.  The concerned officer will not receive any pay and/or allowance after the date of superannuation.  He will also not be entitled of the payment of retirement benefits till the proceedings are completed and final order is passed thereon except his own contributions to CPF.”

5. In view of the aforesaid Regulation, Shukla ceased to be in service

on 31st January, 1999 on attaining his superannuation but the disciplinary

proceedings against him continued.  Shukla denied the charges levelled

against him but the Enquiry Officer submitted a report in which Charges

1 and 3 were proved while Charge 2 was not proved.  The Disciplinary

Authority came to the conclusion that all three charges were proved and

as far as Charge 1 is concerned, he passed an order on 30 th June, 1999

dismissing  Shukla  from  service  which  would  ordinarily  be  a

disqualification for future employment.

6. A departmental appeal was filed by Shukla.  During the pendency

of the departmental appeal,  Shukla filed a writ petition in the Madhya                 C.A No. 2693 of 2013                                                                                Page 3 of 9

Pradesh High Court.  Later, the departmental appeal filed by Shukla was

dismissed.   The writ  petition was transferred to the Chhattisgarh High

Court and by a judgment and order dated 21st December, 2006 the learned

Single Judge allowed the writ petition and quashed the order dated 30th

June, 1999 passed by the Disciplinary Authority.  An appeal filed by the

Bank was dismissed by the impugned judgment and order dated 7th May,

2010  by  the  Division  Bench  of  the  High  Court.   It  is  under  these

circumstances that the present appeal was filed in this Court.

7. At the outset, we make it clear that the learned senior counsel for

the Bank candidly submitted that he was concerned only with Charge 1

and  did  not  seek  to  justify  the  correctness  of  the  findings  of  the

Disciplinary Authority in respect of Charge 2 and Charge 3.

8. The learned Single  Judge  noted  a  few extremely  relevant  facts.

Undoubtedly  the  cheque  was  issued  by  Shukla  on  25th January, 1991

(although he claimed his wife had signed the cheque) but he directed the

Bank  to  ‘stop  payment’  by  a  communication  dated  6th March,  1991.

Notwithstanding  the  ‘stop  payment’  communication,  his  brother

presented  the  cheque  for  encashment  on  2nd April,  1991  and  it  was

temporarily encashed.

9. We have been informed by learned counsel for Shukla that on 19 th

July, 1994 he was promoted to higher category as Manager and on 12th

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August, 1996 he was permitted to cross the efficiency bar.  These events

occurred before the charge sheet was issued to Shukla.

10. The  learned  Single  Judge  took  the  view  that  there  was  no

prohibition in a bank employee having an account in the same bank and

that in case a cheque issued by such an employee was dishonoured, action

may be taken by the complainant under the provisions of the Negotiable

Instruments Act, 1881 but the Bank could not take action under the UCO

Bank Officer Employees’ (Conduct) Regulations, 1976.   In view of this

conclusion, the learned Single Judge held that even if Charge 1 is proved,

it would not amount to a misconduct within the purview of the Conduct

Regulations  applicable  to  bank  employees.   It  was  further  held  that

assuming  misconduct  was  proved,  appropriate  action  could  be  taken

under  the  UCO  Bank  (Employees)  Pension  Regulations,  1995  in

accordance with law and if permissible.

11. The Division Bench of the High Court found no error in the view

taken by the learned Single Judge and accordingly dismissed the appeal

filed by the Bank.  The Division Bench held that the action by Shukla in

issuing a cheque for Rs. 3 lakhs when he had only about Rs. 1,000/- in his

account did not amount to misconduct but was an action personal to him.

The High Court  also noted that  his direction to ‘stop payment’ would

perhaps have made him liable for some action by his brother but certainly

not by the Bank.                 C.A No. 2693 of 2013                                                                                Page 5 of 9

12. We do not find any reason to interfere with the judgment and order

passed by the High Court.  However, it is necessary for us to highlight a

few  facts  which  were  brought  to  our  notice  during  the  course  of

submissions made by learned counsel.  The first issue of concern is the

enormous delay of about 7 years in issuing a charge sheet against Shukla.

There is no explanation for this unexplained delay.  It appears that some

internal discussions were going on within the Bank but that it took the

Bank  7  years  to  make  up  its  mind  is  totally  unreasonable  and

unacceptable.  On this ground itself, the charge sheet against Shukla is

liable to be set aside due to the inordinate and unexplained delay in its

issuance.

13. What compounds the default on the part of the Bank is that Shukla

was placed in a higher category as a Manager on 19th July, 1994 while all

these discussions were going on in the Bank.  He was also allowed to

cross the efficiency bar on 12th August, 1996 again while the discussions

were going on.  Surely, if the Bank was serious about proceeding against

Shukla for misconduct, they would not only have taken prompt action in

issuing a  charge sheet  but  would not  have granted him the benefit  of

being placed in a higher category or crossing the efficiency bar.

14. We were also little taken aback to learn from learned counsel for

Shukla that after  his superannuation on 31st January, 1999 Shukla was

paid nothing during the pendency of the disciplinary inquiry.  He was not                  C.A No. 2693 of 2013                                                                                Page 6 of 9

paid his salary because he had superannuated.  For some reason he was

not paid his pension, perhaps because a departmental inquiry was pending

against him.  He was also not paid any subsistence allowance during the

period that the disciplinary inquiry was pending and even thereafter till

30th June, 1999.  In other words, Shukla was made to face a financial

crunch and presumably, he did not have a fair opportunity of defending

himself.   

15. An employee is entitled to subsistence allowance during an inquiry

pending against him or her but if that employee is starved of finances by

zero  payment,  it  would  be  unreasonable  to  expect  the  employee  to

meaningfully participate in a departmental inquiry.  Access to justice is a

valuable right available to every person, even to a criminal, and indeed

free legal representation is provided even to a criminal.  In the case of a

departmental inquiry, the delinquent is at best guilty of a misconduct but

that  is  no  ground to  deny  access  to  pension  (wherever  applicable)  or

subsistence  allowance  (wherever  applicable).  As  far  as  Shukla  is

concerned he was denied his pension as well as subsistence allowance

which prevented  him from effectively  participating  in  the  disciplinary

inquiry.  On  this  ground  as  well,  the  proceedings  against  Shukla  are

vitiated.

16. Finally, we may also draw attention to an unreported decision of                 C.A No. 2693 of 2013                                                                                Page 7 of 9

this Court in UCO Bank and Ors. v. Prabhakar Sadashiv Karvade.1  In

this decision, the Court considered the provisions of the Regulations that

we are concerned with and held :  

“The sum and substance of these Regulations is that even though a departmental inquiry instituted against an officer employee before his retirement can continue even after his retirement, none of the substantive  penalties  specified  in  Regulation  4  of  1979 Regulations,  which  include  dismissal  from  service,  can  be   imposed on an officer employee after his retirement on attaining the age of superannuation. Therefore, we have no hesitation to hold that  order  dated 12.10.2004 passed by the  disciplinary  authority dismissing the respondent from service, who had superannuated on 31.12.1993 was ex facie  illegal  and without  jurisdiction and the High Court did not commit any error by setting aside the same.”

17. We may also make reference to another decision of this Court in

UCO Bank and Anr. v. Rajinder Lal Capoor.2  This decision also related

to the very same Regulations that we are concerned with.   

18. In dealing with these Regulations, it was observed by the Court in

paragraph 22 of the Report as follows:-

“The respondent, therefore, having been allowed to superannuate, only a proceeding, inter alia, for withholding of his pension under the  Pension  Regulations  could  have  been  initiated  against  the respondent.   Discipline  and Appeal  Regulations  were,  thus  not attracted.  Consequently the charge-sheet, the enquiry report and the orders of punishment passed by the disciplinary authority and the  appellate  authority  must  be  held  to  be  illegal  and  without jurisdiction.”

1 C.A. No. 4725 of 2010 decided on 20th May, 2010

2 (2007) 6 SCC 694

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19. Under the circumstances, we have no hesitation in dismissing the

appeal  filed  by  the  Bank  also  on  the  ground  that  the  punishment  of

dismissal  could  not  have  been  imposed  on  Shukla  after  his

superannuation.

20. However, we must observe that the learned Single Judge had held

against  the  Bank and the  Division  Bench also  held  against  the  Bank.

Notwithstanding  this  the  Bank  preferred  this  appeal.  The  appeal  was

preferred despite at least two decisions delivered by this Court making the

legal position clear. The Bank would have been well-advised to follow the

law laid down by this Court rather than unnecessarily litigate against an

employee who has superannuated.  We have no doubt that Shukla must

have  spent  a  considerable  amount  in  litigation.   Accordingly,  while

dismissing the appeal, we impose costs of Rs. 1 lakh which will be paid

to Shukla within 4 weeks from today towards his legal expenses.

………………………J (Madan B. Lokur)

...……………………..J                              (Deepak Gupta)

New Delhi; February 15, 2018

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