2007 (5) TMI 561 - SC - Indian Laws

Disciplinary Proceedings After Retirement Deemed Illegal: Court Orders Bank to Pay Retiral Benefits Promptly

UCO Bank & Anr Versus Rajinder Lal Capoor

UCO Bank & Anr Versus Rajinder Lal Capoor - 2007 (6) SCC 694, 2007 AIR 2129, 2007 (7) SCR 543, 2007 (8) JT 581 Issues Involved:1. Validity of the disciplinary proceedings initiated post-superannuation.2. Proportionality of the punishment imposed.3. Financial loss to the bank and procedural irregularities.4. Jurisdiction and legal fiction under Regulation 20(3)(iii) of UCO Bank Officer Employees Services Regulations, 1979.Issue-wise Detailed Analysis:1. Validity of the Disciplinary Proceedings Initiated Post-Superannuation:The Supreme Court examined whether the disciplinary proceedings initiated against the respondent after his superannuation were valid. The respondent, a bank officer, was issued a charge-sheet on 13.11.1998, after his superannuation on 01.11.1996. The Court noted that disciplinary proceedings under Regulation 20(3)(iii) of UCO Bank Officer Employees Services Regulations, 1979, could only continue post-superannuation if they were initiated while the officer was still in service. The Court held that a departmental proceeding is initiated only when a charge-sheet is issued, not merely by a show cause notice. Thus, the initiation of proceedings after the respondent's retirement was deemed illegal and without jurisdiction.2. Proportionality of the Punishment Imposed:The respondent was found guilty of procedural irregularities in sanctioning and disbursing loans under the PMRY Scheme. The Disciplinary Authority imposed the penalty of removal from service, which was upheld by the Appellate Authority. However, the High Court converted the penalty to compulsory retirement, considering the respondent's unblemished 40-year service record and the disproportionality of the punishment. The Supreme Court agreed that the punishment was disproportionate but emphasized that the initiation of the disciplinary proceedings itself was illegal.3. Financial Loss to the Bank and Procedural Irregularities:The Court examined the allegations of financial loss and procedural irregularities. The Enquiry Officer's report indicated that the respondent altered the loan purpose and issued cheques to the borrower's brother. However, the Court noted that the bank did not suffer any significant financial loss, and the purported irregularities were trivial in nature. The Court observed that the respondent's actions were driven by the target set for the PMRY Scheme and the emphasis on achieving it.4. Jurisdiction and Legal Fiction under Regulation 20(3)(iii):The Court analyzed the legal fiction created under Regulation 20(3)(iii), which allows disciplinary proceedings to continue post-superannuation as if the officer were still in service. The Court emphasized that this provision could only be invoked if the proceedings were initiated before the officer's retirement. Since the charge-sheet was issued after the respondent's superannuation, the legal fiction did not apply, rendering the entire proceedings vitiated in law.Conclusion:The Supreme Court held that the disciplinary proceedings initiated against the respondent post-superannuation were illegal and without jurisdiction. Consequently, the charge-sheet, enquiry report, and orders of punishment were invalid. The Court directed the appellant bank to pay all retiral benefits to the respondent expeditiously, exercising its discretionary jurisdiction under Article 142 of the Constitution of India to do complete justice. The appeal was dismissed with no order as to costs.