1996 (3) TMI 526 - SC - Indian Laws

Disciplinary enquiry upheld despite minor procedural deviations where prejudice not shown; applied prejudice test and substantial compliance

SC held that the disciplinary enquiry was not vitiated despite non-literal compliance with a procedural regulation because there was no proven prejudice ... Disciplinary proceedings - removal from service - temporary misappropriation of funds and issuing an unauthorized letter jeopardizing the bank's interests - contravention of Regulation 50(4) of the State Bank of Patiala (Officers’) Service Regulations 1979 - rule of audi alteram partem or the rule against bias - nonfurnishing of the copies of the statements of witnesses and documents - Violation of principles of natural justice in disciplinary proceedings - failure to comply with sub-clause (iii) of clause (b) of Regulation 68(ii)(x) - scope of judicial review - Whether the delinquent officer/employee had or did not have a fair hearing? It is on the basis of this evidence that the enquiry officer had come to the conclusion that both the charges were established inspite of non-examination of Balwant Singh. Neither the Trial Court nor the first Appellate Court have found that it is a case of no evidence. The additional ground assigned by the High Court is, therefore, unsustainable in law. Held that:- It is evident from the record that though copies of the statements of Kaur Singh and Balwant Singh were not supplied to the respondents he was permitted to peruse the same more than three days prior to the examination of witnesses. It is necessary to emphasize that sub-clause -(iii) aforesaid only speaks of copies of statements of witnesses recorded earlier and does not refer to documents. So far as the documents are concerned the only right given to the delinquent officer by Regulation 68 is to inspect and take notes and that has been done. Coming back to the statements of witnesses Balwant Singh was not examined at the oral enquiry at all as stated above. Only Kaur Singh, Patwari, was examined. The issue boils down to this whether the failure to literally comply with sub-clause (iii) of clause (b) of Regulation 68(ii)(x)vitiates the enquiry altogether or whether it can be held in the circumstances that there has been a substantial compliance with the said sub-clause and that on that account, the enquiry and the punishment awarded cannot be said to have been vitiated. It is not brought to our notice that the State Bank of Patiala (Officers') Service Regulation contains provision corresponding to Section 99 C.P.C. or Section 465 Cr.P.C. Does it mean that any and every violation of the regulations renders the enquiry and the punishment void or whether the principle underlying Section 99 C.P.C. and Section 465 Cr.P.C. is applicable in the case of disciplinary proceedings as well. In our opinion, the test in such cases should be one of prejudice, as would be later explained in this judgment. But this statement is subject to a rider. The regulations may contain certain substantive provisions, e.g., who is the authority competent to impose a particular punishment on a particular employee/officer. Such provisions must be strictly complied with. But there may be any number of procedural provisions which stand on a different footing. It is a case of codification of the several facets of rule of audi alteram partem or the rule against bias. One may ask, if a decision arrived at in violation of principles of natural justice is voids how come a decision arrived at in violation of rules regulations/statutory provisions incorporating the said rules can be said to be not void in certain situations. It is this doubt which needs a clarification - which in turn calls for a discussion of the question whether a decision arrived at in violation of any and every facet of principles of natural Justice is void. In the case of violation of a procedural provision, the position is this: procedural provisions are generally meant for affording a reasonable and adequate opportunity to the delinquent officer/employee. They are, generally speaking, conceived in his interest. Violation of any and every procedural provision cannot be said to automatically vitiate the enquiry held or order passed. Except cases falling under 'no notice', 'no opportunity' and 'no hearing' categories, the complaint of violation of procedural provision should be examined from the point of view of prejudice, viz., whether such violation has prejudiced the delinquent officer/employee in defending himself properly and effectively. If it is found that he has been so prejudiced, appropriate orders have to be made to repair and remedy the prejudicate, including setting aside the enquiry and/or the order of punishment. If no prejudice is established to have resulted therefrom, it is obvious, no interference is called for. In this connection, it may be remembered that there may be certain procedural provisions which are of a fundamental character, whose violation is by itself proof of The Court may not insist on proof of prejudice in such cases. As explained in the body of the judgment, take a case where there is a provision g expressly providing that after the evidence of the employer/government is over, the employee shall be given an opportunity to lead defence in his evidence, and in a given case, the enquiry officer does not give that opportunity inspite of the delinquent officer/employee asking for it. The prejudice is self- evident. No proof of prejudice as such need be called for in such a case. To repeat, the test is one of prejudice, i.e., whether the person has received a fair hearing considering all things. Now, this very aspect can also be looked at from the point of view of directory and mandatory provisions, if one is so inclined. No prejudice has resulted to the respondent on account of not furnishing him the copies of the statements of witnesses. We are satisfied that on account of the said violations it cannot he said that the respondent did not have a fair hearing or that the disciplinary enquiry against him was not a fair enquiry. Though the copies of the statements of two witnesses [Kaur Singh, Patwari and Balwant Singh] were not furnished, the respondent was permitted to peruse them and take notes therefrom more than three days prior to their examination. Of the two witnesses, Balwant Singh was not examined and only Kaur Singh was examined. The respondent did not raise any objection during the enquiry that the non-furnishing of the copies of the statements is disabling him or has disabled him, as the case may be, from effectively cross- examining the witnesses or to defend himself. The Trial Court has not found that any prejudice has resulted from the said violation. The Appellate Court has no doubt said that it has prejudiced the respondent's case but except merely mentioning the same, it has not specified in what manner and in what sense was the respondent prejudiced in his defence. The High Court, of course, has not refereed to aspect of prejudice at all. Accordingly, we allow the appeal and set aside the judgment of the High Court affirming the judgments of the Trial Court and Appellate Court the suit filed by the respondent shall stand dismissed. Issues Involved:1. Violation of principles of natural justice in disciplinary proceedings.2. Non-furnishing of copies of statements of witnesses and documents.3. Examination of prejudice caused by procedural violations.4. Distinction between substantive and procedural provisions.Detailed Analysis:1. Violation of Principles of Natural Justice in Disciplinary Proceedings:The core issue raised by the appellant concerns the alleged violation of natural justice principles during disciplinary proceedings. The respondent was accused of temporary misappropriation of funds and issuing an unauthorized letter jeopardizing the bank's interests. The disciplinary enquiry found both charges established, leading to the respondent's removal from service. The respondent's appeal argued that the enquiry was flawed due to procedural lapses, specifically the non-furnishing of witness statements and documents.2. Non-furnishing of Copies of Statements of Witnesses and Documents:The factual position, as found by the Appellate Court, indicated that while a list of documents and witnesses was provided, copies of the documents and statements recorded during the preliminary enquiry were not supplied to the respondent. The respondent was allowed to peruse these documents only half an hour before the enquiry commenced. The High Court held that this failure violated Regulation 68(X)(b)(iii) of the State Bank of Patiala (Officers') Service Regulations, 1979, which mandates that copies of statements of witnesses recorded earlier should be furnished not later than three days before the commencement of witness examination.3. Examination of Prejudice Caused by Procedural Violations:The Supreme Court emphasized that not every procedural violation automatically vitiates the enquiry. The test of prejudice must be applied to determine whether the procedural lapse affected the fairness of the hearing. The Court noted that the respondent did not raise any objections during the enquiry regarding the non-furnishing of copies and did not claim that this hindered his ability to cross-examine witnesses or defend himself effectively. The Appellate Court's finding of prejudice was not substantiated with specific details on how the respondent's defense was impacted.4. Distinction Between Substantive and Procedural Provisions:The judgment distinguishes between substantive and procedural provisions. Substantive provisions, which are fundamental to the authority's jurisdiction, must be strictly complied with. Procedural provisions, designed to ensure a fair hearing, can be examined for substantial compliance. The Court held that the procedural lapse in this case, i.e., the non-furnishing of copies of witness statements, did not result in prejudice to the respondent. The Court applied the test of prejudice and substantial compliance, concluding that the respondent had a fair hearing despite the procedural lapse.Conclusion:The Supreme Court allowed the appeal, setting aside the judgments of the High Court, Trial Court, and Appellate Court. The suit filed by the respondent was dismissed, with the Court finding no prejudice resulted from the procedural violation. The judgment underscores the importance of examining procedural lapses through the lens of prejudice and substantial compliance, rather than automatically invalidating disciplinary proceedings for every procedural misstep.