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Kodanchery Service Co-Operative Bank Ltd., Represented by Its Secretary, Kozhikode & Others v/s Joshy Varghese & Others


Company & Directors' Information:- B S AND SERVICE PRIVATE LIMITED [Active] CIN = U92419MH1946PTC004912

Company & Directors' Information:- K P VARGHESE AND COMPANY PVT LTD [Strike Off] CIN = U51909KL1990PTC005731

Company & Directors' Information:- K J VARGHESE AND COMPANY PRIVATE LIMITED [Strike Off] CIN = U99999KA1967PTC001702

Company & Directors' Information:- SERVICE CORPORATION LIMITED [Dissolved] CIN = U93090KL1946PLC001075

    WA. No. 11 of 2020

    Decided On, 13 January 2020

    At, High Court of Kerala

    By, THE HONOURABLE MR. JUSTICE C.T. RAVIKUMAR & THE HONOURABLE MR. JUSTICE N. NAGARESH

    For the Appellants: B.S. Swathi Kumar, Anitha Ravindran, Advocates. For the Respondents: R1, P.N. Mohanan, R2 & R3, K.R. Deepa, Sr. G.P.



Judgment Text

Ravikumar, J.1. This intra-court appeal is directed against the judgment dated 21.11.2019 in W.P.(C)No.22228 of 2019. Respondents 1 to 3 therein are the appellants. They are respectively the Kodanchery Service Co-operative Bank Ltd.No.F.1762, its Managing Committee and the Sub Committee constituted to conduct disciplinary proceedings against the first respondent herein. The writ petition was filed by the first respondent herein seeking the following reliefs:-(i) Call for the records leading to issue Ext.P1, P8 and P9 and quash the same by issuing a writ of certiorari or any other appropriate writ, order or direction.(ii) Issue a writ of mandamus or any other appropriate writ order or direction directing the respondents to reinstate the petitioner in service forthwith with all consequential benefits.(iii) Declare that petitioner is entitled to get reinstatement in service with all consequential benefits.”2. The facts that ultimately culminated in the impugned judgment are as follows:-While the writ petitioner was working as Branch Manager under the first appellant viz., Kodanchery Service Co-operative Bank Ltd.No.F.1762 he was suspended from service on 16.6.2017. Subsequently, a disciplinary sub-committee was constituted. The disciplinary sub-committee thus constituted issued Ext.P1 memo of charges. The substantive charges levelled against the writ petitioner/first respondent herein are as follows:-“(i) While working as Branch Manager of the bank at Adivaram branch sanctioned/disbursed the loans without following the criteria laid down for the same. The managing committee was given consent to all the Branch Managers to renew the loan in order to reduce the overdue and to issue fresh loan to worthwhile customers subject to the satisfaction of the committee.(ii) Failed to mark attendance on certain days and(iii) dereliction of duty.”Ext.P1 memo of charges was framed and issued by the Chairman of the disciplinary sub-committee. On receipt of Ext.P1 charge memo the writ petitioner submitted Ext.P2 reply dated 22.10.2017. Upon finding the reply unsatisfactory an Enquiry Officer was appointed. After conducting enquiry the Enquiry Officer submitted Ext.P5 enquiry report. Later, as per Ext.P6, the first respondent/the writ petitioner was called upon to submit objection, if any, to the enquiry report. Ext.P7 is the reply submitted by the writ petitioner. Later, penalty of dismissal from service was imposed on him as per Ext.P8. Aggrieved by Ext.P8 order passed by the disciplinary authority the writ petitioner preferred an appeal and it was rejected as per Ext.P9 by the appellate authority. Raising various grounds the writ petitioner challenged Ext.P1 charge memo and Exts.P8 and P9 orders in the writ petition. As per the impugned judgment, the learned Single Judge held that the disciplinary proceedings conducted by the disciplinary sub-committee based on the charge memo issued by that committee is legally invalid and no action should have been taken based on such an invalid inquiry, even though the enquiry proceedings were ratified by the Managing Committee subsequently. It was also held that either the participation of the employee in the enquiry or failure to raise any objection in regard to the authority of disciplinary sub-committee to issue charge memo could not legalise the action done without authority which culminated in his dismissal from service. Based on the said conclusions and findings that the learned Single Judge set aside the impugned proceedings and left liberty to the Managing Committee to take action against the writ petitioner, in accordance with law. Taking into account the fact that the writ petitioner/first respondent was under suspension with effect from 16.6.2017 consequent to the declaration that the entire proceedings are illegal it was held that he is liable to be reinstated. Referring to Rule 198(6) of the Kerala Co-operative Societies Rules (KCS Rules) it was held that no employee could be suspended beyond the period of one year without prior approval of the Registrar. In such circumstances, it was further held that it would be open to the respondents to reinstate the writ petitioner in service or to pay full salary during the period of disciplinary proceedings if they propose to initiate action availing the liberty granted. Furthermore, it was directed as follows:-“If disciplinary proceedings are initiated, it shall be concluded within three months. If no proceedings are being initiated or no proceedings are concluded within the time as above, the petitioner shall be reinstated in service.”It is feeling aggrieved by the disposal of the writ petition on the aforesaid lines that the captioned appeal has been preferred.3. We have heard the learned counsel for the appellants and the learned counsel appearing for the first respondent/the writ petitioner.4. On the basic facts there is no dispute. The fact that Ext.P1 memo of charges was issued by the Chairman of the disciplinary sub-committee is not disputed and in fact, it is indisputable in view of Ext.P1. Taking into account the said indisputable aspect evidently, the learned Single Judge considered the question whether the entire proceedings initiated based on Ext.P1 memo of charges framed by the Chairman of the disciplinary sub-committee is valid and whether by the mere ratification of such actions by the Managing Committee the enquiry proceedings could be held as valid ? Obviously, the learned Single Judge answered those questions in the negative. The question is whether such conclusions and findings of the learned Single Judge in regard to the framing of the charge memo and the validity of the disciplinary proceedings initiated based on the same, invite interference.5. For a proper answering of the aforesaid questions it is only appropriate to refer to Section 2(e) of the KCS Act and Rule 182(2) of the KCS Rules. Section 2(e) of the KCS Act reads thus:-"2(e) "committee" means the governing body of a cooperative society by whatever name called, to which the management of the affairs of the society is entrusted."Rule 182(2) of the KCS Rules reads thus:-"182. (2) The Committee shall be the authority competent to appoint employees in a Co-opertive Society."(underline supplied)It is thus evident that the appointing authority of an employee in a Cooperative Society is the committee of the Society concerned elected for the management of the affairs of the society, as defined under Section 2(e) of the KCS Act. Rules 198(2), 198(2A) and (2B) are also relevant in the contextual situation and they read thus:-“198(2) No kind of punishment shall be awarded to an employee unless he has been informed in writing of the grounds on which it is proposed to take action against and he has been afforded an opportunity including a personal hearing to defend himself. Every order awarding punishment shall be communicated to the employee concerned in writing stating the grounds on which the punishment has been awarded.(2A) The committee of a society shall constitute a disciplinary sub-committee consisting of not more than three of its members, of whom one shall be designated as Chairman, but the President of the committee of the society shall not be a member in the disciplinary sub-committee.(2B) The disciplinary sub-committee so constituted shall inquire into the charges against the employee either by themselves or by engaging an external agency.”(emphasis added)Rule 198(2) of KCS Rules mandates that no kind of punishment shall be awarded to an employee unless he has been informed in writing of the grounds on which it is proposed to take action against and he has been afforded an opportunity including a personal hearing to defend himself. Going by Rule 198(2A) evidently, the power to constitute a disciplinary sub-committee, consisting of not more than three of its members, of whom one shall be designated as Chairman, vests with the 'committee of the society'. Rule 198(2B) of the KCS Rules provides that the disciplinary committee so constituted under Rule (2A) shall inquire into the charges against the employee, either by themselves or by engaging an external agency. Before proceeding further it is only appropriate to consider the meaning of the words 'charge' and 'chargesheet' . Charge means any specific act/acts, omission/omissions alleged to have committed by an employee and 'chargesheet' is a memorandum of charges which carry allegations of acts or omissions alleged to have been committed by him. In other words, it is one which carries allegations of misconduct, misbehaviour, indiscipline, negligence etc. The very objective of issuance of memo of charges is to inform the delinquent employee what he is supposed to defend or what he is alleged to have done. Thus, a conjoint reading of Section 2(e) of the KCS Act and Rules 182(2) and 198(2) of the KCS Rules the committee of the society concerned which is the authority competent to appoint employees in a Co-operative Society, is bound to inform the delinquent employee in writing, of the grounds on which it is proposed to take action against him/her. At this juncture, it is only worthwhile to refer to the decisions of the Hon'ble Apex Court in Union of India v. K.V.Jankiraman (AIR 1991 SC 2010), Union of India and others v. Anil Kumar Sarkar [(2013) 4 SCC 161] and in Government of Andhra Pradesh v. Gandhi (2013 (1) KLT SN 121 (C.No.106) SC]. In Jankiraman's case (supra) the Apex Court held that disciplinary proceedings can be said to be commenced only when memorandum of charges is laid. Same view was taken in Anil Kumar Sarkar's case (supra) wherein it was held that departmental proceedings commence only when charge sheet is issued to the delinquent employee. In Gandhi's case (supra) the Apex Court held that decision to initiate disciplinary proceedings could not be subsequent to the issuance of charge sheet. If we analyse the provision under Rule 198(2A) and (2B) of the KCS Rules in the light of the decisions in Jankiraman's case, Anil Kumar Sarkar's case and Gandhi's case (supra) and the indisputable and unambiguous position from Rule 198(2B) that it only mandates that the disciplinary sub-committee constituted by the Managing Committee of a society concerned shall inquire into the charges against employee concerned either by themselves or by engaging an external agency the scope of the provision under Rule 198(2B) would be revealed. It would reveal that the provision under Rule 198(2A) only mandates the committee of a society, which is the appointing authority of its employees, to constitute a disciplinary subcommittee and the provision under Rule 198(2B) empowers the disciplinary sub-committee so constituted, statutorily, only to inquire into the charges against the employee, either by themselves or by engaging an external agency. The constitution of a disciplinary subcommittee pre-supposes two things viz., a decision has been taken to initiate disciplinary proceedings against an employee or employees in respect of a misconduct and secondly, in pursuance of the said decision a memorandum of charges has been framed and issued. We are holding thus, as in view of the decision in Gandhi's case (supra) decision to initiate disciplinary proceedings cannot be subsequent to issuance of charge sheet and in view of the decision in Janakiraman's case (supra) and Anil Kumar Sarkar's case (supra) disciplinary proceedings commence only when charge sheet is issued to the delinquent employee. When the statute empowers under Rule 198(2B) of the KCS Rules only to inquire into the charges against an employee, either by themselves or by engaging an external agency if prior to the constitution of the disciplinary sub-committee charges are not framed what would be there for the disciplinary sub-committee to inquire into. In other words, when the very purpose of constituting a disciplinary sub-committee is to inquire into charges against the employee concerned and at the same time Rule 198(2B) does not specifically empowers the said disciplinary sub-committee to frame definite charges against an employee of a society, according to us, a different construction of the said provision is not permissible in the light of the aforesaid decisions. In this situation it pertinent to refer to the decisions of the Hon'ble Apex Court in Bhavnagar University v. Palitana Sugar Mill (P) Ltd. And Others reported in (2003) 2 SCC 111 and in Union of India and Others v. B.V.Gopinath reported in (2014) 1 SCC 351. In Bhavnagar University's case (supra) the Apex Court held that the charge memo drawn by an officer other than the specified authority would be wholly without jurisdiction and hence, would vitiate the whole disciplinary enquiry and that when a statutory authority is required to do a thing in a particular manner, the same must be done in that manner or not at all. Further, it was held therein that the State and other authorities while acting under the statute are only creature of statute and therefore, they must act within the four corners thereof. In B.V.Gopinath's case (supra) the Apex Court was dealing with disciplinary proceedings initiated under the Central Civil Services (Classification, Control and Appeal) Rules 1965. Going by the provisions thereunder to hold an enquiry against a Government servant either under Rule 14 or 16 the disciplinary authority shall draw or cause to draw the chargesheet. Ultimately the Apex Court held that charge memo drawn by an officer other than the specified authority is wholly without jurisdiction and therefore, it would vitiate the whole disciplinary inquiry conducted against the employee concerned. In the case on hand, admittedly, Ext.P1 memo of charges was issued and it was framed and issued by the Chairman of the disciplinary sub-committee constituted for conducting disciplinary proceedings against the first respondent herein.6. Before the writ Court the appellants herein who were respondents 1 to 3 therein, jointly filed a counter affidavit. It is stated therein that the Committee of the Bank constituted the disciplinary subcommittee to conduct inquiry against the first respondent herein/the writ petitioner and the sub-committee thereafter, appointed an independent enquiry officer to conduct inquiry against the first respondent. The fact that Ext.P1 memo of charges was issued by the Chairman of the disciplinary sub-committee is stated therein and the said fact is discernible from Ext.P1 itself. In the light of our conclusions and findings based on the aforesaid provisions, the decisions referred supra and the aforesaid factual position, we have no hesitation to hold that the learned Single Judge was perfectly right in holding that Ext.P1 charge memo issued by the Chairman of the disciplinary sub-committee was legally invalid and in such circumstances, the whole enquiry proceedings conducted even on ratification by Managing Committee of the framing of charge subsequently, could not validate the proceedings conducted against the first respondent.7. Obviously, the learned Single Judge has also held that the participation of the employee in the enquiry proceedings or his failure to raise any objection in regard to the authority of the disciplinary sub-committee to frame and issue charge memo could not confer an authority on the disciplinary sub-committee to issue memo of charges. When the framing and issuance of charge memo itself is wholly invalid the failure on the part of the first respondent in raising objection against it or his participation in the disciplinary proceedings are all inconsequential and such action/omission could not validate the proceedings based on the said charge memo. We find no reason to interfere with the said finding as well. In other words, in such circumstances, the entire disciplinary proceedings conducted based on Ext.P1 has to be held as vitiated.8. The next question is whether the liberty granted by the learned Single Judge to the Managing Committee to take action against the petitioner in accordance with law requires interference. While considering the said question it is relevant to note that the interference with the charge memo and the disciplinary proceedings, was based on the sole reason that Ext.P1 memo of charges was issued by an incompetent authority. When once, on the aforesaid grounds, the memo of charges is set aside solely on that ground it was only just and proper to leave liberty to the disciplinary authority to take action in accordance with law. Above all, the first respondent did not challenge the judgment dated 21.11.2019. As relates the appellants, it is in fact, not at all adverse to them.9. The further question to be considered is whether the direction of the learned Single Judge in the matter of reinstatement of the first respondent in case of failure to initiate de novo disciplinary proceedings within the period stipulated thereunder or to pay full salary during the period of disciplinary proceedings in case of initiation of disciplinary proceedings, warrants interference. In that context, it is relevant to refer to Rule 198(6) of the KCS Rules which provides thus:-“198(6) An authority competent to appoint an employee may suspend him pending enquiry into serious charges against such employee. No employee shall however be kept under suspension for a period exceeding six months at a time. In no case an employee shall be kept under suspension for a continuous period exceeding one year without the prior approval of the Registrar. [An employee under suspension shall be entitled to subsistence allowance payable under the Kerala Payment of Subsistence Allowance At, 1972 (27 of 1973).][Provided that an employee not coming under the purview of the Kerala Payment of Subsistence Allowance Act, 1972 (27 of 1973) shall be entitled to subsistence allowance at the rate admissible to State Government Employees as prescribed under the Kerala Service Rules.]”A scanning of the said provision would reveal that only an authority competent to appoint an employee could suspend the employee pending enquiry into serious charges against him and the

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authority competent to appoint an employee could suspend and at any rate, no employee could be kept under suspension for a continuous period exceeding one year without the prior approval of the Registrar. Here, the suspension order was issued by competent authority. However, it is an indisputable position that keeping an employee under suspension for a continuous period exceeding one year is possible and permissible only if a prior permission is granted by the Registrar for doing so. In other words, keeping an employee under suspension for a continuous period exceeding one year could not be validated by a ratification of that action subsequently by the Registrar as statutorily it is possible only if prior approval therefor was granted by the Registrar. In the case on hand, the employee was suspended from service with effect from 16.6.2017. When once the charge memo is set aside by this Court the position is that there is no memo of charges available for continuation with the disciplinary proceedings. Needless to say that, in such circumstances, even if the appellants are proposing to initiate disciplinary proceedings that is possible only after the framing and serving charge memo on the writ petitioner by the competent authority. Since there is no case for the appellants that the writ petitioner was kept under suspension for more than one year with prior approval of the Registrar, that apart, taking note of the fact that the writ petitioner was suspended from service on 16.6.2017 and the memo of charges issued by an incompetent authority was set aside as per the judgment dated 21.11.2019 it is only just and proper and legal to reinstate the writ petitioner in service either in the event of non-initiation of disciplinary proceedings or failure to conclude the proceedings within the period of three months. We do not find any reason for interfering with the said direction as well. In short, the impugned judgment does not invite any interference. Consequently, the appeal is dismissed.
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