United Commercial Bank Officers' Regulations | Disciplinary Proceedings Begin Only After Service of Chargesheet : Supreme Court

The Supreme Court recently held that disciplinary proceedings are considered to begin only after the service of a chargesheet and not show cause notice as per the United Commercial Bank Officer, Employees (Discipline and Appeal) Regulations 1976. The case pertained to a former bank officer of the UCO Bank who had faced disciplinary action even after reaching the age of superannuation.

The Court reiterated the principles laid in UCO Bank v. Rajender Lal Capoor (2007) 6 SCC 694(Rajender Lal Capoor -I), Rajendra Lal Capoor-II and finally approved by a 3-judge bench in Canara Bank v. D.R.P. Sundharam, (2016) 12 SCC 724 that the regulations(The United Commercial Bank Officer, Employees (Discipline and Appeal) Regulations, 1976) could be invoked only if disciplinary proceedings had been initiated before the employee's service came to an end. Disciplinary proceedings are considered to have begun only when the chargesheet is issued and not merely upon the issuing of a show-cause notice.

In Rajender Lal Capoor -I's case, it was held that “the departmental proceeding was not initiated merely on the issuance of a show cause notice. It is initiated only when a chargesheet is issued. That is the date of application of mind on the allegations leveled against an employee by the competent authority. The pendency of a preliminary disciplinary inquiry by itself cannot be a ground for invoking Regulation 20 of the 1979 Regulations(The United Commercial Bank Officer's Service Regulations, 1979) On an employee having been allowed to superannuate, only proceeding inter alia including, withdrawal of his pension or any other retiral dues under the applicable regulation, could have been initiated.”

The Court also referred to Rajinder Lal Capoor -II's case, it was held that service of chargesheet is a sine qua non for disciplinary proceedings.

The Supreme Court bench comprising Justices Hima Kohli and Justice Rajesh Bindal was hearing an appeal against a judgment of the Bombay High Court which had allowed the appeal of the retired bank employee and overturned his dismissal from service.

Th respondent had served as the Assistant General Manager at Bombay Main Branch and was scheduled to retire on 31.07.1991. On 17.06.1991, he was served a memo that sought an explanation for alleged irregularities and lapses related to certain accounts during his tenure when he was in charge of the Bombay Main Branch. On 15.07.1991, the General Manager (Personnel) used his authority under Regulation 12 of the 1976 Regulations to place him under suspension. He filed an appeal against the suspension which was dismissed by both the appellate authority and the High Court.

On 03.03.1993, the Disciplinary Authority went on to dismiss him from service under Regulations 7(3) in conjunction with 4(d) of the 1976 Regulations. In response, he filed a statutory appeal, which was rejected by the Appellate Authority. Then, he appealed to the High Court which ruled in favor of the employee, thereby overturning his dismissal from service.

Aggrieved by this decision, the Appellant Bank approached the Supreme Court.

The Court began by noting that Regulation 20 of the United Bank of India Regulations 1979, which was identical to the regulations involved in the present case , had been previously held to be unconstitutional and void in the United Bank of India Officers Association's case.

The Court noted that this case was later reviewed and decided again in Rajinder Lal Capoor -II where the court clarified that Clause (iii) of Sub-Regulation 20(3) of the 1979 Regulations is an independent provision. It allows for the continuation of disciplinary proceedings, but only when such proceedings have been initiated as per the 1976 Regulations.

The Court added “The complete procedure for holding the disciplinary proceeding is provided only in the 1976 Regulations. The 1979 Regulations would be attracted independently where no disciplinary proceeding is to be initiated. However, when read in the context of Regulation 20(3), initiation and pendency of disciplinary proceedings is a must. The 1976 Regulations provided for the mode and manner in which the disciplinary proceeding is initiated. It expressly provides for service of chargesheet which is a sine qua non for disciplinary proceeding.”

The Court also cited the judgment in Canara Bank's case, where it acknowledged the previous decisions of the court in Rajender Lal Capoor -I and Rajender Lal Capoor -II. In Canara Bank's case, a bench of three judges concurred that the provisions of the 1976 Regulations concerning the initiation of disciplinary proceedings had been correctly understood and interpreted, especially concerning departmental proceedings.

The Court held that there was no merit in this appeal since the principles laid down already have been followed consistently. In the specific case at hand, the court noted that the bank officer had reached superannuation on 31.07.1991, while the chargesheet was issued on 07.12.1991. As a result, no disciplinary proceedings were pending against him at the time of his superannuation.

The court concluded that the appeal filed by the appellant-Bank was meritless and dismissed it with costs of ₹25,000/-.

It held “As we have set aside the punishment order inflicted on the deceased employee, all the service benefits due to him along with interest @ 7% per annum from the date of his retirement till the payment is made, shall be paid by the appellant-Bank to his legal heirs within three months.”

Case title: UCO Bank v. M.B. Motwani(Dead) Thr LRs

Citation:  2023 LiveLaw (SC) 893

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