Supreme Court Restricts Representation by Ex-Employees in Departmental Inquiries: Rajasthan Marudhara Gramin Bank vs. Ramesh Chandra Meena (2022)

Introduction

Date of the Judgment: January 4, 2022

Citation: 2022 INSC 17

Judges: M.R. Shah, J. and Sanjiv Khanna, J.

Can an employee facing departmental inquiry insist on being represented by a retired employee of the same organization? The Supreme Court of India recently addressed this question in a case concerning the Rajasthan Marudhara Gramin Bank. The core issue was whether an employee has an absolute right to choose their defense representative, particularly when the organization’s rules specify that the representative must be a current employee. This judgment clarifies the extent of an employee’s right to representation in departmental proceedings. The bench comprised Justices M.R. Shah and Sanjiv Khanna, with the majority opinion authored by Justice M.R. Shah.

Case Background

The case involves Ramesh Chandra Meena, who was working as a Cashier-cum-Clerk (Office Assistant) at Rajasthan Marudhara Gramin Bank (RMGB). While serving as a Branch Manager, he was accused of committing certain irregularities that amounted to misconduct. The bank issued show cause notices on April 24, 2019, and June 24, 2019, alleging that he had granted loans to farmers/villagers without taking adequate precautions and had transferred loan amounts without proper mandates.

A departmental inquiry was initiated against Meena, and a chargesheet was served on November 1, 2019, under the Rajasthan Marudhara Gramin Bank (Officers and Employees) Service Regulation, 2010. Meena denied the charges. The bank appointed an Enquiry Officer, Shri K.C. Gupta, and offered Meena the opportunity to have a defense representative (DR) as per the regulations. Meena requested to be represented by a legal practitioner, which was denied by the Enquiry Officer on March 17, 2020, citing restrictions under Regulation 44 of the 2010 Regulations.

Meena’s subsequent requests to engage a legal practitioner or a retired officer as his DR were also rejected by the Disciplinary Authority on May 27, 2020, and later again. During the inquiry proceedings on August 11, 2020, Meena submitted a consent letter from Shri Mahesh Kumar Atal to act as his DR, which was also turned down. Aggrieved by the Disciplinary Authority’s order on August 19, 2020, Meena approached the High Court.

The High Court allowed Meena to be represented by a retired officer of the Bank. The Bank appealed this decision, but the Division Bench of the High Court upheld the Single Judge’s decision, stating that the circular dated January 31, 2014, and Regulation 8.2 did not prohibit the use of ex-employees as DRs. The Bank then appealed to the Supreme Court.

Timeline:

Arguments

Appellant (Rajasthan Marudhara Gramin Bank) Arguments:

• The High Court erred in allowing the respondent to be represented by a retired officer. The High Court did not consider Regulation 8.2 of the Handbook of Vigilance Administration & Disciplinary Action, which specifies that a defense representative (DR) must be a serving official/employee of the Bank. This Handbook is binding on all employees.

• Regulation 44 of the Rajasthan Marudhara Gramin Bank (Officers and Employees) Service Regulation, 2010, restricts legal practitioners from acting as DRs without prior permission. The High Court incorrectly interpreted this to mean that all outsiders, except lawyers, are allowed. The basic principle is that an employee does not have a right to representation unless specifically provided by service rules.

• The right to representation can be restricted by statute, service rules, or regulations. The extent of representation must be in accordance with these rules. The Bank relied on P. Raghava Kurup & Anr. v. V. Ananthakumari & Anr. [(2007) 9 SCC 179], N. Kalindi & Ors. v. Tata Locomotive & Engg. Co. Ltd [(1960) 3 SCR 407], National Seeds Corporation Limited vs. K.V. Rama Reddy [(2006) 11 SCC 645] and Bharat Petroleum Corporation Limited v. Maharashtra General Kamgar Union & Ors. [(1999) 1 SCC 626] to support this point.

• The Bank cited Cipla Limited & Ors v. Ripu Daman Bahnot & Anr. [(1999) 4 SCC 188], Crescent Dyes & Chemicals Limited v. Ram Naresh Tripathi [(1993) 2 SCC 115], and Indian Overseas Bank vs. Indian Overseas Bank Officer’s Association and Another [(2001) 9 SCC 540] to argue that the right to representation in an inquiry can be controlled by service rules and that there should be minimal intervention by outsiders in departmental proceedings.

• The service conditions are governed by the 2010 Regulations, which do not allow for a DR from outside the Bank’s employees. The purpose of Regulation 44 is to prevent frivolous requests for legal representation. The Handbook Procedure, approved by the Board, also prohibits employees from choosing outsiders or legal practitioners as DRs.

• Allowing ex-employees as DRs would create an anomalous situation, as they may have been subject to disciplinary action, may have access to confidential information, and could disrupt the proceedings. The CVC Circular mandates completion of departmental inquiries within six months, which could be hampered by allowing outsiders as DRs.

Respondent (Ramesh Chandra Meena) Arguments:

• Regulation 44 of the 2010 Regulations does not bar the engagement of a retired employee as a DR. The only restriction is on legal practitioners without the Bank’s permission. The High Court correctly allowed the use of a retired employee as a DR.

• The Handbook of Vigilance Administration and Disciplinary Action dated March 15, 2019, is not binding and is merely directory. Clauses 7.2 and 8.2 of the Handbook, if read together, would mean that only an officer junior to the presenting officer and Enquiry Officer can be appointed as DR, which is a violation of natural justice.

• The judgments cited by the appellant are not applicable, as each bank has its own rules. There is no specific bar in the service regulations against engaging a retired employee as a DR. The High Court did not err in its decision.

• The Allahabad High Court in Rakesh Singh vs. Chairman and Disciplinary Authority and Another held that denying the right to engage a retired employee as a DR is not justified in the absence of a specific bar. The Supreme Court dismissed the SLP against this judgment.

Submissions

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

1. Whether the respondent employee, as a matter of right, is entitled to avail the services of an ex-employee of the Bank as his DR in the departmental proceedings?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The following authorities were considered by the Court:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Court relied on N. Kalindi & Ors. v. Tata Locomotive & Engg. Co. Ltd [(1960) 3 SCR 407]*, Dunlop Rubber Co. (India) Ltd v. Workmen [(1965) 2 SCR 139]*, Cipla Ltd. and Ors v. Ripu Daman Bahnot & Anr. [(1999) 4 SCC 188]*, Crescent Dyes and Chemicals Ltd. v. Ram Naresh Tripathi [(1993) 2 SCC 115]*, Bharat Petroleum Corporation Limited v. Maharashtra General Kamgar Union & Ors. [(1999) 1 SCC 626]*, National Seeds Corporation Limited vs. K.V. Rama Reddy [(2006) 11 SCC 645]* and Indian Overseas Bank vs. Indian Overseas Bank Officer’s Association and Another [(2001) 9 SCC 540]* to reiterate that there is no absolute right to representation in departmental inquiries and that such rights can be restricted by service rules.
• The Court considered P. Raghava Kurup & Anr. v. V. Ananthakumari & Anr. [(2007) 9 SCC 179]* to emphasize that the right to representation is limited to what is specifically provided in the rules.
• The Court interpreted Regulation 44 of the Rajasthan Marudhara Gramin Bank (Officers and Employees) Service Regulation, 2010, as restricting legal practitioners without prior permission but not explicitly allowing or disallowing ex-employees as DRs.
• The Court gave importance to Clause 8.2 of the Handbook of Vigilance Administration & Disciplinary Action, which specifies that the DR should be a serving official/employee from the Bank, and held it to be binding.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to maintain the integrity and efficiency of departmental proceedings. The Court emphasized that while a fair opportunity must be given to the delinquent officer, there is no absolute right to choose a representative, especially if it is against the rules. The Court considered the following points:

• The binding nature of the Handbook Procedure, which explicitly states that the DR must be a serving employee.
• The potential for disruption and delay if ex-employees are allowed as DRs, especially those who may have a conflict of interest or a history of disciplinary issues.
• The need to complete departmental inquiries within the time limits prescribed by the CVC Circular and the Vigilance Handbook.
• The principle that the right to representation is not absolute and can be restricted by service rules.

The Court’s reasoning leaned heavily on the interpretation of the rules and the need to maintain order and efficiency within the disciplinary process.

Fact:Law Ratio

Logical Reasoning

Key Takeaways

• An employee does not have an absolute right to be represented by a former employee in departmental proceedings. The right to representation can be restricted by service rules and regulations.

• The Handbook of Vigilance Administration & Disciplinary Action, if duly approved by the Board, is binding on the employees and can specify who can act as a defense representative.

• Regulation 44 of the Rajasthan Marudhara Gramin Bank (Officers and Employees) Service Regulation, 2010, restricts legal practitioners without prior permission but does not explicitly allow or disallow ex-employees as DRs.

• The primary concern of the court is to maintain the efficiency and integrity of departmental proceedings. The court emphasized that while a fair opportunity must be given to the delinquent officer, there is no absolute right to choose a representative, especially if it is against the rules.

• The court’s decision does not prevent an employee from being represented by a lawyer if the charges are severe and complex, but this should be considered under Regulation 44.

Directions

The Supreme Court quashed and set aside the High Court’s judgment, which had permitted the respondent delinquent officer to be represented by an ex-employee of the Bank. The Court allowed the appeal by the Bank and directed that the departmental proceedings should continue in accordance with the rules and regulations.

Development of Law

The ratio decidendi of this case is that an employee does not have an absolute right to choose their defense representative in departmental proceedings, especially if the organization’s rules specify that the representative must be a current employee. This decision reinforces the principle that the right to representation is not absolute and can be restricted by service rules and regulations. This judgment clarifies the extent of an employee’s right to representation in departmental proceedings and upholds the employer’s right to regulate such proceedings through its rules and regulations. It also emphasizes that the Handbook of Vigilance Administration & Disciplinary Action, if duly approved by the Board, is binding on the employees.

Conclusion

In conclusion, the Supreme Court’s judgment in the case of Rajasthan Marudhara Gramin Bank vs. Ramesh Chandra Meena clarifies that an employee does not have an absolute right to be represented by a former employee in departmental proceedings. The Court emphasized the importance of adhering to the rules and regulations of the organization, particularly the Handbook of Vigilance Administration & Disciplinary Action, which specifies that the defense representative must be a serving employee. This decision reinforces the principle that the right to representation is not absolute and can be restricted by service rules, ensuring the integrity and efficiency of departmental proceedings.