Supreme Court Restricts Representation by Ex-Employees in Departmental Inquiries: Rajasthan Marudhara Gramin Bank vs. Ramesh Chandra Meena (2022) INSC 10

Introduction

Date of the Judgment: 04 January 2022
Citation: 2022 INSC 10
Judges: M. R. Shah, J. and Sanjiv Khanna, J. (authored by M.R. Shah, J.)

Can a bank employee facing disciplinary action choose a retired colleague as their defense representative? The Supreme Court of India recently addressed this question, clarifying the extent of an employee’s right to representation in departmental proceedings. This case examines whether an employee can insist on being represented by a former employee of the bank during a disciplinary inquiry, or if the bank can restrict representation to only current employees. The judgment was delivered by a two-judge bench comprising Justices M.R. Shah and Sanjiv Khanna, with Justice Shah authoring the opinion.

Case Background

The respondent, Ramesh Chandra Meena, 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 irregularities related to loan disbursements. The bank issued show-cause notices on 24 April 2019 and 24 June 2019, alleging misconduct for not taking adequate precautions and transferring loan amounts without proper authorization. A departmental inquiry was initiated, and a chargesheet was served on 1 November 2019, in accordance with the Rajasthan Marudhara Gramin Bank (Officers and Employees) Service Regulation, 2010. Meena denied the charges. The bank appointed an Enquiry Officer and allowed Meena to be represented by a defense representative (DR) as per the regulations. However, Meena requested to be defended by a legal practitioner, which was denied. He then sought permission to have a retired bank employee as his DR, which was also rejected by the Disciplinary Authority on 27 May 2020, citing Regulation 44 of the Regulation, 2010.

Meena’s subsequent requests to engage a legal practitioner or a retired officer were also turned down. On 11 August 2020, Meena submitted a consent letter from one Shri Mahesh Kumar Atal to be engaged as his DR, which was also rejected. Aggrieved by the Disciplinary Authority’s order dated 19 August 2020, Meena approached the High Court, seeking permission to engage a legal practitioner or a retired officer of the Bank as his DR. The High Court allowed Meena to be represented by a retired officer of the Bank. The bank then appealed to a Division Bench, which upheld the single judge’s decision. The bank then approached the Supreme Court.

Timeline

Course of Proceedings

The original writ petitioner, aggrieved by the order of the Disciplinary Authority dated 19.08.2020, filed a writ petition before the High Court of Judicature for Rajasthan at Jodhpur, seeking permission to engage a legal practitioner or a retired officer of the Bank as his DR. The learned Single Judge allowed the writ petition on 28 January 2021, directing the Bank to permit the original writ petitioner to be represented through a retired officer of the Bank in the disciplinary proceedings. The Bank appealed to the Division Bench of the High Court, which dismissed the appeal and confirmed the order of the learned Single Judge on 7 July 2021. The Bank then filed the present appeal before the Supreme Court.

Legal Framework

The case revolves around the interpretation of the Rajasthan Marudhara Gramin Bank (Officers and Employees) Service Regulation, 2010, specifically Regulation 44, which states:

“For the purpose of an enquiry under these Regulations, the Officer or employee shall not engage a legal practitioner without prior permission of the Competent Authority.”

Additionally, the Handbook of Vigilance Administration & Disciplinary Action (Handbook Procedure), approved by the Bank’s Board, is also relevant. Clause 8.2 of the Handbook Procedure specifies that the defense representative (DR) should be a serving official/employee from the Bank. The Handbook Procedure is stated to be binding on all employees and applicable to all kinds of matters.

Arguments

Appellant (Bank)’s Arguments:

• The High Court erred in directing the bank to allow the respondent to be represented by a retired officer.
• Regulation 8.2 of the Handbook Procedure, which is binding, specifies that the DR must be a serving employee of the bank.
• Regulation 44 restricts the engagement of legal practitioners without prior permission and does not allow all outsiders to be DRs.
• An employee has no inherent right to representation in departmental proceedings unless specifically provided by service rules.
• The right to representation can be restricted or regulated by statute, service rules, or regulations.
• Allowing ex-employees as DRs can lead to issues, as they may have been subject to disciplinary action, may have confidential information, and may disrupt the proceedings.

Respondent (Employee)’s Arguments:

• Regulation 44 does not bar retired employees from acting as DRs, it only restricts legal practitioners without permission.
• The Handbook of Vigilance Administration and Disciplinary Action is not binding and is merely directory.
• Clauses 7.2 and 8.2 of the Handbook Procedure, if read together, imply that only an officer junior to the presenting officer and the Enquiry Officer can be appointed as DR, which would be a miscarriage of justice.
• There is no specific bar in the service regulations against engaging a retired employee as a DR.
• The Allahabad High Court in the case of Rakesh Singh vs. Chairman and Disciplinary Authority and Another held that in the absence of any specific bar, denying the right to engage a retired employee is not justified, and this decision was affirmed by the Supreme Court.

[TABLE] of Submissions by Parties

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

Cases Relied Upon by the Court:

• N. Kalindi & Ors. v. Tata Locomotive & Engg. Co. Ltd. [(1960) 3 SCR 407] – Supreme Court of India: Established that an employee does not have an inherent right to be represented by an outsider in domestic inquiries.
• Dunlop Rubber Co. (India) Ltd v. Workmen [(1965) 2 SCR 139] – Supreme Court of India: Reiterated that there is no per se right to representation in departmental proceedings unless specifically recognized by standing orders.
• Cipla Limited & Ors v. Ripu Daman Bahnot & Anr. [(1999) 4 SCC 188] – Supreme Court of India: Held that the right to representation can be regulated by service rules and that there is no right to be represented by an advocate unless specifically provided.
• Crescent Dyes & Chemicals Limited v. Ram Naresh Tripathi [(1993) 2 SCC 115] – Supreme Court of India: Stated that the right to representation can be restricted by statute, rules, or regulations and that the object of such provisions is to ensure that domestic inquiries are completed quickly.
• Bharat Petroleum Corporation Limited v. Maharashtra General Kamgar Union & Ors. [(1999) 1 SCC 626] – Supreme Court of India: Held that there should be minimal intervention of outsiders in departmental proceedings and that the choice of representation cannot go beyond the statutes or service rules.
• National Seeds Corporation Limited vs. K.V. Rama Reddy [(2006) 11 SCC 645] – Supreme Court of India: Reiterated that the right to representation is not absolute and can be restricted by service rules.
• Indian Overseas Bank vs. Indian Overseas Bank Officer’s Association and Another [(2001) 9 SCC 540] – Supreme Court of India: Stated that there is no absolute right to representation in domestic inquiries unless specifically recognized by rules or regulations.
• P. Raghava Kurup & Anr. v. V. Ananthakumari & Anr. [(2007) 9 SCC 179] – Supreme Court of India: Cited to support the proposition that an employee does not have an absolute right to representation in departmental proceedings.

Legal Provisions Considered by the Court:

• Regulation 44 of the Rajasthan Marudhara Gramin Bank (Officers and Employees) Service Regulation, 2010: Restricts the engagement of a legal practitioner without prior permission.
• Clause 8.2 of the Handbook of Vigilance Administration & Disciplinary Action: Specifies that the defense representative should be a serving official/employee from the Bank.

[TABLE] of Authorities Considered by the Court and How

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]* to establish that an employee does not have an inherent right to be represented by an outsider in domestic inquiries.
• The Court relied on Dunlop Rubber Co. (India) Ltd v. Workmen [(1965) 2 SCR 139]* to reiterate that there is no per se right to representation in departmental proceedings unless specifically recognized by standing orders.
• The Court relied on Cipla Limited & Ors v. Ripu Daman Bahnot & Anr. [(1999) 4 SCC 188]* to hold that the right to representation can be regulated by service rules and that there is no right to be represented by an advocate unless specifically provided.
• The Court relied on Crescent Dyes & Chemicals Limited v. Ram Naresh Tripathi [(1993) 2 SCC 115]* to state that the right to representation can be restricted by statute, rules, or regulations and that the object of such provisions is to ensure that domestic inquiries are completed quickly.
• The Court relied on Bharat Petroleum Corporation Limited v. Maharashtra General Kamgar Union & Ors. [(1999) 1 SCC 626]* to hold that there should be minimal intervention of outsiders in departmental proceedings and that the choice of representation cannot go beyond the statutes or service rules.
• The Court relied on National Seeds Corporation Limited vs. K.V. Rama Reddy [(2006) 11 SCC 645]* to reiterate that the right to representation is not absolute and can be restricted by service rules.
• The Court relied on Indian Overseas Bank vs. Indian Overseas Bank Officer’s Association and Another [(2001) 9 SCC 540]* to state that there is no absolute right to representation in domestic inquiries unless specifically recognized by rules or regulations.
• The Court relied on P. Raghava Kurup & Anr. v. V. Ananthakumari & Anr. [(2007) 9 SCC 179]* to support the proposition that an employee does not have an absolute right to representation in departmental proceedings.

The Supreme Court held that the respondent employee does not have an absolute right to be represented by an ex-employee of the Bank in departmental proceedings. The Court emphasized that while Regulation 44 of the Rajasthan Marudhara Gramin Bank (Officers and Employees) Service Regulation, 2010, restricts the engagement of a legal practitioner without prior permission, it does not explicitly permit or restrict the engagement of an ex-employee as a defense representative. However, Clause 8.2 of the Handbook of Vigilance Administration & Disciplinary Action, which is binding, clearly states that the DR should be a serving official/employee from the Bank. The Court noted that the Handbook Procedure is supplementary to the regulations and not in conflict with them. The Court also highlighted the bank’s justification for restricting representation to serving employees, including concerns about confidentiality, orderliness, and potential delays in departmental inquiries. The Court observed that the object of Regulation 44 and Clause 8 of the Handbook Procedure is to avoid any outsider including legal representative and/or even ex-employee of the Bank and that there is no absolute right in favour of the delinquent officer to be represented in the departmental proceedings through the agent of his choice and the same can be restricted by the employer.

The Court stated, “At the cost of repetition, it is observed that there is no absolute right in favour of the delinquent officer’s to be represented in the departmental proceedings through the agent of his choice and the same can be restricted by the employer.”

The Court also observed, “However, at the same time, if the charge is severe and complex nature, then request to be represented through a counsel can be considered keeping in mind Regulation 44 of Regulation, 2010 and if in a particular case, the same is denied, that can be ground to challenge the ultimate outcome of the departmental enquiry.”

The Court further stated, “However, as a matter of right in each and every case, irrespective of whether charges is severe and complex nature or not, the employee as a matter of right cannot pray that he may be permitted to represent through the agent of his choice.”

What weighed in the mind of the Court?

The Supreme Court’s decision was significantly influenced by the need to maintain the integrity and efficiency of departmental inquiries. The Court emphasized that while principles of natural justice require a fair opportunity for employees to present their case, this does not extend to an absolute right to choose any representative they desire. The Court was particularly persuaded by the bank’s argument that allowing ex-employees as defense representatives could lead to several issues, including potential conflicts of interest, breaches of confidentiality, and delays in the proceedings. The Court also noted that the Handbook Procedure, which restricts representation to serving employees, was a valid and binding guideline. The Court’s reasoning also focused on the need to avoid any outsider including legal representative and/or even ex-employee of the Bank.

[TABLE] of Sentiment Analysis of Reasons Given by the Supreme Court

Fact:Law Ratio

Logical Reasoning:

Key Takeaways

• An employee does not have an absolute right to choose a former employee as their defense representative in departmental proceedings.
• Service rules and regulations, such as the Handbook Procedure, can validly restrict the choice of defense representatives to serving employees.
• The primary objective of departmental inquiries is to ensure a fair hearing, but this does not extend to an absolute right to representation by an agent of the employee’s choice.
• The Court emphasized the importance of maintaining the integrity and efficiency of departmental inquiries, which can be compromised by allowing ex-employees as defense representatives.
• This judgment clarifies the scope of an employee’s right to representation in departmental proceedings and provides a framework for interpreting service rules and regulations.

Directions

The Supreme Court quashed and set aside the judgment of the High Court, which had permitted the respondent delinquent officer to be represented in the departmental proceedings through an ex-employee of the Bank. The Court allowed the appeal of the Bank.

Development of Law

The ratio decidendi of this case is that an employee does not have an absolute right to choose a defense representative in departmental proceedings, especially if service rules or regulations restrict such representation to serving employees. This judgment reaffirms the principle that the right to representation is not absolute and can be regulated by the employer. This decision clarifies the interplay between service regulations and internal guidelines, emphasizing that such guidelines, when approved by the board, are binding on employees. The Supreme Court’s ruling reinforces the principle that departmental inquiries should be conducted efficiently and without unnecessary delays and also that the employer can restrict the choice of defense representative to maintain the integrity and efficiency of the departmental proceedings. This is a reiteration of the previous position of law.

Conclusion

The Supreme Court’s judgment in 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 inquiries. The Court upheld the bank’s right to restrict representation to serving employees, emphasizing the validity of the Handbook Procedure and the need to maintain the integrity of disciplinary proceedings. This ruling sets a precedent for interpreting service rules and regulations related to representation in departmental inquiries, ensuring that employers can maintain control over the process while providing a fair opportunity for employees to present their case.