Supreme Court Restricts Representation by Ex-Employees in Disciplinary Proceedings: Rajasthan Marudhara Gramin Bank vs. Ramesh Chandra Meena (2022) INSC 1

Date of the Judgment: 04 January 2022
Citation: (2022) INSC 1
Judges: M. R. Shah, J. and Sanjiv Khanna, J.
Can an employee facing a departmental inquiry insist on being represented by a retired employee of the same organization? The Supreme Court of India recently addressed this question, clarifying the extent of an employee’s right to representation in disciplinary proceedings. The court held that an employee does not have an absolute right to be represented by an ex-employee, especially when the organization’s rules specify otherwise. The judgment was delivered by a two-judge bench comprising Justice M.R. Shah and Justice Sanjiv Khanna.

Case Background

The case involves Ramesh Chandra Meena, a former Cashier-cum-Clerk (office Assistant) at Rajasthan Marudhara Gramin Bank (RMGB). While working as a Branch Manager, he was accused of irregularities in granting loans, leading to a departmental inquiry. The bank issued show cause notices on April 24, 2019, and June 24, 2019, alleging misconduct. A chargesheet followed on November 1, 2019, under the Rajasthan Marudhara Gramin Bank (Officers and Employees) Service Regulation, 2010. Meena denied the charges, and a departmental inquiry was initiated with K.C. Gupta as the Enquiry Officer.

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 Regulation, 2010. His subsequent requests to engage a legal practitioner or a retired officer as his Defence Representative (DR) were also rejected. On August 11, 2020, Meena submitted a consent letter from one Shri Mahesh Kumar Atal to be engaged as his DR, which was also turned down. Aggrieved by the Disciplinary Authority’s order on August 19, 2020, Meena approached the High Court, seeking permission to engage a legal practitioner or a retired bank officer as his DR.

Timeline:

Course of Proceedings

The Single Judge of the High Court allowed Meena’s writ petition on January 28, 2021, directing the bank to permit representation by a retired officer. The bank appealed to the Division Bench of the High Court, which dismissed the appeal on July 7, 2021, primarily on the grounds that the circular dated 31.1.2014 and Regulation 8.2 did not prohibit the use of ex-employees as DRs. The bank then appealed to 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, particularly Clause 8.2, which specifies that the Defence Representative (DR) should be a serving official/employee from the Bank, is also relevant. The Supreme Court is tasked with determining whether these regulations, when read together, permit an employee to be represented by a retired employee of the bank.

Arguments

Appellant (Bank)’s Arguments:

• The High Court erred in directing the bank to allow 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 the DR must be a serving employee of the Bank.

• Regulation 8.2 of the Handbook Procedure is binding on all employees and applicable to all matters. There was no challenge to this regulation by the original writ petitioner.

• The High Court misinterpreted Regulation 44 of the Regulation, 2010, which restricts legal practitioners from acting as DRs without prior permission. Regulation 44 does not permit all outsiders except lawyers to act as DRs.

• An employee has no right to representation in departmental proceedings unless specifically provided by Service Rules. The right to representation is limited to what is explicitly stated in the rules. Reliance was placed 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].

• The right to representation can be restricted by statute, service rules, or regulations. The extent of representation must align with these rules. Reliance was placed on 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].

• There should be minimal intervention of outsiders in departmental proceedings, and any choice of representation cannot exceed the bounds of the rules. Reliance was placed on Bharat Petroleum Corporation Limited (supra).

• The service conditions of the bank’s employees are governed by the Regulation, 2010, which does not allow for a DR from outside the bank’s employees. The purpose of Regulation 44 is to prevent frivolous requests for legal practitioners.

• Allowing ex-employees as DRs creates issues such as:

  • Ex-employees who may have been subject to disciplinary action can act as DRs.
  • Ex-employees from Vigilance or Audit sections with confidential information can act as DRs.
  • It would affect the solemnity of the proceedings and cause issues of orderliness.
  • It would delay the disciplinary proceedings.

Respondent (Employee)’s Arguments:

• Regulation 44 of the Regulation, 2020, does not bar the engagement of a retired employee as a DR. The only bar is regarding the appointment of a legal practitioner without the bank’s permission.

• 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 Procedure, when 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 regulation against engaging a retired employee as a DR.

• The Allahabad High Court in Rakesh Singh vs. Chairman and Disciplinary Authority and Another (Writ Appeal No. 64711 of 2013) held that in the absence of any specific bar, denial of the right to engage a retired employee as DR is not justified. This decision was affirmed by the Supreme Court.

Submissions Table

Issues Framed by the Supreme Court

The primary issue framed by the Supreme Court was:

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 Supreme Court considered the following cases and legal provisions:

Judgment

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

How each authority was viewed by the Court?

The Supreme Court relied on several precedents to support its decision. The court cited N. Kalindi & Ors. v. Tata Locomotive & Engg. Co. Ltd [(1960) 3 SCR 407]* and Dunlop Rubber Co. (India) Ltd v. Workmen [(1965) 2 SCR 139]* to establish that there is no inherent right to representation in departmental proceedings. The court also referred to Cipla Limited & Ors v. Ripu Daman Bahnot & Anr. [(1999) 4 SCC 188]*, Crescent Dyes & Chemicals Limited 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 emphasize that the right to representation can be restricted by service rules and regulations. The court held that the Handbook Procedure was supplementary to the Regulation, 2010, and Clause 8.2 was binding on all employees. The court distinguished the Allahabad High Court’s decision in Rakesh Singh (supra), noting that the Handbook Procedure was not in force at the time of that judgment.

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 be represented by an agent of their choice. The court noted that the Handbook Procedure, specifically Clause 8.2, was binding and that the bank had valid reasons for restricting representation to serving employees. The court also considered the potential for delays and conflicts of interest if ex-employees were allowed to act as DRs. The court balanced the principles of natural justice with the practical considerations of maintaining discipline and order within the bank.

Fact:Law Ratio

Logical Reasoning:

The court considered alternative interpretations but rejected them because they conflicted with the explicit provisions of the Handbook Procedure and the established legal precedents. The court emphasized that while the delinquent officer must be given a fair opportunity, there is no absolute right to be represented by an agent of their choice. The court also highlighted the need to maintain the integrity and efficiency of departmental proceedings.

The court stated, “As per the Bank there is a justification also to permit the delinquent officer to be represented in the departmental proceedings through serving official / employee from the Bank only.” The court further noted, “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 clarified that, “the only requirement is that delinquent officer must be given fair opportunity to represent his case and that there is no absolute right in his favour to be represented through the agent of his choice.”

The court concluded that the employee does not have an absolute right to be represented by a retired employee of the bank in the departmental proceedings. The court also stated that the Handbook Procedure was supplementary to the Regulation, 2010, and Clause 8.2 was binding on all employees.

Key Takeaways

• An employee does not have an absolute right to be represented by an ex-employee in departmental proceedings.
• Service rules, regulations, and standing orders can restrict the right to representation.
• The Handbook of Vigilance Administration & Disciplinary Action, if duly approved, is binding on employees.
• Organizations can specify that only serving employees can act as Defence Representatives in disciplinary inquiries.
• The primary requirement is to provide a fair opportunity to the delinquent officer, but not necessarily through an agent of their choice.
• The court emphasized the need to maintain the integrity and efficiency of departmental proceedings.

Directions

The Supreme Court quashed and set aside the High Court’s judgment and order, which had permitted the respondent to be represented by an ex-employee of the bank. The appeal of the bank was allowed.

Development of Law

The ratio decidendi of this case is that an employee does not have an absolute right to be represented by an ex-employee in departmental proceedings, especially when the organization’s rules specify that the Defence Representative must be a serving employee. This judgment reinforces the principle that service rules and regulations can restrict the right to representation, and it clarifies that the Handbook of Vigilance Administration & Disciplinary Action is binding when duly approved by the Board of Directors. This case does not change the previous position of law but reinforces the existing position.

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 retired employee in departmental proceedings. The court emphasized the importance of adhering to the bank’s regulations and the Handbook of Vigilance Administration & Disciplinary Action, which specifies that the Defence Representative must be a serving employee. This decision underscores the principle that the right to representation can be restricted by service rules and regulations, and it reinforces the need to maintain the integrity and efficiency of disciplinary proceedings.