Supreme Court Upholds Bank’s Decision: No Repeated Hearings for Employees in Disciplinary Cases (25 July 2019)

Introduction

Date of the Judgment: 25 July 2019

Citation: Civil Appeal No. 5842 of 2019 (Arising out of SLP (Civil) No. 16640 of 2017)

Judges: L. Nageswara Rao, J., Hemant Gupta, J.

Can a bank employee, who has been given multiple opportunities to present their case in a disciplinary proceeding, demand another chance simply because they didn’t avail the previous opportunities? The Supreme Court of India recently addressed this question, clarifying that repeated hearings cannot be demanded as a matter of right, especially when the employee has been given sufficient chances to present their defense. This case revolves around a disciplinary proceeding against a bank employee who was charged with financial irregularities.

Case Background

Atindra Nath Bhattacharyya, the respondent, was working as Chief Manager of Baghbazar Branch of the State Bank of India. He was charge-sheeted on December 28, 1999, with 16 charges related to irregularities in credit and local clearing instruments during his tenure from November 19, 1997, to September 9, 1998. An inquiry was conducted, and the inquiry officer submitted a report on January 14, 2002, which was forwarded to the respondent on April 12, 2002. The Appointing Authority found significant irregularities and imposed a punishment of removal on January 24, 2003. The Appellate Authority dismissed his appeal on April 19, 2005.

Timeline

Course of Proceedings

The respondent filed a writ petition before the High Court at Calcutta. The Single Bench of the High Court set aside the punishment order on January 13, 2016, because the respondent was not given an opportunity to show cause regarding the nature and quantum of punishment. Instead of appealing, the bank called the respondent for a personal hearing on March 24, 2016, as per the Single Bench’s direction. The respondent, however, informed the bank that he had challenged the Single Bench’s order. The bank again called the respondent for personal hearings on April 7, 2016 and April 22, 2016, but he did not appear. The intra-court appeal filed by the respondent was dismissed on April 7, 2017. However, the Division Bench directed the bank to grant another opportunity to the respondent to present his case. This direction for another hearing was challenged in the present appeal before the Supreme Court.

Legal Framework

The judgment primarily deals with the principles of natural justice in the context of disciplinary proceedings. The court also considered the impact of the 42nd Amendment, which removed the requirement of a second show cause notice. The court referred to the principles laid down in previous judgments regarding the opportunity to be heard in disciplinary proceedings.

Arguments

Appellant’s (Bank) Arguments:

• The bank argued that the respondent had been given sufficient opportunities to present his case but had failed to avail them.
• Relying on the judgment in Bank of India v. Apurba Kumar Saha [1994] 2 SCC 615, the bank contended that an employee who refuses to avail of opportunities to defend themselves cannot later complain of denial of a reasonable opportunity.
• The bank also referred to State Bank of India & Ors. v. Mohammad Badruddin, Civil Appeal No. 5604 of 2019 decided on July 16, 2019, which held that there is no mandatory requirement of communicating the proposed punishment and that previous punishments can be considered. The relevant portion of the judgment was quoted as,
  
  “24. The previous punishments could not be subject matter of the charge sheet as it is beyond the scope of inquiry to be conducted by the Inquiry Officer as such punishments have attained finality in the proceedings. The requirement of second show cause notice stands specifically omitted by 42nd Amendment. Therefore, the only requirement now is to send a copy of Inquiry Report to the delinquent to meet the principle of natural justice being the adverse material against the delinquent. There is no mandatory requirement of communicating the proposed punishment. Therefore, there cannot be any bar to take into consideration previous punishments in the constitutional scheme as interpreted by this Court. Thus, the non-communication of the previous punishments in the show cause notice will not vitiate the punishment imposed.”

Respondent’s (Employee) Arguments:

• The respondent argued that he was not heard before the imposition of the major penalty.
• The respondent relied on the order in State Bank of India & Ors. v. Ranjit Kumar Chakraborty & Anr. [2018] 12 SCC 807, where the order of removal was set aside because the delinquent was not heard before the imposition of the major penalty.

Rebuttal by the Appellant (Bank):

• The bank distinguished the case of State Bank of India & Ors. v. Ranjit Kumar Chakraborty & Anr. [2018] 12 SCC 807, by referring to the judgment in State Bank of India & Ors. v. B.R. Saini [2018] 11 SCC 83.
• The court in State Bank of India & Ors. v. B.R. Saini [2018] 11 SCC 83, clarified that if the Inquiry Report was furnished and an opportunity was given to the delinquent, there is no further requirement of another opportunity before imposing the penalty. The relevant portion was quoted as,
  
  “9. In State Bank of India v. Ranjit Kumar Chakraborty (supra) which is the basis of the judgment of the High Court, it was held that the Appointing Authority could not pass an order imposing a major penalty. In that case, the Disciplinary Authority sent the Records to the Appointing Authority who passed order of “dismissal from service”. It is not clear from the judgment as to whether the delinquent officer in that case was given a notice by the Disciplinary Authority before the records were sent to the Appointing Authority. This Court held that even in the absence of any Rule requiring a notice to be given, the principles of natural justice would require an opportunity to the delinquent employee. It was not held in the said judgment that even if the Inquiry Report was furnished and an opportunity was given to the delinquent there is a further requirement of another opportunity before imposing the penalty. This Court found that before imposition of a major penalty the delinquent was entitled for an opportunity of being heard. The High Court was wrong in holding that the delinquent employee is entitled for a notice before the penalty is imposed.
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  11. In this case, the Respondent had sufficient opportunity to respond to the Report of the Inquiring Authority and to the findings of the Disciplinary Authority disagreeing with the Inquiring Authority regarding Charge Nos. 6 and 8. He is not entitled to any further notice before imposition of a penalty. Apart from the requirement of a second show-cause notice before imposition of penalty no other point was raised in this Appeal.”

Submissions of Parties

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issue that the court addressed was:

1. Whether the Division Bench of the High Court was correct in directing the Bank to grant another opportunity of hearing to the respondent, when the respondent had failed to avail the opportunities previously granted to him.

Treatment of the Issue by the Court

Authorities

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 Bank of India v. Apurba Kumar Saha [1994] 2 SCC 615* to emphasize that an employee cannot complain of denial of opportunity if they have refused to avail it.
• The Court relied on State Bank of India & Ors. v. Mohammad Badruddin, Civil Appeal No. 5604 of 2019 decided on July 16, 2019* to hold that there is no mandatory requirement of communicating the proposed punishment and that previous punishments can be considered.
• The Court distinguished State Bank of India & Ors. v. Ranjit Kumar Chakraborty & Anr. [2018] 12 SCC 807*, stating it was based on a situation where an opportunity to be heard was not given before the imposition of major penalty.
• The Court relied on State Bank of India & Ors. v. B.R. Saini [2018] 11 SCC 83* to clarify that if the Inquiry Report was furnished and an opportunity was given to the delinquent, there is no further requirement of another opportunity before imposing the penalty.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the principle that an employee cannot repeatedly demand opportunities for a hearing if they have already been given sufficient chances. The court emphasized that delaying tactics should not be rewarded and that there is no requirement to grant multiple opportunities on the pretext of justice. The court also took into account the gravity of the allegations against the employee.

Fact:Law Ratio

The court’s reasoning is as follows:

The Court considered the argument that the employee was not heard before the imposition of the major penalty. However, the court rejected this argument because the employee had been given multiple opportunities to be heard, but he failed to avail them. The court also reasoned that the employee was trying to delay the proceedings by not appearing for the hearing. The court observed that the allegations of financial irregularities against the respondent were grave and serious.

The court quoted from the judgment:

“The respondent has lost his chance to put his version before the Competent Authority when called upon by the Authority to do so.”

“Time and again opportunity of hearing cannot be granted on the pretext of justice.”

“The delaying tactics cannot be rewarded in such a manner.”

There were no dissenting opinions in this case.

Key Takeaways

• Employees cannot demand repeated hearings in disciplinary proceedings if they have been given sufficient opportunities to present their case.
• Delaying tactics by employees will not be rewarded by granting additional hearings.
• The principles of natural justice do not require multiple hearings if the employee has already been given a reasonable opportunity.

Directions

The Supreme Court set aside the directions of the Division Bench of the High Court that had ordered another opportunity of hearing for the respondent.

Specific Amendments Analysis

Not Applicable

Development of Law

The ratio decidendi of this case is that an employee who has been given sufficient opportunities to present their case in a disciplinary proceeding cannot demand another opportunity simply because they did not avail the previous ones. This judgment reinforces the principle that the principles of natural justice do not require repeated hearings, and delaying tactics by employees will not be rewarded. There is no change in the previous position of law, but this judgment reinforces the existing position.

Conclusion

The Supreme Court allowed the appeal, setting aside the Division Bench’s order for another hearing. The court emphasized that employees cannot demand repeated hearings if they have been given sufficient opportunities and that delaying tactics will not be rewarded. This judgment reinforces the importance of availing the opportunities provided in disciplinary proceedings and upholds the principle that repeated hearings are not a matter of right.