Supreme Court: Under United Commercial Bank Officers Regulations, Action Begins Only After Chargesheet

Supreme Court: Under United Commercial Bank Officers Regulations, Action Begins Only After Chargesheet

Directs UCO Bank to provide all service benefits, along with interest, to the legal heirs of the deceased employee within 3 months

The Supreme Court has held that disciplinary proceedings can begin only after the service of a chargesheet and not a show-cause notice as per the United Commercial Bank Officer, Employees (Discipline and Appeal) Regulations, 1976.

The case pertained to a former officer of the UCO Bank who had faced disciplinary action even after reaching the superannuation age.

The court reiterated the principles laid down in the UCO Bank v. Rajender Lal Capoor (2007) 6 SCC 694 (Rajender Lal Capoor-I), Rajender Lal Capoor-II case, and the decision of the three-judge bench in the Canara Bank v. D.R.P. Sundharam, (2016) 12 SCC 724 case.

The bench comprising Justice Hima Kohli and Justice Rajesh Bindal reiterated that the 1976 Regulations could be invoked only if disciplinary proceedings had been initiated before the employee's service came to an end. Such proceedings could begin only when the chargesheet was issued and not merely upon issuing a show-cause notice.

In the Rajender Lal Capoor-I 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 the application of mind on the allegations leveled against an employee by the competent authority. The pendency of a preliminary disciplinary inquiry cannot be a ground for invoking Regulation 20 of the United Commercial Bank Officer’s Service Regulations, 1979 on an employee 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 Rajender Lal Capoor-II’s case, wherein it was held that the service of chargesheet was a sine qua non for disciplinary proceedings.

The judges were hearing an appeal against the judgment of the Bombay High Court, which had allowed the retired bank employee’s plea and overturned his dismissal from service.

The respondent had served as the assistant general manager at UCO Bank’s main branch in Mumbai. He was scheduled to retire on 31 July 1991.

However, on 17 June 1991, he was served a memo seeking an explanation for the alleged irregularities and lapses on certain accounts during his tenure. On 15 July 1991, the General Manager (Personnel) used his authority under Regulation 12 of the 1976 Regulations to place him under suspension.

The officer filed an appeal against it, which was dismissed by both the appellate authority and the high court.

On 03 March 1993, the disciplinary authority dismissed him from the service under Regulations 7(3) in conjunction with 4(d) of the 1976 Regulations.

This led the officer to file a statutory appeal, which was rejected by the appellate authority. Thereafter, he approached the high court, which ruled in his favor, overturning his dismissal from service.

Aggrieved by the decision, the bank approached the top court.

The bench noted that Regulation 20 of the United Bank of India (Officers’) Service Regulations, 1979, which was identical to the regulations involved in the present case, was previously held unconstitutional and void in the United Bank of India Officers Association's case.

The judges stated that the case was later reviewed and decided again in the Rajinder Lal Capoor-II matter, wherein the court clarified that Clause (iii) of Sub-Regulation 20(3) of the 1979 Regulations was an independent provision. It allowed the continuation of disciplinary proceedings, but only when such proceedings were initiated as per the Regulations of 1976.

The bench 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 way the disciplinary proceeding is initiated. It expressly provides for service of the chargesheet, which is a sine qua non for disciplinary proceeding.”

The court noted that the bank officer reached the superannuation on 31 July, while the chargesheet was issued on 07 December. As a result, no disciplinary proceedings were pending against him at the time of his retirement.

Thus, the bench stated that there was no merit in the appeal, as the principles laid down were followed consistently. It imposed a fine of Rs.25,000 on the bank.

The judges held, “As we have set aside the punishment order inflicted on the deceased employee, all service benefits due to him, along with interest at the rate of 7 percent 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.”