Case Note & Summary
The appeal before the Supreme Court arose from a departmental disciplinary proceeding against an employee of Allahabad Bank. The employee was penalised by an order dated June 30, 1987, reducing him to a lower stage in the time scale of his pay. The Executive Director, who was then holding charge of the posts of Chairman and Managing Director, found the penalty inadequate and by order dated December 30, 1987 set aside that penalty and proposed a major penalty of reduction from MMG Scale II to JMG Grade Scale I with pay fixed at the minimum of that scale. After considering the employee's representation, the Executive Director by order dated February 5, 1988 imposed the enhanced penalty. The employee challenged this order in the Allahabad High Court, which dismissed the writ petition. Before the Supreme Court, two contentions were raised: first, that the order enhancing penalty was passed by the Executive Director in his capacity as Executive Director, who was not specified in the Regulations as the reviewing authority; second, that only the Chairman and Managing Director were specified as reviewing authorities, and the Executive Director merely holding current charge could not review the penalty. The Court noted that till June 23, 1987 one R. Srinivasan was the Chairman and Managing Director, and upon his appointment elsewhere, he handed over current charge to the Executive Director R.L. Wadhwa on June 24, 1987. The Court rejected the first contention because the orders were expressly passed in terms of Regulation 18, meaning the officer was discharging the functions of Chairman and Managing Director, and the employee himself had referred to the Executive Director as the reviewing authority. On the second contention, the Court held that the Regulations framed under Section 19 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 could not be equated with a statute; the review power was not delegated but exercised by an officer placed in charge of the offices, who was entitled to perform all duties and functions of those offices. The Court distinguished cases involving statutory powers of detention and requisitioning, such as Ajaib Singh and Hari Chand Aggarwal, and held that the employer's disciplinary power is different from drastic statutory powers. The appeal was dismissed and the High Court's order was upheld.
Headnote
A) Service Law - Disciplinary Proceedings - Reviewing Authority - Allahabad Bank Officer Employees' (Discipline and Appeal) Regulations, 1976, Regulation 18 - The Executive Director who held current charge of the offices of Chairman and Managing Director could exercise the power of review under Regulation 18 because he was discharging the functions of those offices, not acting as a delegate. The disciplinary authority had imposed a penalty of reduction to a lower stage in the time scale of pay; the Executive Director, holding charge of Chairman and Managing Director, found the penalty inadequate, issued a show cause notice proposing enhanced penalty, and after considering the appellant's representation imposed a major penalty of reduction from MMG Scale II to JMG Scale I with pay fixed at the minimum. The Court held that the orders signed as Executive Director were valid because they were passed in terms of Regulation 18, meaning the officer was discharging the functions of Chairman and Managing Director, and the appellant himself understood the show cause notice as issued by the reviewing authority. Held that the first contention that the Executive Director was not specified as reviewing authority failed. (Paras 1-5) B) Service Law - Delegation of Statutory Power - Distinction between statutory regulations and employer's disciplinary power - Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, Section 19 - The Regulations framed by the Board of Directors under Section 19 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 could not be equated with a statute. The power of review was not a statutory power exercised by a subordinate official as a result of delegation; the Executive Director was placed in charge of the offices of Chairman and Managing Director and was entitled to perform all duties and functions of those offices. The Court distinguished Ajaib Singh v. State of Punjab and Hari Chand Aggarwal v. The Batala Engineering Co. Ltd., which involved drastic statutory powers of detention and requisitioning that required appointment to a specific statutory office. Held that the power of an employer to take disciplinary action, including review of penalty, differed from statutory power to detain and could be exercised by an officer holding charge of the relevant office. (Paras 1-5) C) Service Law - Officiating or In-charge Appointment - Powers and Functions - Allahabad Bank Officer Employees' (Discipline and Appeal) Regulations, 1976; Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 - An officer who substantively held a lower post and was asked to discharge the duties of a higher post did not get promoted to that higher post, but he was required to perform the duties and discharge the functions of that post. The Court relied on the principle that a confirmed holder of a substantive post discharges functions attached to the post, and when someone is placed in that very post in an officiating capacity or directed to hold charge, he renders identical service. The Executive Director's exercise of review power while holding current charge of Chairman and Managing Director was therefore valid. Held that the appeal was dismissed and the order of the High Court was upheld. (Paras 1-5)
Issue of Consideration
Whether the power of review available to the Chairman and Managing Director of Allahabad Bank under Regulation 18 of the Allahabad Bank Officer Employees' (Discipline and Appeal) Regulations, 1976 could be exercised by the Executive Director who, in absence of the Chairman and Managing Director, was entrusted with current charge of the duties of those offices.
Final Decision
The Supreme Court dismissed the appeal, holding that the Executive Director while holding current charge of the offices of Chairman and Managing Director was entitled to exercise the power of review under Regulation 18 of the Allahabad Bank Officer Employees' (Discipline and Appeal) Regulations, 1976. The orders signed as Executive Director were treated as passed in discharge of the functions of Chairman and Managing Director, and the enhanced penalty was upheld.
Law Points
- Power of review under service regulations can be exercised by officer holding current charge of higher post
- regulations framed under Section 19 of Banking Companies (Acquisition and Transfer of Undertakings) Act
- 1970 are not statutory
- entrustment of current duties charge does not amount to promotion but allows performance of all functions of higher post
- employer's disciplinary power distinguished from drastic statutory powers of detention or requisitioning
