JAGANNATH DASH Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) PETITIONER is an officer employed by the State Bank of India. During 1970 and 1971, he was posted as the Manager of the Baripada Branch of the Bank. On 5th Oct. 1970, petitioner entered into an agreement for purchase of an Ambassador car bearing registration number WBJ 2130 from one Bhagawandas Agarwalla for a consideration of Rupees 14,500 stipulating to obtain delivery of possession on payment of Rs. 4,000 and agreeing to pay the balance of Rupees 10,500 in two instalments--one of Rs. 2,000 within a month hence and the remainder of Rs. 8,500 after obtaining the transfer of ownership from the registering authority. In the agreement, the copy whereof is Annexure-4 (i) to this writ application, it was mentioned that the vehicle stood in the name of Shri Banker Prasad Singh as the registered owner. On 16. 9. 1970, petitioner applied to the Regional Manager of the Bank for sanction of a loan and made a second application on 28. 9. 1970 to the same effect indicating therein that the sanction of the loan may be made expeditiously. On 28. 10. 1970, the loan was sanctioned. The vehicle had been purchased in the name of Bankey Prasad Singh under hire purchase basis and the Bengal Credit Corporation, Calcutta, was the financier. On 5. 6. 1971, petitioner obtained a letter from the financier that the dues under the hire purchase agreement had been completely satisfied. On 30. 70. 1971, there was transfer of ownership by appropriate endorsement in the registration book and on the following day petitioner withdrew the loan amount and hypothecated the vehicle with the Bank as security for the loan obtained by him. On 19. 11. 1971, petitioner was furnished with the summary of the report made by one A. K. Sarkar, Officer Gr. I, attached to the Circle Audit Cell and was called upon to offer his comments in the matter of purchase of the vehicle. Petitioner furnished his comments. From a letter dated 12. 9. 1973 issued by the Central Office of the Bank at Bombay to the Circle Office at Calcutta shows that the matter was given a final seal (vide paragraph 2 of Annexure-D.) Notwithstanding that decision, the question became the subject-matter of a series of correspondence between different authorities of the Bank and on 16th March, 1976, the Chief Regional Manager of the Bank at Bhubaneswar communicated to the petitioner that he has been ensured with reference to the purchase of the car. On 9th April, 1976, the writ application was filed questioning the imposition of the punishment of censure. Petitioner contended inter alia that the Chief Regional Manager was not the competent authority to impose the punishment. In the counter-affidavit filed by the opposite parties, it was maintained that Annexure 5 was not the appropriate commuincation and the matter was still under consideration by then and was finalised by the Chief General Manager on 23rd Aug. 1976, vide Annexure E. After this disclosure was made in the counter-affidavit, petitioner amended his writ application and challenged that the statement of fact in Annexure E that petitioner had obtained the loan on 1. 7. 1971 and had hypothecated the car for the loan was incorrect, and as a fact the transfer was obtained on 30th of July, 1971, and petitioner withdrew the loan on 31. 7. 1971, after hypothecating the vehicle that day. When this stand was taken by the petitioner in the amended writ application, opposite parties came forward with a further affidavit that the mention of the date as 1. 7. 1971 in Annexure E was a mistake and as a fact it was 31. 7. 1971. Petitioner challenges the imposition of punishment of censure as being contrary to Rule 51 of the State Bank of India (Supervising Staff) Service Rules (hereinafter referred to as "the Service Rules" ). It is further maintained that there is absolutely no basis for proceeding against the petitioner and while the head of the establishment had decided in 1973 that the matter should be closed, the subordinates in the establishment raked up the matter and ultimately manipulated to impose the punishment of censure. It is next contended that the entire premises upon which the decision to impose the punishment of censure has been taken is erroneous inasmuch as by the date the petitioner furnished the security by hypothecation, he was the owner of the vehicle. Lastly, Mr. Rath for the petitioner has taken the stand that there is absolutely no material upon which any adverse view against the petitioner should have been taken and since the imposition of punishment affects the petitioner adversely the order should be vacated.

(2.) IN the several counter affidavits of opposite parties, the action taken has been sought to be supported.

(3.) AT the hearing of the application Mr. Roy Mukherjee for the opposite parties has disputed the maintainability of the application by contending that the Service Rules upon which reliance has been placed are not statutory and infraction thereof, even conceding that there is breach, cannot be made the subject-matter of an application under Article 226 of the Constitution, inasmuch as the matter would not come under any of the three clauses indicated in Sub-article (1 ). Reliance is placed in support of this stand on two decisions, the first one being the case of Ramesh Krishna Rao v. State Bank of India 1974 II L. L. J. 441 : (1975) L. I. C. 175 and the second one being the case of K. L. Tripathiv, State Bank of India (1978) L. I. C. 441 (All ). In the Bombay case 1974 II L. L. J. 441 : (1975) L. I. C. 175, the question that arose for consideration was whether the State Bank of India came within the term "other authorities" occurring in Article 12 of the Constitution. The Court relying upon the dictum of the Supreme Court in the case of Executive Committee of U. P. State W. Corporation, Lucknow v. C. K. Tyagi and in Re': Indian Airlines Corporation came to hold that the State Bank of India did not come within the ambit of Article 12 and the State Bank of India (Officers and Assistants) Rules were not statutory. The fundamental basis of the judgment has been shaken in view of the fact that the ratio in both the decisions of the Supreme Court referred to above has been found not to be correct by a larger Bench in the case of Sukhdev Singh v. Bhagatram In fact, both the desisions relied upon by the Bombay High Court have been specifically overruled. The second case relied upon by Mr. Roy Mukherjee is the Bench decision of the Allahabad High Court (1978) L. I. C. 441, which apparently supports his contention. The Service Rules which are for consideration before us were being considered by the Allahabad High Court and the Court found that (at p. 445): In view of the principles laid down above we are of the opinion that the Central Board cannot frame 'statutory regulations' in the exercise of its general power of superintendence under Section 17 of the Act without following the procedure laid down in Section 50 of the Act. In this view of the matter the impugned service rules cannot be held to be statutory unless they were framed after following the procedure prescribed by Section 50 of the State Bank of India Act, 1966. As stated above, the service rules in question have not been framed by the Central Board after consultation with the Reserve Bank and with the previous sanction of the Central Government and hence in our opinion they have no statutory character. Since the petitioner has failed to establish that the service rules are statutory the petitioner is not entitled to any relief by means of the present petition. In view of our findings that the service rules in question are not statutory we do not consider it necessary to go into the merit of the other submissions made by the learned Counsel for the petitioner challenging the validity of the dismissal order. Learned Counsel for the petitioner has relied upon the observations of Supreme Court in Sukhdev Singh v. Bhagatram, (supra) as contained in paras 22, 23, 32, 100, 116, 121 and 122. We have carefully considered the observations of the judgment of the Supreme Court but we find nothing therein which may in any way advance the argument made on behalf of the petitioner. In fact the Supreme Court had examined the provisions of the Oil and Natural Gas Commission Act, 1969, Industrial Finance Corporation Act, 1956 and thereafter held that various regulations framed under the respective Acts were statutory as the procedure which was required to be followed in framing the said regulations had been followed in these cases. In the instant case the legislative mandate as laid down in Section 50 has not been followed in framing the Service Rules. No plea as to the character of the Service Rules was raised in the counter-affidavits filed in this case. Section 43 of the State Bank of India Act, 1955 provides: