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Judgment
Nainar Sundaram, J.—The original petitioner, who is no more and who was working as Head Clerk of Gobichettipalayam Branch of the
State Bank of India, was proceeded against in disciplinary action under paragraph 521 of the Sastry award, read with paragraph 18.28 of the
Desai Award. There were four charges levelled against the original petitioner. We need not trouble ourselves with the details of the charges in view
of the scope of the controversy raised before this Court in this writ petition. On the basis that the original petitioner admitted guilt in respect of all
the charges, the first respondent, by order dated 12th July 1980 dismissed the original petitioner from service. The original petitioner preferred an
appeal to the second respondent and the second respondent gave the benefit of doubt to the original petitioner in respect of charge II, but,
however, maintained the order of dismissal of the first respondent with reference to the other charges. In this writ petition, the orders of
respondents 1 and 2 are being impugned. On the demise of the original petitioner, pending this writ petition, his legal representatives have been
brought on record and they are prosecuting this writ petition.
Mr. G. Venkataraman, learned Counsel for the petitioners on record, would submit that the original petitioner could not be stated to have
admitted guilt in respect of the charges levelled against him and even otherwise the Sastry Award and Desai Award on the basis of which Circular
relating to disciplinary action and procedure therefore emanated from the State Bank of India on 18th June 1980 contemplated the holding of an
enquiry even where there is an admission of guilt by the employee, if the misconduct is one, if proved, would result in the award of the punishment
of discharge or dismissed. The relevant paragraph in the above Circular reads as follows:
An enquiry need not be held if
(i) the bank has issued a show-cause notice to the employee advising him of the misconduct and the punishment for which he may be liable for such
misconduct;
(ii) the employee makes a voluntary admission of his guilt in reply to the aforesaid show-cause notice; and
(iii) the misconduct is such that even if proved the bank does not intend to award the punishment of discharge or dismissal.
In the instant case, the charges levelled against the original petitioner were termed as gross misconduct in the show-cause notice itself, and if
proved would certainly lead to the award of the punishment of discharge or dismissal, and in fact that is exactly what happened here. The relevant
paragraph in the Circular is unambiguous. Three conditions must be satisfied for dispensing with the holding of an enquiry; First is, a show-cause
notice ought to have been issued to the employee advising him of his misconduct and the punishment which he may be liable for such misconduct.
The second is, the employee should have made a voluntary admission of his guilt in reply to the show-cause notice. The third is, the misconduct
should be such that even if proved, the intention was not to award the punishment of discharge or dismissal. As already noted, the very show cause
notice declared the intention to treat the charges as amounting to gross misconduct and the punishment therefor, if proved, was admittedly
discharge or dismissal. In such a contingency, it is not permissible to dispense with the enquiry.
Mr. Sanjay Mohan, learned Counsel for the respondents, would submit that the holding of enquiry would be an empty formality especially when
the original petitioner had admitted guilt of the charges levelled against him and he wants to rely on a pronouncement of Shanmukham, J., in State
Bank of India v. Kannabiran 1986 1 LLN 462. That was a case which arose u/s 41(1) of the Tamil Nadu Shops and Establishments Act, 1947
and it is true the earned Judge expressed an opinion to the above effect. In contrast, Mr. G. Venkataraman, learned Counsel for the present
petitioners, would submit that the pronouncement of Shanukham J., has not taken note of the specific and direct pronouncement of this Court with
regard to the holding of an enquiry u/s 41(1) of the Tamil Nadu Shops and Establishments Act, 1947, and he would place strong reliance on a
pronouncement of mine in S.K. Raman Vs. The Management of Kundah Rural Cooperative Agricultural Society Ltd. and Another, to say that
even in the case of admission of guilt, there ought to be holding of an enquiry as per the above statutory provision and the non-holding of an
enquiry will vitiate the very order of dismissal.
In my view, there is no need to advert to and draw any inspiration from the pronouncements arising u/s 41(1) of the Tamil Nadu Shops and
Establishments Act (The State Bank of India under the Act of), 1955 is a statutory body and the employment by it is a statutory employment. The
State Bank of India is as much bound by the service rules framed by it governing the service conditions of its employees as the employees who
subscribed to the Rules. The circular, the relevant part of which is extracted as above, is admittedly in implementation of the Sastry Award and
Desai Award. They are solemn documents settling the service conditions of the employees of the State Bank of India. In Sukhdev Singh, Oil and
Natural Gas Commission, Life Insurance Corporation, Industrial Finance Corporation Employees Associations Vs. Bhagat Ram, Association of
Clause II. Officers, Shyam Lal, Industrial Finance Corporation, while dealing with the binding nature of the Service Regulations framed by Oil and
Natural Gas Commission, Life Insurance Corporation, and Industrial Finance Corporation, this is what Mathew, J., in his concurrent judgement
observed: Sukhdev Singh, Oil and Natural Gas Commission, Life Insurance Corporation, Industrial Finance Corporation Employees Associations
Vs. Bhagat Ram, Association of Clause II. Officers, Shyam Lal, Industrial Finance Corporation,
That apart, the regulations framed by these corporations were intended to be binding upon them and were the basis on which the employments
were made. As the employments were under corporations created by statutes for carrying on businesses of public importance, they were public
employment. And even if the regulations have not got the force of law, I think the principle laid down by Justice Frank-further in Vitarelli v. Seaton
359 US 535 , should govern the situation. He said:
An executive agency must be rigorously held to the standards by which it professes its action to be judged.... Accordingly, if dismissal from
employment is based on a defined procedure, even though generous beyond the requirements that bind such agency, that procedure must be
scrupulously observed.... This judicially evolved rule of administrative law is now firmly established and, if I may add, rightly so. He that takes the
procedural sword shall perish with that sword.
Adopting the above ratio, I am obliged to hold that the respondents must be rigorously held to the prescriptions laid down with regard to
disciplinary action and procedure therefore and even assuming that the original petitioner admitted guilt in respect of the charges levelled against
him, over which also there is a controversy, there had been a failure to hold the enquiry as per the mandates set out in the Circular, the relevant
part of which has been extracted as above. In the result I have to hold that the entire disciplinary action which culminated in the dismissal of the
original petitioner stood vitiated and must fall to the ground.
Then the question is what is the relief that the present petitioners could be awarded. The original petitioners died on 16th May 1982. The order
of dismissal was passed on 12th July 1980. The present petitioners, the legal representatives of the original petitioner, will be entitled to all the
service benefits computable in terms of money on the basis that the original petitioner continued in ""service until the date of his demise namely, 16th
May 1982, since ignoring the order of dismissal, he must be held to have been in service until the date of his demise on 16th May 1982. The
respondents are directed to settle and pay such benefits to the present petitioners. This writ petition is ordered in the above terms. No costs.