Case Note & Summary
The case involves a disciplinary action taken by Appellants against its Senior Manager, Respondents, who was reduced from SMG Scale-IV to MMG Scale-III for negligence and collusion in sanctioning loans to M/s. Aman Trading Company and M/s. Creative Trading Company without proper verification. The respondent challenged the punishment before the Karnataka High Court. The Single Judge dismissed the writ petition, but the Division Bench allowed the appeal, setting aside the punishment on grounds that the enquiry relied on statements of co-accused not examined as witnesses, violating natural justice, and that Regulation 10 of the 1976 Regulations was mandatory, requiring a joint enquiry. The Supreme Court, in the present appeal by the Bank, examined two issues: whether the Division Bench exceeded the scope of judicial review, and whether Regulation 10 is mandatory or directory. The Court held that the Division Bench's findings on merits were not material and that Regulation 10 is directory, not mandatory. Consequently, the Supreme Court allowed the appeal, set aside the Division Bench's judgment, and restored the Single Judge's order dismissing the writ petition. The Court did not interfere with the disciplinary authority's decision, as the errors noted by the High Court were not sufficient to warrant interference.
Headnote
A) Service Law - Disciplinary Proceedings - Scope of Judicial Review - The High Court, in exercise of its writ jurisdiction, cannot re-appreciate evidence like an appellate authority; interference is warranted only if the findings are perverse or based on no evidence. In the present case, the Division Bench set aside the punishment by re-appreciating evidence, which exceeded the permissible scope of judicial review. (Paras 14-15) B) Service Law - Regulation 10 of Canara Bank Officer Employees' (Discipline and Appeal) Regulations, 1976 - Interpretation of 'may' - The word 'may' in Regulation 10 is directory, not mandatory, giving the Competent Authority discretion to hold joint or separate proceedings. The Division Bench erred in treating it as mandatory. (Paras 16-17) C) Service Law - Natural Justice - Reliance on Statements of Co-Accused Not Examined - The Division Bench held that the enquiry officer relied on statements of co-accused who were not examined as witnesses, violating principles of natural justice. However, the Supreme Court found that the errors noted were not material and the impugned judgment to that extent is set aside. (Paras 14-15)
Issue of Consideration
Whether the Division Bench exceeded the scope of judicial review in setting aside the punishment order, and whether Regulation 10 of the 1976 Regulations is mandatory or directory.
Final Decision
The Supreme Court allowed the appeal, set aside the impugned judgment of the Division Bench dated 15.02.2023, and restored the order of the learned Single Judge dated 02.09.2013 dismissing the writ petition. Consequently, the disciplinary order dated 31.05.2006 stands restored.
Law Points
- Scope of judicial review in disciplinary matters
- Interpretation of 'may' in Regulation 10 as directory
- Principles of natural justice in domestic enquiries
- Re-appreciation of evidence by High Court
