True Court CopyTM English


Civil Appeal No. 11975 of 2016 (Arising out of SLP (C) No. 30710 of 2014)

Decided On: 09.12.2016

Appellants: Chief Executive Officer, Krishna District Cooperative Central Bank Ltd. and Ors.
Respondent: K. Hanumantha Rao and Ors.

Hon'ble Judges/Coram:
A.K. Sikri and Abhay Manohar Sapre


A.K. Sikri, J.

1. Leave granted.

2. A departmental inquiry was conducted against Respondent No. 1 herein, an employee of Appellant, viz. Krishna District Cooperative Central Bank Ltd., into certain charges of misconduct. In the said inquiry, charges were proved and as a result the disciplinary authority inflicted the punishment of dismissal from service upon Respondent No. 1. The High Court vide impugned judgment has altered the said penalty of dismissal to that of stoppage of two increments for a period of three years.

Whether it was permissible for the High Court to do so in the facts of the present case, is the question that needs to be determined in the instant appeal.

3. The events leading to the filing of this appeal are recapitulated in brief as under:

Respondent No. 1 was a Supervisor of five Primary Agricultural Cooperative Societies (PACS). He failed in discharging his duties properly in supervising the same, which led to cheating by the members of the Nidamanuru Primary Agricultural Cooperative Society (PACS) resulting in misappropriation of the society funds, for which disciplinary action was initiated against him. The precise charges against him, vide charge memo dated 08.03.2002, were that he had derelicted his duties as Supervisor leading to misappropriation of the funds of the society. Details of fifteen such accounts/instances were given wherein frauds had taken place and the amount of fraud involved in each such case totalling upto Rs. 46,87,950.10. Names of the persons who had misappropriated these amounts were also given. It was mentioned that Respondent No. 1 worked as a Supervisor of the society and it was his duty to have close supervision over the affairs of the society and bring to the notice of the Bank the fraud which took place and safeguard the funds of the society and the Bank. However, he failed to discharge his legitimate duties of supervision leading to huge misappropriation that had taken place, which he could not detect and thwart. Thus, by derelicting his legitimate duties he paved way for huge misappropriation and thereby committed grave misconduct. Inquiry was held and charge of dereliction of duty was proved as per the report given by the Inquiry Officer.

4. There is no dispute that this inquiry was conducted in accordance with the principle of natural justice giving fair chance to Respondent No. 1 to defend himself. In fact, as per the report of Inquiry Officer, Respondent No. 1 had even admitted dereliction of duties on his part.

5. The General Manager, Krishna District Cooperative Central Bank Ltd., after examining the report of the Inquiry Officer in detail, observed that the charged employee committed grave misconduct and acted in a way unbecoming of an employee of the Bank and passed an order of dismissal from service of the Bank. Feeling aggrieved by the order dated 05.10.2002, Respondent No. 1 herein filed an appeal/mercy petition before the Chairman, Person In-charge Committee of the Krishna Cooperative Central Bank Ltd., and prayed to consider the case sympathetically on humanitarian grounds and issue reinstatement orders, which was also dismissed on 22.01.2003. Respondent No. 1 thereafter filed writ petition bearing W.P. No. 4238/2003 before the High Court of Andhra Pradesh at Hyderabad.

6. The learned single Judge of the High Court of Andhra Pradesh at Hyderabad, after considerin........