Form not J.(2) IN THE HIGH COURT AT CALCUTTA Civil Appellate Jurisdiction Original Side Present : The Hon’ble Mr.Justice Ashim Kumar Banerjee And The Hon’ble Justice Dr.
Mrinal Kanti Chaudhuri A.P.O.No.208 of 2013 W.P No.494 of 2008 RESERVE BANK OF INDIA versus KRISHNANANDA BANERJEE & ORS.For the Appellant : Mr.Arijit Chowdhury, Senior Advocate Mr.Aloke Banerjee, Advocate Respondent No.1 : Mr.Krishnananda Banerjee (In person) Heard on Judgment on : August 2, 2013.
: August 13, 2013.
ASHIM KUMAR BANERJEE, J.
FACTS : Respondent Krishnananda Banerjee was an officer of Reserve Bank of India.
He was a Class-I Grade-A Officer and working as Assistant Manager in the Foreign Exchange Department.
He was promoted as Assistant Manager (promotee) on ad hoc and temporary basis with effect from October 16, 2001.
The Authority regularized such promotion with effect from November 8, 2001, effective from November 7, 2001.
He claimed to have an unblemished service career.
He complained of not getting the benefit of assured personal promotion as per the scheme introduced on November 21, 2005.
The Authority took the plea, he was subjected to a departmental proceeding and he was involved in a criminal case initiated at the instance of his the then wife Smt.
Kabita Banerjee.
Facts would depict, the couple was married on April 15, 2001.
The lady complained of being physically and mentally tortured by the husband and the family membeRs.The husband was arrested on April 30, 2005 and released on bail on May 5, 2005.
We are told, ultimately Krishnananda got an honourable acquittal that was affirmed by the Court of appeal.
At the instance of the wife, the couple got divorce subsequently.
The Authority supported their stand under Regulation 46(5) read with Regulation 39(2) of the RBI Staff Regulation, 1948.
The Authority alleged, he absented himself unauthorisedly for four days when he was in custody.
The Authority granted him extraordinary leave without pay for the period when he was in custody.
He filed a writ petition just before his retirement, complaining of not getting the assured promotion.
However, we are told, during pendency of the application, the Authority gave him appropriate benefit of promotion.
The writ petition being W.P.No.494 of 2008 came up for hearing before the learned Single Judge.
The learned Single Judge disposed of the same by judgment and order dated March 15, 2013 appearing at pages 376-384 of the paper book.
He challenged the letter dated August 22, 2007 addressed to him by the Bank whereby the Bank justified their action in delaying the process of assured promotion relying on Regulation 18.4.4 of the Master Circular.
He contended, the Regulation 18.4.1 to 18.4.4 would relate to disciplinary proceeding and/or any criminal proceeding, relating to service of an employee.
Since the allegation made against him under Section 498A of the Indian Penal Code would relate to a private complaint made by his ex-wife on a matter not in any way connected with the official work, such regulation and/or guideline and/or circular would have no role to play.
However, he admitted, during pendency of the writ petition, he retired from service and the Authority transferred him the benefit of the promotion by transferring the pecuniary benefit to his Savings Bank Account without informing him.
Hence, he claimed interest on such delayed payment.
The learned Judge recorded his contention.
The relevant extract is quoted below: “He also submitted that the delay caused by the respondent-Bank prejudiced his interest and he suffered monetary loss since he could not invest money to earn something out of it.
The respondent-Bank kept the money with them and also commercially utilized.
Therefore, they are obliged to pay interest on the amount from October, 2006”.The learned counsel appearing for the Bank Authority would however confront such allegation by contending, the Bank acted in good faith as per the service regulation and after the respondent had been acquitted of criminal charges the Authority paid him all his retiral benefit including the promotional benefit.
This payment was made in 2011.
We find from the judgment, the arrear was paid on May 23, 2011.
The Bank paid the gratuity on July 8, 2011.
The arrear pension was paid on December 1, 2011.
The Bank also paid arrear salary and the difference of encashment of ordinary leave on December 13, 2011 and pension on 30th December, 2011.
Significant to note, Krishnananda was entitled to benefit of promotion in October, 2006.
The Criminal Court exonerated him from the charges on March 9, 2010 and the Bank paid him the arrears on diveRs.dates mentioned above.
Krishnananda retired from service on October 30, 2009.
The learned Judge held, paragraph 18.4.1 to 18.4.4 would relate to any criminal or civil proceeding relating to service, hence, the action on the part of the Authority was illegal.
His Lordship directed payment of interest at the rate of eight per cent per annum.
Being aggrieved, the Bank preferred the instant appeal that we heard on the above-mentioned date.
CONTENTIONS : Mr.Arijit Chowdhury, learned senior counsel appearing for the Reserve Bank of India advanced his argument relying on the Reserve Bank Staff Regulations, 1948.
According to him, Regulation 46(3) would make an employee liable to dismissal or any other penalty if he was committed to prison inter alia involving in “gross moral turpitude”.According to Mr.Chowdhury, since he was charged in a case under Section 498A alleging physical and mental torture upon his wife, it would amount to moral turpitude and the Authority was entitled to proceed against him departmentally.
The Authority did not do so, awaiting the decision from the Criminal Court.
He retired from service, hence the Authority could not proceed against him departmentally.
Moreover, there was another charge, for which a departmental proceeding was going on, that could not be completed in view of his retirement as well as pendency of litigation, challenging the said proceeding at the instance of the respondent No.1.
After his retirement, when the employee was exonerated and acquitted from the charges, the Bank immediately gave him the benefit and transferred the pecuniary benefit to his Bank Account, hence, there could not be any scope to award interest.
Moreover, as per the rules, for delayed payment, he was not entitled to interest, at least rule was not specific on that score.
Mr.Chowdhury relied on the decision of the Apex Court in the case of Y.K.Singla versus Punjab National Bank & ORS.reported in 2013 Volume-III Supreme Court Cases page-472 wherein the Apex Court disallowed granting of interest to an employee as the service rules were silent on the issue.
The Apex Court observed, “Accordingly, the appellant has to be awarded interest under Section 7(3-A) of the Gratuity Act.
Therefore, if the provisions of the Gratuity Act are applicable to the appellant, he would most definitely be entitled to interest under sub-Section 3-A of Section 7 of the Gratuity Act, on account of delayed payment of gratuity”.While observing so in paragraph-20, Their Lordships held on the facts and circumstances involved therein, the delinquent was not at fault because of delay in disbursement of the gratuity.
We find in paragraph-26, the Apex Court directed the employer Bank to pay interest in addition to the cost awarded to him.
Apex Court in paragraph-24 observed, Regulation was silent on the issue, hence, the benefit of the Gratuity Act would be available.
Mr.Chowdhury relied upon the Apex Court decision in the case of Ministry of Finance and Anr.
versus S.B.Ramesh reported in 1998 Volume-III Supreme Court Cases page-227 to support his contention, the allegation on which the criminal proceeding was initiated, would come within the scope of moral turpitude.
In the case before the Apex Court, an Income-tax Officer was living together with a lady having extra-marital sexual relationship that was held to be unbecoming of a government servant, attracting punishment.
Mr.Chowdhury also relied upon the case of Sushil Kumar Singhal versus Regional Manager, Punjab National Bank reported in 2010 VolumeVIII Supreme Court Cases page-573 wherein conviction for an offence under Section 409 of the Indian Penal Code was held to be within the ambit of moral turpitude, attracting punishment.
Relying on the said two decisions, Mr.Chowdhury justified the action on the part of the Bank and contended, the Bank was not obliged to pay interest.
He, however, in his usual fairness conceded, there was little delay in making payment of a part of the benefit that would attract some interest, he would advise the Bank to pay the same at an early date.
Per contra, Mr.Krishnananda Banerjee, appearing in person contended, the relevant circular relied by the Bank was amended in 2012 and could not have any retrospective application in a case which had happened long before the amendment.
He relied on his representation appearing at page-79 that remains unattended.
He made application under the Right to Information Act appearing at page-80 that was replied to vide letter dated August 22, 2007, appearing at page-82 wherein the Authority explained the delay by relying upon paragraph-18.4.4 of the Master circular that would have no application in the instant case.
Mr.Banerjee relied on the following decisions:
1.
S.R.Bhanrale versus Union of India reported in 1996 Volume-X Supreme Court Cases page-172.”
2. Dr.
Uma Agarwal versus State of U.P.and ORS.reported in 1999 All India Reporter Supreme Court page-1212.”
3. Y.K.Singla versus Punjab National Bank and ORS.reported in 2013 Volume-III Supreme Court Cases page-472.
In the case of M/S.Glaxo Laboratories (I) LTD.versus Presiding Officer, Labour Court, Meerut and ORS.reported in All India Reporter 1984 Supreme Court page-505, the unfortunate incident of mis-conduct on the part of the employee outside the factory premises was held to be outside the scope and ambit of the disciplinary rules.
Pertinent to note, the present incumbent before us, was a public servant discharging public duty, he could not be equated with a factory worker as in the case of Glaxo Laboratories (supra).In the case of S.R.Bhanrale (supra).the Apex Court granted interest, however, did not assign any reason whereas in the case of Dr.
Uma Agarwal (supra).after considering the facts involved in the said case, Apex Court observed, “it was a fit case for awarding interest”.In reply, Mr.Chowdhury distinguished the three decisions cited by Mr.Banerjee by contending, those decisions would have no application in the facts and circumstances of the present case.
OUR VIEW : We have considered the rival contentions.
We fully agree with Mr.Chowdhury, the decision in the case of Glaxo Laboratories (supra) would not be applicable in the present case, rather the decision in the case of Sushil Kumar (supra) and Ministry of Finance (supra) would squarely apply.
Krishnananda in his written notes of submission contended, service of the Reserve Bank of India could not be construed as public duty as the Reserve Bank was merely an instrumentality of the State.
We beg to defer.
The respondent was a Class-I Officer of the Reserve Bank of India, discharging public duty.
His conduct, if proved, would squarely come within the ambit of gross moral turpitude, attracting mischief of the disciplinary rules.
The Bank took shelter under paragraph-18 of the Master Circular, the learned Judge observed, “it would not be applicable”.Even if we accept the logic that the learned Judge advanced we would still not be in a position to support the ultimate finding on the issue.
In case the allegation against Krishnananda was proved it would definitely come within the mischief of moral turpitude, attracting major penalty.
It is true that the complaint made by his ex-wife would not relate to service.
However, once it would come within the scope of moral turpitude, it would definitely empower the Authority to proceed against him departmentally and inflict appropriate penalty on him.
Pertinent to note, such particular rule was not under challenge.
Hence, we disapprove the finding of the learned Judge on paragraph 18.1 to 18.4.
We however, fully approve of the ultimate relief that the learned Judge gave to Krishnananda.
We are fully impressed by the argument made before His Lordship quoted (supra) that the learned Judge did not discuss in detail.
We fully appreciate the conduct of the Bank until he was exonerated from the charges.
We appreciate the Bank’s action transferring the benefit to his Savings Account without waiting for a direction from the Court.
We fully agree, Bank acted in good faith.
Still, we are not convinced why Krishnananda would not get appropriate interest.
He was otherwise entitled to the benefit of the promotion, the Bank withheld the same in good faith and in our view, very rightly.
Hence, the Bank was not at fault.
Similarly, Krishnananda was not at fault as subsequently found by the Criminal Court.
However, because of such pendency the Bank must have utilized the pecuniary benefit that was withheld for about three yeaRs.Mr.Chowdhury put emphasis on the decision in the case of Y.K.Singla (supra) by contending, the Apex Court foisted the liability after holding, the employee was not at fault.
In the instant case, the Bank was not at fault, hence, the Bank should not be foisted with the liability.
We do not approve of such logic.
In the said case also there was a criminal proceeding initiated against the delinquent before the C.B.I.Court where he was exonerated.
Apex Court granted interest.
Considering such fact, the Mr.Chowdhury would contend, the relevant Reserve Bank rules would not permit payment of interest.
Even if it was so, how could we deal with the logic, the Bank utilized the money for three years and the employee could not get the benefit for three years without having any fault.
Although, we do not agree with the finding of the learned Judge on the applicability of paragraph-18.4.1 to 18.4.4 and hold, the Bank was within their right to withhold the benefit of promotion, we fully approve of the ultimate relief that the learned Judge gave to the respondent in the present facts and circumstances.
The appeal fails and is hereby dismissed.
There would be however, no order as to costs.
Dr.
Mrinal Kanti Chaudhuri, J.I agree.
[ASHIM KUMAR BANERJEE, J.].[ DR.
MRINAL KANTI CHAUDHURI, J.].