VED PRAKASH MALHOTRA Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) The petitioner is Shri Ved Parkash Malhotra who was the Chief Cashier, State Bank of India, New Delhi, on 24th May 1971 and whose credulousness in taking out the astronomical sum of sixty lakhs of rupees and in handing over the same to an unknown person hit the headlines in the Press, supplied ammunition to the critics of the Government and rocked the public. Malhotra says that the times were abnormal, he was working under great pressure and he was a victim of a clever ruse. Fortunately, however, most of the money was recovered soon and the remainder was paid into the treasury of the Bank by Malhotra himself so that the Bank did not suffer any monetary loss. The conduct of Malhotra, however, scandalised the Bank. A departmental inquiry was held against him which resulted in his dismissal on 10th November 1972 in accordance with a resolution of the Executive Committee of the Central Board of the Bank passed atits meeting on that day.

(2.) The petitioner has challenged his dismissal in a very lengthy petition which was supplemented by a rejoinder to the counter affidavit filed by the Bank. We, however, invited the attention of Shri K. C. Sharma, learned counsel for the petitioner, to all the possible legal provisions which could have a bearing on the disposal of the petition. The learned counsel, therefore, moulded the contentions of the petitioner into the following grounds, namely:- 1. According to the statutory regulation No. 55 (2) (a) framed under section 50 of the State Bank of India Act, 1955, the petitioner could be dismissed from service by the Executive Committee of the Central Board of the Bank alone. The tenure of the petitioner's service thus enjoyed a statutory protection. 2. In exercising the power of dismissal under regulation 55(2) (a), the Executive Committee had to act according to the rules of natural justice which are to be construed by the Court to be implied therein. 3. Though the Executive Committee is said to have decided the petitioner's case, the hearing given to the petitioner was not by the Executive Committee. 4. The hearing such as was given to the petitioner was inadequate. 5. The power of dismissal being quasi-judicial, the Executive Committee was bound to give reasons for exercising the same against the petitioner. The order of dismissal, not being a speaking order. is void; and 6. The Bank is "the State" within the meaning of Article 12 of the Constitution. It has discriminated against the petitioner by punishing him alone though some of his colleagues were also responsible for the withdrawal of rupees sixty lakhs from the Bank and handing over the same to an unknown person along with the petitioner.

(3.) While the counter-affidavit of the Bank comprehensively met all the contentions in the lengthy writ petition, Shri F. S. Nariman, Additional Solicitor General, met the above mentioned grounds urged by the petitioner as follows:- 1. The employment of the petitioner by the Bank was purely a contract of service the termination of which could be made at the discretion of the employer. Regulation 5 5(2) (a) did not amount to any statutory protection against such termination. 2. As the power of termination of the petitioner's service was exercised under a contract and not under a statutory provision, the question of natural justice being observed in exercising the said power by an appropriate construction of regulation 55 (2) (a) did not arise at all. 3. It was not necessary for the Executive Committee to have heard the petitioner themselves. The hearing could be delegated to subordinate authorities. 4. The quantum of hearing given to the petitioner was precisely in accordance with rule 40 of the administrative Service Rules framed by the Bank and in force from 1st January 1959 and was adequate in the circumstances. 5. As the power of dismissal did not have to be exercised in accordance with any statutory provision or by any quasi-judicial authority, but only by the employer under a contract, no reasons for the dismissal had to be given. Alternatively, the resolution passed by the Executive Committee gives the reasons for the dismissal. 6. The Bank was not "the State" under Article 12 of the Constitution. Assuming that it was, no discrimination was practised against the petitioner.