K. MARGABANTHU Vs. THE UNION OF INDIA, THROUGH THE SECRETARY, MINISTRY OF FINANCE, DEPARTMENT OF ECONOMIC AFFAIRS, GOVERNMENT OF INDIA, NEW DELHI,

JUDGEMENT

(1.) Aggrieved by the proceedings culminating in the order dated 7 -7 -92 in No. 9/46/91/BO.I terminating the term of office as Chairman and Managing Director of UCO Bank from the date of service of the said notice, the petitioner has filed the above writ petition to quash the same and for consequential direction to restore to him the post of Chairman and Managing Director.

(2.) The case of the petitioner is briefly stated hereunder: The petitioner joined State Bank of India and ultimately he was appointed as Managing Director of State Bank of Sowrashtra in April, 1989. Again he was appointed as Chairman Cum Managing Director of UCO Bank, third respondent herein. He accepted the assignment and took it as a challenge and improved the financial position of the bank. Based on the publication of wrong information in the Media known as "Bank Scam", the Government of India initiated enquiries at different levels through Reserve Bank of India, the Central Bureau of Investigation and the Incometax Department. Such enquiries are directed against the holders of top post in Nationalised Banks and other Financial Institutions. A search was carried out by the Officers of Central Bureau of Investigation at the office and the residence at Calcutta and Madras and he was asked to go over to Bombay immediately. Questioning those proceedings, he filed a writ petition before the Calcutta High Court and the same is pending. While so, he received an order dated 7 -7 -92 issued under the signature of 2nd respondent purporting to terminate the term of office of the petitioner as Chairman and Managing Director of Uco Bank to take effect from the date of service of the said notice. He submitted a representation dated 19 -8 -92 to the Additional Secretary, Government of India, for recalling the said order of termination. The said order casts a stigma on the petitioner and it will affect the future prospects and service of the petitioner and the said order was issued by way of punishment. The respondent has no jurisdiction or authority to impose any punishment upon the petitioner when the allegation is yet to be established and the investigations are still pending. In such circumstances, having aggrieved by the order dated 7 -7 -92, filed the above writ petition.

(3.) Respondents 1 and 2 filed a counter affidavit disputing various averments made by the petitioner. It is stated that as neither the order passed by the Government terminating the services of the petitioner was issued nor served nor directed to the petitioner at Madras, this Court has no jurisdiction to try, entertain and decide the subject matter of the writ petition. Regarding the merits it is stated that the tenure of appointment of the petitioner as Chairman and Managing Director, UCO Bank was for the period from date of taking charge and ending with 30 -9 -93. He took charge of the post on 11 -9 -91. A committee was constituted under the chairmanship of Shri R. Janakiraman to investigate into the possible irregularities in funds management of commercial banks and financial institutions and in particular, in relation to their dealings in Government securities, public sector bonds and similar instruments. On the basis of the report of the said committee and as per the direction of the Government of India, CBI investigated the transaction undertaken by the UCO Bank and after thorough investigation, a First Information Report was registered against the petitioner for offences under Indian Penal Code and the Prevention of Corruption Act. It is further stated that in the light of the report of the said committee and the First Information Report filed by the C.B.I., the petitioner's term was terminated prematurely in exercise of power conferred under Clause 8 (1A) of the Nationalised Banks (Management and Miscellaneous Provisions) Scheme, 1970. Another F.I.R. was also registered against the petitioner on 8 -7 -92. It is also stated that the two provisions, namely, clause 8 (1A) and 8 (4) of the Scheme contemplates two different sets of circumstances to terminate the services of whole -time Director. Since the petitioner was appointed as Chairman and Managing Director of UCO Bank purely on contractual basis, his appointment was subject to the terms and conditions of the scheme and the appointment letter issued to him. The petitioner was fully conscious of the terms and conditions and is bound by the same. Since the case of the petitioner is a case of termination simpliciter under clause 8 (1A), the procedure giving show cause notice is not required.