BURDWAN CENTRAL COOPERATIVE BANK LTD. versus ASIM CHATTERJEE & ORS.

Citation: [2012] 1 S.C.R. 390 · Decided: 18-01-2012 · Supreme Court of India · Bench: ALTAMAS KABIR · Disposal: Appeal(s) allowed

Judgment (excerpt)

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B 
c 
(2012] 1 S.C.R. 390 
BURDWAN CENTRAL COOPERATIVE BANK LTD. 
&ANR. 
v. 
ASIM CHATTERJEE & ORS. 
(Civil Appeal No. 657 of 2012) 
JANUARY 18, 2012 
[ALTAMAS KABIR AND CYRIAC JOSEPH, JJ.] 
SeNice Law: 
Disciplinary proceedings - Central Co-operative Bank 
taking disciplinary action against its employee for financial 
irregularities committed by him during his previous 
employment with the affiliated Society - Held: At the relevant 
0 point of time the delinquent was employed in the Primary Co-
operative Society which was affiliated to the appellant-Bank 
and in view of this link, even though the delinquent was not 
under the administrative control of the appellant-Bank when 
he allegedly committed various financial irregularities, it was 
E still entitled to commence disciplinary proceedings against 
him in view of his past conduct. 
Dismissal of employee of Central Co-operative Bank -
Held.: The order of punishment had been passed against the 
delinquent on a/legations of financial irregularities - The 
F allegation would require serious consideration as to whether 
such an employee should be retained in the seNice of the 
Bank - Since a Bank acts in a fiduciary capacity in regard to 
people's investments, the very legitimacy of the banking 
system depends on the complete integrity of its employees -
G Order of the Bank upheld. 
Constitution of India, 1950: 
Article 311 (2) - Dismissal of employee of Central 
H 
390 
BURDWAN CENTRAL COOPERATIVE BANK LTD. & 391 
ANR. v. ASIM CHATTERJEE 
Cooperative Bank - Opportunity of hearing - Held: Since no 
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prejudice has been caused to the delinquent by the non-
supply of the enquiry report or the second show cause notice 
under Art. 311 (2), it cannot be said that the disciplinary 
proceedings had been vitiated on account of such non-supply. 
Respondent no.1, an employee of Krishi Unnayan 
Samity, which was a cooperative society affiliated to the 
Burdwan Central Cooperative Bank (appellant-Bank), 
was appointed as a Grade Ill Staff of the appellant-Bank 
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on 8.9.1997. While he was serving in the appellant-Bank, 
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he was issued a charge-sheet by the appellant-Bank for 
various financial irregularities committed by him in 
maintaining the accounts of the Samity. Respondent No.1 
was found guilty of the charges and an order dismissing 
him from service was passed. Respondent No.1 filed a 
writ petition which was allowed by the Single Judge of D 
the High Court holding that the dismissal order had been 
passed by the Bank with the mala fide intention of getting 
rid of respondent no.1, and the appellant-Bank had no 
authority to proceed against him on the allegation of 
defalcation of the funds of the Samity at a point of time 
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when he was not an employee of the Bank. It was further 
held that the order of the Disciplinary Authority was 
vitiated as respondent no.1 was not served with a copy 
of the enquiry report, nor was any opportunity given to 
him by way of a second show-cause notice to offer his 
explanation thereto. The Division Bench of the High 
Court declined to interfere. 
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In the instant appeal filed by the Central Co-operative 
Bank, the question for consideration before the Court G 
was: whether an employer can take disciplinary action 
against an employee in regard to acts purported to have 
been done by him in his previous employment in an 
affiliated society. 
Allowing the appeal, the Court 
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392 
SUPREME COURT REPORTS 
[2012] 1 S.C.R. 
A 
HELD: 1.1. The appellant-Bank appointed respondent 
no.1 against the quota reserved for the employees of 
Primary Cooperative So.cieties affiliated to it in terms of r. 
69(2)(b) of the West Bengal Co-operative Societies Rules, 
1987. In view of this link between the Primary Cooperative 
B Society and the appellant-Bank, even though respondent 
no.1 was not under the administrative control of the 
appellant-Bank when he allegedly committed various 
financial irregularities, it was still entitled to commence 
disciplinary proceedings against him in view of his past 
C conduct. In the instant case, since the question of integrity 
in managing the accounts of the Samity is in question, it 
was but natural for the Bank to proceed departmentally 
against respondent no.1 after coming to learn of the 
allegations which have been made against him. [para 16 
D and 18] [399-E-G; 402-A-B] 
S. Govinda Menon vs. Union of India (1967) 2 SCR 566 
- relied on. 
1.2: This is, in fact, a case where the order of 
E punishment ha

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