GOPALJI KHANNA versus ALLAHABAD BANK AND OTHERS

Citation: [1996] 2 S.C.R. 1068 · Decided: 27-02-1996 · Supreme Court of India · Bench: S.C. AGRAWAL · Disposal: Dismissed

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Judgment (excerpt)

A 
GOP AUi KHANNA 
v. 
ALLAHABAD BANK AND OTHERS 
FEBRUARY 27, 1996 
B 
[S.C. AGRAWAL AND G.T. NANAVATI, JJ.] 
Se1vice Law : 
Allahabad Bank Officer Employees' (Discipline and Appeal) Regula-
C tioiis, 1976: Regulation 18. 
Penalty on employee-Imposition of-Review-Enhancement of penal-
ty-Passed by Executive Director acting as Chairman and Managing Direc-
to1~Held : order not null and void on ground that Executive Director not 
specified as reviewing auth01ity-Also not invalid on ground that power could 
D not be delegated especially when employee also understood order as one 
issued by person discharging the functions of Chabman and Managing Direc-
tor. 
Administration Law : 
E 
Delegation of Power-Cliainnan and Managing Director of Bank-Em-
F 
powered to exercise power of review-Enhancement of-Penalty imposed on 
employee by Executive Director holding chaige of Chainnan and Managing 
Directo1~Held: did not amount to exercise of delegated power. 
Words and Phrases : 
"Statute Law''-Meaning of in the context of Allahabad Bank Officer 
Employees' (Discipline and Appeal) Regulations, 1976. 
The appellant was an employee of the respondent-Bank. A 
departmental enquiry was instituted against him for certain acts of mis· 
G conduct. The disciplinary authorities, by way of penalty, reduced him to a 
lower stage in the time scale of his pay. As the penalty imposed upon him 
was found to be inadequate by the Executive Director who was then holding 
charge of the post of Chairman and Managing Director,:, he passed an 
order setting aside the said penalty, issued a show-cause notice and 
H ultimately enhanced the penalty by fixing his pay in the minimum of the 
1068 
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GOP AUi KHANNAv. ALLAHABAD BANK 
1069 
lower grade. The appellant challanged that order by filing a writ petition A 
in the High Court, which was dismissed. Hence this Appeal. 
On behalf of the appellant, it was contended that the order of 
enhancement of penalty was passed by the Executive Director and as the 
Executive Director was not specified in the Allahabad Bank Officer 
Employees' (Discipline and Appeal) Regulations, 1976 as the reviewing B 
authority, the order passed by him should be regarded as null and void; 
that since under Regulation 18 Chairman and Managing Director was 
specified as reviewing authority, the power could not be validly delegated 
to any subordinate authority; and that, therefore, the Executive Director, 
although holding charge of the offices of Chairman and Managing Direc-
C 
tor also, could not have validly exercised that power. 
Dismissing the appeal, this Court 
HELD : 1.1. In the show-cause notice and the order enhancing the 
penalty it is stated that they were being passed by the Executive Director D 
in terms of Regulation 18 of the Allahabad Bank Officer Employees' 
(Discipline and Appeal) Regulations, 1976. That would mean that while 
passing the afore-said orders, he was discharging the functions of Chair-
man and Managing Director. He was only holding charge of the office of 
the Chairman and Managing Director and, therefore, he could not have 
signed the afore-said orders as Chairman and Managing Director. Since E 
he was then holding substantively the post of Executive Director he rightly 
described himself, while signing the afore-said orders, as Executive Direc-
tor. The appellant also understood the show cause notice as one issued by 
a person discharging the functions of Chairman and Managing Director 
as can be seen from his representation made pursuant thereto. [1072-C-E] F 
1.2. Though the Regulations have been framed in exercise of the 
powers conferred by Section 19 of the Banking Companies (Acquisition 
and Transfer of Undertakings) Act, 1970, by the Board of Directors, they 
cannot be equated with a statute. What the Board of Directors have done 
by making those Regulations is to regulate the power of taking disciplinary G 
action against the employees of the bank. Moreover, this is not a case 
where the power of chairman or the Managing Director came to be 
exercised by a subordinate official as a result of delegation of that power. 
The Executive Director while exercising the power of review was really 
discharging the functions of Chairman and Managing Directo• as he was H 
1070 
SUPREME COURT REPORTS 
[1996] 2 S.C.R. 
A then placed incharge of those offices and was therefore entitled to perform 
all the duties and functions of those offices. He did not exercise that power 
on the basis th

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