NEW BANK OF INDIA versus N.P. SEHGAL AND ANR.

Citation: [1991] 1 S.C.R. 473 · Decided: 15-02-1991 · Supreme Court of India · Bench: M.H. KANIA · Disposal: Appeal(s) allowed

Judgment (excerpt)

.J) 
NEW BANK OF INDIA 
V. 
N .P. SEHGAL AND ANR. 
FEBRUARY 15, 1991 
[M.H. KANIA AND KULDIP SINGH, JJ.] 
Service Law-Bank-Promotion Policy-Manager-Misconduct 
-Promotion granted while disciplinary proceedings were contempla-
ted-Charge-sheet served and departmental inquiry initiated subsequent 
to promotion-Held contemplated disciplinary proceedings are no bar 
for considering the employee for promotion-But grant of promotion 
cannot be regarded as condonation of pre_promotional misconduct-
Serving of charge-sheet and initiation of departmental inquiry held 
valid. 
Clause 9 of the Promotion Policy of the Appellant Bank provides 
that an officer in respect of whom disciplinary action is in process will 
be permitted to take part in the promotion process, subject to tile 
condition that his promotion will be withheld until the officer is 
ex!>nerated from the charges and in case such an officer is exonerated 
from the charges, the promotion shall take effect from the date on 
which it would have been otherwi~ effective but for the disciplinary 
action. Respondent-1, a Bank Manager, was promoted from Scale II to 
Scale-III under the aforesaid clause while disciplinary proceedings were 
contemplated against him. Later he was also interviewed for promotion 
from Scale III to Scale IV. thereafter the appellant-Bank cbarge-
sheeted him and initiated a departmental inquiry against him. He chal-
lenged the legality of the bank's action by filing a declaratory suit 
contending that in view of the promotion granted to him, the appellant-
Bank must be deemed to have condoned the earlier misconduct and 
subsequent to his promotion it was not open to the Bank to take any 
action against him. The Trial Court allowed the suit and restrained the 
appellant-bank from proceeding with the inquiry by holding the 
charge-sheet illegal. The order of the trial court was aiTmned by the 
first appellate court and the second appeal filed by the bank was also 
dismissed by the High Court. 
In appeal to this court, it was contended on behalf of the bank that 
A 
B 
c 
D 
E 
F 
G 
the grant of promotion to the appellant under clause 9 cannot be 
regarded in iaw as condonation of pre-promotion misconduct. On 
behalf of the respondent, it was contended that even if the continuation of 
H 
473 
474 
SUPREME COURT REPORTS 
[1991] 1 S.C.R. 
A 
disciplinary proceedings was valid, it was not a ground for holding up 
of his promotion from Scale III to Scale IV because on the date of 
interview no charge-sheet was served on him. 
B 
c 
Allowing the appeal and setting aside the order of the High Court, 
this Court, 
HELD: 1. The mere fact that disciplinary proceedings are con-
templated or under consideration against an employee does not consti-
tute a good ground for not considering the employee eoncerned for 
promotion if he is in the zone of consideration nor would it constitute a 
good ground for denying the promotion if the employee is considered 
otherwise fit for promotion. Clause 9 of the Promotion Policy of the 
Bank gives rise to the implication .that till disciplinary action is in pro-
cess or initiated, the officer concerned, against whom allegations of 
misconduct might be made, can neither be excluded from consideration 
for promotion if he is entitled to be considered for promotion otherwise 
nor can the promotion be denied to him. In these circumstances, when 
D 
the promotion from Scale II to Scale Ill was granted to respondent, 
there could be no question of condonation of the earlier acts of miscon-
duct by reason of this promotion because in law and in view of clause 9 
of the Promotion policy appellant had no option but to consider respon-
dent for promotion and if he was otherwise found fit for promotion to 
E 
promote him. Hence the charge~heet submitted against respondent and 
the disciplinary proceedings pursuant to the said charge-sheet cannot 
be said to be bad in law and cannot be interferred with on the ground of 
condonation. Therefore, the courts below were in error in holding that 
the earlier alleged acts of IDi'iCOnduct of respondent had been condoned by the 
appellant and basing their conclusions thereon. [476G-H; 477F-H; 488A] 
F 
L. W. Middleton v. Horry Play Fair, AIR 1925 Cal. 87; District 
Council, Amraoti through Secretary v. Vithal Vinayak Bapat, AIR 1941 
Nagpur 125 and Audhraj Singh v. State of Madhya Pradesh, AIR. M.P. 
284; held inapplicable. 
2. In view of the fact that the appellant-bank has agreed that 
G 

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