Karnataka High Court
J.I.Havaldar S/O Imam Sab vs State Bank Of India on 23 February, 2022
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IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 23RD DAY OF FEBRUARY, 2022
BEFORE
THE HON'BLE MR. JUSTICE R. NATARAJ
WRIT PETITION NO.64628 OF 2009 (S-DIS)
BETWEEN:
J.I. HAVALDAR S/O. IMAM SAB,
AGE ABOUT 53 YEARS, EARLIER WORKING AS
DEPUTY MANAGER, AN OFFICER IN MIDDLE MANAGEMENT,
GRADE SCALE-II AT STATE BANK OF INDIA, HIREKERUR,
SINCE ILLEGALLY DISMISSED FROM SERVICE AND RESIDING
AT NO.376, SIDDARTH COLONY, 3RD CROSS, OPP: NEW BUS
STAND, BELGAUM ROAD, DHARWAD-580 006.
... PETITIONER
(BY SHRI. V.R. DATAR & SHRI P.H. GOTKHINDI, ADVOCATES)
AND:
STATE BANK OF INDIA,
A BODY CONSTITUTED UNDER STATE BANK OF INDIA ACT, 1955,
HAVING ITS CENTRAL OFFICE AT MADAM COMA ROAD,
HAVING LOCAL HEAD OFFICE, 65, ST. MARK'S ROAD,
REP. BY CHIEF GENERAL MANAGER, BENGALURU-560 001.
... RESPONDENT
(BY SHRI. SYED KASHIF, SHRI SURESH GUNDI,
SHRI. PRADEEP S.SAWKAR & SHRI K.ANANDRAMA, ADVOCATES)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 OF THE
CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED
24.08.2007(UNDER ANNEUXRE-G TO THE WRIT PETITION) PASSED BY
THE DISCIPLINARY AUTHORITY AND ORDER DATED 10.06.2008,
PASSED BY THE APPELLATE AUTHORITY (UNDER ANNEXURE-J TO THE
WRIT PETITION) PASSED BY THE APPELLATE AUTHORITY BY ISSUE OF
THE WRIT IN THE NATURE OF CERTIORARI AND GRANT ALL
CONSEQUENTIAL BENEFITS FOLLOWING THERE FROM INCLUDING
REINSTATEMENT INTO SERVICE OF THE BANK WITH FULL MONETARY
BENEFITS AND CONTINUITY OF SERVICE IN THE INTEREST OF
JUSTICE AND EQUITY.
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THIS PETITION COMING ON FOR ORDERS, THIS DAY, THE
COURT MADE THE FOLLOWING:
ORDER
The petitioner has challenged the legality and correctness of the order dated 24.08.2007 passed by the respondent by which he was dismissed from service under Rule 67-J of the S.B.I. Officers Service Rules, 1992, which was confirmed by the appellate authority in terms of the order dated 26.10.2008.
2. The petitioner joined service at the respondent in the year 1977 as a Clerk-cum-cashier. Later, after several levels of promotion, he was posted as Deputy Manager (Cash) (henceforth referred to as "Cash Officer") cum System Administrator at Hirekerur Branch of the Bank from October-2005. He was one of the joint custodians of the cash chest along with Shri. M. G. Vasudevayya, who was the Deputy Manager. The petitioner as joint custodian of the cash chest, reported that there was a cash shortage of Rs.65,00,000/- on 06.12.2005. The respondent lodged a complaint with the jurisdictional police on 09.12.2005 :3: alleging that between 28.10.2005 and 08.12.2005, the petitioner as a co-joint custodian had negligently caused loss of a sum of Rs.65,00,000/- to the respondent. The jurisdictional Police registered Crime No.208/2005 against the petitioner and co-joint custodian, Mr. Vasudevayya for the offences punishable under Sections 408 and 409 of IPC. Later the petitioner was placed under suspension by an order dated 08.12.2005 for alleged lapses in handing currency chest balance resulting in cash shortage of Rs.65,00,000/-. Since, a complaint was lodged against the petitioner before the Police, he was taken into judicial custody on 04.01.2006 and he was remanded to judicial custody till 12.06.2006. While the petitioner was in judicial custody, a letter dated 25.02.2006 accusing the petitioner of cash shortage of Rs.65,00,000/- was issued by the respondent and the petitioner was called upon to submit his explanation within 10 days from the date of receipt of the letter. Since the petitioner was in judicial custody, he alleged that he could not effectively reply to the notice and therefore he sought for some more time to submit his reply. :4: Following the above, disciplinary proceedings were initiated by issuing charge sheet dated 19.9.2006 containing the following charges:
1. The official, while handling joint custody of cash as Deputy Manager (Cash) failed to exercise administrative control and protect the Bank's interest as laid down in Book of Instructions-
General Instructions, Volume I, Chapter 6 para 1.1 and 1.3 (Page 223).
1.1 The official did not submit cash verification/Handing over-Taking over certificates to the appropriate authority on various occasions as laid down in Book of Instructions-General Instructions, Volume I, Chapter 6 Para 19.4 (Page
242), Few such dates are:
i) 15th October 2005
ii) 13th November 2005
iii) 7th November 2005
1.2.1.1 Entries relating to handing over/taking over
of keys were also not recorded by the official. Few such dates are:
i) 6th September 2005
ii) 13th September 2005
iii) 15th October 2005
iv) 7th November 2005
1.3 The official failed to carry out periodical verification of currency chest balances as laid down in Book of Instructions-General Instructions, Volume I, Chapter 6 Para 13.3 (Page 234) and Para 16.8 (Page 239). 1.4 The official did not ensure presence of his joint custodian [Dy. Manager (Accounts)] during strong room operations as the other official used to open the strong :5: room door in the morning and keep it opened through out the day allowing free entry/access to all without any restrictions and engaged himself in routine duties for the day at his desk. This was contrary to Bank's instructions as laid down in Book of Instructions - General Instructions, Volume I, Chapter 7 Para 2.6 (Page 256). 1.5 The official failed to ensure that the balances in the chest books (TE 1) are authenticates on various dates, especially during 11th November 2005 to 8th December 2005. (Instructions as laid down in Book of Instructions - General Instructions, Volume I, Chapter 6 Para 16.7 (Page 238).
Some of the dates are: 01.11.2005, 16.11.2005 and 21.11.2005 to 08.12.2005.
1.6 The official failed to maintain bin cards for all the bins as per extant instructions. Empty bins were kept unlocked.
1.7 Instances of cash shortages in Single Window Operator's counters were not reported to the controllers as laid down in Book of Instructions - General Instructions, Volume-I, Chapter 6 Para 13.6 (Page 235). Few Instances are as under:
a) Cash shortage of Rs.2,542/- in small coins received during September 2004.
b) Cash shortage of Rs.20,000/- in SWO's counter of Sri. V. B. Chittur.
c) Cash shortage of Rs.50,000/- in SWO's counter of Sri. B. V. Chandrappa during September 2005.
1.8 The grill door of the strong room was not kept locked during the operations as laid down in Book of Instructions - General Instructions, Volume I, Chapter 7 Para 2.7 (Page 256).
1.9 An aluminum enclosure/partition created in front of the strong room with locking facilities to block the Vision of the strong room operations, was kept open throughout the day and was allowed to be used as a passage. :6:
1.10 The official failed to restrict unauthorised visitors after/before banking hours in contravention of laid down Instructions - General Instructions, Volume I, Chapter 7 Para 2.6 (Page 256). As against the security norms of the Bank, the official's young son was reportedly visiting the branch in the evenings with his school bag and stay for some time on his way back home from school. 1.11 The official did not ensure proper maintenance of Standard Books/registers in the Cash Department, like Cash receipt/delivery book as entries made were not authenticated by the cashier/SWO. Receipt/Payment scrolls generated by the system were neither being serially numbered, nor were they being signed by the concerned cashier/officer.
1.12 Hotline connected between the branch and the Police Station was dysfunctional. The official did not initiate any action, to put the system in place. 1.13 The official, while assuming charge as Deputy Manager (Cash), failed to verify the duplicate keys lodged with Ranebennur branch in order to ensure that the keys lodged are intact. (As laid down in Book of Instructions- General Instructions Volume I Chapter 7 Para 6.2 (Page
261).
2.1 A cash shortage of Rs.65 lakhs was detected on 6th/7th Dec 2005 during the official's incumbency as Joint Custodian of the Currency Chest. As such, he is responsible for the loss suffered by the Bank.
3. The disciplinary authority appointed its Chief Manager as the Inquiring Authority who after conducting an enquiry submitted his report holding the following charges were proved.
(a) Charge No.1:
The official, while handling joint custody of cash as Dy. Manager (Cash) failed to exercise administrative control and protect the Bank's interest as laid down in Book of :7: Instructions-General Instructions, Volume 1, Chapter 6, Para 1.1 and 1.3 (page 223)
(b) Charge No.1.8:
The grill door of the strong room was not kept locked during the operations as laid down in Book of Instructions-General Instructions, Volume 1, Chapter 7, Para 2.7.
(c) Charge No.1.11:
The official did not ensure proper maintenance of Standard Books/Registers in the Cash department, like Cash receipt/delivery book as entries made were not authenticated by the cashier/SWO. Receipt/Payment scrolls generated by the system were neither being serially numbered, nor were they being signed by the concerned cashier/officer.
(d) Charge No.1.13:
The official, while assuming charge as Dy. Manager (Cash) failed to verify the duplicate keys lodged with Ranebennur Branch in order to ensure that the keys lodged are intact. (As laid down in Book 1 of instructions- General Instructions Volume 1 Chapter 7, Para 6.2 (page
261).
(e) Charge No.2.1:
A cash shortage of Rs.65 lakhs was detected on 6th/7th December 2005 during the official's incumbency as Joint custodian of the Currency chest. As such, he is responsible for the loss suffered by the Bank.
and the following charges were partly proved.
(a) Charge No.1.3:
The official failed to carry out periodical verification of Currency chest balances as laid down in Book of Instructions-General Instructions, Volume 1, Chapter 6, Para 13.3 (page 234) and Para 16.8 (page 239).
(b) Charge No.1.5:
The official failed to ensure that the balances in the chest books (TE 1) are authenticated on various dated especially during 11th November 2005 to 8th December 2005 (Instructions as laid down in Book of Instructions-:8:
General Instructions, Volume 1, Chapter 16.7 (Page 238). Some of the dates are 01.11.2005, 16.11.2005 and 21.11.2005 to 08.12.2005.
and the following charges were not proved.
(a) Charge No.1.1:
The official did not submit cash verification/Handling over-Taking over certificates to the appropriate authority on various occasions as laid down in Book of Instructions-General Instructions, Volume 1, Chapter 6, Para 19.4 (page 242) Few such dates are: 15th October 2005, 13th November 2005 and 7th November 2005.
(b) Charge No.1.2:
Entries relating to handing over/taking over of keys were also not recorded by the official. Few such dates are:
i) 6th September 2005 ii) 13th September 2005 iii) 15th October 2005 iv) 7th November 2005 (c) Charge No.1.4:
The official did not ensure presence of his joint custodian [Dy. Manager (Account)] during strong room operations as the other official used to open the strong room door in the morning and keep it opened throughout the day allowing free entry/access to all without any restrictions and engaged himself in routine duties for the day at his desk. This was contrary to Bank's instructions as laid down in Book of Instructions-General Instructions, Volume I, Chapter 7, Para 2.6 (Page 256).
(d) Charge No. 1.6:
The official failed to maintain bin card for all the bins as per extant instructions. Empty bins were kept unlocked.
(e) Charge No.1.7:
Instances of Cash shortages in Single Window operator's counters were not reported to the Controllers as laid down in Book of Instructions-General Instructions, Volume I, Chapter 6, Para 13.6 (Page 235). Few instances are as under:
a) Cash shortage of Rs.2,542/- in small coins during September 2004.:9:
b) Cash shortage of Rs.20,000/- in SWO's counter of Shri V. B. Chittur.
c) Cash shortage of Rs.50,000/- in SWO's counter of Shri B. V. Chandrappa during September 2005.
(f) Charge No.1.10:
The official failed to restrict unauthorized visitors after/before banking hours in contravention of laid down Instructions-General Instructions, Volume I, Chapter 6, Para 2.6 (Page 256). As against the security norms of the Bank, the official's young son was reportedly visiting the branch in the evenings with his school bag and stay for some time on his way back home from school.
(g) Charge No.1.11:
The official did not ensure proper maintenance of Standard Books/registers in the Cash Department, like Cash receipt/delivery book as entries made were not authenticated by the cashier/SWO. Receipt/Payment scrolls generated by the system were neither being serially numbered, nor were they being signed by the concerned cashier/officer.
(h) Charge No.1.12:
Hotline connected between the branch and the Police Station was dysfunctional. The official did not initiate any action to put the system in place.
4. Based on the above report, the disciplinary authority issued a second show cause notice calling upon the petitioner to show cause as to why the major penalty of dismissal should not be imposed. The petitioner replied to the said second show cause notice. Following this, the disciplinary authority passed an order dated 24.08.2007 dismissing the petitioner from service. A departmental : 10 : appeal filed before the appellate authority also met the same fate.
5. Being aggrieved by the above orders, the present writ petition is filed.
6. The learned counsel for the petitioner submitted that the enquiry conducted was not in accordance with the principles of natural justice inasmuch as sufficient opportunity was not provided to the petitioner to submit his reply, as he was in judicial custody and could not gain access to crucial records. He also submitted that the Articles of charge was vague as the basis of the Article of charge itself was not mentioned. He also submitted that at the enquiry, the enquiry officer failed to provide adequate opportunity to the petitioner to lead his evidence. He also contended that shortage of cash was a regular feature that was observed by the Bank and the Bank had therefore issued a circular dated 31.07.2006, admitting that there were lapses in almost every Bank. He therefore submitted that unless there was clear finding when the cash went : 11 : missing, it was impossible to pinpoint the complicity of the petitioner in alleged missing of cash. He further stated that the witnesses for the Bank were also unable to point out when the cash was missing and therefore, it was preposterous for the respondent to contend that the petitioner was responsible for the loss of cash.
7. The learned counsel further contended that the respondent-Bank has a set of norms relating to handling currency chest at the respondent and the same had to be followed strictly. He stated that none of the norms prescribed were followed in the case of the petitioner, when he took over charge and it was also pointed out that the zonal office of the respondent was supposed to conduct a yearly inspection of the currency chest, which was not conducted. He invited the attention of this Court to clause No.19.5 of the said cash department systems and procedure which is extracted below:
"19.5 Whenever a post of the Cash Officer changes hands the outgoing and incoming officials will sign a certificate in the following form (suitably amended, wherever necessary), : 12 : "We the undersigned, Shri..................(relieved officer) and Shri.....................(relieving officer), beg to advise having respectively made over and assumed joint charge, with the ........................(insert designation of the concerned joint custodian) of the branch, of the bullion and/or gold ornaments under lien to the Bank and, with the ...................... (insert designation of the concerned joint custodian) of the branch, of the Branch Cash Balance, Currency Chest Balances, Small Coin Depot Balances (strike out whichever is not applicable) and the stocks of travellers cheques (Rupee and other currencies), foreign currency notes held at the branch as from the close of business on the........................... (date)."
Both, the relieving and the relieved, Cash Officers should sign the Cash Balance Book, Currency Chest Book and Small Coin Depot Book as on the date of the relief. The incoming official will also initial against the respective balances in the other relative registers and against the individual items in the gold loan ledgers. He will also initial individual items in the bill registers relating to the bills on hand.
8. The learned counsel also invited the attention of this Court to Ex.R.5 which is a currency chest book record on 05.12.2005, 06.12.2005 07.12.2005, 08.12.2005 & 09.12.2005, which indicated that the respondents had tampered the recording to give an impression that Rs.65,00,000/- was missing. Therefore he submitted that the enquiry officer did not consider this and many other inconsistencies in the case of the respondents but, the enquiry officer proceeded on an assumption that the : 13 : petitioner was joint custodian of the cash chest and therefore he was responsible for the missing cash.
9. He further contended that as per the S.B.I. Officers Service Rules 1992, a joint enquiry was contemplated including the co-custodian of cash currency chest. However in the present case, the respondent held separate enquiry against the two custodians. He therefore submitted that the entire process of enquiry and the consequent application of mind by the disciplinary authority was without any basis. The learned counsel relied upon following judgments:
1) Ranjit Thakur Vs. Union of India and Others reported in (1987) 4 SCC 611.
2) P.K. Dixit and others Vs. State of U.P. and others reported in (1987) 4 SCC 621.
3) Lalla Ram Vs. Management of D.C.M
Chemical Works Ltd. and Ors. In Civil
Appeal No.351/1971.
10. The learned counsel for the respondent submitted that this Court under Article 226 of the Constitution of India should not upset findings of fact recorded in a departmental enquiry, more particularly, when such finding is based on : 14 : evidence. In this regard, he relied upon the judgment of the Hon'ble Apex Court in (a) Deputy General Manger (Appellate Authority) and Others Vs. Ajai Kumar Srivastava reported in (2021)2 SCC 612 and (b) Union of India and Others Vs. P.Gunasekaran reported in 2015(2) SCC 610. He contended that a mere technical violation of principles of natural justice cannot render a decision invalid. He claimed that when the inquiring authority concluded the enquiry in the presence of the petitioner, he did not raise any objection and did not insist to lead his evidence. He relied upon the judgment of the Apex Court in State Bank of Patiala and others Vs. S.K.Sharma reported in (1996)3 SCC 364 and Syndicate Bank and others Vs. Venkatesh Gururao Kurati reported in (2006)3 SCC 150.
11. Learned counsel further contended that the petitioner was appointed as a Deputy Manager (Cash) cum System Administrator and therefore was required to know the procedure prescribed for the purpose of handling cash in the currency chest. He argued that petitioner cannot plead ignorance of the procedure and cannot claim that the entries made in the currency chest register were without his notice.: 15 :
12. Learned counsel further contended that the petitioner owed a duty to satisfy himself each evening in the presence of the co-joint custodian that the balance corresponds exactly with the entries in the cash balance book. He submitted that the petitioner had failed to take steps to ascertain the exact amount of cash lying in the chest.
13. Besides this, the learned counsel submitted that the enquiry officer has also recorded a finding on various other charges and had held that many of the charges against the petitioner were proved. He therefore submitted that the petitioner was negligent in the matter of handling cash. Learned counsel for the respondent submitted that the criminal case filed against the petitioner in C.C. No.34/2011, resulted in his conviction in terms of the judgment dated 12.06.2018. He therefore submitted that the major punishment imposed by the respondent was justified.
14. At this stage, the learned counsel for the petitioner submitted that the respondent has shown shortage of cash as withdrawal after obtaining permission from the competent authority and the balance was corrected as on 08.12.2005.
Learned counsel therefore submitted that even the respondent : 16 : was unsure the date when the cash was short in the currency chest and also was unsure of the fact that the petitioner was responsible for the cash shortage.
15. He further contended that the finding in the criminal case is of no use for the proceedings in the departmental enquiry and therefore the same need not be looked into. Learned counsel also contended that the major punishment of dismissal from the service was unwarranted in view of the fact that the respondent had not proved the complicity of the petitioner in the shortage of cash from the currency chest. He therefore submitted that the order passed by the disciplinary authority may be interfered with.
16. I have considered the submissions made by the learned counsel for the parties.
17. This Court in conscious that while exercising jurisdiction under Article 226 of the Constitution of India, it should not interfere with the findings of the fact arrived at in the departmental proceedings except in a case of mala fide exercise of power or when there is no evidence to support a finding or : 17 : where a finding is such that no man acting reasonably could have arrived at.
18. Since the petitioner has raised preliminary contentions that he was not given adequate opportunity to submit his defense and that the basis of the articles of charge was not furnished and that he was not given opportunity to lead evidence, it is necessary to consider the same before dealing the other serious contentions. A perusal of the records discloses that the petitioner denied the allegations made against him by a one- line reply dated 22.12.2006. He did not raise any concern that he is handicapped in submitting his defense due to his arrest in the criminal case. Further, the records disclose that he was furnished with the documents and the list of witnesses along with the articles of charge, which is evident from the letter dated 19-09- 2006 where it was specifically mentioned "A list of documents by which and the list of witnesses by whom the allegations are proposed to be substantiated in the event of holding an enquiry, are annexed to this letter". The petitioner did not complain that the documents/ list of witnesses were not furnished when he submitted his reply on 26-09-2006 to the articles of charge. Even at the start of the enquiry, he was provided with all the : 18 : documents and the list of witnesses. Therefore, he cannot claim that the respondent was guilty of not complying with the principles of natural justice. The petitioner held a senior position in the bank and was expected to possess knowledge/ expertise of the procedures associated with his job profile. The petitioner cannot therefore contend that he had no adequate opportunity to submit his defense or defend the charges. At the enquiry, the petitioner did not demand an opportunity to lead his evidence, though the inquiring authority openly declared in the presence of the petitioner that the inquiry was concluded. The petitoner cannot now turn the tables against the respondent to claim that he was not given enough opportunity to lead evidence.
19. It is not in dispute that the currency chest is in the joint charge of the Deputy Manager (Cash) and the Branch Manager. The Cash Officer would have the primary control over the cash, while the joint custodian will maintain the joint custody of the cash in the strong room to the extent required.
19.1. The duties, function and responsibilities of the Cash Officer inter-alia is contained in clause (1.3), the same is extracted below:
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"1.3. The duties, functions and responsibilities of the Cash Officer will, inter alia, cover:
i. Responsibility for the correctness of the Branch cash, currency chest and small coin depot balances.
ii. Distribution and collection of cash within the branch and remittances between the branch and link branches, sub-offices, if any.
iii. Responsibility for the custody and safety of all cash a. from the point of withdrawal from the strong room until distribution, b. from the point of collection until deposit in the strong room, c. held in the strong room jointly with the authorised supervising official.
iv. Responsibility for arrangement for sending remittance of treasure, etc. to RBI or on RBI's account to other banks.
v. Responsibility for protection of other items which represent money and which may from time to time be entrusted to him.
vi. Responsibility for ensuring that each packet of notes turned into the vault, irrespective of denomination, bears a note slip, properly and securely attached thereto and signed by the employee who prepared the packet and bearing the day's date stamp and, that each bag of coin contains a slip signed by the employee who prepared the bag.
vii. Responsibility for the proper conduct of work in the cash dept, for ensuring that adequate safety measures are taken in the handling of cash, etc. and that the instructions laid down by the Bank with regard thereto are duly observed.
viii. Responsibility for the proper exercise of receipting and passing powers delegated to him.: 20 :
ix. Responsibility for administration of the Cash Dept. and supervision and control over the Cash Dept. employees and their work.
(Nothing contained herein above shall have the effect of defining or delimiting the duties and responsibilities of the Cash Officer in other spheres of the Bank's work devolving upon him by virtue of contract, custom or usage, procedure and instructions.)"
19.2. The procedure for handling Cash is also provided in Clause (2), the same is extracted below:
"2. Procedure for handling Cash 2.1. Maintenance of Cash Receipts /Delivery Book Every employee /official (e.g. assistant, Senior Assistant, Teller, Single Window Operator, Special Assistant, Cash Officer) in the cash dept. will maintain, for recording cash handled by him, a Cash Receipt / Delivery Book. The physical transfer of cash between any two employees will be made only after making appropriate entries in the Cash Receipt / Delivery Books maintained by the concerned employees. The employee/official receiving the cash must acknowledge for the same by signing against the relative entry in the book of the employee delivering the cash. The latter will also initial in the former's book for correctness of the entry in his book. The Cash Receipt/Delivery Book must not leave the concerned employee's custody during the day, and while not in use, it should be kept locked in his drawer/box. Overnight, the books will be kept in the strong room. In the event of loss or misplacement of the book, the accountability of the concerned employee in respect of cash taken from other employees will be determined on the basis of entries appearing in the other employees' Cash /Receipt Delivery Books wherein, he would have acknowledged receipt of the amount by signing in full.
2.2. After the Cash Officer has taken out of the strong room cash for the day's operations, assistants (cash) / Senior Assistants (cash) / Tellers / Single : 21 : Window Operators (SWOs), as the case may be, would obtain from the Cash Officer their requirements of cash on the basis of their estimate of the day's requirements. While taking over the notes, the receiving employee will examine and count physically, loose pieces of notes, if any. He will count and confirm the number of packets in the bundles received by him. From the cash received, he will break open the bundles one at a time in the presence of the Cash Officer / Senior Assistant/ any other authorised official and scrutinise the packets to ensure that the packets are duly prepared in the manner laid down and bear the note slips duly signed by the employees preparing the packets, and in case of denominations of Rs.500 and above, also recounted by Cash Officer /Special Assistant.
He will further verify the correctness of the note packets. If any defective or forged note or shortage is detected in any packet, Cash Officer/ Special Assistant will arrange to recover the amount of shortage from the concerned employee/official, who is responsible for the said deficiency. He will, thereafter, give receipt for the cash in the Cash Receipt/Delivery Book maintained by the Cash Officer and record the amount of cash received by him in the Cash Receipt /Delivery Book maintained by him. Cash Officer will initial against the entry in the receiving employee's Book.
2.3. While handling the day's operations, if at any time cash falls short of the requirements, the concerned employees will obtain fresh supplies from the Cash Officer in the same manner as indicated above. They may obtain fresh supplies from other employees if so directed by the Cash Officer. While taking over the notes/note packets form other employees during the day, the correctness of the notes /note packets will be verified in the presence of the employee delivering the notes and duly recorded /acknowledged in each other's Cash /Receipt Delivery Books. In case any defective / forged note or shortage is detected while taking cash from other employees, the matter should be brought to the notice of the Cash Officer. 2.4 The employee receiving the cash will be solely responsible for the custody and safety of all cash : 22 : entrusted to his care or received by him in the course of his duties and for the protection of other items, which represent money. He must take due care of cash and other items at his counters. For this purpose he will be provided with a cash box /cash drawers with locking arrangements, and when leaving the counters, he must ensure that all cash is properly locked up in his cash box /drawers. The keys of the drawers /cash box must always remain in his possession. The duplicate of the keys. of his drawers/boxes will be lodged with the Joint Custodians in a packet duly sealed by him. The employees at the cash /single window counters should also handle with care all instruments, such as cheques, drafts, debit /credit vouchers, etc., to ensure their safe-keeping from the moment these are received by them until their proper delivery to other designated employees /officers." 19.3. The manner of taking over of cash by the Cash Officer is stipulated in Clause (9) and the same is extracted below:
"9. Taking over of Cash by Cash Officer 9.1 At the end of the day or at any time during the day when accumulation of cash is in of the requirements, Cash Officer /Special Assistant will take over custody of the cash from the employees (i.e. assistants, Senior Assistants, Tellers, SWOs, etc.) and will arrange to turn it into the vault in the manner stated below:
i. The note packets, for which the recounting responsibility rests with the Cash Officer/Special Assistant (i.e. note packets of Rs.500 and above), will be taken over by him after recounting and signing on the note slips in the manner detailed here before.
ii. Cash Officer will ensure that the packets received from the employees bear the note slips signed by that employee and which are bearing the current day's date.: 23 :
iii. He will ensure that the seals on note packets of all denominations taken over by him are intact. Special care must be taken to scrutinise the portion of the note slip immediately below the transparent seals. There should be no tear or any mark of tampering on any of the note slips. If he finds that the seal on any of the note packets has been tampered with or the note slip is torn, he will not accept such packet unless a fresh packet is properly prepared and duly signed on its covering note slip.
iv. If the note slip on the packet has not been signed by an employee, he will cause it to be signed by the concerned employee or any other employee, after doing the needful. If any note packet is turned into the vault without an employee's signature thereon, the Cash Officer will be deemed to have prepared the packet himself and will be held responsible for quality and quantity of notes contained in such packets.
V. The Cash Officer will ensure that each complete bundle of note packets to be lodged into the vault contains ten note packets. The fractional bundles of soil /non-issuable note packets need to be stored separately and converted into complete bundles at the earliest opportunity.
9.2. The Cash Officer is authorised to verify cash with the Assistants (Cash), tellers, etc. to ensure that they do not carry any excess cash at any time during the day. They should, to that end, carry out 'intra-day' verification of cash at the cash counters at irregular intervals. The 'intra-day cash verification may be used to curb tendency of some of the employees to pocket cash without accounting the same in the Bank's books. Such verification should be carried out in a judicious manner so as to have an exemplary effect on the morale of the staff working at the branch and at the same time not affecting the customer service at the cash counters.
The periodicity of verification may be decided by the Branch Manger in consultation with the : 24 : Controllers so as to avoid indiscriminate use of this provision. A suitable record of all such verifications should be maintained by the Cash Officer in a Register with the columns mentioned below. The Register should be scrutinised by the Controllers during their visits to the branch. Any omissions /lapses revealed during such verifications should be advised by special report to the Controlling Authority Columns in the Register will be as under:
Date, Time, Name of the Employee & Designation whose cash is verified, Name of the Cash Officer and other officer carrying /witnessing the verification, Details of findings /observations, Signature of the Employee involved. Signature of the Cash Officer & the witnessing officers, Signature of Accountant/ Accounts Manager/Branch Manager."
19.4. The method of operating Vault Register is provided in Clause (12), which is extracted below:
"12. Vault Register The denomination-wise details of notes and coins withdrawn from or deposited into the currency chest (at currency chest branches) and the joint custody portion of the Branch Cash Balance (i.c. excluding the Cash Officer's Hand Balance at non- currency chest branches) must be entered in the Vault Register by the authorised supervising official jointly in charge of cash/currency chest (hereafter referred to as Joint Custodian). The Joint Custodian and the Cash Officer will initial all the entries made and the resultant balance worked out in the said register. The Vault Register must always remain in the strong room. The Cash Analysis Book, which is a denomination-wise record of deposits and withdrawals of notes, will be written from the relative entries in the Vault Register. The entries and the resultant balances in each section of the Cash Analysis Book will be verified and initialled by : 25 : both the officials. At branches where transactions in the joint custody portion of the Branch Cash Balance are few, the Cash. Analysis Book may be dispensed with, the relative entries in the Cash Balance Book being checked from the Vault Register and the Uncurrent Coin Register."
19.5. Clause (13) provides for particulars of the Bank Cash Balance at the Bank at the close of business of each day and the same is extracted below:
13. Bank Cash Balance 13.1 The particulars of the Bank Cash Balance at the close of business each day will be recorded in the Cash Balance Book, duly bifurcated into 'Single Custody' and 'Joint Custody'. The entries in the Cash Balance Book will be checked and signed by the Cash Officer and by the Joint Custodian, after he has compared the items of the Joint Custody' balance with the Cash Analysis Book and the Uncurrent Coin Register and the total with the Vault Register. The 'Single Custody' balance, which need be held by the Cash Officer under his lock and key, will be kept as low as possible. The Cash Officer will be responsible for the Branch Cash Balance held in his single custody.
13.2 The Joint Custodian must ensure that the total of single and joint custody portions in the Cash Balance Book agrees with the closing Branch Cash Balance arrived at in the Cash Officer's Jotting Book. The currency chest branches should work out and keep very small closing Cash Balance, the whole of which should be held in the single custody of the Cash Officer.
13.3 The Joint Custodian will satisfy himself each evening that the "Joint Custody balance corresponds exactly with the entries in the Cash Balance Book. He will also check one or more items in the Cash Officer's hand balance and initial against the items checked in the Cash Balance : 26 : Book. At least once a week on different days he will check the whole of the Bank Cash Balance and evidence such check in the Branch Cash Balance Book.
13.4 The Cash Balance will ordinarily consist of nothing but notes and coins. In the event of any cash payment being made or any cash deposit being received after the cash books have been closed, the relative vouchers must be entered the same day in the cash assistant's books (i.c.., payment registers or receipt scroll, as the case may be) and, in case of payment, also in the passing official's scroll, under the following day's date and recorded in the Cash Balance Book. Any deviation from this instruction will be regarded as a serious offence.
13.5 Before taking notes and coins into the currency chest (at the currency chest branches) and into the 'joint custody balance (at the non-currency chest branches), the Joint Custodian will check their correctness in the following manner:
i. He will personally verify and confirm that each complete note bundle being turned into the vault contains 10 packets of notes of the same denomination. He will likewise verify and confirm the number of packets in the fractional bundles (i.e. bundles containing less than 10 packets), if any. Loose note packets, if any, should be verified to ensure that they have been duly secured as per the procedure prescribed in para 5.1 and 5.2 above. He will also confirm that the soiled notes being turned into the vault have been duly sealed into bundles as prescribed in para 6 above. vault.
ii. He will have all bags of rupee coins and fifty paise coins weighed in his presence and a number of bags emptied to confirm that the contents are genuine coins and that they contain denomination slips duly signed by the Assistants counting the bags. Out of a portion of the bags he will take and count a few pieces and have the remainder counted : 27 : in front of him so as to confirm the contents in such bags.
He will occasionally have a similar check in respect of other small coins and uncurrent coins.
13.6 Shortage in the Cash Balance Any shortage in the Cash Balance should be recovered the same day in accordance with the accountability criteria laid down in that behalf. In all cases when the amount of shortage cannot be recovered in full from the concerned employee /official, the shortfall should be debited to Protested Bills Account under advice to the Controlling Authority. It may be debited to Suspense Account in case the Annual Return of Protested Bills Account has been submitted to the Controlling Authority and the branches have been instructed not to raise any entries in the Protested Bills Account after a specified date. In such a case the amount, if not meanwhile recovered, should be transferred to Protested Bills Account on the first business day of the following year. All shortages, whether recovered the same day or not, must be immediately reported in writing to the Controlling Authority and their detailed instructions sought.
The Controlling Authority may sanction to the defaulting employee /official a demand loan, on merits of each case, repayable in suitable instalments. On receipt of such sanction, the relative entry in the protested bills A/c / Suspense A/c will be adjusted from the amount of the demand loan granted to the concerned employee /official.
13.7 Excess in the Cash Balance Any excess in the Cash Balance must be credited the same day to Sundry Deposits Account as on the following working day's date. The relative credit voucher being prepared and signed by the authorised supervising official and entered in the Cash Balance Book after following the procedure laid down in para 13.4 above. The refunds from such amounts may be permitted only with the prior : 28 : approval of the Controlling Authority unless the amount falls within the discretionary powers vested in the Branch Manager. A suitably ruled register should be maintained to record all excesses and shortages under authentication of the Cash Officer and the Joint Custodian. The Branch Manager or the Manager (Accounts), if any, should periodically peruse this register and initiate appropriate measures, wherever necessary, to reduce such occurrences."
19.6. It also provides for verification of cash, currency chest and small coin depot balances in Clause (19), the same is extracted below:
"19. Verification of Cash, Currency Chest & small coin Depot Balances 19.1 The Zonal Offices will arrange for the verification of cash, currency chest and small coin depot balances held at branches under their jurisdiction once in every six months (ie. Jan-June & July-Dec.) through officers other than the custodians of the cash/chests. The RBI requires each Local Head Office to carryout, through their officers, a surprise check of at least 10% of the currency chest branches in their respective circles in each half year. The LHOs should identify critical Currency Chests, where incidents of shortages have been detected in the preceding quarter, and carry out verification of the chest balances thereat. The Reserve Bank of India, at its discretion, may also carry out verification of any number of the currency chests and small coin depots. The circle auditors undertake verification of the cash, currency chest and small coin depot balances as part of their audit exercise. The Central Office Inspecting Officials will carry out verification of the branch cash balance. They may request the Local Head Office concerned to arrange for immediate verification of the chest and small coin depot balances, if they notice any serious deficiencies in the management of the chests/depots.: 29 :
19.2 The verifying official will break open the bundles /note packets in the presence of an authorised official and Assistant/Senior Assistant. He will count the number of pieces in the packet manually or with the help of Note Counting Machine. After verification, fresh packets will be prepared and secured in the manner prescribed in para 5 & 6 above. Any shortage or irregularity found in the quality or quantity of the notes will be recovered from the concerned Assistant (cash), etc. / Cash Officer who prepared /recounted the relative note packet after duly recording it.
19.3 The Verifying Official will adopt the following method while carrying out verification of cash:
i. All notes of higher than Rs.100/-
denomination will be counted in detail.
ii. All notes of other denominations will be verified by the count of packets and bundles. Only a small percentage, (to be fixed by the Circle at its discretion), of note packets will be counted in detail.
iii. Only a percentage of the number of bags of rupee and fifty paise coins need be weighed.
iv. At the time of such verification the designated officer / circle auditor/Inspecting Official will also check the following items, a. Articles in Safe Deposit.
b Travellers Cheques (Rupee & other
currencies).
c. Foreign Currency Notes.
d. Such other items which the ZO/LHO
may specify.
19.3 The verification official will submit a cash verification report to the Controlling Authority on form COS 46. He will also address suitable letters to, : 30 : i. Currency Officer, concerned seeking confirmation of the currency chest and small coin depot balances.
ii. Zonal Office concerned, seeking confirmation
of the stock of Rupee Travellers Cheques
held at the branch, and
iii. Foreign Bank(s) concerned, seeking
confirmation of the foreign currency
travellers cheques.
Copies of of the above letters should be sent to the Controlling Authority for necessary follow-up.
19.4 When the post of the supervising official in joint charge of the cash changes hands, the official taking over will carry out the verification as laid down above.
19.5 Whenever a post of the Cash Officer changes hands the outgoing and incoming officials will sign a certificate in the following form (suitably amended, wherever necessary).
"We the undersigned, Shri. ................................. (relieved officer) and Shri ................................., (relieving officer), beg to advise having respectively made over and assumed joint charge, with the ................................. (insert designation of the concerned joint custodiar) of the branch, of the bullion and/or gold ornaments under lien to the Bank and, with the ................................. (insert designation of the concerned joint custodian) of the branch of the Branch Cash Balance, Currency Chest Balances, Small Coin Depot Balances (strike out whichever is not applicable) and the stocks of travellers cheques (Rupee and other currencies), foreign currency notes held at the branch as from the close of business on the ................................. (date)."
Both, the relieving and the relieved, Cash Officers should sign the Cash Balance Book, Currency Chest Book and Small Coin Depot Book as on the date of the relief. The incoming official will also initial against the respective balances in the other relative : 31 : registers and against the individual items in the gold loan ledgers. He will also initial individual items in the bill registers relating to the bills on hand.
19.6 A certified statement of the total notes and coins held in the currency chest as on 30th June each year will be submitted to the concerned Currency Officer."
In the case on hand, the petitioner took charge on 15.10.2005 and reported the missing of Rs.65,00,000/- from the currency chest on 06.12.2005.
20. The evidence on record more particularly the evidence of PW.3 is relevant and the same is extracted as follows:
"The Deputy Manager (Cash) is wholly responsible in exercising the supervision over the Cash Department. The officer is supposed to ensure that all cash department registers and books are to be maintained and the relevant laid down procedure are to be followed to protect the Bank's interests."
He further deposed that "The strong room must be under the double lock of the Deputy Manager (Cash) and the Joint Custodian jointly in charge of the cash. Both the officials must be present when the strong room is opened and neither may enter it except in the presence of the other and should not handle each other's keys." While PEx.P5 is confronted to PW3, he deposed as follows:
"The column meant for signature of the Deputy Manager (Cash) and the joint custodian is not initiated on few dates i.e., 11.11.05, 16.11.05, 17.11.05, 17.11.05 and more specifically on 5th, 6th, 7th and 8th December 2005.
The book also contains several over-writings and cuttings : 32 : and the same do not bear joint custodian's authentications."
He further stated that "As and when the Deputy Manager (Cash) hands over charge he has to submit handing over certificate to the Branch Manger for onward transmission to controlling authorities. As and when the Deputy Manager (Cash) takes over cash he has to submit taking over certificate to the Branch Manager for onward transmission to controlling authorities."
He further deposed that "Both the joint custodians of the currency chest should have authenticated these bin cards. However, they are signed by one of the joint custodians on most of the occasions and on some occasions they are not authenticated at all e.g. 25.07.05 to 19.09.05 on PEX3/22."
He further reiterated that "The book is not maintained as per the laid down procedure. The deposit and withdrawals made on various dates do not bear authentication of the Deputy Manager (Cash) e.g. 15.10.05, 17.10.05, 11.11.05, 29.11.05 etc., It also contains lot of over-writings and cuttings which have not been authenticated."
He further deposed that "On 02.11.05, Shri A.R. Kulkarni has taken over as Deputy Manager (Cash) from Shri J.I. Havaldar. On 03.11.05, Shri K.A. Ishwar has taken from Shri A.R. Kulkarni. On 07.11.05, Shir J.I. Havaldar has taken over from Shri K.A. Ishwar; and on 08.12.05, Shri K.A. Ishwar has taken over from Shri J.I. Havaldar, who was placed under suspension."
He further deposed that "On verification of books and registers, I found that Bank's laid down instructions were not followed. The cash verification reports were not submitted as and when there were handing over/taking over in the incumbency of Deputy Manager (Cash).
: 33 :To a pointed question "Can you tell on which particular day, the cash is missing from the chest?" He answered "he does not know".
21. The aforesaid oral evidence would indicate that the currency chest was not handled in accordance with the procedure prescribed by the Bank. The Bank did not place on record any material to establish the amount of cash that was available in the currency chest when the petitioner took over the charge. No attempt is made by the Bank to establish that the petitioner was responsible for the missing of the cash and/or he had misappropriated the said sum. As a matter of fact, the Bank did not contest the charge sheet filed by the Police who dropped the offence of misappropriation.
22. Even otherwise, in a departmental enquiry, the standard of proof is preponderance of probabilities and in the present case, it is evident that the Bank which was expected to maintain the currency chest, the heart of any banking institution, had not maintained registers, ledgers and records relating to the daily transactions in the Bank. There is no mention about the closing balance of cash in the currency chest after every day's business. There were no reports of inspections by the Zonal : 34 : Office or by the Head Office of the Bank from time to time. There are no compliances made by the Bank regarding inspection of the currency chest. There is no compliance of the formalities to be observed while handing over the charge to the petitioner. In the face of these lapses, it is too hard to accept the charge by the Bank that the petitioner was responsible for the missing cash. It may be that the cash was missing over a period of time which went unnoticed by the officials of the Bank or that the petitioner and others have exploited the situation by taking advantage of these procedural lapses. Therefore, notwithstanding the constraints against exercise of jurisdiction under Article 226 of the Constitution of India, this Court cannot loose sight of the fact that the garb of departmental proceedings, an employee cannot be exposed to a punitive action, which do not have any legs to stand.
23. A perusal of the report of the Enquiry Officer as well as the findings recorded by the Disciplinary Authority do not indicate whether they have applied themselves to the compliances of various procedures prescribed while operating the currency chest. The enquiry was proceeded on the assumption that the petitioner was one of the custodians of the currency : 35 : chest and therefore, he was responsible for the missing cash. The amount of cash lying in the currency chest as on the date when the petitioner took charge was a fundamental fact that had to be demonstrated before the inquiring authority, before even accusing him of misappropriating a sum of Rs.65,00,000-00. Shockingly, the respondent did not place on record the cash balance book, currency chest book and small Coin depot book when the incumbent cash officer was relieved and when the petitioner took charge. The Hon'ble Apex Court in General Manager (Operations), State Bank Of India And Another Vs R. Periyasamy [(2015) 3 SCC 101] was considering a similar case of a departmental enquiry against a cash officer who had allegedly misappropriated cash from the currency chest. In that case, the employer had furnished material to establish the amount of cash lying in the currency chest when the employee took charge. Therefore, it was held that "6.4 Unlike in the case of acting Cash Officers, when the respondent used to function as Cash Officer, the Accountant Shri Ganesan was in the habit of leaving him alone inside the strongroom while he attended to his desk work outside. The significance of this last finding is that the shortages were found to have occurred between 16-11-1985 to 05-04-1986 when : 36 : the respondent worked as the Cash Officer of the Branch and not from 05-04-1986 to 15-04-1986, when others had acted as Cash Officers for the reasons stated hereinbefore. The respondent was also convicted of the other two relatively minor charges.
24. Unfortunately, in the case on hand, the respondent was slack in proving the fundamental fact about the cash available in the chest when the petitioner took charge. The basis for holding the charge of misappropriation against the petitioner is the mere fact that the petitioner was the cash officer at the relevant time.
25. Therefore, this Court considers that this is a fit case to exercise its power under Article 226 of the Constitution of India and to set right the vexatious order of penalty passed by the disciplinary authority.
26. However, this Court cannot loose sight of the fact that the petitioner took charge on 15.10.2005 as a Deputy Manager (Cash). The petitioner who was initially appointed as a Clerk-cum-Cashier in the year 1977 cannot feign ignorance of the procedure prescribed for operation of the currency chest. He cannot also claim ignorance about the other procedures and that : 37 : he did not have any occasion to make corresponding entries in the registers/bins maintained in the currency chest. If he had taken the responsibility of maintaining the currency chest, he was bound to comply with all the procedures that were prescribed by the Bank from time to time. Evidence galore in the case that the petitioner was clearly guilty of not complying fundamental aspects while operating the chest such as not entering the withdrawals in the bin register, not comparing the cash balance at the end of the day etc. The evidence of the security officer of the Bank (PW.2) is an eye opener to the profound negligence on the part of the petitioner in keeping the grill door of the currency chest open between 10.20 a.m. till the closing hours, thereby allowing free but unauthorized access to all persons moving from the Branch Manager's room to the system room and the bath room. In addition, the evidence of PW.3 discloses the palpable lapses on the part of the petitioner in the maintenance of the currency chest and the corresponding registers etc. He deposed "on verification of books and registers, I found that Bank's laid down instructions were not followed". He further deposed that the cash verification reports were not submitted as and when there were handing over / taking over in : 38 : the incumbency of the Deputy Manager (Cash). Therefore, the petitioner cannot claim innocence in not complying with the procedural requirements that could have resulted in the loss of cash.
27. In that view of the matter, this Court cannot find any reason to interfere with the finding of the Enquiry Officer as well as the disciplinary authority insofar as the articles of charges at Sl.Nos.1, 1.3, 1.8 and 1.11.
28. However, the finding of the enquiry officer insofar as the charge at Sl.No.2.1 is concerned, there is no sufficient evidence to establish that the shortage of Rs.65,00,000/- detected by the petitioner herein was attributable to the petitioner alone and therefore, the finding of the enquiry officer that the petitioner alone is responsible for the missing cash is without any basis and the evidence on record clearly falls short. Therefore, the writ petition deserves to be allowed in part. Hence, the following:
ORDER i. The writ petition is allowed in part;
ii. The impugned order passed by the
Disciplinary Authority dismissing the
: 39 :
petitioner from the service of the
respondent is modified to an order of
compulsory retirement. Consequently,
the petitioner shall be entitled to the retirement benefits and other benefits in accordance with law.
iii. This order is specific to this case and is based on the evidence adduced before the Enquiring Authority and shall not affect the conviction of the petitioner in C.C. No.34/2011 on the file of the Senior Civil Judge and JMFC., Hirekerur.
Sd/-
JUDGE SMM - Upto Para 12 VNP - from paras 12 to 24 KGK - from para 25 to end