Madras High Court
B.Muthiah vs The Chairman And Managing Director on 16 August, 2011
Author: V.Dhanapalan
Bench: V.Dhanapalan
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 16.08.2011 CORAM: THE HONOURABLE MR.JUSTICE V.DHANAPALAN WRIT PETITION No.12759 of 2009 B.Muthiah ... Petitioner vs. 1. The Chairman and Managing Director, (Reviewing Authority) Indian Bank, Head Office, 66, Rajaji Salai, Chennai 600 001. 2. The Executive Director (Appellate Authority), Indian Bank, 66, Rajaji Salai, Chennai 600 001. 3. The General Manager (Disciplinary Authority) 66, Rajaji Salai, Chennai 600 001. 4. The Commissioner for Departmental Inquiries (Inquiring Authority), Satarkata Bhavan A-Block, GPO Complex INA, New Delhi 110 023. ... Respondents Writ Petition under Article 226 of the Constitution of India. For Petitioner : Mr.S.Sethuraman For Respondents : Mrs.Rita Chandrasekaran, for R1 to R3 for M/s.Aiyar & Dolia No appearance for R4 O R D E R
This Writ Petition has been filed under Article 226 of the Constitution of India, praying for issuance of a writ of certiorarified mandamus calling for the records pertaining to Disciplinary proceedings in Charge Sheet No.2908/98/VG dated 18.05.1998 and enquiry report of the 4th respondent dated 28.05.1999 in Ref.No.2699/99/VG, order dated 17.04.2000 in Ref.No.2069/2000/VG passed by the 3rd respondent (the Disciplinary Authority), order dated 20.11.2006 in Ref.No.3035 APP/VG/2006 passed by the 2nd respondent (the appellate authority), order dated 21.05.2007 in Ref.No.671 REV/VG/2007 and 19.06.2008 in Ref.No.REV/NKBM/GEN/964/2008 passed by the 1st respondent (the reviewing authority) and quash the same as illegal, arbitrary and biased and also to direct the respondents to reinstate the petitioner in the service with all benefits.
2. Facts of the case as put forth by the petitioner in the affidavit would run thus:
2a. The petitioner was working as Chief Manager in Thousand Lights Branch of Indian Bank between 27.07.1995 and 31.03.1996. After taking over charge of the said Branch, he submitted a Renewal proposal dated 25.11.1995 based on the request of the parties and at the instance of the Zonal Office of the Bank, recommending the following limits :
(a) Demand loan of Rs.12 crores
(b) Bill discount (CSBP/DABP for 90 days) limit of Rs.5 crores
(c) Open cash credit of Rs.5 crores
(d) OD/Book debts for 90 days of Rs.8 crores
(e) Letter of Credit/DA Inland 90-180 days of Rs.15 crores 2b. Apart from seeking note ratification of the action of the Branch in extending certain adhoc facilities on the advice of the Zonal Manager, the irregularities prevailing in the account were specifically highlighted in the said proposal. The renewal proposal was recommended by the Zonal Office to the Head Office of the Bank and a note was placed to the Board recommending the renewal proposal and ratification of the action of the Zonal Manager and CMD in advising the Branch to release overdrafts and opening of letter of credit. But, the renewal proposal was not approved and the action of the Zonal Manager and the former CMD of the Bank were not ratified. Resultantly, the action of the Branch in opening the letters of credit and release of overdraft limits were treated as unauthorised and in violation of extant guidelines/Circular by the Bank from time to time.
2c. On 02.04.1996, the petitioner was suspended from the services of the Bank and an explanation was called for on 25.04.1996 by the Chief Vigilance Officer with regard to the alleged irregularities in the loan account of M/s.Gemini Picture Circuit Private Limited, that he has failed to monitor the account properly and allowed the party to enjoy Inland LC limits, adhoc sanction limit, TOD and clean OD, with irregularities and absence of securities cover by way of proper Equitable Mortgage and had exposed the Bank to a huge financial risk. The petitioner submitted a reply dated 04.07.1996 in detail denying the allegations, pointing out the fact that excess limit was allowed on the instruction/knowledge of CMD and Zonal Manager and it was not permitted by the petitioner. As far as the mortgage is concerned, the same was available as security when the limit was in the Harbour Branch and continued in the Thousand Lights Branch. Not being satisfied with the said reply of the petitioner, the Disciplinary Authority issued a charge sheet on 18.05.1998.
2d. For each and every charge framed against him, the petitioner submitted a suitable explanation dated 06.07.1998 specifically pointing out that he has always kept the Zonal Office and Head Office informed about the account and the alleged excess were not really excess and they were all allowed with prior permission of the Zonal Manager or against security by way of Fixed Deposit. However, not satisfied with his explanation, the Disciplinary Authority ordered Departmental Enquiry appointing Mr.Suman Nayar as Inquiring Authority and Mr.Suman Nayar conducted the hearing on 14.10.1998, 27.11.1998 and 11.01.1999 and concluded the enquiry and submitted his report on 30.04.1999. Thereafter, the petitioner submitted a detailed reply to the Disciplinary Authority about the infirmity in the enquiry report. Without considering any of the contentions put forth by the petitioner about the infirmity in the enquiry report, the Disciplinary Authority accepted the Enquiry Report and found the petitioner guilty of all the charges except charge No.5 and by an order dated 17.04.2000, imposed the punishment of dismissal from service with immediate effect in terms of Regulation (J) of the Indian Bank Employees (Discipline and Appeal) Regulation, 1976.
2e. Aggrieved by the said order of dismissal from service, the petitioner preferred an appeal to the Appellate Authority on 19.06.2000 and after a lapse of 6 = years, the Appellate Authority, by an order dated 18.12.2006 dismissed his appeal with an observation that the petitioner has to be imposed punishment of compulsory retirement. When the petitioner sent a letter of clarification on 11.12.2006 as to whether the punishment was modified from dismissal to compulsory retirement in terms of recommendation, by a letter dated 20.12.2006, it was clarified by the Department that by mistake, 'compulsory retirement' has been mentioned for the word 'dismissal'.
2f. Challenging the order passed by the Appellate Authority, the petitioner preferred a Review Petition to the Chairman and Managing Director of the Bank , the 1st respondent herein on 06.05.2007 and the 1st respondent, who is the Reviewing Authority, by an order dated 19.05.2007 dismissed the Review Petition without any consideration. In the meantime, the borrower had paid the entire amount of Rs.157 crore under OTS Scheme loan and all the loan accounts were closed. As the gravamen of charges was that the petitioner has exposed the Bank to risk of recovery of Rs.2713.54 lakhs and committed the misconduct under regulation of 3(1) of Indian Bank Officers Employees' Regulation, 1975, the petitioner made a representation dated 11.05.2008 about the recovery of the amount and setting aside of the punishment of dismissal from service. But, the Bank refused to consider the case of the petitioner. Hence, the petitioner is before this court by way of the present writ petition.
3. Respondents 1 to 3 have filed counter affidavit, wherein, they have vehemently denied that the enquiry was not conducted as per the Indian Bank Office Discipline and Appeal Regulations. The Inquiring Authority appointed by the Central Vigilance Commission was experienced in the conduct of the departmental enquiry and was well aware of the provisions under which the enquiry was to be conducted. The copies of 22 documents were served on the petitioner before the conduct of enquiry. During the enquiry, the said documents were taken on record by the Inquiring Authority and marked as Exhibits M1 to M22. The petitioner was given due opportunity by the Inquiring Authority and by following the principles of natural justice, he permitted the petitioner to verify the documents with the petitioner's defence assistant at the Branch. Since the said documents are certified copies of the Bank/Branch, no personal identification is needed in the domestic enquiry. Despite the same, the Inquiring Authority in his proceedings dated 14.10.1998 has stated that if there is any doubt by the petitioner about the authenticity of the documents submitted by the Presenting Officer (PO) and if any such doubt is found, it has to be sent within 3 days of the inspection failing which it shall be assumed that the documents are accepted as genuine. The petitioner has not sent any such intimation to the Inquiring Authority and he cannot question the veracity of the documents at this stage as it is just an after thought. Therefore, the contentions of the petitioner that the Inquiring Authority did not conduct the Inquiry as per the Regulations are not true.
3a. In fact, the petitioner has not made any objection to the 3rd respondent that the Inquiring Authority did not conduct the enquiry properly and that the petitioner was given opportunity to adduce evidence in his favour. Thus, according to the respondents, the procedure of conducting departmental enquiry as envisaged in the regulations were strictly followed by the Inquiring Authority. In the absence of any objection by the petitioner at the time of admission of the documentary evidence or any time later during the enquiry, there was no need for the Inquiring Authority to get them proved in the enquiry by production of witnesses and the objection made by the petitioner is just an afterthought.
3b. According to the respondents, it is not mandatory in terms of Indian Bank Office Employe's (Discipline and Appeal) Regulations that a charge sheet should be preceded with the issue of show cause notice. Where a show cause notice had been issued, it is not mandatory that the charge sheet should be the same as per the show cause notice. Opportunity was given to the petitioner to reply to the charges framed against him and only then, further proceedings were initiated. There is not an iota of truth on the contention of the petitioner that punitive action was taken against him based on suspicion. The charges were proved either beyond reasonable doubt or by preponderance of probability and there is no question of reasonableness in the entire process, as the enquiry was conducted in a proper manner by following the principles of natural justice. Hence, the respondents pray for dismissal of the writ petition.
4. To the counter affidavit filed by the respondents, the petitioner has filed a rejoinder, stating that the counter is silent with regard to his contention that no witness was examined by the Management and the documents were merely marked. According to the petitioner, the marking of the documents will not amount to proving the contents of the documents and the contents of the documents can be proved only by the maker of the documents or by a person who is conversant with the contents of the documents. In the absence of which, the documents cannot be considered as proved. Therefore, relying on such documents without giving an opportunity to the petitioner to cross-examine the maker is in violation of the principles of natural justice. The petitioner has further stated that the Inquiring Authority has merely relied on the submission of the Presenting Officer and has not relied on the documents filed by the Bank proving the charge.
4a. The petitioner has also pointed out that the show cause notice dated 25.04.1996 was signed by the General Manager/Chief Vigilance Officer, Mr.S.C.Vohra. Regulation 19 of Indian Bank Officers Employees (Discipline and Appeal) Regulations, 1976 provides for consultation with the Central Vigilance Commission by the Bank. The Chief Vigilance Officer is the Officer of the Central Vigilance Commission stationed in the Bank. The Vigilance Officer of the Bank, as a representative of the Commission and the Bank took up the case for getting first stage advice and second stage advise at the time of awarding the punishment. Hence, it is settled law that the Chief Vigilance Officer's role has to be confined to the above role and he should not cause any issuance of show cause or charge sheet as he should not frame an opinion about the case.
4b. With regard to the averment of the respondents that M/s.Gemini Pictures Circuits Pvt. Ltd. and other group accounts were the cause of action for initiating vigilance action against many Officers of the Bank, the petitioner would state that out of the one-time settlement of compromise only, the entire liability of Gemini Pictures Circuits Pvt. Ltd. Gemini Arts and other group accounts were adjusted on 28.03.2007 and the Bank has filed a full satisfaction memo to DRT Chennai on 28.03.2007. Such being the factual position, there was discrimination in awarding punishment.
5. Mr.S.Sethuraman, learned counsel for the petitioner would strenuously contend that the impugned orders are legally infirmed on the following grounds (i) the enquiry conducted is in violation of the principles of natural justice (ii) there is denial of cross-examination (iii) the Disciplinary Authority has substituted the finding without affording an opportunity to the petitioner (iv) charges which were not dealt with by the Inquiring Authority were dealt with independently by the Disciplinary Authority (v) there is no monetary loss caused to the Bank and (vi) punishment awarded is disproportionate. In support of his contentions, the learned counsel has relied on the following Supreme Court decisions :
(i) AIR 1994 SCC 1341 (Triveni Rubber and Plastics vs. Collector of Central Excise, Cochin) :
"3. ... The quantum of tread-rubber produced in the appellant's factory during the said two years is a question of fact. Unless it is found that some relevant evidence has not been considered or that certain inadmissible material has been taken into consideration the concurrent findings of fact cannot be disturbed by us in this appeal under Art. 136 of the Constitution. This is not also a case where it can be said that the findings of the authorities are based on no evidence or that they are so perverse that no reasonable person would have arrived at those findings."
(ii) JT 1996 (4) 457 (The Disciplinary Authority-Cum- Regional Manager and others vs. Nikunja Bihari Patnaik) :
"... Each officer of the Bank cannot be allowed to carve out his own little empire wherein he dispenses favours and largesse. No organisation, more particularly, a Bank can function properly and effectively if its officers and employees do not observe the prescribed norms and discipline. Such indiscipline cannot be condoned on the specious ground that it was not actuated by ulterior motives or by extraneous considerations. The very act of acting beyond authority that too a course of conduct spread over a sufficiently long period and involving innumerable instances is by itself a misconduct. Such acts, if permitted, may bring in profit in some cases but they may also lead to huge losses. Such adventures are not given to the employees of Banks which deal with public funds. ... The Enquiry Officer has recorded a clear finding that the respondent did flout the said instructions and has thereby committed an act of disobedience of lawful orders. Similarly, Charge No.8, which has also been established in full is to the effect that inspite of reminders, the respondent did not submit "Control Returns" to the Regional Office. We fail to understand how could all this be characterised as errors of judgment and not as misconduct as defined by the regulations. ..."
(iii) (1998) 7 SCC 84 (Punjab National Bank and others vs. Kunj Behari Misra) :
"17. ... If the enquiry officer had given an adverse finding, as per Karunakar case, the first stage required an opportunity to be given to the employee to represent to the disciplinary authority, even when an earlier opportunity had been granted to them by the enquiry officer. It will not stand to reason that when the finding in favour of the delinquent officers is proposed to be overturned by the disciplinary authority then no opportunity should be granted. The first stage of the enquiry is not completed till the disciplinary authority has recorded its findings. The principles of natural justice would demand that the authority which proposes to decide against the delinquent officer must give him a hearing. When the enquiring officer holds the charges to be proved, then the report has to be given to the delinquent officer who can make a representation before the disciplinary authority takes further action which may be prejudicial to the delinquent officer. When, like in the present case, the enquiry report is in favour of the delinquent officer but the disciplinary authority proposes to differ with such conclusions, then that authority which is deciding against the delinquent officer must give him an opportunity of being heard for otherwise he would be condemned unheard. In departmental proceedings, what is of ultimate importance is the finding of the disciplinary authority.
18. Under Regulation 6, the enquiry proceedings can be conducted either by an enquiry officer or by the disciplinary authority itself. When the enquiry is conducted by the enquiry officer, his report is not final or conclusive and the disciplinary proceedings stand concluded with the decision of the disciplinary authority. It is the disciplinary authority which can impose the penalty and not the enquiry officer. Where the disciplinary authority itself holds an enquiry, an opportunity of hearing has to be granted by him. When the disciplinary authority differs with the view of the enquiry officer and proposes to come to a different conclusion, there is no reason as to why an opportunity of hearing should not be granted. It will be most unfair and iniquitous that where the charged officers succeed before the enquiry officer, they are deprived of representing to the disciplinary authority before that authority differs with the enquiry officer's report and, while recording a finding of guilt, imposes punishment on the officer. In our opinion, in any such situation, the charged officer must have an opportunity to represent before the disciplinary authority before final findings on the charges are recorded and punishment imposed. ..."
(iv) AIR 1999 SC 3734 (Yoginath D.Bagde vs. State of Maharashtra and another) :
"33. In view of the above, a delinquent employee has the right of hearing not only during the enquiry proceedings conducted by the Enquiry Officer into the charges levelled against him but also at the stage at which those findings are considered by the Disciplinary Authority and the latter, namely, the Disciplinary Authority forms a tentative opinion that it does not agree with the findings recorded by the Enquiry Officer. If the findings recorded by the Enquiry Officer are in favour of the delinquent and it has been held that the charges are not proved, it is all the more necessary to give an opportunity of hearing to the delinquent employee before reversing those findings. The formation of opinion should be tentative and not final. It is at this stage that the delinquent employee should be given opportunity of hearing after he is informed of the reasons on the basis of which the Disciplinary Authority has proposed to disagree with the findings of the Enquiry Officer. This is in consonance with the requirement of Article 311(2) of the Constitution as it provides that a person shall not be dismissed or removed or reduced in rank except after an enquiry in which he has been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges. So long as a final decision is not taken in the matter, the enquiry shall be deemed to be pending. Mere submission of findings to the Disciplinary Authority does not bring about the closure of the enquiry proceedings. The enquiry proceedings would come to an end only when the findings have been considered by the Disciplinary Authority and the charges are either held to be not proved or found to be proved and in that event punishment is inflicted upon the delinquent. That being so, the "right to be heard" would be available to the delinquent up to the final stage. This right being a constitutional right of the employee cannot be taken away in any legislative enactment or Service Rule including Rules made under Article 309 of the Constitution. "
36. Along with the show-cause notice, a copy of the findings recorded by the enquiry officer as also the reasons recorded by the Disciplinary Committee for disagreeing with those findings were communicated to the appellant but it was immaterial as he was required to show cause only against the punishment proposed by the Disciplinary Committee which had already taken a final decision that the charges against the appellant were proved. It was not indicated to him that the Disciplinary Committee had come only to a tentative decision and that he could show cause against that too. It was for this reason that the reply submitted by the appellant failed to find favour with the Disciplinary Committee."
(v) AIR 2001 SC 2398 (S.B.I. and others vs. Arvind K.Shukla) :
"2. Mr Sundravardan, the learned Senior Counsel appearing for State Bank of India contended before us that in the case in hand, in fact, there has been no disagreement with the findings of the enquiring officer by the disciplinary authority, and on the other hand, the disciplinary authority on the accepted findings of the enquiring officer has recorded his conclusion differently on the basis of the relevant provisions of the Rules, and therefore the question of giving an opportunity to the delinquent at that stage does not arise. To appreciate this contention, we have been taken through the findings of the enquiring officer and Charges 1(a) and 1(d) as well as the reasonings and ultimate conclusion of the disciplinary authority on those two charges. On examining the same, we are not persuaded to accept the submission of the learned counsel and in our view, the disciplinary authority has disagreed with the conclusion and findings arrived at by the enquiring officer. The next question therefore is, as has been formulated earlier, whether the disciplinary authority was required to record its tentative reasons for disagreement and give to the delinquent officer an opportunity to represent before it recorded its ultimate findings. This question is concluded by a three-Judge Bench decision of this Court in the case of Punjab National Bank v. Kunj Behari Misra1."
(vi) (2004) 8 SCC 653 (J.A.Naiksatam vs. Prothonotary & Senior Master, High Court of Bombay and others) :
"As per Rule 8 of the Bombay Rules, if the disciplinary authority is not agreeing with the reasons given by the enquiry officer it would be open to the disciplinary authority to hold further enquiry in accordance with the provisions of Rule 7 and Rule 8(2) shows that if the disciplinary authority disagrees with the findings of the enquiry officer on any of the articles of charge he shall record his reasons for such disagreement. Sub-rule (4)(i)(a) of Rule 8 of the Bombay Rules further shows that the copy of the report of the enquiry officer and his finding on each article of charge together with brief reasons shall be given to the delinquent employee. The rule further says that the disciplinary authority shall give its reasons for disagreeing with the decision of the enquiry officer. The counsel for the appellants contended that even if the rule does not specifically say that the delinquent employee should be given personal hearing when it disagrees with the enquiry officer, the same shall be read into the provision and the delinquent employee shall be given an opportunity of personal hearing before a final decision is taken in the matter. ..."
(vii) (2007) 1 SCC 437 (Mathura Prasad vs. Union of India and others) :
"18. Even if the enquiry officer had, in his first report, proceeded on surmises and conjectures as was observed by the High Court, the disciplinary authority could disagree with the said finding but it was, therefor, required to record its reasons. No reason was recorded. Sub-rules (2) and (3) of Rule 10 aim at achieving the same purpose. If sufficient materials are not available on record, a direction for holding a further enquiry may be issued in terms of sub-rule (2) of Rule 10 so as to enable the department to lead further evidence before him. For the said purpose also, reasons are required to be recorded by the disciplinary authority. An opportunity of hearing to the delinquent officer is required to be given. However, in the event, the disciplinary authority comes to the conclusion that the conclusion arrived at by the enquiry officer on the basis of materials placed by the parties are incorrect, he may disagree with the said findings but even therefor, he is required to record reasons in support thereof. The requirement of sub-rule (2) or sub-rule (3) having not been complied with, the enquiry officer could not have arrived at a different finding. The High Court unfortunately did not consider this aspect of the matter.
19. When an employee, by reason of an alleged act of misconduct, is sought to be deprived of his livelihood, the procedures laid down under the sub-rules are required to be strictly followed. It is now well settled that a judicial review would lie even if there is an error of law apparent on the face of the record. If statutory authority uses its power in a manner not provided for in the statute or passes an order without application of mind, judicial review would be maintainable. Even an error of fact for sufficient reasons may attract the principles of judicial review."
(viii) (2008) 3 SCC 484 (Moni Shankar vs. Union of India and another) :
"17. The departmental proceeding is a quasi-judicial one. Although the provisions of the Evidence Act are not applicable in the said proceeding, principles of natural justice are required to be complied with. The courts exercising power of judicial review are entitled to consider as to whether while inferring commission of misconduct on the part of a delinquent officer relevant piece of evidence has been taken into consideration and irrelevant facts have been excluded therefrom. Inference on facts must be based on evidence which meet the requirements of legal principles. The Tribunal was, thus, entitled to arrive at its own conclusion on the premise that the evidence adduced by the Department, even if it is taken on its face value to be correct in its entirety, meet the requirements of burden of proof, namely, preponderance of probability. If on such evidences, the test of the doctrine of proportionality has not been satisfied, the Tribunal was within its domain to interfere. We must place on record that the doctrine of unreasonableness is giving way to the doctrine of proportionality."
(ix) 2009 (2) SCC 570 (Roop Singh Negi vs. Punjab National Bank & others) :
"14. Indisputably, a departmental proceeding is a quasi-judicial proceeding. The enquiry officer performs a quasi-judicial function. The charges levelled against the delinquent officer must be found to have been proved. The enquiry officer has a duty to arrive at a finding upon taking into consideration the materials brought on record by the parties. The purported evidence collected during investigation by the investigating officer against all the accused by itself could not be treated to be evidence in the disciplinary proceeding. No witness was examined to prove the said documents. The management witnesses merely tendered the documents and did not prove the contents thereof. Reliance, inter alia, was placed by the enquiry officer on the FIR which could not have been treated as evidence.
15. We have noticed hereinbefore that the only basic evidence whereupon reliance has been placed by the enquiry officer was the purported confession made by the appellant before the police. According to the appellant, he was forced to sign on the said confession, as he was tortured in the police station. The appellant being an employee of the Bank, the said confession should have been proved. Some evidence should have been brought on record to show that he had indulged in stealing the bank draft book. Admittedly, there was no direct evidence. Even there was no indirect evidence. The tenor of the report demonstrates that the enquiry officer had made up his mind to find him guilty as otherwise he would not have proceeded on the basis that the offence was committed in such a manner that no evidence was left."
(x) (2010) 2 SCC 772 (State of Uttar Pradesh and others vs. Saroj Kumar Sinha) :
"28. An inquiry officer acting in a quasi-judicial authority is in the position of an independent adjudicator. He is not supposed to be a representative of the department/disciplinary authority/Government. His function is to examine the evidence presented by the Department, even in the absence of the delinquent official to see as to whether the unrebutted evidence is sufficient to hold that the charges are proved. In the present case the aforesaid procedure has not been observed. Since no oral evidence has been examined the documents have not been proved, and could not have been taken into consideration to conclude that the charges have been proved against the respondents."
(xi) (2010) 5 MLJ 265 (V.Baskaran vs. Director of Collegiate Education, Chennai 6 and another) :
"8. As per the above decision of the Division Bench, it is clear that the Disciplinary authority should give specific notice stating that he intends to disagree with the findings of the enquiry officer. Thereafter, he should seek for further explanation from the delinquent officer. If necessary, the delinquent has also to be given a personal hearing. Only thereafter, an order can be passed taking into consideration the further representation also. In this case, this has not been followed by the disciplinary authority. Therefore, the order passed by the disciplinary authority, without mandatory notice intimating the delinquent that he is disagreeing with the findings of the enquiry officer, is per se illegal."
(xii) (2010) 5 MLJ 346 (S.Arumugathiraviam vs. Tamil Nadu Small Industries Corporation Ltd., Chennai) :
"37. ... In a case where the enquiry officer comes to the conclusion that the charges are not proved and if the disciplinary authority proposes to disagree from the same, then the disciplinary authority is bound to communicate the delinquent officer, the reasons for disagreeing with the findings of the enquiry officer, so as to enable the delinquent to submit his further representation on the findings recorded by the disciplinary authority. It is well settled that no man should be condemned unheard. This aspect has been well considered by the Supreme Court in a catena of decisions and it is worthwhile to extract few decisions."
(xiii) an unreported decision dated 12.05.2011 made in W.P.No.5201 of 2004 in the case of M.Shahul Hameed vs. The Managing Director, TIIC :
"12. Non-examination of relevant witnesses : The second point raised in this matter is that no oral evidence was let in support of the charges levelled against the petitioner and no opportunity was given to him to bring out the truth and the proceedings of the Enquiry Officer were one-sided. On 30.08.2000, the Enquiry Officer made his report holding the petitioner guilty of all the charges except Charge No.7. The 1st respondent/Disciplinary Authority, i.e. the Managing Director accepted the petitioner's explanation only in respect of charges 1 to 6 and held him not guilty of the same. However, the disciplinary authority held that the other charges against the petitioner as proved. This claim of the petitioner has been refuted by the respondents that when the oral evidence is recorded and when the entire case is based on the documents, which is the best form of evidence, there is no need of oral evidence. The borrower of the Company against whom the petitioner has sanctioned a loan, based on which the proceedings are initiated, has not been called in question by bringing him before the Enquiry Officer and putting him in box. Therefore, without calling the concerned person for examination and cross-examination, the entire proceedings are vitiated on the ground of non-examination of witness and it can be only a case of no evidence.
12(a). The legal principles are settled that when serious charges are framed and it is required to be proved to the guilt, as it brings civil and criminal consequences on the employer concerned, he would be liable to be prosecuted. Such a grave charge of quasi-criminal nature was required to be proved beyond any shadow of doubt and to the hilt. It cannot be proved on mere probabilities without taking evidence. It is also well settled now that an enquiry is to be conducted against any person giving strict adherence to the statutory provisions and principles of natural justice. The charges should be specific, definite and giving details of the incident which formed the basis of charges. Enquiry has to be conducted fairly and objectively and not subjectively. Finding should not be perverse or unreasonable, nor the same should be based on conjectures and surmises. There is a distinction in proof and suspicion. Every act or omission on the part of the delinquent cannot be a misconduct. The authority must record reasons for arriving at the finding of fact in the context of the statute defining the misconduct.
12(b). In a recent decision of the Supreme Court reported in (2009) 2 SCC 570 in the case of Roop Singh Negi vs. Punjab National Bank & others, it is laid down that in a departmental proceeding, which is quasi judicial in nature, the Enquiry Officer performs a quasi judicial function. The charges levelled against the delinquent officer must be found to have been proved. The Enquiry Officer has a duty to arrive at a finding upon taking into consideration the materials brought on record by the parties. The purported evidence collected during investigation by the Investigating Officer against all the accused by itself, could not be treated to be evidence in the disciplinary proceeding. No witness was examined to prove the said documents. The management witnesses merely tendered the documents and did not prove the contents thereof. Reliance was placed by the Enquiry Officer on the FIR which could not have been treated as evidence. Therefore, the only basic evidence whereupon reliance has been placed by the Enquiry Officer, was the purported confession made by the appellant before the police and there was no direct evidence. Even there was no indirect evidence. The Enquiry Officer had made up his mind to find him guilty, as otherwise he would not have proceeded on the basis that the offence was committed in such a manner that no evidence was left. "
(xiv) (2006) 5 SCC 88 (M.V.Bijlani vs. Union of India and others) :
"25. It is true that the jurisdiction of the court in judicial review is limited. Disciplinary proceedings, however, being quasi-criminal in nature, there should be some evidence to prove the charge. Although the charges in a departmental proceeding are not required to be proved like a criminal trial i.e. beyond all reasonable doubt, we cannot lose sight of the fact that the enquiry officer performs a quasi-judicial function, who upon analysing the documents must arrive at a conclusion that there had been a preponderance of probability to prove the charges on the basis of materials on record. While doing so, he cannot take into consideration any irrelevant fact. He cannot refuse to consider the relevant facts. He cannot shift the burden of proof. He cannot reject the relevant testimony of the witnesses only on the basis of surmises and conjectures. He cannot enquire into the allegations with which the delinquent officer had not been charged with."
(xv) (2010) 4 SCC 491 (Life Insurance Corporation of India and another vs. Ram Pal Singh Bisen) :
"25. We are of the firm opinion that mere admission of a document in evidence does not amount to its proof. In other words, mere marking of exhibit on a document does not dispense with its proof, which is required to be done in accordance with law."
(xvi) (2010) 5 SCC 349 (Union of India and others vs. Alok Kumar) :
"83. Earlier, in some of the cases, this Court had taken the view that breach of principles of natural justice was in itself a prejudice and no other de facto prejudice needs to be proved. In regard to statutory rules, the prominent view was that the violation of mandatory statutory rules would tantamount to prejudice but where the rule is merely directory the element of de facto prejudice needs to be pleaded and shown. With the development of law, rigidity in these rules is somewhat relaxed. The instance of de facto prejudice has been accepted as an essential feature where there is violation of the non-mandatory rules or violation of natural justice as it is understood in its common parlance. Taking an instance, in a departmental enquiry where the department relies upon a large number of documents majority of which are furnished and an opportunity is granted to the delinquent officer to defend himself except that some copies of formal documents had not been furnished to the delinquent. In that event the onus is upon the employee to show that non-furnishing of these formal documents have resulted in de facto prejudice and he has been put to a disadvantage as a result thereof."
(xvii) (2010) 5 SCC 775 (Administrator, Union Territory of Dadra and Nagar Haveli vs. Gulabhia M. Lad) :
"13. In State of Meghalaya v. Mecken Singh N. Marak9 this Court stated: (SCC p.584, para 14) 14. In the matter of imposition of sentence, the scope for interference is very limited and restricted to exceptional cases. The jurisdiction of the High Court, to interfere with the quantum of punishment is limited and cannot be exercised without sufficient reasons. The High Court, although has jurisdiction in appropriate case, to consider the question in regard to the quantum of punishment, but it has a limited role to play. It is now well settled that the High Courts, in exercise of powers under Article 226, do not interfere with the quantum of punishment unless there exist sufficient reasons therefor. The punishment imposed by the disciplinary authority or the appellate authority unless shocking to the conscience of the court, cannot be subjected to judicial review. In the impugned order of the High Court no reasons whatsoever have been indicated as to why the punishment was considered disproportionate. Failure to give reasons amounts to denial of justice. The mere statement that it is disproportionate would not suffice.
14. The legal position is fairly well settled that while exercising the power of judicial review, the High Court or a Tribunal cannot interfere with the discretion exercised by the disciplinary authority, and/or on appeal the appellate authority with regard to the imposition of punishment unless such discretion suffers from illegality or material procedural irregularity or that would shock the conscience of the court/tribunal. The exercise of discretion in imposition of punishment by the disciplinary authority or appellate authority is dependent on host of factors such as gravity of misconduct, past conduct, the nature of duties assigned to the delinquent, responsibility of the position that the delinquent holds, previous penalty, if any, and the discipline required to be maintained in the department or establishment he works. Ordinarily the court or a tribunal would not substitute its opinion on reappraisal of facts."
(xviii) (2005) 1 SCC 13 (Ganesh Santa Ram Sirur vs. State Bank of India and another) :
"34. The bank manager/officer and employees of any bank, nationalised/or non-nationalised, are expected to act and discharge their functions in accordance with the rules and regulations of the bank. Acting beyond ones authority is by itself a breach of discipline and trust and a misconduct. In the instant case Charge 5 framed against the appellant is very serious and grave in nature. We have already extracted the relevant Rule which prohibits the bank manager to sanction a loan to his wife or his relative or to any partner. While sanctioning the loan the appellant did not appear to have kept this aspect in mind and acted illegally and sanctioned the loan. He realised the mistake later and tried to salvage the same by not encashing the draft issued in the maiden name of his wife though the draft was issued but not encashed. The decision to sanction a loan is not an honest decision. Rule 34(3)(1) is a rule of integrity and, therefore, as rightly pointed out by Mr Salve, the respondent Bank cannot afford to have the appellant as bank manager. The punishment of removal awarded by the appellate authority is just and proper in the facts and circumstances of the case. Before concluding, we may usefully rely on the judgment Regional Manager, U.P. SRTC v. Hoti Lal13 wherein this Court has held as under: (SCC p.614, para 10) If the charged employee holds a position of trust where honesty and integrity are inbuilt requirements of functioning, it would not be proper to deal with the matter leniently. Misconduct in such cases has to be dealt with iron hands. Where the person deals with public money or is engaged in financial transactions or acts in a fiduciary capacity, the highest degree of integrity and trustworthiness is a must and unexceptionable. Judged in that background, conclusions of the Division Bench of the High Court do not appear to be proper. We set aside the same and restore order of the learned Single Judge upholding the order of dismissal. (xix) 1997 (7) SCC 463 (Union of India & another vs. G.Ganayutham:
"31. The current position of proportionality in administrative law in England and India can be summarised as follows:
(1) To judge the validity of any administrative order or statutory discretion, normally the Wednesbury test is to be applied to find out if the decision was illegal or suffered from procedural improprieties or was one which no sensible decision-maker could, on the material before him and within the framework of the law, have arrived at. The court would consider whether relevant matters had not been taken into account or whether irrelevant matters had been taken into account or whether the action was not bona fide. The court would also consider whether the decision was absurd or perverse. The court would not however go into the correctness of the choice made by the administrator amongst the various alternatives open to him. Nor could the court substitute its decision to that of the administrator. This is the Wednesbury test.
(2) The court would not interfere with the administrators decision unless it was illegal or suffered from procedural impropriety or was irrational in the sense that it was in outrageous defiance of logic or moral standards. The possibility of other tests, including proportionality being brought into English administrative law in future is not ruled out. These are the CCSU principles.
(3)(a) As per Bugdaycay20, Brind12 and Smith19 as long as the Convention is not incorporated into English law, the English courts merely exercise a secondary judgment to find out if the decision-maker could have, on the material before him, arrived at the primary judgment in the manner he has done.
(3)(b) If the Convention is incorporated in England making available the principle of proportionality, then the English courts will render primary judgment on the validity of the administrative action and find out if the restriction is disproportionate or excessive or is not based upon a fair balancing of the fundamental freedom and the need for the restriction thereupon.
(4)(a) The position in our country, in administrative law, where no fundamental freedoms as aforesaid are involved, is that the courts/tribunals will only play a secondary role while the primary judgment as to reasonableness will remain with the executive or administrative authority. The secondary judgment of the court is to be based on Wednesbury and CCSU principles as stated by Lord Greene and Lord Diplock respectively to find if the executive or administrative authority has reasonably arrived at his decision as the primary authority.
(4)(b) Whether in the case of administrative or executive action affecting fundamental freedoms, the courts in our country will apply the principle of proportionality and assume a primary role, is left open, to be decided in an appropriate case where such action is alleged to offend fundamental freedoms. It will be then necessary to decide whether the courts will have a primary role only if the freedoms under Articles 19, 21 etc. are involved and not for Article 14.
33. In Ranjit Thakur this Court interfered with the punishment only after coming to the conclusion that the punishment was in outrageous defiance of logic and was shocking. It was also described as perverse and irrational. In other words, this Court felt that, on facts, Wednesbury and CCSU tests were satisfied. In another case, in B.C. Chaturvedi v. Union of India a three-Judge Bench said the same thing as follows: (SCC p.762, para 18) 18. ... The High Court/Tribunal, while exercising the power of judicial review, cannot normally substitute its own conclusion on penalty and impose some other penalty. If the punishment imposed by the disciplinary authority or the appellate authority shocks the conscience of the High Court/Tribunal, it would appropriately mould the relief, either directing the disciplinary authority/appellate authority to reconsider the penalty imposed, or to shorten the litigation, it may itself, in exceptional and rare cases, impose appropriate punishment with cogent reasons in support thereof. (xx) 2011 (4) SCC 584 (State Bank of Bikaner & Jaipur vs. Nemichand Nalwaya :
"7. It is now well settled that the courts will not act as an appellate court and reassess the evidence led in the domestic enquiry, nor interfere on the ground that another view is possible on the material on record. If the enquiry has been fairly and properly held and the findings are based on evidence, the question of adequacy of the evidence or the reliable nature of the evidence will not be grounds for interfering with the findings in departmental enquiries. Therefore, courts will not interfere with findings of fact recorded in departmental enquiries, except where such findings are based on no evidence or where they are clearly perverse. The test to find out perversity is to see whether a tribunal acting reasonably could have arrived at such conclusion or finding, on the material on record. The courts will however interfere with the findings in disciplinary matters, if principles of natural justice or statutory regulations have been violated or if the order is found to be arbitrary, capricious, mala fide or based on extraneous considerations."
(xxi) AIR 1979 SC 1022 (Union of India and others vs. J.Ahmed) :
"9. The expression devotion to duty appears to have been used as something opposed to indifference to duty or easy-going or light-hearted approach to duty. If Rule 3 were the only rule in the Conduct Rules it would have been rather difficult to ascertain what constitutes misconduct in a given situation. But Rules 4 to 18 of the Conduct Rules prescribe code of conduct for members of service and it can be safely stated that an act or omission contrary to or in breach of prescribed rules of conduct would constitute misconduct for disciplinary proceedings. This code of conduct being not exhaustive it would not be prudent to say that only that act or omission would constitute misconduct for the purpose of Discipline and Appeal Rules which is contrary to the various provisions in the Conduct Rules. The inhibitions in the Conduct Rules clearly provide that an act or omission contrary thereto so as to run counter to the expected code of conduct would certainly constitute misconduct. Some other act or omission may as well constitute misconduct. Allegations in the various charges do not specify any act or omission in derogation of or contrary to Conduct Rules save the general Rule 3 prescribing devotion to duty. It is, however, difficult to believe that lack of efficiency, failure to attain the highest standard of administrative ability while holding a high post would themselves constitute misconduct. If it is so, every officer rated average would be guilty of misconduct. Charges in this case as stated earlier clearly indicate lack of efficiency, lack of foresight and indecisiveness as serious lapses on the part of the respondent. These deficiencies in personal character or personal ability would not constitute misconduct for the purpose of disciplinary proceedings.
11. ... It is, however, difficult to believe that lack of efficiency or attainment of highest standards in discharge of duty attached to public office would ipso facto constitute misconduct. There may be negligence in performance of duty and a lapse in performance of duty or error of judgment in evaluating the developing situation may be negligence in discharge of duty but would not constitute misconduct unless the consequences directly attributable to negligence would be such as to be irreparable or the resultant damage would be so heavy that the degree of culpability would be very high. An error can be indicative of negligence and the degree of culpability may indicate the grossness of the negligence. Carelessness can often be productive of more harm than deliberate wickedness or malevolence. Leaving aside the classic example of the sentry who sleeps at his post and allows the enemy to slip through, there are other more familiar instances of which a railway cabinman signals in a train on the same track where there is a stationery train causing head-on collision; a nurse giving intravenous injection which ought to be given intramuscular causing instantaneous death; a pilot overlooking an instrument showing snag in engine and the aircraft crashes causing heavy loss of life. Misplaced sympathy can be a great evil (see Navinchandra Shakerchand Shah v. Manager, Ahmedabad Coop. Department Stores Ltd.8). But in any case, failure to attain the highest standard of efficiency in performance of duty permitting an inference of negligence would not constitute misconduct nor for the purpose of Rule 3 of the Conduct Rules as would indicate lack of devotion to duty."
(xxii) (2009) 7 SCC 248 (Ramanuj Pandey vs. State of Madhya Pradesh and others) :
"7. Learned counsel would draw our attention to the case of B.C. Chaturvedi v. Union of India1, wherein this Court held that: (SCC p.762, para 18) 18. A review of the above legal position would establish that the disciplinary authority, and on appeal the appellate authority, being fact-finding authorities have exclusive power to consider the evidence with a view to maintain discipline. They are invested with the discretion to impose appropriate punishment keeping in view the magnitude or gravity of the misconduct. The High Court/Tribunal, while exercising the power of judicial review, cannot normally substitute its own conclusion on penalty and impose some other penalty. If the punishment imposed by the disciplinary authority or the appellate authority shocks the conscience of the High Court/Tribunal, it would appropriately mould the relief, either directing the disciplinary/appellate authority to reconsider the penalty imposed, or to shorten the litigation, it may itself, in exceptional and rare cases, impose appropriate punishment with cogent reasons in support thereof.
8. In Commr. of Police v. Syed Hussain2, this Court observed that: (SCC pp.176-77, paras 10 & 13) 10. It is one thing to say that order passed by the statutory authority is wholly arbitrary and thus violative of Article 14 of the Constitution and thus liable to be set aside, but it is another thing to say that the discretionary jurisdiction exercised by such authority should not ordinarily be interfered with by a superior court while exercising its power of judicial review unless one or the other ground upon which and on the basis whereof the power of judicial review can be exercised, exists.
* * *
13. It is, therefore, beyond any doubt or dispute that the doctrine of proportionality has to be applied in appropriate case as the depth of judicial review will depend on the facts and circumstances of each case.
9. Admittedly, it is for the disciplinary authority or the administrative authority to decide the quantum of punishment in a case of misconduct and the role of the court is only secondary. But in view of the gravity of the misconduct, namely, the appellant having apprehended Laxmi Narain and registering him under Section 13 of the Lunacy Act, where the disciplinary authority held the appellant guilty for detaining a public servant in police post without any reason and removed him from government service, the interference with the imposition of punishment is necessary.
10. In the present matter the appellant, while discharging his duties apprehended Laxmi Narain and registered him under the Lunacy Act without any sufficient reasons. This act of his had indisputably caused harassment to Laxmi Narain and was detrimental to the image of the Police Department, but the same was also not grave enough to punish him with removal from services. The appellant as a Head Constable was bestowed with official duties and while discharging them he went outside its purview, which definitely warrants that his services must be terminated, but as a warning to others and not as a vengeance.
11. While considering the power to interfere with the order of punishment, this Court in Rangaswami v. State of T.N.3, held that this Court, while exercising the jurisdiction under Article 136 of the Constitution, is empowered to alter or interfere with the penalty. Accordingly, the punishment of the appellant of dismissal from services as imposed by the disciplinary authority is substituted to one of compulsory retirement from the date of his dismissal from service i.e. 7-5-1992."
(xxiii) (1987) 4 SCC 611 (Ranjit Thakur vs. Union of India and others) :
"25. Judicial review generally speaking, is not directed against a decision, but is directed against the decision-making process. The question of the choice and quantum of punishment is within the jurisdiction and discretion of the court-martial. But the sentence has to suit the offence and the offender. It should not be vindictive or unduly harsh. It should not be so disproportionate to the offence as to shock the conscience and amount in itself to conclusive evidence of bias. The doctrine of proportionality, as part of the concept of judicial review, would ensure that even on an aspect which is, otherwise, within the exclusive province of the court-martial, if the decision of the court even as to sentence is an outrageous defiance of logic, then the sentence would not be immune from correction. Irrationality and perversity are recognised grounds of judicial review. In Council of Civil Service Unions v. Minister for the Civil Service9 Lord Diplock said:
Judicial review has I think developed to a stage today when, without reiterating any analysis of the steps by which the development has come about, one can conveniently classify under three heads the grounds on which administrative action is subject to control by judicial review. The first ground I would call illegality, the second irrationality and the third procedural impropriety. That is not to say that further development on a case by case basis may not in course of time add further grounds. I have in mind particularly the possible adoption in the future of the principle of proportionality which is recognised in the administrative law of several of our fellow members of the European Economic Community;. . .
6. Mrs.Rita Chandrasekaran, learned counsel appearing for respondents 1 to 3, has given a point-by-point submission to the grounds raised by the petitioner, as under :
(i) Regarding the first charge that 'the enquiry was conducted in violation of principles of natural justice', learned counsel would submit that the documents marked as Management exhibits are the authentic records of the Bank which do not require any specific identification in the enquiry and without there being any objection from the petitioner with regard to the authenticity/marking of documents during the enquiry, there was no need for the enquiry officer to prove the same in the enquiry by production of witnesses. Moreover, non-examination of witnesses on behalf of the Management has not caused any prejudice to the petitioner as the documents were under the custody of the Thousand Lights Branch, where he was a Chief Manager. Therefore, the conduct of the enquiry was not in violation of the principles of natural justice.
(ii) Secondly, with regard to the ground 'denial of cross-examination', learned counsel would submit that the petitioner has not chosen to examine the veracity and genuineness of the documents marked as Management exhibits nor did he examine the author of the document. Since the onus was on the petitioner to disprove the contents of the documents when he had not chosen to do so, he cannot make an allegation that he was denied the opportunity of cross-examination.
(iii) With regard to the grounds 3 and 4 that 'the Disciplinary authority substituted the finding without affording an opportunity to the petitioner' and 'Charges which were not dealt by the Inquiring Authority were dealt with by the Disciplinary Authority', learned counsel would submit that the Disciplinary Authority, by his order dated 17.04.2000 had concurred with the findings of the Enquiry Officer with regard to all the charges. As far as Charge No.5 is concerned, he had decided to ignore the imputation as it was in favour of the petitioner. As far as Charge No.6 is concerned, the Disciplinary Authority has not dealt with the same. Charge Nos.1 to 4 which are grave in nature were found to be proved for which the major penalty of "dismissal from service with immediate effect" was imposed on the petitioner. Therefore, the allegation that the Disciplinary Authority substituted the findings without affording an opportunity to the petitioner does not arise.
(iv) As regards the ground raised by the petitioner that 'no monetary loss was caused to the Bank', she would submit that the petitioner cannot take credit for the steps taken by the Bank in settling the account, as it was not to absolve the irregularities committed by him in the account.
(v) As far as the point of 'proportionality' is concerned, learned counsel would submit that the irregularities were committed by the petitioner by opening further LCs in favour of the borrower by exceeding his powers. She would contend that since the gravity of misconduct committed by the petitioner warranted the punishment of dismissal, he was imposed the punishment and he cannot compare himself with the action taken against others.
7. I have heard the learned counsel for the parties and also gone through the records as well as the decisions cited.
8. While the petitioner was working as Chief Manager in Thousand Lights Branch of Indian Bank, Chennai, between 27.07.1995 and 31.03.1996, it appears, he submitted a Renewal proposal dated 25.11.1995 based on the request of the parties and at the instance of the Zonal Office of the Bank, recommending the following limits :
(a) Demand loan of Rs.12 crores
(b) Bill discount (CSBP/DABP for 90 days) limit of Rs.5 crores
(c) Open cash credit of Rs.5 crores
(d) OD/Book debts for 90 days of Rs.8 crores
(e) Letter of Credit/DA Inland 90-180 days of Rs.15 crores
9. Apart from seeking note ratification of the action of the Branch in extending certain adhoc facilities on the advice of the Zonal Manager, the irregularities prevailing in the account were specifically highlighted in the said proposal. The renewal proposal was recommended by the Zonal Office to the Head Office of the Bank and a note was placed to the Board recommending the renewal proposal and ratification of the action of the Zonal Manager and CMD in advising the Branch to release overdrafts and opening of letter of credit. But, the renewal proposal was not approved and the action of the Zonal Manager and the former CMD of the Bank was not ratified, as a result of which, the action of the Branch in opening the letters of credit and release of overdraft limits were treated as unauthorised and in violation of extant guidelines/Circular by the Bank from time to time. Therefore, on 02.04.1996, the petitioner was suspended from the services of the Bank and an explanation was called for on 25.04.1996 by the Chief Vigilance Officer with regard to the alleged irregularities in the loan account of M/s.Gemini Picture Circuit Private Limited and also stating that he has failed to monitor the account properly and allowed the party to enjoy Inland LC limits, adhoc sanction limit, TOD and clean OD, with irregularities and absence of securities cover by way of proper Equitable Mortgage and had exposed the Bank to a huge financial risk. The petitioner submitted a reply dated 04.07.1996 in detail denying the allegations, pointing out the fact that excess limit was allowed on the instruction/knowledge of CMD and Zonal Manager and it was not permitted by him and as far as the mortgage is concerned, the same was available as security when the limit was in the Harbour Branch and continued in the Thousand Lights Branch. Not being satisfied with the said reply of the petitioner, the Disciplinary Authority issued a charge sheet on 18.05.1998, with the following charges :
"The branch having pointed out the irregularities in the conduct of the account, vide confirmation notes to Board/EC dated 21.07.95, 12.08.95 and 08.09.95, such as that the company had not been building up funds to meet the LCs on due dates : LCs are opened in favour of M/s.Asian Photo Films (P) Ltd. which is a sister concern: the instalments under the Blocked Loan were overdue, company not submitting the financial statements for renewal of the facility which expired on 04.06.95, and QIS statements were not submitted by the party, you have allowed opening of further LCs and also recommended 3 Adhoc LCs opened on 14.10.95 and 12.12.95 for a total of Rs.1000.00 lakhs over and above the regular limit of Rs.1000.00 lakhs.
You failed to ensure building up of funds by the company to meet the LCs on due dates and consequently when the LCs including the adhoc LCs developed on the Bank, the Advanced Bills liability was created.
Despite the fact that there were discrepancies in the LC Agreements and the Bills/Hundies received under LC, you have allowed to open LCs and followed to debit Advance Bills.
Apart from the Adhoc LCs for Rs.1000.00 lakhs, you have allowed excess in the regular LC limit of Rs.1000.00 lakhs without powers/confirmation.
You have allowed the TOD of Rs.200.00 lakhs and Rs.150.00 lakhs permitted by CMD and ZM, Chennai on 28.09.95 and 11.11.95 respectively even beyond the 90 days permitted and allowed excess.
When the company did not have any piece of land allotted to it out of the property held as EM of 15 grounds 1576 sq.ft and another 1 ground 1600 sq.ft at Gemini Complex, Mount Road, Chennai on account of the compromise decree dated 25.04.95 passed by the Honourable High Court of Chennai allotting the said property to M/s.Gemini Resorts and Holdings Ltd. and M/s.Ravishankar Estates Pvt.Ltd., you have created extension of EM on the above property on 22.12.95 which has no value and the Bank has been deprived of security cover of that property.
Your failure to properly monitor the account, your actions in continuing the facility on lapsed sanctions, allowing excess without powers and not taking proper care to have the EM cover for the facilities, have exposed the Bank, to risk of recovery of Rs.2713.54 lakhs (including MOI) as on 07.07.97 and the Bank has filed a suit for recovery."
10. To the above charges, the petitioner submitted an explanation dated 06.07.1998, pointing out that he has always kept the Zonal Office and Head Office informed about the account and the alleged excess were not really excess and they were all allowed with prior permission of the Zonal Manager or against security by way of Fixed Deposit. However, not satisfied with his explanation, the Disciplinary Authority ordered Departmental Enquiry appointing Mr.Suman Nayar as Inquiring Authority. The said Inquiring Authority conducted the hearing on 14.10.1998, 27.11.1998 and 11.01.1999 and concluded the enquiry and submitted his report on 30.04.1999, holding as under :
"Allegation 1 :
As regards (a) CO's main submission is that he had opened LCs only within the sanctioned limit of Rs.1000 lakhs. I accept the submission that unless until the limits were cancelled or the account was recalled, CO cannot withhold opening of fresh LC on his own within the sanctioned limits. PO has not produced any evidence to show that CO had exceeded the sanctioned limit while opening these fresh LCs. In view of this, I reject the allegation and hold it as "Not Proved".
As regards (b), CO has accepted that he had opened these LCs as permitted by ZM. In view of this, the factual contents of the allegation stands established and accordingly, I hold the allegation as "Proved".
As regards (c), CO has admitted that in spite of his monitoring the party did not meet their commitment and branch had to meet the commitment by debiting advance bill account. Thus, the factual contents of the allegations stand established and accordingly I hold the allegation as "Proved".
Allegation 2 :
Perusal of Ex.M.8, M9 and M.10 confirm the existing of above mentioned discrepancies making these documents as invalid documents. If CO had not put his signatures on Ex.M.11, he as branch-in-charge was responsible in his supervisory capacity. As branch-in-charge he was expected to scrutinise the days' vouchers at the end of the day for any defects/deficiencies in any of them and deal appropriately with those vouchers. This has not been done pointing out CO's supervisory failure. In view of this, I accept the allegation as substantiated and hold it as "Proved".
Allegation 3 :
Perusal of Ex.M.20 and D.22, D.25 and D.26 clearly proves the excess allowed on 22.9.95 of Rs.24.67 lacs and of Rs.28.66 lacs allowed on 26.12.95. However, PO has not produced any document to prove the excess of Rs.104.85 lacs. Hence, I reject the allegation regarding excess of Rs.104.85 lacs as unsubstantiated. CO has not denied the excess of Rs.24.67 lacs and Rs.28.66 lacs allowed on 22.9.95 and 26.12.95 respectively. Accordingly, I accept this part of allegation as substantiated and hold as it as "Proved".
Allegation No.4 :
CO has not denied that he had failed to recover the dues. His main submission is that in spite of his best efforts, party did not respond. This amounts to admission of the factual contents of the allegation and accordingly I hold the allegation as "Proved".
Allegation No.5 :
CO's submissions are vague and evasive. He is silent about action taken by him on Ex.M.14 subsequent to his joining the branch. He has also not denied that he had allowed creation of extension of EM on 22.12.95. In view of his silence on these issues, I accept the allegation as substantiated and hold it as 'Proved".
Allegation No.6:
This allegation is consequential to the allegations discussed earlier under heading Nos.1 to 5 and does not represent any separate/distinct act of irregularity on the part of CO. Accordingly, it is not examined separately.
From the above findings of the Inquiring Authority, it is clear that Charge 1 (a) against the Charged Officer/delinquent officer/petitioner herein has not been proved; Charges 1 (b) 1 (c), 2,4 and 5 are proved and Charge 3 is partly proved. While concluding, the Inquiring Authority has held the charges as "Proved"."
11. Thereafter, the petitioner submitted a detailed representation to the Disciplinary Authority about the alleged infirmity in the enquiry report. Pursuant thereto, on 17.04.2000, the Disciplinary Authority has dealt with the matter in detail, making imputation-wise observations, and passed orders, the summing up of which is as under :
"The Charges (1) to (4) deal with your lapses in containing the facility on a lapsed sanction, recommending Adhoc facilities while irregularities persisted in the accounts, supervisory failure in accepting bills under LCs which are not in conformity with LC terms and allowing excess in LC and OD without powers or authority.
In the face of continuing irregularities, instead of enforcing credit/financial discipline, you had been obliging the borrower as may be seen from the Imputations 1 to 4. The intention of the borrower to pay the dues are brought out by defence as seen from the exhibits produced. The efforts for recovery by your successor and the higher authorities are also produced as defence documents as DEX33,34,35,36,37,38,39 and 41. For these efforts and offers for recovery, you cannot take credit as they pertain to the period after your tenure at the branch. In spite of all these, the recovery had not been forthcoming and the fact remains that the Bank had to file suit for recovery which is still not concluded. The risk of recovery is still there and how far the security available will cover the dues is a matter that can be known only when the suit is finally disposed off and assets/securities encashed. Had you taken corrective steps in view of irregularities that subsisted, the position would not have gone so bad as it exists today.
In view of the above, the final observation of IA holding charges as proved is concurred with.
The charges held proved as narrated above are serious in nature indicating that you had acted without devotion and diligence, affecting the interest of the Bank and exposing the Bank to risk of recovery of a very huge amount. In view of the above, I impose on you a Major Penalty of "DISMISSAL FROM SERVICE WITH IMMEDIATE EFFECT" in terms of Regulation 4 (j) of Indian Bank Officer Employees' (Discipline and Appeal) Regulations 1976 as amended and communicated in CO:Personnel Department Circular No.PRNL:002:99:2000 dated 07.04.1999."
12. While holding as above, the Disciplinary Authority has concurred with the findings of the Inquiring Authority. Since the charges held proved were serious in nature and that the petitioner had acted without devotion and diligence, affecting the interest of the Bank and exposing the Bank to risk of recovery of a very huge amount, the Disciplinary Authority had imposed the major punishment of Dismissal from Service, as per Regulation 4 (j) of the Regulations. Thereafter, on appeal by the petitioner, the Appellate Authority, namely, second respondent herein, by his order dated 18.12.2006, dismissed the appeal, holding that there was no fresh material for consideration in the appeal. Pursuant thereto, the petitioner preferred a Review Petition before the Chairman and Managing Director, first respondent herein, who, by his order dated, 19.05.2007, dismissed the Review Petition, having regard to the gravity of the charges.
13. The mainstay of the petitioner is that the account mentioned in the charge sheet is adjusted and hence, he cannot be held guilty. In this regard, it is to be stated that the successor of petitioner and also the higher authorities had taken efforts for recovery, after the tenure of the petitioner at that branch, for which the petitioner cannot take credit. Had the petitioner taken corrective steps against the irregularities that subsisted, the bank would not have been put to risk of recovery of a very huge amount, as stated by the respondents. Failure to do so is a clear indication of the petitioner in not acting with devotion and diligence, thereby affecting the interest of the Bank.
14. The documents marked as Management exhibits are the authentic records of the Bank which do not require any specific identification in the enquiry and without there being any objection from the petitioner with regard to the authenticity/marking of documents during the enquiry, there was no need for the enquiry officer to prove the same in the enquiry by production of witnesses. Further, non-examination of witnesses on behalf of the Management has not caused any prejudice to the petitioner, as the documents were under the custody of the Thousand Lights Branch, where he was the Chief Manager. Therefore, the conduct of the enquiry was not in violation of the principles of natural justice.
15.The Disciplinary Authority, by his order dated 17.04.2000, had concurred with the findings of the Inquiring Authority with regard to all the charges. As far as Charge No.6 is concerned, the Inquiring Authority did not examine the same separately, as the exposure to risk of recovery of Bank funds was a consequential action of the lapses under Charges 1 to 5, and the same was also concurred with. Charge 1 (a), which was held not proved by the Inquiring Authority, was also concurred with by the Disciplinary Authority. Since Charge 1 to 5 were grave in nature and found to be proved, the penalty of "dismissal from service with immediate effect" was imposed on the petitioner by the Disciplinary Authority. Though it is the claim of the petitioner that the Disciplinary authority substituted the finding without affording an opportunity to the petitioner and that Charges which were not dealt with by the Inquiring Authority were dealt with by the Disciplinary Authority independently, it is not actually so, because, the Disciplinary Authority has not substituted the finding of the Inquiring Authority and also for the reason that the very same charges which were dealt with by the Inquiring Authority only, were dealt with by the Disciplinary Authority and the findings of the Inquiring Authority were concurred with by the Disciplinary Authority in toto. Had the Disciplinary Authority given a different finding vis-a-vis the Inquiring Authority, the situation might have been different, which is not the case here. In addition, the petitioner himself has stated in the affidavit that pursuant to the report of the Inquiring Authority, he submitted a detailed reply to the Disciplinary Authority, which reply was also reflected in the order of the Disciplinary Authority, while passing the impugned order. Therefore, his stand that he was not given an opportunity before passing the impugned order also cannot be countenanced.
16. As already stated above, the petitioner cannot take credit for the steps taken by the Bank in settling the account and it was also not to absolve the irregularities committed by him in the account. Also, as the gravity of misconduct committed by the petitioner warranted major penalty, he was imposed with the punishment of dismissal and, hence, by no stretch of imagination, it can be said that the said punishment is disproportionate to the charges levelled against the petitioner.
17. Clause 3 of the Indian Bank Officer Employees' (Conduct) Regulations,1976, reads as follows :
"(1) Every Officer employee shall, at all times take all possible steps to ensure and protect the interests of the bank and discharge his duties with utmost integrity, honesty, devotion and diligence and do nothing which is unbecoming of a bank officer.
(2) Every Officer employee shall maintain good conduct and discipline and show courtesy and attention to all persons in all transactions and negotiations.
(3) No officer employee shall, in the performance of his official duties or in the exercise of powers conferred on him, act otherwise than in his best judgment except when he is acting under the direction of his official superior.
(4) Every officer employee shall take all possible steps to ensure the integrity and devotion to duty of all persons for the time being under his control and authority."
18. A reading of the above provisions would make it clear that no officer employee, in performance of his official duty or in the exercise of powers conferred on him, acts otherwise than in his best judgment except when he is acting under the direction of his official superior. In the case on hand, the consistent stand of the petitioner is that he acted as per the instructions of his official superior namely the Zonal Manager as he had to act in furtherance of his official duty in accordance with the regulations. But, it cannot be construed that every instruction of the official superior contrary to the regulations should be acted upon. The petitioner knows this position very well, but as an obedient officer of the superior, he has acted and done something which now cannot come to the rescue of the petitioner, while examining the plea of the petitioner that he is innocent and has acted as per the instructions of his superior. The law prescribes what is to be done and what not to be. When that is so, the petitioner should have acted only in accordance with law and it is not as per the instructions alone. Therefore, the plea of the petitioner on this ground also cannot be acceded to.
19. With regard to the plea of denial of cross-examination, it is to be stated that the petitioner was called upon to inspect the documents so also to furnish additional documents, if any, to be marked as defence documents within the time frame given by the inquiring authority. However, he has not chosen to examine the authenticity of the documents marked as management exhibits nor did he examine the author of the documents. The onus was on the petitioner to disprove the contents of the documents. It is incumbent upon the petitioner to plead and prove the prejudice, if any, that has been caused due to non-examination of witnesses. Admittedly, the petitioner has not raised the said issue during the course of enquiry nor did he object to the marking of Exhibits MOs.1 to 22. In this regard, reliance has been placed by the respondents upon the judgments of the Supreme Court in State Bank of India and Others v. Bidyut Kumar Mitra and Others, 2011 (2) SCC 316 and Union of India and Others v. Alok Kumar, 2010 (5) SCC 349, wherein it has been held that in a departmental enquiry, where the department relies upon a large number of documents, majority of which are furnished and an opportunity is granted to the delinquent officer to defend himself except that some copies of formal documents have not been furnished to the delinquent, in that event the onus is upon him to show that non furnishing of those formal documents have resulted in de-facto prejudice and he has been put to disadvantage as a result thereof. In the present case, the documents which have been marked were furnished to the petitioner even prior to commencement of the regular enquiry, but he has not chosen to question the veracity or authenticity or contents of the documents. When the petitioner had not chosen to do so, he cannot make an allegation that he was denied the opportunity of cross-examination. So, it cannot be said that the enquiry was conducted in an unfair and improper manner.
20. Each officer of the Bank cannot be allowed to carve out his own little empire wherein he dispenses favours and largesse. No organisation, more particularly, a Bank can function properly and effectively if its officers and employees do not observe the prescribed norms and discipline. Such indiscipline cannot be condoned on the specious ground that it was not actuated by ulterior motives or by extraneous considerations. The very act of acting beyond authority, that too a course of conduct spread over a sufficiently long period and involving innumerable instances, is by itself a misconduct. Such acts, if permitted, may bring in profit in some cases but they may also lead to huge losses. Such adventures are not given to the employees of Banks which deal with public funds. This is the law laid down by the Supreme Court in The Disciplinary Authority-Cum- Regional Manager and others vs. Nikunja Bihari Patnaik, cited above. In the instant case, the Inquiring Authority has recorded a clear finding that the petitioner has committed misconduct of the charges 1 to 6, except 1 (a), which was not proved, and 6, which was ignored, as it was a consequential action of the lapses under Charges 1 to 5 and the said finding was upheld by the Disciplinary Authority, Appellate Authority and also the Revisional Authority, by giving cogent reasons and without any deviation. In such a situation, this Court is at a loss to understand as to how could all this be characterised as errors of judgment by the authorities and not as misconduct, as defined by the Regulations. The decisions relied upon by the learned counsel for the petitioner are totally on different facts and circumstances and not akin to the ones of the present case, except the one in the case of The Disciplinary Authority-Cum- Regional Manager, cited supra, which too against the petitioner, but in favour of the respondents. Therefore, they are not at all useful here.
21. The bottom line of the learned counsel for the petitioner is that similarly chargesheeted persons as that of the petitioner viz., K.T.Venkateswaran, Chief Manager, Alwarpet Branch; Azeez, AGM, predecessor to the petitioner; T.S.Venkateswaran, G.V.Srinivasan, Senior Manager; Sivgurunathan, Chief Manager; N.Balakrishnan, Senior Manager; A.Ravindran, Manager, L.Natarajan, Chief Manager; H.M.Prathiba, Manager; V.S.Madhavan, Senior Manager; B.Subramaniam, DGM Zonal Office and B.Natarajan, AGM Regional Office, were let off with a minor punishment, whereas, in the case of the petitioner alone, a major punishment is imposed and, hence, there is a discrimination.
22. Though the plea of differential treatment has been raised by the petitioner in the affidavit, in the counter of the respondents, this point of discrimination has not been answered by the respondents. However, while submitting the written arguments, a stand has been taken by the respondents that one R.Sivgurunathan, the then Chief Manager and N.Balakrishnan, Senior Manager, have retired from service even before the irregularities in the Gemini group accounts were detected by the Bank and hence no action was taken by the Bank. However, they have been chargesheeted by CBI as private individuals wherein they have been arrayed as accused. Various punishments were awarded to the individuals whose names are mentioned in para 26 depending upon the gravity of misconduct committed by them. Since the gravity of misconduct committed by the petitioner warranted the punishment of dismissal, he was imposed the punishment and he cannot compare himself with the actions taken against others.
23. Of course, the respondents have not come out with a statement that there was a punishment in respect of others to such a dismissal from service. This is one aspect of differential treatment shown to the petitioner vis-a-vis other persons, who had committed similar irregularities, and it is a matter for concern. During the course of argument in all the session, the consistent plea of the petitioner is that at least some lesser punishment as in the case of others ought to have been imposed.
24. Considering the various factors and the manner in which the petitioner is involved in the conduct which is contrary to the regulations for which the counsel for the petitioner insistently pointed out that no officer employee shall, in the performance of his official duties or in the exercise of powers conferred on him, act otherwise than in his best judgment except when he is acting under the direction of his official superior as per Regulation 3 sub-clause (3) and, as per sub-clause (4), every officer employees shall take all possible steps to ensure the integrity and devotion to duty of all persons for the time being under his control and authority, this Court holds that in a critical situation, whenever the instructions are given by the superior officer to his subordinate, it is for the subordinate to obey and, accordingly, the petitioner has acted as per the instructions of his official superior. However, the oral and documentary evidence could not make his plea as proved to be true. The plea of the petitioner for a similar treatment on par with other employees that he ought to have been either allowed to retire from service with terminal benefits or with a lesser punishment is the matter for consideration by the authorities concerned. In the given situation, it is for the authorities to look into the grievance of the petitioner if the petitioner approaches them and plead for such a prayer. Therefore, the petitioner can go before the highest authority, namely, Chairman and Managing Director, first respondent herein, by submitting a representation, in which event, the same may be looked into by him in accordance with law.
25. Writ Petition is dismissed with the above observation. No costs.
Index : Yes 16-08-2011
Internet : Yes
abe/dixit
To
1. The Chairman and Managing Director,
(Reviewing Authority)
Indian Bank, Head Office,
66, Rajaji Salai,
Chennai 600 001.
2. The Executive Director
(Appellate Authority),
Indian Bank,
66, Rajaji Salai,
Chennai 600 001.
3. The General Manager
(Disciplinary Authority)
66, Rajaji Salai,
Chennai 600 001.
4. The Commissioner for Departmental
Inquiries (Inquiring Authority),
Satarkata Bhavan A-Block,
GPO Complex INA,
New Delhi 110 023.
V.DHANAPALAN,J.
Abe/dixit
W.P.No.12759 of 2009
Dated : 16.08.2011