Jammu & Kashmir High Court - Srinagar Bench
Shamim Ahmad Haji vs J&K Bank Ltd. & Ors on 30 May, 2025
Author: Sanjay Dhar
Bench: Sanjay Dhar
IN THE HIGH COURT OF JAMMU & KASHMIR AND
LADAKH AT SRINAGAR
Reserved on: 22.05.2025
Pronounced on: 30.05.2025
WP(C) No.486/2024
SHAMIM AHMAD HAJI ...PETITIONER(S)
Through: - Mr. M. Y. Bhat, Sr. Advocate, with
Ms. Urba, Advocate.
Vs.
J&K BANK LTD. & ORS. ...RESPONDENT(S)
Through: - Mr. Rabinder Singh, Advocate.
CORAM: HON'BLE MR. JUSTICE SANJAY DHAR, JUDGE
JUDGMENT
1) The petitioner has challenged the disciplinary proceedings initiated by the respondents against him. Challenge has also been thrown to order dated 20th May, 2024, issued by respondent No.4, whereby the petitioner has been reverted back to the post of Chief Manager (Scale- IV) by fixing his basis pay at Rs.92390. It is pertinent to mention here that initially the petitioner had thrown challenge only to the disciplinary proceedings initiated against him by the respondents but during the pendency of the writ petition, the impugned punishment order dated 20th May, 2024, came to be issued by the respondents, as a consequence whereof the petitioner, after seeking amendment of the writ petition, was permitted to challenge the said order as well.
WP(C) No.486/2024 Page 1 of 30
2) According to the petitioner, he was appointed in the service of the respondent bank in the year 1997 and from 15.07.2012 upto 19.05.2017, he functioned as Branch Manager of the respondent bank at Infantry Road, Bangalore. It has been submitted that during this period, credit facilities were advanced in favour of M/S. A. Rawther Spices Private Ltd. and these facilities were renewed, enhanced and ad hoc facilities were also provided to the said company on eight occasions. The account of the said company is stated to have been declared as 'NPA' in September, 2017 after the petitioner had been transferred from the said Branch.
3) In December, 2020, when the petitioner was working as Lead District Manager, Kupwara, he received communication dated 30.12.2020, whereunder an explanation was sought from him in connection with the account of aforesaid borrower company. It was intimated to him that during the course of investigation, the account of the aforesaid borrower company was classified as fraud.
4) The petitioner is stated to have filed a detailed reply to the aforesaid communication in the month of January, 2021, wherein he explained his stand. It has been submitted that the detailed reply filed by the petitioner was WP(C) No.486/2024 Page 2 of 30 ignored by the respondents and they mechanically proceeded to frame charge sheet dated 3rd April, 2023. The charge sheet dated 3rd April, 2023, was replied by the petitioner vide communication dated 10.05.2023 and a request was made to the respondents that the charges against him, being without basis, be dropped.
5) On 2nd February, 2024, the respondents proceeded to issue a show cause notice to the petitioner informing him that the respondent Bank has arrived at a provisional conclusion and the petitioner was asked to show cause as to why he should not be removed from service of the bank. At this stage, the petitioner filed the present writ petition before this Court challenging the disciplinary proceedings.
6) On 15.03.2024, this Court passed an order in the light of the rule position and directed the respondents to furnish certain documents to the petitioner to enable him to file reply to the show cause notice dated 2nd February, 2024 and it was further provided that final order, that may be passed by the respondents, shall remain subject to outcome of the petition. It has been submitted that pursuant to the directions of this Court, the respondents did furnish some of the documents to the petitioner but the same were WP(C) No.486/2024 Page 3 of 30 deficient and this deficiency was pointed out to the respondents by the petitioner through email.
7) Ultimately, the petitioner filed his detailed reply to show cause notice dated 2nd February, 2024, but the respondents, in a malafide manner and without considering his reply to the said show cause notice, proceeded to pass the impugned order dated 20th May, 2024, thereby imposing the punishment of reversion upon the petitioner.
8) The petitioner has challenged the impugned enquiry proceedings and the impugned order dated 20th May, 2024, on the grounds that the impugned order has been passed in a mechanical manner without considering the contentions raised by the petitioner in his reply to the show cause notice. It has been further contended that the petitioner has not been provided with a number of relevant documents which had bearing on the issue and, thus, principles of natural justice have been violated in the present case. It has been contended that even after the passing of order by this Court, the respondents did not bother to furnish all the documents to the petitioner which clearly depicts their malafides. It has been further contended that the charge against the petitioner is vague as it is not indicated in the charge sheet as to what was the WP(C) No.486/2024 Page 4 of 30 material before the respondents to form an opinion that the petitioner had given a rosy picture about the borrowing company. It has been submitted that as per the established procedure, any proposal regarding enhancement of the credit limit goes to the Zonal Officer of the respondent Bank and after its evaluation and assessment by the Project Appraisal team in the Zonal Office, the proposal is forwarded to the Chairman of the Bank and it is only thereafter that Zonal Office gives a nod, otherwise the proposal is returned to the Branch Office. Thus, according to the petitioner, it was not within his competence to independently grant any enhancement of limit to the borrower company.
9) It has been contended that in the Branch Office at Bangalore, officers in the foreign exchange section were wholly and solely responsible for financing exports and, as such, the petitioner, who was only the Branch head, could not have been punished for the acts of his subordinates who were working independently and to impose a harsh penalty of reversion. It has been contended that not a single entry has been made by the petitioner and, as such, the allegation that he has made false entries, is without any basis. It has been further contended that the disciplinary authority has not considered the material on record and WP(C) No.486/2024 Page 5 of 30 has without any basis put blame upon the petitioner. According to the petitioner, the documents placed on record by him, which conclusively proved his innocence, were brushed aside by the enquiry officer and the disciplinary authority. It has been contended that the higher authorities of the bank, particularly respondents No.4 and 5, have acted in a malafide manner by putting blame upon the petitioner in order to save their own skin.
10) It has been submitted that the Anti-corruption Bureau has registered a case in respect of the same set of facts which was later on transferred to the CBI. Therefore, the respondents could not have proceeded to conclude the disciplinary proceedings on the same set of facts as the same is against the dictate of the Supreme Court in the case of Kusheshwar Dubey vs Bharat Cooking Coal Ltd. & Ors, AIR 1988 SC 2118.
11) It has been contended that the departmental enquiry against the petitioner has been conduced in a slipshod manner and the same suffers from procedural defects. It has been further contended that no evidence has been gathered by way of preliminary enquiry and no evidence has been recorded during the enquiry nor the petitioner has been asked to adduce evidence in defence. It has been contended WP(C) No.486/2024 Page 6 of 30 that tendering of documents is not sufficient to prove the charges and without examination of the prosecution witnesses, who are liable to be cross-examined by the delinquent official, the charges could not have been proved against the petitioner.
12) The respondents, in their reply to the writ petition, have submitted that the petitioner along with six other officials, was subjected to disciplinary proceedings. It has been submitted that based on the lapses committed by the officials that was apparent from the investigation report, separate charge sheets were issued to all the seven officials including the petitioner wherein all the charge sheeted officials were asked to submit their reply within fifteen days from the date of receipt of respective charge sheets. According to the respondents, after receiving the reply of all the charge sheeted officials including the petitioner, a full- fledged departmental enquiry was ordered and respondent No.5 was appointed as Enquiry Officer to hold and conduct enquiry against the charge sheeted officials including the petitioner. The charges are stated to have been communicated to the petitioner vide communication dated 24.05.2023. It has been submitted that the charge sheeted officials including the petitioner were provided adequate opportunity to defend and challenge the same before the WP(C) No.486/2024 Page 7 of 30 Enquiry Officer and the petitioner duly participated in the enquiry proceedings. It has been further submitted that after the conclusion of the enquiry, report dated 6th December, 2023, was forwarded by the Enquiry Officer to the disciplinary authority.
13) The respondents have further stated that after going through the enquiry report, notices dated 2nd February, 2024, were issued to the petitioner and other charge sheeted officials and they were asked to show cause as to why proposed punishment shall not be inflicted upon them. It has been submitted that other six officials submitted their replies to the show cause notices but the petitioner proceeded to challenge the disciplinary proceedings before this Court. It has been further submitted that in terms of the order passed by this Court, the relevant documents were furnished to the petitioner and he was also granted personal hearing and opportunity to file reply to the show cause notice.
14) According to the respondents, the disciplinary authority, after perusing the enquiry report, documents relied upon by the Enquiry Officer and after considering the submissions of the petitioner made in the reply to the show cause notice and during personal hearing, passed the final WP(C) No.486/2024 Page 8 of 30 order dated 20th May, 2024, whereby the petitioner was reverted to the post of Chief Manager (Scale-IV) instead of awarding the extreme punishment of removal from service.
15) On the factual aspects of the charges against the petitioner, the respondents have submitted that the petitioner during his tenure as Branch Manager, J&K Bank Infantry Road, Bangalore, has discharged his duties in a manner prejudicial to the interests of the bank and he has violated the established norms of banking and the set procedures relating to lending while processing, recommending and releasing credit facilities in favour of borrower M/S. A. Rawther Pvt. Ltd. by misusing his official position. It has been submitted that the petitioner in connivance with the borrower company has allowed to route/credit funds in current accounts of the company as per its choice and convenience instead of cash credit account in order to allow the borrower company to use the funds to avoid adjustments of the continuous overdrawing in cash credit account and thereafter the petitioner used to make recommendations for enhancement of existing credit facilities for absorbing such overdrawing/ad hoc facilities.
16) It has been submitted that the petitioner has allowed the disbursement of packing credit components mostly WP(C) No.486/2024 Page 9 of 30 without receipt of any request letter from the party and in absence of valid export order of the overseas buyers from the party. It has been alleged that the petitioner has allowed and disbursed under his own ID the packing credit components from the account of borrower company and the said amount has been mostly utilized by the petitioner for realizing the overdue crystalized export bills of the borrower company and for various other purposes like servicing of loan instalments of its sister concern M/S Central Trade Agency. Thus, the petitioner has diverted the funds which were purely meant for export purposes.
17) It has been submitted that the petitioner did not obtain credit report of the suppliers of the raw materials of the company and that he has performed his duties in a most perfunctory way and in violation of FEMA and Exchange Control Regulations of RBI. It has been further contended that the petitioner has allowed purchasing/ discounting of fresh export bills in favour of the borrower company without obtaining set of non-negotiable documents evidencing that shipment of goods has been loaded/laded on board or has passed through concerned custom authorities. It is further alleged that the petitioner has not obtained the buyer wise policy for PSL (Non-LC) WP(C) No.486/2024 Page 10 of 30 documents incorporated in the sanction letter dated 10.11.2015.
18) According to the respondents, the petitioner has continued to recommend enhancements/ad hoc extensions in favour of the borrower company in spite of the fact that the said company was not doing well. It has been submitted that the borrower company could have been classified as NPA in the year 2013 itself but the petitioner has facilitated the dragging of the account till 2017, which resulted in increase in exposure besides the bank lost the opportunity to recover exposure to the company, which otherwise was possible at that stage. It has been alleged that the petitioner, while recommending enhancements/adhoc extensions, has not portrayed the real picture of the borrower company. Thus, according to the respondents, the petitioner was hand in glove with the borrower company and he manipulated and camouflaged the account of the borrower company besides misleading the higher authorities, as a result of which account of the borrower company was declared as 'fraud' on 11.12.2020 with a balance outstanding of Rs.388.92 crores as on 14.03.2023.
19) I have heard learned counsel for the parties and perused record of the case including the record of the enquiry.
WP(C) No.486/2024 Page 11 of 30
20) Before coming to the merits of the rival contentions raised by learned counsel for the parties, it would be apt to notice as to what is the scope of interference by this Court in the findings of the Enquiry Officer recorded in the disciplinary proceedings. It is a settled proposition of law that the Writ Court, while considering challenge to the findings of an Enquiry Officer recorded in disciplinary proceedings, cannot sit as a court of appeal and the Writ Court has very limited scope of interfering into the findings of the Enquiry Officer. In this context it would be necessary to have a survey some of the case law on the subject.
21) The Supreme Court has, in the case of State of A.P and Others v. S. Sree Rama Rao, AIR 1963 SC 1723, while considering the scope of judicial review of departmental proceedings, observed as under:
".......The High Court is not constituted in a proceeding under Art. 226 of the Constitution a Court of appeal over the decision of the authorities holding a departmental enquiry against a public servant: iris concerned to determine whether the enquiry is held by an authority competent in that behalf, and according to the procedure prescribed in that behalf, and whether the rules of natural justice are not violated. Where there is some evidence, which the authority entrusted with the duty to hold the enquiry has accepted and which evidence may reasonably support the conclusion that the delinquent Officer is guilty of the charge, it is not the function of the High Court in a petition for a writ under Art. 226 to review the evidence and to arrive at an independent finding on the evidence.WP(C) No.486/2024 Page 12 of 30
13. Thus, in a proceeding under Article 226 of the Constitution, the High Court does not sit as an appellate authority over the findings of the disciplinary authority and so long as the findings of the disciplinary authority are supported by some evidence the High Court does not reappreciate the evidence and come to a different and independent finding on the evidence. This position of law has been reiterated in several decisions by this Court which we need not refer to, and yet by the impugned judgment the High Court has re- appreciated the evidence and arrived at the conclusion that the findings recorded by the enquiry officer are not substantiated by any material on record and the allegations leveled against the respondent no.1 do not constitute any misconduct and that the respondent no.1 was not guilty of any misconduct."
22) Again, in the case of Union of India and others v. P. Gunasekaran, (2015) 2 SCC 610, the Supreme Court laid down broad parameters within which the High Court ought to exercise its powers under Article 226/227 of the Constitution of India in the matters relating to disciplinary proceedings. The Court held as under:
12. Despite the well-settled position, it is painfully disturbing to note that the High Court has acted as an appellate authority in the disciplinary proceedings, reappreciating even the evidence before the enquiry officer. The finding on Charge I was accepted by the disciplinary authority and was also endorsed by the Central Administrative Tribunal. In disciplinary proceedings, the High Court is not and cannot act as a second court of first appeal.
The High Court, in exercise of its powers under Articles 226/227 of the Constitution of India, shall not venture into reappreciation of the evidence. The High Court can only see whether:
(a) the enquiry is held by a competent
authority;
WP(C) No.486/2024 Page 13 of 30
(b) the enquiry is held according to the
procedure prescribed in that behalf;
(c) there is violation of the principles of
natural justice in conducting the
proceedings;
(d) the authorities have disabled themselves
from reaching a fair conclusion by some
considerations extraneous to the
evidence and merits of the case;
(e) the authorities have allowed themselves
to be influenced by irrelevant or
extraneous considerations;
(f) the conclusion, on the very face of it, is so
wholly arbitrary and capricious that no reasonable person could ever have arrived at such conclusion;
(g) the disciplinary authority had erroneously failed to admit the admissible and material evidence;
(h) the disciplinary authority had erroneously admitted inadmissible evidence which influenced the finding;
(i) the finding of fact is based on no
evidence.
13. Under Articles 226/227 of the Constitution of India, the High Court shall not:
(i) reappreciate the evidence;
(ii) interfere with the conclusions in the enquiry, in case the same has been conducted in accordance with law;
(iii) go into the adequacy of the evidence;
(iv) go into the reliability of the evidence;
(v) interfere, if there be some legal evidence on which findings can be based.
(vi) correct the error of fact however grave it may appear to be;
(vii) go into the proportionality of punishment unless it shocks its conscience.
WP(C) No.486/2024 Page 14 of 30
23) In B. C. Chaturvedi v. Union of India and others, (1995) 6 SCC 749, the Supreme Court, while dealing with a similar issue, has observed as under:
12. Judicial review is not an appeal from a decision but a review of the manner in which the decision is made. Power of judicial review is meant to ensure that the individual receives fair treatment and not to ensure that the conclusion which the authority reaches is necessarily correct in the eye of the court.
When an inquiry is conducted on charges of misconduct by a public servant, the Court/Tribunal is concerned to determine whether the inquiry was held by a competent officer or whether rules of natural justice are complied with. Whether the findings or conclusions are based on some evidence, the authority entrusted with the power to hold inquiry has jurisdiction, power and authority to reach a finding of fact or conclusion. But that finding must be based on some evidence. Neither the technical rules of Evidence Act nor of proof of fact or evidence as defined therein, apply to disciplinary proceeding. When the authority accepts that evidence and conclusion receives support therefrom, the disciplinary authority is entitled to hold that the delinquent officer is guilty of the charge. The Court/Tribunal in its power of judicial review does not act as appellate authority to reappreciate the evidence and to arrive at its own independent findings on the evidence. The Court/Tribunal may interfere where the authority held the proceedings against the delinquent officer in a manner inconsistent with the rules of natural justice or in violation of statutory rules prescribing the mode of inquiry or where the conclusion or finding reached by the disciplinary authority is based on no evidence. If the conclusion or finding be such as no reasonable person would have ever reached, the Court/Tribunal may interfere with the conclusion or the finding, and mould the relief so as to make it appropriate to the facts of each case.
13. The disciplinary authority is the sole judge of facts. Where appeal is presented, the appellate authority has coextensive power to reappreciate the evidence or the nature of punishment. In a disciplinary inquiry, the strict proof of legal evidence WP(C) No.486/2024 Page 15 of 30 and findings on that evidence are not relevant. Adequacy of evidence or reliability of evidence cannot be permitted to be canvassed before the Court/Tribunal. In Union of India v. H.C. Goel [(1964) 4 SCR 718 : AIR 1964 SC 364 : (1964) 1 LLJ 38] this Court held at p. 728 that if the conclusion, upon consideration of the evidence reached by the disciplinary authority, is perverse or suffers from patent error on the face of the record or based on no evidence at all, a writ of certiorari could be issued.
24) From the foregoing analysis of law on the subject, it is clear that the High Court, while exercising its powers under Section 226 and 227 of the Constitution, cannot sit in appeal over the report of the Enquiry Officer and reappreciation of the evidence is not permissible. The High Court can only go into the question as to whether the enquiry is held by a competent authority, whether the procedure prescribed has been followed while holding the enquiry and whether principles of natural justice have been adhered to while conducting the proceedings. The Court can also go into the question whether the findings of the Enquiry Officer are based upon any material or whether any relevant material has been ignored by the Enquiry Officer while recording a finding and also whether irrelevant or extraneous material/considerations have influenced the decision of the Enquiry Officer.
25) With the aforesaid legal parameters in mind, let us now deal with the facts of the present case. WP(C) No.486/2024 Page 16 of 30
26) Briefly stated, the charges against the petitioner, as contained in Article-I annexed to charge sheet dated 3rd April, 2023, are as under:
1. The borrower company, besides other fund and non-fund based facilities, has been maintaining two operative current accounts under account numbers 0183010100001671, 0183010100001970 and a cash credit account under account No. 0183020100000175. You, in connivance with the borrower company, have allowed to route/credit the funds in Current Accounts of the company as per their choice/convenience instead of Cash Credit account in order to allow the party to use the funds to avoid adjustment of the continuous overdrawing in the Cash Credit account, and thereafter used to recommend for enhancement of existing credit facilities for absorption of such Overdrawing/ Adhoc facilities.
2. You have played havoc with the export credit funds both at pre shipment stage (l.e. packing Credit-PCL) as well as at Post Shipment stage (PSL) and have set aside the very purpose for which the export credit facilities were sanctioned. You have allowed the disbursement of packing Credit components mostly without receipt of any request letter from the party and in absence of any valid export order of the overseas buyers from the party. You have as detailed in the Table- 1 to Table -4 below not only allowed but also have disbursed under your own user ID the packing credit components from the account 0183266900000034 of M/s SA Rawther Spices Pvt. Ltd where the amount so disbursed has been mostly utilized by you for realizing the overdue crystallized export bills of the party and various other different purposes like servicing of loan installments of the sister concern of the party M/s Central Trade Agency thereby you have not only diverted the funds which were purely meant for export purposes but also have succeeded in deceiving the higher authorities by providing a rosy Picture of a complete shabby portfolio.
3. You have also not obtained any credit report of the suppliers of the raw materials of company, hence the identity of the vendors in whose favor ILCs have been issued or where funds have been remitted through NEFT/RTGS after disbursement of Pre-Shipment Components could be identified.
4. While allowing the disbursement of the funds under post shipment finance, as are detailed in the Annexure IV and Annexure V, you have performed the duties in the most perfunctory way and have kept not only the FEMA and Exchange Control Regulations of RBI but also t instructions of the Bank Issued in this regard at bay besides violating the WP(C) No.486/2024 Page 17 of 30 stipulations of the sanction. You have allowed Purchasing/discounting of the fresh export bills in favor of the company for converting pre-shipment credit in to post-
shipment credits when overdue export bills outstanding in export bills crystallized account were adjusted by utilization of pre-shipment advance fully/partly. You have not adhered to the condition that "if the drawee of an export bill falls to meet its commitment promptly, no further bill drawn on the same party will be accepted under the sanctioned arrangement" and the bills should have been handled on collection basis. You have even allowed Purchasing/discounting of export bills in favor of the company without obtaining set of non-negotiable documents evidencing that shipment of goods have been loaded/laded on board or passed through concerned custom authorities or date on which goods crossed Indian border as certified by Land Custom Authorities. You have allowed Purchasing/discounting of some direct export bills which have been forwarded directly to the overseas buyer/consignee or agent without sanction from any quarter and not to overseas correspondence bank. You have also allowed Purchasing/discounting of some of the bills for an amount which is much higher than the actual amount of the document. You have neither followed up yourself nor ensured that your team follows up properly with the Buyers or the Buyers Bank for repatriation of the export proceeds.
5. You have not obtained the Buyer wise policy for PSL (Non LC) documents incorporated in the sanction letter dated 10.11.2015 and thereafter which could cover the post shipment bill exposure of the party against the particular Buyers.
6. You have continued to recommend the enhancements/ Adhocs/extensions to the competent authority, despite the fact that the borrower company was not doing well as can be clearly reflected from the. enduse of the PCL funds as above. The accounts could have been classified NPA in 2012-13 itself, while as you have kept on dragging the account till 2017 which has resulted in increase in exposure, besides bank lost golden opportunity for recovery of exposure to the company, which was possible at that stage. While making the recommendations for enhancements /Adhocs/ extensions thereof, you have not portrayed a true picture regarding end use of funds in pre-shipment advance (PCL), details of overdue pre-shipment advances (PCL) & overdue foreign bills purchased or discounted, details of pre & post-shipment advances (PCL & PSL) recovered/ realized from local funds etc. You have while submitting the reply via mail dated 22.05.2023 deceived the competent authority when in response to your recommendations for extension in the Adhoc facility of Rs 4.00 crore in the cash credit facility, You were asked for clarification as under: WP(C) No.486/2024 Page 18 of 30
Clarification sought by FEBD CHQ Reply Submitted by Branch ....."That overdue Crystallized Export bill You allowed adjustment of both the bills under reference no. BGD00122312 with BGD00122312 & BGP00124812 out of pre- balance outstanding Rs 8986501 is overdue shipment disbursements on 22.05.2013 and for more than 90 days (100 days) which calls vide-email dated Wednesday, May 22, 2013 for categorization of the account as NPA? 5:42 PM responded that "Bill no. Further other overdue Crystallized export BGD00122312 amounting to Rs 89,86,501 & bills under reference no. BGP00124812 with BGP00124812 amounting to Rs 27,89,669 balance outstanding of Rs 27, 89,669 & have been realized on 22.05.2013. Further, BGP00136013 for Rs 37,14,900 are overdue as reported by the party, the buyer has for 86 days & 82 days respectively. In this ensured to realize the bill no. BGP00136013 regard before granting extension in adhoc in the coming week.......... Cash Credit facility of Rs4.00 Cr, BU is instructed to get the Bill under Reference No. BGD00122312 adjusted immediately & also impress upon the party for realization of export proceeds of other quoted bills without any further delay...........
7. You have also in the year 2016 recommended the decision for releasing the easily marketable property and substituting the same with securities of forest land (not properly identifiable/ demarcated forest Redeemed Sagu land) thus complicating the process for the Bank in disposing of the property for recovering the funds from the borrower company. The substitution of securities has been allowed at a time when the exposure to the borrower had increased manifold and account was reflecting stress.
27) On the basis of aforesaid allegations, the petitioner has been charge sheeted for following acts/omissions:
a) Breach of rules of business of the bank and instructions for the running of a department;
b) Showing undue favours to parties by grant of banking facilities against the banking practice likely to involve loss to the bank;
c) Doing acts prejudicial to the interests of the bank and gross negligence likely to involve the bank in serious loss;
d) Misuse of official position and powers;
e) Manipulating of entries in records of bank to conceal actual position or cover of any Irregularity.
28) A perusal of the report of enquiry reveals that the petitioner has participated in the enquiry proceedings through his duly authorized representative (defence WP(C) No.486/2024 Page 19 of 30 representative) of his choice. The Presenting Officer of the respondent Bank has produced before the Enquiry Officer as many as ten exhibits, the details whereof are given at page 25 of the enquiry report. As against this, the petitioner, through his authorized representative, has produced three documents. The Enquiry Officer, has, after hearing the Presenting Officer and the representative of the petitioner and upon consideration of the documents produced by the respondent Bank as also by the petitioner, recorded the following findings:
a) Breach of rules of business of the bank and instructions for the running of a department............. ......PROVED
b) Showing undue favours to parties by grant of banking facilities against the banking practice likely to involve loss to the bank........... ..PROVED
c) Doing acts prejudicial to the interests of the bank and gross negligence likely to involve the bank in serious loss;............... ...........PROVED
d) Misuse of official position and powers;.............. PROVED
e) Manipulating of entries in records of bank to conceal actual position or cover of any irregularity............
PROVED
29) Prior to recording the aforesaid findings, the Enquiry Officer has given detailed reasons in his enquiry report for arriving at aforesaid findings.
30) The first argument that has been advanced by the learned Senior Counsel appearing for the petitioner for assailing the aforesaid findings of the Enquiry Officer is that WP(C) No.486/2024 Page 20 of 30 no witness was examined by the Enquiry Officer and the documents were tendered in evidence with their formal proof.
31) The argument advanced by learned Senior Counsel appearing for the petitioner, at first blush, appears to be attractive because the Presenting Officer has not examined any witness and he has simply produced the documents in the form of ten exhibits during the enquiry proceedings. The question arises as to whether the documents produced by the Presenting Officer could have been taken into consideration by the Enquiry Officer, with the same not having been tendered in evidence by any witness.
32) Ordinarily, if the petitioner would have disputed the authenticity of these documents, it would have been incumbent upon the Presenting Officer to examine witnesses to prove the authenticity of these documents, but in the instant case, throughout the enquiry proceedings, which have been conducted over a period of several days, the petitioner has not disputed the authenticity of these document nor has he denied the documents sought to be relied by the Presenting Officer. It is a well settled proposition that in a domestic enquiry, rules of evidence do not apply. An Enquiry Officer, while performing quasi- WP(C) No.486/2024 Page 21 of 30 judicial functions, has to carefully examine the evidence led before him, which can be in the form of oral testimony or in the form of documents. In the instant case, the petitioner, during the course of enquiry proceedings, has not disputed the authenticity of the documents produced by the Presenting Officer, as such, it was not incumbent upon the Presenting Officer to lead oral testimony to prove the authenticity of these documents.
33) Another contention that has been urged by the learned Senior Counsel appearing for the petitioner is that the petitioner was not provided with copies of vital documents which would have enabled him to frame a proper defence and, in fact, some of the documents which were directed to be furnished to the petitioner by this Court in terms of order dated 15.03.2024, have not been furnished to him.
34) If we have a look at the report of enquiry, during the course of proceedings, the representative of the petitioner had sought the following documents from the respondents:
1. Export orders and borrower requests for release of PCL for the FY 2016-2017.
2. Credit report of suppliers of raw material of company under ILCs.
3. Audit reports (forex inspection, RBIA and snap) conducted during the period 2012 to 2017.WP(C) No.486/2024 Page 22 of 30
4. Confirmation of Branch Manager IARB Bangalore regarding non release of mortgaged property permitted to be released vide sanction reference JKB/FEBD/ADV-124/2016-218 dated August 03, 2016.
5. Notes moved by the branch to Zonal Office for making payment towards devolved LCs along with the directions of Zonal Office.
6. Proposals moved by the branch and copies of appraisal notes processed at Zonal Office and CHQ.
7. Buyer wise ECGC policies obtained by the branch.
8. Notes moved by the branch and CHQ to ECGC for claim.
9. Any guidelines specifically issued by the bank in the form of circular or SOP mentioning the set of documents to be obtained before negotiating of documents.
10.Circular issued by bank related with monitoring of stress portfolio at Zonal office level and CHQ level and also the details of team for monitoring of assets above 50 crs (their roles and responsibilities).
11.Directions for operations of accounts where limit has been expired.
35) The enquiry report further reveals that the Enquiry Officer, after hearing the parties on this issue, directed furnishing of following documents to the petitioner:
1. Export orders and borrower requests for release of PCL for the FY 2016-2017.
2. Credit report of suppliers of raw material of company under ILCs.
3. Audit reports (forex inspection, RBIA and snap) conducted during the period 2012 to 2017.
4. Confirmation of Branch Manager IARB Bangalore regarding non release of mortgaged property permitted to be released vide sanction reference WP(C) No.486/2024 Page 23 of 30 JKB/FEBD/ADV-124/2016-218 dated August 03, 2016.
5. Notes moved by the branch to Zonal Office for making payment towards devolved LCs along with the directions of Zonal Office.
6. Proposals moved by the branch.
7. Buyer wise ECGC policies obtained by the branch.
8. Notes moved by the branch and CHQ to ECGC for claim.
36) The enquiry report further reveals that after receipt of the documents from the relevant offices of the bank, the representative of the petitioner conveyed to the Enquiry Officer that he has not received the following documents:
1. Forex Audit reports
2. Buyer-wise cover
3. Credit report
4. Other documents for which presentation has objected that the DR cannot have access to those documents like investigation report, appraisals from Zonal Office and CHQ.
37) This aspect of the matter was highlighted by representative of the petitioner before the Enquiry Officer and it seems that the aforesaid four documents were not furnished to the petitioner.
38) However, there is yet another aspect of the matter which is required to be noticed. In his reply to show cause notice dated 02.02.2024, addressed to the disciplinary authority, the petitioner has admitted having received the aforesaid documents along with the copy of charge sheet WP(C) No.486/2024 Page 24 of 30 filed by the CBI against the petitioner and co-accused. The relevant portion of the reply to the show cause notice, wherein the petitioner has admitted the receipt of aforesaid documents, is reproduced as under:
The Bank granted permission for my prosecution in the court of law. Accordingly, after the challan was presented by CBI, I was handed over the documents like copy of chargesheet by CBI along with numerous other documents in the seizure memo. The said documents contain copies of documents like Audit Reports and statement of persons/staff involved, Investigation report of the Bank, Reports of Buyer- wise cover, Credit reports, confirmed order copies for PCL, Bill discounted by the Bank among all other plethora of documents. Certain documents which were denied to me but provided to the External Investigations Agencies relating to the case were also present in the documents that I received from CBI. Even though, being charge-sheeted by Disciplinary Department and supposed to reply on facts and figures, I was not provided the said documents when I had requested for the same. During the investigation/questioning by CBI in last, 2-3 years, I came to know that Bank has conducted investigation/internal enquiry in 2018 which I tried to refer to the EO as described ahead.
39) From the aforesaid reply filed by the petitioner to the show cause notice, it is clear that he has received forex audit report, buyer-wise cover, credit reports and other documents which were declined to him by the Enquiry Officer. This shows that the petitioner was already in possession of all the relevant documents and despite this, he kept on insisting to have copies of these documents during the enquiry proceedings just to create a defence for himself. In these circumstances, it cannot be stated that WP(C) No.486/2024 Page 25 of 30 the petitioner has not been furnished the documents sought by him during the enquiry proceedings. The ground urged by the petitioner in this regard is, therefore, without any substance.
40) It has also been contended that the petitioner was not given opportunity to lead evidence in defence. In this regard, a perusal of the enquiry proceedings would reveal that the Enquiry Officer has repeatedly heard representative of the petitioner and has taken on record the documents produced by him but at no point of time the representative of the petitioner had sought opportunity to lead evidence in defence. Thus, it cannot be stated that the Enquiry Officer did not afford opportunity to the petitioner to produce material/witnesses in defence.
41) The Enquiry Officer while conducting domestic enquiry is not expected to conduct the proceedings like a court. The Enquiry Officer has to only adhere to the principles of natural justice and the rules governing the said enquiry. The relevant Rule of J&K Officers Services Manual, 2022, which governs the enquiry proceedings in the present case is reproduced as under:
13. 17. Rules regarding enquiry A departmental enquiry being not quasi-judicial in nature, the strict rules of evidence stipulated in WP(C) No.486/2024 Page 26 of 30 the Evidence Act would not be applicable except to the extent specifically indicated in the relevant rules. The standard of proof required in the disciplinary enquiry will be that of 'preponderance of probability' and not, 'proof beyond a reasonable doubt. However, to ensure that the principles of natural justice emerged through judicial pronouncements are observed, the enquiry officer shall:
a) give adequate opportunity to the delinquent officer to present his case and adduce all relevant evidence on which he relies;
b) take evidence against the delinquent officer in his presence;
c) give an opportunity to the delinquent officer to cross examine the witnesses;
d) not rely upon any material against the delinquent officer without giving him an opportunity of explaining/rebutting them.
e) give fair and impartial hearing to the charged officer/employee.
A statement given behind the back of the person charged cannot be treated as substantive evidence. The documents furnished by the witness and relied upon by the enquiry officer in his findings must be made available to the delinquent officer before he is asked to cross examine the witness. It may be done either by reading and explaining the contents of such documents to the delinquent officer or by giving a copy of such documents to him before his is called upon to cross examine the witness.
42) From a perusal of the aforesaid Rule, it is clear that the Enquiry Officer in the present case was required to give adequate opportunity to the petitioner to present his case and to adduce relevant evidences and he had to be given opportunity to cross-examine the witnesses of the department. It was also incumbent upon the Enquiry Officer to make available to the petitioner all material on WP(C) No.486/2024 Page 27 of 30 which reliance is placed by the Enquiry Officer and the copies of the documents were also required to be furnished to him. In the instant case, as already stated, no oral evidence was led by the Presenting Officer. Therefore, there was no question of granting any opportunity to the petitioner to cross-examine the witnesses to the petitioner. So far as the documents relied upon the Enquiry Officer are concerned, the copies thereof were furnished to the petitioner and he was also given opportunity to produce his documents in defence. Thus, requirements of Rule 13.17 quoted above, have been fulfilled by the Enquiry Officer in the present case.
43) In view of the fact that the enquiry in the present case has been conducted against the petitioner in accordance with the requirements of the rules and the law holding the field, it is not open to this Court to interfere in the report of enquiry on the ground of any procedural infraction.
44) So far as the validity of the findings recorded by the Enquiry Officer is concerned, the scope of interference by this Court in these proceedings is extremely limited. The documents placed on record by the Presenting Officer during the enquiry proceedings, authenticity whereof has not been disputed by the petitioner, clearly go on to indicate WP(C) No.486/2024 Page 28 of 30 that the charges framed against the petitioner are established and it can, by no stretch of reasoning, be stated that the findings of the Enquiry Officer are based on no material. Thus, this Court does not find any ground to interfere in the findings recorded by the Enquiry Officer.
45) The petitioner, who is an officer of the bank, is expected to exercise higher standards of honesty and integrity and once it is found that he has acted to the prejudice of interests of the respondent Bank, there was no option left with the disciplinary authority except to impose a major penalty upon him.
46) The Supreme Court in the case of Damoh Pann Sagar Rural Regional Bank & another vs. Munn Lal Jain, (2005) 10 SCC 84, has, while dealing with a case of a Bank Officer, has observed as under:
"17. A bank officer is required to exercise higher standards of honesty and integrity. He deals with money of the depositors and the customers. Every officer/employee of the bank is required to take all possible steps to protect the interests of the bank and to discharge his duties with utmost integrity, honesty, devotion and diligence and to do nothing which is unbecoming of a bank officer. Good conduct and discipline are inseparable from the functioning of every officer/employee of the bank. As was observed by this Court in Disciplinary Authority-cum-Regional Manager v. Nikunja Bihari Patnaik [(1996) 9 SCC 69 : 1996 SCC (L&S) 1194] , there is no defence available to say that there was no loss WP(C) No.486/2024 Page 29 of 30 or profit resulting in case, when the officer/employee acted without authority. The very discipline of an organisation more particularly a bank is dependent upon each of its officers and officers acting and operating within their allotted sphere. Acting beyond one's authority is by itself a breach of discipline and is a misconduct. The charges against the employee were not casual in nature and were serious. These aspects do not appear to have been kept in view by the High Court."
47) In the face of aforesaid legal position, the penalty imposed upon the petitioner in terms of the impugned order can by no stretch of reasoning be termed as unreasonable or excessive. The same, therefore, does not deserve to be interfered with.
48) For the foregoing reasons, I do not find any merit in the petition. The same is dismissed accordingly. Interim direction, if any, shall cease to be in operation.
49) The record be returned to learned counsel for the respondents.
(Sanjay Dhar) Judge SRINAGAR 30.05.2025 "Bhat Altaf-Secretary"
Whether the judgment is speaking: YES/NO Whether the judgment is reportable: YES/NO Mohammad Altaf Bhat WP(C) No.486/2024 Page 30 of 30 I attest to the accuracy and authenticity of this document 30.05.2025 03:49