Calcutta High Court
Subhas Chandra Basu vs Bank Of Baroda And Ors. on 20 August, 1990
Equivalent citations: (1991)2CALLT111(HC), (1992)IILLJ248CAL
JUDGMENT Paritosh Kumar Mukherjee, J.
1. This writ petition was moved before this Court on February 9, 1989, inter alia, challenging the impugned chargesheet dated November 19, 1987, being Anncxure "C" to the writ petition and the departmental proceeding intiated by the respondents Bank of Baroda authorities against the writ petitioner Subhas Chandra Basu, who was working as Senior Manager, posted at International Business Branch, Bank of Baroda, Ruby House, Calcutta, at 8B, India Exchange Place, Calcutta-1
2. Mahitosh Majumder, J, at the time of admission of writ petition, directed the respondents to produce the records and also directed the writ petitioner to co-operate with the disciplinary authority without prejudice to his basic and foundational objection to the charges being stale in nature, according to His Lordship.
3. This writ petition has come up for the final hearing in the presence of Mr. Jatin Ghosh, learned Advocate appearing for the Bank of Baroda authorities, along with Mr. Sunil Chatterjee, learned Advocate.
4. Mr. Majibar Rahman, learned Advocate, at the final hearing of the writ petition has placed the following facts from the writ petition:
A show cause notice was issued by memo dated March 24/April 4, 1981, to the writ petitioner pointing out certain serious irregularities in handling Advance portfolio at Cuttack Branch of Bank of Baroda. In the said notice following irregularities, inter alia, were pointed out which are set out hereinbelow:
(a) Case where bills purchased beyond discretionary power and confirmation was not sought from higher authorities.
Account M/s. Modern Traders.
The firm was enjoying cash credit limit of Rs. 50,000/- from September 25, 1969 which was not reviewed thereafter. A review proposal was submitted on March 13, 1972, query of which were not answered by the Branch. There was no sanctioned B/P limit of the firm. In spite of three bills aggregating Rs. 1.99 lacs were purchased on January 25, 1973 and March 21, 1973 and March 22, 1973 without authority. Subsequently, the outstanding against old bill of January 25, 1973 was adjusted by purchases of fresh bills.
The bill purchased on March 22, 1973 was paid thereafter and the bill of March 21, 1973 has not been paid.
(b) Case where actual stocks pledged to the Bank was very much less than the stocks declared as per the Bank's record.
Account M/s. Tapen Traders Limit of Rs. 60,000/- against pledge of dyes and chemicals sanctioned during December 1972, materials worth of Rs. 59.238/- were pledged during the month of December, 1972. Thereafter a stock statement was submitted in the month of February, 1973 for Rs. 59,470.63. Thereafter on August 14, 1973 goods worth Rs 14,350/- were pledged during the tenure of Shri Mukerjee, However, the borrower could not produce supporting invoices for any of the materials purchased by him and the party had taken delivery of goods worth Rs. 2,000/- only during the above period. From the above it appears that the defective materials were pledged to the Bank and advance allowed to the party during December, 1972 itself.
(c) Case where registration of Bank's charge on the vehicles was not done with R.T.O. and disbursement was allowed before transfer of ownership of the vehicle.
Loan account - Sk. Nazibullah - Limit Rs. 12,000/- granted on February 27, 1973 for purchase of a second hand taxi repayable in 12 equal monthly instalments of Rs. 1000/-. Present outstanding Rs. 18,282.80 with interest upto March 31, 1980.
The Branch's comment vide their letter No. ADV: LOANS : 14 : 5366 dated August 4,1980 is reproduced below in connection with the above advance account "We have contacted the RTO and have been given to understand that Mr, Sk. Nasibullah purchased the vehicle from one Mr. Akbar Khan on March 13, 1973 (date of transfer). Thereafter the vehicle was transferred twice on June 21, 1978 from Mr. Sk. Nazibullah to Shri A.N. Das and finally on June 29, 1979 to Shri P.Sen. Originally the vehicle was financed by Shri Ram Finance Corporation to Akbar Khan and H.P. Agreement was cancelled on March 12, 1973 as per the record with RTO. Then loan of Bank was not recorded with RTO. The loan was granted by the Bank before the transfer of the vehicle was made in the name of the borrower and before cancellation of H.P. with Sree Ram Finance Corpn.
(d) Cases where excess wan allowed beyond discretionary power.
Account Utkal Equipment & Chemical Ltd.
The Company was originally sanctioned vide C.D.E Resolution No. 75 dated January 8, 1972
(i) A cash credit limit of Rs. 5 lacs against pledge of raw materials and finished goods with sub-limit of Rs. 1 lac for advances against hypothecation of raw materials, work-in -progress, advance should not exceed Rs. 25,000/-
(ii) Bill purchased limit Rs. 1 lac for purchase of Demand Documentary Bills.
Cash Credit:"ln case of cash, credit overdrawing to the tune of Rs. 2.69 lacs were allowed by Shri S. Bose for which a confirmation was sought for by the branch vide their letter No. 7/92 dated June 11, 1973. The Regional Officer, however, requested the Branch to ask the Company to bring down the balance in cash credit with Rs. 5 lacs."
(e)No sanction, no report on the means and standing of the borrower, no stock statement was available.
(iii) Account M/s. Lalit Kumar Modi & Sons.
Present position of the account-Suit is going to be filed shortly.
5. The petitioner duly replied to the said showcause notice by letter dated April 24, 1981, addressed to the Assistant General Manager, Bank of Baroda, Eastern Zone, Calcutta, and satisfied the authorities that the petitioner should not be held liable for committing any irregularity as alleged which has been annexed as Annexure "B" to the writ petition. On the basis of such reply, the respondents Bank authorities did not choose to draw up a formal memorandum of charges and according to the petitioner he got the impression that the petitioner had been absolved from the charges, but curiously enough, a formal memorandum of chargesheet dated November 19, 1987 issued under the signature of the Disciplinary Authority has been issued which stated as follows :
"(i) He did not take all possible steps to ensure and protect the interests of the Bank but in fact took such steps and did such acts and omissions as were derogatory, detrimental, prejudicial and injurious to the interest of the Bank;
(ii) He unauthorisedly exceeded his powers or exercised powers which he did not possess without obtaining confirmation or apporval from the higher authorities;
(iii) In the discharge of his duties and in exercise of powers conferred upon him, he acted otherwise than in his best judgment;
(iv) He did not discharge his duties with utmost integrity and honesty but in fact did such actions which displayed a lack of probity on his part;
(v) He did not maintain discipline in transactions;
(vi) He misused and abused his position as Manager of the Bank's Branch;
(vii) He did not perform his duties with devotion and diligence;
(viii) He did acts unbecoming of a Bank Officer;
(ix) He violated and flouted the rules, procedures and regulations of the Bank."
6. It appears from the statement of allegations that the petitioner has been held prima facie guilty for increasing the Overdraft limit of M/s. Tapan Traders from Rs. 10,000/- to Rs. 30,000/- on November 15, 1971 without preparing Memorandum for Advances, Means Report of the borrower and the firm and failed to send the proposal to higher authority for "post sanction scrutiny."
7. The petitioner was also found prima facie guilty for increasing the limit of the said party from Rs. 30,000/- to Rs. 45,000/- on December 1, 1972 without ascertaining the working capital needs and did not prepare Memorandum for Advances, Means Report of the borrower and the firm and did not send the proposal for "post sanction scrutiny."
8. The petitioner was also found guilty for unauthorisedly without taking permission from his higher authority excess drawings in the Cash Credit Account of Utkal Equipment & Chemical Limited to the tune of Rs. 2.69 lacs during June, 1973 and also did not obtain confirmation of his having allowed such excess drawings to the tune of Rs. 2.69 lacs but requested his higher authorities to confirm his action to allow the party to draw in the Cash Credit Account and to negotiate Bills upto the proposed increased limit that is, C.C. A./C. from Rs. 5 lacs to Rs. 7 lacs and B.P. from Rs. 2 lacs to Rs. 5 lacs per letter No. 7/92 dated June 11, 1973.
9. The petitioner was also charged for not maintaining Pledge Register & Stock Register as a result of which Bank could not produce relevant documents to establish the loss suffered by the Company to the Insurance Company due to burglary and riot occasioned at the party's factory on March 12, 1974 to the tune of Rs. 4 lacs. The petitioner was also found not to have reported the advance through quarterly guarantee statement to Reserve Bank of India as the Company was categorised as a SSI Unit and Bank's guarantee claim to the Reserve Bank of India was not entertained as a consequence thereof.
10. The petitioner was also charged for sanction of a demand loan of Rs. 12,000/- to Sk. Nazjbullah on February 27, 1973 for purchase of a second hand Ambassador car bearing Registration No. ORG 3181. The petitioner was charged for committing certain irregularities in respect of the months of January and February, 1973.
11. At the final hearing of writ petition, Mr. Majibar Rahman, learned Advocate, has submitted that no charge-sheet could be drawn as late as on November 19, 1987 on the basis of the instance of alleged irregularities committed by the writ petitioner during the years 1971 to 1973 when the petitioner was posted at Cuttack,
12. In this connection Mr. Rahman, learned Advocate, has placed strong reliance on the judgment of the Division Bench of this Court presided over by Chittatosh Mookerjee and Shamsuddin Ahmed, JJ, in the case of Subrata Chaki and Ors. v. State of West Bengal and Ors., since reported in 90 CWN page 290.
13. In the said case the Division Bench on construing the framing of the belated charge which has been formally drawn with inordinate delay, in paragraph 13 of the said judgment, observed as follows;
"In the instant case the charges framed in respect of the incident which allegedly occurred at the chamber of the Collector of Calcutta, the respondent No. 2, on 3rd March, 1981. In substance, the charge against the appellants was that they, inter alia, held a violent demonstration. The annexure of the charge-sheet indicated that the charges against the appellants were proposed to be sustained by oral evidence of eight persons, The charge-sheet did not mention any documentary evidence in support of the prosecution case. Presumably, on the basis of the oral evidence the respondents proposed to establish tne said charges against the appellants. The appellants are likely to be seriously prejudiced if the disciplinary proceeding against them is now started. We are not prepared to allow the respondents further time to hold enquiry when they themselves have not explained why they did not hold the disciplinary proceeding for such a long time."
14. He has also placed reliance on an un-reported judgment delivered by me on August 25, 1987, in C.R. No. 5826 (W) of 1978 (Dhruba Gopal Bose v. State of West Bengal and Ors.) wherein this Court having accepted the submission of Mr. Malay Kumar Chakraborthy came to the following finding, which is set out herein-below:-
"Although the charge-sheet bears the date of February 26, 1977, it related to incidents of 1965, 3970 and 1972 and during the period from 1965 onwards the writ petitioner having been promoted, the disciplinary authority and /or appointing authority is suppossed to have abandoned the charges, by reason of their granting promotion, of the petitioner.
The second submission of Mr. Chakraborty is that in any event no charge could be framed on the basis of such stale materials as the same has been held by a recent judgment of this Court in the case of Subrata Chaki & Ors. (supra), which has been quoted herein-above."
15. Mr. Rahman also referred to a recent judgment of the Supreme Court in the case of State of Madhya Pradesh v. Bant Singh and Anr., reported in (1990-II-LLJ-529), wherein the Supreme Court has quashed the disciplinary proceeding as there was no satisfactory explanation for inordinate delay in issuing the charge-sheet in the said case and Supreme Court observed as follows(p 530):
"There is no satisfactory explanation for the inordinate delay in issuing the charge-memo and we are also of the view that it will be unfair to permit the departmental enquiry to be proceeded with at this stage. In any case there are no grounds to interfere with the Tribunal's orders and accordingly we dismiss this appeal."
16. Thus, after citing the aforesaid decisions, Mr. Rahman informs the Court that the respondents could not offer any explanation except the explanation offered by the affidavit affirmed by the Assistant General Manager, Bank of Baroda, on May 14, 1990 to the following effect, which is set out hereinbelow:-
"It came into light sometime in the year 1980-81 that the writ petitioner while functioning as Branch Manager of the said Cuttack Branch which is a large branch allegedly committed certain financial irregularities in the matter of giving advance to certain constituents. The writ petitioner by a letter dated April 24, 1981 replied to the said show cause notice. The reply was not found satisfatory. However, the Bank Management decided not to take any action in haste. The matter was deeply gone into and investigation was carried on by various authorities. Apart from the inspection report on the basis whereof the said showcause notice was issued, further inspection was carried on October 30, 1981, February 26, 1983, June 19, 1984, May 24, 1985 and May 7, 1986. In the meantime an External Audit Team also made audit into the affairs of the said branch of the bank. As the said inspection report prima facie revealed gross irregularities being committed by the writ petitioner, the bank decided to intiate disciplinary proceedings as the Bank's money belonging to the customers to the extent of several lakhs of rupees were in jeopardy."
17. Thus, Mr. Rahman submitted that since the Bank Management decided not to take any decision in time, the bank authority is precluded from taking further proceeding on the charge after such a long time as the petitioner is going to retire with effect from 30th August, 1990, and further the Bank authority having regard to the technical nature of the charge-sheet had not decided the fate of the petitioner, who is not even placed under order of suspension.
18. Mr. Jatin Ghosh., learned Advocate appearing on behalf of the Bank, sought to distinguish the facts stated in the unreported judgment in Dhrua Gopal's case as one of the grounds in the said case for quashing the charge is that the writ petitioner having been given promotion, the respondents have condoned the charges which have been held in the case of State of Punjab v. Dewan Chunilal, since .
19. Be that as it may, since this Court in Dhruba Gopal's case set aside the charge-sheet on the ground following the decision of the Division Bench presided over by Chittatosh Mookherjee, J. (the present Chief Justice of Maharashtra High Court) in Subrata Chaki's case (supra), this Court is inclined to follow the consistent view taken in the judicial pronouncement cited, as above, that no charge could be framed on the basis of stale materials, more so, in the facts of the present case, the charges are very technical in nature and do not involve gross irregularities committed by the writ petitioner in discharging his duties as a Branch Manager.
20. This Court also is inclined to take the view that the respondent authorities not having placed the writ petitioner under order of suspension, but decided to chase the writ petitioner after lapse of six years after getting the reply to the show cause notice, the respondents should not be allowed to hold enquiry on the basis of such stale charges, more so, on the basis of the incident that had taken place during the years 1971 to 1973 when the petitioner was posted at Cuttack Branch.
21. In the result, in my view, the writ petition is entitled to succeed. The impugned charge-sheet dated November 19, 1987, which is Annexure C to the instant writ petition, is set aside. If any further proceeding has been conducted pursuant to the liberty given by this Court, the said proceeding is also libale to be quashed by issue of a Writ in the nature of certiorari
22. The writ petition is allowed, as above. There will be no order for costs.
23. Let a xerox copy of this order be given to the learned Advocate for the petitioner on his observing all necessary formalities.