Jharkhand High Court
N. Ramdas vs The Canara Bank A Govt. Of India ... on 16 November, 2022
Author: Anubha Rawat Choudhary
Bench: Anubha Rawat Choudhary
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(S) No. 2240 of 2011
N. Ramdas, son of Sri J. Natrajan, resident of Block 'C' No.12
Nishant Vihar Colony at & P.O. Adityapur P.S. Adityapur Town
Jamshedpur - 831013 District - Saraikella - Kharsawan
... ... Petitioner
Versus
1. The Canara Bank a Govt. of India undertaking through its
Managing Director having its head office at 112 J.C. Road,
Bangalore (Karnataka) - 560002
2. The Chairman cum - Managing Director Canara Bank having its
office at 112 J.C. Road, Banglore (Karnataka) 560002
3. The Executive Director, Canara Bank having its office at 112 J.C.
Road, Bangalore (Karnataka) - 560002
4. The General Manager, Canara Bank Personnel Wing, having its
head office at 112 J.C. Road, Banglore (Karnataka) - 560002
5. The Regional Manager Canara Bank, Regional Office, Kadru Bye
Pass Road, P.S. & P.O. Doranda District - Ranchi.
... ... Respondents
---
CORAM :HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY
---
For the Petitioner : Mr. Jay Prakash Jha, Senior Advocate : Mr. Sunil Kumar Sinha, Advocate For the Respondents : Mr. Anoop Kumar Mehta, Advocate : Mr. Nikhil Mehta, Advocate : Mr. Manish Kumar, Advocate : Mr. Mohit Mukul, Advocate
---
14/16.11.2022 Heard Mr. Jay Prakash Jha, learned Senior counsel appearing on behalf of the petitioner along with Mr. Sunil Kumar Sinha, Advocate.
2. Heard Mr. Anoop Kumar Mehta, learned counsel appearing on behalf of the respondents along with Mr. Nikhil Mehta, Advocate, Mr. Manish Kumar, Advocate and Mr. Mohit Mukul, Advocate.
3. This writ petition has been filed for the following reliefs:
"For quashing the order as contained in Ref. No.IRS/DP/RNC- 3375-2009 dated 31.7.2009 passed by Disciplinary Authority i.e. General Manager, Canara Bank whereby and whereunder the petitioner has been awarded punishment of Removal from service which shall not be a disqualification for future employment and also for quashing the order dated 18.5.2010 passed by the Appellate Authority the Executive Director, Canara Bank whereby and whereunder the order passed by the Disciplinary authority has been confirmed and the petitioner further prays for quashing the order as contained in Ref No.INSW. SAS:E:632:2010 MNP dated 8.2.2010 whereby and where under the amount of gratuity and Bank's contribution towards Provident Fund has been forfeited."
4. Thus, the orders passed in the disciplinary proceedings (both disciplinary authority and appellate authority) as well as the order of forfeiture of gratuity are under challenge in the present proceedings.
25. The arguments were concluded on 14.11.2022 and the matter was posted today for dictation of judgment in open Court.
6. Today, the learned Senior counsel for the petitioner has forwarded a supplementary affidavit annexing therewith a copy of letter dated 07.09.2009 issued by the Respondent bank stating therein that due to inadvertence, the said letter could not be annexed in the main writ application. A submission has been made on the basis of the supplementary affidavit that from perusal of letter dated 07.09.2009, it will appear that the gratuity has been forfeited without any notice to show cause and as such the same is against the principles of natural justice.
7. Filing of supplementary affidavit at this stage has been objected to by the respondents. No interlocutory application as such has been filed seeking leave of this Court to file supplementary affidavit after the conclusion of arguments.
8. This Court finds that the document which is being introduced through the supplementary affidavit is a document issued by the bank itself which is letter dated 07.09.2009 and it finds reference in the impugned order forfeiting the gratuity as contained in Annexure - 9 to the present writ petition. Since the plea being raised through supplementary affidavit relates to principles of natural justice and the document being introduced is a document of the respondent bank, the supplementary affidavit is taken on record.
Arguments of the Petitioner
9. Learned Senior counsel for the petitioner has submitted that altogether three charges were levelled against the petitioner while the petitioner was working with the respondent Bank as Branch Manager, Rajnagar Branch. The petitioner was subjected to disciplinary proceeding in which he participated. The enquiry officer had submitted his report and vide letter dated 30.03.2009, a show cause notice was issued to respond to the findings of the enquiry officer, but in the said letter, the enquiry report was not enclosed. Learned counsel submits that the petitioner had applied for issuance of the copy of the enquiry report under Right to Information Act, but the same was also refused. The petitioner was ultimately punished by the disciplinary authority.
310. The appellate authority confirmed the order passed by the disciplinary authority and dismissed the appeal. He submits that by a separate order dated 08.02.2010, the respondents have also passed an order whereby the gratuity amount payable to the petitioner has been forfeited. By the said order, the Provident Fund contribution of the respondent Bank has also been forfeited.
11. Learned counsel has challenged the impugned action and orders by submitting as follows:
(a) The impugned order of removal from service is too harsh and disproportionate to the charges levelled against the petitioner.
(b) Though 2nd show cause notice was issued to the petitioner, but in the said notice, no copy of enquiry report was enclosed and the same was not handed over to the petitioner even under Right to Information Act and in absence of the enquiry report, the show cause cannot be said to be a proper show cause.
(c) All the charges levelled against the petitioner are procedural lapses in sanctioning the loan and there is no finding either in the order passed by the disciplinary authority or appellate authority that due to procedural loss, the bank has suffered loss and therefore the major penalty of removal from service is disproportionate to the charges levelled against the petitioner.
(d) The petitioner has unblemished 28 years of service to the bank and his services were appreciated by the Management and considering his past services also, no major punishment could have been awarded against the petitioner at the fag end of his service.
(e) There is no finding of the enquiry officer that due to procedural lapses, the bank has suffered loss and as such the order of forfeiture of gratuity of the petitioner is bad in law and thus fit to be set aside.
(f) The impugned order of forfeiture of gratuity and also the employer's contribution towards provident fund has been passed in gross violation of principles of natural justice and fair play and against the prescribed procedure and the procedure established by law.
12. Learned counsel for the petitioner has further relied upon a judgment passed by Hon'ble Supreme Court reported in (2018) 9 SCC 529 (Union Bank of India Vs. Ajay Babu) and also a full Bench judgment delivered on 07.03.2013 by Hon'ble Punjab and Haryana High Court in L.P.A. No.566 of 2012 (UCO Bank and Ors. Vs. Anuj 4 Mathur) to submit that the loss having not been quantified, the gratuity could not have been forfeited.
Argument of the Respondents
13. Learned counsel appearing on behalf of the respondents has vehemently opposed the prayer of the petitioner and has submitted that the petitioner was subjected to disciplinary enquiry and the allegations were relating to irregularities in the matter of sanction and disbursement of loans to various customers of the bank.
14. The enquiry report was submitted against the petitioner. The petitioner was given an opportunity to respond to the enquiry report to which he responded vide letter dated 15.05.2009, but the said response has not been brought on record by the petitioner in the writ petition.
15. The learned counsel submits that the required procedure in the matter of disciplinary proceeding has been followed and the punishment awarded against the petitioner is commensurate with the charges. He has been given the punishment of removal from service which shall not be a disqualification for future employment.
16. Learned counsel submits that the petitioner had filed an appeal and in the memo of appeal at Annexure - 7, no grievance has been raised in connection with non-receipt of enquiry report and in the memo of appeal, the petitioner had admitted some of the lapses. The appellate authority also granted a personal hearing to the petitioner on 30.03.2010 and passed the appellate order. Learned counsel has further submitted that in the charge memo itself, it was clearly mentioned that the acts and omission of the petitioner has exposed the bank to financial risk and some of the accounts had become irregular.
17. Learned counsel has also relied upon a judgment passed by Hon'ble Supreme Court in the case of (2003) 4 SCC 364 (Chairman and Managing Director UCO Bank Vs. P.C. Kakkar) para 9, 10, 11, 12 and 14 and he submits that in the matter of employees of the bank, any irregularity in dealing with the money has to be seriously viewed particularly, when it relates to sanction and disbursement of loan.
18. So far as the order in connection with the forfeiture of gratuity is concerned, learned counsel submits that a letter dated 07.09.2009 was issued to the petitioner to which the petitioner did not respond and ultimately the order of forfeiture of the gratuity has been passed 5 regarding financial loss caused to the bank to the extent of Rs.1,22,74,467/-. He submits that the order does not call for any interference.
Findings of this Court
19. After hearing the learned counsel for the parties and upon going through the records, this Court finds that the petitioner, at the relevant point of time, was Branch Manager of Rajnagar Branch and was served with a charge sheet dated 22.09.2008 and departmental proceeding was initiated. Altogether three charges were levelled against the petitioner and article of each charge was accompanied with the statement of imputation giving details of the charge. As per Article of charge 1, while the petitioner was working in Rajnagar Branch, he had sanctioned tractor loan to various customers of the bank and upon investigation, it was found that there was various irregularities / lapses on the part of the petitioner in sanctioning tractor loan, whose details have been described in the statement of imputation to article of charge no.1 and it was alleged that the petitioner had acted negligently in discharging his duties and in gross violation of the systems and procedure of the bank in apprising, sanctioning, disbursing, monitoring and post sanction follow up of the loan accounts and thus the petitioner had failed to discharge his duty with utmost honesty, integrity, devotion and diligence and thereby contravened Regulation 3 (1) read with Regulation 24 of Canara Bank Officer Employees' (Conduct) Regulation, 1976, which was a misconduct punishable under the Regulations of 1976. The statement of imputation, inter alia, mentioned that there was over dues in 11 loans accounts to the extent of Rs.6.44 lakh as on the date of conduct of investigation and that the petitioner had failed to assess the credit risk and safety of the advances properly while apprising, sanctioning and disbursing the loans.
So far as the charge under Article of Charge -II is concerned, it was alleged that the petitioner had sanctioned loan to M/s Pradhan Fuel Centre on primary security, collateral securities and on personal guarantee and the overall loan sanctioned to the party was beyond the delegated powers of the branch and the loans were sanctioned on 22.03.2006 whereas the ratification was sought for on 06.03.2007 and 6 there was a delay of more than one year and the name of various parties were also given in the statement of imputation to the Article of Charge - II.
So far as Article of Charge III is concerned, it was alleged that the petitioner had sanctioned various loans to customers despite having instructed not to sanction any credit limit / loan other than Agriculture and Government sponsored schemes without obtaining prior permission from the Circle Office, Ranchi. As per statement of imputation, a reference was made to the letter dated 06.12.2006 of the Circle Office, Ranchi, where Rajnagar Branch was instructed not to sanction any credit limit/loan and other than Agriculture and Government sponsored scheme without obtaining prior permission from the Circle Office, but the branch continued sanctioning of loan to the borrowers. The details of the party to which such loan was sanctioned has been given in the statement of imputation.
20. The petitioner had participated in the enquiry proceedings and as per the enquiry report, the petitioner was found guilty of majority of charges levelled against him except Charge No. II (i) (f), III (1), III (2), III (3), III (4). Vide Annexure - 4 dated 30.03.2009, it was mentioned that after holding enquiry into charges levelled against the petitioner, the enquiry authority submitted his finding/report. It was mentioned that the said report of the enquiry authority was enclosed and the petitioner was asked to respond to the same within 7 days.
21. It further appears from the order of the disciplinary authority that the petitioner had submitted his submissions to the 2nd show cause vide letter dated 15.05.2009 which was taken into consideration by the disciplinary authority. The petitioner has not annexed a copy of the letter dated 15.05.2009. In the entire writ petition, it is not the case of the petitioner that he had not filed the letter dated 15.05.2009 which has been specifically referred to in the order passed by the disciplinary authority.
22. In view of the aforesaid facts and circumstances, the argument of the petitioner that the enquiry report was not forwarded to the petitioner for his response is hereby rejected.
23. This Court finds that the disciplinary authority has passed a detailed order considering the enquiry report as well as the 7 submissions made by the petitioner vide letter dated 15.05.2009 and the finally accepted the enquiry report and ultimately held the petitioner guilty of the charges proved in the enquiry. The disciplinary authority vide order dated 31.07.2009 (Annexure - 6) passed the impugned order of removal from services which shall not be a disqualification for future employment.
24. The petitioner filed appeal and at the appellate stage, the petitioner had tried to justify the various disbursements of loan and had also stated that while doing so, procedural deviation had happened, but he had no malafide intention. He has also stated in his memo of appeal that altogether 32 tractor loans were disbursed and in all the above cases R.C. books were obtained except only in a few cases where the borrowers did not cooperate in submitting R.C. He has also stated in his memo of appeal that renewal of insurance regarding only two vehicles was not done as he was busy in attending inspection remarks and was under transfer. The petitioner in his appeal had also mentioned that though there were irregularities, but they were minor in nature and were not critical and were not jeopardizing the very interest of the bank. The appellate authority gave a personal hearing to the petitioner on 30.03.2010 and rejected the appeal by a well-reasoned order and confirmed the order of the disciplinary authority.
25. This Court does not find any procedural irregularity in the conduct of disciplinary proceeding involved in the present case. There is neither any violation of principle of natural justice nor there is violation of any statutory provision calling for any interference in the limited jurisdiction of judicial review under Article 226 of the Constitution of India. Reference may be made to the judgement reported in (2003) 4 SCC 364 whose relevant paragraphs are quoted in next paragraph while dealing quantum of punishment.
26. So far as the argument of disproportionate punishment is concerned, this Court is of the considered view that the acts and omission of the petitioner had exposed the bank to financial risk and the authorities have taken care of the allegations levelled against the petitioner. Learned counsel for the respondents has relied upon the 8 judgment passed by Hon'ble Supreme Court reported in (2003) 4 SCC 364 whose paragraph 11, 12 and 14 dealing with scope of judicial interference in the matter of departmental proceedings with particular reference to a bank employee are quoted as under:
"11. The common thread running through in all these decisions is that the court should not interfere with the administrator's decision unless it was illogical or suffers from procedural impropriety or was shocking to the conscience of the court, in the sense that it was in defiance of logic or moral standards, In view of what has been stated in Wednesbury case the court would not go into the correctness of the choice made by the administrator open to him and the court should not substitute its decision to that of the administrator. The scope of judicial review is limited to the deficiency in decision-making process and not the decision.
12. To put it differently, unless the punishment imposed by the disciplinary authority or the Appellate Authority shocks the conscience of the court/tribunal, there is no scope for interference. Further, to shorten litigation it may, in exceptional and rare cases, impose appropriate punishment by recording cogent reasons in support thereof. In the normal course if the punishment imposed is shockingly disproportionate it would be appropriate to direct the disciplinary authority or the Appellate Authority to reconsider the penalty imposed.
14. A bank officer is required to exercise higher standards of honesty and integrity. He deals with the 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 it is no defence available to say that there was no loss or profit resulted in case, when the officer/employee acted without authority. The very discipline of an organization 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."
27. In the matter of monetary transactions where the officers are dealing with public money, as in the present case, and considering the nature of charge proved during enquiry which exposed the bank to 9 huge financial risks due to acts of financial indiscipline by the petitioner, this Court is of the considered view that the punishment of 'removal from services which shall not be a disqualification for future employment' imposed upon the petitioner, on the basis of proved charges, is appropriate and the same does not call for any interference. The law is well settled by the Hon'ble Supreme Court that the interference in the matter of quantum of punishment is permissible only in the circumstances where the punishment is shockingly disproportionate. No such case of shockingly disproportionate punishment has been made out by the petitioner in this proceeding.
28. As a cumulative effect of the aforesaid findings, no interference is called for even on the quantum of punishment imposed in the disciplinary proceedings.
Forfeiture of Gratuity and employer's contribution towards provident fund.
29. So far as the forfeiture of payment of gratuity is concerned, this Court finds that after the order of punishment, a letter dated 07.09.2009 was issued to the petitioner which has been brought on record by filing the supplementary affidavit during the course of proceedings. In letter dated 07.09.2009, it has been mentioned that the irregularities committed by the petitioner had exposed the bank to a financial loss of Rs.1,22,74,467/-. In the said letter, it has also been mentioned that the gratuity amount will be adjusted against the loss. When the petitioner did not respond, the impugned order dated 08.02.2010 has been passed inter alia forfeiting the gratuity amount by referring to sub section 6 of Section 4 of Payment of Gratuity Act. By the impugned order even the respondents' contribution towards provident fund has been forfeited by citing financial loss to the aforesaid extent of Rs.1, 22, 74, 467/-.
30. Subsection 6 of section 4 of the Payment of Gratuity Act, 1972 deals with forfeiture of gratuity under certain circumstance and gratuity can be forfeited in full or in part. It clearly provides that the gratuity can be forfeited if there is damage or loss suffered by the employer because of willful omission or negligence of the employee which led to his termination. In that case, the forfeiture has to be to the extent of damage or loss caused. The gratuity can also be forfeited if 10 the misconduct by the delinquent employee constitutes an offence involving moral turpitude and when such an offence is committed by him in the course of his employment.
The Karnataka High Court in the case of M/s Bharatnath Gold Mines Ltd. v. The Regional Labour Commissioner (Central) Bangalore and Ors. reported in 1986 Lab.I.C. 1976 has held that before an employer takes steps to forfeit the entire gratuity, the employer has to take an independent decision after the termination of the service of an employee as to whether the gratuity payable should at all be forfeited and that decision must depend on the facts and circumstances of the case.
31. In the judgment passed by Hon'ble Full Bench of Punjab and Haryana High Court in L.P.A. No.566 of 2012 (supra), the Hon'ble Court has dealt with the provisions of forfeiture of gratuity where the concerned employee was compulsorily retired and the Hon'ble Court had referred to the judgment passed by Hon'ble Karnataka High Court in the case reported in 1986 Lab.I.C 1976 (M/s Bharath Gold Mines Ltd. Vs. The Regional Labour Commissioner (Central), Bangalore & Ors. wherein, it was held that before an employer takes steps to forfeit the entire gratuity, the employer has to take an independent decision after the termination of the service of an employee as to whether the gratuity payable should at all be forfeited and that the decision must depend on the facts and circumstances of the case. The Hon'ble court also relied upon the judgment passed by Hon'ble Bombay High Court reported in 2009 (121) FLR 87 (DB) (Smt. Kamla Rameshchandra Sharma Vs. Maharashtra Rajya Wakhar Mahamandal, Pune) wherein, a view was taken that the penalty for recovery from pay of the whole or part of the pecuniary loss caused to the Corporation must be the actual pecuniary loss occasioned by misconduct of employee.
32. In the said case before Hon'ble Full Bench of Punjab & Haryana High Court, after inflicting the punishment of compulsory retirement, a specific show cause notice was given before taking a decision to forfeit gratuity which satisfied the requirement of the case of M/s Bharath Gold Mines (supra). While scrutinizing the order 11 impugned, the Hon'ble full bench recorded its finding in para 22 to 24 as follows:
"22. After considering these arguments, we find that argument of the learned counsel for the respondent has to prevail. We have gone through charge-sheet as well as enquiry report. No doubt, in the charge- sheet as many as 24 accounts are mentioned where the respondent had given loans or other financial accommodation either beyond her powers or without obtaining proper securities. That would show that certain accounts were overdrawn. Even the operation of these accounts was not satisfactory. However, whether the appellant-Bank ultimately suffered loss and what was the actual loss is not reflected. No doubt, the irregularities committed by the respondent may have exposed the Bank to such losses. However, that is entirely different from loss having been actually suffered by the bank. Even if some accounts became bad and the Bank had to file suits for recovery concerning those accounts against the defaulting parties, that would not automatically lead to the conclusion that the loss/damage has been suffered. It is possible that Bank is able to recover full money in those proceedings. Whether that happened in fact or not and whether loss is actually suffered or not is not discernible from either the charge-sheet or the enquiry report.
23. It is for this reason that it was incumbent upon the appellant- Bank to mention specifically about the actual loss having been suffered, if it suffered, in the show cause notice itself with particulars of that loss in order to enable the respondent to meet the same. That has not been done even in the final order. Though the figure of `4 crores is given, in the final order, even that is not substantiated by giving particulars thereof. We are, therefore, of the opinion that the show cause notice or the final orders passed, forfeiting the gratuity, do not meet the legal requirements and have to be set aside.
24. The upshot of the aforesaid discussion would that though we disagree with the reasons given by the learned single Judge allowing the writ petition and also that Ashwani Kumar Sharma (supra) does not lay down correct law, insofar as present case is concerned, still the impugned order forfeiting the gratuity has to be set aside for the reasons given above. At the same time, since it is a procedural defect, liberty is given to the Bank to serve proper show cause notice indicating actual loss, if any, with particulars of the said loss and pass final orders after giving due opportunity of being heard to the respondent."
33. This Court finds that the present case has similar situation as that of the case before the full Bench of Hon'ble Punjab and Haryana High Court which would be apparent from para 22 of the judgement of the Full Bench quoted above. In the present case also in the impugned order of punishment, there is no specific finding with regard to the particulars of the quantum of loss suffered by the bank, but as per the findings of the enquiry officer, the acts and omissions of the petitioner suffered from financial indiscipline, exposed the bank to huge financial risk and some of the accounts were also overdrawn. The fact remains that some of the account stood over drawn even at 12 the time of the enquiry and the entire allegation relates to disbursement of loan and its follow up actions.
34. The argument of the learned counsel for the petitioner that since no loss was assessed in the order of punishment arising out of disciplinary proceedings, the gratuity could not have been forfeited, is hereby rejected in view of the judgment passed by Hon'ble Full Bench and also judgement passed by Hon'ble Karnataka High Court in M/s Bharath Gold Mines Ltd. Vs. The Regional Labour Commissioner (Central), Bangalore & Ors. (supra) as referred to above where the procedure for forfeiture of gratuity and quantification of loss was taken up after the order of punishment of compulsory retirement. However, there can be no doubt that the bank is entitled to recover only actual losses and no more.
35. From the letter dated 07.09.2009 filed along with the supplementary affidavit today, it mentions that the irregularities committed by the petitioner had exposed the bank to a financial loss of Rs.1,22,74,467/-. The details/breakup of the financial loss actually suffered by the bank has not been mentioned in the said letter and it is also not clear as to whether there was any recovery on the loan accounts subsequent to the order of punishment. The breakup of the alleged loss to the bank is required to be considered for which a detailed break up should have been provided by the bank to the petitioner.
36. The quantification of loss is to be done only after giving an opportunity of hearing to the petitioner by forwarding a copy of the breakup of aforesaid amount of loss of Rs.1,22,74,467/- or any other amount which upon scrutiny of the records, the bank would be quantified. Such required opportunity of hearing has not been provided to the petitioner in the present case before passing the order of forfeiture of gratuity. Therefore, the impugned order dated 08.02.2010 passed by the respondent Bank, interalia, forfeiting the gratuity having been passed in gross violation of principle of natural justice and fair play, cannot be sustained in the eyes of law.
1337. However, liberty is reserved with the respondent bank to take fresh decision with regard to forfeiture of gratuity in accordance with law and in the light of the aforesaid observations. Forfeiture of employer's contribution towards provident fund.
38. The issue of forfeiture of provident fund was also subject matter of consideration before the Hon'ble Full Bench and the UCO Bank Employees' Provident Fund Rules were considered in the light of the punishment of compulsory retirement imposed upon the concerned employee of the bank and it has been held as follows: -
"28. As is clear from the reading of Rule 17, it would apply when an employee (contributor) is either dismissed or he is retired from service and such dismissal/retirement is caused as a result of insubordination, misconduct, fraud or any other cause of a like nature. In such a case, the contributor is entitled to repayment of the amount of his own contribution only along with interest accrued thereon. However, the decision has to be that of Trustees of the Provident Fund Trust who are treated as sole judges of the sufficiency of the cause of dismissal or retirement of any contributor. In the present case, no doubt the respondent is given the punishment of compulsory retirement after holding an enquiry, however, there is no decision of the Board of Trustees and the decision is taken by the Bank. It is the Board of Trustees which is supposed to take such a decision as provided in Rule 17 of the Provident Fund Rules.
29. As far as Rule 18 is concerned, the Bank is given the right to recover from the contribution made by the Bank, i.e., employer's share, in case of any loss or damage resulting to the Bank. Here also it is the Board, i.e., Board of Directors which is entitled to declare the amount of loss or damage so resulting. In the instant case, there is no declaration by the Board of Directors. Furthermore, this Rule applies only when the contributor is "dismissed" for fraud or misconduct. This Rule does not apply when he is "retired" from the Bank even by imposing the penalty of "compulsory retirement".
Whereas, Rule 17 mentions the punishment of dismissal and also includes the retirement, the element of retirement i.e. penalty of compulsory retirement as a consequence of fraud or misconduct is conspicuously absent in Rule 18. It is, thus, clear that Rule 18 would not apply in the present case where the punishment imposed is not that of dismissal but that of compulsory retirement. Therefore, the appellant-bank cannot forfeit the employer's contribution in the instant case. The action of the appellant-bank in forfeiting the employer's share is not correct and is, therefore, set aside. However, liberty is given to the Trustees of the Fund to proceed in the matter in accordance with Rule 17 of the UCO Bank Employees' Provident Fund Rules."
39. Thus, in the matter of forfeiture of provident fund, the Board of trustee is the competent authority in terms of The UCO Bank Employees' Provident Fund Rules.
40. Regulation 17, 18, 19 and 20 of the Staff Provident Fund Regulations of Canara Bank are quoted as under:
1417. A member shall not be entitled to payment of the full amount standing to the credit of his account in the Fund except in accordance with these Regulations.
18. Any contributor who is adjudicated as an insolvent shall be entitled to repayment of only the amount of his own contributions with interest accrued thereon at the rate and in the manner aforesaid and the Bank's contribution shall lapse to the Fund.
19. If a member causes financial loss to the Bank by misconduct, fraud, gross negligence or other conduct of like nature and is dismissed from the service of the Bank or is permitted to leave the service of the Bank in consequence of such misconduct, fraud, gross negligence or other like conduct, the amount of such financial loss sustained by the Bank shall be deducted by the Trustees from the Bank's contribution out of the amount due to the member and be paid to the Bank.
20. The deduction made under Regulation 19 is called forfeiture. Such forfeiture shall be imposed at or after the employee ceases to be in the service of the Bank and before the amount standing to the credit of his account in Fund is paid over to him. If after such payment is made it is discovered that there had existed cause justifying the imposition of the forfeiture, the Bank may pursue against the Trustees and/or the member such right of recourse or remedy as the law may allow or permit.
In order to enable the Trustees to settle the accounts of an employee who ceases to be in the services of the Bank the Bank shall intimate the Trustees when any of the employee ceases to be so and whether the Bank wants the Trustees to deduct any amount from the Bank's contribution and pay to the Bank as provided by Regulation 19.
41. Under the aforesaid provision of the regulations of Canara Bank also, the power with regard to forfeiture is vested with the Board of Trustees of the Bank. In the present case, the decision for forfeiture of employer's contribution towards provident fund has been taken by the Bank and not by its Board of Trustees in terms of the aforesaid regulations. Therefore, the impugned order dated 08.02.2010, passed by the respondent Bank, inter alia, forfeiting the employer's contribution of Provident Fund cannot be sustained in the eyes of law.
42. However, liberty is reserved with the respondent bank and its Board of Trustees to take decision with regard to forfeiture of employer's provident fund in accordance with the provisions of Staff Provident Fund Regulations of Canara Bank.
1543. In view of the findings recorded in para 22, 25 and 28 of this judgement, the impugned orders passed in the departmental enquiry do not call for any interference by this Court.
44. In view of the findings recorded in para 36 and 41 of this judgement, the impugned order dated 08.02.2010 relating to forfeiture of gratuity and employer's contribution of provident fund is set-aside with liberties mentioned in para 37 and 42 of this judgement. The steps in terms of the aforesaid liberties may be taken within a period of 6 months from the date of communication of this order. The petitioner shall produce a copy of this order before the respondents by filing a representation and provide his e-mail-id and phone number in the representation so that appropriate communication be made with the petitioner with regard to gratuity and provident fund in the light of the aforesaid observations/directions. The decision in this connection be taken within a period of 6 months from the date of communication of this order and it is observed that recovery, if any, made so far, will be subject to the final outcome of the decision of the bank/ its trustees with regard to gratuity and provident fund.
45. This writ petition is disposed of in the aforesaid terms. It goes without saying that in case the decision on gratuity and employer's share provident fund taken by the respective authorities goes against the writ petitioner herein, he will have right to challenge the said decision in appropriate proceedings in accordance with law.
46. Pending interlocutory application, if any, is closed.
(Anubha Rawat Choudhary, J.) Saurav