Madras High Court
P.R.Shantharam vs The Executive Director on 3 September, 2012
Author: Vinod K.Sharma
Bench: Vinod K.Sharma
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 03.09.2012
CORAM
THE HONOURABLE MR. JUSTICE VINOD K.SHARMA
W.P.No.20857 of 2004
P.R.Shantharam ... Petitioner
Vs.
1 The Executive Director,
Corporation Bank,
Mangaladevi Temple Road,
P.B.No.88, Mangalore 575001.
2 The General Manager,
Corporation Bank Head Office,
Mangaladevi Temple Road,
P.B.No.88, Mangalore 575001.
3 The Chief Manager,
Corporation Bank,
Whites Road branch, Chennai. ... Respondents
The writ petition has been filed under Article 226 of the Constitution of India for issuance of a writ in the nature of Certiorari to quash the impugned order bearing Ref.No.PAD/IRW/DISC/368/2004 of the first respondent dated 15.05.2004 confirming the order of the second respondent in Ref.No.PAD/IRW/DISC/1374/2003 dated 29.8.2003 with consequential prayer for issuance of a writ in the nature of mandamus, directing the respondents to reinstate the petitioner in service with back wages and all other consequential benefits.
For Petitioner : Mr.Vijaynarayanan
Senior counsel for
Mr.T.N.Suresh
For Respondents : Mr.Karthick for
M/s.T.S.Gopalan & Co.
*****
O R D E R
The petitioner prays for issuance of a writ in the nature of Certiorari to quash the order of dismissal from service passed by the respondent No.2 i.e. General Manager, and also that of Executive Director of Corporation Bank in dismissing the appeal filed by the petitioner.
2 The petitioner joined the service of the Corporation Bank in the year 1974 and his performance was considered good as he was awarded productivity award for three years, Star performers Club member for 5 years and certificate of merit for 11 years.
3 The petitioner was placed under suspension on 22.05.2000 in view of the contemplated enquiry for serious misconduct. The petitioner was issued a show cause notice on 10.12.2001 pointing out certain irregularities. The petitioner was called upon to show cause as to why disciplinary action be not taken against him. After considering the explanation submitted by the petitioner, a charge memo was issued to the petitioner vide Ref.No.PAD/IRW/DISC/ 2397/2002 dated 16.09.2002. The charge memo was issued under Regulation 6 of the Corporation Bank Officer Employees' (Discipline and Appeal) Regulations, 1982.
4 The charges levelled against the petitioner read as under:
Charge No.1: "Failing to adhere to the operational guidelines in the matter of withdrawal of gold from FBR safe and delivery thereof to the constituent or its authorized representative and regarding maintenance of Gold Reconciliation statement."
Charge No.2: "Delivering/causing delivery of gold TTB to persons who are not authorized by M/s.Sangeetha Jewellers to receive gold from the Bank and without there being delivery orders and without obtaining acknowledgment of the indenter which led to filing an FIR against the appellant before the CCB, Chennai-8 on 09.05.2000 by one Sampathraj, Power of Attorney holder of M/s.Sangeetha Jewellers, alleging misappropriation, forgery and falsification of accounts and for alleged shortage of 200 TTB of gold".
Charge No.3&4:-
"Causing sale/delivery of gold to the above constituent without insisting for maintaining the stipulated minimum margin and/or by not collecting the required margin, in respect of certain transaction effected to the party, between the period from 06.12.1999 and 29.04.2000 and "Causing delivery of the gold to the party on unfixed price basis without obtaining requisite prior sanction of Precious Metal Division, Head Office and without reporting to Precious Metal Cell, Mumbai on deliveries of gold made on unfixed prices".
Charge No.5: "Accommodating M/s.Sangeetha Jewellers by allowing kite flying operations in its Current Account by not enquiring the fate of clearing cheques presented in high value clearing and delivering/causing delivery of gold TTB to the above constituent against in-cleared effects of pay orders/cheques tendered by the firm, in respect of certain transaction and on a number of occasions such cheques were returned unpaid and amount debited to Sundry Deposit/Current Account of the constituent on the succeeding working day".
Charge No.6: "Issuing two letters dated 06.05.2000/ 08.05.2000 favouring Indian Overseas Bank, West CIT Nagar, Chennai without prior permission/knowledge of the Chief Manager of the Branch making false certification about the credit worthiness of the party even though while issuing the said letters, there was either no clear funds or no funds at all, in the account of the party, thereby exposing the Bank to financial claims by the party as well as IOB".
Charge No.7: "Withholding return of a cheque for Rs.1.55 crores of M/s.Sangeetha Jewellers presented in inward clearing on 06.05.2000 notwithstanding the specific instruction of the Chief Manager of the branch to return the said instrument and unauthorizedly causing debit balance of Rs.12.65 lakhs in the account, besides exposing the Bank to financial risk to that extent as the constituent failed to regularize the same".
Charge No.8: "Issuing a Bank Guarantee for Rs.80 lakhs fraudulently in favour MMTC, on account of the above constituent with deliberate intention of facilitating the firm to purchase gold from MMTC and to regularize its account with Indian Overseas Bank, West CIT Nagar, Chennai".
Charge No.9: "Releasing an amount of Rs.10.00 lakhs in denomination of Rs.100/-, remitted by M/s.Sangeetha Jewellers on 02.02.2000 as late cash and accounted for in the double lock register and tellers cash book on 03.02.2000 and thereafter causing striking off the entries and permitting return of cash to M/s.Sangeetha Jewellers, in contravention of the systems and procedures in the Bank".
Charge No.10: "Failing to ensure and maintain necessary registers such as gold purchase register, sales register stock register, records/ documents confirming industrial transaction of sale of gold TTB both on fixed price basis as well as unfixed price basis an maintaining the same in a manner rendering it difficult to verify and consolidate transactions of delivery, price fixation, remittance and invoicing, contrary to the stipulations provided in the Manual of Operations Precious Metals".
Charge No.11: "Causing credit of proceeds of an uncrossed demand draft for Rs.49,500/- handed over to the appellant by Shri Sanjeev of M/s.Sangeetha Jewellers (hubsand of Smt.S.Sangeetha and Properties of M/s.Sangeetha Jewellers) to CC A/c No.23/97 maintained at the branch, instead of crediting the amount to the account of the customer and thereby deriving undue pecuniary gain froma person who has connection/dealing with the Bank".
5 After holding the enquiry, the enquiry officer submitted enquiry report holding the petitioner guilty of the charges. Respondent No.2 agreed with the findings of the enquiry officer and imposed a punishment of dismissal from service. The appeal filed by the petitioner was also dismissed.
6 The learned Senior counsel for the petitioner has challenged the impugned order by contending that all the 11 charges framed against the petitioner were pertaining to the alleged failure to adhere the guidelines and failure to follow the procedures in dealing with gold transactions with an object to accommodate one M/s.Sangeetha Jewellers.
7 It is the contention of the learned Senior counsel for the petitioner that in order to defend himself before the enquiry officer, the petitioner submitted representation on 31.01.2003, 03.02.2003, 11.04.2003 and 25.04.2003 for supply of the following documents:
a) Inspection Report (which are normally conducted every 3 months by the Inspection Audit Division); (Relevant to charges 1 to 5 & 10)
b) Concurrent Audit Report (conducted every day by outside Auditors); (Relevant to charges 1 to 5 & 10)
c) Surprise Verification Report (conducted by the Regional/Zonal Office normally every month); (Relevant to Charges 1 to 5 & 10)
d) Too late cash registers (relevant to Charge 7)
e) Inspection Reports (Relevant to charges 1 to 5 & 10)
f) Inward Register
g) Unfixed price sale transaction reports
h) Unfixed reporting file
i) PMC sanction order copies; (relevant to charge 10)
j) Fax copy received from M/s.Sangeetha Jewellers on 06.05.2000; (Relevant to charge 7)
k) Time of EOD on 06.05.2000;
l) Report of God sold on unfixed basis sent to PMC Mumbai from 01.04.1999 to 15.04.2000; (Relevant to charge No.10)
m) Computer print out of sales and purchase register from 01.04.1999 to 31.05.2000 (Relevant to Charge 10)
n) Bank Guarantee for 80 lakhs allegedly given; (Relevant to Charge 8)
o) Schedule of returned clearing sheete from accounts section received by the branch (Relevant to Charge 7)
p) AND 03 Report with staff lapse report; (Relevant to Charge 7)
q) Copy of the letter from PMC dated 30.03.2000 and reply thereon; (Relevant to Charge 4)
r) Screen print out for the cheques debited on 08.05.2000;
s) List of exceptional report; (Relevant to Charges 5 & 7)
t) Manual of cash guide (Relevant to Charge 9)
8 Inspite of the fact that the documents asked for by the petitioner directly related to the charges levelled against the petitioner and were very necessary to prove his innocence, but none of these documents were supplied to the petitioner. It is admitted that out of 15 documents sought for by the petitioner, only two were supplied to him, and other documents were said to be not available with the respondents/Bank. The original Bank guarantee alleged to have issued by the petitioner was also not produced during the enquiry nor the audit report was placed on record.
9 It is the contention of the learned Senior counsel for the petitioner that in case the documents were produced as demanded, it would have resulted in conclusion that the petitioner had followed all the procedures and guidelines. That on account of the denial of the documents, the petitioner was denied the opportunity to effectively defend himself. In support of this contention, the learned Senior counsel for the petitioner placed reliance on the judgment of the Hon'ble Rajasthan High Court in Babu Lal vs State Of Rajasthan (2000 LAB I.C. 3032) wherein the Honb'ble Rajasthan High Court was pleased to lay down as under:
"7 We regret our inability to agree with that view. It is true that only obligation of the disciplinary authority is to supply without asking all relevant materials which is relied by the prosecuting authority for establishing the charges against the delinquent officer where such copies are not supplied, the disciplinary authority is bound to supply such copies when demanded. It is also true that though the disciplinary authority is not bound to supply copies of other documents or statements on their own which are not relied on by them whether such statement were earlier recorded during the course of preliminary enquiry or preceding enquiry, but, is duty bound to supply the same when demanded by the delinquent officer for his defence.
8 The delinquent officer apart from being entitled to receive the copies of the statements and documents relied on by the prosecuting authority is also entitled to demand copies of such documents and statements which he considers relevant for preparing his defence and which are in possession of the prosecuting authority. Simply because the authority is not bound to disclose and give those doucments on its own, it cannot be inferred that even when such documents are demanded by the delinquent officer to prepare his defence, the same can be denied on the ground that because the prosecution has not relied on them, they are not bound to supply them. Non supply of such documents would be denying the delinquent officer fair opportunity to prepare and raise his defence against the allegations levelled against him. In such event, the supply of the copies of documents in the possession of the prosecution agency can only be refused if any privilege is claimed in respect thereof in the public interest. It may be relevant to mention here that the delinquent officer in the defence is entitled to produce the evidence relied on by him and if necessary to secure the assistance of the enquiry officer to summon the witnesses for their oral testimony or for productionofrelevant documents in their possession. If that can be done, we see no reason why the prosecuting authority is absolved from that responsibilility from supplying the docments which are in its possession and are demanded by the delinquent officer for the purpose of preparation of his defence against the allegations levelled against him. The admitted facts of the case are that the petitioner has been consistently demanding the copies of the statements recorded by the authorities in the proceedings concerning the same event namely the loss/theft of 24 of Injector assemblies between the fateful period. Such statements may not be relevant for the purpose of substantiating defence of the delinquent or for cross examining such witnesses if and when examined during the course of enquiry. Non supply of such documents, in possession f prosecuting agency, results in denial of fair opportunity to defend the delinquent officer by withholding the relevant material evidence with them even after the same is demanded. In such event, the enquiry is vitiated."
10 The learned Senior counsel for the petitioner also challenged the impugned order on the ground of jurisdiction of the respondent No.2, in passing the impugned order. It is contended by the learned Senior counsel that as per Corporation Bank Officer Employees' (Discipline and Appeal) Regulations, 1982, the Disciplinary Authority for Scale I Officers is Assistant General Manager and the Appellate Authority is Deputy General Manager whereas the respondent No.2 was Reviewing Authority. The impugned order was passed by the Reviewing Authority which resulted in causing serious prejduice to the petitioner. In support of this contention, the learned Senior counsel for the petitoner placed reliance on the judgment of the Hon'ble Supreme Court in Surjit Ghosh vs Chairman & Managing Director, United Commercial Bank and others (A.I.R. 1995 SC 1053) wherein the Hon'ble Supreme Court was pleased to lay down as under:
"5. The respondent-Bank in its submission contended that although it is true that the Deputy General Manager had acted as the disciplinary authority when he was in fact named under the Regulations as an appellate authority, no prejudice is caused to the appellant because the Deputy Gen- eral Manager is higher in rank than the disciplinary authority, viz., the Divisional Manager/AGM [Personnel]. According to the Bank, it should be held that when the order of punishment is passed by a higher authority, no appeal is available under the Regulations as it is not necessary to provide for the same. It was also contended that there is no right to appeal unless it is provided under the Rules or Regulations. Although the argument looks attractive at first sight, its weakness lies in the fact that it tries to place the Rules/Regulations which provide no appeal on par with the Rules/Regulations where appeal is provided. It is true that when an authority higher than the disciplinary authority itself imposes the punishment, the order of punishment suffers from no illegality when no appeal is provided to such authority. However, when an appeal is provided to the higher authority concerned against the order of the disciplinary authority or of a lower authority and the higher authority passes an order of punishment, the employee concerned is deprived of the remedy of appeal which is a substantive right given to him by the Rules/Regulations. An employee cannot be deprived of his substantive right. What is further, when there is a provision of appeal against the order of the disciplinary authority and when the appellate or the higher authority against whose order there is no appeal, exercises the powers of the disciplinary authority in a given case, it results in discrimination against the employee concerned. This is particularly so when there are no guidelines In the Rules/ Regulations as to when the higher authority or the appellate authority should exercise the powers of the disciplinary authority. The higher or appellate authority may choose to exercise the power of the disciplinary authority in some cases while not doing so in other cases. In such cases, the right of the employee depends upon the choice of the higher/ appellate authority which patently results in discrimination between an employee and employee. Surely, such a situation cannot savour of legality. Hence we are of the view that the contention advanced on behalf of the respondent-Bank that when an appellate authority chooses to exercise the power of disciplinary authority, it should be held that there is no right of appeal provided under the Regulations cannot be accepted.
The result, therefore, is that the present order of dismissal suffers from an inherent defect and has to be set aside."
11 The learned Senior counsel for the petitioner contended that the impugned order of dismissal from service is violative of Rule 19 of the Corporation Bank Officer Employees' (Discipline and Appeal) Regulations, 1982, as it was mandatory for the Bank to consult the Central Vigilance Commission with respect to the cases having a vigilance angle. It was further contended that according to the Vigilance Manual, "Vigilance Angle" includes the abuse of official position with a view to obtain pecuniary advantage for self or for any other person and includes lapses involving gross or wilful negligence, flagrant violation of systems and procedures.
12 The Manual further provides that the allegations were to be classified as "A" and "B" category; "A" comprise cases of serious misconduct and where a prima facie case for initiation of major penalty is made out and "B" Category includes cases of less serious nature.
13 It was next contended by the learned Senior counsel for the petitioner that allegation against the petitioner was that he did not follow guidelines and procedures in dealing with the goods transactions to accommodate M/s.Sangeetha Jewellers. But on the otherhand, M/s.Sangeetha Jewellers had lodged criminal proceedings against the petitioner which was closed as mistake of fact. It was thus contended that the finding that the petitioner had tried to favour M/s.Sangeetha Jewellers can be safely said to be perverse. Even otherwise, the charges against the petitioner were identical to the one in a criminal complaint which was closed as mistake of fact and therefore, finding guilty on the same charges is highly unreasonable and improper.
14 It was also contended that the disciplinary authority recorded a finding without comparative analysis of the evidence and has given no reason to accept the contentions of the prosecution. The disciplinary authority also without independent appraisal, accepted the finding of the enquiry officer, thus, violated the principle of natural justice. In support of this contention, the learned Senior counsel for the petitioner placed reliance on the judgment of the Hon'ble Supreme Court in Anil Kumar, Presiding Officer and others (1986-I L.L.J. (SC) 101) wherein the Hon'ble Supreme Court was pleased to lay down as under:
"5. We have extracted the charges framed against the appellant. We have also pointed out in clear terms the report of the Enquiry Officer. It is well-settled that a disciplinary enquiry has to be a quasi-judicial enquiry held according to the principles of natural justice and the Enquiry Officer has a duty to act judicially. The Enquiry Officer did not apply his mind to the evidence. Save setting out the names of the witnesses, he did not discuss the evidence. He merely recorded his ipse aixit that the charges are proved. He did not assign a single reason why the evidence produced by the appellant did not appeal to him or was considered not credit-worthy. He did not permit a peep into his mind as to why the evidence produced by the management appealed to him in preference to the evidence produced by the appellant. An enquiry report in a quasi-judicial enquiry must show the reasons for the conclusion. It cannot be an ipse dixit of the Enquiry Officer. It has to be a speaking order in the sense that the conclusion is supported by reasons. This is too well-settled to be supported by a precedent. In Madhya Pradesh Industries Ltd. v. Union of India , this Court observed that a speaking order will at best be a reasonable and at its worst be atleast a plausible one. The public should not be deprived of this only safeguard. Similarly in Mahabir Prasad v. State of Uttar Pradesh,this Court reiterated that satisfactory decision of a disputed claim may be reached only if it be supported by the most cogent reasons that appealed to the authority. It should all the more be so where the quasi-judicial enquiry may result in deprivation of livelihood or attach a stigma to the character. In this case the enquiry report is an order sheetwhich merely produces the stage through which the enquiry passed. It clearly disclosed a total non-application of mind and it is this report on which the General Manager acted in terminating the service of the appellant. There could not have been a gross case of non-application of mind and it is such an enquiry which has found favour with the Labour Court and the High Court.
6. Where a disciplinary enquiry affects the livelihood and is likely to cast a stigma and it has to be held in accordance with the principles of natural justice, the minimum expectation is that the report must be a reasoned one. The Court then may not enter into the adequacy or sufficiency of evidence. But where the evidence is annexed to an order sheet and no correlation is established between the two showing application of mind, we are constrained to observe that it is not an enquiry report at all. Therefore, there was no enquiry in this case worth the name and the order of termination based on such proceeding disclosing non-application of mind would be unsustainable."
15 Reliance was also placed in support of this contention, on the judgments of the Hon'ble Supreme Court in Roop Singh Negi vs. Punjab National Bank and others [(2009)1 SCC (L & S) 398] and Narinder Mohan Arya vs. United India Insurance Co. Ltd. and others [2006 SCC (L & S) 840] wherein the Hon'ble Supreme Court was pleased to lay down that High Court while exercising its writ jurisdiction is required to examine as to whether the evidence adduced before the enquiry officer has the nexus with the charge and could or could not lead to the guilt of the employee. Mere ipsi dixit of the enquiry officer would not suffice.
16 It was also vehemently contended that the finding of the enquiry officer itself reveals that the petitioner did not derive any pecuniary gain, as it was clearly stated in the enquiry report that it is immaterial whether the petitioner derived any pecuniary benefit or not but it had exposed the bank to serious financial risk, to hold the petitioner guilty of the charges.
17 The learned Senior counsel for the petitioner in order to challenge the finding of the enquiry officer, vehemently contended that the alleged bank guarantee which is said to have been issued by the petitioner was not at all produced inspite of the fact that the petitioner had denied execution of any such Bank guarantee. It was for the respondents, therefore, to prove this fact, by leading cogent evidence.
18 In support of the contention that the charges of serious nature are required to be established by adducing positive evidence, reliance was placed on the judgment of the Hon'ble Supreme Court in Union of India and others vs. Gyan Chand Chattar [(2009)12 SCC 78] wherein it was laid down that serious charges of bribery cannot be proved on mere probabilities on hearsay evidence.
19 It was also the contention of the learned Senior counsel for the petitioner that the authorities had proceeded with a pre-determined attitude and a foreclosed mind to discredit the defence, rather than proving charges by adducing positive evidence. The findings therefore were said to be in violation of principles of natural justice. In support of this contention, reliance was placed on the judgment of the Hon'ble Supreme Court in Director (Marketing), Indian Oil Corporation and another vs. Santhosh Kumar [(2007)1 SCC (L & S) 388] wherein the Hon'ble Supreme Court was pleased to set aside the order of the appellate authority on the ground of non-application of mind.
20 It was next contended that no action was taken against other officials who had committed irregularities and procedural lapses nor any major punishment was imposed. The impugned action initiated against the petitioner alone therefore, can be safely said to be discriminatory, thus violative of Article 14 and 16 of the Constitution.
21 Finally, it was contended that punishment of dismissal from service is shockingly disproportionate to the charges levelled against the petitioner and furthermore, the respondents failed to take into consideration the long service of 25 years rendered by the petitioner.
22 On merit, the learned Senior counsel for the petitioner argued that:-
Charge No.1 was:-
"Failing to adhere to the operational guidelines in the matter of withdrawal of gold from FBR Safe and delivery thereof to the constituent or its authorized representative and regarding maintenance of Gold Reconciliation statement"
Explanation for the said charge of petitioner was
a) The charge is vague. It does not specify the specific operational guidelines that were allegedly not adhered to and the specific instance where they were not followed.
b) The procedure for delivery of gold is that either of the Joint Custodians (the Advances Manager and the Administration Manager) will have to sign along with the Precious Metal Desk in-charge. The Advances Manager was Mr.Nagasundaram and the Administration Manager at the relevant period was Mr.Chadramouleeswaran (who was examined as MW-5). The "FBR Safe keys" are always kept in the "Dual Lock Cabinet" inside the "Strong Room". The procedure being followed as per the instructions of the Chief Manager is evident from:-
(i) the evidence of MW-5 in response to cross examination question No.3 (ii) the evidence of MW-8 in response to question No.8; and from (iii) Exhibit M-36 marked in the enquiry.
(The TTB (Ten Tola Bars) (1 Tola Bar = 116.64 gm of 24 carat gold) are delivered normally on payment of cash and high value cheques. The High Value cheques are presented in the morning and its result would be intimated by the same evening. Thereafter, the gold is delivered. Too late register is the registere for the record of cash received after woring hours on the previous date).
These procedures have not been deviated from by the petitioner.
c) M/s.Sangeetha Jewellers vide their letter dated 16.06.1999 (marked as Exhibit M-28) had furnished a list of six authorized persons, which included Mr.Dhiraj and Mr.Sridhar. The signatures on the delivery challans signed by those two persons earlier were taken for record purposes, with the knowledge and permission of the Chief Manger.
d) M/s.Sangeetha Jewellers never objected to the delivery of gold to the said two persons who were authorized by them.
e) On 03.04.1999 the petitioner was not in charge of the Gold desk.
f) As evident from the Ex.M-3, on nearly 20 occasions while the petitioner alone signed the GRS, the other joint custodians had not signed. Yet no action was taken against any of the said joint custodians. During cross examination, MW-5 (one of the joint custodians) had in response to the question 25, accepted that it is true. He also admitted that no training was given regarding the Gold Transactions and its procedural aspects.
g) It is evident from Ex.M-3 that on 98 occasions during the period from 02.08.1999 to 17.04.2000, "too late cash" was accepted at the Branch from M/s.Sangeetha Jewellers. Ex.D-1 reveals that such "too late cash" were obtained on majority of these occasions by either of the Joint custodians. Further, it is admittedly accepted with the knowledge of the Chief Manager.
h) It is also evident (Question No.14 to MW-8 Mr.Narasimha Rao, Chief manager) that the reason for receiving too late cash is that Bullion parties remit huge amounts of cash running into lakhs of rupees and it would be difficult to process them during business hours without cash counting machine. Hence it is accepted as "too late cash". Further, as per the authoriziation of the Head Office, a commission of 0.25% is also levied and thus the branch has in fact earned huge "non-interest income".
i) It is evident from Ex.M-5 that during the period from 22.04.1999 to 04.05.1999, 28200 gold TT bars were not withdrawn from the FBR Safe on account of M/s.Sangeetha Jewellers. Therefore, the allegation is baseless.
j) Exhibit M-26 clearly reveals that the Manual of Operations of Precious metals was brought out only on 08.10.1999 and it reached the Whites Road branch only in January, 2000. Therefore, the operations were carried on as per the guidance of MW-8 (the Chief manager) as evident from his response to Q Nos.3 & 4.
Charge No.2 was:-
"Delivering/causing delivery of gold TTB to persons who are not authorized by M/s.Sangeetha Jewellers to receive gold from the bank and without there being delivery orders and without obtaining acknowledgment of the indenter which led to filing an FIR against the appellant before the CCB, Chennai 8 on 09.05.2000 by one Sampath Raj, Power of Attorney hold of M/s.Sangeetha Jewellers, alleging misappropriation, forgery and falsification of accounts and for alleged shortage of 200 TTB of gold".
Explanation to the said charge No.2:-
a) The said charge is also vague. It does not specifically as to when the gold bars were delivered allegedly without authorization. It also does not state as to how the petitioner is liable for some criminal act of M/s.Sangeetha Jewellers.
b) In any event, there was no authorized delivery at all of TTB (Ten Tola bars) (1 Tola Bar = 116.64 gm of 24 carat gold) either to M/s.Sangeetha Jewellers or anyone else at any point of time.
c) It is evident from Ex.M-3 that Precious Meta Desk Head office had permitted the branch for delivery of gold on "unfixed price basis" to M/s.Sangeetha Jewellers vide letter dated 15.04.2000 to a maximum limit of 200 TT bars and vide letter dated 30.03.2000. Further, on account of such delivery, no loss is caused to the Bank as evident from Ex.M-3, M-4 and the evidence of MW-4. This procedure was being verified by the Chief Manager and no adverse features were noticed as evident from Ex.M-39.
d) Ex.M-4 clearly reveals that the remittances effected by the branch on 17.04.2000 (for 200 TT bars) and 02.05.2000 (for 100 TT bars) have been duly accounted for by the constituent in the Books of Accounts on the said dates respectively as purchases and that the contention of the constituent alleging non receipt of 200 TT bars has no locus standi.
e) M/s.Sangeetha Jewellers never sought for any clarification from the bank before lodging the complaint as evident from the response to Q.No.27 by MW-8 (Chief Manager).
f) On 04.05.2000 Sangeetha Jewellers had purchased gold (200 TTB) as evident from Ex.M-2. It was delivered by the Joint custodians Mr.Chandramouleeswaran and Mr.Nagasundaram. The payment was made both by cash and by cheque and the said cash was received by the Joint custodians and by the petitioner only on permission from the Chief Manager. On 05.05.200 no cash was received as per the current account records and the Too late register was not furnished despite requests. On 06.04.2000, 300 TTB were actually delivered to Sangeetha Jewellers and a sum of Rs.2.15 crores was paid by cash and cheque and apart from that the amount for a returned cheque of Rs.50 laksh was also provided as indicated in the current account entries and too late cash register entries and the invoice was duly signed for delivery.
g) Sangeetha Jewellers vide their letter dated 16.06.1999 (marked as Ex.M-28) had furnished a list of six authorized persons which included Mr.Dhiraj and Mr.Sridhar. The signatures on the delivery challans signed by those two persons earlier were taken for record purposes with the knowledge and permission of the Chief Manager.
h) Regarding the alleged furnishing of Bank Guarantee, no such bank guarantee for Rupees eighty lakhs was given. Despite request the origianl bank guarantee was not at all produced nor was the photocopy of the said document marked in evidence.
i) Regarding the maintenance of the registers, all registers were duly maintained. The Chief Manager and the Joint custodians would be equally liable. The Inspection report (which are normally conducted every 3 months by the Inspection audit division); concurrent audit report (conducted every day by outside auditors); surprise verification report (conducted by the Regional/Zonal Office normally every month); would prove that no irregularities were there in the maintenance of records.
j) The contention of Sangeetha Jewellers about alleged non receipt of 200 TTB of gold is unfounded. They have received the gold. Further, the complaint lodged has after investigation by the Police, been closed as mistake of fact. It remains a fact that on 06.04.2000 300 TB were actually delivered to Sangeetha Jewellers and a sum of Rs.2.15 crores was paid by cash and cheque and apart from that the amount for a returned cheque of Rs.50 lakhs was also provided as indicated in the current account entries and too late register entries and the invoice was duly signed for delivery.
k) Furrther, contrary to what is alleged, it is clear from the contents of the reply filed by the respondent-Bank herein in O.A.No.958 of 2000 (filed by Indian Overseas Bank against Sangeetha Jewellers and the Corporation Bank) pending before the Debts Recovery Tribunal I and from the written statement filed by the respondent-Bank in C.S.No.747 of 2000 filed by Sangeetha Jewellers against the Corporation Bank and Indian Overseas Bank) pending on the file of the Hon'ble High Court, Madras that the petitioner herein is not at al fault.
Charge Nos.3 & 4 were:-
"Causing sale/delivery of gold to the above constituent without insisting for maintaining the stipulated minimum margin and /or by not collecting the required margin, in respect of certain transaction effected to the party, between the period from 6.12.1999 and 29.04.2000"
And: "Causing delivery of the gold to the party on unfixed price basis without obtaining requisite prior sanction of Precious Metal Division, Head office and without reporting to Precious Metal Cell, Mumbai on deliveries of gold made on unfixed prices".
Explanation to the said charges:-
a) The said charges too are totally vague. It does not state what is the stipulated margin, which order stipulates such margin, when it took effect, which was the date on which and to whom such sale/delivery was made without insisting on the alleged stipulated margin, etc. In as much as the said details are not given, the charges are unsustainable.
b) It is evident from Ex.M-3 that Precious metal desk Head office had permitted the branch for delivery of gold on "unfixed price basis" to Sangeetha Jewellers vide letter dated 15.04.2000 to a maximum limit of 200 TT bars and vide letter dated 30.03.2000. Further, on account of such delivery, no loss is caused to the bank as evident from Ex.M-3, M-4 and the evidence of MW-4. This procedure was being verified by the Chief Manager and no adverse feature were noticed as evident from Ex.M-39
c) Ex.M-26 clearly reveals that the Manual of Operations of Precious metals was brought out only on 08.10.1999 and it reached the whites road branch only in January 2000. Therefore, the operations were carried on as per the guidance of MW-8 (the Chief Manager) as evident from his response to Q Nos.3 & 4. The insistence of 110% margin stated to be contained in the Guidance came to be received only in January 2000. It may also be noted that permission for delivery of gold on unfixed price basis was granted only on 15.04.2000 and that even prior to that conduct of business had taken place. That apart, with a view to facilitate the Bank's business the operations were conducted as it was and that no loss was caused to the bank at any point of time on account of such operations.
d) The Chief Manager was fully aware of and had verified the margin against the unfixed price and thus had full knowledge of all operations. This is evident from Ex.M-39. As per the Chief Manager's instructions, "good for payment" ought to be the basis for the transactions and the account balance together with the too late cash were together taken for arriving at the margin. The instructions were scrupulously followed. The same procedure was adopted for all Jewellers and not for Sangeetha Jewellers alone as alleged and thus there has been no favouritism of any kind. Even the Precious Metal Cell in Mumbai was fully aware of the details and manner of operations and at no point of time irregularities were alleged. No queries were raised from PMC Mumbai regarding unfixed price sale. All unfixed price sale were duly reported and would be contained in the Unfixed reporting file. The chief Manager had been verifying the margin against unfixed price sale basis and that he had not come across anything adverse in the past since the inception of the Gold Business. Further, not even a memo was issued at any point of time for allegedly not maintaining such stipulated margin though the gold business was in vogue for quite a long time.
e) Also, there had been various inspections during the said period, viz., Gold Inspection, BID Inspection and Surprise Inspection, had there been any irregularities in the functioning, the same would have been observed in these inspections. It is thus obvious that no such thing as alleged had occurred. These documents/reports were not produced during the enquiry despite specific requests.
Charge No.5 was:-
"Accommodating Sangeetha Jewellers by allowing kite flying operations in its Current Account by not enquiring the fate of clearing cheques perscribed in high value clearing and delivering/causing delivery of gold TTB to the above constituent against uncleared effects of pay orders/cheques tendered by the firm, in respect of certain transaction and on a number of occasions such cheques were returned unpaid and amount debited to sundry deposit/current account of the constituent on the succeeding working day".
Explanation to the said charge No.5:-
a) The said charge too is totally vague. It does not contain material particulars. It does not specify as to when such allegedly kite flying operations were permited and on which dates the gold was allegedly delivered without enquiring the fate of clearing cheques presented in high value clearing. It also does not specify as to how the petitioner who had been in charge of the Gold Metal desk section and not incharge of the current section, can be held responsible for any of the uncleared effects.
b) The process of delivery is that in respect of the price of gold that is purchased, a Debit challan is raised by the Gold Metal Desk (where the petitioner was in charge ) and it is forwarded to the current section. The current section had instructions from the Chief Manager who had provided instructions to allow debits against uncleared effects in the case of bullion parties and not to charge interests for such debits. The current section Accounts Officer/Section incharge, after taking into account all these passes/authorizes the passing of the debit challan. Once passed, the gold can be delivered. These instructions were strictly followed. The Gold is delivered on the basis of the balance as per the instructions and uncleared effects come to be known only the next morning. In any event, the petitioner is not incharge of the current section and therefore, he cannot be held responsible for the uncleared effects.
c) The evidence recorded in the departmental proceedings would also prove these aspecs. In exhibit M-4 it is stated that one Mr.Kalyanasundaram, Special Assistant and Supervisory Official incharge of Current Accounts had admitted that they have instructions from the Chief Manager for allowing debits against credits of high value clearing in case of Bullion parties. In the same Exhibit M-4 it is also admitted by Mr.Rao that he had permitted debits to be passed against uncleared effects. M.W.3 (Q.NO.38 and 39) had also admitted during cross examination that the Chief Manager had permitted debits to be passed against uncleared effects in the Current Accounts section of Bullion parties. M.W.6 has also supported this contention.
d) Till 04.05.2000 Sangeetha Jewellers had purchased gold. Their cheques on 05.05.2000 and 06.05.2000 were passed on due instructions to the concerned section from the Chief Manager. It is pertinent to note that a cheque for Rs.1.45 crores was passed on 05.05.2000 though it was signed by one Sanjeev Kumar who is not at al mandated to sign the cheques. The concerned section had not raised any questions and the cheque was passed because the balance was available. Though this is a clear violation of procedure, no action was taken against those persons and officials involved in it.
e) The facility of allowing debits against uncleared effects was afforded on the instructions of the Chief Manager to all the Bullion parties including "Deccan& Co." and "Daman Prakash". The petitioner was incharge of the clearing division and was not at all responsible for the passing of cheques. If at all on any particular date the petitioner had been called upon to take charge of the section on account of exigencies of service, all cheques would have been considered as per procedure and in accordance with the instructions of the Chief Manager and not the cheques of Sangeetha Jewellers.
Charge No.6 read as under:-
"Issuing two letters dated 06.05.2000/ 08.05.2000 favouring Indian Overseas Bank, West CIT Nagar, Chennai without prior permission/knowledge of the Chief Manager of the Branch making false certification about the credit worthiness of the party even though while issuing the said letters, there was either no clear funds or no funds at all, in the account of the party, thereby exposing the Bank to financial claims by the party as well as IOB".
Explanation to the said charge No.6:-
a) The said charge is totally false and baseless.
b) Exhibits M-23 (1) to Exhibit M-23(18) reveal that it is the practice among the Banks in Chennai to mark the cheques/Pay orders as "good for payment" or to issue "comfort letters/slips" which would indicate that there is sufficient balance in the account and the cheques would normally be honoured. It is also evident from Ex.M-23 that IDBI Bank, IOB, Indian Bank, ANZ Grindlays Bank and Vijaya Bank have all issued good for payment letters to the Corporation Bank and that they have also been acted upon.
c) The Chief Manager has not issued any instructions for returning the cheque for Rs.1.55 crores on 06.05.2000. The Chief Manager has also deposed that only on 08.05.2000 he came to know the cheque for Rs.1.55 crores has been debited to the account.
d) The petitioner had not issued any letter for 1.75 crores dated 08.05.2000. The said letter does not even contain the signature of the petitioner.
e) In so far as the TOD (Temporary over Drawings) are concerned, it is the sole discretion of the chief Manager to permit them or not. Further, the TOD in the current account of Sangeetha Jewellers had not occurred on account of the passing of the cheque for Rs.1.55 crores on 06.05.2000. The High value cheque was presented by IOB favouring Sangeetha Jewellers (self cheque) and it came to the Corporation Bank on 06.05.2000 and was passed as there was a credit balance of Rs.35,181/- in the account even after the clearing of the said cheque. In any event it is the current section which is involved in the passing of the said cheque and not the Precious Metal Desk where the petitioner was incharge. Thus, no loss caused on account of any act of the petitioner.
f) On 06.05.2000 when information was received about the return of the cheque of value Rs.40 lakhs. M/s.Sangeetha Jewellers was contacted and informed by the Bank and thereafter they had sought permission from the Chief Manager for deposit of cash and they also sent a fax message for deposit of Rs.12 lakhs in Bank of India and on such permission they deposited Rs.28 lakhs in cash at about 3.30 p.m. The Exceptional Transaction Report which requires to be scrutinized by the Chief Manager every day would clearly indicate these aspection. Neither the said report nor the fax message was produced despite requests from the petitioner.
g) TOD in the current account of Sangeetha Jewellers to the tune of Rs.12.65 lakhs had happened due to the debit of Rs.15 lakhs late return cheque from the minit street branch and the petitioner was not connected to the said transaction in any manner. The Chief Manager is solely responsible.
Charge No.7 was :-
"Withholding return of a cheque for Rs.1.55 crores of M/s.Sangeetha Jewellers presented in inward clearing on 06.05.2000 notwithstanding the specific instruction of the Chief Manager of the branch to return the said instrument and unauthorizedly causing debit balance of Rs.12.65 lakhs in the account, besides exposing the Bank to financial risk to that extent as the constituent failed to regularize the same".
Explanation to the said Charge No.7:-
a) The petitioner was not in charge of the clearing division and hence cannot be held responsible for the temporary over-drawings.
b) The TOD in the current account of Sangeetha Jewellers had not occurred on account of the passing of the cheque for Rs.1.55 crores on 06.05.2000. There was a credit balance of Rs.35,181/- in the account even after the clearing of the said cheque. In any event, it is the current section which is involved in the passing of the said cheque and not the Precious Metal Desk where the petitioner was incharge. Thus, no loss was caused on account of any act of the petitioner.
c) On 06.05.2000 when information was received about the return of the cheque of value of Rs.40 lakhs Sangeetha Jewellers was contacted and informed by the Bank and thereafter they had sought permission from the Chief Manager for deposit of cash and they also sent a fax message for deposit of Rs.12 lakhs in Bank of India and on such permission they deposited Rs.28 lakhs in cash at about 3.30 p.m. The Exceptional Transaction Report which requires to be scrutinized by the Chief manager every day would clearly indicate these aspects. Neither the said report nor the fax message was produced despite request from the petitioner.
d) The TOD in the current account of Sangeetha Jewellers to the tune of Rs.12.65 lakhs had happened due to the debit of Rs.15 lakhs late return cheque from the Minit street branch and the petitioner was not connected to the said transaction in any manner. The High value cheque dated 05.05.2000 for Rs.15 lakhs that was returned by the Mint street branch reached the Whites Road branch only on 08.05.2000. No core banking system was available in the year 2000. Despite the return, the cheque had been cleared even earlier on account of the instructions of the Chief Manager to clear cheques even against uncleared effects in respect of the bullion parties. The Chief Manager is thus solely responsible.
e) The prime witness in respect of the said charge, viz. Mr.Manohar Kamath, who was the Clearing Section officer at the relevant point of time, was not at all examined. Infact he had resigned immediately after the incident. Likewise, Mrs.Hema Kulkarni, Incharge of cash, was also not examined. Similarly, Mr.Vijaya Subramaniam, the Officer who had passed the cheuqe was also not called as witness. It is also significant to note that not even a memo was issued to any of the persons involved in the passing of the cheque and the petitioner was being made a scapegoat though he was not at all incharge of the said section.
f) The evidence would also show that the charge is untennable. Ex.M-15 reveals that the cheque was signed and authenticated by Mr.Chandramouleeswaran and not the petitioner. M.W.5 deposed that the cheque was entered into the system by the Clerk Ms.Uma and was authorized by the Officer Mr.Vijaya Subramaniam and this is also confirmed in Exhibit M-37.
g) It is further clear from the following cases, viz. (i) O.A.No.426 of 2001 before the Debts Recovery Tribunal I at Chennai filed by the respondent-Bank against the said Sangeetha Jewellers and (ii) O.A.No. Of 2000 filed by the Indian Overseas Bank against Sangeetha Jewellers and Corporation Bank and the reply filed by Corporation Bank in the said application; that the allegations levelled against the petitioner are without any substance.
Charge No.8 reads as under:-
"Issuing a Bank Guarantee for Rs.80 lakhs fraudulently in favour MMTC, on account of the above constituent with deliberate intention of facilitating the firm to purchase gold from MMTC and to regularize its account with Indian Overseas Bank, West CIT Nagar, Chennai".
Explanation to the said Charge No.8:-
a) No such Bank Guarantee was executed by the petitioner. This was raised in the defence and the petitioner had also sought for production of the original Bank Guarantee alleged to have been executed by the petitioner was not at all produced. Not even the photocopy was produced during the enquiry.
b) What is stated is that a witness had seen it with the Police. It is pertinent to note that the Police had closed the case as a mistake of fact and thus exonerated the petitioner of any criminal liability.
c) Regarding the alleged Bank Guarantee, no entry was found in the Bank's records and this was also confirmed in Exhibit M-39 and by the deposition of M.W.3. In Exhibit M-4 it is reported that the signature of one Ms.Indira Ramasamy an officer was found and that it is a forged one.
d) The alleged Bank Guarantee was not utilized at all as evident from Exhibit M-4. Further, no loss is caused to the Bank as evident from the deposition of M.W.3 (Question 50).
Charge No.9 was:-
"Releasing an amount of Rs.10.00 lakhs in denomination of Rs.100/-, remitted by M/s.Sangeetha Jewellers on 02.02.2000 as late cash and accounted for in the double lock register and tellers cash book on 03.02.2000 and thereafter causing striking off the entries and permitting return of cash to M/s.Sangeetha Jewellers, in contravention of the systems and procedures in the Bank".
Explanations to the said Charge No.9:-
a) On 02.02.2000 a sum of Rs.10 lakhs was accepted in the too late cash by Mr.Chandramouleeswaran. As per the procedure, on the next date, viz. 03.02.2000 the too late entries should have been made 'Nil'. This was not done. On 03.02.2000, when representatives of Sangeeetha Jewellers are stated to have requested for exchange of Rs.100/- notes into Rs.500/- notes for a sum of Rs.10 lakhs, that was considered by the authorities. No allegations of any irregularities were made immediately. The petitioner in any event was not responsible for any of these transactions and it related entirely to other sections and therefore the petitioner cannot be blamed for any irregularities that occurred there.
b) Exhibit M-4 clearly reveals that the constituent, viz. Sangeeetha Jewellers had not made any claim in this regard.
c) It is evident from Exhibit M-1 that the late cash of Rs.10 lakhs was received and initiated by Mr.Chandramouleeswaran. This was confirmed by MW-1 (Q.2), MW-2 (Q 4 to 6) and MW 1 (Q.4). In Exhibit M-1 it is clear that there is discrepancy in the entries made regarding the cash and this was initiated by Mr.Nagasundaram.
d) There is nothing to show that the petitioner had struck off any enries. On the contrary, the deposition of MW-1 (Q.11) would show that the striking of the entry in the "cash deposited" column was cancelled by Mr.Nagasundaram. No signatures or entries were made by the petitioner as he was not at all incharge of the said sections. No action was taken against the Cashier and the cash officers at the relevant point of time.
Charge No.10 reads as under:-
"Failing to ensure and maintain necessary registers such as gold purchase register, sales register stock register, records/ documents confirming industrial transaction of sale of gold TTB both on fixed price basis as well as unfixed price basis an maintaining the same in a manner rendering it difficult to verify and consolidate transactions of delivery, price fixation, remittance and invoicing, contrary to the stipulations provided in the Manual of Operations Precious Metals".
Explanation to the said Charge No.10:-
All records duly maintained by the petitioner. The petitioner had duly maintained the records as required in the normal course of business. These records were available with the Management. The petitioner had sought for the productions of these records during the enquiry proceedings. However, none of these documents were produced or supplied to the petitioner. Their production would have clearly revealed that all records were duly maintained. Further, the Audit and Inspections held prior to the said charge memorandum would very clearly show that all the records were properly maintained and that there was n lacuna of any sort on the part of the petitioner.
Charge No.11 was:-
Causing credit of proceeds of an uncrossed demand draft for Rs.49,500/- handed over to the appellant by Shri Sanjeev of M/s.Sangeetha Jewellers (hubsand of Smt.S.Sangeetha and Properties of M/s.Sangeetha Jewellers) to CC A/c No.23/97 maintained at the branch, instead of crediting the amount to the account of the customer and thereby deriving undue pecuniary gain froma person who has connection/dealing with the Bank".
Explanation to the charge No.11:-
a) The demand draft was handed over by Sangeetha Jewellers for the purpose of making good any shortage in the cash remittance to the Bank and in turn to the currency chest. This was done with the knowledge of the Chief Mangager.
b) The petitioner always maintained a credit balance in the cash credit account and has not derived any pecuniary benefit at all. The proceeds of the said demand draft were never utilized by the petitioner at all.
c) It is revealed from Exhibit D-8 and from the evidence of MW-5 (Q.24) that an amount of Rs.16250/- was debited to the petitioner's account on 19.12.2000 when shortage of cash remittances had occurred on account of Sangeetha Jewellers and that such amounts were debited whenever such shortage had occurred and this was all done with proper endorsements.
As the entire proceedings have been conducted in total violation of the principles of natural justice and as the petitioner has been denied reasonable opportunity to defend and as the findings are totally perverse and unreasonable the said findings are unsustainable and the punishment imposed on the said findings is also liable to be set aside.
23 Writ petition is opposed by the respondent by filing counter. The stand of the respondents in the counter reads as under:
1) The respondent is a Nationalised Bank having its Corporate office in Mangalore with branches throughout the country including the one at Whites Road, Chennai. Apart from normal banking activities, based on the licence issued by the Reserve Bank of India, the respondent started dealing in precious metals including Gold Bullions. This business concept is trading in Gold by way of consignment sale. The Bank secures Gold in bulk from Overseas suppliers and they are held in stock. The International Banking Division of the respondent bank at Mumbai monitors the conduct of this business. There is a Precious Metal Cell in Mumbai which fixes the price for the Gold trade dealing in Bullions by the selected branches of the respondent Bank and the Whites Road branch is one such branch. An Officer is paced incharge of the Precious Metal Desk at the branch and he is responsible for all the transactions relating to precious metals including gold business. However, the branch at Whites Road, Chennai dealt with only gold. The bank acts only as an Agent between the Foreign Supplier and the local purchaser. Gold is sold by the branch in three methods, viz., (i) outright sale (retail), (ii) fixed price basis. In the case of outright sale, and party who wants to buy gold can tender cash and purchase it as any other commodity in the market. In the case of fixed price basis, the price is fixed for the Gold for a future date (not necessarily at the current market price), the intended purchaser should deposit the agreed price amount and take delivery of gold immediately. In the case of unfixed price basis, the intended purchaser will have to deposit 110% of the current market price and take delivery of the gold with an option to fix the price and value date subsequently within a specified period. When the purchaser deposits the amount at the time of taking delivery of the gold, the amount is held under sundry deposit as margin money. As the Gold is very sensitive to fluctuate in the market price, the decision on price fixation is done only by the Precious Metal Cell, Mumbai and communicated to the concerned officer who is incharge of the Precious Metal Desk by quickest mode of communication. Any business dealing in Gold who wish to avail the facility of unfixed price basis should enter into a Bullion Agreement setting out the terms and conditions of the liability and obligations of the bank and the concerned constituent. In the case of unfixed price basis, the constituent should authorize the person/s to who the gold can be delivered and specimen signatures of authorized person/s should be furnished to the branch which shall be held in the branch. The stock of gold in the branch is kept in a steel cabinet with double lock system and the said steel cabinet will be kept inside the safe room, which again is subject to double locking system of safe room. As far as double lock system of safe room is concerned, the key is held in the joint custody of the two officers and the keys of the steel cabinet in which the gold is kept are to be held by the Officer in charge of the Precious Metal Desk and one of the joint custodians of the safe room. While drawing and depositing Gold, the two officers who are the joint custodians of the Safe room's keps along with the officer who is incharge of the Precious Metal Desk should open the safe room and the steel cabinet of the precious metal will have to be opened by the officer who is incharge of the Precious metal desk and another joint custodian of the safe room. The branch maintains Gold Reconciliation statement and Gold Double locking register prepared by the officer incharge of the Precious Metal Desk and the joint custodian.
2) The Whites road branch commenced dealing in the aforesaid business from 31.03.1999 and from 10.4.1999, the petitioner was working as incharge of Precious Metal Desk of the branch.
3) It is submitted that on 21.4.1999 one Sangeetha Jewellers entered into a Bullion Agreement with the branch pursuant to which it was buying Gold from 22.04.1999. It opened a current account on 23.12.99 and till then, it was purchasing gold by remitting cash and cheque to the sundry deposit account. When once the current account was opened, the transactions were to be routed through the current account. The branch can receive cash only as deposit to the current account or to his personal account. All banking transactions are normally to be carried out during the banking hours and only as and by way of customer service, to facilitate a constituent, once in a while, cash can be received late, in which event the cash will be received and kept as a too late cash receipt and next day morning it will be credited to the account as a first entry. Late remittance of cash as a regular phenomenon may justify a legitimate suspicion that it was being restored to by the constituent and permitted by the concerned official with a view to accommodate the uncleared effect of an instrument which is expected to receive in clearing. Between August 1999 and April 2000, on 102 occasions Sangeetha Jewellers has remitted cash after business hours and gold was being delivered against too late cash receipt. Most of the instances of too late receipts were made by the petitioner. On 4.5.2000 the petitioner accepted huge cash from Sangeetha Jewellers, though the said party had not purchased Gold on that day. The Chief Manager instructed the petitioner not to accept huge cash, unless the constituent purchases gold from the branch. Inspite of the instructions of the Chief Manager, the petitioner accepted the huge cash on 5.5.2000 also and on enquiry, the petitioner informed the chief Manager that the constituent was depositing to meet certain cheques issued by them on their account in the branch. At that point of time, a cheque for Rs.25 lakhs drawn on Indian bank in favour of Sangeetha Jewellers when presented to the drawee bank was returned dishonoured. The branch also came to know that Sangeetha Jewellers was purchasing gold from Indian Overseas Bank by presenting the cheque drawn on respondent bank. There was dishonour of another cheque for Rs.40 lakhs in favour of Sangeetha Jewellers drawn on Bank of India which was also presented by the branch in clearing. On 8.5.2000 Indian Overseas Bank presented a cheque for Rs.1.75 crores drawn by Sangeetha Jewellers on respondent bank which was returned unpaid by the respondent Whites road branch for want of requisite funds in the drawer's account. Both Indian Overseas Bank and Sangeetha Jewellers found fault with the respondent bank for having returned the cheque. Indian Overseas bank complained that the cheque which was presented to the respondent bank was accompanied by a covering letter in White road branch of respondent bank's letter head stating that "required funds are earmarked" issued and signed by the petitioner and based on the said letter, they parted with gold to Sangeetha Jewellers. Similarly, Sangeetha Jewellers filed a complaint against the petitioner and the respondent bank complaining that certain credits were not given and it had a credit balance of Rs.1.75 crores when the said cheque was presented in clearing. In that context, an inspection of the transactions of the Precious Metal Desk of Whites Road branch was carried outand certain irregularities were noticed. There was a further investigation made by the Deputy Manager (Vigilance Cell) of the Head Office of the respondent bank and the investigation showed the complicity of the petitioner in the various transactions with the Sangeetha Jewellers.
4) In the course of inspection and investigation, it came to light that the petitioner was not adhering to operational guidelines in the matter of withdrawal of gold and delivery thereafter, that he was delivering gold to the persons who were not authorized by Sangeetha Jewellers to receive the same, that there were various irregularities pertaining to the account of Sangeetha Jewellers all of which were perpetrated by the petitioner. On 10.12.2001, a show cause notice was issued to the petitioner by the Disciplinary Authority listing out various irregularities committed by him in the account of Sangeetha Jewellers. On 27.12.2001, the petitioner gave a reply offering his explanation. After considering the same, a charge sheet was issued by the Disciplinary Authority on 16.09.2002 and domestic enquiry was ordered. He was asked to appear for a domestic enquiry on 21.11.2002. In the enquiry, eight witnesses were examined in support of the charges and they were also cross examined by the Assisting Officer (AO) nominated by the petitioner and he was also questioned by the enquiry officer. The Enquiry Officer gave his report on 7.7.2003 holding that all the charges against the petitioner were proved. A copy of the report of the enquiry Officer was furnished to the petitioner asking for his comments. By letter dated 8.8.2003, the petitioner submitted his reply. After considering his representation, orders were passed on 29.08.2003, dismissing the petitioner from service. The appeal preferred by the petitioner against the order of dismissal to the Appellate Authority was also dismissed.
5) It is submitted that the dismissal of the petitioner dated 29.8.2003 does not suffer from any error or law and the same is not liable to be interfered with for all or any of the reasons urged in the claim petition.
6) In order to appreciate the gravity of the charges against the petitioner, it is necessary to set out how banking system operates and how the responsibilities of the Officers are fixed. In the perception of the public, the transactions routed through any Bank are viewed as legitimate and therefore, the public repose absolute faith and confidence in the Banks. As the Banks are corporate entities, they carry out their functions only through their employees in whom the Bank reposes absolute confidence and trust. Further, the system in the Bank places checks and counter checks and the duties of officers are defined and codified. The banking system is not only to enable all its constituents to carry on various types of transactions, but in the operation system, it cannot allow itself to be used as a medium by unscrupulous persons to enjoy unintended credit which is otherwise not legitimately available. Viewed in this context, any failure to observe the laid down guidelines by the Officers would not only expose the Bank to avoidable risk, but may enable the unscrupulous element to derive advantage to which he is otherwise not entitled to, even if, it does not result in loss to the Bank or any pecuniary advantage to the officer who facilitated the unscrupulous element to derive the advantage.
7) It is submitted that the Bank offers certain credit facilities to its constituents against securities. These credit facilities are in the form of overdraft, discounting of cheques, cash credit, etc. However, in gold bullion business, no such credit facility if offered to any constituent who enters into a Bullions Agreement with the Bank. When a constituent presents a cheque and the same is sent for clearing, his account may be credited immediately, but such credits are termed as uncleared effects and no withdrawal can be permitted against such uncleared effects, unless a credit arrangement is in place. Only in the case of Branch Managers, discretionary power is vested to sanction credit to any constituent, subject to certain limitations prescribed by the Head Office. No officer other than the Branch Manager can in his individual capacity can sanction credit or allow credit.
8) The first charge against the petitioner,which was proved in the enquiry, was that he failed to adhere to the operational guidelines in the matter of withdrawal of Gold from Fire & Burglary Resistant (FBR) Safe and delivery thereof, to the constituent or its authorized representative and regarding maintenance of Gold Reconciliation Statement (GRS). In the enquiry, it was found that though the operational guidelines for doing gold business were codified in the form of a manual (which was brought out only on 8.10.1999 and reached the branch in January, 2000), the guidelines were already in vogue by the circular dated 3.2.1998, that the manual was only compilation of the various circulars issued earlier, that therefore, it was not open to the petitioner to contend that he was not aware of the guildeines earlier to 2000, that on twenty occasions between April 1999 and April 2000, the petitioner has alone signed the GRS without the signature of the joint custodian, that in many cases, the GRS and Gold Double Lock Register (GDLR) were found to be having alterations, striking, over-writing and additions, that GDLR which contains the details of gold taken or deposited, was not signed by the two officials on many occasions, that it was the primary responsibility of Officer of Precious Metal Desk, namely, the petitioner to ensure that the joint custodian also signs the registers, that he had delivered gold to two persons who were not authorized by Sangeetha Jewellers, that some of the copies of delivery orders issued were kept blank, that some of the delivery orders were removed from the Book, that on many occasions, the delivery orders were altered or amended, that there were other discrepancies in the matter of issue of delivery orders and all these instances clearly show that the petitioner was not adhering to the guidelines issued for conducting gold business.
9) The second charge proved against the petitioner was that he failed to observe the norms stipulated in the matter of sale of gold to the domestic customers and effected sale/ delivery of gold to Sangeetha Jewellers on unfixed price basis without insisting for the minimum deposit of 110% of the value of the goods sold, that between 6.12.1999 and 19.4.2000, on many occasions he accompanied Sangeetha Jewellers in the aforesaid manner by not collecting the required margin, that without authority, he delivered gold TTBs to Sangeetha Jewellers against uncleared effects, that on number of such occasions, such cheques were returned unpaid or adjusted from the proceeds of certain other cheques passed in clearing that on certain occasions, gold was delivered to the said customer against the cash remitted after the close of the business hours which were received as late cash receipt, that it came out from the records that Sangeetha Jewellers had filed a criminal complaint against the petitioner alleging misappropriation for his own use and for shortage of 200 TTBs of gold and that during the course of investigation by the Police, there was a raid in his house in Salem on 11.5.2000, 27 TTBs of gold, cash of Rs.65,000/- and certain jewelleries were seized, that the Enquiry officer found gold was delivered to Sridhar and Dhiraj on many occasions without collecting their specimen signatures, that he had not obtained delivery order relating to the withdrawal of 200 TTBs on 17.4.2000 and 100 TTBs on 2.5.2000 made pertaining to the account of Sangeetha Jewellers, that by taking advantage of the situation, Sangeetha Jewellers raised a dispute regarding non-receipt of 200 TTBs of gold, that as Precious Metal Desk Officer, it was the prime duty of the petitioner to ensure compliance with the procedural guidelines, that the conduct of the petitioner in handling transactions of Precious Metal Desk in so far as delivery of gold TTBs to Sangeetha Jewellers without obtaining proper acknowledgments was in gross violation of the laid down guidelines and the said violation was deliberate, as he was fully aware of the laid down procedure which he had followed in the past, as also in respect of transactions of other parties to whom gold was sold, that by taking advantage of the situation created by the petitioner, Sangeetha Jewellers lodged a complaint against him alleging non-delivery of 200 TTBs of gold, notwithstanding the fact that 200 TTBs of gold, notwithstanding the fact that 200 TTBs of gold were delivered to Sangeetha Jewellers.
10) The further charges (3 and 4( against the petitioner were that without any authority and in gross abuse of his official position and with a view to unduly accommodate Sangeetha Jewellers, the petitioner issued a letter in bank's letter head dated 6.5.2000 falsely certifying that an amount of Rs.1.55 crores has been earmarked in the current account of Sangeetha Jewellers towards honour of the cheque issued by them in favour of Indian Overseas Bank, that while issuing the above said letter, no such funds were available in the account of Sangeetha Jewellers to meet the cheque, that the branch received the instrument in inward-clearing on 6.5.2000, that despite clear instructions of the Chief Manager to return the said cheque, the petitioner unauthorisedly caused to be retained the cheque and debited the cheque to their account on the strength of uncleared effect resulting in a net debit balance to the extent of Rs.12.65 lakhs in their account.
11) The further charges against the petitioner were that on 8.5.2000 without there being sufficient balance in the current account of Sangeetha Jewellers and without any authority, he issued another letter to Indian Overseas Bank undertaking to honour the cheque for Rs.1.75 crores issued by Sangeetha Jewellers in favour of Indian Overseas bank mentioning that requisite fund has been earmarked in the current account of Sangeetha Jewellers, that the instrument when presented was dishonoured for want of funds, forcing Indian Overseas Bank to file a claim against the Bank as well as Sangeetha Jewellers, that he had issued or caused to issue a Bank Guarantee for Rs.80 lakhs fraudulently in favour of MMTC on account of the above constituent with deliberate intention of facilitating the firm to purchase gold from MMTC and to regularize its account with Indian Overseas Bank, so that the said bank would not pursue the claim against the bank. This has been done with a view to accommodate Sangeetha Jewellers. He had allowed kite flying operations in the current account of Sangeetha Jewellers by not enquiring the fate of clearing cheques presented in high value clearing and delivering/causing delivery of gold TTBs to the above constituent. Between 18.3.2000 and 6.5.2000, on 11 occasions, cheques were returned unpaid and amount debited to sundry deposit/Current account of the constituent. This has caused a revenue loss of Rs.24,026/- to the Bank. In his report, the Enquiry officer has referred uncontroverted evidence on record covering these transactions and rightly, came to the conclusion that the petitioner had caused delivery of the gold to the Sangeetha Jewellers without insisting for the stipulated margin money and without obtaining prior sanction from the Precious Metal Cell, Mumbai.
12) The next charge against the petitioner was that he had delivered gold TTBs to Sangeetha Jewellers against uncleared effects of cheques has been referred to by the Enquiry Officer to come to the conclusion that this charge was proved. He has also been found the petitioner guilty of having unauthorised issued letters to meet the cheques issued by Sangeetha Jewellers without having sufficient funds in their account.
13) The Enquiry Officer has also found him guilty of the charge that he had received cash from the party without purchase of gold on many days with a view to accommodate incoming cheques in clearing.
14) The petitioner was also found guilty of issuing a Bank Guarantee for Rs.80 lakhs in favour of MMTC on account of Sangeetha Jewellers with a view to facilitate the firm to purchase gold from MMTC and regularize his account with Indian Overseas Bank.
15) One other serious charge found proved against the petitioner was that he had returned an amount of Rs.10 lakhs in the denomination of Rs.100/- remitted by Sangeetha Jewellers on 2.2.2000 as late cash and account for in the GDLR after striking off relative entry made by the cashier in the teller cash book on 3.3.2000. When once cash had been received and accounted for, the petitioner had no authority to return the cash by striking the entry already made in the Cashier's Scroll. This conduct of the petitioner was highly reprehensible and the same was found proved. It was also established by evidence that he had failed to maintain necessary Registers, viz., Gold Reconciliation Statement, Gold Double Lock Register, Stock Register, Sales Register, Records/Document confirming the sales of gold both fixed price basis and unfixed price basis, etc., rendering it not possible to consolidate transactions of delivery, price fixation, remittance and invoicing contrary to the stipulation in the manual of operations. All these, he resorted to with a view to cover up the constituent Sangeetha Jewellers which was using the Bank to secure credit without any security.
16) It was established in the enquiry that on 19.2.2000 an amount of Rs.49,500/- was credited to his personal current account. He had received a uncrossed demand draft in favour of one Rakesh Khanna for Rs.49,500/- from Mr.Sanjeeva, husband of Mrs.S.Sangeetha, Proprietrix of Sangeetha Jewellers. Instead of crediting it to the account of Sangeetha Jewellers, he credited the amount to his personal account. His explanation for doing so was not acceptable. He was found guilty of receiving the amount from constituent for his own advantage. Thus the petitioner was found guilty of all the charges. The findings of the Enquiry officer are supported by adequate evidence and his conclusions are based on cogent and sound reasoning. The dismissal of the petitioner based on the said findings cannot be assailed. Hence, the said order of dismissal has to be upheld.
17) It is submitted that when a proper domestic enquiry has been held and an order of punishment was awarded based on the findings of the Enquiry officer, it is not permissible for the petitioner to persuade this Court to sit in appeal over the said findings and interfere with the same. It is well settled that the judicial review in such cases is confined to examining the decision process and not the decision itself. Viewed in that sense, there is little scope to interfere with the order of dismissal.
18) The averments in Paras 3 to 8 of the petitioner's affidavit do not require to be controverted.
19) With regard to Para 9 of the petitioner's affidavit, it is submitted that the enquiry into the charges against the petitioner was conducted conforming to the principles of natural justice and the petitioner was given every opportunity to vindicate his stand. The petitioner asked for production of 15 documents. Documents 14 and 15 were furnished to the petitioner. Under Sl.No.9, the petitioner asked for production of computer print out of register. Since old transactions were not computerized at the branch at the material time, the same is not made available to the petitioner. Document Nos.1 to 8 and 11 to 13 could not be traced and they could not be made available. Regarding Document No.10, viz., the Bank Guarantee, it was the constituent, Sangeetha Jewellers who had given the same to the police. It was brought out in the enquiry that officers of the Bank had seen the original Bank Guarantee, when it was in the custody of the Police. The Officers of the Bank have spoken to the fact that the Bank Guarantee was written in the handwriting of the petitioner and the signature of the Officer was forged. In any event, it was for the petitioner to show how each document called for by him was relevant and what he would have established if the same was produced. If it is so done, the respondent will be in a position to offer its comments as to whether it has any bearing. In the later part of the petitioner's affidavit, some of the documents have been referred to and while dealing with those paragraphs, the respondent will offer its comments. The non furnishing the document has not caused any prejudice to the petitioner and in any event, the documents, which are not in existence, could not be produced. The charges were all proved based on the available documents and the oral evidence of the witnesses.
20) As regards para 11 of the petitioner's affidavit, it is submitted that the various points raised by the petitioner were even raised in the enquiry and they were dealt with by the Enquiry officer in his report and the respondent craves leave to the report of the Enquiry Officer dealing with the points raised by the petitioner. It is therefore not necessary to deal with the comments made by the petitioner on each of the charges in Para 11 of the petitioner's affidavit.
21) Regarding Para 12 of the petitioner's affidavit, it is submitted that when the allegation against the petitioner was that he was not maintaining a number of registers, there was no question of producing these registers, which he failed to maintain. Similarly, the original Bank Guarantee was issued to Sangeetha Jewllers, which was in the handwriting of the petitioner with no copy available in the branch. The Bank has given certain reasons as to why it was not in a position to produce certain documents and acquiescing to the same, he proceeded to participate in the enquiry. Therefore, he cannot be heard to make a complaint about non-production of registers.
22) Regarding Para 14 of the petitioner's affidavit, it is submitted that none of the grounds urged by the petitioner calls for interference by this Court.
23) As regards Ground A, the respondent submits that the order of dismissal dated 29.8.2003 as confirmed by the order of the first respondent dated 15.5.2004 is perfectly valid in law and fully jusitified and the same is not liable to be interfered with.
24) Regarding Ground B, it is submitted that whatever documents were available were produced and whichever documents were not available could not be produced.
25) With regard to Ground C, the Bank submits that the conduct of the petitioner is accommodating Sangeetha Jewellers would amount to misconduct, irrespective of the outcome of the complaint preferred by Sangeetha Jewellers against the petitioner. In fact, in the complaint filed by Sangeetha Jewellers, the Court has discharged the petitioner, but that will have no bearing in considering whether the petitioner is guilty of the charges.
26) As regards Ground D, it is submitted that whether the transaction resulted in any financial loss to the Bank or the petitione derived any pecuniary benefit is of no consequence. It had exposed the Bank to serious financial risk and that was sufficient to warrant the punishment of dismissal.
27) Regarding Ground E, the respondent submits that the reference to the Central Vigilance Commission is envisaged only in respect of Officers in the Scale IV and above. In any event, it is only an internal matter concerning the Bank and no employee who has been proceeded with by way disciplinary action can claim as a matter of right that the reference should be made to the Central Vigilance Commission.
28) With regard to Ground F, it is submitted that the allegation of Sangeetha Jewellers about the non-delivery of 200 TTBs on 4.5.2000 was not subject matter of the charge. The charge related to allowing accommodation against uncleared effects during the relevant period. The reference to non production of document is repetitive and as it has already been dealt with, the respondent reiterates the same submission.
29) With regard to Ground-M, it is submitted that as Officer of Precious Metal Desk, the petitioner was alone responsible for any irregularity in the conduct of gold business and therefore, the involvement of other officials did not arise.
30) As regards Ground N, it is submitted that charges proved against the petitioner were grave and serious and it called for a deterrent punishment. The punishment cannot be said to be disproportionate to the charges proved against him. In any event, it is not permissible for the petiitoner to persuade this Court to go into the propriety of the punishment.
31) The petitioner has not made out a case for interference by this Court and therefore, the petitioner deserves to be dismissed."
24 On the otherhand, reading of the counter shows that instead of dealing with the positive contentions raised by the petitioner, the respondent/Bank has chosen to plead its stand and re-assert charges which levelled against the petitioner.
25 The learned counsel for the respondents, vehemently contended that no prejudice was caused to the petitioner for non supply of documents sought for by the petitioner, as these documents were not relied upon by the enquiry officer. It was pointed out that out of the 15 documents sought for by the petitioner, two documents (Doc.No.14 and 16) were furnished to the petitioner, whereas document at Sl.No.5 was 'not available' being old transaction and was not computerised. Similarly, documents at Sl.No.1 to 8 and 11 to 13 "could not be traced". It was thus contended that once the documents were not relied upon by the enquiry officer, no prejudice was caused to the petitioner on account of non supply of these documents. In support of this contention, the learned counsel for the respondents placed reliance on the judgment of the Hon'ble Supreme Court in State Bank of Bikaner & Jaipur vs. Nemi Chand Nalwaya (CDJ 2011 SC 310) wherein the Hon'ble Supreme Court was pleased to lay down as under:
"6. It is now well settled that the courts will not act as an appellate court and reassess the evidence led in the domestic enquiry, nor interfere on the ground that another view is possible on the material on record. If the enquiry has been fairly and properly held and the findings are based on evidence, the question of adequacy of the evidence or the reliable nature of the evidence will not be grounds for interfering with the findings in departmental enquiries. Therefore, courts will not interfere with findings of fact recorded in departmental enquiries, except where such findings are based on no evidence or where they are clearly perverse. The test to find out perversity is to see whether a tribunal acting reasonably could have arrived at such conclusion or finding, on the material on record. Courts will however interfere with the findings in disciplinary matters, if principles of natural justice or statutory regulations have been violated or if the order is found to be arbitrary, capricious, mala fide or based on extraneous considerations. (vide B. C. Chaturvedi vs. Union of India - 1995 (6) SCC 749, Union of India vs. G. Gunayuthan - 1997 (7) SCC 463, and Bank of India vs. Degala Suryanarayana - 1999 (5) SCC 762, High Court of Judicature at Bombay vs. Shahsi Kant S Patil - 2001 (1) SCC 416).
7. When a court is considering whether punishment of `termination from service' imposed upon a bank employee is shockingly excessive or disproportionate to the gravity of the proved misconduct, the loss of confidence in the employee will be an important and relevant factor. When an unknown person comes to the bank and claims to be the account-holder of a long inoperative account, and a bank employee, who does not know such person, instructs his colleague to transfer the account from category (contrary to instructions regulating dormant accounts) without any kind of verification, and accepts the money withdrawal form from such person, gets a token and collects the amount on behalf of such person for the purpose of handing it over to such person, he in effect enables such unknown person to withdraw the amount contrary to the banking procedures; and ultimately, if it transpires that the person who claimed to be account holder was an imposter, the bank can not be found fault with if it says that it has lost confidence in the employee concerned. A Bank is justified in contending that not only employees who are dishonest, but those who are guilty of gross negligence, are not fit to continue in its service."
26 This judgment does not support the contention of the learned counsel for the respondents. Even then, it cannot be disputed that mere non supply of documents which were not available with the respondent/Bank in absence of any prejudice, the finding of the enquiry officer cannot be interfered with, on this ground.
27 The learned counsel for the respondents referred to the findings of the appellate authority wherein it was recorded that non production of some of the documents did not result in prejudice to the petitioner, as the charges were based on evidence led before the enquiry officer and no reliance has been placed by the respondent/Bank on the documents not supplied to the petitioner.
28 The learned counsel for the respondent/Bank thereafter placed reliance on the judgment of the Hon'ble Supreme Court in Chairman, A.P.State Electricity Board and others vs. M.Kurmi Naidu (2006(4) L.L.N. 714) to contend that the petitioner cannot take any advantage from the fact that the order of punishment was passed by the General Manager who was the reviewing authority. The Hon'ble Supreme Court in the case referred to above, was pleased to lay down as under:
"The question is as to whether the respondent was at all deprived of his right of appeal in the present case. In Surjit Ghosh (supra) this Court held at scc p.477 as under:
"However, when an appeal is provided to the higher authority concerned against the order of the disciplinary authority or of a lower authority and the higher authority passes an order of punishment, the employee concerned is deprived of the remedy of appeal which is a substantive right given to him by the Rules/Regulations. An employee cannot be deprived of his substantive right. What is further, when there is a provision of appeal against the order of the disciplinary authority and when the appellate or the higher authority against whose order there is no appeal, exercises the powers of the disciplinary authority in a given case, it results in discrimination against the employee concerned".
It is to be noted that in Surjit Ghosh (supra) there was no further appeal provision provided against the order of the higher authority and no appeal could be preferred and, therefore, the appellant was deprived of the appeal provision. It is in those circumstances the above observation was made. Surjit Ghosh's case was reconsidered and distinguished again by this Court in Balbir Chand's case (supra). It was pointed out at scc p.373 as under:-
"It is now well settled legal position that an authority lower then the appointing authority cannot take any decision in the matter of disciplinary action. But there is no prohibition in law that the higher authority should not take decision or impose the penalty as the primary authority in the matter of disciplinary action. On that basis, it cannot be said that there will be discrimination violating Article 14 of the Constitution or causing material prejudice. In the judgment relied on by the counsel, it would appear that in the Rules, officer lower in hierarchy was the disciplinary authority but the appellate authority had passed the order removing the officer from service. Thereby, appellate remedy provided under the Rules was denied. In those circumstances, this Court opined that it caused prejudice to the delinquent as he would have otherwise availed of the appellate remedy and his right to consider his case by an appellate authority on question of fact was not available. But it cannot be laid as a rule of law that in all circumstances the higher authority should consider and decide the case imposing penalty as a primary authority under the Rules, In this case, a right of second appeal/revision also was provided to the Board. In fact, appeal was preferred to the Board. The Board elaborately considered the matter through the Chairman. It is not violative of Article 14 of the Constitution". Reverting back to the facts of the given case there is no dispute that the Member Secretary of the Board was the disciplinary authority. Show cause notice was issued under the signature of the Member Secretary, the disciplinary authority. However, the penalty of compulsory retirement from service was inflicted by the Chairman of the Board, who it is not disputed, is the Appellate Authority. What both the learned Single Judge and the Division Bench have failed to notice was that despite the aforesaid facts the respondent was not deprived of the right of appeal. An appeal lay to the Board. Ultimately, the respondent has filed before theBoard a detailed petition styled as mercy petition on 1.10.1995 questioning the order of show cause dated 9.1.1995 and his explanation submitted to final show cause notice dated 7.2.1995 and challenged the final order passed by the Chairman on 6.9.1995. Though it was styled as mercy petition, the Board has treated the petition as an appeal petition. The Board after considering the appeal rejected the same by an order dated 31.8.1996.
It appears that the order dated 31.8.1996 passed by the Board rejecting his appeal has not been assailed either before the learned Single Judge or before the Division Bench. It has attained finality. Therefore, it cannot be said that the appellant was deprived of the remedy of appeal, which caused prejudice to him."
29 Learned counsel for the respondents also vehemently contended that the factum that the petitioner had issued the Bank Guarantee was amply proved before the enquiry officer by the evidence of M.W.3, who in his cross examination stated that during the course of his investigation, he did not see the Bank Guarantee of Rs.80 lakhs favouring MMTC issued by C.S.O., as the the original of the Bank Guarantee was handed over by M/s.Sangeetha Jewellers or their representative to the police and that the Bank Guarantee was not utilised by M/s.Sangeetha Jewellers, therefore, no financial loss was caused to the Bank, but, at the same time, the Bank Guarantee in question was seen personally by the Chief Manager of the branch at the time when the representative of M/s.Sangeetha Jewellers had handed over the same to the police, therefore, it was proved that the petitioner had issued the Bank Guarantee. It was further contended by the learned counsel for the respondent/Bank that there was ample evidence on record to prove the charges levelled against the petitioner.
30 The finding of the enquiry officer which was accepted by the competent authority which does not call for any interference by this Court, as this Court does not sit in appeal over the finding of the enquiry officer. In support of this contention, reliance was placed on the judgment of the Hon'ble Supreme Court in State Bank of Bikaner & Jaipur vs. Nemi Chand Nalwaya (supra).
31 It was finally contended by the learned counsel for the respondent/Bank that merely because no loss was caused to the bank or that the petitioner did not gain any pecuniary benefit cannot be a ground to challenge the order of dismissal from service, as it is well settled that violation of procedure and acting in excess of his authority itself is misconduct. In support of this contention, the learned counsel for the respondent/Bank placed reliance on the judgment of the Hon'ble Supreme Court in Disciplinary Authority-cum-Regional Manager and others vs. Nikunja Bihari Patnaik, (1996) 9 SCC 69), wherein the Hon'ble Supreme Court was pleased to lay down as under:
7. It may be mentioned that in the memorandum of charges, the aforesaid two regulations are said to have been violated by the respondent. Regulation 3 requires every officer/employee of the bank 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. It requires the officer/employee to maintain good conduct and discipline and to act to the best of his judgment in performance of his official duties or in exercise of the powers conferred upon him. Breach of Regulation 3 is misconduct within the meaning of Regulation 24. The findings of the Inquiry Officer which have been accepted by the disciplinary authority, and which have not been disturbed by the High Court, clearly show that in a number of instances the respondent allowed overdrafts or passed cheques involving substantial amounts beyond his authority. True, it is that in some cases, no loss has resulted from such acts. It is also true that in some other instances such acts have yielded profit to the Bank but it is equally true that in some other instances, the funds of the Bank have been placed in jeopardy; the advances have become sticky and irrecoverable. It is not a single act; it is a course of action spreading over a sufficiently long period and involving a large number of transactions. In the case of a bank for that matter, in the case of any other organisation every officer/employee is supposed to act within the limits of his authority. If each officer/employee is allowed to act beyond his authority, the discipline of the organisation/bank will disappear; the functioning of the bank would become chaotic and unmanageable. Each officer of the bank cannot be allowed to carve out his own little empire wherein he dispenses favours and largesse. No organisation, more particularly, a bank can function properly and effectively if its officers and employees do not observe the prescribed norms and discipline. Such indiscipline cannot be condoned on the specious ground that it was not actuated by ulterior motives or by extraneous considerations. The very act of acting beyond authority that too a course of conduct spread over a sufficiently long period and involving innumerable instances is by itself a misconduct. Such acts, if permitted, may bring in profit in some cases but they may also lead to huge losses. Such adventures are not given to the employees of banks which deal with public funds. If what we hear about the reasons for the collapse of Barings Bank is true, it is attributable to the acts of one of its employees, Nick Leeson, a minor officer stationed at Singapore, who was allowed by his superiors to act far beyond his authority. As mentioned hereinbefore, the very discipline of an organisation and more particularly, a bank is dependent upon each of its employees and officers acting and operating within their allotted sphere. Acting beyond one's authority is by itself a breach of discipline and a breach of Regulation 3. It constitutes misconduct within the meaning of Regulation 24. No further proof of loss is really necessary though as a matter of fact, in this case there are findings that several advances and overdrawals allowed by the respondent beyond his authority have become sticky and irrecoverable. Just because, similar acts have fetched some profit huge profit, as the High Court characterises it they are no less blameworthy. It is wrong to characterise them as errors of judgment. It is not suggested that the respondent being a Class I Officer was not aware of the limits of his authority or of his powers. Indeed, Charge 9, which has been held established in full is to the effect that in spite of instructions by the Regional Office to stop such practice, the respondent continued to indulge in such acts. The Inquiry Officer has recorded a clear finding that the respondent did flout the said instructions and has thereby committed an act of disobedience of lawful orders. Similarly, Charge 8, which has also been established in full is to the effect that in spite of reminders, the respondent did not submit Control Returns to the Regional Office. We fail to understand how could all this be characterised as errors of judgment and not as misconduct as defined by the Regulations. We are of the opinion that the High Court has committed a clear error in holding that the aforesaid conduct of the respondent does not amount to misconduct or that it does not constitute violation of Regulations 3 and 24.
8. We must mention that Shri V.A. Mohta, the learned counsel for the respondent, stated fairly before us that it is not possible for him to sustain the reasoning and approach of the High Court in this case. His only submission was that having regard to the age of the respondent (37 years) and the facts and circumstances of the case, this Court may substitute the punishment awarded to the respondent by a lesser punishment. The learned counsel suggested that any punishment other than dismissal may be imposed by this Court. We considered this request with the care it deserves, but we regret that we are unable to accede to it. The learned counsel for the Bank, Shri V.R. Reddy, Additional Solicitor General, also stated, on instructions of the Bank, that it is not possible for the Bank to accommodate the respondent in its service in view of his conduct."
32 On consideration, this Court finds that this writ petition deserves to succeed. According to the Corporation Bank Officers Employees' (Discipline and Appeal) Regulations, 1982, the General Manager is the reviewing authority, therefore, the petitioner was certainly prejudiced in his right to avail the remedy of appeal, therefore, the impugned order is violative of principles of natural justice. In view of the law laid down in the in the case of Surjit Ghosh vs Chairman & Managing Director, United Commercial Bank and others (1995)2 SCC 474) holding therein that if an order is passed by the authority which resulted in denial of right of appeal, then the impugned order cannot be sustained.
33 The judgment of the Hon'ble Supreme Court in Chairman, A.P.State Electricity Board and others vs. M.Kurmi Naidu (supra) on which reliance is placed by the respondent will have no application to the facts of the present case, as in the said case irrespective of the authority who passed the order, an appeal remedy was available before the appellate authority.
34 In the case of Electronics Corporation of India vs G.Muralidhar (2001)10 SCC 43) the Hon'ble Supreme Court was pleased to hold that power to impose punishment cannot be exercised by appellate authority if it results in denial of right to appeal, the termination by appellate authority was held to be bad. Furthermore, the Hon'ble Supreme Court in Surjit Ghosh vs. Chairman and Managing Director, United Commercial Bank and others [(1995)2 SCC 474] was pleased to lay down as under:
"6. The respondent-Bank in its submission contended that although it is true that the Deputy General Manager had acted as the disciplinary authority when he was in fact named under the Regulations as an appellate authority, no prejudice is caused to the appellant because the Deputy General Manager is higher in rank than the disciplinary authority, viz., the Divisional Manager/AGM (Personnel). According to the Bank, it should be held that when the order of punishment is passed by a higher authority, no appeal is available under the Regulations as it is not necessary to provide for the same. It was also contended that there is no right to appeal unless it is provided under the Rules or Regulations. Although the argument looks attractive at first sight, its weakness lies in the fact that it tries to place the Rules/Regulations which provide no appeal on par with the Rules/Regulations where appeal is provided. It is true that when an authority higher than the disciplinary authority itself imposes the punishment, the order of punishment suffers from no illegality when no appeal is provided to such authority. However, when an appeal is provided to the higher authority concerned against the order of the disciplinary authority or of a lower authority and the higher authority passes an order of punishment, the employee concerned is deprived of the remedy of appeal which is a substantive right given to him by the Rules/Regulations. An employee cannot be deprived of his substantive right. What is further, when there is a provision of appeal against the order of the disciplinary authority and when the appellate or the higher authority against whose order there is no appeal, exercises the powers of the disciplinary authority in a given case, it results in discrimination against the employee concerned. This is particularly so when there are no guidelines in the Rules/Regulations as to when the higher authority or the appellate authority should exercise the powers of the disciplinary authority. The higher or appellate authority may choose to exercise the power of the disciplinary authority in some cases while not doing so in other cases. In such cases, the right of the employee depends upon the choice of the higher/appellate authority which patently results in discrimination between an employee and employee. Surely, such a situation cannot savour of legality. Hence we are of the view that the contention advanced on behalf of the respondent-Bank that when an appellate authority chooses to exercise the power of disciplinary authority, it should be held that there is no right of appeal provided under the Regulations cannot be accepted."
35 I find no force in the contentions of the learned Senior counsel for the petitioner that because of non supply of certain documents, the impugned order could not be sustained in law. It was rightly contended by the learned counsel for the respondents that the documents which were sought for by the petitioner were not relied upon by the enquiry officer, furthermore, and the reason for non supply was non availability of those documents. The petitioner therefore, cannot take any advantage of the fact that the documents were not supplied.
36 The learned counsel for the petitioner however was right in contending that the findings of the enquiry officer are not based on positive evidence, but on conjectures and surmises. The enquiry officer relied upon the statement of M.W.3 to hold that the petitioner had issued Bank Guarantee in absence of any material on record. It was the duty of the prosecution to produce Bank Guarantee and in case it was submitted to the police department, it could be summoned. Furthermore, the enquiry officer believed the statement of M.W.3 even though he admitted that he had not seen the Bank Guarantee which was said to have been seen only by the Chief Manager. This part of the evidence being hearsay evidence could not be taken note of, to hold the petitioner guilty for issuing Bank Guarantee. The finding of the enquiry officer therefore on this charge can be safely said to be arbitrary.
37 The leanred Senior counsel for the petitioner also rightly contended that the authority had proceeded with pre-determined mind, inspite of positive finding that the petitioner had no personal motive to gain and that no loss was caused to the bank, the enquiry officer held the petitioner guilty of serious charges based on oral evidence, and by ignoring the positive evidence showing that the alleged beneficiary had in fact lodged a false criminal case against the petitioner.
38 The learned Senior counsel for the petitioner was also right in contending that the charges were totally vague. The reading of Charge No.1 was failure to adhere operational guidelines in the matter of withdrawal of gold from FBR safe and delivery thereof to the constituent or its authorized representative. This charge does not disclose which operational guideline was not adhered to and how the petitioner violated the guildelines.
39 The second charge also cannot be sustained, as these allegations were found to be mistake of fact on criminal side. The reading of all other charges also shows that they were general in nature without pointing out any specific lapse.
40 In absence of charge being specific, the petitioner cannot be held guilty. The vague charges itself amounts to violation of principle of natural justice, as it comes in the way of delinquent official to effectively defend himself.
41 Last, but not least, on the proved charges, the punishment awarded is certainly disproportionate to the proved charges which in fact was merely of negligence. It is not the case of respondent that procedural violation or exceeding of jurisdiction was with motive of personal gain or to give advantage to the customer. The judgment of the Hon'ble Supreme Court in Disciplinary Authority-cum-Regional Manager and others vs. Nikunja Bihari Patnaik, (supra), has no application to the facts of this case.
42 Consequently, this writ petition is allowed. The impugned order is set aside. The petitioner shall be entitled to all consequential benefits flowing from this order.
No cost.
03.09.2012 Index: Yes/No Internet:Yes/No vaan To 1 The Executive Director, Corporation Bank, Mangaladevi Temple Road, P.B.No.88, Mangalore 575001.
2 The General Manager, Corporation Bank Head Office, Mangaladevi Temple Road, P.B.No.88, Mangalore 575001.
3 The Chief Manager, Corporation Bank, Whites Road branch, Chennai.
VINOD K.SHARMA, J.
vaan
Pre-Delivery order in
W.P.No.20857 of 2004
DATED: 03.09.2012