Karnataka High Court
Shri B Premananda Pai S/O Late B Vinayaka ... vs Vijaya Bank on 16 August, 2023
Author: N S Sanjay Gowda
Bench: N S Sanjay Gowda
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NC: 2023:KHC:29024
WP No. 16150 of 2011
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 16TH DAY OF AUGUST, 2023
BEFORE
THE HON'LE MR JUSTICE N S SANJAY GOWDA
WRIT PETITION NO. 16150 OF 2011 (S-DIS)
BETWEEN:
1. SHRI B PREMANANDA PAI,
S/O LATE B VINAYAKA PAI
AGED ABOUT 58 YEARS,
EARLIER WORKING AS SENIOR MANAGER,
MIDDLE MANAGEMENT SCALE III ,
STAFF CODE NO 1923, VIJAYA BANK
REGIONALOFFICE HUBLI,
R/AT NO 988, 3RD MAIN,
BHAIRAVESHWARNAGAR,
NAGARHBAVI MAIN ROAD,
OPPOSITE MES CONVENT,
BANGALORE-560 072.
...PETITIONER
(BY SRI. S VITTAL SHETTY., ADVOCATE)
AND:
Digitally
signed by 1. VIJAYA BANK
PANKAJA S
Location:
A BODY CONSTITUTED UNDER THE
HIGH
COURT OF
BANKING COMPANIES,
KARNATAKA (ACQUISITION AND TRANSFER OF UNDERTAKING)
HAVING ITS HEAD OFFICE AT
NO 41/2, M G ROAD,
BANGALORE 560 001.
REP BY ITS CHAIRMAN AND
MANAGING DIRECTOR.
2. THE DEPUTY GENERAL MANAGER
DISCIPLINARY AUTHORITY,
VIJAYA BANK HEAD OFFICE,
PERSONNEL (IRD) NO 41/2,
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NC: 2023:KHC:29024
WP No. 16150 of 2011
M G ROAD, BANGALORE 560001.
3. THE GENERAL MANAGER
APPELLATE AUTHORITY,
VIJAYA BANK HEAD OFFICE
PERSONNEL (IRD) NO 41/2,
M G ROAD, BANGALORE 560001.
4. BANK OF BARODA,
A BODY CONSTITUTED UNDER THE
BANKING COMPANIES,
(ACQUISITION AND TRANSFER OF UNDERTAKINGS)
ACT, 1970,
HAVING ITS HEAD OFFICE,
AT BARODA CORPORATE CENTRE,
C-26, 'G' BLOCK, BANKDRA KURLA COMPLEX,
BANDRA (E), MUMBAI-400051.
REPRESENTED BY ITS
MANAGING DIRECTOR AND
CHIEF EXECUTIVE OFFICER.
5. THE GENERAL MANAGER,
BANK OF BARODA,
ZONAL OFFICE, No.72, 2ND FLOOR,
NITESH LEXIGTON AVENUE,
BRIGADE ROAD,
BANGALORE-560 001.
...RESPONDENTS
(BY SRI.S.S.RAMADAS, SENIOR COUNSEL FOR
SRI.PRADEEP.S.SAWKAR, ADVOCATE FOR R-2 & R-3;
R-1 IS SERVED)
THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF
THE CONSTITUTION OF INDIA, PRAYING TO CALL FOR THE
RECORDS OF THE CASE & QUASH THE ORDER DATED:4.5.09,
PASSED BY THE DISCIPLINARY AUTHORITY OF THE BANK, A
COPY OF WHICH IS PRODUCED TO THE WP AS ANNEXURE-D &
TO QUASH THE ORDER DATED.22.9.10, PASSED BY THE
APPELLATE AUTHORITY OF THE BANK, A COPY OF WHICH IS
PRODUCED TO THE WP AS ANNEXURE-F, AS IT IS ARBITRARY,
ILLEGAL, AGAINST THE PRINICPLES OF NATURAL JUSTICE &
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NC: 2023:KHC:29024
WP No. 16150 of 2011
VIOLATIVE ARTICLE 14, 16 & 21 OF THE CONSTITUTION OF
INDIA, ETC.
THIS PETITION, COMING ON FOR HEARING, THIS DAY,
THE COURT MADE THE FOLLOWING:
ORDER
1. This Writ Petition has been filed challenging the imposition of penalty of dismissal from the services of the Bank with immediate effect.
2. On 13.05.2008 a chargesheet was issued under the Regulation 6 of the Vijaya Bank Officer Employees' (Discipline and Appeal) Regulations, 1981 (for short, 'Regulations').
3. The charges leveled against petitioner was-
i. In the matter of sanction of four Light Motor Vehicles in excess of his delegated powers without adherence to the lending policy guidelines of the Bank; ii. Sanction of 48 Housing loans violating the instructions contained in Manual of Advances, sanction of V-Trade and CCM Accounts without assessing the credit requirements of the borrowers;
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NC: 2023:KHC:29024 WP No. 16150 of 2011 iii. Sanction of loan and advances despite withdrawal of his delegated powers by the Regional Office; iv. Allowing continuous overdrawings in certain accounts and for non-obtention of Acknowledgment of Debts in respect of 353 loan accounts.
4. The petitioner was in fact placed under suspension prior to the issuance of chargesheet. An enquiry was held in respect of these 9 charges and the Enquiry Officer submitted a report that charges No.1 to 6 and charge No.9 were proved and charges No.7 and 8 were partly proved. This Enquiry report was accepted by the Disciplinary Authority after issuance of a show-cause notice and after considering the reply. The Enquiry Officer thereafter proceeded to impose the penalty of dismissal from service with immediate effect on 04.05.2009.
5. Being aggrieved by the said penalty imposed, the petitioner preferred an appeal.
6. The Appellate Authority, on consideration of the appeal found no reason to disagree either with the Enquiry -5- NC: 2023:KHC:29024 WP No. 16150 of 2011 Report or with acceptance of the Disciplinary Authority. The Appellate Authority on consideration of the appeal made the following observations -
"6) I have carefully perused the grounds of appeal urged by the Appellant in his Appeal Memo dated 25.06.2009 and the entire enquiry records relating to the matter and I record my observations in regard to each of the issues / pleadings put forth by the Appellant as under :
i. The appellant has made sweeping allegation without specifically pointing out the areas which have not been evaluated in the enquiry report. As such in absence of specific details no credence can be given to this allegation.
ii. It is seen from the records that apart from making his conclusion from the oral and documentary evidence brought on record during the enquiry, the Enquiry Officer has also considered the points mentioned in the written briefs submitted by both the Presenting Officer as well as the Defence Representative. As such there is no substance in the argument of the Appellant.
iii. While arriving at his findings, the Enquiry Officer has given cogent reasons for his conclusions and -6- NC: 2023:KHC:29024 WP No. 16150 of 2011 has held two of the charges as partly proved while holding the other charges as proved which means that the defence view points have been considered by him. In the absence of evidence to controvert the charges and circumstances going in favour of the appellant the charges were held by the Enquiry Officer as either proved or partly proved. Under the circumstances, the allegation of the Appellant is not acceptable.
iv. It is seen from the enquiry records that as many as 27 Management Exhibits were produced by the Presenting Officer apart from examining four Management Witnesses in support of the charges. The entire evidence brought on record by the management has been evaluated by the Enquiry officer duly considering the points deposed during the cross-examination and only after giving cogent reasons, the Enquiry Officer has submitted his findings. Hence the allegation made by the Appellate against the Presenting Officer is unfounded and hence not acceptable.
v. The Appellant has argued that recoveries to the extent of Rs.1.00 Crore has been made by the bank in respect of the loans sanctioned by him and the said aspect was not taken into consideration by the Disciplinary Authority while imposing the punishment. It is to be noted here -7- NC: 2023:KHC:29024 WP No. 16150 of 2011 that the Appellant was placed under suspension from the service of the bank in view of large scale violation of guidelines and for non-compliance of lending norms. Some of the accounts have turned out to be fraudulent accounts resulting in bank exposed to the risk of grave financial loss. Taking into consideration the above aspects recovery made by the branch subsequent to the exit of the Appellant from the branch was not commensurate with the total exposure of the branch under the various loans and advances sanctioned by him. To be more precise, it is observed that in the chargesheet issued to the Appellant as many as 53 loan accounts were covered by way of nine charges. The total amount involved was to the extent of Rs.7.66 Crores and as on date there are 33 accounts with outstanding balance amounting to Rs.6.28 Crores approximately lying under suit filed accounts, 21 account with outstanding balance of Rs.3.34 Crores classified as NPAs. Out of the 48 Housing Loans covered in the Charge Sheet, only eight are reported to be standard assets and three have been closed without any sacrifice. Two Housing Loans have been closed out of compromise settlement thereby bank was forced to sacrifice amounts totaling to Rs.2.82 lakhs. In respect of the CCM accounts, 7 are closed and the amount -8- NC: 2023:KHC:29024 WP No. 16150 of 2011 sacrificed by the bank in this regard is to the extent of Rs.2.25 lakhs. Thus bank has already incurred loss to the extent of Rs.5.00 lakhs and substantial amount is still lying under Suit Filed / NPA accounts. In respect of the five LMVs sanctioned by him contrary to the laid down norms, no recovery is forthcoming since the transactions turned out to be fraudulent in nature. A lot of strain is put on the resources of the branch in following up the suit filed accounts. Had the Appellant exercised necessary restraint while sanctioning these loans and had he diligently followed the laid down guidelines keeping uppermost in mind the safety and security of the bank's funds this situation would not have arisen. Thus the bank is saddled with lot of suit filed accounts where full recovery of the dues without sacrificing the unrealized interest or principal in certain cases is impossible.
vi. The Appellant himself has admitted that the LMVs were fraudulent in nature. The pertinent point to be noted here is that the antecedents of Shri.Abdul Hameed was very well within the knowledge of the Appellant as the said individual had indulged in fraudulent withdrawal of money through credit card. His action of sanctioning LMVs to his accomplices without exercising due diligence is definitely not acceptable. His -9- NC: 2023:KHC:29024 WP No. 16150 of 2011 contention that he had no iota of doubt about the integrity of the parties is only a weak argument and it only shows his lack of sincerity and devotion to duty. As such his contentions are not acceptable."
7. The Appellate Authority accordingly proceeded to hold that there was no merit in the appeal and the petitioner has not brought forth any factors for re- consideration of punishment imposed upon him and accordingly proceeded to dismiss the appeal. As against this dismissal of the appeal and the consequential confirmation of the order of dismissal, the present Writ Petition has been filed.
8. The learned counsel for the petitioner Sri.S.Vittal Shetty contended that the charges were not precise and definite and they were only sweeping allegations made and they themselves did not amount to any mis-conduct. He submitted that it was settled law that the general provision which merely stated that the conduct
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NC: 2023:KHC:29024 WP No. 16150 of 2011 unbecoming of an employee would be insufficient to hold that the charges leveled against the employee had been proved.
9. He also contended that there was a gross violation of Regulation 6 clause (17) inasmuch as after the employer had closed his evidence, the petitioner was neither generally questioned in the circumstances appearing against him so as to enable the petitioner to explain any circumstances appearing in the evidence against him. He submitted that in the present case the Enquiry Officer had simply asked the petitioner as to whether the petitioner had any submissions to make and had proceeded to record the submissions made and this was a clear contravention of Regulation 6 clause (17). He, therefore, submitted that the enquiry conducted has vitiated and the consequential orders of dismissal were unsustainable.
10. Sri. S.S. Ramadas, learned Senior Counsel appearing on behalf of the Bank, however, contended that there was absolutely no infirmity either in the procedure adopted by
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NC: 2023:KHC:29024 WP No. 16150 of 2011 the Enquiry Officer nor by the appreciation of evidence by the Enquiry Officer. He submitted that the allegations leveled against the petitioner were extremely serious and the Appellate Authority had noted that as a result of petitioner's wrong doing, the Bank stood exposed to a financial liability of 7.66 crores and the Bank was forced to litigate in respect of an outstanding balance amount of 6.28 crores. He also submitted that the Bank had actually suffered serious financial loss and the petitioner was responsible for serious wrong doing and an appropriate punishment was given to the petitioner after it was found that the charges had been proved.
11. I have heard the learned counsel appearing for the petitioner as well as learned Senior Counsel appearing for the Bank.
12. It is settled law that in respect of a disciplinary proceedings, this Court exercising its powers under Article 226 and 227 of the Constitution of India does not sit in appeal over the findings recorded by the Enquiry Officer
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NC: 2023:KHC:29024 WP No. 16150 of 2011 and the acceptance of the same by the Disciplinary Authority. This Court would fundamentally be concerned with ascertaining as to whether principles of natural justice had been followed and the relevant Regulations were adhered to, which would establish that the employee had a fair chance of stating his case.
13. A reading of the Articles of charge itself indicates that there was serious dereliction of duty on the part of the petitioner. The charges leveled against the petitioner was that he had sanctioned loans without following the Guidelines laid down by the Bank with regard to the sanction of the motor vehicle loan and four loans were in fact sanctioned by him beyond his delegated powers. The allegations against the petitioner were that he had not ensured that the margin money by the applicants were rooted through the Bank and he had basically aided in the act of fraud played by the applicants.
14. The petitioner, in fact, did not seriously dispute the allegations and the defence of his was more of an attempt
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NC: 2023:KHC:29024 WP No. 16150 of 2011 to shirk responsibility and lay blame on others. The fact that the petitioner did not dispute that the Bank was exposed to Bank loans to the extent of 7.66 crores by contending that there were recoveries of one crore by itself establishes the financial loss that was caused to the Bank. An employee of the Bank is expected to act in a manner which would aid the functioning of the Bank effectively and it is the responsibility of every Bank employee to ensure that every attempt to defraud the Bank is prevented.
15. In cases where there is evidence to indicate that the employee himself was part of the wrong doing, the employer would be bound to act stringently and impose an appropriate degree of punishment. In that view of the matter, in my judgment, there is no palpable error committed by the employer in the acceptance of the enquiry report or imposition of penalty.
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16. The argument of the petitioner that there is a gross violation of Regulation 6(17) is also not justified. Clause 6(17) reads as follows -
" 6(17) The inquiring authority may, after the officer employee closes his evidence, and shall, if the officer employee has not got himself examined, generally question him on the circumstances appearing against him in the evidence for the purpose of enabling the officer employee to explain any circumstances appearing in the evidence against him."
17. The Enquiry Officer, after the evidence of the employer was closed, informed the petitioner as to whether he had any documents or witnesses to produce in his defence. The petitioner was, in fact, asked the following questions -
EO Do you have any more documents or witnesses in to your defence DR DR No. EO Do you wish to be examined as a witness in your to own defence.
CSO
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NC: 2023:KHC:29024 WP No. 16150 of 2011 CSE No. EO Do you wish to be examined as a witness in your to own defence.
CSO CSE No. EO Do you wish to make any submission? to CSO CSO Yes. I submit as below.
1. I took charge of the branch during June, 2005 when the branch records were in a mess. Branch was shifted from the old premises to the present premises and records/ledgers/files were just bundled in gunny bags nd dumped in the present premises. I have struggled a lot to re-arrange them all.
2. During my period branch has migrated to CBS and all the initial toothing problems had been overcome and CBS was stabilized.
3. ATM was installed and made operative during my period.
4. ATM enable Kissan Vikas cards were introduced during my period.
5. I have done maximum recovery in the earlier overdue accounts including written accounts prior to 1995, AUC etc and this can be cross verified from the correspondence file of the branch called as NPA correspondance file.
6. During year ending March, 2006 I have crossed both the Deposits and Advances targets and I have received appreciation letter from the then Regional Head.
I request to take note of my submission as above
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NC: 2023:KHC:29024 WP No. 16150 of 2011 and do justice to me. I conclude.
EO The evidence for both the management as well as the defence are concluded. The enquiry proceedings which commenced on 26.11.2008 at 10.00 AM concluded on 01.12.2008 at 6.30 p.m. It is ordered that necessary written brief by the PO be submitted to EO within 15 days with a copy to the DR and written brief of the DR to be submitted to EO within next 15 days after receipt of the same from the PO.
18. This particular deposition would by itself indicate that the Enquiry Officer did provide an opportunity to the petitioner to make any submissions that he wished to make. The argument that evidence against the petitioner was to be made known to him is not argument worthy of acceptance. The only purpose of Regulation 6(17) is to ensure that the employee has an opportunity to have his say. When, in a case, where the employee chose to put forth no defence and does not wish to produce any witnesses on his behalf and makes his submission covering the allegations made against him, in my view, there would be adequate compliance of Regulation 6(17).
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19. In this regard, reference can be made to the decision rendered by the Hon'ble Supreme Court in SUNIL KUMAR BANERJEE VS. STATE OF WEST BENGAL AND OTHERS, (1980)3 SCC 304, wherein it is held as under-
"3. There is no substance in the contention of the appellant that the 1955 Rules and not the 1969 Rules were followed. As pointed out by the High Court, in the charges framed against the appellant and in the first show-cause notice the reference was clearly to the 1969 Rules. The appellant himself mentioned in one of his letters that the charges have been framed under the 1969 Rules. The enquiry report mentions that Shri Mukherjee was appointed as an Enquiry Officer under the 1969 Rules. It is, however, true that the appellant was not questioned by the Enquiry Officer under Rule 8(19) which provided as follows :
The enquiring authority may, after the member of the services closes his case and shall if the member of the service has not examined himself generally question him on the circumstances appearing against him in the evidence for the purpose of enabling the member of the service to explain any
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NC: 2023:KHC:29024 WP No. 16150 of 2011 circumstances appearing in the evidence against him.
It may be noticed straightway that this provision is akin to Section 342 of the Criminal Procedure Code of 1898 and Section 313 of the Criminal Procedure Code of 1973. It is now well established that mere non-examination or defective examination under Section 342 of the 1898 Code is not a ground for interference unless prejudice is established, vide, K.C. Mathew v. State of Travancore-Cochin; Bibhuti Bhusan Das Gupta v. State of W.B. We are similarly of the view that failure to comply with the requirements of Rule 8(19) of the 1969 Rules does not vitiate the enquiry unless the delinquent officer is able to establish prejudice. In this case the learned Single Judge of the High Court as well as the learned Judges of the Division Bench found that the appellant was in no way prejudiced by the failure to observe the requirement of Rule 8(19). The appellant cross-examined the witnesses himself, submitted his defence in writing in great detail and argued the case himself at all stages. The appellant was fully alive to the allegations against him and dealt with all aspects of the allegations in his written defence. We do not think that he was in the least prejudiced by the failure of the Enquiry
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NC: 2023:KHC:29024 WP No. 16150 of 2011 Officer to question him in accordance with Rule 8(19)."
20. Having regard to the above decision, it is clear that the interpretation of Regulation 6(17) sought to be made by the petitioner cannot be accepted. In my view, having regard to the nature of charges alleged against the petitioner and the evidence that was brought on record to establish the charges, there is no infirmity either in the proceedings or in the findings recorded by the Enquiry Officer meriting interference under Article 226 of the Constitution of India. The petition is therefore dismissed.
Sd/-
JUDGE hnm List No.: 1 Sl No.: 64