Madras High Court
Tamil Nadu Mercantile Bank Ltd vs The Appellate Authority Under The on 2 February, 2023
Author: S.Srimathy
Bench: S.Srimathy
W.P.(MD).No.1312 of 2018
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 02.02.2023
CORAM
THE HONOURABLE MRS.JUSTICE S.SRIMATHY
W.P.(MD).No.1312 of 2018
and
W.M.P(MD)Nos.1375 & 5309 of 2018
Tamil Nadu Mercantile Bank Ltd.,
57, V.E.Road,
Tuticorin-2,
Represented by its Deputy General Manager. ... Petitioner
Vs.
1.The Appellate Authority under the
Tamil Nadu Shops and Establishments Act,
(Deputy Commissioner of Labour),
Palayamkottai,
Tirunelveli.
2.J.Prabahar ... Respondents
Prayer : Writ Petition filed under Article 226 of the Constitution of India,
praying this Court to issue a Writ of Certiorari, to call for the records relating to
the impugned order dated 25.10.2017 passed by the 1st respondent in TNSEA
No.1 of 2014 and quash the same as illegal.
https://www.mhc.tn.gov.in/judis
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W.P.(MD).No.1312 of 2018
For Petitioner : Mr.M.E.Ilango
For R1 : Mr.R.Suresh Kumar
Additional Government Pleader
For R2 : Mr.Ajmal Khan
Senior Counsel
for M/s.Ajmal Associates
ORDER
This writ petition has been filed challenging an order passed by the Tamil Nadu Shops and Establishments authority in TNSEA No.1 of 2014, dated 25.10.2017.
2. The 2nd respondent joined the writ petitioner’s bank on 08.01.1990. During 2008, he was transferred to Ichalkaranji Branch of the Bank. A charge memo, dated 19.05.2011 was issued alleging that the 2nd respondent has purchased local cheques from certain group of customers to be accommodative in nature, totally to the tune of Rs.14,59,09,679/- on 510 occasions as mentioned in Annexure-I of the charge memo, which is in gross violation of the banking guidelines by allowing the group to indulge in “Kite Flying” https://www.mhc.tn.gov.in/judis 2/11 W.P.(MD).No.1312 of 2018 operations. The 2nd respondent has misused his power by purchasing local cheques and has indulged in such activities. Moreover, the 2nd respondent has failed to maintain any record regarding purchase of cheques amounting to Rs.7,17,03,130/- on 299 occasions. Likewise, the 2nd respondent has indulged in several activities, thereby the 2nd respondent has caused lost to the bank. Hence, the 2nd respondent was issued with charge memo, dated 19.05.2011 and he submitted explanation on 19.06.2011 denying the allegation. The petitioner bank did not accept the explanation and a full-fledged domestic enquiry was conducted. The 2nd respondent has participated in the domestic enquiry and has accepted certain charges. A specific acceptance is that the 2nd respondent has opened an account in the name of his sister-in-law and he has accepted that he has signed the signature of his sister-in-law in the opening form also and in the other transactions also. Likewise, the 2nd respondent has indulged in various illegality in various transactions amounting to more than 700 transactions. Therefore, the 2nd respondent was held guilty and impugned punishment of dismissal from service. Aggrieved over the same, the 2nd respondent has preferred a petition before the Shops and Establishments authority. The authority has considered the case and has set aside the punishment order and https://www.mhc.tn.gov.in/judis 3/11 W.P.(MD).No.1312 of 2018 directed the petitioner bank to reinstate the 2nd respondent with backwages. Aggrieved over the same, the petitioner Bank is before this Court.
3. The contention of the Bank is that the purchase of cheques is allowed as per the rules and regulation of the banks. However, it should be used in a reliable transaction. But the 2nd respondent has exceeded his power and he has indulged in purchasing the cheques even without any amount in the account. Thereby, he has accommodated the transactions to the tune of Rs.14,59,09,679/- on 510 occasions, whereby it has caused a bad reputation to the bank. Moreover, in another set of transactions for 289 occasions, the 2nd respondent has indulged in the same activity, whereby transaction was made to the tune of Rs.7,17,03,130/- by accommodating such dishonored cheques causing a revenue leakage of commission earnings to the bank. The 2nd respondent has further indulged in 22 such cases. Likewise, the 2nd respondent has indulged in parallel banking by lending money to selected groups by using the accounts and falsifying bank records and thereby, he has personally gained Rs.3,53,274/-. All these allegations were not considered by the Shops and Establishments authority. The authority has simply held the charges are not proved and the punishment is disproportionate. Moreover, the authority has https://www.mhc.tn.gov.in/judis 4/11 W.P.(MD).No.1312 of 2018 also held the enquiry was not conducted in fair and reasonable way.
4. Heard Mr.M.E.Ilango, the Learned Counsel for the petitioner, Mr.R.Suresh Kumar, the Learned Additional Government Pleader for 1st respondent and Mr.Ajmal Khan, the Learned Senior Counsel for M/s.Ajmal Associates and perused the records.
5. After hearing the rival submissions, this Court has given its anxious consideration. It is seen from the records that the 1st respondent has held that the enquiry was not conducted in fair and reasonable way. If it is so, then the authority ought to have remitted the case to the bank for re-enquiry with the direction to conduct enquiry after giving opportunity to the 2nd respondent.
6. The contention of the petitioner is that the 1st respondent authority has held that the punishment is disproportionate, hence prayed to reduce the punishment. On perusing the records, it is seen that the 2nd respondent has https://www.mhc.tn.gov.in/judis 5/11 W.P.(MD).No.1312 of 2018 accepted certain transactions in the domestic enquiry. The petitioner bank accepted that the purchase of cheques is adopted in banking transactions, but it has to be with the reliable customers, the customers should have adequate balance amount in the account, then only such purchase of cheques are allowed. In the present case, the 2nd respondent had allowed such transactions in several cases. On hearing the rival submissions, this Court is of the considered opinion that the purchase of cheques is not prohibited in the banking transactions. However, the bank alleges that the 2nd respondent has allowed in several cases, but the 2nd respondent submitted that it is within the discretion of the officer and he has exercised the discretion power within the parameters.
7. As far as the charge of parallel banking is concerned, the same is against the rules and regulations of the banking transaction. It is also unethical as well. The 2nd respondent has not denied such transactions. Therefore, this Court is of the considered opinion that the 1st respondent ought not to have directed the bank to reinstate the 2nd respondent.
8. It is seen from the records that the 2nd respondent had joined the https://www.mhc.tn.gov.in/judis 6/11 W.P.(MD).No.1312 of 2018 service on 08.01.1990 and dismissed from service on 27.01.2012, thereby had rendered 22 years of service.
9. For the reasons stated supra, this Court is of the considered opinion that second charge is grave in nature. But as far as the 1st charge is concerned, such transactions are permissible in banking transactions. But the 2nd respondent has followed that as routine, hence, it cannot be categorized as grave. Hence, this Court is of the considered opinion that the dismissal from service is disproportionate punishment and it is hitting the conscious of the Court.
10. Having held the punishment is disproportionate, then this Court ought to remit back to the authorities to impose reduced punishment, but since the 2nd respondent was out of service from 2012 onwards and it is more than 10 years, this Court proceed to impose the punishment of compulsory retirement by fixing the date of dismissal as compulsory retirement. https://www.mhc.tn.gov.in/judis 7/11 W.P.(MD).No.1312 of 2018
11. The 2nd respondent is eligible for terminal benefits that is applicable to the punishment of compulsory retirement. The learned counsel appearing for the petitioner as well as the 2nd respondent submit that the 2nd respondent was already paid Provident Fund, Gratuity, Earned Leave and also 17B wages to the tune of Rs.25,64,501.80 was paid to the 2nd respondent from the date of filing of this writ petition until today. The delinquent is entitled to 17B wages whenever the relief of reinstatement is granted. Since in the present case this Court has declined the reinstatement, the 2nd respondent is not entitled to 17B wages. Since this Court is declining the plea of reinstatement, 17-B wages paid to the 2nd respondent ought to be deducted. However, the Learned Senior Counsel appearing for the 2nd respondent prayed not to deduct the amount paid as 17-B wages. However, this Court is not inclined to accept the said plea, because this Court has declined reinstatement. In the interest of justice, this Court is inclined to grant 17-B wages to the tune of 50% alone. The rest of the amount, the 2nd respondent is directed to remit back or the amount shall be deducted from the pensionary benefits in installment.
https://www.mhc.tn.gov.in/judis 8/11 W.P.(MD).No.1312 of 2018
12. With this modification, this Writ Petition is disposed of. No costs. Consequently, connected Miscellaneous Petition is closed.
02.02.2023
NCC : Yes / No
Index : Yes / No
Internet : Yes/ No
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To
The Appellate Authority under the
Tamil Nadu Shops and Establishments Act,
(Deputy Commissioner of Labour),
Palayamkottai, Tirunelveli.
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S.SRIMATHY, J.
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