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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1135 of 1978.

From the Judgment and Order dated the 2nd February, 1978 of the High Court of Allahabad in Civil Misc. Writ No. 1724 of 1976.

R.K. Garg and Pramod Swaroop with him for the Appellant.

P.R. Mridul, O.C. Mathur, S. Sukumaran, Miss. Meera Mathur for M/s. J.B. Dadachanji & Co. for the Respondents.

S.S. Sharma for State Bank of India.

The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. Shri K.L.Tripathi, the appellant herein joined the State Bank of India in 1955. At the relevant time, he was working as Branch Manager, State Bank of India, Deoria.

Certain complaints were received about his conduct from Gorakhpur Branch Manager, Shri R.S. Kapoor, Staff Officer Grade II, who reported to the Head Office on 5th May, 1974 that, from the information given to him by some members of the staff of Deoria Branch, namely, Shri M.R. Sharma, Head Clerk, M.S. Gupta, Field Officer and from other enquiries made by him he found that the bills negotiated by the Gorakhpur Branch under a Revolving Letter of Credit No. 20/1 dated 21st March, 1974 established by the Deoria Branch on Gorakhpur Branch for Rs. 2 lakhs at a time subject to maximum of Rs. 17 lakh had remained unpaid to the extent of Rs. 12 lakhs and that the openers of the Letter of Credit, M/s Jamuna Prasad Munni Lal Jaiswal, Deoria were unable to meet their obligations. In the same letter, he also informed that Deoria Branch had opened another Revolving Letter of Credit No. 20/2 dated 3rd April, 1974 for Rs. 50,000 per day subject to a maximum of Rs. 10 lakhs and that because the clauses of the credit had not been drawn properly, the bills were not negotiated thereunder by his Branch, and were instead, sent on collection basis. Certain other allegations giving the particulars of the bills and records were mentioned. In those circumstances, the head office ordered a preliminary enquiry which was conducted by Shri R.P. Srivastava, Staff Officer, Grade II and having considered his report, the head office directed Shri B.D. Sharma, Chief Manager to carry out investigation under the rules governing the services of the officers of the State Bank.

Shri Sharma conducted the investigation between 9th June to 23rd June, 1974 and in the course of the investigation, he visited Deoria and Gorakhpur. On 9th September, 1974, charges were framed. The information Shri Sharma could gather was that M/s Jamuna Prasad Muni Lal Jaiswal, Station Road, Deoria was a sole proprietorship concern with Shri Jamuna Prasad Jaiswal as the sole proprietor. Their business was to deal in scrap iron which they purchased from Sugar Mills around Deoria and from other sources. The firm maintained a current account only with an average balance of Rs. 10,000. There was no opinion report on record with the Branch. It appeared that the firm had no experience in oil business. Shri Sharma enquired from Mr. Tripathi. From the report of Shri Sharma, it appears that in respect of all relevant entries upon which he has based his conclusion, he asked Shri Tripathi after giving him the gist of the relevant materials gathered from other persons in the absence of the appellant and asked his pinion or explanation in respect of those. We have examined the report of Shri Sharma and find that at all stages in respect of all the matters mentioned in the report the appellant was associated with the preliminary investigation and his versions or explanations were sought for and recorded.

So far as dates of payment of bills No. 30, 35 and 36, he gave his explanation.

So far as another matter-telegrams relating to the advising negotiation of bills under Letter of Credit No. 20/1 dated 21st March, 1974, the appellant stated, inter alia, as follows:-

"A representative of F. C. I., Gorakhpur came to Deoria on the 11th April, 1974 and handed over Gorakhpur Branch S. C. No. 774 to 778 along with a D. O. letter from Shri Maheshwari, Dy. Finance Manager, F. C. I. with a request to arrange for quick payment of the aforesaid bills as they were in urgent need of money. With a view to render helpful service to valued constituent like F. C. I. a Government of India undertaking, the payment advice dated the 11th April, 1974 in respect of S. C. Nos. 774 to 778 was signed by me before the bills were paid as I was to leave my office for inspection. In this connection, I invite your kind attention to the fact that Shri S. N. Singh was only an Acting Accountant and his name appeared in the Officers Grade I column of the Officers list of the Circle. As such I was particular about signing inter office advices of heavy amounts to avoid their being dis-honoured by the branch on which they were drawn. The firm's account showed a credit balance of approximately Rs. 1,02,000 and I had called the proprietor of the firm on that day for depositing sufficient funds in their account so that the bills could be retired by debit to firm's account and it was on his assurance that the payment advice was signed by me in good faith and handed over to Shri S. S. Srivastava, Officer Grade II for delivery to the Corporation's representative only when the required transactions had been put through in the books of the Branch. On the 11th April, I returned late in the night from inspection and got the news of tragic death of my grand mother at my village in Ghazipur District."