Judgment reserved on 04.05.2010
Judgment delivered on 30.07.2010
Civil Misc. Writ Petition No.48264 of 2008
M.N. Verma Vs. Union of India & Ors.
Hon. Sunil Ambwani, J.
Hon. Kashi Nath Pandey, J.
The petitioner was appointed as clerk/ typist in State Bank
of India in the year 1967. He was granted promotion in the officers
cadre on 15.11.1977 and in Officer Middle Management Grade
Scale-II on 1.11.1990. The petitioner was, thereafter, promoted as
Branch Manager at CMP Degree College, Allahabad Branch of the
bank on 30.1.2004.
By this writ petition the petitioner has prayed for writ of
certiorari quashing the order dated 20.4.2007 passed by the
General-II, State Bank of India, Local Head Office, Lucknow, as
also the order dated 12.3.2008 by which he was dismissed from
service in terms of Rule 67 (j) of the State Bank of India Officers
Service Rules for having violated Rule 50 (4) of the SBI Officers
Services Rules; and the appellate order dated 12.3.2008 passed by
the Chief General Manager, State Bank of India, Local Head
Office, Lucknow, dismissing the departmental appeal.
The petitioner was placed under suspension in terms of Rule
68 (A) of the SBI Officers Service Rules on 18.6.2005 on certain
acts of gross misconduct during his posting as Branch Manager
in CMP Degree College at Allahabad. He was served with
chargesheet dated 27.1.2006 and 31.1.2006 alleging as follows:-
“Charge No.1
You failed to conduct Pre-sanction survey before
sanctioning Housing Loan and Post disbursement Inspection
and released installments without ensuring stage wise
constructions and end use of funds of installments already
disbursed. You disbursed next installments without taking
the actual progress of constructions.
2
ALLEGATION ON WHICH CHARGE NO.1 IS BASED
Housing loans were sanctioned for the plots located in
extensively Agricultural area lacking basic facilities like
water, road, electricity etc. Installments were disbursed
without linkage to stage wise construction.
Due to this act, the loan amount was disbursed while the
houses were only nominally/ partially or totally not
constructed. Further while disbursing of next loan
installment, you did not adopt need-based approach linking
disbursement to actual progress of construction. Thus you
flagrantly violated Bank’s instructions and exposed the
Bank to financial loss e.g.
Account No. Name (S/Shri) Date of Amount Rs.
Sanction
26513 N.K. Nishad 26.05.04 5.00 lac
26636 S.K. Yadav 16.07.04 3.64 lac
26601 S. Srivastava 13.06.04 4.55 lac
26652 A. Pandey 11.08.04 5.00 lac
26449 Vijay 15.02.04 5.00 lac
26497 A.K. Gupta 14.03.04 5.00 lac
26462 A. Malviya 24.03.04 5.00 lac
26509 R. Sahu 24.03.04 5.00 lac
26522 A.K. Bhola 17.04.04 5.00 lac
26594 M.C. 25.05.04 5.00 lac
Kesarwani
Charge No.2
You failed to cross check the Income tax returns submitted
by the borrowers for availing Housing Loans.
ALLEGATION ON WHICH CHARGE NO.2 IS BASED
The genuineness of ITRs, being the basis for sanction of
loans were not cross checked either by obtaining
assessment certificate of copy of statement of account or
Pass Book e.g.
26613, 16636, 26601, 26652, 26449, 26497, 26462, 26509,
26522, 26594
3
Charge No.3
While appraising Housing loans, availability of margin
money/ deficit to be met by the borrowers have not been
ascertained and brought on record.
ALLEGATION ON WHICH CHARGE NO.3 IS BASED
You sanctioned and disbursed the Housing Loans without
ensuring the actual availability of margin money with the
borrowers, resulting in the projects remaining incomplete
e.g.
26613, 26636, 26601, 26652, 26449, 26497, 26462, 26509,
26522, 26594
Charge No.4
Role of middleman have been allowed by you in sanction of
housing loan in as much as even submission of Income Tax
returns were arranged by him.
ALLEGATION ON WHICH CHARGE NO.4 IS BASED
ACCOUNT OF ALFRED DAVID & SMT. DORTHY DAVID
You sanctioned on 01.03.2004 a Housing Loan of Rs.5.00
lacs to Shri Alfred David and Smt. Dorthy David with the
involvement of middle man Shri Ravi Srivastava and
installments were released without ensuring end use of
previous installments.
Charge No.5
Accommodation loan was given by you to close loan account
sanctioned earlier.
ALLEGATION ON WHICH CHARGE NO.5 IS BASED
You sanctioned Housing loan on 19.02.2004 for Rs.2.00 lacs
to Smt. Sushma Chaurasia and Shri Suresh Kumar for
construction of house. Smt. Sushma Chaurasia purchased a
ready build house of ADA from Suman Devi, and 75% of the
loan amount i.e. Rs.1,51,313.91 was allowed to be
transferred to Housing Loan Account No.26450 of Shri
Suresh Kumar on 06.04.04 to close his Housing Loan
account.
Charge No.6
A number of limits i.e. cash credit limit of Rs.5.00 lac &
Rs.7.50 lac were irregular sanctioned by you for giving
undue benefits to the borrower Shri Amit Ganguli.
4
ALLEGATION ON WHICH CHARGE NO.6 IS BASED
A number of limits have been irregularly sanction by you to
Shri Amit Ganguli for giving undue benefits to him. The
irregularities committed by you are as under:-
(i) Cash Credit limit of Rs.5 lacs has been sanctioned on
26.04.2004 to M/s A.R. Sales Corporation (Shri Amit
Ganguli Partner) despite the fact that Cash Credit
limit of Rs.2.50 lacs sanctioned on 30.01.04 to M/s
Ganguli Optical Science Emporium (Shri Amit
Ganguli, Proprietor) was already running in the
Branch. The business as shown of the firm is
entirely different. Out of the Cash Credit limit of
Rs.2.50 lac sanctioned on 30.01.2004 and disbursed
on 06.02.2004, you transferred a sum of Rs.2.00 lac
to current account No.01050070031 of Shri Ganguli.
End use of the funds was thus not ensured.
(ii) The limit of Rs.5.00 lacs has been disbursed on
27.04.2004 and a sum of Rs.4.99 lac was allowed to
be withdrawn in cash on the same day without
ensuring end use thereof.
(iii)Although the disbursal has been made on
27.04.2004, the partnership deed of the firm was
executed on 04.03.2005. The limit was thus
sanctioned/ disbursed to a non-existing firm.
(iv)You sanctioned/ disbursed the loan on 27.04.2004 to
enable Shri Ganguli to purchase on 11.05.2004 part
of house No.129/140 with the proceeds of the loan.
Thus you passed on undue advantage to Shri
Ganguli.
(v) The limit was released on 27.04.2004 without
creating Equitable Mortgage. It was created on
12.05.2004 of the house purchased on 11.05.2004.
You have thus allowed diversion of Cash Credit
funds.
(vi)You sanctioned a Cash Credit limit of Rs.7.50 lacs,
Account No.01660065117 (10518192746) on
14.10.2004 to M/s. Ganguli Optical Science
Emporium (Shri Amit Ganguli Proprietor). Proceeds
of this loan have been allowed by you to be diverted
as under:
(a) Rs.5.00 lacs to Cash Credit Account of M/s
A.R. Sales Corporation.
(b) Rs.2.50 lacs to Cash Credit Account of M/s.
Ganguli Optical & Science emporium.
(vii)You sanctioned the above limit of Rs.7.50 lac without
the recommendation of the Field Officer posted at the
Branch.
5
(viii)The limit has been disbursed without obtaining
collateral security. Equitable Mortgage of
residential property purchased on 22.07.2004 has
been obtained on 24.11.2004 i.e. after more than one
month of the disbursement of Cash Credit limit.
(ix)There are no transaction in the Cash Credit Account
No.01660065117 (10518192746) excepting the
details shown above. The account has turned NPA
with outstanding in excess of Rs.7.78 lacs. The limit
has been sanctioned by you to a non-existent unit.”
The prosecution documents were supplied to the petitioner
with covering letter dated 24.5.2006 enclosing all the documents to
be relied upon in the departmental enquiry in respect of each of the
allegations. The petitioner verified the receipt of the documents on
23.6.2006 with an exception that on allegation Nos.1, 2 and 3 the
documents listed at Item No.I and II were not made available, the
photocopy was produced, which was not acceptable to the
petitioner. The rest of the documents were perused in original. On
allegation No.4 the original documents were perused except item
listed against Point No.5 namely letter dated 20.5.2005 of Shri
Alfred David (Borrower). With regard to allegation No.5 the
original documents except document at Point No.5 namely Unit
Inspection Register of the two loan accounts was perused by him.
In respect of charge No.6 the original documents were perused
except item No.8 listed against (viii) namely statement of Shri R.P.
Gautam, the then Field Officer dated 20.5.2005. The petitioner
submitted his reply and also submitted a list of defence documents
on 18.7.2006.
The presenting officer’s brief was submitted on 7.11.2006
and was given to the petitioner containing therewith arguments of
the Presenting Officer, in respect of each of the loan account
mentioned in the charges. The petitioner submitted his defence
brief on 27.2.2007. His case was defended by his defence
representative Shri G.C. Verma. The preliminary hearing of the
case was held on 21.4.2006 at Vigilance Department, State Bank
of India, Local Head Office, Lucknow and the regular hearing
6
took place on 26.9.2006 at State Bank of India, CMP Degree
College, Allahabad Branch and the enquiry was concluded on the
same day. The findings of the enquiry officer on each of the
charges are given as below:-
“I have examined the arguments of prosecution and
defence and it is observed that Charged Officer has
sanctioned and disbursed the above housing loans on Arazi
land No.41, situated at Mauza-Dhanua, Pargana-Arail,
Tehsil-Karchna.
Defence has produced DEX (1/20, 2/1-26, 3/1-22, 4/1-30,
5/1-33, 6/1-21, 7/1-31, 8/1-23, 9/1-37, 10/1-26) in respect
of copies of the sale deed, Lawyer’s NEC report and
Recital in respect of above housing loans. From perusal of
the sale deed DEX (1/65, 2/12, 3/11, 4/9, 5/23, 6/12, 7/16,
8/13, 9/14-15, 10/11, it is observed that all the plots under
reference are located in residential area under the Awas
Vikas limits and the land is being used for the residential
purposes. Defence has also argued that infrastructure like
water, roads and electricity etc. are available thereat. The
contention of defence in respect of other part of allegation
that subsequent loan installments were recommended for
payment by the Field Officer is not tenable, as defence
themselves argued that all the remarks (adverse) were
incorporated by the Field Officer him self in the Inspection
Register. Both the arguments of the defence are
contradictory to each other. It is, therefore, evident that
Charged Officer has released the subsequent housing
loan installments without ensuring the end use of funds
of the previous installments and without linkage to actual
progress of construction of the houses, which resulted in
non completion of the projects in respect of all the above
housing loans.
I, therefore, hold allegation No.1 as partly
substantiated.
I have examined the arguments of prosecution and defence
and it is observed that although 3 years ITRs are enclosed
with all the housing loan documents in case of account
no.26513, 26652 and 26522 one year Tax deposit challen
is enclosed but figures incorporated in the ITRs are not
evidenced to ascertain their genuineness. The contention
of the defence that Savings Bank Account statements were
although obtained by the Charged Officer at the material
time but later being misplaced, while handing over the
documents to CBI Officials is not tenable, as all the
documents were handed over to the CBI Officials were duly
listed and duly acknowledged by them.
7
I, therefore, hold the allegation No.2 as substantiated.
I have examined the arguments of prosecution and
defence and it is observed that margin money as stipulated
by the Bank must be deposited by the borrowers as their
stake in the project, which was not deposited by the
borrowers in respect of all the above cases. The contention
of defence regarding treating the borrowers investment in
the plot as margin money is not tenable.
I, therefore, hold the allegation No.3 as
substantiated.
I have examined the arguments of prosecution and
defence and it is observed that allegation of involvement of
middleman could not be established due to non production
of Shri Alfred David, the housing loan borrower in the
enquiry proceedings.
Regarding arranging of ITRs by the middleman and
releasing the loan installments without ensuring the end
use of funds is also not established as the prosecution
could not produce any documentary evidence in support of
their contention. I, therefore, hold the allegation No.4 as
not substantiated.
Therefore, Charge No.4 stands not proved.
I have examined the arguments of prosecution and
defence and it is observed that Charged Officer has
transferred a part loan amount of the new housing loan to
close the outstanding of the previous housing loan
sanctioned and disbursed to the same borrower to
accommodate him. I, therefore, hold the allegations No.5
as substantiated.
Therefore, charge No.5 stands proved.
I have examined the arguments of prosecution and
defence and it is observed that Charged Officer has
sanctioned and disbursed Cash credit Limits to M/s A.R.
Sales Corporation and M/s Ganguli Opticals & Science
Emporium of Rs.5.00 lacs and Rs.7.50 lacs respectively and
allowed the diversion of funds to their other accounts. Shri
Amit Ganguli transferred the funds of the firm to his
personal account, which was evidenced vide statement of
account enclosed with the loan documents. From perusal
of loan documents, it is observed that a sum of Rs.5.00 lacs
and Rs.2.50 lacs were diverted to other account and not
utilized for the activity for which Cash Credit limit was
sanctioned to the firm. It is, therefore, evident that
Charged Officer has unduly accommodated Shri Amit
Ganguli. The contention of the Defence that Cash Credit
8
limit of Rs.2.50 lacs sanctioned to M/s Ganguli Optical &
Science Emporium dated 31.1.2004 was not sanctioned by
the Charged Officer but sanctioned by the previous
incumbent, is not tenable, as disbursement of the C/C limit
was done by the Charged Officer. The contention of the
Charged Officer that Field Officer, posted in the Branch
at the material time not recommend the sanction of cash
credit limits due to lack of job knowledge in not tenable. I,
therefore, hold the allegation No.6 as substantiated.
Therefore, Charge No.6 stands proved.”
The enquiry officer in his report dated 9.3.2007 thus found
charge No.1 to be partly proved, the charge Nos.2 and 3 to be
proved, charge No.4 to be not proved and charge Nos.5 and 6 to be
proved.
The petitioner submitted his defence to the enquiring
authorities dated 9.3.2007, which was received by him on
15.3.2007. His defence statement dated 20.3.2007 was considered
by the General Manager-II/ appointing authority. It was found by
him that lapses are serious in nature and have caused loss to the
bank. The petitioner failed to discharge his duty with utmost
sincerity, dignity, devotion and diligence, and acted in a manner
unbecoming of an officer in violation to rule 50 (4) of the SBI
Officers Service Rules. His conduct was highly detrimental to the
bank interest. The appointing authority further find that the
petitioner has tried to shift the burden of responsibility towards
Field Officer. The petitioner released the installment of house loan
without ensuring the margin money and end use of funds. He
unduly accommodated a policy of transferring the proceeds of cash
credit of the firm in the personal account of the proprietor of the
firm. These acts were found to be in violation of Rule 50 (4) of the
SBI Officers Service Rules. The appointing authority thus decided
and punished the petitioner with penalty of dismissal from service
in terms of Rule 67 (j) of the State Bank of India Officers Service
Rules. The suspension period was directed to be treated as such,
that is, not to be counted as on duty and no salary and allowance
would be payable except subsistence allowance, which was already
9
paid to him. The petitioner’s appeal to the appellant authority was
dismissed by a long and reasoned order considering his defence on
each of the allegations and grounds in detail by order of the
appellate authority/ Chief General Manager, State Bank of India,
Local Head Office, Lucknow dated 12.3.2008. Aggrieved the
petitioner filed this writ petition.
The petitioner was dismissed from service 10 days before
the date of his superannuation.
Shri Ashok Khare, learned counsel for the petitioner submits
that the departmental enquiry was not conducted in conformity with
principle of natural justice. Some of the documents in support of
the charges were not supplied nor inspection permitted. There was
no order rejecting such request or communicating any reason for
non supply/ non inspection of the documents. The list of
documents supplied clearly indicates that statement of Shri R.P.
Gautam, the then Field Officer dated 20.5.2005 enumerated at Item
No.8 under allegation No.6 was not supplied. The petitioner,
therefore, could not prepare his defence. The copy of the laid down
bank instructions to be followed for ascertaining genuineness of the
income tax returns as also the instructions regarding obtaining
assessment certificates were also not provided. Copy of the title
deed in respect of loan account was not given tot he petitioner.
Shri Ashok Khare submits that allegations levelled against
the petitioner and the findings recorded do not make out any of the
charge of misconduct for initiating disciplinary action and to
punish the petitioner. The enquiry report demonstrates that the
findings recorded are only with regard to technical breach of
procedure and sanction of loans. There was no allegation or
finding with regard to any ill-will, ulterior motive and the loss
causes to the bank. The entire enquiry was held within one
working day and the petitioner was dismissed 10 days before his
retirement after 40 years of satisfactory service in which his work
and conduct was appreciated and he had received regular
10
promotion. During his entire career the petitioner has sanctioned
thousands of loans without any allegation of irregularity. The
penalty of dismissal is wholly disproportionate with the allegations
levelled against the petitioner.
Shri Ashok Khare has relied upon the judgments of the
Supreme Court in Union of India & Ors. Vs. J. Ahmed, (1979)
2 SCC 286 to submit that deficiency in personal character or
personal apology do not constitute misconduct for taking
disciplinary action. The matter of efficiency, failure to attain
highest standard of administrative ability while holding a high post
would not by itself constitute misconduct. There must be
negligence in performance of duty and lapse in performance or
error of judgment in evaluating the developing situations but that
does not constitute misconduct unless the consequences directly
attributable to negligence are such, as are irreparable or the
resultant damage is so heavy that the degree of culpability would be
very high. An error can be indicative of negligence. Carelessness
can often be productive of more harm than deliberate wickedness or
malevolence. But in any case, failure to attain the highest standard
of efficiency in performance of duty permitting an inference of
negligence does not constitute misconduct.
Shri Ashok Khare submits relying upon State of Punjab &
Ors. Vs. Ram Singh Ex-Constable, (1992) 4 SCC 54 that there
is distinction between ‘gravest misconduct’ and ‘grave misconduct’.
Before awarding an order of dismissal it is mandatory that
dismissal order is made only when there are gravest acts of
misconduct, since it impinges upon the pensionary rights of the
delinquent after putting long length of service. In this case a
constable was loitering in a drunken condition near bus stand while
on duty and when brought to hospital abused the doctors, the court
held that the act constitute gravest act of misconduct warranting
dismissal from service.
11
In State of U.P. & Ors. Vs. Ramesh Chandra Mangalik,
(2002) 3 SCC 443 the Supreme Court held that where charge of
commission of irregularities is not result of mere omission or lack
of competence the question whether the charge constituted
misconduct or not would depend upon the factual statements in the
case.
In Inspector Prem Chand Vs. Government of NCT of
Delhi & Ors., (2007) 4 SCC 566 the Supreme Court reiterated that
the error of judgment or negligence simplicitor is not misconduct.
In a given case what should have been done, depends on the facts
and circumstances of the case and no hard and fast rule can be laid
down. The petitioner was Inspector (Malaria). A member of the
raiding party offerred tainted money to him. He refused to accept
it. The tainted money was not seized and that prosecution ended in
acquittal. In disciplinary proceedings no finding was recorded that
delinquent police inspector was guilty of an unlawful behaviour in
relation to discharge of his duties. The Supreme Court said that
in the given circumstances, the appellant cannot be said to have
committed any misconduct.
On the proportionality of punishment to the charges levelled
against the officer, Shri Ashok Khare has relied upon Bhagat Ram
Vs. State of Himachal Pradesh & Ors., 1993 SCC (L&S) 342 in
which it was held that dismissal on trivial charge namely where out
of 21 trees 17 were in forest and 4 were on the private land of an
individual. Forest guard had paid compensation for illegal felling
causing loss to the government. On the joint enquiry the enquiry
against the co-delinquent was separated. One of the three charges
were proved against the appellant. There was no evidence led to
show that the appellant as Class-IV employee was aware of all
technical rules prescribed for holding enquiry and was entitled to
be defended by a government servant of his choice. The enquiry
was found to be held in violation of principle of natural justice and
that while allowing the appeal the Supreme Court observed that a
12
minor infraction of duty leading to a trivial charge of negligence
of checking hammer marks on trees and which did not cause any
loss to the government, it was not fair to punish the employee and
also to order a fresh enquiry. The Supreme Court found that
withholding two increments with future effect and payment of 50%
arrears would be sufficient punishment.
Shri Vipin Sinha appearing for the bank would submit that
all the documents relied upon by the bank were given to the
petitioner to prove the allegations against him. The complete set
of such documents; application with all enclosures including salary
certificate, income proof, IT return forms and unit inspection
register were provided to him. The defence representative gave a
certificate on 25th September, 2006 that all the documents have
been perused. The documents listed at Item No.5 under allegation
No.4 relating to letter dated 20th May, 2005 of Shri Alfred David
was also perused by the petitioner. Unit Inspection Register in
respect of allegation NO.5 of the two loan account was also perused
and signed and the minute of proceedings was singed by the
chargesheeted officer. In para 19 o the counter affidavit it is stated
that after perusing the minutes of the enquiry, the enquiring officer
advised the chargesheeted officer that since the perusal of the
original prosecution and defence document has been done, whether
these were genuine and were to be admitted, the chargesheeted
officer confirmed and admitted the genuineness of the documents
perused by him. The certificate of inspection dated 25th September,
2006 clearly bears the testimony to perusal of all the documents
by the petitioner and thereafter no objection of non supply of
document was made by him in the enquiry proceedings. Further
it is stated in para 24 that a report in respect of CMP Degree
College, Allahabad Branch was lodged by the bank with CBI. As
per the Rules and norms the CBI Officer has taken custody of the
original documents. The notorised duplicate copy of the documents
were, however, kept in the branch, which were perused by the
13
charge sheeted officer. He had taken no objection to perusing
these documents. The CBI had found sufficient material for
initiating action against the petitioner and for the said purpose
sanction was also sought but in the meanwhile the petitioner was
dismissed from service.
It is denied by Shri Vipin Sinha that the bank did not suffer
any financial loss on account of negligence of the petitioner in
sanctioning loan transactions. In para 36 it is clearly stated
relying upon loss statement prepared by the bank that the bank had
sufferred a financial loss to the tune of Rs.73,48,421.16.
In reply Shri Khare submits that the allegations of financial
loss is wholly imaginary. There was no allegation or charge against
the petitioner for embezzlement or financial improprietory. The
entire amount of gratuity has been paid to the petitioner and that
CBI Special Court, Prevention of Corruption Act has in Case No.51
of 2007; RC No.18A/5, State Vs. S.N. Lal under Section 120B,
420, 468 and Section 13 (2) of the Prevention of Corruption Act
accepted the final report submitted by the CBI on the ground that
all the 13 persons including the women, have been made accused in
the mater of residential loan given by the bank. The allegations are
of civil nature and that the bank has already filed a suit for
recovery of the money and thus in view of the circumstances and
insufficient evidence it is not proper to rope in the accused and to
cause him mental, physical and financial hardships. The charge
sheet in the criminal case was set aside and the petitioner and other
accused were discharged.
Shri Vipin Sinha submits that the government’s contribution
to the provident fund was paid by the trustees to the bank. He was
paid on the direction of the trustees of the bank the provident fund
amount of Rs.4,63,398/- on 25th September, 2007, with reference to
the employee’s own contribution. The gratuity of Rs.3.5 lacs with
delayed interest was also paid on 27th August, 2008. The leave
14
encashment was, however, not paid as the petitioner is not entitled
to pension and other terminal benefits.
We have gone through the allegations against the petitioner,
material relied upon by the bank and the defence taken and the
findings recorded by the enquiry officer. On the first charge the
enquiry officer found that the residential loans were given for
construction of house of all the plots located in the residential area
under Awas Vikas limits, and that land was being used for
residential purposes for which infrastructure like water, road and
electricity was available. The Field Officer had already
recommended for payment of loan installments. The enquiry
officer, however, found that the arguments of the defence were
contradictory and that the charged officer had released the
subsequent housing loan installment without ensuring the end use
of the fund of the previous installment linked to actual progress of
the construction of houses. The charge was thus partly proved.
In respect of charge No.2 the enquiry officer found that
though 3 year’s ITR as per norms were enclosed with all the
housing loan document in case of Account No.26513, 26652,
26552, only one year’s tax deposit challen was enclosed and that
figures incorporated in the income tax return were not evidence to
ascertain their genuineness. The contention of the officer that the
saving bank account statements were obtained by the charged
officer but they were misplaced while handing over to CBI was not
accepted as the documents were duly listed and duly acknowledged
by CBI officers. The third charge related to ensuring the margin
money to be available with the borrowers. It was found that as
against the terms and conditions of the loan the borrowers did not
deposit any margin money as their stake in the project in respect of
10 cases proving charge No.3.
The charge No.4 related to housing loan of Rs.5 lacs to Shri
Alfred David and Smt. Dorthy David through middleman Shri
Ravi Srivastava and this charge was not proved as Shri David was
15
not examined. In respect of charge No.5 the enquiry officer did not
dispute the defence statement that initial housing loan was
sanctioned to Shri Suresh Kumar for a project situate at 208 EWS,
ADA Colony, Neem Sarai, Allahbad. Subsequently on the request
of the borrower on account of some family dispute the project was
transferred in the name of his wife Smt. Sushma Chaurasia and the
loan account was regularised by closing previous housing loan
account. The enquiry officer did not record any finding whether
the transaction was irregular or the manner in which the loss was
caused to the bank in closing the previous housing loan account by
transferring the project in the name of Smt. Sushma Chaurasia.
There are no finding as to how this transfer of loan account in the
name of Shri Suresh Kumar was irregular and against the interest
of the bank.
In respect of allegation on which charge No.6 was based, it
was observed that partnership deed of the firm was executed on
4.3.2005, whereas the loan was disbursed on 27.4.2004; equitable
mortgage was created on the house as collateral security on
12.5.2004. At that time the sanctioning cash credit limit was not in
existence. The charged officer had sanctioned cash credit limit of
Rs.7.5 lacs on 14.1.2004 to the same unit in which Shri Amit
Ganguly was proprietor of the firm. The enquiry officer found that
the charged officer had diverted the funds to the other accounts of
Shir Amit Ganguly and that these amounts were not utilised for the
activity for which the cash credit limit was sanctioned. The
charged officer had unduly accommodated Shri Amit Ganguly in
the transactions.
From the aforesaid discussions we find that charge No.1
was partly proved and charge No.4 was not proved by the enquiry
officer. This leaves charge Nos.1, 2, 5 and 6 against the
petitioner, to be found proved by the enquiry officer.
This Court has consistently held in D.S. Bisnoi vs. State
Bank of India 2004 (1) ESC 381; Sudhir Singh vs. District
16
Cooperative Bank 2003 (1) ESC 465; Ram Pratap Sonekar
vs. Allahabad Bank 2000 (2) ESC 814; K.K. Singh vs. Gomti
Gramin Bank 2002 (1) ESC 257, delivered by Division
Benches, relying upon Disciplinary Authority vs. N.B. Patnaik
1996 (4) SCC 457; State Bank of India vs. T.J. Pant 1999 (4)
SCC 759, that the High Court, in exercise of its jurisdiction under
Article 226 of the Constitution of India, cannot sit in appeal over
the findings recorded by the disciplinary authority of the bank
based upon the enquiry report. Where full opportunity is given to
the employee of the bank to defend himself, the High Court would
not interfere in the findings on technical and flimsy grounds. In
Disciplinary Authority vs. N.B. Patnaik (supra) the Supreme
Court observed that even if no loss has been caused to the bank, an
act beyond the authority of the officer of the bank amounts to
misconduct.
In Tara Chand Byas vs. Chairman JT 1997 (3) SC 500
a bank employee was punished for giving loans without adequate
security. The Supreme Court upheld the punishment. In State
Bank of India vs. T.J. Pal (1999) 4 SCC 759 the Supreme Court
observed that proof of actual loss was not necessary for punishing
a bank employee. In Union of India vs. Vishwa Mohan 1998 (4)
SCC 310 it was held by the apex court that absolute devotion,
diligence and integrity is required from the employees in the
banking business, otherwise the confidence of the public will be
impaired.
In Dr. Ram Pal Singh vs. State of UP and others (2006)
2 ESC 1182 Allahabad (DB) a Division Bench of this Court
held that the jurisdiction of court in the matters of challenge to the
findings recorded by the enquiry officer and the disciplinary
authority is very limited. The Court cannot sit in appeal over such
findings. It only reviews the manner in which the decision was
taken. The jurisdiction of the High Court under Article 226 of the
Constitution of India in such matters is confined to correct errors
17
of law or procedural matters and violations of principles of natural
justice resulting in miscarriage of justice. The judicial review is
permissible against the decision making process and not against
the decision itself. A similar view was taken by Division Bench in
Sarvesh Kumar Sharma vs. Nuclear Power Corporation of
India Ltd and another 2006 (2) ESC 1153.
In Regional Manager and Disciplinary Authority SBI
Hyderabad vs. S. Mohad. Gaffar the Supreme Court
interpreted the words ‘gross misconduct’ as against the ‘minor
misconduct’ under the ‘Shashtriya Award’ and ‘Desai Award’
applicable to the employees of the bank and held that the
expression ‘gross misconduct’ is not to be viewed or considered as
it may appear or appeal to the perception of the court. It has to be
construed in the context of the definition. If any act is done
prejudicial to the interest of the bank or gross negligence involves,
or is likely to involve the bank in serious loss and where the
employee of the bank knowingly makes a false statement in any
document pertaining to or in connection with the employment
with the bank, the findings on such issue would amount to gross
misconduct. The penalty or punishment imposed by the
disciplinary authority or appellate authority will not be treated to
be excessive, shocking conscious of the court, if it is permissible.
The High Court does not normally interfere or substitute its own
opinion and impose some other punishment or penalty than the
punishment imposed by the bank.
Similar view was also taken in Union of India and others
vs. K.G. Singh (2006) 3 ESC 373 (SC) limiting judicial review to
the deficiency in the decision making process and not the decision
itself.
The petitioner was given full and adequate opportunity to
defend himself. He was served with chargesheet with statement of
allegation and was given and permitted inspection of all the
relevant documents relied upon by the enquiry officer. The
18
petitioner appeared in the enquiry proceedings and was
represented by a defence representative of his choice. The
preliminary hearing and regular hearing took place in the presence
of the petitioner. The enquiry officer considered the documents
produced by the department and the defence and found the
allegation on charge No. 1 to be partly proved and allegation of
charge Nos.2, 3, 5, and 6 to be proved against the petitioner. The
charges proved against the petitioner related to negligence in
performance of his duties. It cannot be said that the petitioner was
not guilty of the allegations levelled against him or that the
allegations were so trivial or inconsequential that the punishment
of dismissal of service could not be awarded by the disciplinary
authority.
We have also taken into consideration the pleas that the
charges were not sufficient to visit the petitioner with punishment
of dismissal, close to his superannuation. The disciplinary
authority was required to consider the effect of long association of
the petitioner as officer with the bank. We, however, cannot
substitute our opinion on the punishment awarded by the
disciplinary authority and affirmed by the appellate authority, on
the ground of compassion. The allegations found proved against
the petitioner are not such on which the punishment of dismissal
can be treated to be grossly disproportionate, to shock the
conscience of the Court.
The writ petition is dismissed.
Dt.30.07.2010
SP/