IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE: 03-03-2009 CORAM: THE HONOURABLE MRS. JUSTICE PRABHA SRIDEVAN AND THE HONOURABLE MR. JUSTICE K.K. SASIDHARAN W.A.No.1027 of 2006 S. Mani ... Appellant Vs. 1. Chairman and Managing Director Syndicate Bank, Head Office Manipal-Karnataka State 576 119 2. The General Manager (Personnel) Syndicate Bank, Head Office Manipal, Karnataka State 576 119 3. Dy. General manager Syndicate Bank, Zonal Office 27/28, Woods Road, B.R. Complex II & III Floors, P.B.No.5227 Anna Salai, Chennai 600 002 4. M.J. Prasad Inquiring Authority Industrial Relations Cell Zonal Office, Syndicate Bank Maker Towers "E" 2nd Floor Plot No.85, Cuffee Parade Colaba, Bombay 400 004 ... Respondents Writ Appeal against the order of dismissal of the writ petition No.1838 of 2000 dated 16-04-2003. For appellant :: Mr. AR.L. Sunderasan, Senior Counsel For respondents :: For RR1 to3 ::Mr. V. Karthick for Mr. T.S. Gopalan & Co. JUDGMENT
The appellant joined Syndicate Bank as a Clerk in 1977. His punishment of dismissal was converted to one of compulsory retirement purely on the ground of mercy. The writ petition is filed against the findings on merits.
2. Charges were framed against him while he was the Branch manager, Sholapur. He was working as such in the Sholapur Branch till 26-07-1996. He was then transferred to the Karaikudi branch and after about one and a half years, he was posted as Manager, Devakottai Branch from 01-06-1998. He was placed under suspension by order dated 08-10-1998 alleging acts of misconduct when he was working as Branch Manager at Sholapur. Against the order of suspension, he preferred an appeal. The appeal was dismissed on the ground that departmental enquiry was contemplated. Subsequently, the charges were framed. A charge memo was issued on 23-11-1998. There was a corrigendum dated 17-12-1998. Thereafter, domestic enquiry was held in terms of the Respondent Bank’s Regulations where the delinquent officer participated. He had a Defence Assistant. The enquiry officer submitted the report holding that the charges were proved. The disciplinary authority agreed with the findings and thereafter, the petitioner was imposed with the punishment of dismissal by order dated 30-08-1999. His appeal thereagainst was dismissed on 26-11-1999. Therefore, he filed a writ petition. Pending the writ petition, he gave a mercy petition before the Chairman and Managing Director of the respondent bank. Though the disciplinary authority had concurred with the findings of the enquiry officer and had imposed the penalty which was affirmed by the first respondent a lenient view was taken and the penalty of dismissal was modified to one of compulsory retirement by proceedings dated 20-03-2000. Therefore, the prayer was duly amended. The learned Single Judge found no reason to interfere with the factual findings against the appellant in respect of the charges though the order of dismissal was subsequently modified to compulsory retirement and therefore, this appeal has been filed.
3. When the matter came up for final hearing, the learned Senior counsel before making his submissions said that the appellant has given a letter stating that the respondents may consider whether he could be permitted to voluntarily retire from the services of the Bank. The learned counsel for the respondent sought for time to ascertain the views of the respondent bank. Thereafter, an affidavit dated 09-02-2009 was filed where the respondent took a stand that though the Chairman and the Managing Director did not differ from the finding that the petitioner was guilty of misconduct, the punishment was tempered with mercy and the respondent had never agreed that he could go on voluntary retirement. It is stated that voluntary retirement is not a punishment under the Syndicate Bank Officers (Discipline and Appeal Rules).
4. Since this final plea was rejected, the learned Senior Counsel made his submissions. The learned Senior Counsel submitted that the petitioner was not permitted to cross-examine the witnesses who had spoken of the alleged misconduct and the two complainants with regard to charge No.2 were illiterates who did not know how to read or write and their evidence would not stand scrutiny. The learned Senior counsel submitted that the dealer of farm equipments, the farm loan borrower and other witnesses were not examined and the non-examination of them by the respondent bank had seriously prejudiced the rights of the petitioner. The learned Senior counsel submitted that it is only because the petitioner had unearthed certain misdeeds committed by other that a case had been concocted as if the petitioner had indulged in the acts of misconduct and proceedings had been initiated long after he had left the branch and had been posted in the Devakottai Branch. The learned Senior counsel submitted that the lapse of time in initiating proceedings should arouse a suspicion in the minds of the Court regarding the genuineness of the complaint.
5. The learned Senior counsel appearing for the respondent submitted that concurrently the enquiry officer and the departmental authority and this Court had found the writ petitioner guilty of the acts of misconduct and his scope for interference by the Court in such a situation is very limited.
5. The Enquiry Officer framed three points for evaluation.
(a) Whether the writ petitioner had misused his official position to sanction farm loans to Badadapure and Mahanad and misappropriated the proceeds of the loans sanctioned to the two borrowers by conniving with Mr. B.S. Mahanad enabling M/s. Priya Arts to derive undue pecuniary benefits at the cost of the Bank?
(b) Whether the writ petitioner demanded and accepted illegal gratification aggregating to Rs.33,000/- from three of the prospective borrowers for sanctioning loans of them?
(c) Whether the writ petitioner submitted fake consent letter dated 30-06-1994 in the name of Mr. Agnihothri Rajopadhyay and derived fro the Bank undue pecuniary benefit @ Rs.400/- p.m. during the period between July 1994 and December 1994 and thereafter @ Rs.600/- p.m. till June 1998?
6. The Enquiry Officer held that all the three questions have to be concluded against the writ petitioner. The report of the enquiry officer was given to the petitioner and on 15-08-1999, he made his submissions on the said report. In this, he had stated that since the complainant had not been examined, the truth could not be established. It was found that though the farm loan was allegedly granted to the person from whom the loan application had been obtained and evidence revealed that they have not received the amount.
7. Therefore, the submission that the loan was misappropriated by the petitioner must be rejected. Loan was sanctioned to the mother of the branch clerk ostensibly for the starting of hosiery business, the amount was withdrawn on the same day and there was no acknowledgment from the account holder and subsequently, the loan was classified as a NPA. On a consideration of the materials on record Charge Nos.1 to 3 was held to be proved The Appellate Authority by a detailed order rejected the appeal. For example, with regard to the charge relating to illegal gratification it was found that the three complainants, who appeared before the enquiry officer had testified the fact of giving bribe. The learned Single Judge found that the Management Witnesses, and Exs-1 to 5 substantiate the case against the appellant. The investigation officer who conducted the investigation had deposed in detail regarding the misconduct of the petitioner and the petitioner had in fact cross-examined him elaborately. The withdrawal slips were the documents which speak for itself and therefore, the non-examination of the cashier would not weaken the case of the respondents. The learned Judge also found that there is nothing to show co-ercion or inducement by the management to obtain the complaints. The impugned judgment has dealt with the facts and the Supreme Court decisions. The conclusion of the fact finding authorities are neither perverse nor arbitrary and their probable conclusions flow from the facts as proved by the materials on record. This is why the learned Single Judge though he had considered the material on record in detail did not exercise his power under Article 226 in favour of the petitioner. We agree with him. 1964 (5) SCR 64 (Syed Yakkoob Vs.K.S. Radhakrishnan and Others) and AIR 1996 SC 1669 (State Bank of Patiala Vs. S.K. Sharma) were cited.
(i) In AIR 1996 SC 1669(cited supra), the delinquent officer had utilised a crop loan for his own advantage and had revoked the loan on the mortgaged land, though the crop loan was not discharged. A preliminary enquiry was conducted and documents were gathered and thereafter, employees of the Bank were examined. The complainant did not appear as a witness in the regular enquiry, though his statement had been recorded during the preliminary enquiry. It was contended by the delinquent officer that his right was violated because of non-examination of witnesses and non-supply of certain documents. The Supreme Court held that the test is: whether all things taken together the delinquent officer/employee had or did not have a fair hearing.
(ii) In K.L. Tripathi Vs. State Bank of India(1984 (1) SCC 43) where a three Judge Bench held that the enquiry held and the punishment imposed cannot be said to have been vitiated on account of the non-accountability of cross examining certain witnesses.
(iii) In Managing Director Vs. B. Karunakar (1993 (4) SCC 727) and C.B. Gautham Vs. Union of India (1993 (1) SCC 78), the Supreme Court held that principles of natural justice are but the means to achieve the ends of justice and therefore, principles of natural justice cannot be basis for allowing the guilty escape. The Supreme Court summarised the principles emerging from their discussion in AIR 1996 SC 1669(cited supra), which runs as follows:
33. We may summarise the principles emerging from the above discussion. (These are by no means intended to be exhaustive and are evolved keeping in view the context of disciplinary enquiries and orders of punishment imposed by an employer upon the employee):
(1) An order passed imposing a punishment on an employee consequent upon a disciplinary/departmental enquiry in violation of the rules/regulations/statutory provisions governing such enquiries should not be set aside automatically. The Court or the Tribunal should enquire whether (a) the provision violated is of a substantive nature or (b) whether it is procedural in character.
(2) A substantive provision has normally to be complied with as explained hereinbefore and the theory of substantial compliance or the test of prejudice would not be applicable in such a case.
(3) In the case of violation of a procedural provision, the position is this: procedural provisions are generally meant for affording a reasonable and adequate opportunity to the delinquent officer/employee. They are, generally speaking, conceived in his interest. Violation of any and every procedural provision cannot be said to automatically vitiate the enquiry held or order passed. Except cases falling under no notice, no opportunity and no hearing categories, the complaint of violation of procedural provision should be examined from the point of view of prejudice, viz., whether such violation has prejudiced the delinquent officer/employee in defending himself properly and effectively. If it is found that he has been so prejudiced, appropriate orders have to be made to repair and remedy the prejudice including setting aside the enquiry and/or the order of punishment. If no prejudice is established to have resulted therefrom, it is obvious, no interference is called for. In this connection, it may be remembered that there may be certain procedural provisions which are of a fundamental character, whose violation is by itself proof of prejudice. The Court may not insist on proof of prejudice in such cases. As explained in the body of the judgment, take a case where there is a provision expressly providing that after the evidence of the employer/government is over, the employee shall be given an opportunity to lead defence in his evidence, and in a given case, the enquiry officer does not give that opportunity in spite of the delinquent officer/employee asking for it. The prejudice is self-evident. No proof of prejudice as such need be called for in such a case. To repeat, the test is one of prejudice, i.e., whether the person has received a fair hearing considering all things. Now, this very aspect can also be looked at from the point of view of directory and mandatory provisions, if one is so inclined. The principle stated under (4) hereinbelow is only another way of looking at the same aspect as is dealt with herein and not a different or distinct principle.
(4)(a) In the case of a procedural provision which is not of a mandatory character, the complaint of violation has to be examined from the standpoint of substantial compliance. Be that as it may, the order passed in violation of such a provision can be set aside only where such violation has occasioned prejudice to the delinquent employee.
(b) In the case of violation of a procedural provision, which is of a mandatory character, it has to be ascertained whether the provision is conceived in the interest of the person proceeded against or in public interest. If it is found to be the former, then it must be seen whether the delinquent officer has waived the said requirement, either expressly or by his conduct. If he is found to have waived it, then the order of punishment cannot be set aside on the ground of the said violation. If, on the other hand, it is found that the delinquent officer/employee has not waived it or that the provision could not be waived by him, then the Court or Tribunal should make appropriate directions (include the setting aside of the order of punishment), keeping in mind the approach adopted by the Constitution Bench in B. Karunakar(cited supra). The ultimate test is always the same, viz., test of prejudice or the test of fair hearing, as it may be called.
(5) Where the enquiry is not governed by any rules/regulations/ statutory provisions and the only obligation is to observe the principles of natural justice or, for that matter, wherever such principles are held to be implied by the very nature and impact of the order/action the Court or the Tribunal should make a distinction between a total violation of natural justice (rule of audi alteram partem) and violation of a facet of the said rule, as explained in the body of the judgment. In other words, a distinction must be made between no opportunity and no adequate opportunity, i.e., between no notice/no hearing and no fair hearing. (a) In the case of former, the order passed would undoubtedly be invalid (one may call it void or a nullity if one chooses to). In such cases, normally, liberty will be reserved for the Authority to take proceedings afresh according to law, i.e., in accordance with the said rule (audi alteram partem). (b) But in the latter case, the effect of violation (of a facet of the rule of audi alteram partem) has to be examined from the standpoint of prejudice; in other words, what the Court or Tribunal has to see is whether in the totality of the circumstances, the delinquent officer/employee did or did not have a fair hearing and the orders to be made shall depend upon the answer to the said query. [It is made clear that this principle (No. 5) does not apply in the case of rule against bias, the test in which behalf are laid down elsewhere.]
(6) While applying the rule of audi alteram partem (the primary principle of natural justice) the Court/Tribunal/Authority must always bear in mind the ultimate and overriding objective underlying the said rule, viz., to ensure a fair hearing and to ensure that there is no failure of justice. It is this objective which should guide them in applying the rule to varying situations that arise before them.
(7) There may be situations where the interests of State or public interest may call for a curtailing of the rule of audi alteram partem. In such situations, the Court may have to balance public/State interest with the requirement of natural justice and arrive at an appropriate decision.”
It is well settled that the High Court cannot sit in appeal over the findings recorded by the Enquiry Officer and confirmed by the Disciplinary Authority. In B.C. Chaturvedi Vs. Union of India (JT 2003 (2) SC 78: 2003 (4) SCC 364), the Supreme Court held that,
12. Judicial review is not an appeal from a decision but a review of the manner in which the decision is made. Power of judicial review is meant to ensure that the individual receives fair treatment and not to ensure that the conclusion which the authority reaches is necessarily correct in the eye of the court. When an inquiry is conducted on charges of misconduct by a public servant, the Court/Tribunal is concerned to determine whether the inquiry was held by a competent officer or whether rules of natural justice are complied with. Whether the findings or conclusions are based on some evidence, the authority entrusted with the power to hold inquiry has jurisdiction, power and authority to reach a finding of fact or conclusion. But that finding must be based on some evidence. Neither the technical rules of Evidence Act nor of proof of fact or evidence as defined therein, apply to disciplinary proceeding. When the authority accepts that evidence and conclusion receives support therefrom, the disciplinary authority is entitled to hold that the delinquent officer is guilty of the charge.”The ground of illegal ratification and falsification of records and misappropriation of funds are based on evidence and the conclusion appears to be reasonable and we are unable to find any fault in the decision making process.
(iv) In Regional Manager, U.P.SRTC Vs. Hoti Lal(2003 (3) SCC 605: 2003 SCC (L&S) 363) the Supreme Court held that,
If the charged employee holds a position of trust where honesty and integrity are inbuilt requirements of functioning, it would not be proper to deal with the matter leniently. Misconduct in such cases has to be dealt with iron hands. Where the person deals with public money or is engaged in financial transactions or acts in a fiduciary capacity, the highest degree of integrity and trustworthiness is a must and unexceptionable.
(v) In State Bank of India Vs. Bela Bagchi (2005 (7) SCC 435) the Supreme Court held thus:
“15. A bank officer is required to exercise higher standards of honesty and integrity. He deals with money of the depositors and the customers. Every officer/employee of the bank is required 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.
(vi) In Union of India Vs. Narain Singh (2002 (5) SCC 11) this Court held:
7. This Court has, in the case of Union of India v. Sardar Bahadur 1972 (4) SCC 618) held that there are limits to the powers which can be exercised by a Single Judge under Article 226 of the Constitution and, similarly, there are limits to the powers of a Division Bench while sitting in appeal over the judgment of a Single Judge. This Court has held that where there are relevant materials which support the conclusion that the officer is guilty, it is not the function of the High Court to arrive at an independent finding. It has been held that if an enquiry has been properly held the question of adequacy or reliability of evidence cannot be canvassed before the High Court.”
8. We have already recorded that just before the hearing the learned Senior Counsel appearing for the appellant prayed that the respondents may consider altering the order of compulsory retirement to one of voluntary retirement without any of the benefits to which a person who retires voluntarily is entitled. He said the appellant would be satisfied if the order alone is converted to one of voluntary retirement. This was not accepted by the respondent. We are also unable to persuade ourselves to accept this prayer and grant such a direction. The writ petitioner was found guilty of misconduct. The Supreme Court has held that such a case cannot be dealt with leniently. The order of dismissal was imposed. Only on grounds of mercy, it was altered to compulsory retirement. Compulsory retirement is a punishment provided in the Bank’s Regulations. According to the affidavit filed by the Bank, Voluntary Retirement is not a punishment. We do not think the writ petitioner who has committed a serious misconduct should get away with an order which is not a punishment and which will not cast a stigma on him. We cannot erase the stigma from his record. His conduct does not deserve any such indulgence and to allow him to voluntarily retire would virtually plug the consequences that should naturally flow from his misconduct. The writ appeal is dismissed. However, there will be no order as to costs.
(P.S.D.,J.) (K.K.S.,J.)
03-03-2009
Index: Yes/No
Internet: Yes/No
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PRABHA SRIDEVAN,J.
and
K.K. SASIDHARAN,J.
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W.A.No.1027 of 2006
03-03-2009