JUDGMENT
Kumar Rajaratnam, J.
1. The management being aggrieved by the order dated 20-3-1998 passed by the learned Single Judge in W.P. No. 16162 of 1982 has preferred this writ appeal questioning the jurisdiction of the Court to alter the punishment rendered to the employee on a grave misconduct from one of dismissal to one of removal from service to enable the employee to receive his terminal benefits.
2. The 1st respondent was working as Branch Manager, Nagpur Branch of Corporation Bank from 1976 to 1978. The management (Bank) found several irregularities and illegalities committed by the 1st respondent during his tenure of his office as Nagpur Branch Manager. A show-cause notice dated 29-1-1979 (Annexure-M) was issued pointing out the various irregularities and illegalities. The 1st respondent submitted his reply to the same. The management was not satisfied with the explanation and held a domestic enquiry. Even though sufficient opportunity was given to the 1st respondent, he deliberately did not participate in the enquiry. The enquiry was conducted ex parte. The 1st respondent faced 29 serious charges of misconduct. The Enquiry Officer found all the charges proved except Charge Nos. 9, 21, 23 and 26.
3. The 1st respondent was found guilty of committing acts prejudicial to the interest of the Bank, gross negligence, misuse of discretionary powers, manipulation of records and credit facilities and favoured credit facilities to persons contrary to the Bank instructions.
4. A show-cause notice was issued as per Annexure-B to the 1st respondent along with the enquiry report dated 31-10-1980. The 1st respondent sent his explanation. The Disciplinary Authority independently considered the matter and passed an order of dismissal dated 9-2-1981 dismissing the 1st respondent from service.
5. The 1st respondent kept quiet for 10 months after receipt of the order and filed an appeal belatedly on 12-1-1982. The appeal was dismissed on 25-1-1982, as it was filed belatedly.
6. The 1st respondent filed the Writ Petition No. 16162 of 1982 against the order of dismissal dated 9-2-1981 and endorsement dated 25-1-1982. The writ petition was disposed of by the learned Single Judge on 3-8-1993. Aggrieved by the order of the learned Single Judge, the 1st respondent preferred W.A. No. 1425 of 1994. The Division Bench of this Court in W.A. No. 1425 of 1994 on 5-6-1984 remanded the matter for fresh disposal to the learned Single Judge.
7. The learned Single Judge heard the matter on 12-12-1994 and reserved it for judgment. Ultimately by judgment dated 20-3-1998 (M. Ramesh Kamath v. The Corporation Bank, Mangala Devi Temple Road, Mangalore and Ors., 1998(4 )Kar. L.J. 426) the writ petition was allowed by the learned Single Judge granting certain reliefs to the 1st respondent.
8. Aggrieved by the order dated 20-3-1998 (M. Ramesh Kamath’s case, supra) passed by the learned Single Judge the management (Bank) is before us in this writ appeal.
9. We are not concerned in this writ appeal as to why there is an inordinate delay in disposing of the writ petition. The learned Single Judge has explained the delay at the very outset.
10. We shall straightaway in this writ appeal deal with the nature of misconduct committed by the 1st respondent and determine whether it
was permissible for the learned Single Judge to interfere with the punishment rendered by the Disciplinary Authority.
11. We have perused the records. The gamut of the charges are serious.
12. The charges related to grant of loans to the tune of Rs. 7,10,838.26/- in excess of discretionary powers given to the Manager, permitting account; holders to overdraw their account far in excess of sanctioned limits, allowing credit facilities to various customers in excess of powers delegated to the delinquent, extending credit facilities without obtaining security and in some cases overvaluing the securities.
13. The charges go on endlessly and the total amount involved in the alleged misconduct is over rupees forty lakhs.
14. The learned Single Judge curiously and erroneously took a lenient view. The learned Single Judge at paragraph 10 of the judgment states that this is a rather unusual case and therefore qualifies for unusual reliefs. The learned Single Judge further holds that normally in the facts of the present case writ petition is bound to be dismissed. The learned Single Judge then proceeds to state that the delinquent had not been formally suspended during the pendency of the enquiry, but goes on to record that the delinquent was unauthorisedly absent.
15. We fail to understand firstly, how a person can be placed under suspension when it is the admitted case that he was unauthorisedly absent. Secondly, the question of granting subsistence allowance during the period of suspension did not arise for consideration before the learned Single Judge.
16. The learned Single Judge granted full salary and allowance payable to the petitioner from 29-1-1979 to 9-2-1981 and also directed the Bank to pay interest on the amount only on the ground that a formal order of suspension was not made during the pendency of the enquiry.
17. The learned Single Judge fell in error when he ordered full salary and interest on salary to be paid during the period of suspension, since this was not the subject-matter of the writ petition. The relief of salary during the period of suspension was only a consequential relief sought in the writ petition if the dismissal order is set aside. There was no independent prayer in the writ petition to seek arrears of salary during the period of unauthorised absence.
18. What was required to be seen was whether the Bank had complied with the rules and complied with the principles of natural justice while conducting the enquiry.
19. The learned Single Judge again fell in error in altering the punishment on number of grave charges of misconduct involving pecuniary loss to the Bank to the tune of rupees forty lakhs. The learned Single Judge concluded the judgment with the following observations at paragraphs 11, 12 and 13 of the judgment.–
“1 have very carefully examined the charges levelled against the petitioner, the amounts of money involved and the explanations put forward by the petitioner. While the Bank was justified in having instituted disciplinary proceeding’s against him, the gravity of the charges is not serious enough to have warranted an order of dismissal. The petitioner has demonstrated that his track record was good but this cannot justify acts of subsequent misconduct. The well-settled principle of law that the punishment awarded must be a very clear and fair nexus to the gravity of the misconduct and the established charges would not justify the passing of a dismissal order in the present case. To my mind, an order of removal from service or discharge from service would have been the correct and appropriate order and this being the position, it would make some difference insofar as the petitioner would be entitled to receive his terminal benefits. The respondents are directed to compute this amount and to pay over the same to the petitioner along with interest calculated in the same manner as indicated by me earlier within an outer limit of twelve weeks from today.
12. In the result, the petition partially succeeds. The order or dismissal passed against the petitioner is modified to one of removal from service and consequently, the petitioner would be entitled to receive his terminal benefits. For the reasons earlier indicated by me, petitioner would also be entitled to receive his full salary and allowances along with deemed promotions, if any for the period from 29-1-1979 to 9-2-1981 along with interest to be computed in the manner as indicated earlier. The Bank shall be required to compute these amounts and to pay over the same to the petitioner within an outer limit of twelve weeks from today. I need to clarify that on the amounts payable to the petitioner there would undoubtedly be the question of deduction of tax at source. It is open to the petitioner to inform the Bank within the period of twelve weeks, as to what would be the most beneficial manner in which the tax should be deducted in his case and the Bank shall accordingly follow this request.
13. The petition partially succeeds. In the facts and circumstance of this case, the petitioner shall be entitled to costs of the petition computed at Rs. 2,000/-“.
20. On a perusal of the judgment of the learned Single Judge it is clear that the learned Single Judge also realised the seriousness of the charges and that is why the learned Single Judge confirmed the finding of guilt.
21. Having done that, the learned Single Judge fell in serious error in altering the punishment and ordering payment of salary for the period of suspension.
22. Mr. Rajagopal, learned Counsel tor the Branch Manager, 1st respondent, submitted that although no appeal was filed by the Branch Manager, he would be entitled to reagitate the matter on merits before the Court.
23. We are not able to persuade ourselves to accept such a submission.
24. Mr. Rajagopal, learned Counsel for the Branch Manager (1st respondent) relied on a judgment of the Supreme Court in Anil Kumar Gupta and Ors. v. Municipal Corporation of Delhi and Ors., : wherein the Supreme Court held that it was open to the respondents to assail the adverse findings arrived at or observations made by the High Court even if they had not filed a separate appeal against that part of the judgment. It was open to the respondents to contend that the findings or observations are not correct.
25. Reliance was also placed on the judgment of the Supreme Court in Thepfulo Nakhro Angami v. Smt. Ravoluei alias Rani M. Shaiza, wherein the Supreme Court pronounced that the respondent is entitled to support the judgment of the High Court without preferring an appeal against an order made against him if the ultimate decision in the petition is in his favour.
26. Reliance was also placed by the Counsel for the Branch Manager (1st respondent) on the judgment of the Supreme Court in J.K. Cotton Spinning and Weaving Mills Company Limited v. Collector of Central Excise, and on the Division Bench judgment of the Patna High Court in Akhleshwar Singh v. Bihar State Co-operative Land Development Bank and Ors., 1995-II-LLJ-1230(Pat.)
27. It would not be open for the 1st respondent to submit that the enquiry was defective in the absence of any appeal by the respondent.
28. Even assuming for a moment that such an extraordinary theory is permissible (as it is permissible in a criminal case where the State files an appeal for enhancement of sentence, it is permissible for the accused to argue on merits) we have carefully perused the records and find that there is not an iota of doubt that the charges are grave and serious and involves huge financial misappropriation and mismanagement and there is no flaw in the enquiry.
29. The 1st respondent is the Senior Manager of the Bank and was entrusted with enormous powers which has been misused to the detriment of the Bank. He is no ordinary peon or clerk to claim clemency. The charges are too serious for any sympathy to be shown.” If such sympathy is to be exercised in favour of a Manager who holds high position in the Bank the confidence of the public will be eroded in the functioning of the Bank.
30. Although the enquiry was an ex parte it can be safely said that the Bank Manager (1st respondent) refused to participate in the proceedings after being served with notice. He literally scooted from the Bank during enquiry and came back into the scene only after the enquiry was over. No doubt he submitted his explanation to the charges. He also submitted his explanation to the findings of the Enquiry Officer. Therefore, it cannot be said that opportunity was not given to the Bank Manager to defend himself before the enquiry.
31. Ultimately, the only question to be considered by this Court is whether the Court has power to review the punishment in the case of a serious misconduct while exercising power of judicial review under Article 226 of the Constitution of India.
32. The Supreme Court in State Bank of India and Ors. v. Samarendra Kishore Endow and Anr, has pronounced that in the matter of imposition of punishment of penalty which can be lawfully imposed on the proved misconduct of the employee, Tribunal or the High Court has no power to substitute its own discretion for that of the Disciplinary Authority.
33. The Supreme Court had occasion to deal with a similar matter which is before us. The Supreme Court in Disciplinary; Authority-cum-Regional Manager and Ors. v. Nikunja Bihari Patnaik, dealt with the conduct of a Branch Manager of a Bank. In Patnaik’s case, supra, the High Court held that if the Bank Manager was guilty of doing many acts beyond his authority and it was not established that it was done with any ulterior motive or for any extraneous consideration and the Enquiry Officer found that there was no financial loss, the delinquent is entitled to be absolved.
34. The Supreme Court overturned the judgment of the High Court and held that once the High Court accepted the finding of the Disciplinary Authority it was impermissible for the High Court to disturb the punishment especially in the case of a Bank Manager on whom the entire functioning of the branch depends. The Supreme Court pronounced at paragraphs 7 and 8 as follows.–
“7. It may be mentioned that in the memorandum of charges, the aforesaid two regulations are said to have been violated by the respondent. Regulation 3 requires every officer/employee of the Bank 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. It requires the officer/employee to maintain good conduct and discipline and to act to the best of his judgment in performance of his official duties or in exercise of the powers conferred upon him. Breach of Regulation 3 is “misconduct” within the meaning of Regulation 24. The findings of the Inquiry Officer which have been accepted by the Disciplinary Authority, and which have not been disturbed by the High Court, clearly show that in a number of instances the respondent allowed overdrafts or passed cheques involving substantial amounts beyond his authority. True, it is that in some cases, no loss has resulted from such acts. It is also true that in some other instances such acts have yielded profit to the Bank but it is equally true that in some other instances, the funds of the Bank have been placed in jeopardy; the advances have become sticky and irrecoverable. It is not a single act; it is a course of action spreading over a sufficiently long period and involving a large number of transactions. In the case of a Bank – for that matter, in the case of any other organisation – every officer/employee is supposed to act within the limits of his authority. If each officer/employee is allowed to act beyond his authority, the discipline of the organisation/Bank will disappear; the functioning of the Bank would become chaotic and unmanageable. Each officer of the Bank cannot be allowed to carve out his own little empire wherein he dispenses favours and largesse. No organisation, more particularly, a Bank can function properly and effectively if its officers and employees do not observe the prescribed norms and discipline. Such indiscipline cannot be condoned on the specious ground that it was not actuated by ulterior motives or by extraneous considerations. The very act of acting beyond authority -that too a course of conduct spread over a sufficiently long period and involving innumerable instances – is by itself a misconduct. Such acts, if permitted, may bring in profit in some cases but they may also lead to huge losses. Such adventures are not given to the employees of Banks which deal with public funds. If what we hear about the reasons for the collapse of Barings Bank is true, it is attributable to the acts of one of its employees, Nick Leeson, a minor officer stationed at Singapore, who was allowed by his superiors to act far beyond his authority. As mentioned hereinbefore, the very discipline of an organisation and more particularly, a Bank is dependent upon each of its employees and officers acting and operating within their allotted sphere. Acting beyond one’s authority is by itself a breach of discipline and a breach of Regulation 3. It constitutes misconduct within the meaning of Regulation 24. No further proof of loss is really necessary though as a matter of fact, in this case there are findings that several advances and overdrawals allowed by the respondent beyond his authority have become sticky and irrecoverable. Just because similar acts have fetched some profit – huge profit, as the High Court characterises it – they are no less blameworthy. It is wrong to characterise them as errors of judgment. It is not suggested that the respondent being a Class I officer was not aware of the limits of his authority or of his powers. Indeed, Charge 9, which has been held established in full is to the effect that in spite of instructions by the Regional Office to stop such practice, the respondent continued to indulge in such acts. The Inquiry Officer has recorded a clear finding that the respondent did flout the said instructions and has thereby committed an act of disobedience of lawful orders. Similarly, Charge 8, which has also been established in full is to the effect that in spite of reminders, the respondent did not submit “Control Returns” to the Regional Office. We fail to understand how could all this be characterised as errors of judgment and not as misconduct as defined by the regulations. We are of the opinion that the High Court has committed a clear error in holding that the aforesaid conduct of the
respondent does not amount to misconduct or that it does not constitute violation of Regulations 3 and 24.
8. We must mention that Sri V.A. Mohta, learned Counsel for the respondent, stated fairly before us that it is not possible for him to sustain the reasoning and approach of the High Court in this case. His only submission was that having” regard to the age of the respondent (37 years) and the facts and circumstances of the case, this Court may substitute the punishment awarded to the respondent by a lesser punishment. The learned Counsel suggested that any punishment other than dismissal may be imposed by this Court. We considered this request with the care it deserves, but we regret that we are unable to accede to it. The learned Counsel for the Bank, Shri V.R. Reddy, Additional Solicitor General, also stated, on instructions of the Bank, that it is not possible for the Bank to accommodate the respondent in its service in view of his conduct”.
(emphasis supplied)
35. The Supreme Court in Union of India and Ors. v. Narain Singh, pronounced that it was not for the Court to determine the quantum of punishment once the charges are proved and it was not for the Court to interfere with the punishment on the misplaced grounds of sympathy or mercy.
36. The act of misconduct committed by the Branch Manager, 1st respondent is grave and serious and in our view it cannot be held that the punishment of dismissal is not commensurate with the charges.
37. In the result the writ appeal is allowed and the order of the learned Single Judge is set aside. There will be no order as to costs.