Gen.Manager,Punjab & Sind Bank & Ors vs Daya Singh

GOKHALE J. 1. This appeal seeks to challenge the judgment and order

dated 25.01.2007 rendered by a Division Bench of Allahabad High Court

allowing Civil Writ Petition No. 2846/2004 filed by the respondent. The

respondent at the relevant time in 1997-99 was working as a Manager of a

Branch of Punjab & Sind Bank in Kanpur and he was directed to be

dismissed for misconduct after a departmental inquiry vide order dated 6th

June, 2003. The respondent had challenged this order and two subsequent

orders in his writ petition to the High Court and these orders have been set

aside by the impugned judgment and order. Being aggrieved by the same,

this appeal has been filed by the General Manager (P) on behalf of Bank.

Apart from setting aside order of dismissal, High Court directed the

reinstatement of the respondent. The respondent moved a contempt petition

for non-implementation thereof. This Court vide its order dated 7th May, 2007

has stayed the contempt proceedings. Subsequently, leave was granted on

appellant's Special leave petition on 6th September, 2007. Mr. Rajiv Nanda,

learned Counsel has appeared for the appellant. The respondent has

appeared in person.

Short facts leading to this appeal

2. As stated above, the respondent was working as a Manager of the

appellant's Branch (earlier an extension counter) at Guru Nanak Girls Degree

College, Sunder Nagar, Kanpur. In a vigilance inspection, it was found on 8th

of March, 1999 that some 20 loans to the tune of Rs.16.48 lacs were

disbursed to some persons against FDRs though the FDRs were in the

names of altogether different persons. It was also seen that the withdrawals

which were allowed, were far in excess over the amounts in the FDRs. All

those entries were in the hand-writing of the respondent.

3. On 9th of March, 1999, when the Zonal Manager, Lucknow,

telephonically made further inquiries with the respondent, immediately

thereafter, the respondent left the Branch by leaving behind a letter of

voluntary retirement dated 9th March, 1999 without handing over the charge

of the articles and documents of the Branch to anybody else. He did not

report for duty any time thereafter, although a telegram was sent to him on

11th March, 1999 that he should join immediately. He was, therefore,

suspended on 12th March, 1999. An FIR was lodged on 13th March, 1999

and the respondent was arrested along with the Cashier Mr. K.P.Singh.

4.The appellant Bank issued a charge-sheet to the respondent containing

the following charges :

(i) He sanctioned demand loan against twenty non-existent

FDR's amounting Rs.16.48 Lac to the fictitious persons. Thus

he has misappropriated Rs.16.48 lac by way of sanctioning

demand loans against non-existent FDRs without any security.

(ii) He has left the Branch on 9th March, 1999 without handing

over the charge of articles and documents of Branch.

(iii) He has left his station of posting without authorization, and he

is absconding from the services since 09.03.1999.

(iv) He stands a guarantor to the loan sanctioned to M/s Mark

Tubes, at Branch office Gurgaon. The loan was sanctioned

against his surety for which he has not obtained prior

permission from the competent authority. The account turned

into NPA account and he has not made sincere efforts to

ensure the recovery of this loan amount, and

(v) He has taken guarantee of his wife named Mrs. Satvinder

Kaur who has taken a loan from Bank of India, Tilak Nagar,

New Delhi-110018 in the name of M/s Paper Products. He has

never sought a permission from competent authority for

standing as guarantor.

The inquiry could not start earlier since the respondent was in judicial

custody till December, 2001. Thereafter, a full-fledged inquiry was conducted.

5. During the inquiry, relevant documents were produced through the

concerned officers. The material produced before the inquiry officer with

respect to charge No.1 was that some 20 fictitious loans were sanctioned

against non-existent FDRs. A chart to that effect has been produced before

us as well as photo copies of the documents which were placed before the

inquiry officer. Thus in this compilation at page 21 , there is a photo copy of a

page of loan register which shows at serial number 54, an advance of a loan

of Rs.75000/- to one Rajinder Kaur against FDR Nos. 115/86 and 116/86. In

this very compilation at page No.54, there is photocopy of a page of the FDR

ledger wherein the FDR Nos. 115 and 116 are recorded. The FDR No.115 is

worth of Rs.10000/- and No. 116 is worth of Rs. 2500/- only. FDR No. 115 in

the name of one Nand Kumar whereas FDR No.116 is in the name of one

Hardeep Satija. Thus as can be seen, whereas the amounts in the two FDRs

were only Rs.12500/- together, the loan advanced was Rs.75000/- and that

too to a third party one Rajinder Kaur in whose name either of the FDRs do

not stand. The above referred two extracts of the ledger are brought on

record during the inquiry as Management Exhibits, MEX B-1 and MEX F-1.

6. These amounts are stated to have been handed over to the respondent

by the Cashier of the Bank one K.P. Singh on 18 occasions and by one Mr.

Dixit on two occasions. Mr. K.P. Singh has deposed during the departmental

inquiry. He has proved the above referred two extracts. He has stated that the

respondent used to ask him to get such cash as against FDRs and he used to

make the cash available to him. Thus in all 20 ledger entries were brought on

record and exhibited showing the withdrawals permitted to some persons and

the ledger entries showing the names of altogether different persons in whose

names the FDRs stood and also that the FDR amounts were for less than the

amount allowed to be withdrawn. The inquiry officer has dealt with this

material on record in the following words in his report :

"Presenting officer relied on MEX A 1-20 MEX BI to 10; MEX C 1 to 20,

MEX F 1 to 20 and MEX G-1 to 20. These are the documents showing all

the entries by CSO in his own handwriting. The presenting officer also

brought in MW1 to prove payments made to CSO by MW1 through

Exhibits marked MEX C 1 to C4; MEX C-6 to C-7; MEX C-11 to C-20.

Through exhibits MEX B1 to B10 presented that there were no records

through which FDRs kept as security could be proved. P.O. in his plea

brought in MEX E-1 to MEX E-3 to show that FDRs against which the

loan were raised too did not belong to borrower and one was paid to the

beneficiary on 11.07.96. P.O. argued advance was made were non-

existent."

7. Although, the respondent participated in the inquiry and filed his reply

therein as well as a detailed counter in this Court, there is no explanation

whatsoever as to how these 20 persons were given the loans when the FDRs

were not in their names and also why the loan amount is far exceeding the

amount that was deposited. The only submission of the respondent was that

when earlier inspections were carried out, no such allegation was made. He

submitted that he had increased the business at the extension counter at the

College and that is how it had become a Branch, yet his work was not being

appreciated. However, no particulars were given to pin point any mala fides.

Besides, all these entries were in his hand-writing and there was no

explanation in that behalf. As far as the deposition of Mr. K.P. Singh is

concerned, it was sought to be contended that bank officers had stood surety

for his bail and, therefore, his evidence should not be accepted. That

obviously could not be, in view of the documentary evidence, which was in his

own hand-writing and which showed that the loan advances were far more

than the amounts in the FDRs and they were given to persons other than

those in whose names, the FDRs were issued.

8. The inquiry officer, therefore, concluded in his report as follows :

`Assessment of evidence of presenting officer's and CSO weighs heavily

on P.O. side. He has produced the documents as available in the branch

and proved that advances made were having incomplete details on each

documents. The C.S.O. has based himself on premises and has nothing

to present in his defence.

On going through both written and oral evidence before me, I posed

queries before CSO, whether he can produce any evidence of FDRs from

Bank records. The answer was negative and evasive. Further query was

raised whether the borrowers could be produced to prove his contention.

The reply again was negative. Hence evaluating the document before me

and other relevant evidence, I am of the opinion that charge number 1

based on allegations 1 to 20 stands proved'.

9. Similarly, with respect to the charges Nos. 2 and 3 of his going away

from the branch on 9th March, 1999 without handing over charge and

absconding thereafter, the only submission forthcoming was that when the

Zonal Manager talked to him, he felt reprimanded and, therefore, he sent his

letter of V.R.S. There was however no explanation as to how he could walk

away without handing over the change and why he did not turn up even

though he was given a telegram to join on the duty.

10. As far as the charge number 4 and 5 are concerned, it was alleged

against him that he has stood guarantor firstly for a company in one case and

then for his wife which was done without the permission from the competent

authority. The only defence of the respondent was that there was no harm to

the bank in this, and if necessary the amount be adjusted from his retirement

benefit or otherwise after reinstatement by regular installments. This was no

explanation and this was against the service rules and hence the inquiry

officer held that the charges were proved.

11. After considering the inquiry report, the Zonal Manager who was the

disciplinary authority came to the conclusion that the respondent has

committed misconduct under Clause 3(1) and 15(v) read with Regulation

No.24 of the Punjab & Sind Bank Officers Employees (Conduct) Regulations

1981. He concurred with the findings of the inquiry officer. Therefore, by the

order dated 6th June, 2003, he imposed the penalty of dismissal from service

alongwith recovery of pecuniary loss under `Punjab and Sind Bank

officer/employees (Discipline and appeal) Regulation 1997. That order has

been subsequently confirmed in the internal appeal and in review.

12. As stated above, all these three orders were challenged in the above

writ petition in the High Court, and have come to be set aside. It was

contended on behalf of the respondent that the report submitted against him

by the inquiry officer was too sketchy and it did not contain any reasons in

support of the findings arrived at by the inquiry officer. The High Court

accepted that submission. It held that the inquiry officer merely stated in his

report that certain documents in support of each of the charges were

presented and also that the submissions of the petitioner in reply were not

tenable and therefore, the charges stood proved. The High Court held that

the documents produced were neither detailed nor their nature was

explained. It further held that there was no discussion and much less any

analysis of the evidence presented. The Court held that no specific finding

has been recorded on the basis of the evidence to establish the guilt of the

respondent. The absence of good reason was held to be in breach of the

principles of natural justice. Therefore, the order was set aside.

13. The High Court directed the appellant to reinstate the respondent

though for the limited purpose of holding the inquiry afresh. That was

following the law laid down in Managing Director ECIL Hyderabad Vs. B.

Karunakar AIR 1994 SC 1074. It directed the appellant to hold a fresh inquiry

and then to pass appropriate orders. It is this order which has been

challenged before us.

Rival Contentions

14. Mr. Nanda, learned counsel appearing for the appellant has taken us

through the material which was there before the inquiry officer and which was

also placed before the High Court and also before this Court. He has referred

to the report of the inquiry officer and as to how the charges were

established. The relevant paragraphs therefrom are already quoted above.

Mr. Nanda, therefore, raised a question - Can this report in any way be said

to be sketchy? He submitted that the inquiry officer may not have given

separate finding based on each and every document, but he has referred to

all the documents produced in the inquiry and considered them. He pointed

out that the report clearly shows that a complete co-relation was established

between the ledger entries in the loan register and the entries in the FDR

register by producing the relevant pages of both these registers. All those

entries were noted to be in the hand-writing of the respondent. It clearly

showed that in 20 cases, loans were disbursed to persons in whose name

there were no FDRs and the amounts released were far in excess. The

respondent had not disputed those entries. The inquiry officer has, therefore,

given the necessary finding and the High Court has clearly erred in holding

that no specific finding had been recorded on the basis of the evidence to

establish the guilt of the respondent. Mr. Nanda has also stated that once the

charges were established, the High Court had no jurisdiction to interfere in

the decision of the Bank authority and he relied upon the judgments of this

Court in Suresh Pathrella Vs. Oriental Bank of Commerce, AIR 2007 SC 199,

State Bank of India Vs. Bela Bagchi (2005) 7 SCC 435 and Damoh Panna

Sagar Rural Regional Bank Vs. Munna Lal Jain (2005) 10 SCC 84.

15. The respondent who appeared in person reiterated his submissions

which were made during the inquiry. He submitted that he had improved

business at the extension counter to make it a branch, that he was being

made a victim and that the documents did not establish the misconduct. On a

query from the Court he could not dispute that the relevant entries were in his

hand-writing. With a view to satisfy ourselves, we asked him as to what was

his explanation with respect to those entries. He had no particular answer to

offer. His only submission was that no borrower had been examined in

support of the allegations against him.

Resultant Conclusions

16. In view of what is stated above, it is very clear that the Bank had

taken the necessary steps to establish the misconduct before the inquiry

officer. The relevant documents including ledger entries were produced

through the concerned witnesses. The respondent fully participated in the

inquiry. He had no explanation to offer during the course of the inquiry or any

time thereafter. When all the relevant entries were in the handwriting of the

respondent, the Bank did not think it necessary to call the borrowers. In fact,

as the inquiry officer states, the respondent should have produced the

borrowers if he wanted to contend anything against the documentary

evidence produced by the Bank. In the circumstances, the conclusions

arrived at by the inquiry officer as stated above could not have been held as

without any evidence in support. The High Court has clearly erred in holding

that the documents produced were neither detailed nor their nature was

explained.

17. We are rather amazed at the manner in which the High Court has

dealt with the material on record. The Inquiry Officer is an officer of a Bank.

He was considering the material which has placed before him and thereafter,

he has come to the conclusion that the misconduct is established. He was

concerned with a serious charge of unexplained withdrawals of huge amounts

by a Branch Manager in the name of fictitious persons. Once the necessary

material was placed on record and when the charge-sheeted officer had no

explanation to offer, the Inquiry Officer could not have taken any other view.

The order of a bank officer may not be written in the manner in which a

judicial officer would write. Yet what one has to see is whether the order is

sufficiently clear and contains the reasons in justification for the conclusion

arrived at. The High Court has ignored this aspect. Absence of reasons in a

disciplinary order would amount to denial of natural justice to the charge-

sheeted employee. But the present case was certainly not one of that

category. Once the charges were found to have been established, the High

Court had no reason to interfere in the decision. Even though there was

sufficient documentary evidence on record, the High Court has chosen to

hold that the findings of the Inquiry Officer were perverse. A perverse finding

is one which is based on no evidence or one that no reasonable person

would arrive at. This has been held by this Court long back in Triveni Rubber

& Plastics vs. CCE AIR 1994 SC 1341. Unless it is found that some relevant

evidence has not been considered or that certain inadmissible material has

been taken into consideration the finding cannot be said to be perverse. The

legal position in this behalf has been recently reiterated in Arulvelu and

Another vs. State Represented by the Public Prosecutor and Another (2009)

10 SCC 206. The decision of the High Court cannot therefore be sustained.

18. As held in T.N. C.S. Corporation Ltd. vs. K. Meerabai (2006) 2 SCC

255 the scope of judicial review for the High Court in departmental

disciplinary matter is limited. The observation of this Court in Bank of India

vs. Degala Sriramulu (1999) 5 SCC 768 are quite instructive:

"Strict rules of evidence are not applicable to departmental enquiry

proceedings. The only requirement of law is that the allegation against

the delinquent officer must be established by such evidence acting upon

which a reasonable person acting reasonably and with objectivity may

arrive at a finding upholding the gravamen of the charge against the

delinquent officer. Mere conjecture or surmises cannot sustain the finding

of guilt even in departmental enquiry proceedings. The court exercising

the jurisdiction of judicial review would not interfere with the findings of

fact arrived at in the departmental enquiry proceedings excepting in a

case of mala fides or perversity i.e where there is no evidence to support

a finding or where a finding is such that no man acting reasonably and

with objectivity could have arrived at that finding. The court cannot

embark upon reappreciating the evidence or weighing the same like an

appellate authority. So long as there is some evidence to support the

conclusion arrived at by the departmental authority, the same has to be

sustained. In Union of India v. H.C. Goel (AIR 1964 SC 364, (1964) 4

SCR 718). the Constitution Bench has held:

a. "The High Court can and must enquire whether there is any

evidence at all in support of the impugned conclusion. In other

words, if the whole of the evidence led in the enquiry is

accepted as true, does the conclusion follow that the charge in

question is proved against the respondent? This approach will

avoid weighing the evidence. It will take the evidence as it

stands and only examine whether on that evidence legally the

impugned conclusion follows or not."

19. In a number of cases including State Bank of India vs. Bela Bagchi

(supra) this Court has held that a bank employee has to exercise a higher

degree of honesty and integrity. He is concerned with the deposits of the

customers of the Bank and he cannot permit the deposits to be tinkered with

in any manner. In Damoh Panna Sagar Rural Regional Bank's case (supra)

the Manager of a Bank who had indulged in unauthorized withdrawals,

subsequently returned the amount with interest. Yet this Court has held that

this conduct of unauthorized withdrawals amounted to a serious misconduct.

Same is the case in the present matter. There was a clear documentary

evidence on record in the handwriting of the respondent which established his

role in the withdrawal of huge amounts for fictitious persons. The ledger

entries clearly showed that whereas the FDRs were in one name, the

withdrawals were shown in the name of altogether different persons and they

were far in excess over the amounts of FDRs. The respondent had no

explanation and, therefore, it had to be held that the respondent had

misappropriated the amount. Inspite of a well reasoned order by the Inquiry

Officer, the High Court has interfered therein by calling the same as sketchy.

The High Court has completely overlooked the role of the bank manager as

expected by this Court in the aforesaid judgments.

20. In these facts and circumstances, we allow this appeal and set aside the impugned

judgment and order passed by the Division Bench of the Allahabad High Court. The

petition filed by the respondent in the High Court will stand dismissed. Consequently,

contempt proceedings initiated by him will also stand dismissed.