State Bank Of Bikaner & Jaipur vs Nemi Chand Nalwaya

STATE BANK OF BIKANER & JAIPUR .......APPELLANT

Versus

NEMI CHAND NALWAYA .....RESPONDENT

O R D E R

R. V. Raveendran J.,

The respondent was employed as a clerk in the

Kalindri branch of the appellant Bank. He was issued a

charge-sheet dated 30.8.1988. The two charges against him

are extracted below :

(i) On 14.10.1987, you disclosed the balance of SB Account No.1025 of Shri Dharamchand Nathaji lying in in-operative account to an unidentified person posing himself as the said account holder though the person was not having even Pass Book of that account. This disclosure of secrecy led a fraudulent withdrawal of Rs.6,000/- from the said account thereby putting the bank into loss.

(ii) On 14.10.1987, you have advised Shri I.M. Rawal, the counter clerk handling Savings Banks ledgers to transfer the balance lying in account number 1025 in the name of Shri Dharam Chand Nathaji from in-operative Savings Bank ledger to that of operative ledgers without first obtaining the permission of the Branch Manager which is a pre-requirement in all such cases. It is further alleged that you have collected the withdrawal form purported to have been signed by the depositor, handed over the

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same to Shri I.M. Rawal, the counter clerk, obtained token and after it was passed for payment by the Branch Manager, obtained payment from paying cashier Shri S.R. Meghwal The real depositor has subsequently complained that the signature on withdrawal form was forged and the matter is now under police investigation."

The charge-sheet followed a preliminary enquiry by one H.

S. Sharma, an officer of the appellant bank, in which the

respondent broadly admitted the facts constituting the

subject matter of the two charges.

2. A joint inquiry was held in respect of the

charges against the respondent and two others namely I.M.

Rawal and S.R. Meghwal. Several witnesses were examined.

The Inquiry Officer submitted a report dated 12.6.1989

holding that both the charges against the respondent were

proved. He also held that the charges against I.M. Rawal

and S.R. Meghwal were also proved. The disciplinary

authority considered the inquiry report. He was of the

view that on the material placed in the inquiry, the

respondent was not guilty of the first charge. He, however,

concurred with Inquiry Officer in regard to the finding of

guilt recorded in respect of the second charge. He,

therefore, issued a show cause notice dated 23.6.1990

proposing to impose the punishment of dismissal in regard

to the second charge. After considering the respondents'

reply, the disciplinary authority, by order dated 1.8.1990,

imposed the punishment of dismissal. The matter rested

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there for several years.

3. In the meanwhile, on the basis of a complaint by the

Branch Manager, a charge-sheet was filed before the Chief

Judicial Magistrate, Sirohi, in regard to the allegations

which were the subject matter of the departmental enquiry.

The criminal court acquitted the respondent by judgment

dated 7.7.1994, holding that charges were not proved beyond

doubt. Thereafter, he filed a writ petition (WP

No.5761/1994) challenging his dismissal, on the ground that

he was acquitted in the criminal case. The said writ

petition was disposed of by a brief order dated 26.5.1997

observing that he may avail the remedy of appeal and the

appellate authority may consider the explanation for delay

in submitting the appeal.

4. The respondent filed an appeal before the Appellate

Authority, with an application for condonation of delay.

The appellate authority, by order dated 7.10.1997,

dismissed the application for condonation of delay and

consequently dismissed the appeal.

5. The respondent challenged the order of the appellate

authority in WP No.450/1998. A leaned Single Judge of the

Rajasthan High Court dismissed the writ petition on the

ground that the appellate authority had not committed any

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error in dismissing the appeal on the ground of delay. The

respondent filed a special appeal and the division bench of

the High Court allowed the appeal by the impugned judgment

dated 4.4.2006. The pendency of the criminal case was

accepted as sufficient explanation regarding delay. The

division bench held that the non-filing of the appeal by

the respondent in time was due to a bona fide impression

that he could do so after the disposal of the criminal

proceedings. With reference to merits, the division bench

held that no wilful or fraudulent conduct with intention to

cause loss to the appellant Bank, nor misappropriation by

the respondent, was made out. The division bench was of

the view that the case was not one where respondent had

acted in wilful dereliction of duty; and that in an

increasing customer-friendly atmosphere in the Bank, the

respondent had acted bona fide and allowed the person

considered by him to be a valued customer to operate on the

account not realising that such person was impersonating

the account holder. The High Court was of the view that in

such circumstances, the question of loss of confidence

would not arise and the punishment of dismissal was grossly

disproportionate to the misconduct. Therefore, it set

aside the order of dismissal and directed reinstatement

with full backwages and consequential benefits. The said

order is challenged in this appeal by special leave.

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6. It is now well settled that the courts will not act as

an appellate court and reassess the evidence led in the

domestic enquiry, nor interfere on the ground that another

view is possible on the material on record. If the enquiry

has been fairly and properly held and the findings are

based on evidence, the question of adequacy of the evidence

or the reliable nature of the evidence will not be grounds

for interfering with the findings in departmental

enquiries. Therefore, courts will not interfere with

findings of fact recorded in departmental enquiries, except

where such findings are based on no evidence or where they

are clearly perverse. The test to find out perversity is to

see whether a tribunal acting reasonably could have arrived

at such conclusion or finding, on the material on record.

Courts will however interfere with the findings in

disciplinary matters, if principles of natural justice or

statutory regulations have been violated or if the order is

found to be arbitrary, capricious, mala fide or based on

extraneous considerations. (vide B. C. Chaturvedi vs.

Union of India - 1995 (6) SCC 749, Union of India vs. G.

Gunayuthan - 1997 (7) SCC 463, and Bank of India vs.

Degala Suryanarayana - 1999 (5) SCC 762, High Court of

Judicature at Bombay vs. Shahsi Kant S Patil - 2001 (1) SCC

416).

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7. When a court is considering whether punishment of

`termination from service' imposed upon a bank employee is

shockingly excessive or disproportionate to the gravity of

the proved misconduct, the loss of confidence in the

employee will be an important and relevant factor. When an

unknown person comes to the bank and claims to be the

account-holder of a long inoperative account, and a bank

employee, who does not know such person, instructs his

colleague to transfer the account from "dormant" to

"operative" category (contrary to instructions regulating

dormant accounts) without any kind of verification, and

accepts the money withdrawal form from such person, gets a

token and collects the amount on behalf of such person for

the purpose of handing it over to such person, he in effect

enables such unknown person to withdraw the amount contrary

to the banking procedures; and ultimately, if it transpires

that the person who claimed to be account holder was an

imposter, the bank can not be found fault with if it says

that it has lost confidence in the employee concerned. A

Bank is justified in contending that not only employees who

are dishonest, but those who are guilty of gross

negligence, are not fit to continue in its service.

8. Several witnesses were examined to prove the charge.

One of them was H.S. Sharma who conducted the preliminary

inquiry and to whom the respondent had made a statement

broadly admitting the facts which constituted the subject

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matter of the second charge. I.M. Rawal, who was the

cashier and I.C. Ojha, the officiating Branch Manager were

also examined. Based upon their evidence, the Inquiry

Officer found the respondent to be guilty of the second

charge and that has been accepted by the disciplinary

authority. The High Court has interfered with the said

finding without expressly holding that the said finding of

guilt was erroneous. The High Court has proceeded as if it

was sitting in appeal over the departmental inquiry and

interfered with the finding on a vague assumption that the

respondent must have acted bonafide in an "increasing

customer friendly atmosphere". There was no justification

for the division bench to interfere with the finding of

guilt.

9. The fact that the criminal court subsequently

acquitted the respondent by giving him the benefit of

doubt, will not in any way render a completed disciplinary

proceedings invalid nor affect the validity of the finding

of guilt or consequential punishment. The standard of proof

required in criminal proceedings being different from the

standard of proof required in departmental enquiries, the

same charges and evidence may lead to different results in

the two proceedings, that is, finding of guilt in

departmental proceedings and an acquittal by giving benefit

of doubt in the criminal proceedings. This is more so when

the departmental proceedings are more proximate to the

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incident, in point of time, when compared to the criminal

proceedings. The findings by the criminal court will have

no effect on previously concluded domestic enquiry. An

employee who allows the findings in the enquiry and the

punishment by the disciplinary authority to attain finality

by non-challenge, cannot after several years, challenge the

decision on the ground that subsequently, the criminal

court has acquitted him.

10. We are, therefore, of the view that the High Court was

not justified in quashing the punishment and directing

reinstatement with backwages and consequential benefits.

In fact, the order of the High Court directing back wages

amounts to rewarding a person who has been found guilty of

a misconduct.

11. However having regard to the fact that the proven

charge did not involve either misappropriation or

fraudulent conduct and the other circumstances of the case,

we are of the view that the punishment of dismissal should

be substituted by compulsory retirement, which does not

involve reinstatement.

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12. We, accordingly, allow the appeal and set aside the

judgment of the High Court. We uphold the finding of guilt

recorded by the disciplinary authority, but modify the

punishment from `dismissal' to `compulsory retirement'.

There is therefore no question of grant of any back-wages.

......................J. ( R.V. RAVEENDRAN )

New Delhi; ......................J. March 01, 2011. ( A.K. PATNAIK )