Baldev Raj Mahi vs Punjab National Bank

Ajay Tewari, J.—By this petition the petitioner has challenged the imposition of punishment of compulsory retirement upon him. Charge sheet was issued to the petitioner containing the following charges:-

CHARGE-1

A) Shri Mahi has sanctioned Term Loan (Education) loan of Rs. 4.00 lacs (Ac No. JB 4) for pursuing Diploma Course in favour of Shri Suresh Madan and Shri Vishal Madan on 15.10.2007 and has committed the following irregularities:

a) He has sanctioned Term loan (Education) loan of Rs. 4.00 lacs for pursuing diploma course without seeking prior administrative clearance

from the competent authority.

b) He has provided false information to the competent authority for getting his action confirmed. It was informed vide his letter dated 23.11.2007 that the loan is secured by way of lien on FDR of Rs. 5.00 lacs, whereas, no such FDR was available as, security in the account. Further, no such FDR was ever issued by the branch.

Balance outstanding in the loan account as on 05-08-2009 is Rs. 372047.50p:

B)

(I) Shri Mahi has issued fake certificate dated 11.02.2009 conveying sanction, of Education Loan of Rs. 14.00 lacs and Overdraft limit of Rs. 13.50 lacs favouring Smt. Tanudeep Kaur, Sukhwinder Singh & Ballit Singh, whereas no such Education loan and Overdraft limit was sanctioned in the books of the branch.

(II) During the course of investigation in the Matter referred B(i) above through Shri G.L. Sharma Senior Manager, BO:Mahilgelan, Shri Parveen of M/s. Vision Way, Nawashehar has given in writing to Shri G.L. Sharma that Shri Mahi charged 4 % as bribe for the total amount of sanction letters handed over by him to Shri Parveen.

C) Australian High Commission, New Delhi asked for verification of the FD account No. PR- 2076 issued on the leaf with printed Serial Number SVQ 949341 of Rs. 25 lacs by BO: Usmanpur in favour of Smt. Shashi Verma W/o. Shri Love Kishore Verma. On perusal of the record, it has been found that Shri Mahi has issued the fake FDR, the original leaf of which bearing serial number SVQ 949341 is still in the custody of the branch and no such FDR has been issued by the branch.

D) Shri Mahi has issued two fake sanction letters dated 13.01.2008, first for sanction of Education Loan of Rs. 6.50 lacs for pursing Diploma Course at New Zealand and second issued for sanction of OD limit of Rs. 3.50 lac,both in favour of Mrs. Prabhjot Kaur d/o. Sh. Davinder Singh against the security of sanction of Equitable mortgage of residential house, whereas no such Education loan has been sanctioned in the books of Bank in favour of Mrs. Prabhjot Kaur and also no Equitable mortgage of house has been created.

E) He has Sanctioned Education loan of Rs. 3.00 lacs on 10.06.2007 to Smt. Taranjit Pabla and Neelam against the security of Mortgage of Residential House property worth Rs. 4528943/- and has issued the Education loan sanction letter to Sh. Taranjit Pabla, whereas no mortgage of house has been created in favour of the bank and he has got confirmed his action from the then Senior Regional Manager, Jalandhar giving false information of creation of Equitable Mortgage. F) As per the scheme for Education Loan, the branch nearest to the place of domicile of student was required to consider the proposal, but Shri Mahi sanctioned the education loans at far off places in violation of bank''s guidelines.

CHARGE II

A. Overdraft A/c No. 3500009300001562 - Rakesh Kumar S/o. Sh. Tirath Ram

Shri Mahi has sanctioned overdraft limit of Rs. 470000/- on 12.12.2008 in favour of Sh. Rakesh Kumar S/o. Sh. Tirath Ram against FD account No. PR-1591 (Receipt No. SVQ 949220) dated 11.12.2008 for Rs. 510000/- Rakesh Kumar S/o. Tirath Ram and has committed the following irregularities:-

(i) Although FD account No. PR-1591 bearing receipt No. SVQ 949220 dated 11.12.2008 of Rs. 510000/- is enclosed along with above said loan documents but no entry and balance of Rs. 510000/- has been found in the system. The account No. FD PR.-1591 has been opened with ZERO balance on 11.12.2008. It clearly indicates that the FD receipt held alongwith loan documents is issued without any deposit in the account and creating clean overdraft in the account in contravention of bank guidelines i.e. without any deposit of Rs. 510000/- with the bank.

(ii) The above said OD limit has been sanctioned for Rs. 4,70,000/, whereas, the account was opened in the system for Rs. 471000/- and Overdraft agreement on PNB 727A has been got executed for Rs. 471750/-.

B) OD A/c No. 3500009300001359 - Gurmeet Singh S/o. Bhagat Singh

I) He has issued fake Education can sanction letter of Rs. 6.00 lacs dated 15.07.2007 to Shri Amrik Singh S/o. Shri Qui-mit Singh, VPOLasra, Tehsil Phillaur against the security of Equitable Mortgage of residential house worth Rs. 1332500/-, whereas no such loan has been sanctioned in the books of the Bank and also no such Equitable mortgage has been created in favour of the bank.

II) Shri Mahi got issued the draft in foreign currency i.e. Aus Dollars 10930 from BO GT Road, Phagwara in favour of Perth Institute of Business and Technology, by issuing TPO No. 1/2008 dated 15.01.2008 for Rs. 391201/- from BO: Usmanpur. An Overdraft limit of Rs. 4.50 lacs was sanctioned on 15-01-2008 against FOR of Rs. 5.00 lacs to Shri Gurmeet Singh. He debited Rs. 91301/- in the said CAOD account No. 3500009300001359 but in the letter sent alongwith the TPO he submitted wrong/false information that the amount was debited to Education Loan of Sh. Amrik Singh and Gurmeet Singh, whereas no such Education loan has been sanctioned in the branch. Thus he has misled the BO GT Road Phagwara for getting the draft in foreign currency and helped in remittance of funds in violation of RBI Guidelines.

C) OD ACCOUNT 3500009300001517 to Sh. Santokh Singh Against FDR no P-R 1476 dated 02-12-2008 of Rs. 9.00 Lacs, an overdraft of Rs. 832500/- was allowed to Shri Santokh Singh on 03-12-2008 without execution of any loan documents and the overdraft amount was credited in SF account of Shri Santokh Singh bearing No. 3500000106037083. After depositing another sum of Rs. 125000/- on 03.12.2008, another FDR of Rs. 950000/- was issued on 04-12-2008 and overdraft of Rs. 878500/- was sanctioned on the same day against this FOR and was places in saving fund account of Shri Santokh Singh referred above. Thus he committed the following irregularities:

I) He has allowed clean overdraft of Rs. 8,32,500/- on 03-12-2008 to Shri Santokh Singh without execution of loan documents.

II) By transferring the proceeds of abovesaid clean overdraft up to the extent of Rs. 832500/- and cash deposit of Rs. 125000/- in saving fund account No. 3500000106037083 of Shri Santokh Singh, he has issued FD account No. PR-1519 for Rs. 9,50,000/- on 04-12-2008 in favour of Shri Santokh Singh against which overdraft was permitted for a sum of Rs. 878500/- on the same day thus violating Bank''s guidelines.

III) Thus he also inflated both deposits and advances which resulted in to window dressing of business figures.

CHARGE-III

1) Sh Mahi sanctioned undernoted CC (Book debt.) limits without conducting detailed pre-sanction appraisal:

Shri Mahi has committed the following irregularities in the above mentioned accounts:

a) He has sanctioned C.C. (Book-debts) limits to accounts No. CC-1 and CC-2 beyond his vested loaning powers.

b) Shri Mahi has allowed overdrawing to the above mentioned parties beyond his vested loaning powers. The fact regarding allowing such over accommodation to the above mentioned parties was never reported by him to the competent authority and confirmation of his action in having allowed such over accommodation was not sought within the prescribed time schedule as per extent guidelines of the Bank.

c) Both the firms are concerns as Smt. Kamaljit Kaur is common in both the firms and the fact has not been disclosed in the sanction note.

2) Sh. Mani has sanctioned the CC (BD) limits to the following allied concerns without conducting detailed pre-sanction appraisal and has disbursed the same without taking any post sanction safeguards.

Shri Mahi has committed the following irregularities in the above mentioned accounts:

a) Out of above three CC accounts, two accounts mentioned at CC-3 and CC-4 are of the same parties which were closed on 05-11-2007. All the above three firms are allied firms/family concerns to each other with Smt. Kamaljit Kaur as the common partner in account No. CC-3 and 4 and Shri Tara Singh as common partner in A/c. No. CC-3 and CC-5. Shri Mahi has sanctioned the limits beyond his vested loaning powers. He also gave false information in the limit sanctioned statement for. November 2007 by incorporating the above limits sanctioned under super trade category instead of actual sanctioned as CC (Book- debts) limits.

b) He failed to obtain requisite financial data, Income tax returns, VAT returns etc. and has also not conducted Credit risk rating. He failed in preparing of CRs on borrowers/guarantors before sanctioning of credit facilities. Also no Board Note/PBF note was prepared.

c) In account No. CC-3 of M/s. Dasondhi Ram Pawan Kumar, recommendations of IInd man in the branch has not been obtained.

d) The loan documents have not been got executed as per the extent guidelines of the Bank.

e) Sh Mahi did not obtain any collateral security in the abovesaid accounts in contravention to HO guidelines''.

f) Sh Mahi has permitted frequent overdrawing in the above mentioned accounts up to the maximum extent of Rs. 7.85 lacs, Rs. 8.08 lacs and Rs. 8.13 Lacs respectively beyond his vested loaning powers without reporting and getting his action confirmed from the competent authority.

g) The above said CC accounts i.e. CC-3, CC-4 and CC-5" were adjusted on 24.12.2007 unauthorizedly by debiting three entries to Sundry Bill account aggregating to Rs. 438336/- ( Rs. 798394/- + 815529/- + 824413/-) and affording credit to CC-3 for Rs. 798394/- of Dasondi Ram Pawan Kumar, CC-4 of Sanjeev Kumar Sachin Kumar for Rs. 815529/- and CC-5 of Punjab Trading Company for Rs. 824413/. Debit and credit transfer vouchers weft: also not got signed from the parties concerned.

On the same day, Shri Mahi again allowed availment to these parties by opening new CC accounts i.e. CC-6, CC-7 and CC-8 with per detail hereunder:

3) Shri Mahi has committed the following irregularities in the above mentioned accounts No. CC-6, CC-7 and CC-8:

The three entries of Sundry Bills account aggregating to Rs. 2438336/- ( Rs. 798394/- + 815529/- + 824413/-) created on 24-12-2007 were adjusted to the extent of Rs. 18.75 lacs by allowing availment in the above mentioned three CC accounts i.e. in CC-6, CC-7 and CC-8 of Rs. 6.25 lass each. The remaining amount of Rs. 563836 in Sundry Bill account was adjusted as per details hereunder:

Shri Mahi has acted unauthorisedly for creation and adjustment of three entries in sundry bills accounts aggregating to Rs. 2438336/- in contravention to Banks Guidelines.

a) All the above three firms are allied firms to each other and allowing credit limits to these parties was not within the vested loaning powers of Shri Mahi. Allowing such over unauthorized authority was not reported to the competent sanctioning authority'' and case for confirmation of such action has also not been got confirmed from the competent authority.

b) Shri Mahi had not reported the above accounts in the relevant Limit sanctioned statement to the then Regional Office, Jalandhar. Frequent overdrawing was also allowed which was not reported to controlling Regional Office.

c) The conduct of all the three accounts is not satisfactory and accounts are running irregular.

d) He has not obtained any collateral security in these CC Accounts and the creation of primary security is also not established.

e) He created bogus/fake account of Sundry Bills thus violating Bank''s guidelines.

CHARGE-IV

K.C.C. ACCOUNTS

He sanctioned following KCC Loans

1) A/c No. KCC 86-12162 Balbir Singh for Rs. 5.00 lacs Date of advance 11.03.2005 The limit was sanctioned on 11.03.2005 for Rs. 5.00 lacs. At the request of the party and as per office note the limit was reduced from Rs. 4.00 Lacs to Rs. 5.00 Lacs w.e.f. 17.05.2005 but the limit was not reduced in system and party is allowed to avail the limit up to the level of Rs. 4.00 lacs. The Balance outstanding in the account is Rs. 3.92 lacs as on 07.09.2009.

2) A/c no KCC 86-1349 Baljit Kaur W/o. Harvinder Singh and others for Rs. 5 lac. Date of Advance: 30.06.2007. He sanctioned KCC limit of Rs. 5 lac on 30.06.2007 in favour of Baljit Kaur, Resident of Village Hussainpura and Pawan Kumar; Saniv Kumar and Sachin Kumar S/o. Dev Raj residents of Village Shah Pur Patti and has committed following irregularities

a) Revenue record (Fard Jamabandi and Faid Hakiat) showing the ownership of agri. Land measuring 75 kanal 10 Marlas of Smt. Baljit Kaur and 6 kanals 8 marlas of Sanjiv Kumar, Pawan Kumar and Sachin Kumar.

As per certificate given by Halqa Patwari, the land holding of Smt. Baljit Kaur Shri Harwinder Singh is bogus/fake. Total land holding of the other co-borrowers as stated above is only 6K 8M. Thus he sanctioned KCC limit of Rs. 5.00 lacs against the land holding of 6 kanal 8 marlas in violation of Bank''s Guidelines. Thus he unauthorisedly accommodated the parties. Present outstanding in he account is Rs. 590897/- and the account is running irregular.

b) He did not to adhere to the KYC norms of Smt. Baljit Kaur as no photograph, photo ID proof, proof of residence address etc, are held on record.

c) Most of the vital columns of Loan application PNB 762 are incomplete and photographs of the borrowers not affixed on the loan application.

CHARGE-V

HOUSING LOANS

1) H/Loan No. NC 102 Sh. Vipan Soni and Anjali Soni

a) He sanctioned Housing loan of Rs. 3.00 lacs on 29.12.2006 for carrying out Repair and Renovation of existing House situated behind Sitla Mandir, Banga. The charge on property has not been created.

b) The loan mentioned at (a) above has not been utilized for the purpose for which it was sanctioned. He disbursed the loan for purchase of plot instead of carrying out repair and renovation of the house for which the loan was sanctioned.

c) Out of above loan of Rs. 3.00 lacs sanctioned for repair and renovation of house, he disbursed Rs. 240000/- on 20.03.2007 and has given the draft of Rs. 360000/- including borrower''s margin of Rs. 120000/- to Shri Vikas Kumar S/o. Shri Gulab Mal on 20.03.2007 for purchase of plot from Shri Surjit Singh through his General Power of Attorney holder Shri Vikas Kumar. However, the charge on property has not been got created.

d) The borrower is resident of Banga town, which is about 30 Kms. from BO: Usmanpur thus he has violated the bank''s norms/guidelines with regard to financing within command area.. Present balance outstanding as on 07.09.2009 in the A/c is Rs. 112997/-.

2) Housing Loan A/c No. NC-12-Smt. Gurdev Kaur

The above borrower was sanctioned housing loan or Rs. 4.50 lacs on 30.03.2006 for construction of house. As per the extant guidelines of the bank, the loan was to be disbursed in stapes looking in to the progress of Construction of house but he has allowed entire disbursement of Rs. 4.50 lacs on 30.03.2006 in one stroke in violation to Bank''s guidelines. He has also failed to verify the end use of funds released and did not obtain completion certificate from Bank''s approved Architect, Present balance outstanding as on 07.09.2009 in the account is Rs. 528212/- and account is running irregular.

In all the above accounts(Housing loan account No. NC-102 and NC-12) he did not prepare RBL score sheet to assess the eligibility of the borrowers. Shri Mahi has also not obtained the Valuation Certificate of IPs.

CHARGE - VI

CAR LOANS

1) A/c No. NG-5185. Amarjeet Singh - Date of Advance 07.02.2008 Rs. 1.48 lacs Balance outstanding as on 07-09-2009 Rs. 1.13 lacs Registration certificate held on record is not in the joint name i.e. in the name of the borrower/our Bank.

2) A/c No. NG-5194 Sushil Kumar Date of Advance 20.02.2008 Rs. 2.50 lacs Balance outstanding as on 07-09-2009: Rs. 1.80 lacs. He failed to obtain the copy of joint registration certificate of the vehicle.

CHARGE-VII

(A) He allowed Clean Overdraft in SF A/c No. 01-6031308 on different dates beyond his vested powers in contravention to H.O. guidelines, the detail of which is as under:-

In none of the above mentioned cases, he moved for confirmation of his action from the competent-authority and has violated the bank''s guidelines.

3) FD A/c No. 776 dated 14.08.2008 for Rs. 50000.00 favouring Mr. Nirmal Singh and Smt. Gurdial Kaur. He issued fake FD receipt no SVQ 949142, (account No. PR- 776) dated 14-08-2008 for Rs. 50000/- but FD account was opened with ZERO balance since inception in the system, which is in contravention to H.O. guidelines.

(C)

Shri Mahi issued No due certificates for release of mutated land mortgaged in above accounts even though debit balance is outstanding.

Due to the above mentioned lapses on the part of Shri Mahi, he has not only misutilised his official status but has violated Bank''s laid down procedure/guidelines to accommodate different parties unauthorisedly and has put huge funds of the bank at stake.

For charges No. 1, 1-B, 1-C and 1-D the inquiry officer found him not guilty. With regard to charges 1-E and 1-F the petitioner was found partially guilty and with regard to all other charges he was found guilty. The disciplinary authority agreed with the contentions of the inquiry officer regarding the charges for which the petitioner had been found guilty but in addition also found the petitioner guilty of charge No. 1-B, 1-C, 1-D and also did not accept that with regard to charge No. 1-E and 1-F the petitioner was only partially guilty and held him fully guilty and, as mentioned above, imposed upon him the punishment of compulsory retirement.

Learned counsel for the petitioner has argued that with regard to the charges in respect of which the disciplinary authority had a difference of opinion with the inquiry officer it was necessary to have issued a second show cause to the petitioner. Further he has argued that if there had been no difference of opinion the punishment of compulsory retirement may not have been imposed. His third argument is that this punishment has been imposed under the ''advice of the Chief Vigilance Officer'' i.e. the argument is that copies of various suggestions given by various authorities with regard to punishment were not given to the petitioner. In the circumstances the prayer made is for setting aside the punishment order and directing the disciplinary authority to reconsider the matter.

In my opinion even if arguments No. 1, 3 and 4 are accepted the petitioner would still not be entitled to any relief for the simple reason that the charges in respect of which the petitioner was found guilty by the inquiry officer are extremely serious. In Union of India (UOI) and Another Vs. S.S. Ahluwalia, , the Hon''ble Supreme Court held as follows:-

.... The scope of judicial review in the matter of imposition of penalty, as a result of disciplinary proceedings, is very limited. The Court can interfere with the punishment only if it finds the same to be shockingly disproportionate to the charges found to be proved. In such a case, the Court is to remit the matter to the disciplinary authority for reconsideration of the punishment. In an appropriate case, in order to avoid delay the court can itself impose lesser penalty......

I am not persuaded that the punishment awarded to the petitioner is shockingly disproportionate to the charges found to be proved against him. The petition is, therefore, dismissed.