Panchanan Mal vs Punjab National Bank and Ors

Partha Sarathi Sen, J

The challenge in this writ petition is the order dated 19.03.2012 as passed by respondent no.5 being the disciplinary authority, the order dated 31.08.2012 as passed by the respondent no.4 being the appellate authority and the order dated 23.11.2012 as passed by the respondent no.3 being the reviewing authority. By the said order dated 19.03.2012 the disciplinary authority found all the charges have been proved against the delinquent/petitioner and thus imposed a major penalty of compulsory retirement with immediate effect. Challenging the said order of compulsory retirement the writ petitioner approached the appellate authority where he could not succeed and thus he thereafter approached the reviewing authority wherein also he got no favourable order. The writ petitioner thus preferred the instant writ petition seeking judicial review with regard to the correctness of the said three orders dated 19.03.2012, 31.08.2012 and 23.11.2012.

For effective adjudication of the instant writ petition the facts leading to filing of the instant writ petition are required to be dealt with in a nutshell.

During the relevant period the writ petitioner was a senior manager of Punjab National Bank (hereinafter referred to as ‘PNB’ in short) in Gorpar Branch and thereafter in Park Circus Branch. On 14.05.2008, 19. 09.2008, 24.10.2008 and 22.09.2009 by issuing four separate memos the higher officials of PNB sought some explanations from the writ petitioner regarding some alleged irregularities involving pre-sanction and post sanction lapses on the part of the writ petitioner. The writ petitioner replied to the said explanations as sought for by submitting four separate written submissions.

On 30.07.2010 the writ petitioner was served with a charge sheet containing statement of articles of charges under seven heads including statement of imputation of misconduct in support of the said articles of charges. On 16.09.2010 the writ petitioner replied to the said charge sheet. The PNB authority was not satisfied with the replies of the writ petitioner and thus a disciplinary proceeding was started. After conclusion of the said disciplinary proceeding the enquiry officer found charge no.5 under Article V was partially proved and charge no.6 under Article VI was fully proved while the said enquiry officer came to a finding that the other charges under the remaining articles were not proved.

By a memo dated 03.11.2011 the disciplinary authority informed the writ petitioner regarding his notes of disagreement with the findings of the enquiry authority and thus sought for a reply from the writ petitioner. Under cover of a letter dated 18.11.2011 the writ petitioner replied to the said disciplinary authority.

The disciplinary authority found no substance in the reply of the writ petitioner and thus on 19.03.2012 imposed a major penalty of compulsory retirement with immediate effect which was affirmed both by the appellate authority and the reviewing authority.

In course of his submission Mr. Ghosh, learned advocate appearing on behalf of the writ petitioner at the very outset took me to the articles of charges as framed against the writ petitioner. It is submitted by Mr. Ghosh that from the said articles of the charges as well as from the statement of imputations of the alleged misconduct it would reveal that as per the PNB Authority the said articles of charges are basically with regard to the pre-sanction/post-sanction lapses /irregularities on the part of the writ petitioner jeopardizing the bank’s interest while sanctioning loan in favour of the customers of the said bank during the period from 29. 05.2002 to 23.07.2005. Drawing attention to page no.97 of the writ petition it is submitted by Mr. Ghosh that admittedly the charge sheet was submitted on 30.07.2010 i.e. more than 5 years after occurrence of the alleged lapses and/or irregularities by the writ petitioner. At this juncture Mr. Ghosh draws attention of this Court to Clause no.2.8 of Section VII of PNB (Officers’) Services Regulations, 1979 (hereinafter referred to as the said ‘Regulations of 1979’ in short). Attention of this Court is also drawn to page no.120 of the writ petition being a copy of circular dated 10.10.2008 as issued by PNB Authority which has been exhibited as defence Exhibit 13(1/1) in the said enquiry proceeding. It is submitted by Mr. Ghosh that both Clause 2.8 of Section VII of the Regulations of 1979 as well as memo dated 10.10.2008 as issued by the PNB Authority it would reveal that no disciplinary proceeding would lie against any officials for any lapses not detected within two successive internal regular audit/inspection of the same account or four years from the date of event, whichever is later.

It is further submitted by Mr. Ghosh that the aforementioned clause and the memo dated 10.10.2008 however made it clear that the said time limit would not apply in cases of frauds and other criminal offences and where mala fides are inferable.

It is further submitted by Mr. Ghosh that from the charge sheet as submitted against the writ petitioner it would reveal that the alleged lapses/irregularities occurred during the period of 29.05.2002 to 23. 07.2005 whereas the charge sheet was submitted on 30.07.2010 and therefore it can be safely held that submission of the charge sheet by the authorities of PNB is barred under the aforementioned clause as well as as per the aforementioned memo. It is contended by Mr. Ghosh that the enquiry authority, the disciplinary authority, the appellate authority and the reviewing authority had failed to visualize the true purport and meaning of the said clause and the said memo and thus a serious miscarriage of justice occurred for which interference of this Court is necessary in judicial review.

It is further submitted by Mr. Ghosh that the writ petitioner in his reply dated 16.09.2010 against the submission of the charge sheet brought to the notice of the authorities of the PNB regarding the expiry of the stipulated time as mentioned in the said clause and in the said memo but the PNB Authorities for the reason best known to them did not adhere to the contention as raised by the writ petitioner and thus proceeded with the disciplinary proceeding without giving any adherence to the established procedure governing the rules for an in-house proceeding against the delinquent.

In course of his submission Mr. Ghosh further draws attention of this Court to page no.217 and 218 of the writ petition being copies of two regular inspection reports. It is submitted that in the said two inspection reports comments have been made by the inspection team as ‘satisfactory’ over the issue of pre-sanction appraisal and post-sanction follow up as has been done by the writ petitioner. It is further submitted by Mr. Ghosh that the copies of the said two inspection reports were also exhibited on the part of the charged officers in the enquiry proceeding but the PNB Authority did not consider those exhibited documents and thus for non-consideration of the relevant materials as available in the record that the decisions making process of the said authorities have been violated like anything.

In course of his argument Mr. Ghosh also draws attention of this Court to Clause 7 of PNB Officers’/Employees’ (Discipline and Appeal) Regulations, 1977 (hereinafter referred to as the said ‘Regulations of 1977’). It is submitted by Mr. Ghosh that Clause 7 (2) of the said Regulations of 1977 made it obligatory for the disciplinary authority to record its reason in the event the said authority disagrees with the finding of the inquiry authority on any articles of charges and he is further duty bound to record its own finding on such charge, if the evidence on record is sufficient for the purpose.

At this juncture Mr. Ghosh took me to the memo dated 03.11.2011 as issued by the disciplinary authority in favour of the writ petitioner enclosing therewith a copy of the report of the enquiry authority and the memorandum of alleged disagreement dated 03.11.2011 of the said authority. It is submitted by Mr. Ghosh that from the said memo dated 03.11.2011 it would reveal that the said appellate authority unilaterally came to a finding with regard to the alleged proof of all the charges against the writ petitioner without affording any opportunity of hearing to the writ petitioner which tantmounts to violation of Rule 7.2 of the said Regulations of 1977 as well as the violation of principle of natural justice. In this regard Mr. Ghosh places his reliance upon the reported decisions of Punjab National Bank and Ors. vs. Kunj Behari Misra reported in (1998) 7 SCC 84 and Central Bank of India and Anr. vs. Kashinath Chakraborty reported in (2010) SCC OnLine Cal 2141.

It is further submitted by Mr. Ghosh that the appellate authority prior to disposal of the appeal as preferred by the writ petitioner against the decision of the disciplinary authority has miserably failed to comply with the provision of Clause 17 of the said Regulations of 1977 since the comment of the inquiry authority was never forwarded to the appellate authority prior to disposal of the said appeal causing serious procedural irregularity for which the findings of the appellate authority may be set aside.

In his next limb of submission Mr. Ghosh further contends that the disciplinary authority, the appellate authority as well as the revisional authority have also failed to visualize the utter violation of Article 311(2) of the Constitution of India inasmuch as it reveals from the record that soon after the conclusion of the enquiry proceeding the report of the enquiry officer was not provided to the writ petitioner. In this regard Mr. Ghosh places his reliance upon the reported decision of Managing Director ECIL Hyderabad vs. B. Kakunakar reported in (1993) 4 SCC 727.

It is further argued by Mr. Ghosh that there occurred irregularity and illegality while imposing punishment on the writ petitioner since the authority which submitted the charge sheet against the writ petitioner and the authority which imposed punishment upon the writ petitioner are different which affects the root of the authority which has imposed punishment upon the writ petitioner. It is further submitted by Mr. Ghosh that from the supplementary affidavit as filed by the writ petitioner and as affirmed on 20.02.2015 it would reveal that on 31.03.2011 another enquiry report was submitted which was never brought on record for the reason best known to the respondent/bank.

In course of his argument Mr. Ghosh also places his reliance upon the case of State Bank of India and Ors. vs. Navin Kumar Sinha reported in 2024 SCC Online SC 3369.

In support of the interlocutory application being IA No.CAN 4 of 2023 it is submitted further that the respondent/bank most illegally deducted the statutory dues of the writ petitioner which may be directed to be refunded by the respondent/bank.

Per contra, Mr. Bandhopadhyay, learned advocate appearing on behalf of the respondent/PNB also draws attention of this Court to page no.237 of the instant writ petition being a copy of the memo dated 03.11.2011 as issued by the appellate authority in favour of the writ petitioner. It is submitted by Mr. Bandhopadhyay that from page nos. 238 to 241 of the writ petition it would reveal that the memo dated 03.11.2011 contains the tentative finding of the said appellate authority with regard to his disagreement with the finding of the enquiry officer in respect of the articles of charges as framed against the writ petitioner. Drawing attention to the last paragraph of the said memo dated 03.11.2011 it is submitted by Mr. Bandhopadhyay that while forwarding the said memo of disagreement the appellate authority asked the writ petitioner to submit his reply within a stipulated period which has been duly replied to by the writ petitioner under cover of its letter dated 18.11.2011 and thereafter after considering the entire materials including the replies of the writ petitioner the appellate authority came to a finding with regard to the guilt of the writ petitioner in respect of the articles of charges as framed against him and only thereafter the said disciplinary authority imposed punishment. It is thus submitted by Mr. Bandhopadhyay that from the chronology of the events as discussed hereinabove by no stretch of imagination it can be said that the findings of the appellate authority suffers from any procedural irregularity and/or violation of principles of natural justice.

It is further submitted by Mr. Bandhopadhyay that Regulation 7.2 of the said Regulations of 1977 has been duly followed by the said appellate authority. Mr. Bandhopadhyay further submits that though immediately after conclusion of the enquiry proceeding the writ petitioner was not served with the report of the enquiry officer but a copy of such report was forwarded to the writ petitioner under cover of memo dated 03.11.2011 along with reason of disagreement of the appellate authority. It is contended by Mr. Bandhopadhyay that in absence of any prejudice it cannot be said that a manifest error took place in not forwarding the enquiry report to the writ petitioner immediately after conclusion of the enquiry proceeding. It is further argued by Mr. Bandhopadhyay that no case of serious prejudice has also been made out by the writ petitioner in his writ petition and thus the writ petitioner is not correct to agitate his grievance by saying that his constitutional right under Article 311 (2) of the Constitution of India has been violated. In this regard Mr. Bandhopadhyay places his reliance upon the reported decision of Haryana Financial Corporation and Anr. Vs. Kailash Chandra Ahuja reported in (2008) 9 SCC 31.

In his next fold of submission Mr. Bandhopadhyay draws attention of this Court to articles of charges as framed against the writ petitioner. Attention of this Court is also drawn to chapter VII of ‘Staff Accountability’ to the Regulations of 1977. It is submitted by Mr. Bandhopadhyay that on careful perusal of the articles of charges as framed against the writ petitioner it would reveal that though the said articles of charges deals with various lapses and irregularities on the part of the writ petitioner but except Article VII the other articles of charges are not related to NPA. It is thus submitted that the time limit for fixing staff accountability as has been argued on behalf of the writ petitioner has got no manner of application in respect of the remaining charges. It is submitted further that on perusal of the chapter VII for Staff Accountability in the said Regulations of 1977 it would reveal further that the said Regulations fixes the staff accountability from the vigilance angle and not from the angle of holding domestic enquiry and thus by no stretch of imagination it can be said that the charge sheet as has been filed against the writ petitioner is beyond stipulated time.

It is further submitted that the argument of the learned advocate for the writ petitioner regarding alleged change of disciplinary authority has got no basis at all since the schedule of the said Regulations of 1977 clearly specifies who are the appellate authorities in respect of a particular class of employees/officers. In this regard Mr. Bandhopadhyay places his reliance upon the reported decision of Allahabad Bank vs Prem Narain Pande & Ors reported in (1995) 6 SCC 634.

It is further submitted by Mr. Bandhopadhyay that the reported decisions as cited from the side of the writ petitioner are completely distinguishable from the facts and circumstances of the instant writ petition and thus the same have got no manner of application in the said writ petition.

While opposing the prayer as made in IA no. CAN 4 of 2023 it is submitted on behalf of the respondent/bank that from the annexures to the affidavit-in-opposition it would reveal that the writ petitioner himself authorized the PNB Authority to deduct money from his retiral benefits to pay off his loan amount as owed to the bank.

It is lastly submitted by Mr. Bandhopadhyay that the correctness of the enquiry report is however not under challenge in this instant writ petition.

Before entering into the factual aspects of the instant writ petition this Court proposes to look to the reported decisions as cited from the Bar. In the reported decision of Kunj Behari Misra (supra) the Hon’ble Supreme Court has considered the Rules 7(2) of the said Regulations of 1977 and in doing so the Hon’ble Apex Court held that whenever the disciplinary authority disagrees with the enquiry authority on any article of charges, then before it record its findings on such charge, it must record its tentative reason for such disagreement and give to the delinquent an opportunity to represent before it record its findings. It has been further held that the report of the enquiry officer containing its findings shall have to be conveyed and the delinquent must have been given opportunity to persuade the disciplinary authority to accept the favourable conclusion of the enquiry officer.

In the reported decision of Kashinath Chakraborty (supra) a Division Bench of this Court expressed the same view as has been expressed in the reported decision of Kunj Behari Misra.

In the reported decision of B. Karunakar (supra) the Hon’ble Supreme Court while dealing with the provisions of Article 311(2) of the Constitution of India held that when the enquiry officer is not the disciplinary authority, the delinquent has a right to receive copy of the enquiry officer’s report before the disciplinary authority arrives at its conclusion with regard to the guilt or innocence of the employee in relation to the charges lebelled against him. It has been further held that however, it is equally incumbent on the part of the delinquent to show his prejudice because of the non-supply of such report.

In the reported decision of Navin Kumar Sinha (supra) the Hon’ble Apex Court held that a departmental proceeding is initiated only when a charge sheet is issued to the delinquent.

In the reported decision of Kailash Chandra Ahuja (supra) the Hon’ble Supreme Court considered the ratio laid down in the case of B.Karunakar (supra) and held that though it is settled law that principle of natural justice has to be complied with but it is equally well settled that concept of natural justice is not a fixed one. The Hon’ble Apex Court held further that principle of natural justice has meant many things to many writer, lawyers, jurists and system of law and thus rules of natural justice are not embodied rules and they cannot be imprisoned within the straitjacket of a rigid formula.

In the reported decision of Prem Narain Pande (supra) the Hon’ble Supreme Court had considered the effect of change of disciplinary authority in a case where one disciplinary authority served charge sheet upon the delinquent while the other disciplinary authority had imposed punishment. In doing so the Hon’ble Supreme Court held that unless the regulations suggest it specifically, that there is no compulsion that once a competent disciplinary authority has initiated the disciplinary proceeding by framing charges and appointing enquiry officer, it is only that disciplinary authority who must necessarily complete the proceedings till the delinquent is terminated and final order is passed under the said Regulation.

In the conspectus of the factual scenarios and the propositions of law as discussed in the foregoing paragraphs I now propose to look to the memo dated 03.11.3011 as issued by the disciplinary authority to the writ petitioner enclosing therewith his ‘memo of disagreement’ along with the findings of the enquiry officer.

This Court has meticulously gone through the memorandum dated 03.11.2011 containing the alleged ‘memo of disagreement’ of the disciplinary authority. Since according to the PNB Authority the said disciplinary authority recorded its disagreement under Clause 7(2) of the said Regulations of 1977 this Court considers that Clause 7 is required to be looked into the same is quoted hereinbelow in verbatim:-

“7.1………………………

7.2. The Disciplinary Authority shall, if it disagrees with the findings of the Inquiring Authority on any article of charge, record its reasons for such disagreement and record its own findings on such charge, if the evidence on record is sufficient for the purpose.

7.3……………………….

7.4………………………”

On careful consideration of the said memo of disagreement dated 03.11.2011 vis-avis the aforementioned Clause 7.2 of the said Regulations of 1977 it appears to this Court that while recording reasons for disagreement in respect of the charges as framed against the writ petitioner the said disciplinary authority made no attempt to assign his own reasons as to why he was disagreeing with the findings of the enquiry authority and on the contrary the said disciplinary authority most unilaterally discussed the factual scenario in relation to the said articles charges and come to a finding that all the charges have been proved.

This Court has also occasion to go through the order of the disciplinary authority as has been passed by him on 19.03.2012 after receiving reply from the writ petitioner in relation to his alleged memo of disagreement. It appears to this Court that in the said order dated 19.03.2012 he initially dealt with the versions of the writ petitioner and then practically made an attempt to justify his observations as contained in his alleged ‘memo of disagreement’. However he made no attempt at all in coming to a finding as to whether the charges as framed against the delinquent have been proved or not by a speaking order which is supposed to be made prior to passing of the order of punishment. It thus appears to this Court that the disciplinary authority had acted contrary to the finding of the Hon’ble Court in the reported decision of Kunj Behari Misra (supra) rather it appears to this Court that the disciplinary authority in the garb of the alleged ‘disagreement memo’ had already reached to a conclusion with regard proof of guilt of the delinquent without giving any opportunity to the delinquent to support the decision of the enquiry authority which are in his favour and thus this Court has got no hesitation to hold that the finding of the disciplinary authority under cover of its memo dated 19.03.2012 is perverse and violative of principles of natural justice.

Though in course of his argument Mr. Bandhopadhyay, learned advocate appearing for the respondent/PNB contended that finding of the disciplinary authority under cover of its memo dated 03.11.2011 is merely tentative one but on careful reading of the said memo dated 03.11.2011 read with clause 7(2) of Regulations of 1977 this Court finds no iota of disagreement in the said memo which is /are mandatorily to be recorded as per Clause 7(2) of the said Regulations of 1977. This Court thus finds that the findings of the disciplinary authority as has been communicated vide memo dated 19.03.2012 cannot be sustained in the eye of law.

Since Mr. Ghosh in course of his argument was very vocal with regard to the delayed submission of charge sheet against the writ petitioner, this Court proposes to look to the charge sheet as submitted against the writ petitioner. On perusal of the articles of charges and the statement of imputation of misconduct in support of the said articles of charges it reveals that in the said charge sheet it has been categorically mentioned that the delinquent had committed the alleged lapses/irregularities particulars of which have been mentioned in the said articles of charges from 29.05.2002 to 23.07.2005. As discussed in the forgoing paragraph Mr. Ghosh in this regard places his reliance upon Clause 2.8 of the Section VII of the ‘Inspections Matters’ of the said Regulations of 1979. In order to arrive at a logical conclusion on the said point the aforementioned Clause 2.8 is reproduced herinbelow in verbatim:

“2.8 No accountability will be fixed for any lapse, which has not been pointed out for the two successive inspection reports or 4 years from the date of the event (i.e. occurrence of lapse) whichever is later. In case any major irregularity attributable to the previous inspection period is detected subsequent to the second audit/inspection, the auditors/inspectors concerned will be held accountable and be liable for disciplinary proceedings. This time limit will not apply to cases of (i) frauds (ii) other criminal offences or (iii) cases where mala fides are inferable.”

In course of his submission Mr. Ghosh places his reliance upon a circular dated 10.10.2008 of PNB authority which was marked as defence Exhibit 13(1/1) in the said enquiry proceeding and the contents of the said circular is practically verbatim of the aforementioned Clause 7.2. Drawing attention to page nos. 217 and 218 being the copies of the two inspection reports it was argued on behalf of the writ petitioner that those documents have also been exhibited in the enquiry proceeding where satisfactory notes have been given by the inspection team in respect of pre-sanction appraisal and post sanction follow up as done by the writ petitioner while disabusing loan in favour of the customers of the bank. It was submitted by Mr. Ghosh that since all the articles of charges unerringly dealt with the alleged lapses/irregularities within the period of 29.05.2002 to 23.07.2005 and since the said charge sheet was submitted on 30.07.2010 there cannot be any hesitation to hold that the charge sheet has been submitted beyond the stipulated time as mentioned in Rule 7.2 as well as in the aforementioned circular. Such contention was disputed by Mr. Bandhopadhyay contending that Rule 2.8 is restricted while fixing accountability of an employee in respect of ‘NPA’ that too from vigilance angle.

This Court has meticulously perused Section VII of the inspection matters of the said Regulation of 1979 which deals with staff accountability. In the said Section it has been categorically stated that in banking institutions risk taking forms an integral part of business and therefore every loss caused to the organization, either pecuniary or other forms need not necessarily become the subject matter of vigilance enquiry. It has been stated therein that at the same time it would be unfair to ignore motivated or reckless decisions which causes damage to the interest of the organization.

The said Section VII further stated that a need has been felt in larger interest of the bank to lay down clear guidelines to determine the accountability in relation to a) credit decision particularly in respect of NPAs and quick mortality cases and b) non-borrowal delinquencies.

In dealing with the staff accountability the respondent/PNB authority thought it fit to consider the following as matters of suspicion from vigilance angel namely:-

i. Lapses arising out of gross or willful negligence.

ii. Act of recklessness.

iii. Exercise of power without discretion or in excess of power/jurisdiction.

iv. Failure to report to competent authorities.

v. Causing loss to the bank.

vi. Concomitant gain to an individual or a set of individuals.

vii. Flagrant violation of system and procedure.

viii. Irregularities reflecting adversely on the integrity of the bank employee, commission of criminal offence like demand and acceptance of illegal gratification, possession of disproportionate assets, forgery, cheating, abuse of official position with a view to obtain pecuniary advantage for self or any other person.

On comparative study of the articles of charges including the statement of imputations vis-à-vis Section VII of the said Regulation of 1979 relating to staff accountability it appears to this Court that the alleged lapses/irregularities come under the purview of point nos. (i) to (viii) of the preceding paragraph and therefore this Court holds that the provision of Clause 7.2 and the circular dated 10.10.2008 squarely applies in respect of the charge sheet as supplied as against the writ petitioner.

For the sake of argument even if it is accepted that the aforementioned clause 7.2 and/or the circular dated 10.10.2008 is restricted to NPA only as argued by Mr. Bandhopadhyay in course of his argument but he could not show any other provision of any regulations of PNB authority under which charge sheet was submitted against the writ petitioner on account of the alleged lapses /irregularities.

This Court thus holds that the charge sheet dated 30.07.2010 as submitted against the delinquent has been filed beyond the stipulated time and thus the entire disciplinary proceeding as conducted by the enquiry officer, the proceedings before the disciplinary authority, appellate authority and the reviewing authority stand hereby quashed and set aside.

As a result the instant writ petition succeeds.

Admittedly the writ petitioner has already crossed his age of superannuation and therefore there cannot be any order for his reinstatement. However, the writ petitioner is entitled to all his arrear salary including his retiral benefits after adjustment of the payments as has been made by the PNB in favour of the writ petitioner.

This Court however, finds no merit in IA No. CAN 4 of 2023 since sufficient materials have been placed before this Court that a sum of Rs.9,49,289.94 has been adjusted against various dues of the bank from the writ petitioner on account of the authority granted by the writ petitioner in writing.

Accordingly IA no. CAN 4 of 2023 is dismissed.

The respondent/authorities more specifically respondent nos. 2 and 3 are herby directed to disburse all arrears salary and the retiral dues of the writ petitioner after necessary adjustment of previous disbursement of retiral benefits to the writ petitioner positively within 3 months from the date of communication of this judgement .

Liberty is given to the respondents/PNB and its functionaries to approach this Court for withdrawal of Rs. 9,49,829/- along with accrued interest thereon only from the office of Registrar General only after showing compliance of this judgement.

The respondents/authorities are directed to act on the server copies of this judgement. Learned advocate on record for the respondent/bank is hereby requested to communicate the server copy of this order to the respondent no.3 for his immediate compliance.

Similarly liberty is given to the learned advocate for the writ petitioner to communicate the server copy of this order to the respondent no.3.

The instant writ petition is thus disposed.

All pending interlocutory applications, if there be any, are also disposed of.

Urgent photostat certified copy of this judgement, if applied for, be given to the parties on completion of usual formalities.