Syndicate Bank vs Sri B. Ganesh Pai

The Appellant-Bank is in this intra-Court appeal assailing the order dated 07.12.2006 passed by the learned Single Judge in W.P. No. 2658/2002(S-DE). By the said order, the learned Single Judge has allowed the petition and quashed the order dated 25.05.2001 passed by the Disciplinary Authority of the Appellant-Bank, which was impugned at Annexure-X to the petition. The Disciplinary Authority by the said order dated 25 05.2001 had dismissed the Respondent herein from the services of the Appellant-Bank.

The brief facts are that the Respondent herein who had joined the services of the Appellant-Bank as a Clerk in the year 1969 had progressed and was working as a Senior Manager in the Middle Management Grade Scale-Ill from 1993 onwards. In the year 1999, he was posted as the Branch Manager of Dana Bunder Branch, Mumbai. While discharging his duties as the Branch Manager, he was issued a charge sheet and statement of imputations of misconduct alleging that during the period between 31.05.1999 and 01.03.2000. the Respondent had unduly accommodated M/s Sonu Steels to the extent of Rs. 9.72 crores and M/s Maurthi Steels to the extent of Rs. 3.63 crores by discounting instruments relating to non-genuine trade transactions under MDP, beyond sanctioning power delegated to the Respondent. It was further alleged that while seeking approval, the Respondent had suppressed the fact of adjusting returned CD Ds by fresh discounting of cheques and had thereby allowed the party to indulge in kite flying operations.

The Respondent herein however denied the charges alleged against him and as such, a departmental inquiry was held. The Inquiry Officer by his report dated 15.01.2001 held the delinquent Respondent guilty of the charges alleged against him. The Disciplinary Authority on accepting the said findings, imposed the punishment of dismissal from the services of the Appellant -Bank vide order dated 25.05.2001. The Appellate Authority confirmed the order of dismissal by its order dated 16.07.2001. The learned Single Judge while setting aside the order passed against the Respondent herein was of the view that the proceedings of the inquiry and the findings thereof were vitiated since the documents sought for by the Respondent and the preliminary investigation report had not been furnished. The learned Single Judge was also of the view that the charge alleged against the Respondent herein cannot be sustained since the regional office had ratified the action of the Respondent.

The learned Counsel for the Appellant while assailing the order of the learned Single Judge would contend that the finding to the effect that the inquiry is vitiated since the documents were not furnished is not sustainable. It is contended that the Inquiry Officer after considering the request of the delinquent had come to the conclusion that the said documents were either not relevant or the same were not available. In any event, the said documents were not relied on in the inquiry and the position is the same in respect of the preliminary investigation report. Mere infraction of the rules of procedure or non-furnishing of documents which are not relevant will not vitiate the proceedings unless prejudice is shown to have been caused. It is also contended that the delinquent having accepted the ruling of the Inquiry Officer and having not made any grievance with regard to the same cannot thereafter complain about non-furnishing of the documents. The learned Counsel placed reliance on the judgments in the case of Krishna Chandra Tandon Vs. The Union of India (UOI), . Managing Director, ECIL, Hyderabad, Vs. Karunakar, etc. etc., , State Bank of Patiala and others Vs. S.K. Sharma, , Syndicate Bank and Others Vs. Venkatesh Gururao Kurati, and Bank of India and Others Vs. T. Jogram, . Even on merits, it was contended that the Inquiry Officer after analysing the evidence available before him has rendered a finding of fact with regard the delinquent having indulged in the misconduct whereby he had exceed his powers and also the ratification was obtained by suppressing relevant materials. It is contended that when such serious charges have been proved, the Disciplinary Authority as well as the Appellate Authority were justified and when there is no error in the decision making process, the decision itself cannot be faulted unless it shocks the conscience.

On the other hand, learned Counsel for the Respondent sought to justify the order passed by the learned Single Judge. By placing reliance on the judgment of a Division Bench of this Court in the case of G.V. Aswathanarayana Vs. Central Bank of India and Others, which was also relied before the learned Single Judge contended that the furnishing of the documents is the essence of a fair inquiry. If the documents are not furnished, that in itself would vitiate the inquiry. The learned Counsel also made reference to the very same decision cited by the learned Counsel for the Appellant. to indicate that even the proposition of law therein would indicate that non-furnishing of the documents and the relevant report in appropriate cases would cause prejudice. In the instant case, it is pointed out that the sole witness examined before the Inquiry Officer is the person who had carried out the preliminary investigation with regard to the charge alleged against the Respondent and as such any effective cross-examination was possible only if the report was furnished to the Respondent and therefore, it is evident that prejudice is caused. With regard to the ratification of the act of the Respondent, the learned Counsel pointed out that the learned Single Judge has relied on the decision of the Hon''ble Supreme Court in the case of Maharashtra State Mining Corporation Vs. Sunil Pathak, which was cited on behalf of the Respondent. In that context, it is contended that when the learned Single Judge has kept in view the factual aspects and the legal position, the order of the learned Single Judge does not call for interference in an intra-Court appeal.

In the light of the rival contentions and the reasons assigned by the learned Single Judge, it is seen that the procedural irregularity, such as not furnishing the documents and the preliminary investigation report has resulted in the learned Single Judge coming to the conclusion that the inquiry and the findings thereof is vitiated. In this regard, the reference to Regulation 6 of the Syndicate Bank Officer Employees (Discipline and Appeal) Regulations, 1976 (hereinafter referred to as ''the Regulations'') was noticed by the learned Single Judge with regard to the procedure contemplated in holding the inquiry. The mandate contained in Regulation 6 (10)(b)(iii) relating to the furnishing of the investigation report was kept in view to indicate the requirement therein to furnish the same.

In that context, the position of law as enunciated in the decisions relied on by the respective learned Counsel would have to be noticed. The decision of a Division Bench of this Court in the case of G.V. Aswathanarayana Vs. Central Bank of India and Others, would no doubt refer in detail with regard to the procedure relating to inquiry and it is held that the refusal to furnish documents requisitioned and sought by the delinquent had resulted in prejudice. It is further held therein that the burden to show that non-supply of documents required by the delinquent did not cause any prejudice to him. is on the Disciplinary Authority and not on the delinquent.

Since the learned Single Judge has relied on the same, the decisions relied on by the learned Counsel for the Appellant to contend to the contrary also requires to be noticed by us. In this regard, the decision in the case of Krishna Chandra Tandon Vs. The Union of India (UOI), lays down the position that the delinquent cannot make out a grievance about the denial of the copy of the preliminary investigation report, if the Inquiry Officer or the punishing authority does not rely on the same for his findings against the delinquent. In the case of Managing Director, ECIL, Hyderabad, Vs. Karunakar, etc. etc., , the Hon''ble Supreme Court while examining the question of the requirement or otherwise of furnishing the report of the Inquiry Officer/Authority to delinquent employee has dealt with the said aspect of the matter very exhaustively and has also held with regard to the right of the delinquent to be furnished the copy of the inquiry report before the punishment being imposed. While doing so, the Hon''ble Supreme Court has also held that the setting aside of the action for not furnishing a copy would not be a mechanical ritual and the Courts/Tribunals would have to apply their judicial mind to the question and give their reasons for the decision if it comes to the conclusion that there was breach of principles of natural justice or denial of reasonable opportunity. In such situation, the course to be adopted in the matter while enabling a fresh inquiry is also laid down. In the case of Syndicate Bank and Others Vs. Venkatesh Gururao Kurati, and Bank of India and Others Vs. T. Jogram, relied on by the learned Counsel for the Appellant, the Hon''ble Supreme Court after reiterating the position relating to the prejudice that is required to be established by the delinquent in view of non-supply of the documents in question, has come to the conclusion that if the documents which are not supplied, is neither relied upon by the Inquiry Officer nor forms the basis of the finding, will not cause prejudice. It is further held that it cannot be put in a straitjacket formula; it will depend upon the facts and circumstance of each case and the facts involved in the said oases were taken into consideration while arriving at such conclusion. The decision in the case of State Bank of Patiala and others Vs. S.K. Sharma, relied on by the learned Counsel for the Appellant is also on the position with regard to the prejudice which is to be noticed. In the said case, though the documents were not furnished, since the delinquent was permitted to peruse the statements and take notes therefrom, it was held that there is no prejudice.

The judgments cited by both the learned Counsel would establish the legal position that the requirement of course, is to furnish all documents, statements and reports to the delinquent so as to enable him to put up an appropriate defence in the inquiry. If the Regulation/Rule provides for any particular mode of furnishing the documents, it would be incumbent on the Disciplinary Authority/Inquiry Officer to furnish such documents and the waiver of the same by the delinquent would not arise. Even if there is no specific requirement, the compliance of principles of natural justice and the providing of fair opportunity to defend oneself will require furnishing of the documents/inquiry reports. If the delinquent contends that there is denial of fair opportunity and that there is violation of principles of natural justice and if it is contended that non-supply of document has prejudiced him, it is for him to point out the same. If in fact, any document is not furnished and it is contended on behalf of the Disciplinary Authority/Inquiry Officer that non-furnishing of such document/report has not caused prejudice as it has not formed the basis for the finding, it is for them to establish the same before the Court/Tribunal.

In the above background, if the factual matrix in the instant case is adverted to, it is seen that the grievance of the Respondent herein before the learned Single Judge was that the inquiry was vitiated for non-furnishing of the documents sought for by him and also as the copy of the preliminary investigation report was not made available to the Respondent. Insofar as the non-supply of documents sought by the delinquent, it was contended on behalf of the Appellant herein that the said documents are not relevant and in any event, the Inquiry Officer has not relied on the same. It is also contended that the ruling of the Inquiry Officer relating to the same has been accepted by the Respondent herein and as such, the right to receive the documents even if existed, has been waived. Relating to the non-furnishing of the preliminary investigation report, it is the contention of the Appellant that the Inquiry Officer has not relied on the same in the inquiry and therefore the non-furnishing of the report has not caused prejudice. It is therefore contended that in view of the law as noticed by us above, the inquiry cannot be held to be vitiated.

Firstly, with regard to the waiver as contended, the same cannot be accepted since a perusal of the proceedings recorded by the Inquiry Officer on 18.12.2000 would indicate that the defence representative had sought for the documents which were referred at Sl. Nos. 1, 4 and 6 of his letter dated 18.11.2000. The Inquiry Officer no doubt, ruled that considering the issues involved, the request is rejected. It is also recorded in the inquiry that the defence representative strongly objected to the ruling and stated that they are continuing in the regular hearing under protest. Thereafter they (Defence representative and Delinquent Officer) have taken part in the proceedings. Though a specific contention was not raised in the appeal, the issue has been canvassed in the writ petition, as such it cannot be said that the right was waived. Though that is the position, the question is as to whether the non-supply of the said documents has caused any prejudice. In this regard, the learned Single Judge except for relying on the decision in the case of G.V. Aswathanarayana referred supra, has not rendered a specific finding. To that extent, we are of the view that the learned Single Judge was not justified, inasmuch as the very letter dated 18.11.2000 under which the Respondent had sought the documents would indicate that two of the documents are for verification and in any event, the movement register as sought was not maintained. The audit report was sought to find out if there are any adverse entries. The said documents in any event have not been shown to be relied on by the Inquiry Officer and therefore to the said extent, no prejudice has been caused to the Respondent herein.

Having stated so, the question relating to the non-furnishing of the preliminary investigation report requires to be considered differently. It is true that from the decision relied on supra, the non-supply cannot be considered prejudicial, if it is not relied on in the inquiry and that too, the same would have to be considered keeping in view the Regulation which is referred above, as noticed before the learned Single Judge. As noticed, it is contended on behalf of the Appellant that the preliminary investigation report has not been relied on in the inquiry. Though it is a fact that the report in its original form is rot relied, the entire issue emerges based on the preliminary investigation. It is seen that the documents produced in the inquiry are as per the list of documents enclosed along with the letter dated 14.11.2000 addressed by the Presenting Officer to the Inquiry Officer (Annexure-P to the writ petition) The list at Sl. No. 110 would refer to the visit report, of Sri N.R. Badve and Sri G.T. Chikkodi. The proceedings of the inquiry dated 18.12.2000 (Annexure-S to the petition) would indicate that the documents listed in the letter dated 14.11.2000 were marked as Exhs.1 to 115. The additional documents which were produced on the said date before the Inquiry Officer were marked as MEX 116 to 122. The said Sri G.T. Chikkodi, is the Chief Officer, Vigilance Unit, at Mumbai, and he is the only witness who was examined in the inquiry on behalf of the Appellant-Bank as M.W.1. In his examination-in-chief, the witness has referred to the investigation conducted by him as instructed by the Head Office and that he had submitted report to the higher authorities. He further states with regard to the inquiry conducted by him and the verification of the relevant documents and states that he has collected various documents, which he identifies as at MEX 1 to MEX 122. Thereafter, he narrates the entire transaction which has reference and relevance to the investigation made by him. Hence, in the present facts, even though it is not shown that the Inquiry Officer had relied on the preliminary investigation report itself, in a circumstance where the visit report of the Vigilance Officer who had conducted the investigation was marked as MEX 110 and the entire evidence tendered by the sole witness was based on the investigation report carried out by the said witness, it cannot be said that no prejudice was caused to the Respondent. Though the said witness has been cross-examined, an effective defence would have been possible if the preliminary investigation report was made available to the Respondent. In that view, to that extent, the learned Single Judge was justified in coming to the conclusion that prejudice had been caused to the Respondent.

Though the learned Single Judge has also adverted to the contention relating to the ratification of the action of the Respondent in providing the facility of discounting, the review of the finding rendered therein in the facts of the present case is superfluous inasmuch as only in a valid inquiry, the said aspect would require consideration while adverting to the position as to whether there is any perversity in the finding of the Inquiry Officer keeping in view the evidence available on record in establishing the charges and in that context, whether the Inquiry Officer was justified in coming to the conclusion that a misconduct was committed even though there being ratification. That apart, in the instant case, the charge against the Respondent herein is also that while seeking approval, he had suppressed certain facts. Such charge is based on the observations in the preliminary investigation report since M.W.1 has referred to the document examined by him in the preliminary investigation and has referred to it while deposing and marking it in the disciplinary inquiry. Hence, that charge, in any event, can only be held as conclusively proved, if the preliminary investigation report had been furnished and a fair opportunity of defending himself was ensured. Therefore, we do not find it necessary to consider that aspect of the matter in further detail since we have agreed with the learned Single Judge with regard to the finding that the inquiry is vitiated in view of the non-furnishing of the preliminary investigation report.

In view of the above conclusion, the next aspect for consideration would be the course to be adopted. In the case of ECU, v. B. Karunakar, the Hon''ble Supreme Court in the circumstance of non-supply of the inquiry report before the punishment is imposed has indicated the course to be adopted with regard to reconsideration from the stage at which prejudice is caused. In the instant case, the prejudice being at the inception of the inquiry proceedings, the entire process would have to be re-commenced. The course suggested by the Hon''ble Supreme Court is, reinstatement and holding fresh proceedings but leaving the discretion to the Disciplinary Authority with regard to the manner of grant of backwages. However, in the instant case, it is not in dispute that the Respondent herein has reached the age of superannuation during the pendency of writ appeal. Further, except the present misconduct, the Respondent had rendered blemishless service of 30 years and in that context, the proportionality of the punishment would also have arisen for consideration even if the charge was validly proved, In any event, since the proceedings is held to be vitiated and action is set aside, the Respondent would get the entire length of his service till the date of his superannuation. At best, the question would only be about regulating the backwages in the manner noticed above. On this aspect, it is seen that even at this stage, the learned Single Judge has already denied backwages to the extent of 50%. But, in a circumstance where we have come to the conclusion that the reconsideration of the matter afresh would be a futile exercise and in the context, the Respondent herein would get the benefit of his entire length of service, and taking an overall view of the matter, we are opinion that the interest of justice would be served, if the backwages is reduced to 25% and the matter is set at rest.

In the result, we pass the following:

ORDER

i) The order dated 07.12.2006 passed by the learned Single Judge insofar as quashing Annexure-''X'' to the writ petition is sustained,

ii) The backwages granted by the aforestated order shall however stand reduced to 25%.

iii) The writ appeal is accordingly allowed in part, with no order as to costs.