Urmila Singh vs The Punjab National Bank and Others

S.P. Singh, J.—Heard learned counsel for the petitioner and learned counsel appearing on behalf of the Punjab National Bank.

The petitioner is a widow of late Ram Shankar Singh, who died in harness on 18.9.2007 while serving as Deputy Manager-cum-Branch Manager of Veer Branch, Patna of Punjab National Bank. He left behind two unmarried sons and two unmarried daughters.

After death of her husband, the petitioner made a representation to various authorities of the Bank including the Chairman-cum-Managing Director, Chief General Manager, Regional Manager and Zonal Manager of the Bank for compassionate appointment of her son to meet immediate hardship which her family suffered on account of death of sole bread-earner. Thereafter, the Manager of Punjab National Bank, Veer Branch at Patna vide its letter dated 15.3.2008 forwarded the application of the petitioner for sanction of Ex-gratia payment to the Senior Regional Manager, Head Office as per the scheme of the Bank. The application of the petitioner being in time and also in appropriate format was forwarded to the General Manager, Punjab National Bank by forwarding letter dated 6.6.2008. When the petitioner did not hear any response from the respondents, she again filed a representation dated 13.2.2009 followed by an application before the R.T.I. on 22.2.2009. However, after three years of filing of her application dated 13.2.2009, the petitioner received a letter dated 5.9.2011 from Branch Manager of Veer Branch at Patna, Punjab National Bank wherein it was stated that the Board has declined her request for grant of ex-gratia payment. The actual decision of the Board is contained in Annexure-B series of counter affidavit filed on behalf of the Bank, the relevant extract of which is quoted hereinbelow for easy reference:--

"Item 20. Declining of Ex-gratia (lump sum amount) to the family of late Shri Rana Ram Shankar Singh, Ex-Dy. Manager, BO: Veer, Patna due to involvement in financial irregularities-General Manager (GSD) note dated 12.7.2011 (Ref. RAD:IR:EXG:90/08)

Approved for Non-Payment Copy of Resolution No. 20 of Board Meeting held on 27/28.7.2011

For necessary action.

One finds from the impugned resolution of the Bank that the application of the petitioner for grant of ex-gratia payment was declined solely on the ground that her husband was involved in financial irregularities.

Challenging the impugned order, petitioner submits that the respondents erred in coming to the conclusion that her husband was involved in financial irregularities.

The Bank however, refutes the claim and submits that her husband overdrew O.D. limit and thus the application for grant of ex-gratia payment was declined.

Before I consider the respective submissions of the parties, it would be relevant to notice the scheme of the Bank with respect to largess to be granted to the family members of the deceased employee dying in harness. In the year 2007, the Punjab National Bank in supersession of its earlier circular No. 235, dated 7.1.2005 framed a modified scheme for consideration of extending financial assistance as ex-gratia (lump sum amount) or employment on compassionate ground in exceptional cases. As the petitioner is not seeking relief with respect to compassionate appointment, I would confine myself to the provisions of 2007 Scheme which relates to ex-gratia payment.

Clause 2.3 of the modified, which is relevant in the context states that where an employee dies in harness, the family members of the deceased employee shall be eligible to be considered for payment of Ex-gratia (lump sum amount). Schedule "I" of the Scheme states that the object of the scheme is to provide relief to the family of such employee to tide over the sudden crisis brought about by the premature death or premature retirement owing to incapacitation on medical grounds before the employee has attained 55 years of age and to offer immediate financial assistance to recover from deprivation of income of bread earner. Such request for ex-gratia payment was to be made within a period of six months from the date of death of employee.

It is not in dispute that the petitioner did make application within time schedule as provided in the Scheme. The guidelines contained for granting ex-gratia payment is contained in clause 11 of the scheme, which is quoted hereinbelow for easy reference:--

"While dealing with proposals for grant of Ex-Gratia, in cases where disciplinary action had been taken/was pending against the employee dying in harness or where the deceased employee was involved in financial irregularities, embezzlement of funds, committing of frauds etc., Bank will continue to abide by the guidelines issued by the Government of India requiring consideration and decision in each case by the Board of the Bank."

Learned counsel for the Bank has heavily relied upon this clause in support of the order of the Headquarter declining the request of the petitioner for consideration of payment of ex-gratia amount. He submits that the petitioner''s case for payment of ex-gratia amount was declined under the clause as the deceased employee was involved in financial irregularities.

On the other hand, counsel for the petitioner submits that while declining the request for ex-gratia payment, the Headquarter did not state that the petitioner''s husband was involved in any embezzlement of funds or fraud; rather he was said to be involved in financial irregularities. He states that the nature of financial irregularities has been best summed up in paragraph No. 4 of the resolution dated 13.7.2011 of the Board itself. Paragraph (4) of the said resolution is quoted hereinbelow:--

"4. Comments of Shri Rana Ram Shankar Singh while he was posted as Dy. Manager (Br. Incumbent) at BO: Veer were called by the then SRM, Patna vide his letter No. SRM: IZO, Patna dated 31.8.07 (Annexure-I) for various acts of commission and omission on his part including why his clean OD account continuously exceeded the sanctioned limit and why he during the period 7.1.07 to 31.8.07 debited his own OD account in excess of the sanctioned limit. Shri Singh did not submit any reply to the said letter where after disciplinary action against him was contemplated for the aforesaid and certain other serious lapses on his part and his suspension order dated 14.9.07 (Annexure-II) was issued by the then SRM, Patna though the same could not be served as Shri Rana Ram Shankar Singh unfortunately expired on 18.9.2007. A copy of the note dated 14.9.07 placed before the then SRM, IZO, Patna and the OD Statement of the late officer are enclosed marked Annexures-III & IV respectively."

It would appear from resolution of the Board that the petitioner''s husband over drew from his O.D. Account in excess of sanctioned limit which was the only instance of financial irregularities. There is no allegation of fraud or embezzlement. Furthermore, no disciplinary proceeding was even initiated against him before his death. The case of the writ petitioner is that generally an employee of a Bank is provided a O.D. Account which has a prescribed limit of drawal. According to the Bank, the petitioner exceeded his O.D. limit which is the maximum of allegation leveled against him.

Learned counsel for the petitioner has made two-fold submissions on the issue. Firstly, the "over drawn amount" along with interest was immediately recovered from the admissible dues of petitioner''s husband. In support of his submission, learned counsel has drawn my attention to the chart with respect to details of assets and liabilities at page 23 of the brief. He thus submits that overdrawal, if any, was immediately adjusted with interest. Therefore, no loss was caused to the Bank. Secondly, the Bank has not established that the petitioner was involved in financial irregularities. He submits that in any view of the matter, the overdrawal of one''s own account cannot be termed financial irregularities.

He submits that before concluding that a person was involved in financial irregularities, one has at least to prima facie to come to a conclusion that there was financial involvement. Furthermore, even according to respondents, at the most, the petitioner''s husband was issued show cause notice on 31.8.2007 alleging that he exceeded his O.D. limit. Furthermore, though the Bank has passed suspension order on 14.9.2007, it does not deny that the same neither has been communicated nor served on upon him.

In reply to the submission of the petitioner, the Bank in paragraph 6 of the reply affidavit stated that show cause notice dated 31.8.2006 was served upon the petitioner''s husband. However, counsel for the Bank does not dispute the other submissions that suspension order was never served on petitioner''s husband. He submits that overdrawal of O.D. limit is also a kind of financial irregularity.

The issue in short is whether the respondents were justified in declining Ex-gratia payment on the ground of alleged involvement of petitioner''s husband.

I find that there was no preliminary enquiry before coming to the conclusion that the petitioner''s husband committed financial irregularity. Before a person is declared involved in an act of omission or commission, there has to be prima facie finding based on the some sort of enquiry. In the instant case there was no semblance of any enquiry on basis of which it could be said that late Rana Ram Shekhar Singh was involved in financial irregularities.

Notwithstanding all this, the respondents overlooked the pious object of the scheme which was framed to provide relief to families which faced a sudden financial crisis due to death of its bread-earner.

Clause 11 of the Scheme cannot. be read to mean that in every case of financial irregularity, however innocuous or trivial, it may be, request for ex-gratia payment is to be declined not mechanically without considering the nature of financial irregularities. The Scheme is a welfare scheme to provide succor to the family of the deceased employee. The petitioner has rightly referred to observation of the Apex Court in the case of Rajanna Vs. Union of India, . In the aforesaid case, ex-gratia payment to a member of Special Protection Group (SPG) was denied as he did not die, while he was in duty. In the said case, the SPG personnel was on his way to his duty though not actually in duty. Though the respondents technically may be correct in their submissions that the petitioner was not on duty, and as such on. strict construction of provisions, could be denied the benefit attached to the said welfare scheme. Negating the approach of the respondents, the Apex Court in paragraph 14 observed as follows:--

"14. We are constrained to observe that the authorities concerned must adopt a humane approach and construe the circular liberally to advance its object instead of taking such a rigid and pedantic stand. Unless properly implemented, the scheme in the circular would be frustrated resulting in failure to achieve the avowed purpose."

In the instant case, the irregularity if any, was of a minor nature as the petitioner''s husband at the best is alleged to have overdrawn his own O.D. account beyond the sanctioned limit which amount too was adjusted from his legal dues just after his death. There is no specific allegation of any other financial irregularities, much less one of embezzlement or fraud. The valuation report of his income and property prepared by the Bank qualified her for grant of ex-gratia payment of lump sum amount. The matter would have been different if the allegation was that he embezzled any amount or committed any fraud. There is no allegation that her husband favoured any customer or wrongly denied any legitimate due of any customer or he processed any matter in violation of any financial norms. Equally, there is no allegation that he either misbehaved or disobeyed his seniors or did not do his duty diligently. The Bank cannot in every case of financial irregularities irrespective of its innocuousness or triviality would deny payment of ex-gratia amount. There can be some financial irregularity which could be trivial and in consequential e.g. If an employee returns Bank loan beyond the schedule date, can the respondents decline payment of ex-gratia lump sum to the family in eventuality of his death in harness, on ground of financial irregularity. The answer has to be in "negative''. It is for the respondents to reminisce whether denying ex-gratia payment in such circumstances would further the ends, for which the scheme was framed.

In backdrop of findings and reasoning recorded in foregoing paragraph, the impugned, order declining ex-gratia payment to the petitioner is unsustainable in law. I remit the matter to the Board for reconsideration of the case of the petitioner in light of observation of the Apex Court in the case of Rajanna vs. Union of India as well as observation made in foregoing paragraphs within a period of three months from the date of receipt/production of a copy of this order. The impugned order dated 5.9.2011 and decision of the Headquarter of Punjab National Bank declining the application of the petitioner for ex-gratia payment, as contained in Annexure-6, is set aside. The Bank becomes liable for interest for period it sat over the application beyond a reasonable time. In the result, this writ application is allowed.