V.K. Garg vs State Bank of India and Others

In D.B. Civil Restoration Application No. 29/2015:

We have heard learned counsel appearing for the applicant/appellant.

The delay of 321 days in filing the restoration application, is sought to be explained on the ground that the appellant was out of country and, thus, could not prefer the application in time.

Learned counsel appearing for the respondent-Bank submits that the passport of the appellant does not establish that he was out of the country during the period, when he could file the restoration application.

In our view, considering the punishment and his right to prefer the appeal as well as the explanation given by the appellant, the delay has been sufficiently explained and is, accordingly, condoned. The application under Section 5 of the Limitation Act is allowed.

The restoration application is allowed and the matter was heard.

In D.B. Civil Special Appeal(W) No. 217/2006:

The appellant is aggrieved by the judgment of learned Single Judge, dated 12.01.2006, by which he had dismissed the writ petition, against the order orders passed by the Appointing Authority, dismissing the services of the appellant as Branch Manager of the Bank, on the charges levelled against him in distribution of loans. The appeal against the dismissal order was also dismissed by the Appellate Authority under the State Bank of India (Supervising Staff) Service Rules. The appellant was charged for having committed misconduct in terms of Rule 50(2)(iii) of the Rules, vide charge-sheet dated 12.06.1989, levelling following charges:-

"i) You sanctioned advances beyond the area of operation of the Branch and in some cases the borrowers reside at a distance of 140 K.M. The advances are scattered in 125 villages and many of them were not adopted. (A few instances are given in Annexure-I).

ii) You did not submit discretionary power statements in respect of advances made by you in time despite repeated reminders of Regional Office and thus concealed the facts from the Controlling Authority.

iii) You did not conduct pre-sanction survey and post sanction inspections of the loans as is evident from the fact that you remained present on all working days at the branch except Sundays/holidays or when you were on leave. You did not follow-up the advances either by visiting the villages or sending notices to the borrowers for recovery of the advances.

iv) You disbursed loans for purchase of milk cattle/bullocks but the borrowers did not purchase the same. The receipts of the sellers of the assets and certificates of veterinary surgeons and applications for the insurance cover are false. Thus failed to ensure end use of funds (A few instances are given in Annexure- II).

v) You sanctioned advances for purchase of Diesel Pump Sets and placed the order for the supply of Diesel Pump Sets to those suppliers who were established at a distance of 65 to 85 K.Ms. In preference to local dealers. You released the payment of D.P.S. without ascertaining that these have been taken delivery by the borrowers. Thus you did not ensure end use of funds (A few instances are given in Annexure-III).

vi) You sanctioned advances for construction of wells and Diesel Pump Sets at a uniform limit of Rs. 15,000/- without assessing the actual need of the borrowers. The wells were not constructed. Thus you did not ensure end use of funds (A few instances are given in Annexure-IV).

vii) You disbursed loans to the borrowers for development of land but the following irregularities are observed:

a) The entire loan for land development was disbursed in cash whereas it should have been paid to the party who executed the work.

b) The borrowers have denied having received the amount of loan.

c) The borrowers (in Annexure-V) have complained that D.P.S. dealers got their signatures/thumb impression affixed on bank documents pretending to be those for grant of subsidy.

d) No pass books after recording the loan amount was issued to the borrowers.

viii) On 18-8-83 you sanctioned a Term Loan for Rs. 75,000/- for purchase of taxi to Shri Akshay Kumar Jain who is a permanent resident of Bhinamal which is at a distances of 140 Kms as such it is beyond the area of operation of the Branch and Shri Jain was not a transport operator as he was proprietor of M/s. Sanghavi Traders at Sanchore, dealing in Diesel Pump Sets. You also did not compile opinion report on the borrower.

ix) You sanctioned Agriculture Term Loans to 32 borrowers and disbursed Rs. 5,000/- cash to each borrower agg. Rs. 1,60,000/- through middlemen S/Shri Pachna and Manormal between 7-5-84 to 16-5-84 bearing Accounts Nos. 99/58 to 99/84 and 100/1 to 100/4 who (middlemen) purchased the drafts for Rs. 1,30,000/- in their favour on S.B.B.J. Bhinamal A.D.B. They encashed the drafts thereat and disbursed the cash to the said borrowers who complained that they were paid less amount what was sanctioned to them. How the remaining amount of Rs. 30,000/- was disposed of.

x) You sanctioned advances for purchase of diesel whereas there are no instructions of the Bank to finance for the purpose.

xi) You sanctioned advances in Bhinamal Tehsil Head Quarters in Jalore District inspite of the regional Office instructions not to finance in that Town vide their letter No. 8/15236 dated 8-10-83.

xii) You sanctioned loans for digging of new wells and installation of Pump Sets in the Dark Zone declared by the underground water Board, Govt. of Rajasthan where there are no chances of striking of water. Few examples are given in the Annexure-VI."

The Enquiry Officer gave an opportunity of hearing to the appellant, and after examining the bank records, recorded the findings on the charges, except Charge No. 12 against the appellant. The appellant was given a copy of the enquiry report by the Disciplinary Authority, with a proposal for his dismissal from service. The representation of the appellant was considered, and on which, by a reasoned order, the Disciplinary Authority of the Bank, finding the charges to be proved, and disagreeing with finding of the Enquiry Officer on Charge No. 12, awarded the punishment of dismissal from service to the appellant. The order of dismissal, enclosed a note of the Chief General Manager, who was the Appointing Authority. On acceptance of the charges, except Charge No. 12, an appeal was preferred by the appellant, which was dismissed by the Appellate Authority, by a reasoned order.

It was submitted before learned Single Judge that the Disciplinary Authority has not passed a speaking order. He had not accepted the findings of the Enquiry Officer on Charge No. 12, without giving any opportunity of hearing to the appellant, and giving reasons as to how the charges are proved. The appellate order was also assailed on the ground that it is not a speaking order. The appellant also challenged the findings recorded by the Enquiry Officer on merits, and relied upon the documents of inspection, conducted by the appellant on several dates, on which he was charged of being paid the halting allowance. The notices were also sent by him to the borrowers.

The order of Disciplinary Authority dismissing the appellant''s services was also challenged on the ground that the punishment of dismissal, being extreme punishment, could not have been awarded on the charges levelled against the appellant. The argument of proportionality was also raised.

Learned Single Judge considered all the submissions, and found that the charges were proved in the departmental enquiry, in which the appellant was given full and adequate opportunity to defend himself. On Charge No. 12, the Disciplinary Authority did not agree with the finding of the Enquiry Officer, but that even if the Charge No. 12 is ignored, the findings on remaining charges are sufficient to hold the appellant guilty, and to award the punishment of dismissal.

On the proportionality, learned Single Judge observed that seriousness of the charges, as found, and to the extend found, proved by the Enquiry Officer, and were sufficient to sustain the punishment, as imposed.

Learned counsel appearing for the appellant has assailed the judgment of learned Single Judge, mainly on the ground of the reasoning on the proportionality of the charges, and submitted that failure of appraisal without causing any loss to the Bank by any irregularity in pre-sanction and post-sanction inspections in micro financing, could not have been a ground to punish the appellant, with extreme punishment of dismissal. There was no charges of misappropriation and embezzlement, or lack of integrity against the appellant, as the charges considered separately or even cumulatively, did not impeach the integrity of the appellant.

Learned counsel for the appellant has relied on the judgment in Canara Bank Vs. V.K. Awasthy, AIR 2005 SC 2090 : (2005) 4 CompLJ 249 : (2005) 2 ESC 225 : (2005) 105 FLR 630 : (2005) 4 JT 40 : (2005) 2 LLJ 461 : (2005) 6 SCC 321 : (2005) SCC(L&S) 833 : (2005) 61 SCL 144 : (2005) 3 SCR 81 : (2005) 2 SLJ 463 : (2005) AIRSCW 2005 : (2005) 3 Supreme 492 , in which the question of proportionality of punishment was considered in the light of the previous decisions of Hon''ble Supreme Court, in Om Kumar and Others Vs. Union of India, (2000) 3 JT 92 : (2000) 7 SCALE 524 : (2001) SCC(L&S) 1039 : (2000) 4 SCR 693 Supp ; B.C. Chaturvedi Vs. Union of India and others, AIR 1996 SC 484 : (1995) 8 JT 65 : (1996) LabIC 462 : (1996) 1 LLJ 1231 : (1995) 6 SCALE 188 : (1995) 6 SCC 749 : (1995) 4 SCR 644 Supp : (1996) 1 UJ 80 , and Union of India and another Vs. G. Ganayutham (Dead) by LRs., AIR 1997 SC 3387 : (1997) 7 JT 572 : (2000) 2 LLJ 648 : (1997) 5 SCALE 606 : (1997) 7 SCC 463 : (1997) SCC(L&S) 1806 : (1997) 3 SCR 549 Supp : (1997) AIRSCW 3464 : (1997) 8 Supreme 269 as well as Chairman and Managing Director, United Commercial Bank and Others Vs. P.C. Kakkar, AIR 2003 SC 1571 : (2003) 96 FLR 1067 : (2003) 2 JT 78 : (2003) 2 LLJ 181 : (2003) 2 SCALE 42 : (2003) 4 SCC 364 : (2003) SCC(L&S) 468 : (2003) 1 SCR 1034 : (2003) 2 SLJ 65 : (2003) AIRSCW 944 : (2003) 2 Supreme 93 , and it was observed as follows:-

"21. Coming to the question whether the punishment awarded was disproportionate, it is to be noted that the various allegations as laid in the departmental proceedings reveal that several acts of misconduct unbecoming of a bank official were committed by the respondent.

It is to be noted that the detailed charge-sheets were served on the respondent employee who not only submitted written reply, but also participated in the proceedings. His explanations were considered and the inquiry officer held the charges to have been amply proved. He recommended dismissal from service. The same was accepted by the disciplinary authority. The proved charges clearly established that the respondent employee failed to discharge his duties with utmost integrity, honesty, devotion and diligence and his acts were prejudicial to the interest of the Bank. In the appeal before the prescribed Appellate Authority, the findings of the inquiry officer were challenged. The Appellate Authority after analysing the materials on record found no substance in the appeal.

The scope of interference with the quantum of punishment has been the subject-matter of various decisions of this Court. Such interference cannot be a routine matter.

Aforesaid being the position, the decision of the learned Single Judge on the quantum of punishment and of the Division Bench regarding alleged violation of the principles of natural justice cannot be maintained and are, therefore, set aside. The inevitable conclusion is that the order of dismissal as passed by the appellant Bank does not suffer from any infirmity. Appeal is accordingly allowed, but with no order as to costs.

In reply, learned counsel appearing for the respondent-Bank submits that the charges levelled against the appellant were serious enough to award the punishment of dismissal. Even if the finding on Charge No. 12 is ignored, the decision taken by the Disciplinary Authority, does not require any interference. Learned Single Judge has considered the arguments and has dismissed the writ petition, holding that the charges were proved, and that no illegality was caused in the procedure. The principles of natural justice were observed, and that the punishment is proportionate to the charges, which shows complete recklessness on the part of the appellant, as an Officer of the Bank in discharge of his duties. He has relied on the judgment in Ganesh Santa Ram Sirur Vs. State Bank of India and Another, AIR 2005 SC 314 : (2004) 9 JT 620 : (2005) 1 LLJ 188 : (2004) 9 SCALE 449 : (2005) 1 SCC 13 : (2005) 2 SLJ 246 : (2005) 1 UJ 123 : (2004) AIRSCW 6725 : (2004) 8 Supreme 607 , in which the Hon''ble Supreme Court observed, in para 34, as follows:-

"34. The bank manager/officer and employees of any bank, nationalised/or non-nationalised, are expected to act and discharge their functions in accordance with the rules and regulations of the bank. Acting beyond one''s authority is by itself a breach of discipline and trust and a misconduct. In the instant case Charge 5 framed against the appellant is very serious and grave in nature. We have already extracted the relevant Rule which prohibits the bank manager to sanction a loan to his wife or his relative or to any partner. While sanctioning the loan the appellant did not appear to have kept this aspect in mind and acted illegally and sanctioned the loan. He realised the mistake later and tried to salvage the same by not encashing the draft issued in the maiden name of his wife though the draft was issued but not encashed. The decision to sanction a loan is not an honest decision. Rule 34(3)(1) is a rule of integrity and, therefore, as rightly pointed out by Mr. Salve, t he respondent Bank cannot afford to have the appellant as bank manager. The punishment of removal awarded by the appellate authority is just and proper in the facts and circumstances of the case. Before concluding, we may usefully rely on the judgment Regional Manager, U.P. SRTC v. Hoti Lal, wherein this Court has held as under: (SCC p.614, para 10)

"If the charged employee holds a position of trust where honesty and integrity are inbuilt requirements of functioning, it would not be proper to deal with the matter leniently. Misconduct in such cases has to be dealt with iron hands. Where the persons deals with public money or is engaged in financial transactions or acts in a fiduciary capacity, the highest degree of integrity and trustworthiness in a must and unexceptionable. Judged in that background, conclusions of the Division Bench of the High Court do not appear to be proper. We set aside the same and restore order of the learned Single Judge upholding the order of dismissal."

In the present case, we find that the charges against the appellant were of recklessly disbursing the loans without following the norms of micro financing. He even went beyond the areas, which were not assigned to the Bank, for sanctioning loans to the residents living therein. He did not make pre-sanction and post-sanction inspections for considering the utilization of the loans and its end use. The Disciplinary Authority considered the effect of the proof of the charges against the appellant, and found that the charges were sufficient to punish the appellant with punishment of dismissal.

In Regional Manager, U.P.S.R.T.C., Etawah and Others Vs. Hoti Lal and Another, AIR 2003 SC 1462 : (2003) 96 FLR 1076 : (2003) 2 JT 27 : (2003) 2 LLJ 267 : (2003) 2 SCALE 54 : (2003) 3 SCC 605 : (2003) SCC(L&S) 363 : (2003) 1 SCR 1019 : (2003) 2 SLJ 56 : (2003) AIRSCW 801 , the Supreme Court observed that if the charged employed holds a position of trust where honesty and integrity are inbuilt requirements of functioning, it would not be proper to deal with the matter leniently.

In case of a Bank Officer, he is not only required to adhere to the norms prescribed by the Bank in disbursing the loans, but also required to be prudent in disbursing the loans, both, for the purposes of being an Officer of the Bank as well as protecting the Banks'' interests.

In the present case, we do not find that learned Single Judge has committed any error of law, to interfere with the judgment. We entirely agree with the findings recorded by learned Single Judge that that punishment was not disproportionate to the charges levelled against the appellant.

The Special Appeal is dismissed.