Ajay Kumar vs General Manager, State Bank of India and Others

Dr. Ravi Ranjan, J.—I have heard the parties and perused the records of this case. The petitioner, who was working as Special Assistant in the State of Bank of India in S.K. Nagar Branch, Patna, was served with a memorandum of charges on 16th of December, 2009 as contained in Annexure-3. Altogether following three charges were framed against the petitioner:--

"(i) You have deliberately overdrawn beyond the limit of Rs. 3.00 lacs in your CA OD A/C No. 10223782514 on 20 occasions from 24.6.2005 to 12.4.2007, thereby rendering above account irregular by Rs. 1.43 lac. The irregularity continued for more than a year.

(ii) You have liquidated these over drawings on 23.5.2007 and 24.5.2007 by taking credit of Rs. 20,000/- and Rs. 50,000/- from our two Cash Credit borrowers M/s. Aryodaya and M/s. Jai Maa Kali Cementwala respectively to liquidate these over drawings against stipulations of the service condition and credited the same to your SB A/C No. 10223875056 from where fund was utilized to liquidate overdrawing in CA OD A/C No. 10223782514.

(iii) You have deposited cash of Rs. 40,000.00 and Rs. 50,000.00 in your account No. 10223875056 on 23.5.2007 and Rs. 30,000.00 in the account No. 10223782514 on 24.5.2007. You have failed to satisfactorily explain the source of cash deposited in your account."

It was also stated in paragraph 2 of the aforesaid memorandum that the charges, if established, would amount to gross misconduct in terms of the "Memorandum of Settlement of Disciplinary Action for Workmen" dated 10.4.2002.

The petitioner submitted his defence and, thereafter, departmental proceeding was initiated by appointing Inquiry Officer vide Annexure-5 dated 20.3.2010. The Inquiry Officer submitted his report and a copy thereof was made available to the petitioner along with the letter dated 18.10.2010 (Annexure-6) asking him to make his submission on the inquiry report as the charges were found proved by the Inquiry Officer. The petitioner filed his written submission. Thereafter, he was again served with a notice dated 28.3.2011 (Annexure-7) to appear and explain as to why the penalty of removal "from service with superannuation benefit without disqualification from future employment" should not be imposed upon him. The petitioner again submitted his reply vide Annexure-8 dated 18.4.2011. However, the disciplinary authority vide its order contained in memorandum dated 30th of May, 2011 (Annexure-10) imposed the penalty of removal from service with superannuation benefits (i.e., pension, provident fund and gratuity) as would be due otherwise under the Rules and Regulations prevailing at the relevant time and without disqualification from future employment in terms of paragraph 6(b) of the Memorandum of Disciplinary Action Procedure for workmen dated 10.4.2009.

The petitioner preferred appeal vide the memorandum of appeal contained in Annexure-11/A dated 13.7.1011, however, the same was also dismissed vide order dated 23.8.2011, as contained in Annexure-11/B, by the appellate authority and Deputy General Manager (O & C), NW-1. Hence this writ application came to be filed by the petitioner-seeking quashing of the orders contained in Annexures-10 as well as 11/B.

First submission made on behalf of the petitioner is that the charges, as set out in the charge-sheet contained in Annexure 3, do not fall in any category of the "gross misconduct" as set out under Clause 5 of the Disciplinary Action and Procedure for Workmen Staff (Memorandum of Settlement dated 10th April, 2002) (hereinafter to be referred to as "the Disciplinary Action and Procedure"). It is submitted that the first charge against the petitioner is that he had deliberately overdrawn beyond limit on twenty occasions from 24.6.2005 to 12.4.2007 thereby rendering his account irregular by Rs. 4.43 lacs. It is submitted that it would emerge from the inquiry report contained in Annexure-6 that such overdrawing was made after necessary permission of the Branch Manager concerned. However, the Inquiry Officer had found the charges proved on account of the fact that the Branch Manager may allow such overdrawing under his discretion but he could not have done it repeatedly. It has been urged that such observation does not disclose that the petitioner had withdrawn such money fraudulently or without the permission of the Branch Manager. That being the situation, it is contended that he cannot be held guilty on the aforesaid charge and the aforesaid charge cannot come under Clause 7 of the Disciplinary Action and Procedure for its consideration as "gross misconduct".

Secondly, it is submitted that admittedly the entire money has been paid back by the petitioner, thus, it cannot be held that by his aforesaid action he had put the Bank in pecuniary loss. So far the second charge is concerned, it is submitted that of course, two of the cash credit borrowers of the Bank namely, M/s. Aryodaya and M/s. Jai Maa Kali Cementwala, had liquidated part of the drawings of the petitioner by taking credit of Rs. 20,000.00 and Rs. 50,000.00 on 23.5.2007 and 24.5.2007, respectively but they were examined as witnesses in the proceeding and have stated that they had helped the petitioner for the reason that they were family friends and relatives knowing each other since long. Third allegation against the petitioner is that he could not explain the source of cash deposited in his account for liquidation of the overdrawn amount. He had deposited cash of Rs. 75,000/- altogether. Learned counsel has submitted that the petitioner had borrowed some of the amount from his friends and well-wishers and the rest by selling jewellery for which Kachcha transaction was made, therefore, he was not in a position to produce a receipt in support of this submission. It is submitted that a sum of Rs. 75,000.00 is not a huge amount for a Bank Employees which could not have been deposited by him. Further submission is that non-disclosure of the source of repayment does not amount to any "gross misconduct" asset out in Clause 5 of the Disciplinary Action and Procedure. Thus, it is contended on behalf of the petitioner that the charges can well be held to be les non scripta as the plain reading of the relevant provision would disclose that such alleged offence cannot be brought into the ambit of "gross misconduct" rather it is submitted that the same may be considered under "minor misconduct" specially under Clause 7(d) of the Disciplinary Action and Procedure which is reproduced for better appreciation as under:--

"7. By the expression "minor misconduct" shall be meant any of the following acts and omissions on the part of an employee:

(a) xx xx

(b) xx xx

(c) xx xx

(d) breach of any rule of business of the bank or instruction for the running of any department.

xx xx "

It is urged that from conjoint reading of the charges and the findings recorded in the inquiry report and also in view of the fact that no financial loss has been caused upon the Bank due to action of the petitioner and no fraud had been played by the petitioner for overdrawing the amount since such action was well known to the Bank authority which is apparent from the observation of the Inquiry Officer, the charges could only be clarified as minor misconduct as it would be apparent that the overdrawing was made after permission granted by the Branch Manager. Learned counsel submitted that no action has been taken against the Branch Manager but the petitioner, even though had returned the money, has been punished. It is further submitted that the impugned orders are omnibus and unspeaking without recording any finding upon the cause shown by the petitioner.

Learned counsel for the petitioner has further submitted that even if it is assumed that the charges could come under the ambit of "gross misconduct" and stand proved, however, since no loss has been caused upon the Bank and no fraud has been played by the petitioner, the punishment inflicted upon the petitioner would be harsh. On the aforesaid issue learned counsel has placed reliance upon a decision of the Apex Court in Deputy Commissioner, KVS and Others Vs. J. Hussain, . It is submitted that when the charges are proved then it would be upon the disciplinary authority with whom the discretion lies to decide as to what kind of punishment is to be imposed, however, the discretion has to be exercised objectively keeping in mind the nature and gravity of charge, past conduct, nature and responsibilities of duties assigned to the delinquent, previous penalty, if any, and the discipline required to be maintained in the department or the establishment where he works as well as extenuating circumstances, if any. The appellate authority, while having relook of the case, would be required to examine as to whether the punishment imposed by the disciplinary authority is reasonable or not.

It is contended that in the present case, even the appellate authority has not considered this aspect and has simply passed an order dismissing the appeal without recording any finding upon the grounds raised by the petitioner which are contained in the memorandum of appeal contained in Annexure-11/A. It has not recorded any finding upon the issue of quantum of punishment. The appellate authority has only held, without recording any reason, that the appeal is devoid of any merit and there is no reason to disagree with the order passed by the disciplinary authority. It has nowhere considered as to whether the punishment is reasonable or not.

Counter affidavit has been filed on behalf of the respondents defending its action. It has been stated that the charges framed against the petitioner would come under the ambit of "gross misconduct". Learned counsel for the respondent-Bank took me through Clause 5(i) of the "Disciplinary Action and Procedure'' to impress upon this Court that any action prejudicial to the interest of the bank or gross negligence or negligence involving or likely to involve the bank in serious loss would also amount to "gross misconduct". However, a question would arise as to whether in case the petitioner had overdrawn some amount with the permission of the Branch Manager of the Bank then can be held to be gross negligence or negligence involving or likely to involve the bank in serious loss specially when the entire amount with interest was admittedly deposited by the petitioner? Whether it should not be considered to be breach of rule of business of Bank or instruction for running of any department as envisaged under Clause 7(d) of the Disciplinary Action and Procedure bringing the charges under the ambit of minor misconduct?

Second issue to be considered would be as to whether such amount was actually overdrawn by the petitioner without any permission from the Branch Manager or with his permission? The inquiry report is silent on this point as the only observation made on this issue is that even Branch Manager cannot allow such overdrawing repeatedly. The question is whether he had allowed or he did not allow? This question is not answered. In case the Branch Manager had allowed then the picture would be different. It is not the case of any of the parties that the petitioner had utilized his ID etc. for fraudulent withdrawal. So far the borrowers are concerned, there is no finding that they were not having long drawn relationship etc. with the petitioner and as such their statement is to be discarded. Learned counsel for the respondents has not been able to point out any finding recorded by the Inquiry Officer that such liquidation was made by them in lieu of any financial help or any benefit granted by the petitioner being an employee of the Bank.

Another question would be that even if the petitioner had paid back Rs. 75,000.00 by cash, i.e., Rs. 40,000.00 on one day, thereafter, Rs. 5,000.00 and Rs. 30,000.00 on subsequent occasions, whether this would also come under the ambit of "gross misconduct" even if the source could not be disclosed by the petitioner.

It appears that several issues were raised by the petitioner before the appellate authority but the appellate authority has not dealt with the aforesaid grounds and recorded any finding upon them rather a non-speaking order has been passed. The appellate authority has also not considered as to whether in the facts and circumstances of the case the punishment awarded upon the petitioner was reasonable or not specially in terms of observation of the Apex Court in Deputy Commissioner, KVS & Ors. (supra). Relevant passage from the aforesaid judgment is extracted as under:--

"6. When the charge proved, as happened in the instance case. It is the disciplinary authority with whom lies the discretion to decide as to what kind of punishment is to be imposed. Of course, this discretion has to be examined objectively keeping in mind the nature and gravity of charge. The Disciplinary Authority is to decide a particular penalty specified in the relevant Rules. Host of factors go into the decision making while exercising such a discretion which include, apart from the nature and gravity of misconduct, past conduct, nature of duties assigned to the delinquent, responsibility of duties assigned to the delinquent, previous penalty, if any, and the discipline required to be maintained in department or establishment where he works, as well as extenuating circumstances, if any exist. The order of the Appellate Authority while having a relook of the case would, obviously, examine as to whether the punishment imposed by the Disciplinary Authority is reasonable or not. If the Appellate Authority is of the opinion that the case warrants lesser penalty, it can reduce the penalty so imposed by the Disciplinary Authority. Such a power which vests with the Appellate Authority departmentally is ordinarily not available to the Court or a Tribunal. The Court while undertaking judicial review of the matter is not supposed to substitute its own opinion on reappraisal of facts. (See: The Administrator, Union Territory of Dadra and Nagar Haveli Vs. Gulabhia M. Lad, . In exercise of power of judicial review, however, the Court can interfere with the punishment imposed when it is found to be totally irrational or is outrageous in defiance of logic. This limited scope of judicial review is permissible and interference is available only when punishment is shockingly disproportionate, suggesting lack of good faith. Otherwise, merely because in the opinion of the Court lesser punishment would have been more appropriate, cannot be a ground to interfere with the discretion of the departmental authorities."

The Hon''ble Supreme Court has laid down as to what should be considered by the appellate authority while having a re-look of the order passed by the disciplinary authority. That includes nature and gravity of charge, past conduct, nature and responsibility of the delinquent and previous penalty etc. The appellate authority, while having a re-look of the case would, obviously, examine also as to whether the punishment imposed by the disciplinary authority is reasonable or not.

It does not appear from the appellate order that the aforesaid procedure has been followed by it by recording necessary findings. The Apex Court, at the same time, has also observed that the High Court while undertaking its judicial review of the matter would not substitute its own opinion on the reappraisal of the facts. However, the Courts can interfere with the punishment imposed when it is found to be totally irrational or is outrageous. In the present case, since the appellate authority itself has not considered the aforesaid issues, in my considered opinion, this matter should be remitted back to it for reconsideration of the issues discussed above in terms of the observations of the Apex Court rendered in Deputy Commissioner, KVS & Ors. (supra) as well as the observations made by this Court as above. As a result, this application succeeds. The appellate order contained in Annexure-11/B is set aside and the matter is remitted back for passing a reasoned order after consideration of the grounds raised by the petitioner, the observation of this Court made as above and also the issue of reasonability of the quantum of punishment.