G. Daniel vs Kollam District Co-operative Bank

K. Vinod Chandran, J.—The petitioner retired as Deputy General Manager, from the respondent bank, after 34 years of service on 31.5.2009. The petitioner claims full retirement benefits and the service benefits which he is entitled to. The non payment of the benefits are on the ground of an enquiry pending against the petitioner, against actions of the petitioner causing loss to the Bank.

In the financial year 2006-07, the petitioner was suspended on grounds of allegation of loan sanction having been carried on, without obtaining sufficient security for the amounts disbursed. Though the petitioner was suspended from service, nothing transpired in the enquiry proceedings. Hence the petitioner was before this Court in a writ petition, which by judgment dated 18.3.2008 directed payment of subsistence allowance. It was also directed to complete disciplinary proceedings within six months therefrom.

The disciplinary proceedings having not been effectively proceeded with and since the petitioner''s retirement was fast approaching, the petitioner again approached this Court by W.P.(C) 28544/08. By Ext. P3 judgment, the petitioner was directed to be reinstated. This Court found that nothing had even then transpired in the enquiry proceedings. The claim for subsistence allowance though upheld in the earlier judgment, remained unpaid. Ext. P3 judgment, referred to the principle underlining the payment of subsistence allowance and reiterated the earlier direction to pay the same. The disciplinary proceedings were also directed to be concluded on or before 31.12.2008, especially noticing the date of retirement of the petitioner; falling on 31.5.2009.

The learned counsel for the petitioner submits that he was reinstated in service and was superannuated on 31.5.2009. But, however, the amounts due to him were not paid on the pretext that the recovery against the loanees were pending and the liability could be fixed only on such recovery being concluded. Learned counsel for the petitioner also submits that nothing has been done with respect to the enquiry proceedings after Ext. P3 judgment.

Learned counsel appearing for the respondent bank however refers to the counter affidavit and specifically points to the enormous loss caused by the petitioner to the respondent bank. The respondent bank would contend that the petitioner in his capacity as Deputy General Manager had sanctioned loans without taking sufficient security for the amounts disbursed, that too against the regulations of the bank and had thus caused loss to the bank. The learned counsel would specifically point out that against a liability of Rs. 64,31,372/- in the loan accounts, the total value of security would come to only Rs. 34,07,000/-. The difference would have to be mulcted on the petitioner, as loss caused to the bank; is the specific contention raised by the respondent bank.

It is pertinent to note that the enquiry which was initiated in the year 2007 has not reached anywhere even after five years of the retirement of the petitioner. This Court definitely accepts the contention of the learned counsel for the respondent bank that subsequent to the retirement of the petitioner, the bank could not pursue the disciplinary proceedings, but could only proceed with the enquiry so as to quantify the liability. But however even that proceedings seems to have not been taken up. The opinion of the bank seems to be that such liability could be quantified only after the recovery proceedings are concluded and the loss to the bank clearly quantified. It would be harsh to ask the petitioner to wait till such quantification is made, especially for payment of retirement benefits even five years after the retirement of the petitioner. The bank is unable to place before this Court as to what amounts have already been recovered, even now.

It is also pertinent to note that the loss caused to the bank could have been quantified in a proper proceeding, with notice to the petitioner, which the bank failed to take within a reasonable time. Even with respect to the disciplinary proceedings initiated against the respondent bank despite this Court having granted time to conclude the same, the bank failed to conclude such proceedings. The respondent bank allowed the petitioner to retire without conclusion of the enquiry proceedings. In such circumstances, this Court cannot countenance the conduct of the bank in withholding the retirement benefits, especially the amount of gratuity from being disbursed to the petitioner.

With respect to the actual quantification of the amounts it may not be proper for this court to go into the same. However, the bank admits that the amount of gratuity due to the petitioner was not paid at all.

Admittedly the subsistence allowance is paid. But however, the petitioner has a contention that the enquiry proceedings have not been concluded despite various opportunities and hence the period of suspension has to be regularised and full pay granted for the said period with the revision in pay fixation, also granted to the petitioner. This Court cannot decline such a prayer especially since the petitioner is said to have been kept out of service, on suspension for more than one year and three months, during which period the enquiry was not proceeded with effectively. Even later despite directions from this Court, to conclude the proceedings in a time bound manner, nothing towards that end was done. The petitioner hence would be entitled to full pay during the suspension period and any subsistence allowance paid by the respondent bank would have to be deducted, while quantifying the amounts payable.

With respect to the claim of medical reimbursement the petitioner had submitted medical bills amounting to Rs. 2,21,665/- against which the bank contends, in its statement, only an amount of Rs. 1,02,574/- has been sanctioned. Sanctioned amounts also have not been paid yet. With respect to the balance amount and the rejection of the same, the bank should intimate the petitioner as to why such amounts were declined. The remedy of the petitioner to challenge such rejection would be left open. The petitioner also claims leave surrender for 67 days being the amount of Rs. 1,18,545/- which the bank would have to verify.

In such circumstances, the gratuity and the leave surrender payable to the petitioner would be computed by the respondent bank and the admitted amounts be paid along with written communication showing computation of amounts. The full pay during the suspension period also shall be computed on the basis of any revision of pay applicable and the amounts due after deducting the amount paid as subsistence allowance also shall be computed and statement issued along with the payment. With respect to the medical reimbursement, the sanctioned amount would also be paid and communication issued as to the rejection of certain amounts. The petitioner would have reserved; his rights to challenge the computation of gratuity, leave surrender, the medical reimbursement and the pay applicable during the suspension period.

The petitioner also claims interest. Learned counsel has relied on a judgment of the apex court reported in H. Gangahanume Gowda Vs. Karnataka Agro Industries Corpn. Ltd., . The Honourable Supreme Court found that interest on wrongfully withheld guarantee is a statutory compulsion and not a matter of discretion. On the facts which comes to fore, this Court is convinced that even for the amounts due, other than gratuity, the petitioner is entitled to interest since the withholding of such amounts was not at all justified. The computation of the above amounts shall be done within a period of one month from today and the amounts shall be paid within two weeks from the issuance of the computation statements.

The amounts under the various heads, as indicated above, shall carry interest at the rate of 6% from 31.5.2009 and if the bank fails to comply with the above directions within the stipulated time, the amounts shall carry interest at the rate of 10% from 31.5.2009 till payment.

Writ petition is allowed to the above extent.