Ramadhin Ram vs The Chairman Managing Director Head Office Bank of India

Narayan Shukla, J.—1. Heard Mr. Kapil Dev, learned Senior counsel assisted by Mr. Ashwani Kumar, learned counsel for the petitioner as well as Mr. Lalit Shukla, learned counsel for the respondent-Bank and Mr. Shailendra Singh Chauhan, learned counsel for the opposite party No. 8.

The petitioner while posted as Branch Manager at Tandaur Branch of the State Bank of India sanctioned the loan under SCP (Special Component Plan) & SLRS (Scheme for Liberation and Rehabilitation of Scavengers) schemes to purchase the goats and pigs in which some irregularities were reported, on account of which a disciplinary proceeding to impose a major penalty was initiated against him, in furtherance of which a charge-sheet dated 27 March, 1998 was issued to him containing three charges. The charge No. 1 was to defraud the Government Subsidy and/or marginal money. The charge No. 2 was that petitioner had colluded with the Village Development Officer, Veterinary doctors, insurance company agents as well as borrowers of goats and pigs who misappropriated the Government subsidy and/or margin money. The charge No. 3 was with regard to dereliction of duty committed by the petitioner.

The learned Senior Counsel Mr. Kapil Dev, appearing for the petitioner has submitted that there was no charge levelled against the petitioner for loss of money. The petitioner denied all the charges before the Inquiry Officer; during the course of inquiry the petitioner submitted a list of documents required for defence, he was assured to be made available some documents on the next date, but only few documents were supplied and remaining documents were not supplied to him even till conclusion of inquiry. He drew attention of this Court towards the Regulation 6(11) and (12) of the Discipline and Appeal Regulations. Regulation 6(11) reads that ''Inquiring Authority shall, on receipt of the notice for the discovery or production of the documents, forward the same or copies thereof to the authority in whose custody or possession the documents are kept with a requisition for the production of the documents on such date as may be specified.''

Regulation 6(12) reads that ''On the receipt of the requisition under sub-regulation (11), the authority having custody or possession of the requisitioned documents, shall arrange to produce the same before the Inquiry Authority on the date, place and time specified in the requisition.''

Since no documents were supplied to him he had claimed the violation of the aforesaid Regulations. In support of his submissions he cited the following decisions:-

Moni Shankar Vs. Union of India and Another , (2008) 3 SCC 484 para 17. "17. The departmental proceeding is a quasi judicial one. Although the provisions of the Evidence Act are not applicable in the said proceeding, principles of natural justice are required to be complied with. The Court exercising power of judicial review are entitled to consider as to whether while inferring commission of misconduct on the part of a delinquent officer relevant piece of evidence has been taken into consideration and irrelevant facts have been excluded therefrom. Inference on facts must be based on evidence which meet the requirements of legal principles. The Tribunal was, thus, entitled to arrive at its own conclusion on the premise that the evidence adduced by the department, even if it is taken on its face value to be correct in its entirety, meet the requirements of burden of proof, namely preponderance of probability. If on such evidences, the test of the doctrine of proportionality has not been satisfied, the Tribunal was within its domain to interfere. We must place on record that the doctrine of unreasonableness is giving way to the doctrine of proportionality. (See - State of U.P. v. Sheo Shanker Lal Srivastava : , (2006)) 3 SCC 276 and Coimbatore District Central Cooperative Bank vs. Coimbatore District Central Cooperative Bank Employees Association and another : , (2007) 4 SCC 669".

Ministry of Finance and Another Vs. S.B. Ramesh , (1998) 3 SCC 227 para 14 and 15.

"14. Then, again after extracting the relevant portions from the disciplinary authority''s order, the Tribunal observed as follows:-

"We have extracted the fore-going portions from the order of the disciplinary authority for the purpose of demonstrating that the disciplinary authority has placed reliance on a statement of Smt. K.R. Aruna. without examining Smt. K.R. Aruna. without examining Smt. Aruna as a witness in the inquiry and also on serval documents collected from somewhere without establishing the authenticity thereof to come to a finding that the applicant has conducted himself in a manner unbecoming of a Government servant. The nomination form alleged to have been filed by Sri Ramesh for the purpose of Central Government Employees'' Insurance Scheme, was not a document which was attached to the memorandum of charges as one on which the Disciplinary Authority wanted to rely on for establishing the charge. This probably was one of the documents which the applicant called for, for the purpose of cross-examining the witness or for making proper defence. However, unless the Government servant wanted this document to be exhibited in evidence, it was not proper for the Enquiry Authority to exhibit it and to rely on it for reaching the conclusion against the applicant. Further, an inference is drawn that S.B.R. Babu mentioned in the school records (admission registers and Sh. Ramesh mentioned in the Municipal records was the applicant, on the basis of a comparison of the hand-writing or signature or telephone numbers are only guess work. which do not amount to proof even in a disciplinary proceedings. It is true that the degree of proof required in a departmental disciplinary proceedings, need not be of the same standard as the degree of proof required for establishing the guilt of an accused in a criminal case. However, the law is settled now that suspicion, however strong, cannot be substituted for proof even in a departmental disciplinary proceeding. Viewed in this perspective we find there is a total dearth of evidence to bring home the charge that the applicant has been living in a manner unbecoming of a Government servant or that, he has exhibited adulterous conduct by living with Smt. K.R. Aruna and begetting children."

It has been contended that after conclusion of the management case the Inquiring Authority did not give opportunity to the petitioner to state his defence orally or in writing that has resulted the violation of the provisions of Regulation 6(15) of Bank of India Officer Employees'' (Discipline and Appeal) Regulations and denial of the Principles of Natural Justice. It has vitiated the entire enquiry, therefore, no punishment could be inflicted on such a vitiated enquiry.

Regulation 6(15) reads that ''when the case in support of the charge is closed, the officer employee may be required to state his defence, orally or in writing, as he may prefer. If the defence is made orally, it shall be recorded and the officer employee shall be required to sign the record, in either case a copy of the statement of defence shall be given to the Presenting Officer, if any, appointed.''

On 9 March 1999 the petitioner closed the defence case, but he had not got himself examined. Therefore, the Inquiring Authority was required to examine on the circumstances appearing against him in the evidence but he did not do so, whereby the provision of Regulation 6(17) reads that ''The Inquiring Authority may, after the officer employee closes his evidence, and shall, if the officer employee has not got himself examined, generally question him on the circumstances appearing against him in the evidence for the purpose of enabling the officer employee to explain any circumstances appearing in the evidence against him.''

In support of his submission he cited several cases, one of which is quoted here:-

Narinder Mohan Arya Vs. United India Insurance Company Ltd. , (2006) 4 SCC 713 para 26.

"26. In our opinion the learned Single Judge and consequently the Division Bench of the High Court did not pose unto themselves the correct question. The matter can be viewed from two angles. Despite limited jurisdiction a civil court, it was entitled to interfere in a case where the report of the Enquiry Officer is based on no evidence. In a suit filed by a delinquent employee in a civil court as also a writ court, in the event the findings arrived at in the departmental proceedings are questioned before it, it should keep in mind the following: (1) the enquiry officer is not permitted to collect any material from outside sources during the conduct of the enquiry. [See State of Assam & Anr. V. Mahendra Kumar Das & Ors. [, (1970) 1 SCC 709 : AIR 1970 SC 1255] (2) In a domestic enquiry fairness in the procedure is a part of the principles of natural justice [See Khem Chand V. Union of India & Ors., , AIR 1958 SC 300 and State of Uttar Pradesh v. Om Prakash Gupta, , (1969) 3 SCC 775]. (3) Exercise of discretionary power involve two elements (i) Objective and (ii) subjective and existence of the exercise of an objective element is a condition precedent for exercise of the subjective element. [See K.L. Tripathi V. State of Bank of India & Ors. [, (1984) 1 SCC 43 : AIR 1984 SC 273]. (4) It is not possible to lay down any rigid rules of the principles of natural justice which depends on the facts and circumstances of each case but the concept of fair play in action is the basis. [See Sawai Singh V. State of Rajasthan [, AIR 1986 SC 995] (5) The enquiry officer is not permitted to travel beyond the charges and any punishment imposed on the basis of a finding which was not the subject matter of the charges is wholly illegal. [See Director (Inspection & quality Control) Export Inspection Council of India Vs. Kalyan Kumar Mitra, [1987 (2) Cal LJ 344]. (6) Suspicion or presumption cannot take the place of proof even in a domestic enquiry. The writ court is entitled to interfere with the findings of the fact of any tribunal or authority in certain circumstances. [See Central Bank of India Ltd. V. Prakash Chand Jain, , AIR 1969 SC 983, Kuldeep Singh v. Commissioner of Police , (1999) 2 SCC 10."

He further submitted that the finding of the Inquiring Authority does not contain the gist of the defence of the petitioner in respect of various articles of charges and thus there has been violation of Regulation 6(21)(i)(b) which reads that ''On the conclusion of the inquiry the Inquiring Authority shall prepare a report which shall contain the following:

(b) a gist of the defence of the officer employee in respect of each article of charge''.

He further claimed the violation of Regulation 6(21)(ii) of Regulation, according to which the Inquiring Authority was required to forward to the Disciplinary Authority, along with his finding the entire record of enquiry but he did not send the entire record of enquiry to the disciplinary authority along with his finding as only the finding was sent. He further contended that no witnesses were produced for their examination. On merit also he contended that the sellers of goat, pigs, veterinary doctors and Insurance agents and management witnesses had deposed that the animals were presented before the veterinary doctor who had examined their whole status and recorded it in the whole survey which were found genuine.

On the basis of the aforesaid submissions, the learned counsel for the petitioner has submitted that since the inquiry was vitiated in law, the petitioner who was awarded the punishment being based on such inquiry, is unsustainable.

He also cited following decisions:-

U.P. State Textile Corporation Ltd. Vs. P.C. Chaturvedi and others , (2005) 8 SCC 211 para 10

"10. Records reveal that copies of a large number of documents were supplied to Respondent No. 1. Whether they were adequate for the purpose of taking a view in the disciplinary proceedings is another matter, but to say the relevant documents were not supplied is not correct. The High Court had attached great importance to the alleged admission of documents for the purpose of adjudication on 8-10-1992. Though this ground was urged with great vehemence before the High Court, it is not disputed that what was accepted by the enquiry officer on 8-10-1992 was not any document but a list of documents/books of accounts in the possession of Respondent 1 employee. It has not been shown as to how the non-supply of this list caused any prejudice. The stand of the respondent was that additional documents had been entertained which plea the High Court had wrongly accepted. As noted above, no additional document was brought on record, and it was the list. On that score, the High Court''s view is clearly untenable."

Syndicate Bank and others Vs. Venkatesh Gururao Kurati , 2006 (3) SCC 150 para 13 and 18

The High Court''s finding, in our view, is perverse. The High Court having come to the conclusion that the documents sought by the respondent are not the basis for framing the charges nor those on which the disciplinary authority placed any reliance to prove the charges against the delinquent officer held that non-supply of those documents sought by the delinquent officer prejudiced his case and resulted in vitiating the proceedings.

In our view, non-supply of documents on which the enquiry officer does not rely during the course of enquiry does not create any prejudice to the delinquent. It is only those documents, which are relied upon by the enquiry officer to arrive at his conclusion, the non-supply of which would cause prejudice being violative of principles of natural justice. Even then, the non-supply of those documents prejudice the case of delinquent officer must be established by the delinquent officer. It is well settled law that the doctrine of principles of natural justice are not embodied rules. It cannot be put in a straitjacket formula. It depends upon the facts and circumstances of each case. To sustain the allegation of violation of principles of natural justice, one must establish that prejudice has been caused to him for non-observance of principles of natural justice.

In reply, Mr. Lalit Shukla, learned counsel for the respondent-Bank has submitted that the petitioner being Branch Manager of the Bank had abused his official position and engineered defrauding of Government subsidy and/or margin money while financing for goat rearing under the SCP (Special Component Plan) & SLRS (Scheme for Liberation and Rehabilitation of Scavengers) schemes. The Banks officials are expected to implement the scheme properly not only by sanctioning loans to deserving people but also by ensuring the proper disbursement and post disbursement supervision to ensure that the assets for which loan has been granted are created, the activity has commenced and that it continues so that through income generation the social objective is achieved. During the course of investigation the petitioner''s version was recorded. During the course of inquiry it was undoubtedly reflected that the petitioner did not discharge his duty with honesty, integrity and diligently. It was submitted that no sale/purchase of goats were taken place and merely formalities and documentation prepared to show that the purchase and sale of cattle had taken place. In so far as the supply of relevant document is concerned, the documents asked by the defence through his letter dated 26.10.1998 were supplied to him which were marked as DEX-1 to DEX-35. However, only few documents such as covering letter of Government Agencies, forwarding loan applications and few cover notes were not available. The presenting officer also produced 345 documents in support of the charges, copies of which were provided to the defence. They also carried out inspection of original documents. Thus, almost all the documents were provided to the petitioner. More over, neither in the inquiry nor before the disciplinary authority/appellate authority, the petitioner had pleaded as to how the documents sought by him were relevant for his defence and how the same has prejudiced his case. The Presenting Officer had produced his witnesses and the inquiry authority had given opportunity to defence to cross examine them and thereafter to produce his witness. Whereas defence side produced only one witness. The inquiry proceedings were concluded when the defence stated that they have no more witness to produce. In so far as the examination of petitioner is concerned, it was stated that neither the petitioner nor did his defence Assistant make any request for examining him. Thus it has been contended that petitioner was given full opportunity to defend his case in the departmental proceedings and therefore, there had been no violation of principles of natural justice.

In support of his submission he has cited the following cases;

(1) State Bank of India and others Vs. S.N. Goyal , (2008) 8 SCC 92 para 41

"41. At the relevant point of time the respondent was functioning as a Branch Manager. A Bank survives on the trust of its clientele and constituents. The position of the Manager of a Bank is a matter of great trust. The employees of the Bank in particular the Manager are expected to act with absolute integrity and honesty in handling the funds of the customers/borrowers of the Bank. Any misappropriation, even temporary, of the funds of the Bank or its customers/borrowers constitutes a serious misconduct, inviting severe punishment. When a borrower makes any payment towards a loan, the Manager of the Bank receiving such amount is required to credit it immediately to the borrower''s account. If the matter is to be viewed lightly or leniently it will encourage other Bank employees to indulge in such activities thereby undermining the entire banking system. The request for reducing the punishment is misconceived and rejected."

(2). State Bank of India Vs. Ram Lal Bhaskar and another , (2011) 10 SCC 249 para 9

"9. We have perused the decision of this Court in UCO Bank and Another v. Rajinder Lal Capoor (supra) and we find that in the facts of that case the delinquent officer had already superannuated on 01.11.1996 and the charge-sheet was issued after his superannuation on 13.11.1998 and this Court held that the delinquent officer having been allowed to superannuate, the charge-sheet, the enquiry report and the orders of the disciplinary authority and the appellate authority must be held to be illegal and without jurisdiction. In the facts of the present case, on the other hand, we find that the charge-sheet was issued on 22.12.1999 when the respondent No. 1 was in service and there were clear provisions in Rule 19(3) of the State Bank of India Officers'' Service Rules, 1992, that in case disciplinary proceedings under the relevant rules of service have been initiated against an officer before he ceased to be in the Bank''s service by the operation of, or by virtue of, any of the rules or the provisions of the rules, the disciplinary proceedings may, at the discretion of the Managing Director, be continued and concluded by the authority by which the proceedings were initiated in the manner provided for in the rules as if the officer continues to be in service, so however, that he shall be deemed to be in service only for the purpose of the continuance and conclusion of such proceedings."

(3). State Bank of India and others Vs. Ramesh Dinkar Punde , (2006) 7 SCC 212 para 9 and 21

"9. It is impermissible for the High Court to re-appreciate the evidence which had been considered by the Inquiry Officer a Disciplinary Authority and the Appellate Authority. The finding of the High Court, on facts, runs to the teeth of the evidence on record."

"21. Confronted with the facts and the position of law, learned counsel for the respondent submitted that leniency may be shown to the respondent having regard to long years of service rendered by the respondent to the Bank. We are unable to countenance with such submission. As already said, the respondent being a bank officer holds a position of trust where honesty and integrity are inbuilt requirements of functioning and it would not be proper to deal with the matter leniently. The respondent was a Manager of the Bank and it needs to be emphasised that in the banking business absolute devotion, diligence, integrity and honesty needs to be preserved by every bank employee and in particular the bank officer so that the confidence of the public/depositors is not impaired. It is for this reason that when a bank officer commits misconduct, as in the present case, for his personal ends and against the interest of the bank and the depositors, he must be dealt with iron hands and he does not deserve to be dealt with leniently."

(4) Union of India and others Vs. Alok Kumar , (2010) 5 SCC 349 para 83

"83. Earlier, in some of the cases, this Court had taken the view that breach of principle of natural justice was in itself a prejudice and no other ''de facto'' prejudice needs to be proved. In regard to statutory rules, the prominent view was that the violation of mandatory statutory rules would tantamount to prejudice but where the Rule is merely directory the element of de facto prejudice needs to be pleaded and shown. With the development of law, rigidity in these Rules is somewhat relaxed. The instance of de facto prejudice has been accepted as an essential feature where there is violation of non-mandatory rules or violation of natural justice as it is understood in its common parlance. Taking an instance, in a departmental inquiry where the Department relies upon a large number of documents majority of which are furnished and an opportunity is granted to the delinquent officer to defend himself except that some copies of formal documents had not been furnished to the delinquent. In that event the onus is upon the employee to show that non-furnishing of these formal documents have resulted in de facto prejudice and he has been put to a disadvantage as a result thereof."

We have heard the learned counsels for the parties, the petitioner has attacked the inquiry on the ground that it suffers from procedural error. It was contended by learned Senior counsel appearing for the petitioner that neither the documents as were asked by the petitioner were supplied to him nor were the witnesses produced for their examination. On account of which he has also claimed the violation of the relevant regulations which imposes a duty upon the inquiry officer to record his finding about the charges and defence produced by the parties.

In reply, the learned counsel for the respondent-Bank has submitted that sufficient documents were provided to the petitioner and he was also given opportunity to inspect the relevant documents, more over the petitioner did not point out any other documents to be relevant for the inquiry which were not supplied to him. Whereas it was his obligation to specify the documents which were relevant for the inquiry. In so far as, the examination of witness is concerned, it was contended that petitioner himself had stated that there was no other witness to be produced by him. In totality the petitioner has not pleaded about the prejudiceness caused to him from non-supply of documents demanded by him or production of witnesses. On the other hand, the inquiry officer has found proved the charges on the basis of material available before him. However, we are of the view that once no prejudiceness, caused to the petitioner, has been pleaded for want of supply of any relevant documents or production of witnesses, it would be inappropriate to interfere with the inquiry as well as punishment awarded to him.

In State Bank of Patiala and others Vs. S.K. Sharma , (1996) 3 SCC 364 para 33(4)(a) of the Supreme Court held that "in the case of a procedural which is not of a mandatory character, the complaint of violation has to be examined from the standpoint of substantial compliance. Be that as it may, the order passed Violation of such a provision can be set-aside only where such violation has occasioned prejudice to the delinquent employee."

In the present case the petitioner has failed to establish that, the documents which were asked by him to be supplied were relevant for his defence. Moreover he had not pleaded any prejudiceness for want of supply of relevant documents.

In view of the aforesaid submissions, we do not find any irregularity in the procedure of inquiry. In so far as the quantum of punishment is concerned, in view of the petitioner''s misconduct to defraud the Bank being in connivance with Village Development Officer, Veterinary Doctor, Insurance Company Agents, borrower of goats and pigs, we do not find the punishment awarded to the petitioner to be harsh.

In the result the writ petition stands dismissed.