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2004 DIGILAW 142 (CAL)

SUKUMAR BHATTACHARYA v. BANK OF INDIA

2004-02-26

SOUMITRA SEN

body2004
SOUMITRA SEN, J. ( 1 ) THE petitioner at the material point of time was the Manager of the salkia Branch of the respondent (hereinafter referred to as the Bank ). The petitioner has alleged that on 19th September, 1997, a member of the subordinate Staff of the said branch of the Bank brought one person claiming to be one Ajay Kumar Mohanty along with an Account Opening Form. The said Ajay Kumar Mohanty described himself as the proprietor of Polycab indsutries of Howrah and expressed his desire to open a Current Account in the said branch, ( 2 ) AFTER checking the Account Opening Form and the enclosures thereto which was accompanied by a copy of the challan for professional tax of the said person bearing the endorsement of payment of such tax, the petitioner alleged to have instructed the said sub-staff to take the said person to the dealing official for the actual opening of the account. It is the case of the petitioner that the said Ajay Kumar Mohanty assured that his introducer would arrive shortly and would carry out the necessary formalities. ( 3 ) THE said account was thereafter opened by another official of the bank after the opening of the Account Cheque Book was also issued to the said person. Subsequent thereto a cheque dated August 22, 1997, for a sum of Rs, 12,77,081/- was deposited on 28th of September, 1997. The said cheque was issued by Indian Oil Corporation favouring M/s. Polycab industries and drawn on State Bank of India, Dhakuria Branch. ( 4 ) THE said cheque was cleared in usual course of business. Thereafter, the said Ajay Kumar Mohanty between 23rd of September, 1997 and 30th of November, 1997, withdrew almost the entire amount. Thereafter, it transpires that M/s. Polycab Industries have alleged that the account which was opened in the name of Polycab Industries by Ajay Kumar Mohanty in the said branch of the bank was a fictitious account and the money has been fraudulently withdrawn by the said Ajay Kumar Mohanty who was not the proprietor and had no connection with M/s. Polycab Industries. Thereafter Polycab Industries has filed a suit inter alia against the Bank claiming a money decree. Thereafter Polycab Industries has filed a suit inter alia against the Bank claiming a money decree. ( 5 ) ON the back drop of the aforesaid facts, the Bank issued a charge- sheet on 9th December, 1998, inter alia, alleging that the petitioner with dishonest intentions have aided and abetted the said Ajay Kumar Mohanty who falsely claimed to the proprietor of M/s. Polycab Industries in opening of the current account without any introduction with scant regard to the bank's instructions and guidelines and thereby facilitating the said Ajay kumar Mohanty to deposite the allegedly stolen cheque for rs. 12,77,081/- in the said account. ( 6 ) THE petitioner was also charged of aiding and abetting in allowing the said Ajay Kumar Mohanty to withdraw almost the entire amount within 2/3 days from the, said newly opened account in violation of bank's norms/ guidelines in case of newly opened accounts and that the petitioner went to the extent of permitting payment of a cheque of Rs. 3,80,000/- on 24th september, 1997, in spite of department officials objections and thereby facilitated the said Ajay Kumar Mohanty to defraud the bank for the amount deposited in the account which ultimately resulted in huge financial loss to the bank, ( 7 ) ACCORDINGLY, the writ petitioner was charged of having committed breach of Regulation 3 (1) of the Bank of India Officer Employees' (Discipline and Appeal) Regulation, 1976 read with Regulation 24 of the said regulations. For the sake of conveyance the Regulations are set aside as hereunder: regulation 3 (1): "every officer employee shall, at all times take all possible steps to ensure and protect the interests of the Bank and discharge his duties with utmost integrity, honesty, devotion and diligence and do nothing which is unbecoming of a Bank Officer. " regulation 24 : "a breach of any of the provisions of these regulations shall be deemed to constitute a misconduct punishable under the Bank of India Officer Employees (Discipline and Appeal) regulations, 1976. " regulation 24 : "a breach of any of the provisions of these regulations shall be deemed to constitute a misconduct punishable under the Bank of India Officer Employees (Discipline and Appeal) regulations, 1976. " ( 8 ) FROM the statement of allegation in support of article of charge it appears that the principal allegation on the basis of which the charges were framed and which is the central issue in the entire proceeding initiated against the writ petitioner was that the writ petitioner had authorized the opening of the account without any introduction, trade licence and any other documents to establish the identity of the said Ajay Kumar Mohanty except a copy of the professional tax challan. It was also alleged that the petitioner had failed to verify the signature of Ajay Kumar Mohanty of the challan as the same did not tally with the specimen signature appearing in the Opening form. ( 9 ) AFTER submission of the written statement of defence to the article of charge departmental enquiry was held against the writ petitioner and detail examination and cross-examination of witnesses have taken place. ( 10 ) ON 11th October, 1999 the said departmental enquiry was concluded, After conclusion of the departmental enquiry, the respondent no. 4 submitted a report to the respondent No. 3, though copy of the said report was not served upon the writ petitioner. Thereaftrer, the respondent no, 3 by his letter dated 10th January, 2000, informed the petitioner that the said respondent No. 3 was remitting the case back to the respondent no. 4 for further enquiry on the following issues :- " (a) Whether the Current Deposit Account No. 110738 in the name of M/s. Polycab Industries is a fictitious account ? Whether shri Ajay Kumar Mohanty falsely claimed to be the proprietor of M/s. Polycab Industries ? (b) Whether the Cheque No. 017186 dated 22. 8. 1997 for rs. 12,77,081/- issued by Indian Oil Corporation favouring M/s. Polycab Industries, drawn on State Bank of India, Dlhakuria Branch and deposited in the said Current Deposit Account No. 110738 on 20. 9. 1997 was a stolen cheque ? (c) Whether Bank of India suffered a pecuniary loss to the tune of Rs. 8. 1997 for rs. 12,77,081/- issued by Indian Oil Corporation favouring M/s. Polycab Industries, drawn on State Bank of India, Dlhakuria Branch and deposited in the said Current Deposit Account No. 110738 on 20. 9. 1997 was a stolen cheque ? (c) Whether Bank of India suffered a pecuniary loss to the tune of Rs. 12,76,800/- in the said Current Deposit Account No. 110738?" against the said order of remind the writ petitioner had filed a writ application which was dismissed by a judgment and order dated 1st of March, 2000. Against the said order and judgment an appeal was preferred. By an order dated 10th of April, 2000, a Division Bench of this Hon'ble Court gave liberty to the respondents to proceed with further enquiry but made its result thereof subject to the pending appeal filed by the writ petitioner. Subsequent thereto the finding of the Enquiring Authority was forwarded to the petitioner with a direction to submit written representations, if any, to the finding of the enquiring authority. ( 11 ) THE petitioner duty submitted written representations on the enquiry report. Thereafter, on or about 31st May, 2001, the petitioner was held guilty of charges levelled against him and penalty order was passed. Against the said order, imposing penalty the writ petitioner preferred appeal in terms of the Regulation of the Bank. The said appeal was decided against the writ petitioner. ( 12 ) IN view of the final order of penalty of the appellate authority affirming the order of penalty, the pending appeal before this Hon'bie Court was withdrawn by the writ petitioner. The said appeal was decided against the writ petitioner. ( 12 ) IN view of the final order of penalty of the appellate authority affirming the order of penalty, the pending appeal before this Hon'bie Court was withdrawn by the writ petitioner. After withdrawing the appeal the petitioner challenged the final order passed by the Appellate Authority in the instant writ application, ( 13 ) THE submission made on behalf of the petitioner can be summarized as follows :-A) The petitioner as the manager was not responsible for actually opening the account which is done by a subordinate officer; b) The fact whether or not the account opened in the name of polycab Industries was fictitious was not proved; c) The account was opened in good 1aith without any introduction and there was no bad intention in such action; d) The Bank did not suffer any pecuniary loss; e) The writ petitioner alone cannot be he d responsible for opening the account without any introduction as he had given verbal instruction to the concerned sub-staff to take the person who had come to open the account to the dealing official and directed him to ensure that proper introduction was obtained and authenticated before opening the account; f) Opening of a new account without introduction is permissible, but introduction is to be obtained before payment is allowed; g) The Bank having taken a stand in the written statement to the suit filed by Polycab Industries that the Bank has committed no irregularity in paying the cheque, no liability can be foisted upon the petitioner; h) The matter could not have been remitted back as it would amount to a fresh enquiry and that the disciplinary authority desired a different kind of finding to the suit requirement of the Bank. ( 14 ) THE respondents, on the other hand, has contended that the departmental enquiry was held strictly in accordance with the established practice and procedure and the petitioner was afforded every opportunity to defend this case. Witnesses were allowed to be examined and cross- examined and documentary evidence were also allowed to be furnished. ( 15 ) IT was also contended that the Appellate Authority did not mechanically accept the finding of the enquiry officer but has also applied its own independent mind and has come to a particular finding which should not be interfered with. Witnesses were allowed to be examined and cross- examined and documentary evidence were also allowed to be furnished. ( 15 ) IT was also contended that the Appellate Authority did not mechanically accept the finding of the enquiry officer but has also applied its own independent mind and has come to a particular finding which should not be interfered with. It was submitted that the petitioner was totally negligent in the matter of opening the account and permitting payment of high value cheque in the newly opened account. From the language of regulation 3 (1) read with Regulation 24 clearly indicates that the petitioner has not taken steps to ensure and protect the interest of the Bank and did not discharge his duties with utmost integrity, honesty, devotion and diligence and has done something which, is unbecoming of a Bank Officer. ( 16 ) THE order of the Appellate Authority dated 19th February, 2002 which is under challenged in the writ application indicates that the Appellate authority has gone into minute details with regard to appreciation of the evidence which was led both by the prosecution and by the defence. ( 17 ) AT the time when the account was opened the column regarding introduction was kept blank. Even then the petitioner wrote in his own hand "please accept" in the said Account Opening Form. This appears to be in contradiction with the stand of the petitioner that he had given verbal instruction to the person actually opening the account to ensure that the account was to be opened with proper introduction. If the petitioner really wanted that the account was to be opened with proper introduction there was no need for him to write in his own hand in the Account Opening Form "please accept". He would have simply sent the person intending to open the account to the concerned dealing assistant to take necessary steps for opening the account. After having given a clear written instruction to open the account the case sought to be made out by the petitioner that he gave oral instruction to ensure that proper introduction was obtained before opening the account does not hold good. In any view of the matter, the said action is a clear example of gross negligence. After having given a clear written instruction to open the account the case sought to be made out by the petitioner that he gave oral instruction to ensure that proper introduction was obtained before opening the account does not hold good. In any view of the matter, the said action is a clear example of gross negligence. ( 18 ) THE Appellate Authority while analysing the evidence has also come to the conclusion that the case made out by the petitioner in his written statement of defence dated 31st July, 1999, submitted to the Enquiring authority and the written representation dated 27th of October, 2000, in response to the finding of the enquiry officer and in the appeal petition dated 2nd July, 2001 were totally inconsistent. It was further noticed by the appellate Authority that there was no evidence which could support the petitioner's stand made out from time to time with regard to the circumstances leading to the opening the account without any introduction. ( 19 ) ON an examination of the signature of the said Ajay Kumar mohanty, on the copy of challan of professional tax, which was the only evidence produced at the time of opening the account, it was noticed that it did not tally with the signature appearing on the Account Opening Form. ( 20 ) IT also appears from the evidence on record that a cheque for rs. 3,80,000/- was placed before the petitioner for second cancellation which was passed by the petitioner with the instruction "please pay". It has also come out in the evidence that the said cheque was referred to the petitioner as manager for second cancellation as the cheque in question was of a high value that too form for newly opened C/d account. It has also come out in the evidence that petitioner as the manager had a dialogue with the customer who stated that further cheque would be deposited and as such the payment was allowed to be made. The Appellate Authority has observed that the evidence with regard to passing of the said cheque was not controverted by the petitioner in any manner. ( 21 ) WHEN the real Polycab Industries did not receive the money it complained to the Bank and after enquiry it was revealed that the address given in the Account Opening Form was totally fictitious. ( 21 ) WHEN the real Polycab Industries did not receive the money it complained to the Bank and after enquiry it was revealed that the address given in the Account Opening Form was totally fictitious. No care was taken to establish the identity of the person opening of the account. ( 22 ) IT appears that once the account was actually opened it was treated to be a regular account by all concerned and accordingly the Cheque book was issued and amounts were allowed to be withdrawn from the account. Clause 81 of deposits-general of manual of instruction clearly provides that the branch should invariably insist that a perspective depositor should furnish introduction for opening any type of deposits and such introduction should, therefore, be treated as a substantive step having real significance and not merely a formality. Clause 83 of the same manual also provides that merely and introduction from another account holder is not enough and before such an introduction was accepted, the Bank must be satisfied that the account to the introducer is well conducted and its dealings are satisfactory. Therefore, it is clear that the authenticity of the introducer should be established beyond doubt in the light of such clear provisions contained in the manual. Therefore, the petitioner was totally careless and negligent in allowing opening of the account without introduction. If he had really intended that the Subordinate Staff should properly open the account, he ought not to have given the written instruction in the Account Opening form as "please accept". ( 23 ) FROM the records disclosed I find that the petitioner has also sought to contend that at the material point of time, the branch was converted from a manually operated branch to a computerized branch as a result there was a great deal of confusion in the Branch. But the petitioner as the manager must have been aware as to how accounts are opened in a computerized system. It was well within his knowledge that even with the column for introduction being kept blank the computer would allow opening of the account. It was, therefore, necessary for the petitioner to ensure that proper introduction was obtained prior to giving written instruction in the account Opening Form itself that the account should be opened. It was well within his knowledge that even with the column for introduction being kept blank the computer would allow opening of the account. It was, therefore, necessary for the petitioner to ensure that proper introduction was obtained prior to giving written instruction in the account Opening Form itself that the account should be opened. ( 24 ) THE petitioner was also aware that in accordance with the manual of instruction, Volume-I, Clause-92, Page-33, Chapter-II, under the caption deposit-general, it is clearly mentioned, "in a very special case Cheque-DDs etc. may be accepted for collection in an account in which introducers' references are still to be obtained but on no account should payment there against be made until Bank is fully satisfied about the introduction of the account holder". In the instant case, it is on record that though the petitioner had permitted opening of the account in the name of Polycab Industries without any introduction but he had not given any instruction in writing in the Account Opening Form for obtaining introduction before opening of the account or for not allowing withdrawal therefrom. It was very much within the knowledge of the petitioner that once the account is opened on the basis of his written instruction, it would be treated as a regular account, therefore, due caution and care ought to have been taken by him before or even after opening of the account, since he was fully aware that at the time when he permitted opening of the account, there was no introduction. ( 25 ) THE Appellate Authority has also found from the evidence led by the parties that apart from the cheque for a sum of Rs. 3,80,000/-, other cheques for Rs. 4,30,000/- and for Rs. 1,70,000/- the petitioner has given written instruction "please pay" and the said cheques were passed only after the petitioner gave the said written instruction. Though in the normal course of events such instruction was not required, unless it was pointed out to the petitioner that the cheque, which was placed before him for second cancellation, was of unusual nature the question of the petitioner giving specific written instruction "please pay" would not have arisen. Though in the normal course of events such instruction was not required, unless it was pointed out to the petitioner that the cheque, which was placed before him for second cancellation, was of unusual nature the question of the petitioner giving specific written instruction "please pay" would not have arisen. ( 26 ) IT is also difficult to believe that the account which was opened on the specific instruction given by the petitioner without any introduction would be allowed to be operated within a very short while for the purpose of withdrawing large sums of money and it would escape the notice of the petitioner himself, when he himself stated that he was aware that at the time when he allowed opening of the account it was done so without any introduction. ( 27 ) WITH regard to the contention of the petitioner that the Bank having taken a stand in the written statement to the suit filed by Polycab Industries against the Bank, that there was no negligence on the part of the Bank, no charges could be leveled against the petitioner, in my opinion, cannot be accepted. The matter of internal management of the Bank with regard to maintaining discipline and conduct of employees has got no connection with the Bank defending a suit filed by a third party. It would be permissible for the Bank to defend a Civil Suit by contending that there was no negligence on its part which would obviously be subject to proof, but at the same time it would be perfectly competent for the Bank to take its officers and/or employees to task if their actions were contrary to the established banking practice and procedure which would amount to acting in a manner unbecoming of a bank official. ( 28 ) IN the instant case, irrespective of the fact whether Bank suffers pecuniary loss or not the manner in which the petitioner has conducted himself as a manager clearly indicates that he was grossly negligent and did not take due care and was not diligent in his duty. A little more care on the part of the petitioner could have prevented the unfortunate incident from happening. A little more care on the part of the petitioner could have prevented the unfortunate incident from happening. ( 29 ) THE petitioner was not only careless and negligent in the matter of opening of the account but was also careless and negligent in allowing withdrawal of large sums of money from a newly opened account. ( 30 ) FROM the order of the appellate authority it appears that after analyzing all the evidence both documentary and oral certain contentions of the petitionerwas not accepted. There is no perversity in such conclusions in that view of the matter it is not open for the Writ Court to reappraise the evidenciary value of such evidence and come to different conclusion. ( 31 ) IN spite of opportunity being afforded the petitioner did not bring his defence witness in the enquiry and upon considering the entire materials- on-record the appellate authority had concurred in the finding of the enquiring authority I find no reason to interfere with the same. ( 32 ) BANK official deals with public money and since there are established practice in such dealings, digression therefrom should be made very carefully and if it is done, appropriate care should be taken so that no one is able to misuse the system. In the instant case, the petitioner was perfectly aware that opening of an account without introduction is not the normal course of opening of an account. Therefore, he ought to have taken adequate care by giving proper instruction to his subordinate officers to ensure that the account was opened with proper introduction which was admittedly not done in the instant case. ( 33 ) THE respondent had relied upon the decision reported in 1991 (4) supreme Court Cases 759 (Sub-Committee on Judicial Accountability v. Union of India), for the proposition that doing any act prejudicial to the interest of the Bank or gross negligence involving or likely to involve the Bank in serious loss is sufficient to bring the case within the ambit of gross misconduct. It is not necessary that actual loss is required to be suffered by the Bank. In other words, likelihood of serious loss coupled with negligence is sufficient to establish gross misconduct. The principles of the said case 1991 (4) SCC. (supra) squarely applies in the instant case. It is not necessary that actual loss is required to be suffered by the Bank. In other words, likelihood of serious loss coupled with negligence is sufficient to establish gross misconduct. The principles of the said case 1991 (4) SCC. (supra) squarely applies in the instant case. ( 34 ) THE case reported in AIR 2000 Supreme Court 22 (High Court judicature at Bombay v. Shashikant S. Patil) has been cited for the proposition that in exercise of jurisdiction under Article 226 of the Constitution the Court can interfere with the decisions of the departmental authority provided such authority had held proceedings in violation of the principle of natural Justice or in violation of statutory regulations prescribing a mode of such enquiry or if the decision is vitiated by considerations extraneous to the evidence and merits of the case or if the conclusion made by the authority on the face of it is actually arbitrary or capricious that no reasonable person could have arrived at such conclusion. ( 35 ) IT has been held in the said case in the High Court Judicature at bombay (supra) that the settled legal position is that if there is some legal evidence on which the findings can be based then its adequacy or even reliability cannot be canvassed before the High Court in a writ petition filed under Article 226 of the Constitution. In the instant case, the writ petitioner has not been able to satisfy me that there has been in violation of natural justice or that the evidence is such that the conclusion arrived at by the appellate Authority is totally perverse, arbitrary or capricious. Therefore, the principles laid down in the said judgment in the High Court Judicature at Bombay (supra) are applicable in the instant case. ( 36 ) ANOTHER case reported in 2003 (4) Supreme Court Cases 364 (Chairman and Managing Director, United Commercial Bank and Ors. v. P. C. Kakkar) has been cited for the proposition that it is a settled law that the court should not interfere with the decision of the disciplinary authority unless it is illogical or suffers from procedural impropriety or shocking to the conscience of the Court in the sense that it was in defiance or logical or moral standard. In the said case Chairman and Managing Director, United commercial Bank and Ors. In the said case Chairman and Managing Director, United commercial Bank and Ors. (supra) it was held by the Hon'ble Supreme Court that the scope of judicial review is limited to the deficiency in the decision making process and not the decision. It has been further held that a Bank officer is required to exercise highest standard to honestly and integrity. He deals with the money of the depositors and the customers. Every officer and/or employee of the Bank is required to take all possible steps to protect the interest of the Bank and to discharge the duties with utmost integrity, honesty, devotion and diligence and to do nothing which is unbecoming of a Bank officer. In the instant case, even if it is assumed that the integrity and/or honesty of the petitioner is not in question but it is apparent that he has acted in a most negligent and careless manner which is unbecoming of a Bank officer. Another case reported in 1996 (2) Labour Law Journal 185 (The disciplinary Authority-cum-Regional Manager Central Bank of India and Ors. v. Nikunja Bihari Patnaik) has been cited for the proposition that acting beyond authority is by itself a breach of discipline and breach of Regulation 3 in constituting misconduct within the meaning of Regulation 24. In the instant case, the petitioner did not exercise his authority properly and did not care to follow the instruction of the higher authority in the matter of opening of the account and allowing withdrawals therefrom. Therefore, his action would clearly attract the provisions of Regulation 3 and would amount to misconduct within the meaning of Regulation 24. The very discipline of an organization and more particularly a Bank is largely dependent upon each of its employees and officers acting and operating in a manner as required of them in accordance with the established practice and procedure any departure therefrom would result in very serious consequence. Therefore, even if such departures are permitted due care in accordance with the established practice and procedure should be followed. In my opinion, I do not find any reason to interfere with the finding of the appellate authority. Therefore, I hereby dismiss the writ petition. No order as to costs. .