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Rajasthan High Court · body

2006 DIGILAW 2547 (RAJ)

Sharwan Kumar v. Canara Bank

2006-08-23

P.S.ASOPA

body2006
JUDGMENT 1. - By instant writ petition, the petitioner has challenged the punishment order dated 17.5,1989 (Ex.9), appellate order dated 21.10.1989 (Ex.12) whereby the punishment of censure and recovery has been upheld with the further prayer that the amount recovered by the States in pursuance of the penalty of recovery be refunded with interest @ 18% per annum, 2. Briefly stated the relevant facts of the case are that in respect of the incident of sanctioning loan of Rs. 20,000/- out of which cash disbursement of Its. 1000/- for construction of engine room when the petitioner was working as Bank Manager, Branch Etamadpur, he was given a charge sheet on 15.3.1998 (Ex.3) under Rule 6 of the Canara Bank Officer Employees (Discipline & Appeal) Regulations 1976 (hereinafter to be referred as "the Regulations of 1976") levelling the charge of irregularities in sanctioning/disbursing the loan of Rs. 20,000/- to one Shri Ajay Pal Singh without taking proper care and caution resulting in failure to discharge the duties with utmost devotion and diligence and the said act is in contravention of Regulation No. 3(1) read with Regulation No. 24 of the Regulations, of 1976. The petitioner denied the charge and submitted his reply to the charge on 22.4.1988 (Ex.4). During the course of enquiry, two witnesses were examined on behalf of the department namely Shri K.R. Gupta and Shri S.R. Bekal. The petitioner further produced himself as a defence witness. On 15.4.1989, the enquiry officer submitted the enquiry report. Although in the enquiry report, the enquiry officer has appreciated the prompt steps taken by the petitioner in cancelling the pay order as well as sought permission to cancel the loan from Divisional Office, Agra on 25.4.1984, which was DEX-9 in enquiry proceedings and is Ex.9 in this writ petition, even before his transfer on 28.4.1984, but still he has been held guilty of the charge by giving clean chit to one of the witness Shri K.R. Gupta, who succeeded the petitioner after 28.4.1984 in the office and then admitted the knowledge of letter dated 25.4.1984 in answer to question No. 12 has further disbursed the said loan even after receipt of letter dated 3.5.1984 from Divisional Office, Agra, which was DEX-11 in enquiry proceedings and is Ex.22 in this writ petition. Copy of the enquiry report was not supplied to the petitioner and straightway, the disciplinary authority passed the minor penalty order on 17.5.1989 of "Censure" and recovery of the loan amount. Against the said punishment order, an appeal was filed which was dismissed on 21.10.1989 and again a review was filed but without success. 3. The State Bank had filed reply and raised preliminary objection that the writ petition has been filed in 1993 after four years of the last impugned order passed by the appellant authority on 21.10.1989, therefore, the petition suffers from delay and the same is liable to be dismissed on this ground alone. It was further submitted that enquiry was fully in accordance with the Regulations of 1976 as well as principle of natural justice. The finding of guilt recorded by the enquiry officer is based on evidence and further the punishment order as well as appellate order are speaking orders. Otherwise, also this Court cannot re-appreciate the evidence under Article 226 of the Constitution. 4. The submission of counsel for the petitioner is that copy of the enquiry report was also not given to him before passing of the punishment order, thus, principle of natural justice has been violated. The counsel for the petitioner further submits that the present case is of no evidence against him, but still he has been held guilty and the present enquiry suggests that enquiry is to be irritated against Shri K.R. Gupta - Bank witness, successor of the petitioner, who although was aware of the fact that loan was recommended to be cancelled, but still disbursed it, has been given clean chit by enquiry officer. Further case of the petitioner is that neither the enquiry officer considered that there is no evidence against the petitioner and gave a perverse finding nor the disciplinary authority nor the -appellate authority applied their mind while relying on finding of guilt without there being any evidence against the petitioner and imposing and upholding the punishment and their orders are non-speaking orders, therefore, same are liable to be set aside. 5. 5. The submission of counsel for the Bank is that the enquiry officer on consideration of the evidence has rightly held the petitioner guilty of the charge as there was enough evidence against the petitioner that he has not taken proper care to ascertain the fact that loanee was defaulter in case of earlier loan and further the petitioner has committed various irregularities in sanctioning and disbursing the loan. The disciplinary authority has rightly agreed with the finding of the enquiry officer and passed the punishment order of Censure and recovery. The order of the appellate Authority is also speaking order. Counsel for the States relied on one judgment of the Punjab & Haryana High Court reported in K.C. Kapoor V/s State of Haryana 2004 (2) SLR 88 on the issue that in case may pecuniary loss is caused to the Government then notice and explanation will fulfill the requirement of principle of natural justice and no personal hearing before inflicting minor punishment is necessary. 6. I have considered the record of the writ petition and further considered the submissions of both the parties. 7. As regard the issue of delay, the petitioner has submitted that he has filed the review petition on 18.2.1993 and the same was rejected on 17.3.1993 and further on rejection of the review petition, the present writ petition has been filed, therefore, the delay is fully explained. 8. In my view, there is no statutory rule for filing the review petition by the delinquent official, however under Regulation No. 18 of the Regulations of 1976, the reviewing authority can suo motu review the order within six months of the date of final order, therefore, the delay has not been explained on account of filing of the review petition, but the fact is that the writ petition was admitted on 20.9.1993 and remain pending for 13 years and was heard on merit, therefore, I am not inclined to reject the writ petition merely on the ground of delay. 9. One of the legal submission raised by the petitioner is that the petitioner was not supplied copy of enquiry report of the enquiry officer. 9. One of the legal submission raised by the petitioner is that the petitioner was not supplied copy of enquiry report of the enquiry officer. Here in this case, the punishment was imposed on 17.5.1989 before 20.11.1990, the date fixed by the seven Judges Bench of Supreme Court in a case reported in Managing Director, ECIL V/s B. Karunakar 1993 (4) SCC 727 , therefore, there is no illegality in not supplying the copy of the enquiry report before passing the punishment order. Otherwise also, penalty imposed was a minor penalty. 10. Before proceeding further to examine the validity of the impugned order on merit, the article of charge, relevant dates and letter as comes on record, discussion and finding recorded by the enquiry officer are reproduced as under:-ARTICLES OF CHARGE : While working as the Manager of our Etmadpur branch, on 2.2.84 you had sanctioned CLS Loan No. 4/84 for an amount of Rs. 20,000/-, to one Shri Ajay Pal Singh for 'SURKI MAKING' under Self Employment Scheme. A number of irregularities have been noticed in the sanctioning/disbursing of the loan amount. The details of the irregularities in sanctioning/disbursing the loan is more fully enumerated in the statement of imputations. By your above action in sanctioning/disbursing the said loan without taking proper care and caution you'tave failed to discharge your duties with utmost devotion and diligence, thereby contravened Regulation 3(1) read with Regulation 24 of Canara Bank Officer Employee (Conduct) Regulations 1976 and committed a misconduct punishable under the provisions of Canara Bank Officer Employee (Discipline & Appeal) Regulations 1976. Relevant dates and letter as comes on record:- 2.2.1984:-On 2.2.1984, loan of Rs. 20,000/- was sanctioned under the Self Employment Scheme of the Government to one Shri Ajay Pal Singh and in such kind of sanction of loan for which eligibility is to be scrutinised by the Government and then the application is forwarded to the Bank for formal sanction of the loan. 11.4.1984:-On 11.4.1984, the petitioner - Branch Manager, Etamadpur informed the loanee that he has not constructed the room nor purchased the engine as per the specification mentioned in the letter dated 14.3.1984, therefore, he was requested to deposit the cash amount and pay order within three days. 11.4.1984:-On 11.4.1984, the petitioner - Branch Manager, Etamadpur informed the loanee that he has not constructed the room nor purchased the engine as per the specification mentioned in the letter dated 14.3.1984, therefore, he was requested to deposit the cash amount and pay order within three days. 25.4.1984:-The recommendation of cancellation of loan was made but not cancelled by the Divisional Office, Agra rather the time was extended for completion of work/project vide letter dated 3.5.1984 by Divisional Office. 24.5.1984:-Another letter was given by the petitioner on 25.4.1984 to the higher authorities that local persons are pressurising. 28.4.1984:-Before 3.5.1984 petitioner was transferred on 28.4.1984. 3.5.1984:-Vide letter dated 3.5.1983 issued by the Divisional Office (DO) for giving more time for completion of work/project in case the loanee is unable to fulfill the condition within reasonable time, the limit may be cancelled. The letter of Divisional Office dated 3.5.1984 was in the knowledge of Shri K.R. Gupta and he had distributed the loan for which the petitioner cannot be held responsible. The petitioner was required to explain the circumstances upto 28.4.1984, subsequently the successor of the petitioner Shri K.R. Gupta made payment to the loanee on following dates has submitted that he has acted as per letter dated 3.5.1984:- Date Amount 1. 14.6.84 Rs. 1500.00 2. 10.7.84 Rs. 9017.59 3. 16.7.84 Rs. 4290.00 4. 19.7.84 Rs. 2000.00 5. 19.7.84 Rs. 1000.00 6. Sept. 84 Rs. 534.00 Discussion and finding recorded by the enquiry officer:- "In view of the foregoing it is clear that the CSO has failed in his duty to make enquiries and to peruse and verify the books and records and files at the branch and take note of the fact that the party was already a defaulter with the Branch. However, on the plus side certain facts in favour of the CSO have to be noted. After granting the loan before the pay order could be encashed the CSO found out that the party had installed an 8 HP Motor instead of the 15 HP motors for which the loan had been granted. The CSO took prompt and immediate action to cancel the pay order and recredit the amount into the loan account. Even though the pay order was presented by the dealer's Banker the CSO returned the same with the reason that goods were not supplied as per specification. The CSO took prompt and immediate action to cancel the pay order and recredit the amount into the loan account. Even though the pay order was presented by the dealer's Banker the CSO returned the same with the reason that goods were not supplied as per specification. This memorandum for returning a pay order has been marked as MEX-3 and taken on record. The CSO also sent a detailed notice to the party recalling the advance and informing him the relevant observations and also requesting him to deposit the amount of the pay order with upto date interest and also the amount of Rs. 1000/- which had been disbursed in cash. The said notice was returned undelivered and it has been mentioned else where that the party refused to accept the notice. The CSO also wrote a letter dated 25.4.84 to the D.O. Agra informing the said office about the party's failure to prepare or construct any engine room and about the fact that the engines supplies was nit as per the specification. In the said letter, he has also asked the D.O. to permit him to cancel the limit and to recall the amount of Rs. 1000/- paid in cash for construction of the engine room. He had also recommended in the same letter for waiver of interest on the amount of Rs. 15000/- disbursed under the loan since the pay order was not paid and the amount had been recredited. The CSO had also written a letter dated 25.4.84 to D.O.. Agra informing the said office that some local person came to the branch with the dealer of Diesel Engine and threatened the branch officials and the CSO and demanded payment of the pay order without insisting on inspection of the horse power of the Engine. The said letters have been marked as DEX-9. The steps taken by the CSO as mentioned above shows his vigilance and an alertness in noting that the party was not complying with the terms and conditions of the loan promptly recovering the amount advanced. It is the contention of the CSO that after he left the branch on 28.4.84 loan should not have been disbursed again by Sh. The steps taken by the CSO as mentioned above shows his vigilance and an alertness in noting that the party was not complying with the terms and conditions of the loan promptly recovering the amount advanced. It is the contention of the CSO that after he left the branch on 28.4.84 loan should not have been disbursed again by Sh. K.R. Gupta, Accountant of the branch who was acting as Manager in view of the fact that the CSO has already recalled the loan and recredited the amount of the pay order to the loan account. The CSO has submitted that he could not make a note in the ledger that loan should not be disbursed again as he left the branch immediately after sending the notice to the party and the letters to the D.O. informing about the recovery of the amount. However, it has to be noted that if the CSO'wanted he could have made a note in the ledger simultaneously with the sending of the notice to the party and the letters to the D.O. As far as Sh. Gupta is concerned he has mentioned in his examination in chief and also in the cross examination that since the party acquired the engine of the prescribed specification he disbursed the loan amount again. Sh. Gupta has also referred to D.O. letter dated 3.5.84 which has been taken on record as DEX-11. In the said letter which is a reply to a letter of the CSO informing the D.O. that some person came to the branch with the dealer and threatened the branch officials and the CSO, the D.O. has instructed the branch to give more time for completion of the work/project and in case the party is unable to fulfill the condition within a reasonable time the limit may be cancelled. It seen that in the light of the said letter addressed to the branch by the D.O. the action of Sh. Gupta as Ag. Manager in disbursing the loan amount once again is not wrong or improper provided he has ensured that the engines of the right specification have been installed by the party. This fact however not been investigated or brought before me in the present enquiry as it is not strictly speaking the subject matter of the present chargesheet. Gupta as Ag. Manager in disbursing the loan amount once again is not wrong or improper provided he has ensured that the engines of the right specification have been installed by the party. This fact however not been investigated or brought before me in the present enquiry as it is not strictly speaking the subject matter of the present chargesheet. The prompt action taken by the CSO for recovery of the amount when he found that the party was not fulfilling the terms and conditions of the loan has to be appreciated. However, even such a situation could have been avoided if in the first instance itself the CSO had ascertained from the branch file and taken note of the fact that the borrower was an existing borrower having an overdue liability and that as a defaulter he was an undesirable character. Not only was the party defaulter but he had also filed a case against the bank claiming that he had not borrowed any money from the bank and therefore no amount can be recovered from him by means of the R.C. In the result and in view of the evidence I find that the charge has been proved and the CSO is GUILTY of the charge. However, the facts mentioned in his favour may also be taken into consideration." (emphasis - supplied) 11. However, the facts mentioned in his favour may also be taken into consideration." (emphasis - supplied) 11. In case of loan sanctioned by the Government under the Self Employment Scheme, there was not much scope to scrutinise the eligibility of the prospective loanee, The petitioner has taken the affidavit from Ajay Pal Singh that he has not taken any loan earlier in accordance with the Bank Regulation, which was verified by the Notary Public and further he made enquiries from A.E.O. and the Accountant Shri Jain dealing with the agriculture loan, therefore, the enquiry officer has committed an error in ignoring the said aspect of the matter and further held guilty of not perusing and not verifying the books, record and the files of the Branch to find out as to whether the party was defaulter or not, in respect of the some earlier loan taken in 1976 along with Megh Sinha, otherwise, also when the petitioner sought permission from Divisional Office, Agra for cancellation of loan vide his letter dated 25.4.1984, but the said permission was not granted and a letter was issued on 3.5.1984 for extension of time for completion of work/project after his transfer on 28.4.1984. Thus, when the loan was not allowed to be cancelled and further instalments of Rs. 19,000/- were distributed as per letter dated 3.5.1984 after the transfer of the petitioner on 28.4.1984 then even if any irregularity in sanction of loan was there then the same also stand regularised, and this aspect has also been ignored by the enquiry officer. The other finding of not making the entry in the ledger book of cancellation of loan is also perverse as the recommendation of the petitioner for cancellation of loan vide letter dated 25.4.1984 was not accepted by the Divisional Office, Agra vide his letter dated 3.5.1984. The enquiry officer appreciated the prompt step and immediate action to cancel the pay order and recredit the amount into the loan account then there is no justification to hold guilty on the basis of no evidence. 12. The enquiry officer appreciated the prompt step and immediate action to cancel the pay order and recredit the amount into the loan account then there is no justification to hold guilty on the basis of no evidence. 12. Apart from above, the enquiry officer has also commented on the role of Shri K.R. Gupta in the light of the said letter addressed to the branch by Divisional Office dated 3.5.84, the action of Shri Gupta as Acting Manager in disbursing the loan amount again was not wrong or improper provided he has ensured that the engine of the right specification has been installed by the loanee. When disbursement of amount of Rs. 19,000/- out of loan amount of Rs. 20,000/- held to be legal in view of Divisional Office, Agra's letter dated 3.5.1984 then it is surprising how sanction and disbursement of Rs. 1000/- by petitioner, who had sought permission to cancel loan of Rs. 20,000/- from Branch Office vide letter dated 25.4.1984 in reply to which aforesaid letter dated 3.5.1984 was issued, had been held unjustified particularly when the prompt action taken by the charge sheeted officer (CSO) - the petitioner, has been appreciated. Apart from above, there is nothing on record what efforts have been made by State Bank to recover the amount from the loanee. 13. This Court is conscious of the fact that it cannot re-appreciate the evidence but certainly when a finding is recorded by the enquiry officer on the basis of no evidence or misreading, which no reasonable prudent person can arrive at the same conclusion, this Court can interfere under Article 226 of the Constitution of India. 14. Considering the charge of irregularities in sanctioning and disbursing the loan and the evidence referred in the enquiry as well as incidents referred in chronological order hereinabove, I am of the view that there is no evidence to hold the petitioner guilty of the charge of irregularities in sanctioning and disbursing the loan. The present case is of minor penalty in a regular enquiry for major penalty, therefore, the procedure as envisaged in case of major penalty will be applicable. 15. Accordingly, the writ petition is allowed. The order dated 17.5.1989 (Ex.9) and order dated 21.10.1989 (Ex.12) are quashed and set aside with the further direction to the States to refund the recovered amount to the petitioner @ 12.5% per annum.Petition allowed. *******