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2008 DIGILAW 207 (DEL)

Bhagwan Dass v. State Bank of Bikaner and Jaipur

2008-02-21

MUKUL MUDGAL, S.L.BHAYANA

body2008
JUDGMENT Mukul Mudgal, J. 1. With the consent of the learned Counsel for the parties this appeal is taken up for final hearing. 2. This is an appeal against the impugned order and judgment dated 7th September 1998 whereby the learned trial Court dismissed the suit for recovery of a sum of Rs. 2,52, 999 filed by the appellant/ plaintiff. 3. Brief facts leading to the culmination of this appeal are as follows: a) The appellant while working as a Branch Manager with the respondent bank, was issued a charge sheet by the respondent bank on account of his misconduct of allowing advances to M/s Sotan Lal Jamboo Prasada, M/s. Dhanesh Tube Company, M/s Rakesh Steels, M/s. Jaypee Tubes and M/s. Jain Industries. b) The charges against the appellant related to the misuse of official position by allowing indiscriminate advances, much beyond the limit set up and beyond his discretionary powers. Further he was charged with gross violation of Bank norms and was also found to be negligent and lacking due care in the conduct of business. c) An inquiry authority was appointed to investigate into the irregularities allegedly committed by the appellant as the branch manager at the respondent bank. The enquiry proceedings commenced on 14th September 1983 and concluded on 2nd December 1983. d) The appellant was informed vide letter No. DAC/481 Baisakha 17, 1906 (S) dated 7th May, 1984 that the penalty of dismissal from services in terms of regulation 67(h) of the State Bank of Bikanar and Jaipur (officers) Service Regulations 1979 was imposed on him on account of his misconduct. e) Subsequently, the appellant approached the respondent for the payment of his retiral benefits vide letter dated 16th Match 1990. The Respondent reverted to the Appellants vide its letter dated 16th July 1991 whereby they refused to release the banks contribution towards his provident fund, gratuity and leave encashment. 4. Mr. Yadav, the learned Counsel for the appellant in challenging the judgment dated 7th September 1998 passed by the learned Additional District Judge, dismissing his suit, urges that since the entire amount has been recovered from M/s Sotan Lal Jamboo Prasad, the appellant was entitled to avail the benefits, i.e., the banks contribution towards his provident fund, gratuity and leave encashment. Yadav, the learned Counsel for the appellant in challenging the judgment dated 7th September 1998 passed by the learned Additional District Judge, dismissing his suit, urges that since the entire amount has been recovered from M/s Sotan Lal Jamboo Prasad, the appellant was entitled to avail the benefits, i.e., the banks contribution towards his provident fund, gratuity and leave encashment. The order of the Disciplinary Action passed by the General Manager, State Bank of Bikaner & Jaipur, dated 7th May 1984 reads as follows: STATE BANK OF BIKANER AND JAIPUR Associate of the State Bank of India Head Office: Tilak Marg, P.B. No. 154, JAIPUR - 302005 (Rajasthan) (Private & Confidential) Dear Sir, DISCIPLINARY ACTION Please refer to the major penalty proceedings initiated against you vide memorandum dated 3.6.1983 and the enquiry conducted by Shri S.L. Gulati, Inquiring Authority. A copy of the enquiry report dated 27.12.1983 submitted by the Inquiring Authority is enclosed. 2. I have carefully gone through the memorandum of charge issued to you, your reply thereto, record of the enquiry proceedings, written briefs and the enquiry report aforesaid. Taking an overall view of the evidence led both for and against the charges I concur with the findings of the Inquiring Authority and have come to the conclusion that charge Nos. 1 to 6 and 8 are fully proved, charge Nos. 7 9 and 10 are partly proved and charge Nos. 11 to 14 are not proved. 3. Having regard to the gravity of acts of misconduct viz. Misuse of official position to give undue advantage to the borrowers, grant of unauthorized and indiscriminate credit facilities to the subject borrowers far in excess of the sanctioned limits/discretionary powers out of which over Rs. 45 lacs are yet to be recovered, manipulations in the Branch Books/records and exposing the Bank to serious financial risk for huge amounts, it has been decided with the approval of the Managing Director, to impose upon you the penalty of dismissal from the service of the Bank in terms of Regulation 67 (h) of the State Bank of Bikaner & Jaipur (Officers) Service Regulations, 1979. A copy of the order dated th 4th May 1984 recommending the imposition of the penalty of dismissal from Banks service and a copy of the order dated 7th May 1984 of the Managing Director according approval to the said recommendation are enclosed. 4. A copy of the order dated th 4th May 1984 recommending the imposition of the penalty of dismissal from Banks service and a copy of the order dated 7th May 1984 of the Managing Director according approval to the said recommendation are enclosed. 4. Accordingly, you stand dismissed from the service of the Bank with immediate effect. 5. As regards the period of your suspension, it has been decided that the entire period of your suspension will be treated as such and apart from the subsistence allowance already paid, you will not be entitled to receive salary and allowance, etc. 6. The Bank may take a view about the release of your retiral benefits depending upon the recovery of the present outstanding of over Rs. 45 lakhs in the subject borrowers accounts. Yours faithfully Sd/- (V.P. Dogra) General Manager (Operations) 5. The learned Counsel for the appellant has relied upon paragraph 5 to contend that since the recovery of the amount of over Rs. 45 lakhs stood liquidated by way of settlement, no dues were payable, and the appellant was entitled to avail of the benefit of Clause 5 since all the recovery proceedings against the subject matter for sum of Rs. 45 lakhs stood liquidated. 6. On 16th March 1990, the appellant addressed a communication to the Managing Director of the respondent bank and the relevant portion of the said communication reads as follows: Respected Sir, Reg: Payment of Retiral benefits - Staff Supervising Bhagwan Dass. I beg to lay down the following few lines for your favourable kind consideration. My services were terminated by the bank authorities for allowing alleged unauthorized and indiscriminate credit facilities to M/s Jamboo Prasad Jain Group of Firms vide HO Letter No. DAC/481, dated 7.5.84, the photostat copy of which is enclosed herewith for ready reference. I have been paid only my own P.F. Contribution while the remaining retiral benefits were to be released to me subject to the recovery of then outstanding dues of Rs. 45 lakhs from the subject borrowers. In this connection I understand that entire amount of outstanding dues have since been recovered from the above borrowers and normal operations are being allowed in all their Cash Credit Accounts. 45 lakhs from the subject borrowers. In this connection I understand that entire amount of outstanding dues have since been recovered from the above borrowers and normal operations are being allowed in all their Cash Credit Accounts. Prior to this particular case during my thirty one years service in the Bank, my performance by way of sincerity, integrity and dedication towards duties, has always been highly satisfactory and at times excellent reports were awarded to me in connection with the development of the business of bank especially when I was posted as Branch Manager at Ramganj Mandi and Kota City Branches. Ever since I joined the Bank in the year 1953, I had a clean service record and there was no adverse report against me at any stage of my entire service. Prior to my joining at Naraina, Phase II, New Delhi Branch the party was being accommodated over and above the sanctioned limits which was well within the knowledge of Banks higher authorities. I had acted in utmost good faith and all my predecessors had been allowing excess accommodation to the above party and it was a normal feature at the branch. Moreover, there has been no concealment of facts on my part and the excess accommodation allowed to the party from time to time was brought to the notice of higher authorities by sending Monthly/Qtryly/Yearly/ Inspection/Audit Returns. At that time this party was considered one of the best borrowers of the Branch. Moreover Sh. Jamboo Prasad Jain was the President of Bon and Steel Merchants Association, Naraina and was having a great inflence among the business community of the area. I have already been awarded very severe punishment, by way of dismissal from Banks service, in the above case and I should not be penalised further by with-holding my retiral benefits such as payment of Banks contribution to my provident Fund/Gratuity/Leave Encashment etc. I, therefore, approach your kind honour to review my case sympathetically and to release my above retiral benefits at an early date as I am in urgent need of money for the marriage of my daughter and son who are of marriageable age and to support my family. 7. I, therefore, approach your kind honour to review my case sympathetically and to release my above retiral benefits at an early date as I am in urgent need of money for the marriage of my daughter and son who are of marriageable age and to support my family. 7. The respondent bank responded to this communication of the appellant vide its reply dated 16th July 1991: Dear Sir, Payment of Retiral Benefits: This has reference to your letter dated 16.3.1990 requesting for release of your retiral benefits. 2. In this connection, we have considered your request and observe your contention that the party has repaid the entire amount is not correct. In fact, the Bank have suffered a substantial financial loss to the tune of Rs. 24.89 lakhs in the subject borrowers account in the shape of "write off" while accepting the compromise proposal. As such, you request for release of Banks contribution to your P.F. Account, Gratuity and leave encashment does not merit any consideration. As regards the payment of your own contribution to the P.F. Account, the same has already been paid to you. Yours faithfully Sd/-General Manger (Operations) 8. The respondent has relied upon the resolution of the Executive Committee, which according to the respondents clearly shows that the recoverable dues are to the tune of Rs. 49,37,732.98. The amount recoverable from the borrowers at the time of settlement was Rs. 49,37,732.98 and thus, the bank had incurred a loss of Rs. 24,88732.98. The respondent has thus, submitted that the appellant is not entitled to avail the benefit of Clause 5 relied upon by him during the foundation of the suit. 9. The learned Counsel for the appellant has submitted that it has been demonstrated by him that the collateral security, which was taken by the appellant as the Branch Manager, was more than Rs. 47 lakhs and the settlement term warranted the return of such security documents to the borrowers. He has further submitted that if the respondent bank had sought to realize the collateral security, the liability would not have been accrued at all because the collateral security was worth Rs. 3 crores. In support of this plea, the learned Counsel for the appellant has referred to the cross examination of DW-1 Shri Suresh Kumar Barjatya, to contend that such a suggestion was put in the cross-examination. 3 crores. In support of this plea, the learned Counsel for the appellant has referred to the cross examination of DW-1 Shri Suresh Kumar Barjatya, to contend that such a suggestion was put in the cross-examination. However, there is no admission of such a statement in the cross-examination. The said witness stated that he does not know whether collateral security was worth more than Rs. 3 crores. He stated that even if it was to be assumed to be more than 3 crores, a fact which is strongly disputed by the learned Counsel for the bank, nevertheless, if in the process of settlement, the bank takes a view that in order to cut short the litigation some loss may be incurred and the collateral security may be returned, no fault can be found by the delinquent appellant with such a process or reliance be placed on such a course adopted by the management to cut its losses. The process of realizing collateral security is time consuming and can lead to protracted and contentious litigation. In such a situation, the settlement even by foregoing some part of the dues cannot entitle the appellant to lay claim to the benefit of his plea that no loss was occasioned to the respondent bank. 10. In this view of the matter, we are unable to differ with the finding of the learned Additional District Judge and accordingly the appeal is dismissed. However, during the course of the hearing we ascertained that this was the only charge leveled against the appellant in continuation of his unblemished 35 years services tenure, which is evident from the fact that the appellant was granted an extension. In this view of the matter, we would still deem it fit and proper to permit the appellant to make request to the Managing Director of the respondent bank to release such of his retiral dues which may be available to the appellant in law. If such a representation is made the respondent/bank in light of the previous unblemished record of the appellant may consider such a representation sympathetically. 11. The appeal is accordingly dismissed with no order as to costs. Appeal dismissed