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2010 DIGILAW 334 (KER)

Balagopalan v. Syndicate Bank

2010-04-09

C.T.RAVIKUMAR, K.BALAKRISHNAN NAIR

body2010
Judgment :- C.T. Ravikumar, J. The appellant herein was the petitioner and the respondents herein were the respondents in O.P.No.20260 of 2000. The said Original Petition was filed by the appellant challenging Exts.P1, P3, P5, P7, P10, P11 and P13 and also for issuance of a writ of mandamus commanding the respondents to reinstate him in service with all attendant benefits. 2. Ext.P1 is the memo of charges dated 14.2.2000 issued by the first respondent initiating proceedings for imposition of a minor penalty against the appellant/petitioner. Ext.P7 is the memo of charges dated 9.8.1999 issued by the first respondent initiating proceedings for imposing a major penalty against the appellant/petitioner. A mere perusal of Exts.P1 and P7 would reveal that they were issued based on the same set of charges. The allegations based on which Exts.P1 and P7 were issued to the appellant/petitioner pertain to the period between 25.4.1994 and 22.8.1998 during which, he was functioning as the Branch Manager, Melmuri Branch of the Syndicate Bank. The disciplinary proceedings initiated as per Exts.P1 and P7 culminated in an order directing recovery of loss to the tune of Rs.1,01,980/- and a penalty of compulsory retirement from service. The punishment of compulsory retirement was imposed on the appellant as per Ext.P11 order and the appeal preferred against the same was rejected as per Ext.P13. The proceedings initiated as per Ext.P1 culminated in Ext.P3 order whereby the aforesaid amount, being the financial loss by way of seepage of income caused to the bank on account of the transaction carried out by the appellant, was ordered to be recovered from him. The appeal preferred against Ext.P1 was rejected as per Ext.P6. It was challenging the aforesaid orders that the Original Petition was filed. The learned Single Judge, after considering the rival contentions, dismissed the Original Petition. Hence, this appeal. 3. We heard Sri. Anil Kumar, the learned counsel appearing for the appellant and Sri. M.P. Ashok Kumar, the learned Standing Counsel for the respondents. Virtually, both the appellant and the respondents reiterated before us the contentions raised before the learned Single Judge. 4. In the context of the contentions, it is relevant to look into the charges leveled against the appellant/petitioner as per Exts.P1 and P7. M.P. Ashok Kumar, the learned Standing Counsel for the respondents. Virtually, both the appellant and the respondents reiterated before us the contentions raised before the learned Single Judge. 4. In the context of the contentions, it is relevant to look into the charges leveled against the appellant/petitioner as per Exts.P1 and P7. The articles of charge issued against the appellant as per Ext.P7 reads thus: “That you were functioning as Branch Manager at Melmuri branch, Palakkad during the period between 25.4.94 and 22.8.98 and while functioning in your position as such, you by abusing your official position debited UCB, arranged LDs, discounted Dds, transferred/adjusted amounts from one account to another account in blatant violation of Bank’s rules/banking norms and accommodated the parties concerned and in the process you derived/caused others to derive undue pecuniary benefits at the cost of the Bank/customers besides exposing the Bank to the risk of financial loss”. The details of the transactions and the irregularity alleged to have been committed by the appellant/petitioner are described in detail in the statement of imputations of misconduct appended along with the articles of charge. Based on the same set of transactions and irregularities, steps were initiated to recover the loss caused to the bank by way of seepage of income and Ext.P1 is the memo of charge pertaining to the same. As per Ext.P1, the appellant/petitioner was required to submit his written statement of defence showing cause as to why appropriate penalty should not be imposed on him. As noticed hereinbefore, as per Ext.P7, a major penalty was proposed to be imposed on the appellant and as per Ext.P1, a minor penalty was proposed to be imposed on him. 5. The appellant assailed the orders on various grounds. According to him, imposition of two penalties, viz. compulsory retirement from service and recovery of loss to the tune of Rs.1,01,980/- on the same set of allegations amounts to double jeopardy. It was further contended that no loss was suffered by the bank on account of the transactions carried out by the appellant during the period in question. The enquiry proceedings, are vitiated by non supply of material documents and that the punishments imposed on him are disproportionate to the charges, are the other contentions raised by the appellant. 6. As is obvious from Exts.P1 and P7, the said two proceedings were initiated on the same set of facts. The enquiry proceedings, are vitiated by non supply of material documents and that the punishments imposed on him are disproportionate to the charges, are the other contentions raised by the appellant. 6. As is obvious from Exts.P1 and P7, the said two proceedings were initiated on the same set of facts. The appellant also admits the same. Therefore, the question is whether the imposition of penalty of compulsory retirement and recovery of the pecuniary loss sustained by the bank amount to double jeopardy. In respect of the question as to whether the appellant can put forth absence of loss as a ground to assail Ext.P3 and to challenge the said proceedings as one amounting to double jeopardy, the decision of the Honourable Apex Court in State Bank of India & Ors. V. Bela Bagchi & Ors. ((2007) 7 SCC 435) assumes relevance. In the said decision, it was held thus: “A bank officer is required to exercise higher standards of honesty and integrity. He deals with money of the depositors and the customers. Every officer/employee of the bank is required to take all possible steps to protect the interests of the bank and to discharge his duties with utmost integrity, honesty, devotion and diligence and to do nothing which is unbecoming of a bank officer. Good conduct and discipline are inseparable from the functioning of every officer/employee of the bank. As was observed by this court in Disciplinary Authority-cum-Regional Manager v. Nikunja Bihari Patnaik, it is no defence available to say that there was no loss or profit which resulted in the case, when the officer/employee acted without authority. The very discipline of an organization more particularly a bank is dependent upon each of its officers and officers acting and operating within their allotted sphere. Acting beyond one’s authority is by itself a breach of discipline and is a misconduct. The charges against the employee were not casual in nature and were serious. That being so, the plea about absence of loss is also sans substance”. In the light of the principles laid down by the Honourable Apex Court in the said decision, the appellant cannot be heard to contend that on account of the transactions in question, the bank did not sustain any financial loss and, therefore, Ext.P3 is unsustainable. That being so, the plea about absence of loss is also sans substance”. In the light of the principles laid down by the Honourable Apex Court in the said decision, the appellant cannot be heard to contend that on account of the transactions in question, the bank did not sustain any financial loss and, therefore, Ext.P3 is unsustainable. As regards the allegations leveled against a bank officer pertaining to the financial transactions, it is not the amount involved that assumes relevance, but it is the contumacious action that has to be looked into. If the action is proved, the volume of the amount will lose its significance and it is the action which invite the punishment. 7. A scanning of the contentions of the appellant would reveal that he is not virtually challenging the findings of the enquiry. In other words, the fact that the allegations were proved in the enquiry is not under challenge. Essentially, the attack against Ext.P11 is mainly on one ground, that is, non supply of vital documents, requested to be furnished to him, claiming privileges by the respondents, is fatal and it vitiated the entire disciplinary proceedings. As per Ext.P9, the appellant had requested for production of the investigation reports of the preliminary enquiry conducted by two officers, viz., Sri P.V.V. Kamath and Sri. Ratnakumar. Ext.P10 is the reply submitted by the presenting officer in the enquiry. The essence of the reply is that in the enquiry those preliminary reports were not intended to be relied upon and further that they are privileged documents and, therefore, the Management is entitled to withhold the same. For a proper consideration of the said question sub-cls.(12) and (13) of Cl.6 of the Syndicate Bank Officer Employees’ (Discipline and Appeal) Regulations, 1976 (hereinafter referred to as “the Regulations”) are relevant. Sub-cl.(12) of the Regulations reads thus: “On receipt the requisition under sub-regulation (11), the authority having the custody or possession of the requisitioned documents, shall arrange to produce the same before the inquiring authority on the date, place and time specified in the requisition: Provided that the authority having the custody or possession of the requisitioned documents may claim privilege if the production of such documents will be against the public interest or the interest of the bank. In that event, it shall inform the inquiring authority accordingly”. In that event, it shall inform the inquiring authority accordingly”. Sub-cl.(13) provides that on the date fixed for the enquiry, the oral and documentary evidence by which the articles of charge are proposed to be proved shall be produced by or on behalf of the Disciplinary Authority. Another aspect that is also noteworthy in this context is the purpose of conducting a preliminary enquiry. There cannot be any dispute that the very purpose of conducting a preliminary enquiry is to find out whether there is any prima facie case requiring further probe into the allegations involved. On account of the assertions on the part of the appellant that the respondents are withholding the said documents and that the investigating officers in their report held the appellant innocent, we directed the respondents to produce the said documents. The said documents were made available to us in a sealed cover. Having perused the same, we are of the opinion that the contentions of the appellant is unfounded. Therefore, the question is whether the Management was within their right to withhold the said documents. The said aspect has to be viewed in the light of sub-cls.(12) and (13) of Cl.6 of the Regulations and also on the ground as to whether non supply of the said documents caused any prejudice to the appellant. A bare perusal of sub-cl.(12), as extracted above, would reveal that the Management can claim privilege if the production of the documents, sought to be produced, would be against public interest or in the interest of the bank. Whether that would prejudice the appellant is the prime aspect which has to be considered in this context. This has to be considered in the light of sub-cl.(13) which provides that all oral and documentary evidence on the articles of charge proposed to be proved against the delinquent officer shall be produced by or on behalf of the Disciplinary Authority. It is a fact, as contended by the Management, that they did not rely on the said preliminary reports as evidence to prove the charges leveled against the appellant in the enquiry. It is a fact that the appellant also did not have a case that the said preliminary documents were used as evidence to prove the charges leveled against him in the enquiry. It is a fact that the appellant also did not have a case that the said preliminary documents were used as evidence to prove the charges leveled against him in the enquiry. The appellant also failed to establish the prejudice caused to him on account of non supply of the preliminary enquiry reports. That apart both the officers who conducted the preliminary enquiry were allowed to be cross-examined by the appellant/petitioner at length. That would reduce the objections/contentions of the appellant as those of technical in nature. The learned counsel for the petitioner placed reliance on the following decisions: (1974) 3 SCC 459; (2002) 3 SCC 443; AIR 1986 SC 180; (1991) 1 SCC 588; (1955) 1 SCC 404; AIR 1993 SC 1197; (1996) 3 SCC 364; (1998) 6 SCC 651. Those decisions are not applicable in the facts obtained in this case. As already held, the documents withheld are only the reports of the preliminary enquiries and they were not relied on to prove the charges against the appellant. That apart, the investigating officers were also cross-examined. The contention is one based on violation of the principles of natural justice. The decisive factor to decide violation of principles of natural justice in such circumstances is not the mere action of withholding of documents, but the prejudice caused on account of such withholding. In this case, as we have noticed earlier, the appellant/petitioner did not have a case that he was prejudiced on account of the non production of the documents. The petitioner had also failed to establish the prejudice caused to him on account of the said action on the part of the Management. According to us, the said technical plea cannot be taken as a ground to interfere with the proceedings that culminated in the impugned orders. 8. The other contention is that the imposition of the aforesaid penalties on the same set of charges amounts to double jeopardy. In the context, it is profitable to look into Cl.7(3) of the Regulations, which reads thus: “If the Disciplinary authority, having regard to its findings on all or any of the articles of charge, is of the opinion that any of the penalties specified in Regulation 4 should be imposed on the officer employee it shall, notwithstanding anything contained in Regulation 8, make an order imposing such penalty”. A perusal of the said provision would make it clear that any of the penalties specified in Regulation 4 could be imposed on the delinquent officer notwithstanding anything contained in Regulation 8. Recovery from pay or such other amounts as may be due to the delinquent employee, the whole or part of any pecuniary loss caused to the bank by negligence or breach of orders is one of the minor penalties falling under Regulation 4. Admittedly, in this case, the amount sought to be recovered is pecuniary loss based on the very same set of allegations raised for imposition of the major penalty. Therefore, the question is whether two penalties could be imposed in a disciplinary proceedings based on the same set of allegations. The said question was considered by this Court in Abdul Karim v. Canara Bank (1997 (1) KLT 521). Though the learned Single Judge found that the imposition of such punishment is impermissible, considering the very same Regulations referred to above, the same was reversed by a Division Bench of this Court in W.A.No.1088 of 1997. According to us, holding that the proceedings initiated to recover the loss sustained by the bank, on account of the alleged transactions, are impermissible would prevent the bank from realizing the loss suffered by it on account of the commissions/omissions on the part of its employees. It would become more grave, especially when an extreme-penalty is imposed on the delinquent employee on account of the same set of allegations. This is because mere imposition of a penalty on such a delinquent employee would not be sufficient to make good the pecuniary loss. For making good the loss sustained by the banking institution, the amount has to be realized. We are fortified in our view by a Division Bench decision of this Court in Sankaran Nair v. K.S.S.I.D. Corporation Ltd. (2005 (2) KLT 245). The fact that the punishment of compulsory retirement was imposed and recovery was ordered in two proceedings in such circumstances, cannot legally invalidate the proceedings. For imposing the minor penalty of recovery of the loss sustained by the bank, proper procedure was followed, as can be seen from Exts.P1 and P2. Regulation 8 provides procedures for imposing minor penalty. It is after following the due procedure that Ext.P3 was issued. So also, the appellant has failed to establish that the amount was incorrectly quantified as per Ext.P3. Regulation 8 provides procedures for imposing minor penalty. It is after following the due procedure that Ext.P3 was issued. So also, the appellant has failed to establish that the amount was incorrectly quantified as per Ext.P3. With respect to the procedure followed for imposing the major penalty as per Ext.P11, the only grievance is regarding non supply of the preliminary enquiry reports. We have already found that the contentions raised by the appellant in this regard is unsustainable. The cumulative effect of the conclusions of the aforesaid points is that the proceedings that culminated in the impugned orders cannot be said to be vitiated or suffer from any illegality or irregularity warranting interference by this Court. Based on the same set of allegations, the two punishments as aforesaid can be legally imposed in the facts and circumstances of this case. The fact that such punishments were imposed in different proceedings cannot and will not invalidate the said proceedings. 9. In view of the findings in the enquiry it cannot be said that the appellant/petitioner had not indulged in unauthorized transactions like debiting cheques and depositing the amounts in various accounts. Thought the cheques were ultimately returned unpaid, indisputably, during the entire process, the amounts available with the bank were blocked and converted into various NRE fixed deposits and other accounts in the names of various parties. In such a situation, the contention of the appellant that the bank had not suffered any loss cannot be sustained at all. 10. Lastly, it was contended that the punishment imposed on the appellant was disproportionate to the charges. ‘Judicial review’ of the punishments imposed in a domestic enquiry is permissible only if the penalty imposed by the Disciplinary Authority is shockingly disproportionate. A branch Manager of a Bank when found guilty of such serious allegations, as proved in this case, cannot contend that the punishment of compulsory retirement imposed on him is shockingly disproportionate warranting interference by this Court. In fact, the question of proportionality was looked into by the Appellate Authority and it was found that no interference was called for with respect to the quantum of punishment. We are unable to uphold the contention of the appellant that the punishment imposed on him is shockingly disproportionate to the charges. In fact, the question of proportionality was looked into by the Appellate Authority and it was found that no interference was called for with respect to the quantum of punishment. We are unable to uphold the contention of the appellant that the punishment imposed on him is shockingly disproportionate to the charges. In short, we are of the view that the learned Single Judge has rightly appreciated all the aspects and rightly come to the conclusion that the impugned orders invite no interference by this Court. According to us, the findings and conclusions of the learned Single Judge call for no interference. The Writ Appeal is devoid of any merits and it is accordingly dismissed.