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2012 DIGILAW 3174 (MAD)

Chief General Manager v. S. Arunachalam

2012-07-20

ELIPE DHARMA RAO, M.VENUGOPAL

body2012
Judgment :- Elipe Dharma Rao, J. 1. The facts pertaining to the Writ Petition are as follows :- The petitioner joined the respondent Bank as a clerk and subsequently got promoted as Officer. During March, 2002, while he was working in Sankaranainar Kovil Branch, he was placed under suspension by order dated 19.3.2002 alleging certain irregularities. On 18.2.2003, a charge memo was issued to the effect that the petitioner had sanctioned PMRY loans to ineligible persons, disbursed loans to persons other than borrower and non-existent borrowers, failed to conduct pre-sanction inspections, misappropriated the loan amount sanctioned to yet another borrower and not maintained records for conducting inspections. For which, the petitioner had given his reply on 27.2.2003 denying the charges. After conducting enquiry, the enquiry officer submitted his findings dated 3.9.2003. Out of six charges, the petitioner was found guilty in respect of five charges and he was exonerated from Charge No.2. On the basis of the enquiry report, the third respondent, viz., the General Manager (D&PB) by order dated 25.11.2003, imposed the punishment of removal from service and treated the period of suspension as suspension. The appeal preferred by the petitioner before the Chief General Manager was rejected by order dated 13.5.2004. Against the aforesaid decision, the petitioner preferred appeal to the Review Committee viz., the first respondent, which, by order dated 3.2.2005, confirmed the order of removal from service. 2. All the aforesaid orders have been challenged by the petitioner in this writ petition on the following grounds :- (i) Since the allegations mentioned in the charge memo could be only a procedural irregularity and at best he could be charge sheeted only for negligence, imposing the penalty of removal from service is grossly disproportionate. (ii) There was no intentional disbursement of loan to non-existing persons and the loans have been sanctioned on the basis of the recommendation made by the Task Force and, since the loan amount had also been repaid, there was absolutely no loss to the bank. (iii) The charge of misappropriation was levelled only to impose major penalty and no complaint was received from the customer Thamodharan and, on the other hand, the entire loan amount had been repaid and, therefore, ignoring the material evidence, on imaginary basis, the respondents have held that the charges were proved against the petitioner. 3. (iii) The charge of misappropriation was levelled only to impose major penalty and no complaint was received from the customer Thamodharan and, on the other hand, the entire loan amount had been repaid and, therefore, ignoring the material evidence, on imaginary basis, the respondents have held that the charges were proved against the petitioner. 3. After the punishment of 'Removal from Service' dated 02.12.2003 and after confirming the said punishment in Review by order date 18.11.2004, while issuing the letter of 'Settlement of Terminal Benefits' dated 25.4.2005, the Bank indicated that on account of lapses on the part of the writ petitioner, the Bank had suffered a loss to the tune of Rs.2,37,296/- and, by order dated 8.5.2007, the aforesaid amount was sought to be recovered from the terminal benefits of the writ petitioner. The aforementioned letter and the order of recovery came to be challenged by the writ petitioner / employee in W.P.No.22584 of 2007 before the learned single Judge. The learned single Judge after hearing both sides and going through the materials on record, quashed the orders of recovery on the ground that there was no prior notice before recovery and there was no actual financial loss to the Bank. Aggrieved by the said order, the Bank has come with the appeal in W.A.No.1368 of 2010. 4. Since the Writ Appeal and the Writ Petition are inter-connected and the issue involved is same, with the consent of the counsel for both sides, both were heard together and disposed of by this common judgment. 5. Before going into the contentions raised in the writ appeal relating to recovery of amount are concerned, it would be profitable to look into the charges levelled against the writ petitioner / delinquent. Six charges, which were levelled against the officer vide charge memo dated 18.2.2003, are as follows :- "i) You had sanctioned PMRY loans to ineligible persons and disproportionate amounts to their activities. ii) You had disbursed loans to persons other than to borrower himself. iii) You had sanctioned/disbursed loans to non-existent borrowers iv) You had failed to conduct pre-sanction inspections while sanctioning/disbursing loans to various borrowers v) You had misappropriated the loan amount sanctioned to yet another borrower vi) You had not maintained any records for conducting inspections" 6. ii) You had disbursed loans to persons other than to borrower himself. iii) You had sanctioned/disbursed loans to non-existent borrowers iv) You had failed to conduct pre-sanction inspections while sanctioning/disbursing loans to various borrowers v) You had misappropriated the loan amount sanctioned to yet another borrower vi) You had not maintained any records for conducting inspections" 6. A perusal of the aforesaid charges would disclose that except charge No.5, other charges relate to procedural activities in disbursing the loan to the borrowers, who according to the respondent Bank are non-existent or other than the borrowers. Out of aforesaid six charges, the second charge, viz., disbursal of loan to the persons other than to the borrower himself was found 'not proved' by the enquiry officer. 7. Coming to Charge No.1, the Prosecution Argument was as follows :- "Thus, the CSO had knowingly sanctioned the loan to an ineligible borrower for an activity which was not pursued by her. It is, therefore, clearly proved that the CSO had acted detrimental to the interest of the Bank by sanctioning the loan. The money was fully recovered due to the efforts taken by the subsequent incumbent only." The finding of the enquiry officer in respect of the aforesaid Charge No.1 regarding sanction of PMRY loan to ineligible persons, is as follows :- "It is proved beyond doubt that the CSO had sanctioned the above 2 loans (P.Ex.15 and P.Ex.5) to ineligible persons and disbursed loan amounts disproportionate to the respective activities. As such, I hold the charge as PROVED." 8. Against Charge No.(iii), the Prosecution Argument was that "the CSO had knowingly sanctioned/disbursed the aforementioned loan in the name of a deceased person". The Defence argument was that "since the CSO believed that he was the borrower, he processed accordingly. Moreover, the loan accounts were paid and there is no loss to the Bank". On the aforesaid charges, the enquiry officer found that the entire dealings relating to these transactions had clearly established the involvement of the CSO and held the charges against the delinquent. 9. So far as Charge No.(iv) relating to failure to conduct pre-sanction inspection is a procedural irregularlity and on the basis of the records furnished, the enquiry officer held the charge against the delinquent. 10. Charge No.(v) relates to misappropriation. 9. So far as Charge No.(iv) relating to failure to conduct pre-sanction inspection is a procedural irregularlity and on the basis of the records furnished, the enquiry officer held the charge against the delinquent. 10. Charge No.(v) relates to misappropriation. It is alleged that the respondent officer had sanctioned disbursed a loan of Rs.25,000/-each to one Damodharan and one A this ayapanivasagam respectively and they have lodged complaint stating that they have not received any amount. However, the amount had been deposited and there was no loss to the Bank. 11. From the above referred charges and the prosecution and the defence argument in respect of those charges, it is crystal clear that the loan amount sanctioned by the respondent officer either to non-existent borrower or any other person than the borrower or said to have been misappropriated, were all paid by the borrowers to the Bank and, admittedly, there was no financial loss to the Bank in non-payment of the loan amount. Either the enquiry officer in his enquiry report, dated 3.9.2003 or the disciplinary authority while imposing punishment by order dated 2.12.2003 or the appellate authority while confirming the punishment by its order dated 18.11.2004 had made a mention about the loss suffered by the Bank in respect of the transactions made by the respondent officer. There is no whisper either in the charge memo or in the enquiry report with regard to the loss sustained by the Bank. There is not even a scrap of paper to substantiate the claim of the Bank to show that the Bank had suffered a huge loss of about Rs.2.60 lakhs due to the lapses on the part of the respondent officer. It is for the first time on 25.4.2005, while the terminal benefits of the respondent officer was being settled, it was informed by the appellant Bank that a sum of about Rs.2.60 lakhs is being recovered from his gratuity/pension amount. Admittedly, no prior notice had been issued to the respondent officer before sought to recover the amount. 12. The learned single Judge keeping in view all the aforesaid aspects has rightly came to a conclusion that in the absence of any notice to the respondent officer regarding the loss suffered by the Bank, the impugned orders of recovery are liable to be quashed. 12. The learned single Judge keeping in view all the aforesaid aspects has rightly came to a conclusion that in the absence of any notice to the respondent officer regarding the loss suffered by the Bank, the impugned orders of recovery are liable to be quashed. From the materials produced by the appellant Bank themselves, it is apparent that no notice had been issued with regard to the actual loss suffered by the bank due to the lapses on the part of the respondent officer. Therefore, we have no hesitation in confirming the decision of the learned single Judge and the writ appeal is liable to be dismissed. 13. Coming to the contentions raised in the writ petition, though we have accepted the contention of the writ petitioner to the effect that no loss had been caused to the Bank and, therefore, no amount could be recovered from him, we are not going to quash the charge memo in to. A reading of the charges levelled against the writ petitioner makes it clear that he had disbursed/sanctioned loan to a deceased person, to a Government employee and further without disbursing the loan to the borrower had said to have misappropriated the sum. Though the writ petitioner could say that no loss had been suffered by the bank, he could not deny the irregularities mentioned by the bank in disbursing/sanctioning the loan, which are serious in nature. From the materials produced and from the averments made, it is a clear case that the writ petitioner has flouted the rules while disbursing the loan. The defence of the writ petitioner through out the enquiry was that no loss had been suffered by the bank and the borrowers had repaid the amount. He had not specifically denied the procedural irregularities pointed out by the enquiry officer during his enquiry. In such circumstances, the writ petitioner cannot be heard to contend that he has to be fully exonerated from the charges. 14. The writ petitioner has joined as Clerk in 1977 and subsequently got promoted as an officer. He got suspended on 19.3.2002 and he was terminated from service by order dated 2.12.2003. It is not in dispute that the writ petitioner has put about 25 years of unblemished service in the respondent Bank. 14. The writ petitioner has joined as Clerk in 1977 and subsequently got promoted as an officer. He got suspended on 19.3.2002 and he was terminated from service by order dated 2.12.2003. It is not in dispute that the writ petitioner has put about 25 years of unblemished service in the respondent Bank. Considering the past services of the writ petitioner and the charges levelled against him, we are of the considered opinion that the punishment imposed was disproportionate and, for the reasons stated above, we modify the punishment of 'removal from service' as that of 'compulsory retirement'. 15. In the result, the writ appeal is dismissed and the writ petition is allowed to the extent of modifying the punishment imposed on the writ petitioner from 'the removal of service' to that of 'the compulsory retirement'. The direction of refund has to be complied with by the appellant Bank within a period of four weeks from the date of receipt of a copy of this order. It is made clear that the writ petitioner would be entitled to pensionary benefits and other consequential benefits, if any. There would be no order as to costs.