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2015 DIGILAW 26 (CAL)

Shiv Pujan Gwalia v. State Bank of India

2015-01-15

SANJIB BANERJEE

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Judgment Sanjib Banerjee, J. CAN 9 of 2015 is a formal application by the petitioner for correcting the affidavit verifying the petition. Such application is allowed by requiring the correction as indicated in paragraph 3 of the application to be incorporated in paragraph 3 of the affidavit verifying the petition. The appropriate amendment in the affidavit should be incorporated immediately. A bank officer who has been removed from service for recklessly recommending the grant of credit facilities to a seemingly undeserving borrower complains of the disproportionate punishment meted out to him for an act of inadvertence. In addition to the complaint of disproportionate punishment, the petitioner complains of the unfair procedure in the bank not favouring the petitioner with a copy of the report of the disciplinary authority on the basis of which the appointing authority handed down the extreme punishment of removal. The petitioner asserts that there was no charge of lack of integrity on his part and, since the petitioner was one of three officials who recommended the grant of the loan, it was unfair for the petitioner to be singled out for the harshest punishment while the others were let off lightly. A newly-formed company applied for credit facilities in December, 2010 when the petitioner was posted as manager (RMME) at the small and medium enterprises branch of the State Bank of India at Chiriamore on the fringes of the city. The loan proposal was appraised, inter alia, by the petitioner before the application being put up for sanction to the network credit committee of the bank. The charges brought against the petitioner were, inter alia, that the petitioner had overlooked the adverse reports against the two directors of the would-be borrower company as evident from the CIBIL website. The substance of the charges was that the credit records of the directors of the would-be borrower company which had then been recently floated did not merit a recommendation in support of the application and material facts were not mentioned in the recommendation. In the case of one of the directors of the company there were four instances of settlement and one instance where the amount due was written of, but such facts were not referred to in the recommendation. In the case of the other director there was an outstanding building loan in excess of Rs. 20 lakh but such fact was not recorded in the recommendation. In the case of the other director there was an outstanding building loan in excess of Rs. 20 lakh but such fact was not recorded in the recommendation. Sundry other details pertaining to the applicant company were also said to have been overlooked while recommending the grant of the credit facilities sought. The defence of the petitioner was that there was no active concealment of any material fact in the recommendation, but there may have been some inadvertence or error in judgment in perceiving certain matters as irrelevant. The petitioner also claimed in course of the disciplinary proceedings that the CIBIL reports formed a part of the papers appended to the recommendation. After the conclusion of the inquiry, the disciplinary authority took up the proceedings and, since the disciplinary authority did not have the power to award a punishment of removal, the matter was referred to the appointing authority of the petitioner. The appointing authority directed the removal of the petitioner from service and a departmental appeal was preferred by the petitioner. The petitioner did not complain before the appellate authority of the petitioner not being supplied a copy of the disciplinary authority’s order or recommendation as forwarded to the appointing authority. No ground was urged that the petitioner suffered any prejudice as a consequence of the relevant report not being made available to the petitioner. The appellate order of November 18, 2013 affirming the petitioner’s removal from service has been challenged herein. The petitioner refers to a judgment reported at (1993) 1 SCC 13 (State Bank of India v. D.C. Aggarwal) and places paragraph 4 of the report where the Supreme Court opined on procedural fairness and observed that the imposition of a punishment on an employee on material not supplied to the employee and not disclosed to him could not be countenanced. The material that had not been supplied to the employee in that case was a recommendation of the Central Vigilance Commission which was the foundation of the charge against the employee. A single Bench judgment of this court reported at (2006) 3 CHN 54 (Major General Arun Roye v. Union of India) is next placed on behalf of the petitioner where an army officer had challenged the denial of his promotion on the ground that the adverse comments against the officer, on the basis of which his promotion was withheld, had not been furnished to him. The bank harps on the fact that the ground as to non-furnishing of the disciplinary authority’s report was not canvassed before the appellate forum. The bank relies on the Constitution Bench judgment reported at (1993) 4 SCC 727 (Managing Director, ECIL, Hyderabad v. B. Karunakar) and places paragraphs 30 and 31 of the report from which it is evident that there can be no straightjacket rule that the non-furnishing of a report of the inquiry officer would vitiate the disciplinary proceedings. It does not appear that the failure on the part of the respondents to supply a copy of the disciplinary authority’s report prejudiced the petitioner in any manner. Indeed, it did not dawn on the petitioner that such report ought to have been received by him when he prosecuted the departmental appeal. There is no dispute that an initial show-cause notice was issued to the petitioner and, following his reply thereto, a formal charge-sheet was received by him. He responded to the charges, participated in the proceedings thereafter and was duly afforded an opportunity to defend himself before the disciplinary authority. It was not as if the petitioner was not aware of the reasons why he was being proceeded against. In the circumstances, there is no merit in the primary ground urged that the failure to forward a copy of the report of the disciplinary authority vitiates the order of removal from service that has been made against the petitioner. The rule of natural justice has undergone considerable refinement and it is no longer a mantra that can be chanted to escape the knots that a person may find himself to be tied in. In its present refined form as judicially recognised, the unbridled rule has been reined in. The test is one of prejudice: whether a person has received a fair hearing considering all things. The extent of the applicability of the rule depends on the nature of the proceedings. It is the substance and not the form that is the paramount consideration in the application of the rule. Most importantly, the violation of the principles of natural justice would not vitiate the proceedings if it were perceived that no other result would be possible. The extent of the applicability of the rule depends on the nature of the proceedings. It is the substance and not the form that is the paramount consideration in the application of the rule. Most importantly, the violation of the principles of natural justice would not vitiate the proceedings if it were perceived that no other result would be possible. As to the ground of disproportionate punishment, it must first be remembered that it is only when the punishment qua the perceived or proven misconduct shocks the conscience of the court that the court would interdict the same. Here was a case where an officer entrusted to appraise the creditworthiness of the applicant failed to notice or mention the adverse reports against the two directors of the newly-formed company that sought the loan. There can be no denial that the responsibility of the petitioner was to vet the records pertaining to the applicant company and the human agencies in control thereof. The applicant was a private company with anomalies as to its capital and accounts and without a licence entitling it to carry on the export-import business for which the facilities were sought. The credit records of the applicant company’s two directors were not clean. The applicant company was formed by taking over a sole proprietorship concern. The circumstances were such that any prudent person in the position of the petitioner ought to have specifically referred to the dubious credit records of the directors of the applicant and the anomalies surrounding the applicant company’s accounts and ability to conduct the business for which it sought credit facilities. In the order impugned dated November 18, 2013, the appellate authority meticulously recorded the defence to each charge as made out by the petitioner and gave due consideration to the petitioner’s version. The petitioner admitted having not referred to the CIBIL report of December 27, 2010 in his recommendation. Such adverse report was so material in the context of the work that had been entrusted to the petitioner, that the petitioner’s admission was good enough for the charge to be taken as proven without further ado. The appellate authority noticed that as to the other acts of omission with which the petitioner was charged, his defence was evasive and he sought to lay the blame at the doors of the chartered accountants who had audited the annual accounts of the fledgling applicant company. The appellate authority noticed that as to the other acts of omission with which the petitioner was charged, his defence was evasive and he sought to lay the blame at the doors of the chartered accountants who had audited the annual accounts of the fledgling applicant company. In the context of the petitioner’s responsibility while recommending the grant of credit facilities to an applicant, the failure to go through the annual accounts of the applicant company with a toothcomb was damning in itself. To compound matters, the petitioner sought to make out a case that if an unqualified, clean report had been given by the auditors of the company, it was not required of a bank official vetting the accounts to assess the creditworthiness of the company to look into the annual accounts any further. If this was the understanding of the petitioner of his brief while assessing an application for grant of credit facilities, he can have no grievance for his removal from service. Further, the recklessness or deliberate conduct of the petitioner has resulted in substantial financial loss to the bank. It is not necessary to ascertain at this stage whether the acts of omission by the petitioner in assessing the application were deliberate or inadvertent. Apart from the fact that it is difficult to accept that the acts of omission were not by design, if the petitioner considered the matters that he missed referring to in his recommendation as irrelevant, he was worthy of removal from service for crass incompetence. It does not appear from the orders of the appointing authority or the appellate authority that an unreasonable view has been taken either in respect of the misconduct that has been proven against the petitioner or as regards the punishment awarded to him. One of the tests in judicial review is as to whether the decision complained of reflects a plausible view taken by a prudent person on the set of facts before such authority. Both the orders of the appointing authority and the appellate authority pass the test. There is no merit in the challenge to either the procedure adopted or the decision rendered in course of the disciplinary proceedings. WP No. 33329(W) of 2014 is dismissed but without any order as to costs. Both the orders of the appointing authority and the appellate authority pass the test. There is no merit in the challenge to either the procedure adopted or the decision rendered in course of the disciplinary proceedings. WP No. 33329(W) of 2014 is dismissed but without any order as to costs. Urgent certified website copies of this judgment, if applied for, be urgently made available to the parties, subject to compliance with all requisite formalities.