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2015 DIGILAW 978 (GAU)

Nagendra Lal Choudhury v. UCO Bank

2015-08-07

HRISHIKESH ROY

body2015
JUDGEMENT : Heard Mr. B. Pathak, the learned counsel appearing for the petitioner. The respondents UCO Bank and their officers are represented by Mr. P. C. Goswami, the learned Advocate. 2. While serving as the Manager of the Rangia Branch of the UCO Bank, the petitioner committed certain irregularities in disbursal of loans and that is how the show cause notice was issued on 25.8.2007 (Annexure-3), whereby the response of the Manager was sought to the nine specific charges. In his reply furnished on 2.9.2007 (Annexure-5), the delinquent stated that he was under order of transfer from Rangia to Guwahati on 4.8.2007 but as no officer was available to take charge at Rangia, he remained stranded at Rangia until 24.8.2007. During these 21 days, there was acute shortage of staff for which certain formalities could not be completed. Moreover after learning of the transfer order, life threat was given by the militants to immediately disburse the pending loans and that is how some loans under the Government sponsored programmes such as Kishan Credi Card (KCC)/KVIB/DICC Schemes had to be sanctioned without completion of all the Bank’s formalities. The delinquent also gave explanation for the personal loan taken by him in the context of the education requirement of his two sons. 3. However the explanation was found to be unsatisfactory and accordingly the employer initiated a formal proceeding under Regulation 6 of the UCO Bank Officer Employees’ (Discipline and Appeal) Regulations, 1976 (hereinafter referred to as ‘the Discipline Regulations’) through the Charge Memo dated 23/27.11.2007 (Annexure-6). Six specific charges are reflected in the charge memo and since they are relevant, they are extracted herein below for ready reference:- “Article of Charge ………………………………………………………………… (1) Shri Choudhury while discharging his duties as Manager, Rangia Branch grossly abused his power for personal gain by closing 5 nos. of Demand Loan A/cs for Rs.1,79,879/- standing in his name and purchasing 8 nos. of self drawn cheques for Rs.57,000/- on his SB A/c. No.5986 with Guwahati Branch. He also availed two Demand loans on his own for Rs.50,000/- on 31.7.07 and Rs.1,50,000/- on 18.8.2007 without any documentation. There are unusual transactions on his Cash Credit A/c. No.13 with Rangia Branch and SB A/c. No.5986 with Guwahati Branch disproportionate to his known sources of income. He also availed two Demand loans on his own for Rs.50,000/- on 31.7.07 and Rs.1,50,000/- on 18.8.2007 without any documentation. There are unusual transactions on his Cash Credit A/c. No.13 with Rangia Branch and SB A/c. No.5986 with Guwahati Branch disproportionate to his known sources of income. The above acts are unbecoming of an Officer and violative of Regulation-3(1) and Regulation-24 of UCO Bank Officer Employees’ Conduct Regulation, 1976 as amended. (2) Shri Choudhury while discharging his duties as Manager of Rangia Branch disbursed 12 Nos. of KVIC loans amounting to Rs.22.80 Lac on 13.8.07, 17.8.07 and 21.8.07 without debiting the loan accounts in KVIC load ledger by ciolating the guidelines and procedures of the Bank. He left the said loan documents unfilled/partially filled in. He did not prepare any Sanction Advices, Process Notes for the said accounts. The above acts are unbecoming of an Officer and violative of Regulation-3(1), 3(3) and Regulation-24 of UCO Bank Officer Employees’ Conduct Regulation, 1976 as amended. (3) Shri Choudhury released collateral security in 3 (three) KVIC loan A/cs of Rajeeb kalita, Rina Medhi and Mukunda Madhab Sarma amounting to Rs.4.5 Lac. The borrowers Rina Medhi and Mukunda Madhab Sarma are fictitious persons as they are not residents of the area declared in the loan applications. He also received Rs.50,000/- from the released collateral security of Rina Medhi. While disbursing 11 Nos. of KVIC loans he did not ensure their end use and it was found that the 11 units are non-existent. By releasing the security and not by ensuring proper end use of loans, he failed to protect the interests of the Bank and acted for his personal gain. No asset was created out of the loan given to Rajeeb kalita (Rs.3.21 Lac) and together with the loans of Rina Medhi (Rs.3.99 Lac) and Mukunda Madhab Sarma (Rs.3.05 Lac) the Bank is exposed to a financial risk to the extent of Rs.9.47 Lac. The above acts are unbecoming of an Officer and violative of Regulation-3(1), 3(3) and Regulation-24 of UCO Bank Officer Employees’ Conduct Regulation, 1976 as amended. (4) Shri Choudhury connived with two middlemen to disburse 13 Nos. of fictitious KCC Loans, thereby defrauding the Bank to the amount of Rs.3.86 Lac. There was no documentation of the loans nor there were any Sanction Advices, Process Note. Other than the withdrawal slip no documents are taken by him. (4) Shri Choudhury connived with two middlemen to disburse 13 Nos. of fictitious KCC Loans, thereby defrauding the Bank to the amount of Rs.3.86 Lac. There was no documentation of the loans nor there were any Sanction Advices, Process Note. Other than the withdrawal slip no documents are taken by him. The Bank is therefore exposed to a financial risk to the extent of Rs.3.86 Lac. The above acts are unbecoming of an Officer and violative of Regulation-3(1), 3(3) and Regulation-24 of UCO Bank Officer Employees’ Conduct Regulation, 1976 as amended. (5) Shri Choudhury disbursed KCC Loan proposals which were forwarded to other Banks viz. State Bank of India, Soneswar and Rangia Branch. He also sanctioned and disbursed a KCC loan proposal forwarded to the Branch in the year 2003. All the loans were disbursed on 21.8.07. He also disbursed KCC Loans to 8 (eight) persons twice and to one person three times against one certificate of KCC loan proposal per person forwarded by Sub-Divisional Agriculture Officer, Rangia. The above acts are unbecoming of an Officer and violative of Regulation-3(1), 3(3) and Regulation-24 of UCO Bank Officer Employees’ Conduct Regulation, 1976 as amended. (6) Shri Choudhury while discharging his duties as Manager of Rangia Branch failed to issue Office Orders for balancing of Books to members of staff every month. He failed to ensure proper balancing of books and made false balancing position while submitting the monthly IT-4 statement. He thus failed to discharge his duties with utmost integrity and devotion. The above acts are unbecoming of an Officer and violative of Regulation-3(1), 3(4) and Regulation-24 of UCO Bank Officer Employees’ Conduct Regulation, 1976 as amended.” 4. The reply given by the delinquent was found unsatisfactory and therefore the disciplinary authority appointed the Senior Manager of the Guwahati Main Branch to inquire into the allegation against the delinquent. The inquiries were conducted on various dates during 27.12.2007 to 7.1.2008 and in the inquiry report forwarded on 25.2.2008 (Annexure-17), the charges were found to have been proved. 5. The report furnished by the Inquiry Officer was then considered by the disciplinary authority and through the impugned order dated 28.3.2008 (Annexure-19), six separate punishments against the six misconducts were inflicted on the delinquent. 5. The report furnished by the Inquiry Officer was then considered by the disciplinary authority and through the impugned order dated 28.3.2008 (Annexure-19), six separate punishments against the six misconducts were inflicted on the delinquent. The order shows that the penalty of dismissal from service was ordered for charge Nos.2, 3 & 4 and for charge Nos.1 & 5, the reduction of pay to JMG Scale-I from MMG Scale-II was issued. For the 6th charge, the basic pay of the delinquent was reduced by two stages in time scale of pay, until his superannuation in the year 2009. 6. The Appeal under Regulation-17 of the Discipline Regulations was preferred by the delinquent on 9.5.2008 against the above order of 28.3.2008 but the same is still to be considered by the Appellate Authority. 7.1. Assailing the legality of the disciplinary proceeding, Mr. B. Pathak, learned counsel submits that the petitioner had a clean service record of about 37 years in different capacities with UCO Bank and the aberrations at Rangia Branch was for other factors like shortage of staff, excessive work load and the pressure brought upon by the militants to immediately disburse some of the pending loans, as the delinquent was transferred from Rangia to Guwahati. 7.2. On the allegation pertaining to self loan and transactions in the personal account of the petitioner, Mr. Pathak submits that there is nothing unusual about the self loan and the transaction in his personal account and adequate explanations have been furnished by the delinquent against these charges. 7.3. In so far as the sanction of the loans under the Government sponsored KCC/ KVIC/PMRY schemes, unexpected pressure and threat was given from the underground organization and the Manager was physically attacked outside the Bank premises and that is how some loans had to be sanctioned hurriedly without completion of all required formalities. But the petitioner refers to the intimation letter dated 24.8.2007 (Annexure-2) to project that all these facts were brought to the notice of the higher authorities. 7.4. The petitioner projects that none of the loans were sanctioned for personal gain and therefore he contends that harsh punishment of dismissal is disproportionate, as such penalty prevents future employment and also result in considerable financial loss for the delinquent, who reached the superannuation age on 31.12.2008. 7.5. Referring to the unfairness of the enquiry, Mr. 7.4. The petitioner projects that none of the loans were sanctioned for personal gain and therefore he contends that harsh punishment of dismissal is disproportionate, as such penalty prevents future employment and also result in considerable financial loss for the delinquent, who reached the superannuation age on 31.12.2008. 7.5. Referring to the unfairness of the enquiry, Mr. Pathak submits that the delinquent was denied the due opportunity and list of management witness was not furnished to the delinquent. Moreover the delinquent was unaware about the management documents but abruptly on 5.1.2008, the Presenting Officer relied on 13 documents and over 70 management exhibits were relied upon to reach the adverse conclusion by the Inquiry Officer. The fairness of the inquiry proceeding is also questioned on the ground that defence assistance was not provided in the early stages of the proceeding but was given only after 5.1.2008 and by that time, few of the charges were already taken into account. 8.1. On the other hand, Mr. P.C. Goswami, the learned standing counsel for the UCO Bank submits that if the delinquent was threatened by the militants, he should have lodged an FIR or sought support of his superiors during those days but in the instant case, no police case was ever registered for the purported threat or the assault made upon the delinquent. 8.2. The Bank’s lawyer submits that as a long serving senior personnel of the Bank, the delinquent was well aware that the Bank can’t be exposed to unnecessary risk by sanctioning loan without completion of due formalities and accordingly Mr. Goswami submits that the misconduct of the petitioner deserve major punishments. 9. The submission made by the petitioner to question the fairness of the disciplinary proceeding has received careful consideration and it can be noted both from the charge memo dated 27.11.2007 and the show cause notice dated 25.8.2007 that, the list of management documents or the list of management witnesses, were never furnished to the delinquent. Only in the midst of the proceeding, the Presenting Officer produced a list of 13 documents on 5.1.2008 but the petitioner was not provided with copies of these documents. But what is more striking is that in order to reach his conclusion, the Inquiry Officer not only relied on these 13 documents but took support of about 74 management exhibits without any intimation to the delinquent. But what is more striking is that in order to reach his conclusion, the Inquiry Officer not only relied on these 13 documents but took support of about 74 management exhibits without any intimation to the delinquent. Non availability of defence assistance at the early stage of the Inquiry Proceeding also raises a question mark on the fairness of the procedure. However all these deficiencies remained unnoticed and the disciplinary authority did not take those factors into account, while agreeing with the adverse finding given against the delinquent. 10. That apart, the prevalent difficulties in the Rangia Branch such as shortage of staff and militant threat received by the Bank Manager to force him to disburse the pending loans were not appropriately appreciated. This could have led to a more lenient treatment for the delinquent. 11. No charge of misappropriation or personal gain was made against the delinquent but the allegations are in the realm of irregular transaction and procedure. But at the same time, as a responsible employee of the Bank, the delinquent can’t escape liability for disbursing loan without completion of formalities and therefore it can’t be said that the disciplinary action was not warranted against the Bank Manager. 12. The above discussion highlights some of the deficiencies in the inquiry proceeding and also few mitigating circumstances, which should have received due attention of the disciplinary authority. It further appears that amongst the major penalties prescribed under Regulation-4 of the Discipline Regulations, dismissal is the ultimate penalty whereas lesser punishments like compulsory retirement and removal from service are also available options. 13. The respondents here while supporting the disciplinary proceeding question the maintainability of the Writ Petition on the ground that the Appellate Authority is still to decide the Appeal, filed under Regulation-17 of the Discipline Regulations by the delinquent. 14. Taking all the above factors into account, I feel that the issues identified in this order should receive the attention of the Appellate Authority. Accordingly the delinquent’s Appeal of 9.5.2008 is directed to be decided by the higher authority who should pass a reasoned order on merit, within 8 weeks from the date of receipt of this order. If the validity of the inquiry proceeding is upheld by the Appellate Authority, any alternate penalty except dismissal should be considered for the retired delinquent, in the facts and circumstances of this case. It is ordered accordingly. 15. If the validity of the inquiry proceeding is upheld by the Appellate Authority, any alternate penalty except dismissal should be considered for the retired delinquent, in the facts and circumstances of this case. It is ordered accordingly. 15. With the above order, the case stands disposed of without any order on cost.