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2016 DIGILAW 3 (CAL)

Tamal Chanda v. State Bank of India

2016-01-04

SANJIB BANERJEE

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JUDGMENT : A legal question of some importance arises here and there may be a need to buck the recent trend of staying departmental proceedings pending criminal trials founded on similar allegations. The petitioner was the branch manager of the Dhaniakhali Branch of the respondent bank. In his usual course of duties, the petitioner sanctioned loans by way of Kissan Credit Cards to several perceived farmers qualified to receive such credit facilities. Most of these loans were sanctioned in the years 2011-2013. By a notice of July 21, 2015, the bank required the petitioner to respond to the articles of charge enclosed with the covering letter of such date as the bank had decided to initiate disciplinary action with a major penalty against the petitioner in accordance with the bank’s service rules. The substance of the charges against the petitioner was that he had “committed serious irregularities and grave lapses, misused his official powers by giving substantial enhancements of limits in quick successions, allowed misappropriation of bank’s funds, (was) instrumental in defrauding the bank by cheating and forgery in connivance with outsiders and exposed the Bank to huge financial loss to the tune of around Rs.9.75 crores.” The petitioner responded to the individual charges by a 27-page response of September 4, 2015. The petitioner dealt with the several matters particularised in the bank’s charge-sheet, by prefacing his reply with the submission that the allegations levelled against him were stale and that on the self-same charges the petitioner had been implicated in a criminal case which was pending. The bank lodged a complaint against the petitioner before the appropriate police authorities on November 28, 2014 which has resulted in a charge-sheet being filed before the Chief Judicial Magistrate, Sadar Court, Hooghly on May 31, 2015 indicating possible offences under Sections 420/406/109/471/120B of the Indian Penal Code. The petitioner says that since it would be evident from the provisions of the Penal Code invoked against the petitioner that the charges in the criminal proceedings are identical to those in the departmental action, it would not be desirable for the petitioner to disclose his defence or face the disciplinary proceedings before the conclusion of the criminal trial. The petitioner refers to several judgments beginning the one reported at 1999(3) SCC 679 (Capt.M. Paul Anthony v. Bharat Gold Mines Ltd.) and some later decisions relying on the principle enunciated in Paul Anthony. The petitioner refers to several judgments beginning the one reported at 1999(3) SCC 679 (Capt.M. Paul Anthony v. Bharat Gold Mines Ltd.) and some later decisions relying on the principle enunciated in Paul Anthony. According to the petitioner, in every case where the charges levelled are similar or identical, the departmental proceedings should be stayed pending the outcome in the criminal trial. In particular, the petitioner relies on the second of the several grounds noticed at paragraph 22 of Paul Anthony to suggest that the same would be attracted in the instant case: “22. The conclusions which are deducible from various decisions of this Court referred to above are: i) … ii) If the departmental proceedings and the criminal case are based on identical and similar set of facts and the charge in the criminal case against the delinquent employee is of a grave nature which involves complicated questions of law and fact, it would be desirable to stay the departmental proceedings till the conclusion of the criminal case. … ” In tune with the sentiment echoed in Paul Anthony, the petitioner has referred to a Division Bench judgment reported at 2004(4) CHN 376 (Jayati Banerjee v. United Bank of India) where the second clause of paragraph 22 of Paul Anthony was paraphrased to make it applicable in that case. The petitioner has also carried a Single Bench judgment reported at 2014(1) CHN 399 (Firoz Ahmed v. Union of India) and a Division Bench judgment reported at 2014(3) CHN 198 (Balai Kumar Sanfui v. State of West Bengal). The bank opposes the prayer for delaying the departmental proceedings on the ground that the criminal trial may take long as 30 witnesses have been cited and it is undesirable that the departmental action be stayed for an inordinate duration of time till the conclusion of the criminal trial. In words politely couched, it is submitted on behalf of the bank that such matters never really see the end of the day in criminal courts and it is not advisable that a person with such charges be allowed to work for the bank with the employer always being suspicious of the employee. The bank has also gone back to the days before Paul Anthony to cite a judgment reported at 1996(6) SCC 417 (State of Rajasthan v. B.K. Meena). The bank has also gone back to the days before Paul Anthony to cite a judgment reported at 1996(6) SCC 417 (State of Rajasthan v. B.K. Meena). The cases cited by the parties are dealt with in chronological order to appreciate the circumstances in which the views were rendered by the appropriate courts. In B.K. Meena, an IAS officer was charged with misappropriation of public funds to the tune of Rs.1.05 crore and the special leave petition before the Supreme Court was directed against the Central Administrative Tribunal staying the disciplinary proceedings pending the criminal trial. In the context of the rather vague words such as “desirable” and “advisable” and the like which feature in judgments on such aspect, the Supreme Court in B.K. Meena noticed the dictum in the famous cases of DCM and Tata Oil Mills to observe that disciplinary proceedings could not be delayed indefinitely. In words that ring truer now, the Supreme Court observed, at paragraph 14 of the report, as follows: “14. …So far as criminal cases are concerned, it is well known that they drag on endlessly where high officials or persons holding high public offices are involved. They get bogged down on one or the other ground. They hardly ever reach a prompt conclusion. That is the reality in spite of repeated advise and admonitions from this court and the High Courts … The judgment went on to instruct as follows at paragraph 17 of the report, based on the distinction as to the standard of proof and mode of inquiry in departmental actions and criminal proceedings: “17. There is yet another reason. The approach and the objective in the criminal proceedings and the disciplinary proceedings is altogether distinct and different. In the disciplinary proceedings, the question is whether the respondent is guilty of such conduct as would merit his removal from service or a lesser punishment, as the case may be, whereas in the criminal proceedings the question is whether the offences registered against him under the Prevention of Corruption Act (and the Indian Penal Code, if any) are established and, if established, what sentence should be imposed upon him. The standard of proof, the mode of enquiry and the rules governing the enquiry and trial in both the cases are entirely distinct and different. The standard of proof, the mode of enquiry and the rules governing the enquiry and trial in both the cases are entirely distinct and different. Staying of disciplinary proceedings pending criminal proceedings, to repeat, should not be a mater of course but a considered decision. Even if stayed at one stage, the decision may require reconsideration if the criminal case gets unduly delayed.” In Paul Anthony the petitioner before the Supreme Court was a security officer at the Kolar Goldfields and a gold ball and gold dust were recovered from his house. Before the Supreme Court went on to discuss the merits of the matter since the disciplinary action had already been concluded in that case, it discussed previous judicial authorities on whether criminal proceedings and departmental action in respect of similar charges could be permitted to be continued simultaneously. But it must be observed that in that case the act complained of was of theft against a person engaged to protect the assets of the employer. In Jayati Banerjee, the disciplinary proceedings arose in connection with the same charges for which a complaint under Section 409 of the Indian Penal Code had been lodged by the bank. The petition was dismissed by the Single Bench since the criminal proceedings were only at the investigation stage. The Division Bench relied on the dictum in Paul Anthony and said that the employee could not be compelled to disclose his defence “which could ultimately prejudice him in the criminal proceeding and/or in the event the charge-sheet is filed against him”. In Firoz Ahmed, the charge against the concerned Railway Protection Force employee was of demanding and accepting illegal gratification. The court applied the Paul Anthony principle and came to a conclusion that there was a real danger of the employee’s defence having to be disclosed in the departmental proceedings. In Balai Kumar Sanfui, the charge against an officer-in-charge of the Economic Offences Wing of the Enforcement Branch pertained to demanding a bribe for releasing a person who had been arrested. The Division Bench discussed the law, after noticing Paul Anthony, and directed that the departmental inquiry against the petitioner would remain stayed for a year. In Balai Kumar Sanfui, the charge against an officer-in-charge of the Economic Offences Wing of the Enforcement Branch pertained to demanding a bribe for releasing a person who had been arrested. The Division Bench discussed the law, after noticing Paul Anthony, and directed that the departmental inquiry against the petitioner would remain stayed for a year. Simultaneously, the criminal court was requested to expeditiously dispose of the trial and the matter was adjourned for a year with liberty to the parties to move the court in the event the criminal trial was not concluded within such time. Several factors go into deciding whether in a particular situation the allied departmental action should be stayed or postponed till the outcome of the criminal trial. For one, a distinction has to be made based on the nature of the charges levelled against a delinquent in both sets of proceedings: whether they pertain to the employee’s line of duty or are in respect of matters extraneous to the duties. Even if the charges are relatable to the duties of the perceived delinquent, a further distinction has to be made as to whether such charges arise directly in connection with any duty discharged by the employee or are only incidentally relatable thereto. The distinctions may be appreciated with examples, some of which are found in the judgments cited. A grievous charge of murder or rape or dacoity brought against an employee will, almost invariably, not have any connection with the line of duty of the employee. The employer may, justifiably, perceive that an employee facing such a serious charge should not be allowed to continue in the employment. In such a case, where the alleged offence has no nexus with the usual work of the concerned employee, it may be more appropriate for the departmental action to be temporarily stayed so that the criminal trial may be concluded within reasonable time. Even in such a case, it would not be appropriate to indefinitely stay the departmental proceedings during the pendency of the criminal case. As instructed by the Supreme Court in B.K. Meena, in no case should the departmental proceedings be indefinitely deferred. Next comes the situation where the charge is somewhat in connection with the usual duties of the perceived delinquent, but may not be directly relatable to his official functions. As instructed by the Supreme Court in B.K. Meena, in no case should the departmental proceedings be indefinitely deferred. Next comes the situation where the charge is somewhat in connection with the usual duties of the perceived delinquent, but may not be directly relatable to his official functions. For example, such a case may be one of seeking or accepting a bribe. It would depend on the facts of a particular case whether the departmental proceedings ought to be deferred for a reasonable time to await the outcome of the criminal proceedings. The third category of cases, as in the instant matter, would be where the acts complained of against the delinquent pertain to his official functions and would amount to criminal culpability, if proved. In such a situation, it will be inappropriate to allow the delinquent to continue in service or remain suspended indefinitely while the criminal matter languishes. It must be remembered that the standards of proof in departmental proceedings and in criminal matters are not the same. It is possible that on the test of balance of probabilities a charge is established against a delinquent but on the higher altar of beyond reasonable doubt, the criminal charge fails. It is such distinction which has prompted courts to refrain from setting down any straight-jacket rules as to when departmental proceedings should be stayed in the wake of a criminal complaint pertaining to the same act or set of acts. It is true that an employer may not be forced to continue with or post an employee who is perceived to have committed a grievous wrong merely because the criminal trial has not been concluded to pronounce the perceived delinquent guilty. In such a case, the employer has the right to keep the concerned employee in suspension. But where the rules of service do not provide for suspension, the stay of any departmental action pending the conclusion of the criminal trial automatically implies the delinquent being required to discharge his duties contrary to the wishes of the employer. Again, merely because an employee may remain suspended during the period of the criminal trial does not mean that national resources can be squandered away in subsistence allowance being afforded to the perceived delinquent without any service being rendered by such person. Courts have frowned on indefinite orders of suspension. Again, merely because an employee may remain suspended during the period of the criminal trial does not mean that national resources can be squandered away in subsistence allowance being afforded to the perceived delinquent without any service being rendered by such person. Courts have frowned on indefinite orders of suspension. In a case where the charges levelled against the perceived delinquent in the criminal matter are more or less the same as in the disciplinary proceedings and such charges have a direct nexus with the official duties and functions of the perceived delinquent, it would be more appropriate to ensure that the disciplinary proceedings are concluded and the order of punishment, if any, may be made subject to the outcome of the criminal trial to the extent that an honourable acquittal may entitle the employee to seek a review of the punishment awarded to him in the disciplinary proceedings. Here also, one needs to tread with caution and circumspection. Criminal jurisprudence makes no distinction between an acquittal simplicitor and an honourable acquittal. It is only judge-made law in recent times that makes such a distinction, probably as a convenient tool to deal with matters of the present kind. Be that as it may, but what appears to be the law is that when the criminal court positively finds the accused not to be connected with the offence with which he was charged rather than the prosecution failing to establish the charges by bringing appropriate material, the acquittal is seen to be an honourable acquittal which may have an impact on the disciplinary proceedings or on the punishment that may have been awarded to the employee at the end of the disciplinary proceedings. Criminal trials seem to be never-ending exercises, particularly, if charges are based on documentary evidence and the like. There is justification for the bank’s apprehension in this case that the criminal trial may not be concluded in a hurry. It is the same sentiment that reverberates in paragraph 17 of the report in B. K. Meena quoted above. In Jayati Banerjee which is the closest to the facts of the present case, the charge was also one under Section 409 IPC and pertained to a bank employee. However, for reasons not disclosed in the judgment, it was found that the charge involved complex facts and law. In Jayati Banerjee which is the closest to the facts of the present case, the charge was also one under Section 409 IPC and pertained to a bank employee. However, for reasons not disclosed in the judgment, it was found that the charge involved complex facts and law. There is no complexity on facts or in law in the present case. In simple language, the petitioner has been charged with sanctioning loans or affording credit facilities to fictitious persons without due verification. There is no denying that the petitioner was the sanctioning authority. It is possible that the petitioner herein may be found guilty as charged in the departmental proceedings but held to be not guilty in the criminal proceedings and one has to be alive to such possibility when making an assessment of the present nature. The ancillary question is whether the petitioner would be irreparably prejudiced and the chances of the petitioner being found not guilty in the criminal proceedings irretrievably jeopardised if the departmental proceedings were to be concluded against him and the outcome declared and implemented before the criminal trial is over. In the event the petitioner is found not guilty in the departmental proceedings, that can only aid the petitioner in the criminal trial; since the charges would have stood rejected on a lower test against the petitioner than is required in criminal proceedings. If the petitioner is found guilty in the departmental proceedings, such finding would not be binding on the criminal court and the criminal court would have to assess the culpability of the petitioner on the exalted test of beyond reasonable doubt. While setting down parameters for interference with departmental proceedings at such a stage, courts have also to be alive to the present scenario where the honest can be persecuted by a clique of the corrupt; or where the gravy train runs right up to the top. It is for such reason that a loose legal framework has been judicially recognised for such guidelines to be kept in mind while making an assessment in a particular case. It is for such reason that a loose legal framework has been judicially recognised for such guidelines to be kept in mind while making an assessment in a particular case. The facts of the case and the nature of charges levelled against the petitioner in the disciplinary proceedings do not warrant an arrest of the departmental action at this stage, particularly since the charge-sheet has already been filed in the criminal case and the petitioner has furnished a detailed response to the charges following the receipt of the disciplinary charge-sheet of July 21, 2015. The petitioner will go through the departmental inquiry and the stage before the disciplinary authority without prejudice to the petitioner’s defence in the criminal trial. Any order of punishment, if at all, passed against the petitioner will be subject to review by the disciplinary authority in the event the petitioner is honourably acquitted in the criminal proceedings. WP 28039 (W) of 2015 is disposed of by not interfering with the conduct of the departmental proceedings against the petitioner and by requesting the employer to conclude the same as expeditiously as possible. The relevant criminal court in seisin of the criminal case pertaining to Dhaniakhali PS FIR No.195/2014 dated November 28, 2015 and culminating in charge-sheet No.85/2015 dated May 31, 2015 is requested to conclude the trial as expeditiously as possible and without granting adjournments to either the prosecution or the defence. It will be the obligation of both the petitioner and the bank to reach copies of this order to the relevant criminal court so that the trial can be completed, preferably, within a year. The observations herein are only for the purpose of assessing the matter in issue will not be held against the petitioner in the criminal proceedings or in the departmental action. There will be no order as to costs. Certified website copies of this order, if applied for, be urgently made available to the parties upon compliance with the requisite formalities.