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2017 DIGILAW 211 (GAU)

UCO Bank v. Sailendra Namasudra

2017-02-16

HRISHIKESH ROY, NELSON SAILO

body2017
JUDGMENT : Hrishikesh Roy, J. Heard Mr. S. Katoky, the learned counsel for the appellant. Also heard Mr. A.K. Purakayastha, the learned counsel appearing for the respondent (Writ Petitioner). 2. The UCO bank and their officers have filed this writ appeal to challenge the judgment dated 25.06.2014 (Annexure-C) in the WP(C) No.2933 of 2009, whereby, the Writ Court upheld the disciplinary proceeding and the guilty finding against the delinquent Bank Manager. But, considering the penalty of dismissal from service to be 'too harsh', the punishment was reduced to compulsory retirement with all monetary and pensionary benefits to the delinquent, under the applicable service rules. 3. At the relevant time, the respondent was serving as the Manager of the Tamulpur Branch of the UCO Bank. Noticing multiple fraudulent transactions in several SB accounts in the Branch, the charge memo dated 30.06.2006 was served under the Regulation 3 of the UCO Bank Officers/ Employees (Conduct) Regulations, 1976 (hereinafter referred to as the Conduct Regulation). The nature of the three charges being relevant, they are extracted herein below for ready reference: "ROG/VIG/MISC/09/2006-07 Date: 30.06.2006 Article of Charges Sri S Namasudra (PFM No.35267) while functioning as Officer at Tamulpur branch from 23.07.1997 to 22.01.2004 had indulged in several acts of omission and commission for which he is hereby charged as under: (1) Sri S. Namasudra had indulged in fraudulent transactions with malafide intention in several SB accounts of Tamulpur branch which has cause financial loss to the Bank. He has thus failed to discharge his duties with utmost integrity, honesty which is in violation of Regulation -3 of UCO Bank Officer Employees' (Conduct) Regulations, 1976 as amended. (2) Sri S. Namasudra had intentionally issued fictitious FDR/KYs without debiting any account. Thus he had most irregularly and fraudulently abused his official position which is in violation of Regulation -3 of UCO Bank Officer Employees' (Conduct) Regulations, 1976 as amended. (3) Sri S. Namasudra closed one LBY A/C without adjusting the loan against it. He failed to ensure and protect the interest of the bank which is in violation of regulation -3 of UCO Bank Officer Employees' (Conduct) Regulations, 1976 as amended." 4. Finding the response to the charge memo to be unsatisfactory, an inquiry was ordered against the Bank Manager. He failed to ensure and protect the interest of the bank which is in violation of regulation -3 of UCO Bank Officer Employees' (Conduct) Regulations, 1976 as amended." 4. Finding the response to the charge memo to be unsatisfactory, an inquiry was ordered against the Bank Manager. After due deliberation, the Inquiry Officer concluded that charge Nos.1 and 2 are proved and the 3rd charge is partly proved, as per finding recorded on 04.06.2007 (Page-98). The inquiry report was furnished to the delinquent for his comments and noticing the bald denial in the reply, the disciplinary authority observed that the proven charges are grave and serious and such fraudulent act is unbecoming of a senior officer of the Bank. Accordingly, dismissal from service was ordered by the Zonal Manager on 10.09.2007 (Annexure-11). 5. The delinquent then approached the appellate authority, but, since, appeal was not disposed of, he filed the WP(C) No.2933 of 2008 to challenge the disciplinary action. The Writ Court considered in detail the charges and the defence thereto of the delinquent, as also the findings of the Inquiry Officer. The delinquent's explanation was to the effect that those are the unintentional lapses, the over drawn amounts have been regularized by the customers and no financial loss is caused to the bank. After due consideration of all aspects of the disciplinary proceeding, the learned Judge opined that the nature of misconduct would surely warrant penalisation of the errant manager and thus, the proceeding and the penalisation was held to be justified. 6. However, on the proportionality on the penalty of dismissal, the Court found two extenuating factors, i.e., the overdrawn amounts have been regularized by the concerned customers after some delay and thus, the bank has not suffered financially. The 23 years of service rendered by the Bank Manager was also taken into account to reflect on the penalty. With such considerations, the punishment was declared to be harsh and accordingly, the dismissal order was substituted to compulsory retirement, under the impugned judgment dated 25.06.2014 (Annexure-C) in the WP(C) No.2933 of 2008. 7.1. Mr. S. Katoky, learned counsel projects that the delinquent occupies a position of trust and the traits of honesty and integrity are the inbuilt requirements, in the functioning of the Bank Manager. 7.1. Mr. S. Katoky, learned counsel projects that the delinquent occupies a position of trust and the traits of honesty and integrity are the inbuilt requirements, in the functioning of the Bank Manager. Therefore, the bank's lawyer argues that proportionality of punishment for a person holding fiduciary responsibility, will have to be assessed on a higher standard. 7.2. The appellant submits that as the Bank Manager was dealing with the public money, he must be honest in his transactions and merely because the bank did not eventually suffer any financial loss, on squaring up of the accounts by the bank's customers, there cannot be a lenient penalty, for the errant manager. 8.1. On the other hand, Mr. A.K. Purkayastha, the learned counsel for the respondent, submits that the penalty cannot be disproportionate to the proven charges and in this case the delinquent had an unblemished record of 23 years' service with the same bank. Therefore, he argues that for the solitary lapse, the punishment of dismissal is not justified. 8.2 The delinquent argues that when disproportionate penalty is imposed, it violates the guarantee under Article 14 of the Constitution of India and accordingly, Mr. Purakayastha contends that the intervention with the disproportionate penalty, was rightly ordered by the learned Judge. 8.3. As the Bank did not suffer any financial loss nor there was any personal gain for the delinquent, Mr. Purakayastha submits that the substitution of penalty from dismissal to compulsory retirement, was a reasonable order and accordingly he submits that the impugned judgment in the WP(C) No.2933 of 2008 should be left undisturbed. 9. The power of judicial review exercised by the High Court in disciplinary action was examined with reference to the earlier decisions, in B.C. Chaturvedi v. Union of India and Others reported in (1995) 6 SCC 749 and the following proposition was laid down by the Apex Court, on the power of judicial review. "............................ 18. A review of the above legal position would establish that the disciplinary authority, and on appeal the appellate authority, being fact-finding authorities have exclusive power to consider the evidence with a view to maintain discipline. They are invested with the discretion to impose appropriate punishment keeping in view the magnitude or gravity of the misconduct. The High Court/Tribunal, while exercising the power of judicial review, cannot normally substitute its own conclusion on penalty and impose some other penalty. They are invested with the discretion to impose appropriate punishment keeping in view the magnitude or gravity of the misconduct. The High Court/Tribunal, while exercising the power of judicial review, cannot normally substitute its own conclusion on penalty and impose some other penalty. It the punishment imposed by the disciplinary authority or the appellate authority shocks the conscience of the High Court/Tribunal, it would appropriately mould the relief, either directing the disciplinary/appellate authority to reconsider the penalty imposed, or to shorten the litigation, it may itself, in exceptional and rare cases. Impose appropriate punishment with cogent reasons in support thereof. ............................" 10. In the context of disciplinary action against a bank officer, who occupies a position of trust, a higher degree of integrity is expected from them and to determine the proportionality of punishment for such officers, the following principles of law was enunciated by the Apex Court in the Regional Manager, U.P. SRT, Etawah v. Hoti Lal and Another reported in (2003) 3 SCC 605 on the power of judicial review. "................... 10. It needs to be emphasized that the Court or Tribunal while dealing with the quantum of punishment has to record reasons as to why it is felt that the punishment does not commensurate with the proved charges. As has been highlighted in several cases to which reference has been made above, the scope for interference is very limited and restricted to exceptional cases in the indicated circumstances. Unfortunately, in the present case as the quoted extracts of the High Court's order would go to show, no reasons whatsoever have been indicated as to why the punishment was considered disproportionate. Reasons are live links between the mind of the decision taker to the controversy in question and the decision or conclusion arrived at. Failure to give reasons amounts to denial of justice. (See Alexander Machinery Dudley Ltd. v. Crabtree (1974 LCR 120) A mere statement that it is disproportionate would not suffice. A party appearing before a Court, as to what it is that the Court is addressing its mind. It is not only the amount involved but the mental set up, the type of duty performed and similar relevant circumstances which go into the decision-making process while considering whether the punishment is proportionate or disproportionate. A party appearing before a Court, as to what it is that the Court is addressing its mind. It is not only the amount involved but the mental set up, the type of duty performed and similar relevant circumstances which go into the decision-making process while considering whether the punishment is proportionate or disproportionate. If the charged employee holds a position of trust where honesty and integrity are inbuilt requirements of functioning, it would not be proper to deal with the matter leniently. Misconduct in such cases has to be dealt with iron hands. Where the person deals with public money or is engaged in financial transactions or acts in a fiduciary capacity, highest degree of integrity and trust-worthiness is must and unexceptionable. Judged in that background, conclusions of the Division Bench of the High Court do not appear to be proper. We set aside the same and restore order of learned Single Judge upholding order of dismissal. ........................................" 11. Approving the above quoted ratio for an employee holding a position of trust, the Supreme Court while examining disciplinary action against a bank employee in Ganesh Santa Ram Sirur v. State Bank of India reported in (2005) 1 SCC 13 , made the following observation :- "........................... 34. The Bank Manager/Officer and employees and any Bank nationalised/or non-nationalised are expected to act and discharge their functions in accordance with the rules and regulations of the Bank. Acting beyond one's authority is by itself a breach of discipline and Trust and a misconduct. In the instant case Charge No. 5 framed against the appellant is very serious and grave in nature. We have already extracted the relevant rule which prohibits the Bank Manager to sanction a loan to his wife or his relative or to any partner. While sanctioning the loan the appellant do not appear to have kept this aspect in mind and acted illegally and sanctioned the loan. He realized the mistake later and tried to salvage the same by not encashing the draft issued in the maiden name of his wife though the draft was issued but not encashed. The decision to sanction a loan is not an honest decisions. The Rule 34(3)(1) is a rule of integrity and therefore as rightly pointed out by Mr. Salve, the respondent Bank cannot afford to have the appellant as Bank Manager. The decision to sanction a loan is not an honest decisions. The Rule 34(3)(1) is a rule of integrity and therefore as rightly pointed out by Mr. Salve, the respondent Bank cannot afford to have the appellant as Bank Manager. The punishment of removal awarded by the Appellate Authority is just and proper in the facts and circumstances of the case. Before concluding, we may usefully rely on the judgment Regional Manager, U.P. SRTC. Etawah & Ors. v. Hoti Lal & Anr . reported in 2003(3) SCC 605 . Wherein this Court has held as under:- "If the charged employee holds a position of trust where honesty and integrity are inbuilt requirements of functioning, it would not be proper to deal with the matter leniently. Misconduct in such cases has to be dealt with iron hands. Where the person deals with public money or is engaged in financial transactions or acts in a fiduciary capacity, the highest degree of integrity and trustworthiness is a must and unexceptionable. Judged in that background, conclusions of the Division Bench of the High Court do not appear to be proper. We set aside the same and restore order of the learned Single Judge upholding the order of dismissal." 35. We entirely agree with the above observations made in the above judgment. ................................" 12. From the above pronouncements, it can be inferred that when proportionality of punishment for a bank employee is to be considered, whether the bank suffered any financial loss from the mis-conduct, is not a relevant factor. Nevertheless, if the penalty is shockingly disproportionate and shocks the conscience of the Court, a lesser penalty can definitely be ordered, in a deserving case by the Court. 13. In the present matter, the learned Judge considered the penalty of dismissal to be harsh firstly because the bank had not suffered any financial loss as the overdrawn amounts have been regularised and secondly, the delinquent had served the bank for 23 years. Long length of service cannot by itself be a mitigating factor for ordering lesser punishment. Similarly, non-sufferance of financial loss by the bank cannot also be an extenuating factor for a lesser punishment, for a Bank Manager. 14. To support the ordering of lesser penalty by the Writ Court, the learned Counsel Mr. A.K. Purkayastha relies on Apparel Export Promotion Council v. A.K. Chopra reported in (1999) 1 SCC 759 . Similarly, non-sufferance of financial loss by the bank cannot also be an extenuating factor for a lesser punishment, for a Bank Manager. 14. To support the ordering of lesser penalty by the Writ Court, the learned Counsel Mr. A.K. Purkayastha relies on Apparel Export Promotion Council v. A.K. Chopra reported in (1999) 1 SCC 759 . But here the Supreme Court by referring to B.C. Chaturvedi (supra) held that, when a High Court does not find any infirmity with the conduct of the disciplinary proceeding, it should not interfere with the punishment which was lawfully imposed by the disciplinary authority. In other words, the substitution of the discretion by the High Court with that of the disciplinary authority, was not approved by the Apex Court. Therefore, this decision cited by the respondent's counsel cannot aid the delinquent. 15. The respondent also cites Nagendra Lal Choudhury v. UCO Bank reported in 2015 (4) GLT 200 to contend that when there was no charge of misappropriation or personal gain against the Bank Manager and the allegations are in the realm of irregular transaction, the Writ Court can intervene with the disciplinary action. But when we see the facts in the cited case, the deficiencies in the enquiry proceedings were noticed there unlike the present matter where, the disciplinary proceedings were found to be in order. In that context, the pending appeal of the delinquent in Nagendra Lal Choudhury (supra) was ordered to be decided on merit, by the High Court. Therefore, a lesser penalty for the delinquent cannot be justified under this ratio as well. 16. On the proportionality of punishment, the law is clearly enunciated in Ranjit Thakur v. Union of India reported in (1987) 4 SCC 611 and here it was categorically observed that when punishment is strikingly disproportionate, judicial intervention of the Court would be justified with disciplinary action. In other words, the punishment has to be in proportion with the proven mis-conduct. While power of judicial review permits a Court to verify the proportionality of punishment, case for judicial intervention may not be made out only because the penalty is declared to be harsh. On this count the reason shown in this case by the learned Court for reducing the penalty, is not acceptable to us. While power of judicial review permits a Court to verify the proportionality of punishment, case for judicial intervention may not be made out only because the penalty is declared to be harsh. On this count the reason shown in this case by the learned Court for reducing the penalty, is not acceptable to us. In cases where the penalty defies logic and is shockingly disproportionate to the mis-conduct, the Court may interfere with the punishment imposed by the disciplinary authority but no such finding was recorded in the judgment, under challenge. 17. What is striking in the impugned judgment is that lesser punishment was ordered for the Bank Manager only because the Court abruptly held the penalty to be "too harsh". There was no attempt to co-relate the punishment with the mis-conduct. Nor the position of trust held by the Bank Manager was taken into account. If a delinquent is found to be have committed a mis-conduct which amounts to breach of trust and is likely to undermine the bank's trustworthiness, the fact that the Bank Manger put in 23 years of service cannot be a rational justification, for ordering a lesser penalty. Similarly, the non- sufferance of financial loss by the bank cannot also be a mitigating factor, for deciding the proportionality of punishment for a delinquent, expected to demonstrate higher trust, in his work. 18. Therefore, bearing in mind legal ratio enunciated in Hotilal (supra) and Ganesh Santa Ram Sirur (supra) which provides for a higher level of integrity, trust and honesty for those occupying fiduciary position and noticing that the penalty in relation to the misconduct is in reasonable proportion to the mis-conduct by the delinquent Manager, we find merit in the Bank's challenge to the impugned verdict. Accordingly the Writ Court's intervention with the penalty through the impugned judgment of 25.6.2014 (Annexure-C) is declared to be erroneous and the same is accordingly quashed. 19. With the above order, the Appeal stands disposed of without order on cost.