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2020 DIGILAW 154 (GUJ)

Sukesh N Desai v. Bank Of India

2020-01-24

A.S.SUPEHIA

body2020
JUDGMENT : 1. At the outset learned advocate Mr.Gandhi appearing on behalf of the petitioner has pointed out that the petition is filed against the respondent “State Bank of India”, however, the board reflects the name of the respondent as “Bank of India”. On perusal of the record of the petition, it is found that while feeding the data in the computer such mistake has occurred. Accordingly, the Registry is directed to amend/correct the cause-title in the computer, as per the memo of petition and issue writ thereafter. 2. By way of the present petition, the petitioner is seeking quashing and setting aside the order dated 16.09.2002 passed by the respondent of imposing the punishment of dismissal from service under Rule 67(j) of the State Bank of India Officers Service Rules, 1992 (“the Rules”), which was confirmed by the appellate authority of the respondent vide order dated 13.06.2003. 3. The petitioner was working as Chief Manager, Personnel at Ahmedabad and he was served with the articles of charge dated 13.12.2000 for the certain acts of misconduct, which was alleged to have been found committed, when he was serving as Chief Manager (NRI Branch) in the Head Office of respondent at Vadodara. The details of the allegations are as under: “(A) You arranged the finance for Shrinath Steel Ltd. as stated in the above paras. (b) You were approached by M/s. Toshvin Industries Ltd. for arranging funds. You took representatives of Toshwin Industries Ltd. to S.S. Sodhi of Kamla Electrical & Engg. Co., Baroda for arranging a loan of Rs.10 lacs from Shri Sodhi to Toshwin Industries. It is alleged that a brokerage of 2% was paid to you alongwith Shri Pradip Gupta. Subsequently, M/s. Toshwin Industries Ltd. asked for another loan of Rs.5 lacs from S.S. Sodhi for which you acted as an intermediary alongwith Shri Gupta. You had collected advance receipt of Rs.5 lacs alongwith undated cheques and shares of Toshwin Industries Ltd. for Rs.1 lac for passing on to Mr.Sodhi. You were paid brokerage of 2% on this account also alongwith Mr.Gupta as alleged. (c) You introduced Shri Ashok Abhyankar, Director of Pearl Paper Products Ltd. (PPPL) to Shri S.S. Sodhi for arranging loan for PPPL. A cheque No. 475161 for Rs.5 lacs drawn on Punjab National Bank, Atmajyoti Ashram Branch, Baroda was issued by your son, Anant S. Desai and the cheque was encashed by PPPL. (c) You introduced Shri Ashok Abhyankar, Director of Pearl Paper Products Ltd. (PPPL) to Shri S.S. Sodhi for arranging loan for PPPL. A cheque No. 475161 for Rs.5 lacs drawn on Punjab National Bank, Atmajyoti Ashram Branch, Baroda was issued by your son, Anant S. Desai and the cheque was encashed by PPPL. (d) You had also served as an intermediary for the loan of Rs.4 lacs given by Shri Dinkar R. Patel, NRI Accountholder at Baroda Main Branch to PPPL. The account of Shri Dinkar R. Patel was operated thorough Shir Niranjan T. Patel, Power of Attorney holder. The cheque No. 910926 favouring PPPL for Rs.4 lacs was handed over by Shri Niranjan T. Patel to you and you had handed over the same cheque for Shri Abhyankar. Shri Abhyankar and Shri Niranjan T. Patel had never met each other. Apparently, you were intermediary for these transactions. (e) At no stage you had informed the Bank regarding arranging of finance on commission basis by you and your son which you should have done in accordance with the extant service rules governing your service in the Bank. 3. Because of your above lapses/irregularities, the Bank is exposed to a financial loss of Rs.50.00 lacs in this regard.” 3.1 After holding a departmental inquiry, the Inquiry Officer vide his inquiry report dated 19.01.2002 held the charges proved against the petitioner and accordingly, he was issued a show-cause notice calling upon his explanation to the findings from the Inquiry Officer. After considering the reply tendered by the petitioner to the Inquiry Officer dated 16.02.2002, the disciplinary authority and Chief General Manager imposed the aforesaid penalty of dismissal from service under the Rules. The petitioner, thereafter, filed an appeal against the order of penalty and the same was also rejected by the order dated 13.06.2003. Both the impugned orders are the subject matter of challenge in the present petition. 4. Learned advocate Mr.Gandhi appearing for the petitioner has submitted that the impugned orders are required to be set aside since at the relevant time, when the petitioner was working as a Chief Manager (NRI Division), Main Branch at Vadodara between 04.07.1995 to 04.01.1997, he was overburdened. He has submitted that the findings of the Inquiry Officer are perverse and based on either of no evidence or of hearsay evidence or of biased evidence. He has submitted that the findings of the Inquiry Officer are perverse and based on either of no evidence or of hearsay evidence or of biased evidence. Further, it is submitted that the overdraft limit to Shri N.I.Shah and Smt.Lata Shah was given in the form of draft demand to which the petitioner was the second signatory and thus, he cannot be held liable for alleging irregularities since, his Superior, i.e. Assistant General Manager, Shri P.C.Bhattacharya was mainly responsible as he was the first signatory. He has submitted that the Inquiry Officer has placed reliance on the deposition of Shri P.C.Bhattacharya, who was interested in saving his own skin by deposing against the petitioner. It is further submitted by Mr.Gandhi that the NRI Division is the customer driven department, whose ultimate goal is to obtain more and more NRI deposits and, therefore, officer of the NRI Deposits Division cannot inquire about the use of draft, when any NRI takes out a draft in favour of any payee. It is further submitted that without knowing end use of the draft, the petitioner signed the same for which the petitioner cannot be fastened with any liability of misconduct. On the contrary, as an officer of the NRI Division, if the petitioner would have refused to sign the draft, he could have been made the target of complaints from NRI, which may hinder the work of obtaining NRI deposits, resulting into the accountability of the petitioner. He has submitted that the petitioner has acted as a responsible officer of the respondent bank working in the NRI Division and hence, he cannot question the depositors taking out the demand draft. He has further submitted that the petitioner was not also allowed to cross-examine the relevant witnesses Nos.5 and 6, i.e., Mrs.Sunia Bagree and Mrs.Veena Bagree and hence, the testimonies of these witnesses cannot be relied upon. 4.1 Learned advocate Mr.Gandhi has submitted that during the course of the inquiry, the petitioner wanted to examine Shri Keyur Patel, who was a Project Financial Consultant of Shrinath Steel Ltd. for justifying his defence that on that day, the workload was more and hence, due to work pressure, he has signed the aforesaid drafts. Thus, he has submitted that the impugned order of punishment and the subsequent order confirming the same may be set aside. Thus, he has submitted that the impugned order of punishment and the subsequent order confirming the same may be set aside. 4.2 Learned advocate Mr.Gandhi has further submitted that the petitioner had asked the Investigating Officer to examine Mr.Keyur Patel, who was the promoter, as a defence witness and in fact he was introduced himself to Shri P.C.Bhattacharya and hence, Shri P.C. Bhattacharya was responsible for the aforesaid conduct. 4.3 Lastly, Mr.Gandhi has submitted that since no loss caused to the respondent-Bank, the penalty of dismissal was disproportionate. 5. Per contra, learned advocate Mr.Paritosh Gupta appearing for the respondent bank has submitted that the Inquiry Officer, after threadbare examination of the allegations as well as various documents, has proved the charges. He has submitted that in fact the petitioner has misused his authority and in collusion with the employees / members of M/s.Shrinath Steel Ltd. and Shri Niranjan Shah and the account of Shri Dinkar and Malini Patel and Shri Mahesh and Mina Patel were used, to clear the debt of M/s. Shrinath Steel Ltd. of Dena Bank at Godhra by misleading the respondent bank. He has submitted that the witnesses have been in fact deposed about the involvement of the petitioner as a Manager of NRI Branch in all transactions. 5.1 Learned advocate Mr.Paritosh Gupta has further invited the attention of this Court to the findings of the Inquiry Officer's report and has submitted that the petitioner was given ample opportunity to cross examine the witnesses, Mrs.Sunia Bagree and Mrs.Veena Bagree, but the petitioner refused to do so and as regards the examination of witnesses, Mr.Keyur Patel is concerned, the Inquiry Officer has observed that he working as promoter of M/s Shreenath Steel, and was knowing the co-delinquent Mr.Bhattacharaya who was extensively cross-examined by the petitioner hence there was not need to examine him as a witness. 5.2 Learned advocate Mr.Paritosh Gupta has further submitted that since the petitioner has not alleged any violation of Regulations, under which the disciplinary proceedings were conducted, the scope of judicial review is very limited. He has submitted that the Inquiry Officer has elaborated the charges levelled against the petitioner and has also proved the charges on the evidence pertaining to the documents as well as the oral, the Court may not interfere with the order of penalty. He has submitted that the Inquiry Officer has elaborated the charges levelled against the petitioner and has also proved the charges on the evidence pertaining to the documents as well as the oral, the Court may not interfere with the order of penalty. 5.3 In support of his submissions, learned advocate Mr.Paritosh Gupta has placed reliance on the decisions of the Supreme Court in the case of State Bank of India and Ors. Vs. Narendra Kumar Pandey, (2013) 2 S.C.C. 740 and in the case of State Bank of India and Ors. Vs. Ramesh Dinkar Punde, (2006) 7 S.C.C. 212 as well as Union of India and Others Vs. P. Gunasekaran, 2015 (2) S.C.C. 610 . 5.4 As regards the submissions of disproportionate punishment as no loss was caused to the Bank, learned advocate Mr.Paritosh Gupta has placed reliance on the judgment of the Supreme Court in the case of Disciplinary Authority-cum-Regional Manager and Others Vs. Nikunja Bihari Patnaik, (1996) 9 S.C.C. 69 . Thus, he has submitted that since the petitioner was given full opportunity to defend his case, the penalty of dismissal many not be interfered. 6. Heard the learned advocates appearing for the respective parties as well as this Court has perused the requisite documents. 7. The petitioner has been imposed the penalty of dismissal from service by the order dated 16.09.2002 since the charges, which were levelled against him vide Articles of charges dated 13.12.2000, are proved by the Inquiry Officer. It is proved that the petitioner has indulged into various irregularities in violation of the Service Rules governing his services as well as the Bank Regulations. There are several lapses / irregularities, which were committed by the petitioner, which resulted into the charge-sheet. It is proved that the demand drafts were signed by the petitioner, while working as a Chief Manager (NRI Division), Main Branch at Vadodara and he has sanctioned overdraft limit of Rs.20,00,000/- against the security of FCNR – STDR dated 21.05.1996 to Shri Niranjan Shah and Smt.Lata Shah, both NRIs, in their joint account, and the proceeds were remitted by a draft for Rs.20,00,000/- favouring Shrinath Steel Ltd. drawn on Godhra Branch. The aforesaid demand draft was signed by the petitioner. Accordingly, there are amounts remitted by issuing various drafts favouring Shrinath Steel Ltd. without giving the reasons thereto. The aforesaid demand draft was signed by the petitioner. Accordingly, there are amounts remitted by issuing various drafts favouring Shrinath Steel Ltd. without giving the reasons thereto. Because of such lapses and irregularities, the bank was exposed to financial loss of Rs.50,00,000/- . From the charges levelled against the petitioner, it emerges that the petitioner has done undue favoritism to Shrinath Steel Ltd. by allowing such transactions against the norms of the bank. The Inquiry Officer, by a comprehensive report, has held the charges proved against the petitioner and it is proved that such action of the petitioner resulted in exposing the bank to the significant loss of Rs.50,00,000/- by way of debit to cash credit account of the M/s.Shrinath Steel Ltd., in reimbursing the investments. The summary conclusions of the Inquiry Officer as are incorporated: “SUMMARY While taking into consideration the enquiry proceedings, CSO's submission and the evidences made available, following points emerge establishing CSO's involvement in commission of various lapses:- (i) Sanction of loans to NRIs, arranging to place their funds with SSL and subsequent reimbursement/ repayment thereof is established as a conscious act by the CSO and not a mere coincidence. (ii) All there 6 transactions have taken place on 21.05.96 and 22.05.96, while the limits to SSL were sanctioned by DGM-BMB on 18.5.96 indicating before hand knowledge of SSL's indebtedness to Dena Bank, Godhra to CSO. (iii) The main promotor of SSL Shri M.P. Shah was introduced by CSO to the AGM (C&I) of BMB for obtention of credit facilities. CSO was also following up with him the sanction of the loan. (iv) NRI clientele was encouraged and persuaded by the CSO to place their funds as investment with SSL. The letters written by clients confirm this also. (v) CSO was fully aware of the SSL's affairs, especially its indebtedness to Dena Bank, Godhra as he channelised the proceeds of such loans for credit of SSL's accounts at Dena Bank, Godhra. (vi) No approval of RBI was taken for permitting such investments from NRNR a/cs. of NRI clients. (vii) CSO also indulged in arranging finance to other firms in addition to SSL on commission basis through his son and Shri Sodhi. (viii) By allowing O.D./D.L. to NRI clientele, Shir Sukesh Desai, The CSO enable SSL to clear SSL's outstandings at Dena Bank, Godhra to the extent of Rs.50 lacs. of NRI clients. (vii) CSO also indulged in arranging finance to other firms in addition to SSL on commission basis through his son and Shri Sodhi. (viii) By allowing O.D./D.L. to NRI clientele, Shir Sukesh Desai, The CSO enable SSL to clear SSL's outstandings at Dena Bank, Godhra to the extent of Rs.50 lacs. (ix) Withdrawals from the C.C. A/c of SSL were used to reimburse the loans made out by NRIs by way of investment of SSL on 05.06.96, 06.06.96, 07.06.96 and 04.07.96 as evidenced from SSL's ledgersheets. (x) Shri Anant S. Desai, son of CSO had no independent source of income and was dependent on CSO and did not posssess adequate financial means to undertake transactions in lacs without involvement of the CSO and Shri Sodhi. (xi) CSO managed these transactions by using his position in the Bank for his son's benefit and also derived undue benefits (commission basis). (xii) CSO’s actions resulted in exposing the Bank to a loss of Rs.50 lacs by way of debits to C.C. a/c. Of the SSL in reimbursing the investments. (xiii) All the above findings also establish malafides on the part of the CSO and cast aspersions on his honesty and integrity.” 8. The contentions raised by the petitioner that since he was overburdened, and he has inadvertently signed the draft does not merit acceptance since the petitioner, being a responsible officer and functioning as a Manager, is required to verify the document/instrument and verify the purpose for which the same is being used. The petitioner cannot make a lame excuse that since he was overburdened and inadvertently, on that day, he has signed the draft since he was assigned to do the work of the Chief Manager of NRI Branch. 9. With regard to the non-examination of the relevant witnesses, this Court has noticed that the petitioner was allowed to cross-examine Mrs.Sunia Bagree and Mrs.Veena Bagree, i.e., witnesses No.5 and 6 but he did not avail the aforesaid opportunity avoiding the same. As regards the non examination of the witness Mr.Keyur Patel, the record reveals that there is no charge leveled in connection with him. From the appeal filed by the petitioner it is revealed that he wanted to examine him as a witness only to support that the petitioner was in fact introduced to M/s.Shrinath Steel Ltd. by AGM, Shri Bhattacharya. As regards the non examination of the witness Mr.Keyur Patel, the record reveals that there is no charge leveled in connection with him. From the appeal filed by the petitioner it is revealed that he wanted to examine him as a witness only to support that the petitioner was in fact introduced to M/s.Shrinath Steel Ltd. by AGM, Shri Bhattacharya. The inquiry officer has refused to call Mr.Keyur Patel as a defence witness since the inquiry officer did not find him as a relevant witness. It is also coming on record that the AGM Mr.Bhattacharya was extensively cross-examined by the petitioner who has deposed that the main promoter of M/s. Shrinath Steel Mr.M.P.Shah was introduced by the petitioner to him. Thus, the non- examination of witness Keyur Patel will not affect the overall findings of the inquiry officer which pertain to innumerable transactions. Mr.Keyur Patel was merely a project finance consultant and the charge leveled against the petitioner was introduction of Directors of M/s.Shrinath Steel and not about the introduction of Mr.Keyur Patel who was not authorized to deal with the Bank. Hence, no illegality can be found in the action of the inquiry officer in refusing to call Mr.Keyur Patel as a witness in the inquiry since his examination was absolute irrelevant for the proceedings. The petitioner was allowed to bring other defence witnesses. All the allegations pertain to documentary evidence pertaining to Cash Credit Account of M/s.Shrinath steel, issuance of demand draft, sanction of overdraft limit. Etc. Thus, the transactions which are entered during the tenure of the petitioner are held to be precarious for the Bank. It is proved that he has been negligent in his duties and has performed his duties in a casual manner and misused his position to pass the undue benefit to the third party. Under the circumstances the non-examination of Mr.Keyur Patel who was not relevant to the charges leveled against the petitioner will not vitiate the other independent charges which are proved against the petitioner. The documentary evidence, which has been considered by the Inquiry Officer are supplied to the petitioner. He has jeopardized the funds of the Bank by signing such instruments without knowing the repercussion of such irresponsible act. 10. The documentary evidence, which has been considered by the Inquiry Officer are supplied to the petitioner. He has jeopardized the funds of the Bank by signing such instruments without knowing the repercussion of such irresponsible act. 10. From the pleadings of the petition as well as the submissions of the learned advocate appearing for the petitioner, it is not alleged that the Rules or Regulations of the bank while holding the disciplinary proceedings are violated by the disciplinary authority or by the inquiry officer. It is no more res integra that this Court while exercising the powers under Article 226 of the Constitution of India cannot re-appreciate the evidence adduced during the disciplinary proceedings. The Supreme Court in the case of P. Gunasekaran (supra) has laid down the parameters for exercising the powers of the High Court under Articles 226 and 227 of the Constitution of India with regard to the re-appreciation of evidence. The Supreme Court has held thus: “12. Despite the well-settled position, it is painfully disturbing to note that the High Court has acted as an appellate authority in the disciplinary proceedings, reappreciating even the evidence before the enquiry officer. The finding on Charge no. I was accepted by the disciplinary authority and was also endorsed by the Central Administrative Tribunal. In disciplinary proceedings, the High Court is not and cannot act as a second court of first appeal. The High Court, in exercise of its powers under Article 226 /227 of the Constitution of India, shall not venture into re- appreciation of the evidence. I was accepted by the disciplinary authority and was also endorsed by the Central Administrative Tribunal. In disciplinary proceedings, the High Court is not and cannot act as a second court of first appeal. The High Court, in exercise of its powers under Article 226 /227 of the Constitution of India, shall not venture into re- appreciation of the evidence. The High Court can only see whether: (a) the enquiry is held by a competent authority; (b) the enquiry is held according to the procedure prescribed in that behalf; (c) there is violation of the principles of natural justice in conducting the proceedings; (d) the authorities have disabled themselves from reaching a fair conclusion by some considerations extraneous to the evidence and merits of the case; (e) the authorities have allowed themselves to be influenced by irrelevant or extraneous considerations; (f) the conclusion, on the very face of it, is so wholly arbitrary and capricious that no reasonable person could ever have arrived at such conclusion; (g) the disciplinary authority had erroneously failed to admit the admissible and material evidence; (h) the disciplinary authority had erroneously admitted inadmissible evidence which influenced the finding; (i) the finding of fact is based on no evidence. 13. Under Article 226 /227 of the Constitution of India, the High Court shall not: (i) re-appreciate the evidence; (ii) interfere with the conclusions in the enquiry, in case the same has been conducted in accordance with law; (iii) go into the adequacy of the evidence; (iv) go into the reliability of the evidence; (v) interfere, if there be some legal evidence on which findings can be based. (vi) correct the error of fact however grave it may appear to be; (vii) go into the proportionality of punishment unless it shocks its conscience.” 11. Thus, it is directed by the Supreme Court that under Articles 226 and 227 of the Constitution, the High Court shall not (i) reappreciating the evidence; (ii) interfere with the conclusions in the enquiry, in case the same has been conducted in accordance with law; (iii) go into the adequacy of the evidence; (iv) go into the reliability of the evidence; (v) interfere, if there be some legal evidence on which findings can be based; (vi) correct the error of fact however grave it may appear to be; AND (vii) go into the proportionality of punishment unless it shocks its conscience. 12. 12. In the present case, looking to the post on which the petitioner was working apro pos his proved misconduct, this Court is of the considered opinion that the penalty of the dismissal cannot be said to be disproportionate to the misconduct. As regards the contentions raised by the petitioner that no financial loss was caused to the bank, at this stage, it would be apposite to refer to the observations made by the Supreme Court in the case of Nikunja Bihari Patnaik (supra). The Supreme Court has refused to interfere with the penalty of dismissal of a Bank officer by observing thus: “7. ….True, it is that in some cases, no loss has resulted from such acts. It is also true that in some other instances such acts have yielded profit to the Bank but it is equally true that in some other instances, the funds of the Bank have been placed in jeopardy; the advances have become sticky and irrecoverable. It is not a single act; it is a course of action spreading over a sufficiently long period and involving a large number of transactions. In the case of a Bank - for that matter, in the case of any other organization - every officer/employee is supposed to act within the limits of his authority. If each officer/ employee is allowed to act beyond his authority, the discipline of the organisation/ bank will disappear; the functioning of the Bank would become chaotic and unmanageable. Each officer of the Bank cannot be allowed to carve out his own little empire wherein he dispenses favours and largesse. No organization, more particularly, a Bank can function properly and effectively if its officers and employees do not observe the prescribed norms and discipline. Such indiscipline cannot be condoned on the specious ground that it was not actuated by ulterior motives or by extraneous considerations. The very act of acting beyond authority - that too a course of conduct spread over a sufficiently long period and involving innumerable instances - is by itself a misconduct. Such acts, if permitted, may bring in profit in some cases but they may also lead to huge losses. Such adventures are not given to the employees of Banks which deal with public funds. Such acts, if permitted, may bring in profit in some cases but they may also lead to huge losses. Such adventures are not given to the employees of Banks which deal with public funds. If what we hear about the reasons for the collapse of Barings Bank is true, it is attributable to the acts of one of its employees, Nick Leeson, a minor officer stationed at Singapore, who was allowed by his superiors to act far beyond his authority. As mentioned hereinbefore, the very discipline of an organization and more particularly, a Bank is dependent upon each of its employees and officers acting and operating within their allotted sphere......” 13. Thus, the Supreme Court has held that it is true, that in some cases, no loss has resulted from such acts and in some other instances such acts have yielded profit to the Bank, but it is equally true that in some other instances, the funds of the Bank have been placed in jeopardy; the advances have become sticky and irrecoverable very act of acting beyond authority – and the conduct spread over a sufficiently long period and involving innumerable instances – is by itself a misconduct. Such acts, if permitted, may bring in profit in some cases but they may also lead to huge losses. Such adventures are not given to the employees of Banks which deal with public funds. Hence, the punishment of dismissal cannot be set aside merely because there is no loss caused to the Bank. 14. Hence, the present writ petition is dismissed. Rule discharged. There shall be no order as to costs.