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2020 DIGILAW 465 (CAL)

Rita Mukherjee v. Uco Bank

2020-05-13

AMRITA SINHA

body2020
JUDGMENT Amrita Sinha, J. - The petitioner prays for setting aside the entire disciplinary proceeding, the enquiry report, the order of penalty of dismissal from service passed by the disciplinary authority and the order of the appellate authority affirming the order of the disciplinary authority. The petitioner also prays for releasing her arrear salary, and all terminal benefits in view of her superannuation. A prayer has also been made for declaring the rule/policy of the bank causing forfeiture of leave encashment or lapse of leave on termination of service as unconstitutional and arbitrary. 2. The brief facts of the case are as follows: 3. The petitioner was an officer of the UCO Bank. When the petitioner was serving as the Senior Manager posted in the Inspection Department in the Zonal Office Kolkata she was called by the disciplinary authority on 2nd August, 2016 and enquired about ten RTGS transactions amounting to Rs. 8.9 crore. 4. The Zonal Manager, Kolkata zone on 6th August, 2016 sought for an explanation from the petitioner as to why disciplinary action would not be taken against her with reference to the investigation report of the vigilance department dated 28th July, 2016. The petitioner duly submitted her reply on 19th August, 2016 denying the charges levelled against her. A further notice was issued on 3rd September, 2016 seeking her explanation with regard to the various accounts that were opened during her tenure in the Bank. Reference was again made to the investigation report of the vigilance department. The petitioner submitted her explanation thereto vide her letter dated 6th September, 2016. 5. Vide a communication dated 10th February, 2017 the petitioner was intimated that the bank proposed to hold an enquiry against her in respect of the charges set out in the statement of allegations and the articles of charges. The petitioner was required to submit a written statement in her defence. The petitioner by a letter dated 21st February, 2017 denied the charges levelled against her. The written statement filed by the petitioner not being found satisfactory the Bank proceeded to hold an enquiry against her. Inquiry officer and a presenting officer was appointed. 6. The petitioner participated in the disciplinary proceeding and the inquiry officer filed the report on 10th July, 2017. The disciplinary authority on 14th December, 2017 passed an order of penalty dismissing the petitioner from service. Inquiry officer and a presenting officer was appointed. 6. The petitioner participated in the disciplinary proceeding and the inquiry officer filed the report on 10th July, 2017. The disciplinary authority on 14th December, 2017 passed an order of penalty dismissing the petitioner from service. The petitioner preferred an appeal against the order of dismissal and by an order dated 23rd May, 2018 the appellate authority affirmed the order passed by the disciplinary authority. 7. Being aggrieved, the petitioner has filed the present writ petition praying for necessary relief. 8. The writ petition was filed on 24th May, 2019. The normal date of superannuation, had the petitioner not been dismissed from service, was 31st May, 2019. After dismissal the petitioner has been paid the employees' share of provident fund with the interest accrued thereon. 9. The petitioner contends that the Bank did not follow its own norms/guidelines with regard to dealing with disciplinary proceedings. The Bank did not produce a single document in support of the allegation that the petitioner violated the norms/guidelines of the Bank in discharge of her duties. The job responsibilities alleged to have been flouted by the petitioner did not fall under the assigned duties of the Senior Manager. 10. The charge no. 1 relating to opening of a current account without Board Resolution, held to be proved by the inquiry officer, is contrary to the guidelines of the Bank. The Bank deliberately did not take note of the Board Resolution signed by two Directors, one of them designated as Chairman which was available with the records. 11. The charge no. 2 relating to money laundering has been held to be not proved by the disciplinary authority. 12. The charge no. 3 regarding opening of 13 current accounts entering the same mobile number was held as not prudent by the disciplinary authority. The petitioner's defence that there were no restrictive guidelines with regard to opening multiple accounts with single mobile number was ignored by the Bank. The practice of the Bank for opening multiple accounts with single mobile number has been relied upon by the petitioner. 13. The charge no. 4 of opening account without verifying the antecedents of the introducer, facilitating money laundering was held by the disciplinary authority as not taking special precautions by the petitioner. The allegation of money laundering stood not proved. The practice of the Bank for opening multiple accounts with single mobile number has been relied upon by the petitioner. 13. The charge no. 4 of opening account without verifying the antecedents of the introducer, facilitating money laundering was held by the disciplinary authority as not taking special precautions by the petitioner. The allegation of money laundering stood not proved. Introduction was not mandatory for opening of bank accounts as per RBI norms. According to the petitioner the charge was contrary to the norms of the Reserve Bank of India and the UCO Bank's own guidelines. 14. With regard to the charge no. 5 regarding special precautions on opening accounts the disciplinary authority found that the petitioner did not undertake independent enquiry and accordingly did not take special precautions. The petitioner relies upon the manual of instructions of the Bank which mention that independent enquiry is required only in "special cases". According to the petitioner as the Directors of the account holder was known to the bank for quite some time past (2008) there was no need and requirement for further enquiry. The disciplinary authority found the charge of being hand in gloves with the introducer in instructing the Branch Manager to open the bank account to be proved. As the bank account was opened by the Manager and the Assistant Branch Head the petitioner did not have any role to play in the matter. 15. The transactions involving heavy amount took place when the petitioner was posted at a different branch and the petitioner was no way connected with the disputed RTGS transactions. There is no evidence to link the charges with the findings and hence the findings were perverse. The inquiry officer as well as the disciplinary authority failed to give reasons as to why the defence case, set up by the petitioner, did not appeal to them. No reasons have been disclosed for rejecting the petitioner's defence. 16. The petitioner was a high performer and a great achiever in her service tenure for which she received several awards. She has rendered dignified service to the Bank for 33 years. She has been dismissed from service contrary to all settled laws dealing with disciplinary proceedings. The punishment imposed upon the petitioner is shockingly disproportionate in the facts and circumstances of the case. 17. She has rendered dignified service to the Bank for 33 years. She has been dismissed from service contrary to all settled laws dealing with disciplinary proceedings. The punishment imposed upon the petitioner is shockingly disproportionate in the facts and circumstances of the case. 17. The appellate authority failed to apply its independent mind and has simply reiterated the observations of the disciplinary authority. The Bank applied the wrong test by relying upon non-existent guidelines and held the petitioner guilty of the alleged misconduct. 18. The petitioner relies upon the judgment delivered by the Hon'ble Supreme Court in the matter of Union of India vs- C. G. Ajay Babu & Anr., (2018) 9 SCC 529 on the issue of the entitlement of gratuity. 19. She relies upon the decision delivered by the three-judge Bench of the Hon'ble Supreme Court in the matter of Anil Kumar vs- Presiding Officer & Ors., (1985) 3 SCC 378 on the issue of non-consideration of the defence case in enquiry. 20. She further relies upon the decision of Narinder Mohan Arya vsUnited India Insurance Co. & Ors., (2006) 4 SCC 713 and Roop Singh Negi vs- Punjab National Bank & Ors., (2009) 2 SCC 570 on the issue that the inquiry officer has a duty to arrive at a finding upon taking into consideration the materials brought on record by the parties. The enquiry report based on conjectures and surmises cannot be sustained and suspicion howsoever high cannot be a substitute for legal proof. 21. The Bank on the other hand submits that during the tenure of service of the petitioner in the Kolkata Main Branch from 11th September, 2012 to 21st December, 2014 and in the Lower Circular Road Branch from 22nd December, 2014 till 29th October, 2015 she opened several unauthorized current accounts. 22. The Bank received instructions of ten RTGS transactions during the period 27th October, 2015 to 7th January, 2016. One of the RTGS transactions mentioned the current account number of one Hallow Securities Pvt. Ltd. The said account was found to be opened by the petitioner while she was serving as Senior Manager in the Lower Circular Road Branch. One Sri, Surya Kanta Mondal, Director, Blue Force Merchant Pvt. Ltd. was the introducer of the said current account and the signature in the account opening form was made in the presence of the petitioner. One Sri, Surya Kanta Mondal, Director, Blue Force Merchant Pvt. Ltd. was the introducer of the said current account and the signature in the account opening form was made in the presence of the petitioner. As the name of the account holder did not match with the account number the transaction could not be completed. The Bank investigated the matter through its machineries and during investigation it was revealed that during her tenure the petitioner opened several current bank accounts without following the mandate of the Bank, and thus, failed to protect the interest of the Bank. Failure to protect the interest of the Bank is in violation of the regulations of the UCO Bank Officer Employees' (Conduct) Regulation, 1976 as amended from time to time. 23. The Bank has raised the issue of delay and latches on the part of the petitioner in approaching the writ court. It has been submitted that the petitioner filed the writ petition on 24th May, 2019 nearly one year after the appellate authority dismissed the appeal of the petitioner on 23rd May, 2018. The petitioner has not been able to provide sufficient explanation with regard to the reasons for the delay in approaching the court. 24. It has been submitted that there has neither been any procedural error nor there has been violation of the principle of natural justice. It is not open for the court to interfere in the disciplinary proceeding under its limited scope of judicial review under Article 226 of the Constitution of India. 25. It has been contended that it was the duty of the petitioner to inform the superior officers about the suspicious transactions immediately upon detection. Admittedly one of the ten transactions took place on 27th October, 2015 when the petitioner was serving as the Senior Manager of the Bank posted in the Lower Circular Road Branch. The petitioner has unsuccessfully tried to deny the fact of her involvement at the time of opening of the bank accounts and the RTGS transactions. The findings of the enquiry are backed up by records and there is no scope to deny the same. The petitioner opened multiple bank accounts without proper Board Resolutions. The registered addresses of the Companies mentioned in all the accounts were the same. The findings of the enquiry are backed up by records and there is no scope to deny the same. The petitioner opened multiple bank accounts without proper Board Resolutions. The registered addresses of the Companies mentioned in all the accounts were the same. The petitioner has tried to mislead the court by making false statements and accordingly the writ petition is liable to be dismissed with exemplary costs. 26. The inquiry officer found several irregularities on the part of the petitioner at the time of opening of the bank accounts. The alleged Board Resolutions in respect of seven Companies were adopted on the self-same day and time i.e. on 20th August, 2013 at 5:30 am. All the accounts were opened with the same mobile number and all the Companies had the same address. It as absurd that several Companies adopted board resolutions at 5.30 in the morning. The inquiry officer weighed the evidence of both the presenting officer and charged officer rationally and concluded that some of the charges levelled against the petitioner stood proved. 27. A branch functions under the direct control and supervision of the Branch Manager. Opening of seven current bank accounts with different Directors but the same mobile number is a matter of suspicion and the petitioner being the Branch Manager ought to have taken active steps to verify the same. The petitioner has tried her best to shrug off her responsibility as the head of the branch. It has been submitted that as per the Banking Regulations special precaution needs to be exercised while opening accounts of limited Companies and such account needs to be opened after proper introduction by a respectable and trustworthy person and immediate steps are to be taken to make independent enquiry with regard to the Company and its Directors. Pending completion of such enquiry no charge should be accepted for collection in the account of the Company or withdrawal therefrom. 28. The Bank relies upon the decision delivered by the Hon'ble Supreme Court in the matter of Srinivasa Bhat (dead)/LRS vs- A. Sarvothama Kini (dead)/LRS & Ors., (2010) 12 SCC 523 (paragraph 10) on the issue that the relief under Article 226 may be refused if it is found that the party invoking such jurisdiction has not disclosed true, correct and complete facts. 29. 29. The respondents also rely upon the judgment delivered by the Hon'ble Supreme Court in the matter of Shashi Bhushan Prasad vs- Inspector General, Central Industrial Security Force & Ors., (2019) 7 SCC 797 (paragraphs 11-23) on the issue that in a departmental enquiry penalty is imposed on a finding recorded on the basis of "preponderance of probability". It is not open for the court to interfere in the disciplinary proceedings under its limited scope of review unless there is any procedural error or there has been violation in the principles of natural justice. 30. According to the respondents as there has been no procedural error and the principles of natural justice have been duly complied with, the order passed in the disciplinary proceeding ought not to be interfered with by the court. 31. I have heard the submissions made on behalf of both the parties and have perused the materials on record. 32. The petitioner from the very beginning has tried to give an impression that being the branch head it was not her responsibility or duty to verify the documents of a customer for the purpose of opening a bank account. The petitioner has tried to highlight that the same is not the function of the head of the Bank but is the duty and responsibility of the officer who is second in command. It has been submitted that the petitioner exercised due diligence at the time of opening the bank account by obtaining the signature of the person entrusted to open the account and also of the Director who happened to be the introducer of the account holder. 33. The petitioner has sought to defend herself by contending that she was not posted in the Bank on the day the RTGS transactions took place. It has been argued that the charges levelled against her were contrary to the Banking Regulations and the practice adopted by the Bank at the time of opening of account. The Bank has sought to punish her relying upon Rules which came into effect long after the accounts were opened. There was practically no evidence against the petitioner which could have been relied upon by the disciplinary authority for arriving at the conclusion arrived at. The Bank has sought to punish her relying upon Rules which came into effect long after the accounts were opened. There was practically no evidence against the petitioner which could have been relied upon by the disciplinary authority for arriving at the conclusion arrived at. The petitioner had an unblemished service tenure of thirty three years and she is entitled to receive the arrear salary along with all her terminal benefits including gratuity, leave encashment and medical insurance. 34. The sheet anchor of the submission of the Bank is that as there has been no procedural error and as the principle of natural justice has been duly complied with the court ought not to interfere with the order of penalty. It has been submitted that there are definite instances against the petitioner to prove her involvement at the time of opening of the bank accounts. 35. Prior to delving more in the matter it is suffice to say that the writ court under Article 226 of the Constitution of India does not act as an appellate authority and review orders passed in the departmental proceeding. The Court cannot re-appreciate the evidence and arrive at a different finding. It is settled law that the scope of interference in these type of matters is extremely limited. In the absence of any overwhelming evidence in favour of the delinquent employee the court ought not to interfere and disturb the findings of a departmental proceeding. 36. The petitioner admittedly happened to be the head of the branch on the day the multiple accounts in question were opened. The Board Resolutions relied upon at the time of opening the bank accounts may or may not have been in accordance with the prevailing practice of the Bank. Assuming that the petitioner was not solely responsible for opening the bank accounts, but being the head of the Bank she certainly cannot shrug off the responsibility to ensure that bank accounts are opened upon strict compliance of the Banking Regulations. One cannot forget that the petitioner, after years of service, had acquired enough experience to reach the level of the Senior Manager. What could have been passed off as an act of sheer negligence by an officer of the lower rank cannot be applied in respect of the head of the organisation/institution. One cannot forget that the petitioner, after years of service, had acquired enough experience to reach the level of the Senior Manager. What could have been passed off as an act of sheer negligence by an officer of the lower rank cannot be applied in respect of the head of the organisation/institution. It is the bounden duty of the Branch Manager to ensure that the officers of the Bank act strictly in accordance with the Banking Regulations. It is also the duty of the head of the institution to take appropriate action against erring officer(s). On one hand the petitioner denies her responsibility and accountability, and on the other hand does not fix up the responsibility of the officer who, according to her, was responsible for opening the disputed multiple accounts on the fateful day. Both cannot go together. The act of the petitioner clearly implies that she was aware that the bank accounts were opened without following the banking norms/guidelines but even thereafter she simply sat tight over the issue without taking any remedial step(s). 37. It is on record that at least one of the disputed RTGS transactions took place during the tenure of her posting in the Bank. The Hon'ble Supreme Court in umpteen number of cases has laid down that if there is "some evidence" in support of the allegations and in the absence of any procedural lapses, the order passed in the disciplinary proceeding ought not to be interfered with by the court. It has also laid down that strict rules of evidence are not required to be followed in departmental proceedings and the principle of "preponderance of probability" shall be enough to decide the charges levelled. 38. In the instant case quite a few lapses on the part of the petitioner is explicit on record. Though the petitioner has tried to shirk of her responsibility but has failed to come out clean. Imposition of penalty is the absolute prerogative of the employer. Showing any type of leniency to an officer in the rank of the head of the Bank, will do more harm to the banking institution, than good to the delinquent. Banks deal with the money deposited by the general public. Imposition of penalty is the absolute prerogative of the employer. Showing any type of leniency to an officer in the rank of the head of the Bank, will do more harm to the banking institution, than good to the delinquent. Banks deal with the money deposited by the general public. Exposing the bank to financial loss by its top officer will lead to loss of trust and confidence of the general public in the banking system resulting in the collapse of the system itself. Exemplary punishment to the head of the institution acts as a deterrent to the other officers and gives out a clear message to mend their ways. 39. The Supreme Court in Tara Chand Vyas -vs- Chairman & Disciplinary Authority & Ors., (1997) SCC(L&S) 1241 observed that the banking business and services were nationalised to achieve social and economic justice envisaged in the preamble of the Constitution. The nationalised banks are the prime sources and pillars to achieve the above object. The employees and officers working in the banks are not merely the trustees of the society, but also bear responsibility and duty to the society for effectuation of socio economic empowerment. Nationalization of the banks was done in public interest. Every employee/officer in the bank should strive to see that banking operation and services are rendered in the best interest of the system and the society. Any conduct that damages, destroys, defeats or tends to defeat the said purpose is to be dealt in accordance with the rules. 40. The decisions relied upon by the petitioner in the matter of Anil Kumar (supra), Narinder Mohan Arya (supra) and Roop Singh Negi (supra) do not come to her aid in view of the specific observation of the inquiry officer that in the course of the enquiry 25 documentary evidences were exhibited. Copies of all the exhibits were supplied to the petitioner upon acknowledgement. The defence representative engaged by the petitioner was given opportunity of discovery of defence related documents, which she duly availed of. The petitioner submitted 14 defence exhibits. The petitioner also availed the opportunity to cross examine the management witnesses. After completion of hearing of both the parties and after the petitioner expressed her satisfaction about her defence representation and no further submission forthcoming, the enquiry stood concluded. The inquiry officer dealt with each and every charge separately and recorded his findings giving reasons therefor. The petitioner also availed the opportunity to cross examine the management witnesses. After completion of hearing of both the parties and after the petitioner expressed her satisfaction about her defence representation and no further submission forthcoming, the enquiry stood concluded. The inquiry officer dealt with each and every charge separately and recorded his findings giving reasons therefor. It does not appear that there has been any procedural lapse in conducting the disciplinary proceeding. 41. The submission of the petitioner that the appellate authority has not applied its independent mind and has not given separate reasons for affirming the order of the disciplinary authority, is also not accepted by the court. It appears from records that the appellate authority applied its independent mind and thereafter passed order on affirmation. Separate reasons become necessary, only if the appellate authority disagrees or disapproves the findings of the disciplinary authority. In the instant case, the appellate authority was ad idem with the views of the disciplinary authority, and accordingly, the order of the appellate authority was not required to be backed up by fresh detailed reasons. 42. What falls for consideration in judicial review in this case is, whether there has been any error in the decision making process and whether the penalty imposed is so disproportionate that it shocks the conscience of the court. From the facts narrated above it does not appear that the decision making process was erroneous. There is hardly any reason to interfere with the quantum of penalty imposed, as the same does not shock the conscience of the court. 43. The punishment imposed upon the petitioner is dismissal from service, without any indication as to whether she will be entitled to receive her terminal benefits including provident fund, gratuity, leave salary, medical insurance etc. The reason for non-payment of the terminal dues has also not been disclosed to the petitioner. There is neither any finding nor any quantification of loss caused to the bank on account of the lapses on her part. 44. The Hon'ble Supreme Court in the matter C. G. Ajay Babu (supra) held that gratuity cannot be forfeited where the termination is for misconduct. It has been laid down that forfeiture of gratuity is not automatic on dismissal from service; it is subject to sub-sections (5) & (6) of Section 4 of the Gratuity Act, 1972. 45. 44. The Hon'ble Supreme Court in the matter C. G. Ajay Babu (supra) held that gratuity cannot be forfeited where the termination is for misconduct. It has been laid down that forfeiture of gratuity is not automatic on dismissal from service; it is subject to sub-sections (5) & (6) of Section 4 of the Gratuity Act, 1972. 45. It is trite law, that the Bank is not entitled to withhold the terminal benefits of an employee without assessing the likelihood of loss or the actual loss caused to the Bank due to the misconduct on the part of the employee. Mere allegation that the petitioner failed to protect the interest of the Bank ultimately causing huge financial risk/loss to the Bank, without quantification of the loss caused, is not a good ground to withhold the terminal benefits of the employee. Terminal benefits may be withheld only to the extent of the financial loss caused to the Bank and not without the loss being quantified. Since the loss allegedly caused to the Bank has not been assessed and intimated to the petitioner, no direction can be passed for assessing the same afresh, at this stage. 46. The petitioner is accordingly granted leave to make appropriate representation before the respondent authority giving details of the terminal dues payable to her. In the event such a representation is made, the disciplinary authority shall take prompt steps to decide the same in the light of the discussions made hereinabove, within a period of four weeks from the date of receipt of the representation and communicate the decision to the petitioner immediately thereafter. It is made clear, that the Bank shall not be entitled to bring in any fresh charge or allegation against the petitioner. It will take decision only with regard to the disbursal of the terminal dues of the petitioner, as put forth in her representation, and shall take immediate necessary steps for releasing the dues in her favour. The petitioner shall, however, not be entitled to receive her arrear salary as she has been dismissed from service. 47. Though there is no fixed time period for filing writ petition under Article 226 of the Constitution of India, but the Court has the discretion to refuse the prayer of the petitioner, if the Court is not satisfied with the conduct of the petitioner, in approaching the Court at a delayed date. 47. Though there is no fixed time period for filing writ petition under Article 226 of the Constitution of India, but the Court has the discretion to refuse the prayer of the petitioner, if the Court is not satisfied with the conduct of the petitioner, in approaching the Court at a delayed date. The prayer of the petitioner for interest on the terminal dues is refused, as the Court is not satisfied with the explanation provided by her for approaching this Court nearly a year after the impugned order was passed and only a couple of days prior to her normal date of superannuation. 48. W.P 235 of 2019 is disposed of. 49. No costs. 50. Urgent certified photocopy of this judgment, if applied for, be supplied to the parties or their advocates on record expeditiously on compliance of usual legal formalities.