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2022 DIGILAW 1249 (KAR)

State Bank Of Mysore v. Shivanna D. Hulgur

2022-09-21

ALOK ARADHE, S.VISHWAJITH SHETTY

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JUDGMENT 1. This intra court appeal emanates from the order dtd. 8/10/2019 passed by learned Single Judge by which in a writ petition preferred by the respondent, the order of punishment as well as orders passed by the appellate authority dtd. 20/9/2007 and 8/2/2008 respectively have been quashed and the appellant has been directed to pay all the consequential service benefits to the respondent along with interest at the rate of 8% per annum. In addition, the appellant has further been directed to pay medical expenses for which respondent was permitted to furnish the medical particulars. In order to appreciate the appellant's challenge to the impugned order, relevant facts need mention, which are stated hereinafter. 2. The respondent (hereinafter referred to as 'the employee' for short) joined the services of the State Bank of Mysore (hereinafter referred to as 'the Bank' for short) as a clerk on 15/1/1979. The employee was promoted as Officer in Junior Management Grade Scale-I and as Manager in Middle Management Grade Scale-II in December 1991 and December 1997 respectively. 3. The employee worked as a Branch Manager at BTM Layout, Bangalore for three years and thereafter, as Branch Manager from 26/6/2003 till 12/6/2004 at J.P.Nagar Branch of the Bank. The employee thereafter served between a period from 16/6/2004 to 28/5/2005 as Branch Manager of Anekal Branch of the Bank. The appellant noticed some irregularities and misconduct committed by the employee while he was working as Branch Manager at J.P.Nagar Branch. 4. Thereafter, a charge sheet dtd. 28/4/2006 containing Articles of Charges, Statement of Imputations based upon the Articles of Charges was served. The following three charges were framed against the employee, which are reproduced below for the facility of reference: "Charge I In respect of the following 6 housing loan accounts considered as a single project and sanctioned by controlling authority based on your recommendation. Said six names are as under: 1. Shalini Ashok 2. M.Suresh 3. Mini Annamma 4. J.Madan Kumar 5. D.T.Ethiraj 6. S.Jayaram Charge II You have failed to notice the following discrepancies in respect of the following borrowers already mentioned in Charge I and to take corrective measures. Said six names are as under: 1. Shalini Ashok 2. M.Suresh 3. Mini Annamma 4. J.Madan Kumar 5. D.T.Ethiraj 6. S.Jayaram Charge II You have failed to notice the following discrepancies in respect of the following borrowers already mentioned in Charge I and to take corrective measures. Charge III Without ascertaining credit worthiness you have sanctioned the following loan limits to Sri.N.Sanjeev Nedungadi, who had instructed the developer of the above project mentioned in Charge-I. It transpires that this borrower is the brother of the developer who had already having a housing loan of Rs.14.75 lacs, which was irregular. 5. The employee was asked to file reply to the charge sheet within 15 days from the date of receipt of the charge sheet. However, the employee failed to respond to the charge sheet. The Bank by an order dtd. 26/10/2006 appointed an Enquiry Officer as well as a Presenting Officer. Thereafter, an enquiry was held. The employee participated in the enquiry and engaged a defence assistant of his choice. The Bank adduced the evidence in the departmental enquiry and examined two witnesses viz., Chandrababu, Deputy Manager of Gangenahalli Branch of the Bank and S.B.Shivakumar, Manager at J.P.Nagar Branch, and filed several documents, copies of which were supplied to the employee. The employee however, neither examined himself nor produced any evidence in support of his defence. The Enquiry Officer concluded the enquiry on 8/6/2007 and submitted a report to the disciplinary authority vide communication dtd. 22/6/2007. 6. A copy of the Enquiry Report was furnished to the employee who submitted his reply on 27/7/2007. The disciplinary authority by an order dtd. 20/9/2007 imposed the punishment of compulsory retirement on the employee. The said order was upheld in appeal by an order dtd. 8/2/2008 passed by the appellate authority. The employee filed a review and thereafter, a writ petition. During the pendency of the writ petition, the review petition preferred by the employee was dismissed by an order dtd. 8/2/2011. 7. The learned Single Judge by an order dtd. 10/10/2018 inter alia held that charges leveled against the employee are vague. It was further held that Bank acts in a collective manner and if any irregularity is pointed out, a single person cannot be held responsible and in case, a Branch Manager recommends the case for grant of loan, the same has to be made in a collective manner. 10/10/2018 inter alia held that charges leveled against the employee are vague. It was further held that Bank acts in a collective manner and if any irregularity is pointed out, a single person cannot be held responsible and in case, a Branch Manager recommends the case for grant of loan, the same has to be made in a collective manner. It was further held that no ill motive and fraudulent intention on the employee has been established and therefore, he cannot be held to be guilty of misconduct. It was also held that negligence simplicitor is not an offence. The learned Single Judge also recorded a finding that punishment imposed on the employee of compulsory retirement is disproportionate to the charges leveled against the employee. The learned Single Judge therefore, quashed the punishment dtd. 20/9/2007 passed by the disciplinary authority as well as order dtd. 8/2/2008 passed by appellate authority. The Bank was directed to pay all consequential service benefits along with interest at the rate of 8% per annum. The Bank was further directed to pay medical expenses for which the employee was permitted to furnish medical particulars. In the aforesaid factual background, this appeal has been filed. 8. Learned Senior counsel for the appellant submitted that departmental enquiry was held against the employee in accordance with the Rules in which the employee participated. It is further submitted that in exercise of powers of judicial review under Article 226 of the Constitution of India, in respect of a disciplinary action, this Court cannot act as a Court of appeal and cannot re-appreciate the evidence to arrive at a different conclusion. It is contended that the finding recorded by the learned Single Judge that the charges leveled against the employee are vague, is perverse. It is contended that strict rules of evidence do not apply to the disciplinary proceedings and the evidence on record was sufficient to arrive at the conclusion with regard to punishment of misconduct by the employee. It is also pointed out that the employee has not even claimed the relief of reimbursement of medical expenses and therefore, learned Single Judge erred in directing the appellant to accord the benefit of reimbursement of medical expenses to the employee. In support of aforesaid submissions, reliance has been placed on decisions of Supreme Court in UNION OF INDIA AND OTHERS v. DALBIR SINGH,CIVIL APPEAL NO.5848 OF 2021. In support of aforesaid submissions, reliance has been placed on decisions of Supreme Court in UNION OF INDIA AND OTHERS v. DALBIR SINGH,CIVIL APPEAL NO.5848 OF 2021. DISCIPLINARY AUTHOIRTY CUM REGIONAL MANAGER AND OTHERS v. NIKUNJA BIHARI PATNAIK, (1996) 9 SCC 69 . UNION OF INDIA & OTHERS v. P.GUNASEKARAN, AIR 2015 SC 545 . STATE OF PUNJAB & OTHERS v. BAKSHISH SINGH, AIR 1997 SC 2696 . BANK OF INDIA AND ANOTHER v. DEGALA SURYANAGARAYANA,1999 II LLJ 682. CHAIRMAN & MANAGING DIRECTOR, UNITED COMMERCIAL BANK & OTHERS v. P.C.KAKKAR, AIR 2003 SC 1571 . SUNIL KUMAR BANERJEE v. STATE OF WEST BENGAL & OTHERS,(1990) 3 SCC 304. CANARA BANK v. A.V.HANUMANTHAPPA, W.A.NO.4221/2011. 9. On the other hand, learned counsel for employee has submitted that the employee was on medical leave for a period from 8/6/2005 till 30/9/2006 and the copy of the charge sheet was sent to Anekal Branch of the Bank, whereas, the employee was posted in Tumkur Branch of the Bank. It is further submitted, that 112 documents were marked in the enquiry in the absence of the witnesses. It is also urged that the witnesses on behalf of the management have not stated about the misconduct committed by the employee. It is also urged that the orders passed by the disciplinary authority, appellate authority and reviewing authority are cryptic in nature and suffer from the vice of non application of mind. 10. We have considered the rival submissions made by learned counsel for the parties and have perused the record. Before proceeding further, we may refer to the well settled principles with regard to scope of judicial review of interference with the disciplinary proceeding. In STATE OF ANDHRA PRADESH & ORS. v. S.SREE RAMA RAO, AIR 1963 SC 1723 . it was held that High Court in a proceeding under Article 226 of the Constitution of India does not sit as a Court of appeal over the decision of the authorities holding a departmental enquiry. It is only concerned to determine whether the enquiry held by an authority competent in that behalf and according to the procedure prescribed in that behalf and whether the rules of natural justice have been followed. It has also been held that where there is some evidence which the authority entrusted with the duty of holding an enquiry has accepted and which may support the conclusion. It has also been held that where there is some evidence which the authority entrusted with the duty of holding an enquiry has accepted and which may support the conclusion. It is not the function of the High Court to review the evidence and to arrive at an independent finding on the evidence. Similar view was reiterated in B.C.CHATURVEDI v. UNION OF INDIA & ORS, (1995) 6 SCC 749 . In HIGH COURT OF JUDICATURE AT BOMBAY THROUGH ITS REGISTRAR v. SHASHIKANTH S. PATIL & ANR ., (2000) 1 SCC 416 . it was held that interference with the decision of the departmental authorities is permitted if such authority has held the proceedings in violation of the principles of natural justice or in violation of statutory regulations providing the mode of departmental enquiry. [Also See: PRAVIN KUMAR v. UNION OF INDIA, (2020) 9 SCC 471 ]. 11. In STATE BANK OF BIKANER AND JAIPUR v. NEMICHAND NALWAYA, (2011) 4 SCC 584 . it has been held that no interference shall be made in a disciplinary proceeding on the ground that another view is possible on the basis of material on record. If the enquiry has been fairly and properly held and the findings are based on evidence, the question of adequacy of evidence and reliable nature of evidence will not be a ground for interfering with the findings. In STATE OF BIHAR v. PHULPARI, (2020) 2 SCC 130 . it has been held that standard of proof in the criminal proceeding and the departmental enquiry is different. In criminal case, the standard of proof is beyond reasonable doubt, whereas in the departmental enquiry the charges have to be proved on the basis of preponderance of probabilities. 12. It is equally well settled in legal proposition that the question of choice of quantum of punishment is within the jurisdiction and discretion of the disciplinary authority. The Court can while undertaking the judicial review of the matter is not supposed to substitute its own opinion on reappraisal of facts. In exercise of power of judicial review, the Court can interfere with the punishment imposed when it is found to be totally irrational or is outrageous in defiance of logic. This limited scope of judicial review is permissible and interference is available only when the punishment is shockingly disproportionate, suggesting lack of good faith. In exercise of power of judicial review, the Court can interfere with the punishment imposed when it is found to be totally irrational or is outrageous in defiance of logic. This limited scope of judicial review is permissible and interference is available only when the punishment is shockingly disproportionate, suggesting lack of good faith. Otherwise, merely because in the opinion of the court lesser punishment would have been more appropriate, cannot be a ground to interfere with the discretion of the departmental authorities. [See: DADRA & NAGAR HAVELI v. GULABHIA M. LAD, (2010) 5 SCC 775 . CHIEF EXECUTIVE OFFICER, KRISHNA DISTRICT COOPERATIVE CENTRAL BANK LTD. & ORS. v. K.HANUMANTHA RAO AND ORS ., (2017) 2 SCC 528 .]. 13. In the backdrop of aforesaid well settled legal principles, we may advert to facts of the case in hand. The State Bank of Mysore (Officers Service Regulations), 1979 regulate the procedure pertaining to disciplinary proceeding. It is pertinent to note that it is not the case of the employee that the disciplinary proceeding against him was either initiated or conducted in infraction of the aforesaid Regulations. It is also pertinent to note that employee has participated in the enquiry and has cross examined the witnesses examined on behalf of the Bank. The employee was also represented by a defence Assistant. However, he has neither examined himself as a witness nor has adduced any evidence. 14. From perusal of the record, we find that it is not the case of the employee that the charges leveled against him were vague. The employee has also not made any grievance with regard to non supply of documents. It is also not the case of the employee that the documents which were not supplied to him were made the basis for recording finding against him. Therefore, we hold that the enquiry, which was initiated against the employee was held in accordance with the Regulations and does not suffer from any infirmity. The High Court in exercise of power of judicial review cannot go into the sufficiency of the evidence. 15. For the aforementioned reasons, in our considered opinion, the findings recorded by the learned Single Judge that the charges leveled against the employee were vague or that the employee is not guilty of misconduct as the Bank acts in a collective manner, cannot be sustained. 15. For the aforementioned reasons, in our considered opinion, the findings recorded by the learned Single Judge that the charges leveled against the employee were vague or that the employee is not guilty of misconduct as the Bank acts in a collective manner, cannot be sustained. Similarly, the finding that negligence simplicitor does not amount to an offence cannot be sustained in the eye of law. The learned Single Judge also erred in interfering with the quantum of punishment on the ground that the same is disproportionate to the gravity of charges, even without assigning any reasons. The learned Single Judge also erred in directing the appellant to pay the medical expenses for which the employee was required to furnish medical particulars, even in the absence of relief claimed in this behalf by the employee. 16. For the aforementioned reasons, we would have allowed the appeal. However, we notice another aspect of the matter. It is well settled law that Supreme Court in the case of S.N. MUKHERJEE v. UNION OF INDIA, (1990) 4 SCC 594 . has held that the decisions of this Court referred to above indicate that with regard to the requirement to record reasons, the approach of this Court is more in line with that of the American Courts. An important consideration which has weighed with the Court for holding that an administrative authority exercising quasi-judicial functions must record the reasons for its decision, is that such a decision is subject to the appellate jurisdiction of Supreme Court under Article 136 of the Constitution as well as the supervisory jurisdiction of the High Courts under Article 227 of the Constitution and that the reasons, if recorded, would enable this Court or the High Courts to effectively exercise the appellate or supervisory power. 17. It is trite law that even a quasi-judicial authority is required to assign reasons for passing the order. In view of the decision laid down by the Supreme court in VICTORIA MEMORIAL HALL v. HOWRAH GANATANTRIK NAGRIK, 2010 (3) SCC 732 . reasons were held to be the heartbeat of every conclusion, apart from being an essential feature of the principles of natural justice, that ensure transparency and fairness, in the decision making process. [SEE: MAYA DEVI v. RAJ KUMARI BATRA & ORS., (2010) 9 SCC 486 . SANT LAL GUPTA & ORS. reasons were held to be the heartbeat of every conclusion, apart from being an essential feature of the principles of natural justice, that ensure transparency and fairness, in the decision making process. [SEE: MAYA DEVI v. RAJ KUMARI BATRA & ORS., (2010) 9 SCC 486 . SANT LAL GUPTA & ORS. v. MODERN CO-OPERATIVE GROUP HOUSING SOCIETY LIMITED AND OTHERS, (2010) 13 SCC 336 . UNION OF INDIA & ANR. v. TALWINDER SINGH , (2012) 5 SCC 480 . and UNION OF INDIA v. RAVINDER KUMAR,(2015) 12 SCC 291. ]. It is well settled in law that non-application of mind by the enquiry Officer, of the Disciplinary Authority, non- recording of reasons in support of conclusion arrived at by them are justifiable grounds for interference by Writ Courts (SEE: ALLAHABAD BANK AND ORS. VS KRISHNA NARAYAN TIWARI, (2017) 2 SCC 308 .). 18. In the instant case, after supply of the enquiry report, the employee had submitted a reply. The disciplinary authority has passed an order dtd. 20/9/2007. The relevant extract is reproduced below for the facility of reference: "I have gone through the charge sheet, Enquiry Officer's findings, charged official's submission and all the relevant records of the case. The lapses established against the officer include the failure on the part of the charged official to notice in the sanction process: (a) the connection of borrowers with the builder, even though there were inconsistencies like mentioning the name of one of the applicant as Shalinin Ashok in the application where as her name was mentioned as Shalini Nedungadi (indicating the relationship with the builder Sri.Rajeev Nedungadi), in her salary intimation letter. (b) To verify the reasons for mentioning the builder /power of attorney holder's name as "Rajeev Ramachandran" in joint development agreement dtd. 10/11/1999 and as "Rajeev Nedungadi in Joint General Power of Attorney dtd. 14/3/2000. (c) to obtain an undertaking to create mortgage. (d) to verify the original title deeds (parent deed) (e) to verify date of expiry of approved building plan. (f) to verify the authenticity of the borrowers addresses. Further, he had failed to conduct post- sanction inspection to ensure end use of funds, obtained mortgage confirmation letter without creating Equitable Mortgage and also exhibited laxity in follow up of the said loans for recovery of installments. (f) to verify the authenticity of the borrowers addresses. Further, he had failed to conduct post- sanction inspection to ensure end use of funds, obtained mortgage confirmation letter without creating Equitable Mortgage and also exhibited laxity in follow up of the said loans for recovery of installments. I find that there is preponderance of proof indicating dilution of bank's norms, acts of commission which have jeopardized the interest of the Bank, and disregard for the instructions of the bank leading to huge potential financial loss of Rs.71.58 lacs as the proposed security of flats have already been mortgaged to other banks / KSFC by the builder / Power of Attorney Holder. This calls for severe deterrent punishment. However, I am of the view that imposition of the punishment of "compulsory retirement" on the charged official in terms of Regulation 67(h) of State Bank of Mysore Officers Service Regulations 1979 will meet the ends of justice. I order accordingly." 19. Being aggrieved, the appellant preferred an appeal. The appellate authority by an order dtd. 8/2/2008 dismissed the appeal preferred by the employee. The relevant extract of the order reads as under: "g. It is observed that the nature of punishment inflicted against the appellant is in commensurate with the gravity of the misconduct found to have been committed in the enquiry proceedings; there is no scope for modification of the same. 5. In view of the above, I find no reason to differ with the order passed by the disciplinary authority. 6. For the foregoing, appeal preferred by the appellant is devoid of merits and therefore rejected. I order accordingly." 20. The employee thereafter, preferred a review, which is provided under the Regulations. The reviewing authority by an order dtd. 8/2/2011 has dismissed the review petition. The relevant extract of the order is extracted below: "I have also carefully perused the review petition submitted by the officer. My view in this case is that the appellate authority has taken a balanced and reasonable view of the case and has accordingly concurred with the decision of the disciplinary authority. I therefore, do not find any valid ground for modifying the punishment. The review petition stands rejected." 21. Thus, from perusal of the aforesaid orders, it is evident that the orders are perfunctory in nature and are bereft of reasoning. No reasons have been recorded for recording the conclusions. I therefore, do not find any valid ground for modifying the punishment. The review petition stands rejected." 21. Thus, from perusal of the aforesaid orders, it is evident that the orders are perfunctory in nature and are bereft of reasoning. No reasons have been recorded for recording the conclusions. The impugned order contains conclusions only and in support of the same, no reasons have been assigned. The disciplinary authority has not taken into account the reply filed by the employee. Similarly, the appellate as well as the reviewing authority has not adverted to the various grounds urged by the employee in the memo of appeal as well as in the review. The orders are cryptic and suffer from the vice of non application of mind. The impugned orders therefore, cannot be sustained in the eye of law. 22. In view of preceding analysis, the order dtd. 10/10/2018 passed by learned Single Judge in W.P. No.6677/2010 is quashed. The impugned orders dtd. 20/9/2007, 8/2/2008 and 8/2/2011 passed by disciplinary authority, appellate authority and reviewing authority respectively are also quashed and the matter is remitted to the disciplinary authority to take a decision afresh after considering the reply submitted by the employee to the enquiry report. The aforesaid exercise shall be conducted within a period of two months from the date of receipt of copy of this order. In the result, the appeal is disposed of.