High Court
Case Details
WP(C) 4479/2009 BEFORE THE HON’BLE MR. JUSTICE B.K. SHARMA JUDGMENT AND ORDER (ORAL) 1. The petitioner is aggrieved by the Annexure-XIV order dated 11.1 1.2008, by which pursuant to the departmental proceeding, the Disciplinary Autho rity of the respondent bank imposed on him the penalty of compulsory retirement from service. He is also aggrieved by the order dated 18.06.2009, by which his D epartmental Appeal was dismissed by the Departmental Appellate Authority, uphold ing the order of compulsory retirement passed by the Disciplinary Authority. 2. The petitioner while was serving as Senior Manager of the respon dent bank was issued with the Annexure-I show cause notice dated 12.06.2007, all eging serious financial irregularities. Referring to the transactions with as m uch as 14 organizations, it was alleged in the show cause notice that the petiti oner abused his position and failed to discharge his duties with utmost integrit y and honesty and also failed to protect the interest of the bank exposing it to grave financial risk.
Legal Reasoning
Responding to the show cause notice, the petitioner by his Annex 3. ure-II reply dated 14.07.2007 quiet to justify his action. It was stated in the show cause reply that over drawing was allowed with the prior permission of the competent authority from the Regional Office obtained over telephone. Being not satisfied with the reply, so furnished, the respondent bank issued the charge sh eet dated 12.10.2007, alleging violation of the provisions of UCO Bank Officer E mployees’ (Conduct) Regulation, 1976. Along with the articles of charge, the sta tement of allegation was also enclosed dealing with the misconduct and the charg e attributed to the petitioner. Referring to the financial transactions with the organizations named in the statement of allegation, it was alleged that the pet itioner had recommended cash credit beyond his jurisdiction and that no regular inspections of stock were carried out. It was also alleged that the petitioner h ad allowed disbursement of term loan by crediting directly to the cash credit ac count of the parties and without ensuring its end dues. The transactions in refe rence to which the statement of allegation was made against the petitioner invol ved huge amount and it was alleged that the petitioner exposed the bank to finan cial risk. 4. Responding to the charge sheet, the petitioner submitted his wri tten statement of defence, on perusal of which, the Disciplinary Authority being not satisfied with the same, ordered for a regular enquiry. The Enquiry Officer appointed for the purpose conducted the enquiry and by his enquiry report dated 30.04.2008, held as follows:- (cid:28)I finally conclude as follows- The following allegations and the relevant charges are proved- 1(a), 4(a ), (c) and (d), 5(b), 6(a), (b), (g), (i), 9(a) and 13(a). The following allegations and relevant charges are partially proved- 1-(d), (e), (f), (g), 2(a), (b), 3(a), 4(b), (e), (f), 5(a), (c), 6(b), 7(b), (c), 8(e), (h), (k), 9(d), (e), 10, 11 and 13(c). The following allegations and relevant charges are not proved- 1(b), (c), (h), 3(b), 7(a), (d), 8(c), (d), (f), (j), 9(b), (c), (f), (g
Legal Reasoning
), (h), 12, 13 (b) and 14. (cid:29) 5. It will be pertinent to mention here that in the writ petition, the petitioner has not pleaded any procedural irregularity in conducting the dep artmental enquiry, but what has been pleaded is that the irregularity attributed to the petitioner was condonable more particularly when the transactions did no t incur any financial loss to the respondent bank. Placing reliance on the decis ion of the Apex Court, reported in AIR 2013 SC 1377 (Kailash Nath Gupta Vs. enqu iry Officer (R.K. Rai), Alahabad Bank and others), Mr. B. R. Dey, learned senior Counsel assisted by Mr. P.Sen, learned counsel for the petitioner has submitted that the transactions in respect of which the charges have been leveled against the petitioner were duly transacted by the petitioner without any evil intentio n and was not for any personal gain. He submits that the procedural irregularity in the financial transactions cannot lead to the extreme penalty of compulsory retirement. 6. Mr. P. Goswami, learned counsel representing the respondent bank on the other hand has submitted that the petitioner by his conduct having put t he bank to huge financial risk and in the enquiry, charges having been establish ed, the petitioner cannot harp upon the purported procedural irregularity only i nvolved in the financial transactions as referred to in the charge sheet. Placin g reliance on the decision of the Apex Court reported in 2010 AIR (SCW) 5447 (Ge neral Manager, Punjab & Sind Bank & Ors Vs. Daya Singh), he submits that it bein g not a case of establishing the charge without any evidence and that findings r ecorded by the Enquiry Officer and the Disciplinary Authority and so also the Ap pellate Authority being perverse, this Court exercising its jurisdiction under A rticle 226 of the Constitution of India, cannot sit on appeal over those finding s so as to return a different findings. I have given my careful consideration to the submissions advance 7. d by the learned counsel for the parties and have also perused the entire materi als on record. 8. The allegations made against the petitioner were in respect of f inancial transactions involving as many as 14 organizations/customers. In the st atement of allegations enclosed along with the charge sheet, details of the tran sactions had been noted/indicated. For a ready reference, two such transactions in reference to two customers are quoted below:- M/S. Shree Sachkhand Enterprise:- A cash Credit limit of Rs.48 Lacs was sanctioned on recommendati ons of Shri V.K. Chhabra by Regional Office, Chandigarh on 25.08.2005 in favour of the above named party. On verification of the account, it has been noticed that the con duct of the account was not satisfactory. Heavy overdrawings were allowed I the account by Shri Chhabra which continued till November, 2006. He allowed the over drawings beyond his delegated powers for which no permission was obtained from t he competent authority. Such overdrawings were also not reported to the controll ing office as well. Details of overdrawings allowed by Shri Chhabra on various d ates are given below: Date 21.01.2006 01.03.2006 22.05.2006 15.11.2006 Balance outstanding (Amount in laces of Rs.) 56.70 85.10 98.23 70.91 Maximum overdrawing allowed in the account was Rs.47.23 lacs on 22.05.2006 which was regularized on 30.06.2006 only. Further, overdrawings were allowed on regul ar basis and the account was regularized only on 01.08.2006. overdrawings have b een noticed thereafter also. No permission for allowing such overdrawings was o btained by Shri Chhabra from the competent authority nor reporting was made by h im in this regard to the controlling office. It has been noticed that there was transfer of funds of the order of Rs.35 lacs on 25.03.2006 from CC A/C No. 90097 of M/S. SMC packaging Pvt.Ltd. and this party has no business connection with t he said party. On 17.03.2006. A sum of Rs 9 lacs was debited to the party’s acco unt, thus increasing the overdrawings in the alredy overdrawn account from Rs 74 .23 lacs to Rs 83.23 lacs. The said amount of Rs 9 lacs was transferred to the c urrent account of M/S. Asha Telecom (p) Ltd. having no business relationship. Li kewise, a sum of Rs 9 lacs was debited to the party’s account for credit to the current account of M/S Asha Telecom (p) Ltd. having no business relationship. He nce, Shri V.K. Chhabra had not ensured the end use of funds and allowed the fund s to be misutilized. There are other entries also which represented inter accoun ts adjustments having no business relation, e.g. on 04.07.2006, a sum of Rs 10,0 0,000/- was transferred by Shri Chhabra to CC A/C No.900936 of M/S. Shree Krishn a Electronics to the debit of above party’s account without any mandate/debit au thority from them and the vouchers have been prepared and signed by him only. Thus by his above said acts, Shri V.K. Chhabra had allowed heavy overdrawings to the above party in order to accommodate him by misusing his len ding powers and in gross violation of the guidelines laid in the Loan policy doc ument of the Bank thus putting the Bank in financial risks. He had also unauthor izedly debited the account of the party with large sum without any authority fro m the party in order to accommodate other parties. A cash credit limit of Rs. 48 lacs was sanctioned by Regional Office, Chandigarh on 10.12.2005 on recommendations of Shri V.K. Chhabra in favour of above named M/S. Jai Balaji Enterprises: party. It has been noticed that Shri Chhabra allowed the overdrawings i n the account beyond his delegated powers for which no permission was obtained f rom the competent authority. Such overdrawings were aslo not reported to the con trolling office as dwell. Details of such overdrawings allowed by him on various dates is given below: Balance outstanding (Amount in laces of Rs) Date 15.02.2006 28.02.2006 21.11.2006 67.31 70.01 56.12 Most of the entries in the account represent adjustments with other accounts suc h as S.B.A/C No. 9602 (HUF), 9603, CC A/C M/S PRJ Internationals, M/S Shree Sach khand Enterprises etc. It has also been noticed that all the above three concerns namel y, M/S Shree Krishana Electronics, M/S Shree Sachkhand Enterprises and M/S Shree Jai Balaji Enterprises are sister concerns where huge overdrawings were being a llowed by Shri V.K. Chhabra. Thus, by his above said acts, Shri Chhabra had allowed overdrawi ngs to the above party indiscriminately in order to accommodate the firm by misu sing his delegated powers and in gross violation of the Loan policy Document of the Bank thus putting the Bank in greave financial risks. (cid:29) 9. Similar allegations had been made against the petitioner against the other parties/customers. In the enquiry, the Enquiry Officer found some of the component of the charges fully established and some partially established. S ome of the components were found not proved. The Disciplinary Authority disagree d with the findings of the Enquiry Officer in respect of certain charges held no t established. The petitioner was furnished with the note of disagreement along with the copy of the enquiry report. Responding to the same, the petitioner subm itted his representation. Thereafter, the Disciplinary Authority in consideratio n of the entire materials on record, passed the impugned order of penalty dated 11.11.2008 imposing the penalty of compulsory retirement on the petitioner. The order of penalty dated 11.11.2008 has discussed in details the relevant facts an d the evidence on record. As will be evident from the enquiry report and the ord er of the Disciplinary Authority, the allegations made against the petitioner ha d been bifurcated during the enquiry into following parts:- (a)- Regarding Confidential Report on IBA format. (b)- Discrepancies in the creation of EM. (c)- Allowing overdrawings beyond delegated powers and without p ermission from RO and not even reported to RO. (d)- Others regarding Gir not being sent to the controlling offi ce, proper monitoring not done, statement of means not authenticated and pre-san ction and post disbursement reports not on record. The Disciplinary Authority analyzing the evidence on record, inc 10. luding the enquiry report and the note of disagreement and the representation ma de by the petitioner, found that the allegations/charges leveled against the pet itioner were established in the enquiry. It will be pertinent to mention here th at the above referred bifurcation of the allegations refers to only one customer and similar bifurcation of the charges has also been made in respect of other c ustomers. Eventually the Disciplinary authority in its final order held the peti tioner guilty of the charges. 11. As noted above, the Enquiry Officer has held the petitioner guil ty of some of the charges and some of the charges were held partially proved. In respect of certain charges held to be not established during the enquiry, the D isciplinary Authority disagreed with the same and the note of disagreement along with the enquiry report was provided to the petitioner, enabling him to make re presentation against the same. Upon evaluation of the entire materials on record and having regard to the gravity of the charges leveled against the petitioner, he was imposed with the penalty of compulsory retirement. It is on this count, Mr. Goswami, learned counsel representing the bank submits that the Disciplinary Authority dealt with the matter leniently, otherwise it was a fit case for impo sing penalty of dismissal from service or removal from service. 12. Being aggrieved by the aforesaid order of penalty, the petitione r preferred the departmental appeal, which was rejected by order dated 18.06.200 9. In the appellate order, the nature of illegalities committed by the petitione r has been noted as follows:- i) In respect of taken over borrowal accounts, he did not obtain Confidential Report on IBA format and Statement of accounts for the last six mo nths from the banks wherefrom the accounts have been taken over. ii) Overdrawings were allowed by him indiscriminately on contain ing basis beyond his delegated powers without obtaining permission from Regional Office to extend undue benefits to the parties by accommodating them. iii) He had unauthorizedly debited borrowal accounts of some par ties with large sums without their authority in order to accommodate other parti es having no business connection. iv) He did not monitor end use/utilization of funds s h allowed them loan installments to be directly credited to cash/current accounts of the p arties thereby allowing them to siphon off bank’s funds. v) He did not comply with the terms of sanction relating to crea tion of equitable mortgage or property. vi) He did not submit Godown Inspection Report to the Regional O ffice and did not monitor the accounts properly. vii) He did not create equitable mortgage in the EMTD Register n or was title deed of the property available pertaining to one UCO Shelter loan a ccount in the name of his cousin brother. viii) In his own cash credit account, there were number of cash deposit entries of substantial amount which seem to be the income from other sou rces disproportionate to his salary income which Shri Chhabra had failed to repo rt in his annual return of assets and liabilities as statutorily required. BCTT had not been charged where the cash withdrawals were for amounts exceeding Rs.25 ,000/- violating the Govt. guidelines. ix) In one UCO Mortgage Loan Sanctioned by him, he had accepted non-encumbrance certificate and report on title from the lawyer which was issued more than 6 months earlier. 13. The appellate authority also referred to the ground urged by the petitioner in his appeal and rejected the appeal. Thereafter, the petitioner fi led the instant writ petition. 14. The petitioner being a bank employee and having occupied a respo nsible position was depository of confidence of the bank, however, he failed to adhere to the said confidence when he involved in the financial transactions wit h as many as 14 organizations. Such conduct on the part of the petitioner expose d the Bank to huge financial risk. In Daya Singh (Supra), the Apex Court while u pholding the dismissal of the bank employee held that ground of huge loss on FDR ’s exposing the bank to huge financial risk was not expected of a bank employee. Justifying the penalty imposed, the Apex Court while interfering with the judgm ent of the Division Bench of the High Court, observed thus:-