R.Samba Murthy v. State bank of India, Corporate Office

Order

(Per. Hon’ble Sri Justice G. Bhavani Prasad) The orders of the Appointing Authority dated 11-3-1997 and the Appellate Authority dated 18-5-2005 resulting in removal from service of the petitioner led to the filing of the writ petition. The writ petitioner joined the State Bank of India on 29-11-1973 as a clerk-cum-typist and later was promoted as Trainee Officer on 1-8-1980 and then as Deputy Manager Scale-II since 1-8-1986. From August 1991 to April 1992, he worked as Manager o f Payakaraopet branch. He was transferred to Visakhapatnam Zonal Office in April 1992 and was issued a show cause notice on 5-6-1992 alleging certain irregularities while working as Branch Manager at Payakaraopet. The writ petitioner submitted his detailed explanation on 22-6-1992 and he was placed under suspension by an order dated 24-7-1992 with effect from 31-7-1992, the date of service of the suspension order.

Later, the Disciplinary Authority issued proceedings dated 8-9-1993 alleging irregularities contained in two charges, the first about process, sanction and disbursement of loans/advances to groups of borrowers under Cash Credit (SBF) and Agricultural Segments (including loans under DIR scheme) during the period from 22-2-1992 to 7-4-1992 in haste and hurry without involving the Field Officer and in violation of various instructions of the bank exposing the bank to grave financial loss, while passing on the pecuniary benefit to the borrowers with mala fide intention and the second charge about demanding and accepting illegal gratification in cash as consideration for sanction of loans/advances from certain borrowers.

The petitioner submitted his explanation dated 27-10-1993 and requisition for indenting certain documents in his representation dated 11-10-1995 requesting for the report of the investigating officer, statements obtained

from Sri V. Sri Ram and Sri B.A. Rama Rao, correspondence and instructions circular and the documents were not furnished. The enquiry was proceeded with by examining the petitioner’s successor Sri V. Sri Ram as PW.1 and not examining the Field Officer Sri B.A. Rama Rao. The petitioner examined Sri Suryanarayana Raju, Development Officer, New India Assurance Company as his defence witness. The Enquiring Authority in its report found charge No.2 to be not proved due to absence of any oral evidence and the relevant two documents not being marked or identified. Out of 9 allegations contained in charge No.1, the Enquiring Authority found one allegation to have not been proved, one allegation to have been partly proved and remaining 7 allegations to have been proved. The petitioner was furnished with a copy of the report and asked to make his representations by a letter dated 18-9-1996 and the Disciplinary Authority in the proceedings dated 6-3-1997 differed with the Enquiring Authority only to the extent of treating some of the charges considered to have been proved, to have been only partly proved. Consequently, the order dated 11-3-1997 was issued by the Appointing Authority imposing punishment of “removal from service” and treating the period of suspension as “not on duty”. The petitioner preferred an appeal against the said order on 9-7-1997 and by the order dated 29-1-1998 the appeal was rejected by the appellate authority. The petitioner filed W.P.No.13201 of 1998 against the orders of the Appointing Authority and the Appellate Authority and a learned judge of this court by the judgment dated 8-8-2000 allowed the writ petition mainly on the ground that the petitioner was put to serious prejudice by denying the investigation report. In W.A.No.1167 of 2000 by the bank against the said judgment, a Division Bench of this Court by the judgment dated 23-7-2001 found that the investigation report was made use of only for the purpose of prima facie satisfaction of the Disciplinary Authority but was not relied upon at all by way of proof in support of articles of charges. The Division Bench observed that documents are required to be supplied to the delinquent officer only when he requires the same to meet charges and not otherwise, and hence, remanded the matter consideration of the merits of the matter on other points raised. W.P.No.13201 of 1998 was accordingly disposed of by the order dated 26-6-2002 with learned judge confining contentions other than those relating to the consequences of non- furnishing of the report in the preliminary enquiry. The learned Judge concluded that non-furnishing of the statements of the witnesses and copies of other documents, which culminated in the preliminary enquiry report, cannot be placed at a higher pedestal than the report itself and non-furnishing of such documents was not fatal. The learned Judge observed that the High Court cannot sit as an Appellate Authority to re-appreciate the evidence recorded by the Enquiry Officer and review the findings recorded by him and concluded that having regard to the fact that voluminous evidence was recorded before the Enquiry Officer and that the Enquiry Officer in turn had discussed the matter with specific reference to the components of charges as well as the explanation offered by the petitioner in his reply to the charge sheet as well as the evidence adduced by him during the enquiry, it cannot be said that the findings recorded by the Enquiry Officer are either on the basis of no evidence or that they are perverse. The learned Judge also considered that the order passed by the appellate authority indicates that he has considered and examined the matter with reference to the entire material on record and passed the order. However, the learned judge found that the appellate authority only satisfied itself about the propriety of the findings recorded by the enquiry but did not address itself to the question as to whether the penalty imposed was excessive and disproportionate. The learned Judge, therefore, felt that whether the petitioner deserves the severe punishment of removal from service ought certainly to have been taken into consideration and discussed in its proper perspective. Accordingly, the appellate authority’s order dated 29-1-1998 was set aside and the appellate authority was directed to consider the appeal afresh regarding the question of penalty. The Appellate Authority again passed the order dated 14-8-2002, in pursuance of the orders of the High Court concluding again that the penalty of removal from service is proportionate and equitable and rejecting the appeal. The petitioner filed C.C.No.1125 of 2002 in which an order was passed on 30-10-2002 observing that if the order is wrong on any account, the same needs to be challenged in appropriate proceedings. The petitioner W.P.No.24513 of 2002 accordingly and in W.P.M.P.No.30831 of 2002 a learned judge ordered on 29-11-2002 to consider the fresh representation to be made by the petitioner within one week and to pass appropriate orders within four weeks therefrom after giving an opportunity to the petitioner, having regard to the petitioner agreeing to pay the amounts subject to the condition of reinstatement into service. In W.A.No.162 of 2003 against the said order, a Division bench set aside the order and directed disposal of the writ petition expeditiously. Then the writ petition was disposed of by the order dated 13-9-2004 holding that the allegations proved in respect of charge No.1 are not grave and the punishment of removal from service was excessive and disproportionate shocking the conscience of the court. The learned judge treated the case as an exceptional case where an appropriate punishment can be imposed by the court itself and accordingly, modified the punishment to one of compulsory retirement. This order was the subject of W.A.Nos.1961 and 1825 of 2004 at the instance of the petitioner and the bank respectively and a Division Bench by the common judgment dated 1-2-2005 set aside the modification of punishment ordered by the Single Judge but found that the Appellate Authority has not applied its mind and has come to a conclusion of its own, more so, basing on the material available on record and directions issued by the Single Judge of this Court. The Division Bench granted leave to the petitioner to make an appropriate application before the Appellate Authority and directed the Appellate Authority to pass final orders after affording an opportunity of hearing to the petitioner in accordance with law. The Division Bench also incidentally noted that the bank did not place any material to show any past misconduct or disciplinary action. Accordingly, the petitioner submitted a representation dated 4-3-2005 and another representation during personal hearing on 6-5-2005. The minutes of personal hearing were recorded noting the submissions of the petitioner, the enquiries by the appellate authority and the responses from the petitioner. Then the appellate authority in the impugned order dated 18-5-2005 extracted the sequence of events in substantial detail including the contents of the allegations and the enquiry into them and the other issues raised and the conclusions by the appellate authority are, – “I have carefully considered the records of the case including the submissions made in the appellant’s letter dated the 9th July, 1997, his representations dated the 4th March, 2005 and 6th May, 2005 and I have also granted him a personal hearing on the 6th May 2005 and have taken his submissions made therein into account. I observe that the irregularities committed by the appellant in the sanction, disbursement, conduct and follow-up of the advances are very serious in nature. The appellant having been assigned the responsibility of managing a branch was expected to carry out his functions with due diligence by adhering to the Bank’s laid down instructions. The appellant has failed to live up to the trust reposed in him by the Bank by flouting basic instruction with regard to sanction and conduct of advances. Though a Field Officer had been posted in the branch whose primary duty was to appraise, recommend and supervise loans granted at the branch, the appellant without obtention of recommendations of the Field Officer has sanctioned a large number of loans within a short span of time. The loans were purportedly government sponsored accounts but were sanctioned and disbursed by the appellant without any sponsorship by the government agency and without receipt of subsidy. There has been mis-utilization of loans in many accounts as assets were not created, existing defaulters to the Bank have been again financed which is a serious lapse, several persons from the same family have been financed, credit requirements have not been properly assessed, in many cases arbitrary enhancement of limits have been granted and uniform repayment schedule has been fixed without taking into account the income generation of various activities. The foregoing actions of the appellant are indicative of reckless lending in violation of basic credit norms. Only a small portion of the amounts so disbursed have been repaid the borrowers. The Bank has been saddled with a substantial loss. While it is a fact that in the course of lending some loans do go bad what is significant in this case is that a large number of loans sanctioned and disbursed in a very short period of time without the recommendations of the Field Officer and violation of basic credit norms have resulted in a loss to the Bank. On an over all consideration of the facts and circumstances of the case and after consideration of the submissions of the appellant, I am of the view that the appellant has not the allegations held as proved/partly proved. I have also applied my mind with regard to the quantum of penalty imposed on the appellant. In view of the very serious nature of the allegations, on independent application of mind, I am of the view that the penalty of rebutted removal from service is commensurate and appropriate to the nature of allegations held as proved/partly proved. The appeal submitted by Shri Samba Murty is, therefore, rejected. The period of suspension is to be treated as not on duty. I order accordingly.” The petitioner filed C.C.No.1363 of 2005 against the said order, but a Division Bench of this Court by an order dated 28-11-2005 opined that merely because the respondents are repeating same order, it does not amount to contempt and the only remedy left open for the petitioner is to challenge the same by appropriate separate proceedings. Accordingly, the petitioner filed the present writ petition contending that he was not afforded an opportunity to prove to the authorities the existence of the units with activity, the Field Officer was not examined; the pre and post sanction reports were not produced as not traceable; the assets hypothecation register was not traceable; the leave record of the Field Officer was not produced; the absence of any previous disciplinary proceedings, unblemished service and the job being only the source of survival were ignored and no moral turpitude or loss to the bank or misappropriation of the amounts were involved. The earlier orders were reiterated without any respect to the directions of the Division Bench. Ignoring the evidence of DW.1 and without any evidence concerning violation of norms, the appellate authority passed the orders on surmises and conjectures, and hence, the petitioner desired the original communication conveying imposition of penalty of removal from service and the confirmation of the same by the Appellate Authority ultimately to be quashed. The Bank in its counter affidavit through the General Manager pleaded that in W.P.No.24513 of 2002 only the punishment was modified and the conclusions about the proof of allegations was not interfered with. While reiterating its contentions, the bank defended the order of the appellate authority as in accordance with law and in compliance with the directions of the Division Bench and it referred to the cases of C.M.D., United Commercial Bank, 2003 (4) SCC 364, Munna Lal Jain AIR 2005 SC 584 and Nikuna Bihari Patnaik, 1996 (9) SCC 69. No re-enquiry can be conducted and the impugned orders cannot be interfered with. The petitioner filed a reply affidavit again reiterating that he was handicapped for want of material statements and other averments made by the Field Officer and contending that even during his personal hearing on 6-5-2005 the material represented by the petitioner were unanswered including about the present status and recovery position of the loans which are in the stage of execution. The authorities of the bank are ignoring all the directions and findings of the court in various cases and the petitioner referred to five precedents in his reply affidavit. The petitioner reiterated his contentions in his arguments in person and also presented a brief synopsis to claim that the second charge pertaining to moral turpitude was not proved and that no reasonable opportunity was afforded to him at any stage making him suffer untold misery since 16 years. Learned counsel for the respondents attempted to repel the contentions through extensive arguments. The five precedents relied on by the petitioner are – 1) State of Punjab v. Bhagat Ram [1] , wherein the Apex Court held that it is unjust and unfair to deny the employee copies of the statements of the witnesses examined during investigation and produced at the enquiry in support of the charges levelled against the employee. 2 ) Kashinath Dikshita v. Union of India and others [2] , wherein also the Apex Court held that the employee was denied a reasonable opportunity of exonerating himself due to non-supply of copies of the documents or statements resulting in prejudice to the employee. However, it was made clear that whether or not refusal to supply copies of documents or statements has resulted in prejudice to the employee facing the departmental enquiry depends on the facts of each case. 3) State of A.P. v. Dr. K. Ramachandran [3] , wherein the Apex Court held that a penalty imposed by the State Government without referring the case to the Disciplinary Proceedings Tribunal was without jurisdiction as it was mandatory to make such reference the unamended Section 4 of the Andhra Pradesh Civil Services (Disciplinary Proceedings Tribunal) Act, 1960. 4) B.C. Chaturvedi v. Union of India [4] , wherein the Apex Court held that it did not appear to have been intended to lay down that in no case, the High Court or Tribunal has the power to alter the penalty imposed by the disciplinary/appellate authority. 5) Kailash Nath Gupta v. Enquiry Officer, Allahabad Bank and others [5] , decided on 27-3-2003, wherein the Apex Court with reference to the cases earlier decided by it, concluded that the High Court/Tribunal while exercising the power of judicial review, cannot normally substitute its own conclusion on penalty and impose some other penalty. But, if the punishment imposed by the disciplinary authority or the appellate authority shocks the conscience of the High Court/Tribunal, it would appropriately mould the relief, either directing the disciplinary authority/appellate authority to reconsider the penalty imposed or to shorten the litigation, it may itself in exceptional and rare cases impose appropriate punishment with cogent reasons in support thereof. The Apex Court pointed out that one thing is clear that the power of interference with the quantum of punishment is extremely limited. But, when relevant factors are not taken note of, which have some bearing on the quantum of punishment, certainly the court can direct reconsideration or in an appropriate case to shorten litigation, indicate the punishment to be awarded. It should also be noted that the Apex Court in spite of referring to the circumstances concerning the employee, remitted the matter back to the High Court only concerning the quantum of punishment, while making it clear that no opinion was expressed by them as to what would be the appropriate punishment. The respondents relied on the following precedent, – State of Maghalaya and others v. Mecken Singh N. Marak [6] , wherein the Apex Court again reiterated the same principles concerning interference with the punishment by the High Court/Tribunal. The judgment in W.P.No.13201 of 1998 dated 26-6-2002 insofar as it concluded that the order of the Appellate Authority dated 29-1-1998 or the order of the Enquiring Authority on which the appeal was filed were not vitiated by any other reasons except regarding the quantum of punishment imposed had obviously remained unchallenged and became final. Therefore, the reference by the writ petitioner to precedents about supply of copies of statements of witnesses or the documents etc., have no relevance and the question of any prejudice to the petitioner in that regard cannot be a matter of re-appreciation again at this stage. The various legal proceedings to which the petitioner had taken recourse to against the subsequent order of the Appellate Authority dated 14-8-2002 ended with the judgment of the Division Bench in W.A.No.1961 and 1825 of 2004 dated 1-2-2005 in which the conclusion of the learned single Judge in W.P.No.24513 of 2002 in the order dated 13-9-2004 confining the consideration only to the proportionality and legality of the punishment imposed was not interfered with. The Division Bench noted that the petitioner argued at length regarding the conduct of enquiry by the bank and also the subsequent events and observed that they do not want to go into the merits of the impugned judgment in W.P.No.13201 of 1998 in view of the fact that the learned Single Judge having found the misconduct proved, modified the punishment. The Division Bench felt that the Appellate Authority did not apply its mind and did not come to a conclusion of its own, more so, basing on the material available on record and directions issued by the learned single judge of this Court. Thus, the matter was remitted back to the Appellate Authority for proper consideration of the matter and passing final orders after affording an opportunity of hearing to the petitioner in person in accordance with law, obviously only concerning the quantum of punishment to be imposed. Therefore, the questions raised by the writ petitioner again concerning facts, circumstances or events leading to his being found guilty of seven allegations in the first charge framed against him, apart from being found partly guilty of one allegation and the Disciplinary Authority slightly deviating in respect of three allegations considering them not fully proved but partly proved, cannot be the subject of a fresh adjudication in the present writ petition. The consideration herein can only be concerning the questions whether all the material available on record was considered, the petitioner was given an opportunity of making an appropriate application and of hearing and whether the final orders were appropriately passed within the time fixed keeping in view the directions issued by this Court from time to time and the absence of any past misconduct or disciplinary action and the family circumstances of the petitioner. The impugned order referred to in detail about the entire sequence of events since inception up to the date of passing of the order and also the representations submitted by the petitioner on 4- 3-2005 and 6-5-2005 and also the submissions made by the petitioner during the personal hearing on 6-5-2005. Obviously due to the petitioner raising various contentions regarding the events since inception, the Appellate Authority made detailed observations regarding each of the allegations, which in fact may have to be considered as superfluous, but which may also show that the Appellate Authority applied its mind to the questions raised with all the sincerity at its command. The Appellate Authority also specifically dealt with the other issues raised by the petitioner and noted that substantial loss was caused to the bank due to violation of its instructions in grant of loans and he further noted that recoveries in the loans granted by the petitioner were very meagre, while the loss was minimized only due to the bank’s claims being made good by DI & CGC. While acknowledging that the petitioner’s earlier 18 years of service was unblemished, the Appellate Authority felt the irregularities committed by him as Branch Manager to be very serious not mitigating the gravity of the lapses on his part. The Appellate Authority gave his reasons in detail, which were already extracted earlier and concluded the penalty of removal from service commensurate and appropriate to the nature of allegations held as proved/partly proved. As observed by the Division Bench of this court in the order dated 28-11-2005 in C.C.No.1363 of 2005 the conclusions of the Appellate Authority do not amount to contempt and the claims of the petitioner in this writ petition are once again reiteration of what all he claimed earlier. The affidavit filed in support of the writ petition does not disclose any specific reason to presume the Appellate Authority to have not applied its mind. Though the High Court may have the power to interfere with the order of penalty imposed by the Disciplinary or the Appellate Authority in extreme cases, it cannot normally substitute its own conclusions on the penalty. When the Appellate Authority gave valid reasons for the imposition of penalty, the High Court may not be able to substitute its own perception about the gravity of the charges or otherwise and it may not be open to the court to substitute its own opinion in the face of the considered opinion of the Appellate Authority. It is true that in the judgment of the learned Judge in W.P.No.24513 of 2002 dated 13-9-2004, the learned Judge considered the allegations proved to be not grave and punishment imposed to be excessive, disproportionate and shocking the conscience of the court, but the said judgment was set aside by the Division Bench. It is also true that the Division Bench found some force in the submissions made by the petitioner, in its judgment dated 1-2-2005, regarding the absence of any material showing any past misconduct or disciplinary action but the Appellate Authority explained in the impugned order that notwithstanding the past record of the petitioner, the present misconduct is serious enough warranting the punishment imposed. When the Appellate Authority applied its mind and came to a conclusion of its own based on the material available on record and directions issued by this court from time to time after considering the representations of the petitioner and affording a full opportunity of hearing, the impugned order does not appear susceptible to any interference in exercise of the extremely limited power of interference with the quantum of punishment. In the written and oral submissions of the petitioner, emphasis was repeatedly laid on the absence of a reasonable opportunity before coming to adverse findings against him in seeking a de novo enquiry. But, as already stated, all those questions were closed by the judgments and orders in the earlier proceedings leaving only the justifiability and proportionality of the punishment alone to be considered in this writ petition. When the punishment is examined with reference to the detailed reasons given in the impugned order and the settled principles of law in this regard, it is clear that the same cannot be interfered with in this writ petition. Therefore, notwithstanding the fact that the petitioner had obviously undergone a great deal of suffering for a considerable length of time fighting this litigation for the better part of his life, the impugned order of the Appellate Authority does not appear susceptible interference within the extremely limited and restricted scope of such power of interference with the quantum of punishment. Accordingly, the writ petition should fail and is dismissed without costs. ______________________ GHULAM MOHAMMED, J ______________________ G. BHAVANI PRASAD, J // TRUE COPY // SECTION OFFICER Date: 24-04-2009 Ksn To 1) 2 CD copies Form-NIC-OGS/WP{MPL} [1] AIR 1974 SC 2335 [2] AIR 1986 SC 2118 [3] [4] [5] [6] (1998) 4 SCC 82 1995 (6) SCC 749 Appeal (Civil) 2508 of 1998 2008 (9) Scale 326