S. Mani... v. Chairman and Managing Director Syndicate Bank & Ors.

IN THE HIGH COURT OF JUDICATURE AT MADRASDATE: 03-03-2009CORAM:THE HONOURABLE MRS. JUSTICE PRABHA SRIDEVANANDTHE HONOURABLE MR. JUSTICE K.K. SASIDHARANW.A.No.1027 of 2006S. Mani... AppellantVs.1.Chairman and Managing DirectorSyndicate Bank, Head OfficeManipal-Karnataka State 576 1192.The General Manager (Personnel)Syndicate Bank, Head OfficeManipal, Karnataka State 576 1193.Dy. General managerSyndicate Bank, Zonal Office27/28, Woods Road, B.R. ComplexII & III Floors, P.B.No.5227Anna Salai, Chennai – 600 0024.M.J. PrasadInquiring AuthorityIndustrial Relations CellZonal Office, Syndicate BankMaker Towers "E" 2nd FloorPlot No.85, Cuffee ParadeColaba, Bombay 400 004... RespondentsWrit Appeal against the order of dismissal of the writ petitionNo.1838 of 2000 dated 16-04-2003. which is filed under Article 226 ofConstitution of India to issue a Writ of certiorarified Mandamus tocall for records pertaining to the order of dismissal passed by therespondent III in 12/CZO/DA-6/99 dated 30.8.99 as confirmed by therespondent II in 166/PD-IRD-DA-7 dt.26.11.99 and to quash the bothand to direct the respondents to reinstate the petitioner in servicewith continuity of service and with all back wages and pecuniarybenefits. https://hcservices.ecourts.gov.in/hcservices/ For appellant :: Mr. AR.L. Sunderasan, Senior Counsel for M/s.Gandhimathi, AdvocateFor respondents:: For RR1 to3:: Mr. V. Karthick for Mr. T.S. Gopalan & Co.JUDGMENTThe appellant joined Syndicate Bank as a Clerk in 1977. Hispunishment of dismissal was converted to one of compulsory retirementpurely on the ground of mercy. The writ petition is filed againstthe findings on merits. 2.Charges were framed against him while he was the Branchmanager, Sholapur. He was working as such in the Sholapur Branchtill 26-07-1996. He was then transferred to the Karaikudi branch andafter about one and a half years, he was posted as Manager,Devakottai Branch from 01-06-1998. He was placed under suspension byorder dated 08-10-1998 alleging acts of misconduct when he wasworking as Branch Manager at Sholapur. Against the order ofsuspension, he preferred an appeal. The appeal was dismissed on theground that departmental enquiry was contemplated. Subsequently, thecharges were framed. A charge memo was issued on 23-11-1998. Therewas a corrigendum dated 17-12-1998. Thereafter, domestic enquiry washeld in terms of the Respondent Bank's Regulations where thedelinquent officer participated. He had a Defence Assistant. Theenquiry officer submitted the report holding that the charges wereproved. The disciplinary authority agreed with the findings andthereafter, the petitioner was imposed with the punishment ofdismissal by order dated 30-08-1999. His appeal thereagainst wasdismissed on 26-11-1999. Therefore, he filed a writ petition.Pending the writ petition, he gave a mercy petition before theChairman and Managing Director of the respondent bank. Though thedisciplinary authority had concurred with the findings of the enquiryofficer and had imposed the penalty which was affirmed by the firstrespondent a lenient view was taken and the penalty of dismissal wasmodified to one of compulsory retirement by proceedings dated 20-03-2000. Therefore, the prayer was duly amended. The learned SingleJudge found no reason to interfere with the factual findings againstthe appellant in respect of the charges though the order of dismissalwas subsequently modified to compulsory retirement and therefore,this appeal has been filed. 3.When the matter came up for final hearing, the learnedSenior counsel before making his submissions said that the appellanthas given a letter stating that the respondents may consider whetherhe could be permitted to voluntarily retire from the services of the https://hcservices.ecourts.gov.in/hcservices/ Bank. The learned counsel for the respondent sought for time toascertain the views of the respondent bank. Thereafter, an affidavitdated 09-02-2009 was filed where the respondent took a stand thatthough the Chairman and the Managing Director did not differ from thefinding that the petitioner was guilty of misconduct, the punishmentwas tempered with mercy and the respondent had never agreed that hecould go on voluntary retirement. It is stated that voluntaryretirement is not a punishment under the Syndicate Bank Officers(Discipline and Appeal Rules). 4.Since this final plea was rejected, the learned SeniorCounsel made his submissions. The learned Senior Counsel submittedthat the petitioner was not permitted to cross-examine the witnesseswho had spoken of the alleged misconduct and the two complainantswith regard to charge No.2 were illiterates who did not know how toread or write and their evidence would not stand scrutiny. Thelearned Senior counsel submitted that the dealer of farm equipments,the farm loan borrower and other witnesses were not examined and thenon-examination of them by the respondent bank had seriouslyprejudiced the rights of the petitioner. The learned Senior counselsubmitted that it is only because the petitioner had unearthedcertain misdeeds committed by other that a case had been concocted asif the petitioner had indulged in the acts of misconduct andproceedings had been initiated long after he had left the branch andhad been posted in the Devakottai Branch. The learned Senior counselsubmitted that the lapse of time in initiating proceedings shouldarouse a suspicion in the minds of the Court regarding thegenuineness of the complaint. 5.The learned Senior counsel appearing for the respondentsubmitted that concurrently the enquiry officer and the departmentalauthority and this Court had found the writ petitioner guilty of theacts of misconduct and his scope for interference by the Court insuch a situation is very limited. 5.The Enquiry Officer framed three points for evaluation.(a) Whether the writ petitioner had misused his official positionto sanction farm loans to Badadapure and Mahanad and misappropriatedthe proceeds of the loans sanctioned to the two borrowers byconniving with Mr. B.S. Mahanad enabling M/s. Priya Arts to deriveundue pecuniary benefits at the cost of the Bank?(b) Whether the writ petitioner demanded and accepted illegalgratification aggregating to Rs.33,000/- from three of theprospective borrowers for sanctioning loans of them? https://hcservices.ecourts.gov.in/hcservices/ (c) Whether the writ petitioner submitted fake consent letterdated 30-06-1994 in the name of Mr. Agnihothri Rajopadhyay andderived fro the Bank undue pecuniary benefit @ Rs.400/- p.m. duringthe period between July 1994 and December 1994 and thereafter @Rs.600/- p.m. till June 1998?6.The Enquiry Officer held that all the three questions haveto be concluded against the writ petitioner. The report of theenquiry officer was given to the petitioner and on 15-08-1999, hemade his submissions on the said report. In this, he had stated thatsince the complainant had not been examined, the truth could not beestablished. It was found that though the farm loan was allegedlygranted to the person from whom the loan application had beenobtained and evidence revealed that they have not received theamount. 7.Therefore, the submission that the loan was misappropriatedby the petitioner must be rejected. Loan was sanctioned to themother of the branch clerk ostensibly for the starting of hosierybusiness, the amount was withdrawn on the same day and there was noacknowledgment from the account holder and subsequently, the loan wasclassified as a NPA. On a consideration of the materials on recordCharge Nos.1 to 3 was held to be proved The Appellate Authority by adetailed order rejected the appeal. For example, with regard to thecharge relating to illegal gratification it was found that the threecomplainants, who appeared before the enquiry officer had testifiedthe fact of giving bribe. The learned Single Judge found that theManagement Witnesses, and Exs-1 to 5 substantiate the case againstthe appellant. The investigation officer who conducted theinvestigation had deposed in detail regarding the misconduct of thepetitioner and the petitioner had in fact cross-examined himelaborately. The withdrawal slips were the documents which speak foritself and therefore, the non-examination of the cashier would notweaken the case of the respondents. The learned Judge also foundthat there is nothing to show co-ercion or inducement by themanagement to obtain the complaints. The impugned judgment has dealtwith the facts and the Supreme Court decisions. The conclusion ofthe fact finding authorities are neither perverse nor arbitrary andtheir probable conclusions flow from the facts as proved by thematerials on record. This is why the learned Single Judge though hehad considered the material on record in detail did not exercise hispower under Article 226 in favour of the petitioner. We agree withhim. 1964 (5) SCR 64 (Syed Yakkoob Vs.K.S. Radhakrishnan and Others)and AIR 1996 SC 1669 (State Bank of Patiala Vs. S.K. Sharma) werecited. (i)In AIR 1996 SC 1669(cited supra), the delinquent officer hadutilised a crop loan for his own advantage and had revoked the loanon the mortgaged land, though the crop loan was not discharged. A https://hcservices.ecourts.gov.in/hcservices/ preliminary enquiry was conducted and documents were gathered andthereafter, employees of the Bank were examined. The complainant didnot appear as a witness in the regular enquiry, though his statementhad been recorded during the preliminary enquiry. It was contendedby the delinquent officer that his right was violated because of non-examination of witnesses and non-supply of certain documents. TheSupreme Court held that the test is: whether all things takentogether the delinquent officer/employee had or did not have a fairhearing.(ii)In K.L. Tripathi Vs. State Bank of India(1984 (1) SCC 43)where a three Judge Bench held that the enquiry held and thepunishment imposed cannot be said to have been vitiated on account ofthe non-accountability of cross examining certain witnesses.(iii)In Managing Director Vs. B. Karunakar (1993 (4) SCC727) and C.B. Gautham Vs. Union of India (1993 (1) SCC 78), theSupreme Court held that principles of natural justice are but themeans to achieve the ends of justice and therefore, principles ofnatural justice cannot be basis for allowing the guilty escape. TheSupreme Court summarised the principles emerging from theirdiscussion in AIR 1996 SC 1669(cited supra), which runs as follows:33. We may summarise the principles emerging from theabove discussion. (These are by no means intended to beexhaustive and are evolved keeping in view the context ofdisciplinary enquiries and orders of punishment imposed byan employer upon the employee):(1) An order passed imposing a punishment on anemployee consequent upon a disciplinary/departmentalenquiry in violation of the rules/regulations/statutoryprovisions governing such enquiries should not be set asideautomatically. The Court or the Tribunal should enquirewhether (a) the provision violated is of a substantivenature or (b) whether it is procedural in character.(2) A substantive provision has normally to be compliedwith as explained hereinbefore and the theory ofsubstantial compliance or the test of prejudice would notbe applicable in such a case.(3) In the case of violation of a procedural provision,the position is this: procedural provisions are generallymeant for affording a reasonable and adequate opportunityto the delinquent officer/employee. They are, generallyspeaking, conceived in his interest. Violation of any andevery procedural provision cannot be said to automatically https://hcservices.ecourts.gov.in/hcservices/ vitiate the enquiry held or order passed. Except casesfalling under — “no notice”, “no opportunity” and “nohearing” categories, the complaint of violation ofprocedural provision should be examined from the point ofview of prejudice, viz., whether such violation hasprejudiced the delinquent officer/employee in defendinghimself properly and effectively. If it is found that hehas been so prejudiced, appropriate orders have to be madeto repair and remedy the prejudice including setting asidethe enquiry and/or the order of punishment. If no prejudiceis established to have resulted therefrom, it is obvious,no interference is called for. In this connection, it maybe remembered that there may be certain proceduralprovisions which are of a fundamental character, whoseviolation is by itself proof of prejudice. The Court maynot insist on proof of prejudice in such cases. Asexplained in the body of the judgment, take a case wherethere is a provision expressly providing that after theevidence of the employer/government is over, the employeeshall be given an opportunity to lead defence in hisevidence, and in a given case, the enquiry officer does notgive that opportunity in spite of the delinquentofficer/employee asking for it. The prejudice is self-evident. No proof of prejudice as such need be called forin such a case. To repeat, the test is one of prejudice,i.e., whether the person has received a fair hearingconsidering all things. Now, this very aspect can also belooked at from the point of view of directory and mandatoryprovisions, if one is so inclined. The principle statedunder (4) hereinbelow is only another way of looking at thesame aspect as is dealt with herein and not a different ordistinct principle.(4)(a) In the case of a procedural provision which isnot of a mandatory character, the complaint of violationhas to be examined from the standpoint of substantialcompliance. Be that as it may, the order passed inviolation of such a provision can be set aside only wheresuch violation has occasioned prejudice to the delinquentemployee.(b) In the case of violation of a procedural provision,which is of a mandatory character, it has to be ascertainedwhether the provision is conceived in the interest of theperson proceeded against or in public interest. If it isfound to be the former, then it must be seen whether thedelinquent officer has waived the said https://hcservices.ecourts.gov.in/hcservices/ requirement, either expressly or by his conduct. If he isfound to have waived it, then the order of punishmentcannot be set aside on the ground of the said violation.If, on the other hand, it is found that the delinquentofficer/employee has not waived it or that the provisioncould not be waived by him, then the Court or Tribunalshould make appropriate directions (include the settingaside of the order of punishment), keeping in mind theapproach adopted by the Constitution Bench in B. Karunakar(cited supra). The ultimate test is always the same, viz.,test of prejudice or the test of fair hearing, as it may becalled.(5) Where the enquiry is not governed by anyrules/regulations/ statutory provisions and the onlyobligation is to observe the principles of natural justice— or, for that matter, wherever such principles are held to be implied by the very nature and impact of theorder/action — the Court or the Tribunal should make adistinction between a total violation of natural justice(rule of audi alteram partem) and violation of a facet ofthe said rule, as explained in the body of the judgment. Inother words, a distinction must be made between “noopportunity” and no adequate opportunity, i.e., between “nonotice”/“no hearing” and “no fair hearing”. (a) In the caseof former, the order passed would undoubtedly be invalid(one may call it ‘void’ or a nullity if one chooses to). Insuch cases, normally, liberty will be reserved for theAuthority to take proceedings afresh according to law,i.e., in accordance with the said rule (audi alterampartem). (b) But in the latter case, the effect ofviolation (of a facet of the rule of audi alteram partem)has to be examined from the standpoint of prejudice; inother words, what the Court or Tribunal has to see iswhether in the totality of the circumstances, thedelinquent officer/employee did or did not have a fairhearing and the orders to be made shall depend upon theanswer to the said query. [It is made clear that thisprinciple (No. 5) does not apply in the case of ruleagainst bias, the test in which behalf are laid downelsewhere.](6) While applying the rule of audi alteram partem (theprimary principle of natural justice) theCourt/Tribunal/Authority must always bear in mind theultimate and overriding objective underlying the said rule,viz., to ensure a fair hearing and to ensure that there isno failure of justice. It is this objective which should https://hcservices.ecourts.gov.in/hcservices/ guide them in applying the rule to varying situations thatarise before them.(7) There may be situations where the interests ofState or public interest may call for a curtailing of therule of audi alteram partem. In such situations, the Courtmay have to balance public/State interest with therequirement of natural justice and arrive at an appropriatedecision."It is well settled that the High Court cannot sit in appeal over thefindings recorded by the Enquiry Officer and confirmed by theDisciplinary Authority. In B.C. Chaturvedi Vs. Union of India (JT2003 (2) SC 78: 2003 (4) SCC 364), the Supreme Court held that,“12. Judicial review is not an appeal from a decisionbut a review of the manner in which the decision is made.Power of judicial review is meant to ensure that theindividual receives fair treatment and not to ensure thatthe conclusion which the authority reaches is necessarilycorrect in the eye of the court. When an inquiry isconducted on charges of misconduct by a public servant, theCourt/Tribunal is concerned to determine whether theinquiry was held by a competent officer or whether rules ofnatural justice are complied with. Whether the findings orconclusions are based on some evidence, the authorityentrusted with the power to hold inquiry has jurisdiction,power and authority to reach a finding of fact orconclusion. But that finding must be based on someevidence. Neither the technical rules of Evidence Act norof proof of fact or evidence as defined therein, apply todisciplinary proceeding. When the authority accepts thatevidence and conclusion receives support therefrom, thedisciplinary authority is entitled to hold that thedelinquent officer is guilty of the charge."The ground ofillegal ratification and falsification of records andmisappropriation of funds are based on evidence and theconclusion appears to be reasonable and we are unable tofind any fault in the decision making process. (iv) In Regional Manager, U.P.SRTC Vs. Hoti Lal(2003 (3) SCC605: 2003 SCC (L&S) 363) the Supreme Court held that,“If the charged employee holds a position of trustwhere honesty and integrity are inbuilt requirements offunctioning, it would not be proper to deal with the matterleniently. Misconduct in such cases has to be dealt withiron hands. Where the person deals with public money or is https://hcservices.ecourts.gov.in/hcservices/ engaged in financial transactions or acts in a fiduciarycapacity, the highest degree of integrity andtrustworthiness is a must and unexceptionable.”(v)In State Bank of India Vs. Bela Bagchi (2005 (7) SCC 435)the Supreme Court held thus:"15. A bank officer is required to exercise higherstandards of honesty and integrity. He deals with money ofthe depositors and the customers. Every officer/employee ofthe bank is required to take all possible steps to protectthe interests of the bank and to discharge his duties withutmost integrity, honesty, devotion and diligence and to donothing which is unbecoming of a bank officer. (vi) In Union of India Vs. Narain Singh (2002 (5) SCC 11) thisCourt held:7. This Court has, in the case of Union of India v.Sardar Bahadur 1972 (4) SCC 618) held that there are limitsto the powers which can be exercised by a Single Judgeunder Article 226 of the Constitution and, similarly, thereare limits to the powers of a Division Bench while sittingin appeal over the judgment of a Single Judge. This Courthas held that where there are relevant materials whichsupport the conclusion that the officer is guilty, it isnot the function of the High Court to arrive at anindependent finding. It has been held that if an enquiryhas been properly held the question of adequacy orreliability of evidence cannot be canvassed before the HighCourt."8.We have already recorded that just before the hearing thelearned Senior Counsel appearing for the appellant prayed that therespondents may consider altering the order of compulsory retirementto one of voluntary retirement without any of the benefits to which aperson who retires voluntarily is entitled. He said the appellantwould be satisfied if the order alone is converted to one ofvoluntary retirement. This was not accepted by the respondent. Weare also unable to persuade ourselves to accept this prayer and grantsuch a direction. The writ petitioner was found guilty ofmisconduct. The Supreme Court has held that such a case cannot bedealt with leniently. The order of dismissal was imposed. Only ongrounds of mercy, it was altered to compulsory retirement.Compulsory retirement is a punishment provided in the Bank'sRegulations. According to the affidavit filed by the Bank, Voluntary https://hcservices.ecourts.gov.in/hcservices/ Retirement is not a punishment. We do not think the writ petitionerwho has committed a serious misconduct should get away with an orderwhich is not a punishment and which will not cast a stigma on him.We cannot erase the stigma from his record. His conduct does notdeserve any such indulgence and to allow him to voluntarily retirewould virtually plug the consequences that should naturally flow fromhis misconduct. The writ appeal is dismissed. However, there will beno order as to costs.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.glpTo1.Chairman and Managing DirectorSyndicate Bank, Head OfficeManipal-Karnataka State 576 1192.The General Manager (Personnel)Syndicate Bank, Head OfficeManipal, Karnataka State 576 1193.Dy. General managerSyndicate Bank, Zonal Office27/28, Woods Road, B.R. ComplexII & III Floors, P.B.No.5227Anna Salai, Chennai – 600 002W.A.No.1027 of 2006KA {CO}TP/30.3.2009.