M.Sundar Singh v. Canara Bank

O R D E RThe prayer in the writ petition is to quash the order of thefirst respondent dated 2.7.1998 confirming the order of the secondrespondent dated 14.10.1996, which is in confirmation of the orderpassed by the third respondent dated 6.4.1995 and direct therespondents to reinstate the petitioner in service with fullbakwages, increment, promotions and other benefits from the date ofdismissal from the service.

The brief facts necessary for disposal of the writ petitionare as follows: (a)The Petitioner while working as Agricultural ExtensionOfficer in the respondent Bank at Keeranur Branch, was placed undersuspension by the order of the third respondent dated 8.11.1993stating that departmental proceedings were contemplated against himfor certain allegations of misconduct. On 9.3.1994 the thirdrespondent served the charge memo containing three charges. Petitioner submitted his explanation through his defencerepresentative. Thereafter oral enquiry was conducted and the Enquiry Officer submitted his report on 10.2.1995 holding that thepetitioner temporarily misappropriated the amount entrusted to him bythe borrowers for closure of their loan amount and derived unduepecuniary benefits and also misrepresented to the higher authoritiesthat the borroweres have closed their earlier loan accounts, whenactually the same were in existence.

The third respondent filed counter affidavit by statingthat the petitioner joined in the services of the Bank on 30.8.1982as Agricultural Extension Officer and while working at Kodaikkanalbranch and at Keeranur branch, he received money from the borrowersfor the closure of liability in their Farmers Green Card Scheme Loanaccounts. The petitioner after receipt of the money from theborrowers did not remit the amount into their loan account andmisappropriated the same. The petitioner also obtained fresh loanpapers for the renewal of the Farmers Green Card Scheme Loan from theborrowers and submitted the renewal proposal to the sanctioningauthority by misrepresenting that the earlier loans were closed, though the non-closure of the loan amount was within his knowledge. When the Kodaikkanal branch officials sent official notices to theborrowers the fact of non-closure of the loan amount came to lightand when the borrowers approached the petitioner after knowing aboutthe non-remittance of the amount, the petitioner paid and closed theloan accounts. Thus, the petitioner temporarily misappropriated theamount entrusted to him by the borrowers and derived pecuniarybenefits. Departmental proceedings were initiated for the saidmisconduct by conducting enquiry and it was found that the petitionerwas guilty of all the charges and imposed the punishment of dismissalfrom service. The appeal and review petitions filed were alsorejected by the second and third respondents respectively. It isalso stated in the counter affidavit that the petitioner was earliercharge sheeted for certain misconduct and was imposed with thepunishment of reduction to lower time scale of pay by one stage on2.8.1997 and the same was modified as 'Censure' on appeal. Thedisciplinary authority agreed with the findings of the EnquiryOfficer and as per the service regulation there is no legalrequirement to give detailed reasons. All the facts including theremarks submitted by the petitioner were taken note of by the thirdrespondent before passing the order of dismissal. The appellateauthority and reviewing authority found no ground to revise/reviewthe decision. The petitioner was subjected to departmentalproceeding in compliance of the Canara Bank Officer Employees'(Disciplinary and Appeal) Regulations, 1976.

The learned Senior Counsel appearing for the petitionerargued that the third respondent's order imposing major penalty ofdismissal is a non-speaking order and he has not discussed as to howthe charges are proved and also not considered the remarks filed by https://hcservices.ecourts.gov.in/hcservices/ the petitioner for not accepting the Enquiry Officer's report. Thelearned Senior Counsel also submitted that the appellate authority, though passed speaking order, the same will not cure the defectcontained in the order passed by the third respondent-originalauthority. The learned Senior Counsel further submitted that thereviewing authority while concurring with the orders passed by theoriginal authority and appellate authority, failed to give any reasonand therefore the order of punishment imposed on the petitioner isliable to be set aside.

The learned counsel for the respondents on the other handsubmitted that the petitioner having been appointed as bank employee, utmost integrity is expected and he having misappropriated the loanamounts repaid by the borrowers, had committed breach of trust andconfidence and therefore he cannot be retained in the bankingservice. The charges levelled against the petitioner were alsoproved before the Enquiry Officer and the petitioner was given copyof the enquiry report and after considering the remarks submitted bythe petitioner, the Disciplinary Authority concurred with thefindings of the Enquiry Officer and imposed the punishment ofdismissal. As the Disciplinary Authority concurred with the findingsof the Enquiry Officer, no detailed reason need be given to come tothe conclusion. Since the charges of misappropriation is proved andthe honesty and integrity of the petitioner is not upto the mark, helost the confidence of the bank and therefore petitioner cannot beretained in the banking service.

I have considered the submissions of the learned SeniorCounsel for the petitioner as well as the learned counsel for therespondents.

The charges levelled against the petitioner are as follows: "Charge -I:(Regarding FCGS 61/92 and 67/92)While the CSO was working at our Kodaikanalbranch, amounts were entrusted to you by thecustomers for the closure of loan accountsoutstanding in their FGCS liabilities and has notremitted to the accounts, thus misappropriatedtemporarily. Subsequently you had obtained loanpapers from the borrowers for renewal of theirGreen Card and while forwarding the renewalapplication to the sanctioning authority, you hadmisrepresented that the earlier loan sanctioned tothe borrowers were closed, even though the non-closure of loan accounts was within yourknowledge. Charge -II:(Regarding FCGS 47/92)While the CSO was working at our Kodaikanalbranch, amounts were entrusted to you by thecustomers for the closure of loan accountsoutstanding in their FGCS liabilities and has notremitted to the accounts, thus misappropriatedtemporarily.

The petitioner's explanation having been found notsatisfactory, enquiry officer was appointed and during the enquiryall the three charges were found proved. Even though the saidM.Rathinam was examined as MW-3, he changed his statement during theenquiry. MW-13, MW-5 and MW-7 who have also witnessed the statementgiven on 4.11.1993 against the petitioner. MW-7 gave deposition asfollows: "........ Sri C.Rathinam had given his statementat our Kodaikkanal branch on 4.11.93. Regardingthe statement of Sri C.Rathinam it was given byhim in the Branch Manager's cabin at Kodaikanalbranch in the presence of the Senior Manager, Inspecting Officer and myself on interrogation bythe IO. The statement was written by SriC.Rathinam himself. Further to the question byPO, can you say anybody compelled these borrowers https://hcservices.ecourts.gov.in/hcservices/ to give such statement, he promptly replied theywere not compelled by anybody. ............."Relying on the said statement, the Enquiry Officer gave a findingwith regard to Charge No.1 and disbelieved the version of thepetitioner that the said Chandrasekar lent money to the petitioner asthere is no documentary proof to confirm the same.

The Disciplinary Authority in his order dated 6.4.1995agreed with the findings of the Enquiry Officer and imposed thepunishment of dismissal from service. The petitioner's remarks aboutthe Enquiry Officer's finding submitted on 6.3.1995 was alsoconsidered and referred to in the order of the third respondent. Eventhough no detailed order is passed by the third respondent, it is notin dispute that the third respondent agreed with the findings of the Enquiry Officer and chosen to impose the punishment of dismissal fromservice.

In the decision reported in (1995) 6 SCC 279 (State Bank of Bikaner & Jaipur v. Prabhu Dayal Grover), similar regulation viz.,Regulation 68(3) of the State Bank of Bikaner & Jaipure Officers' https://hcservices.ecourts.gov.in/hcservices/ Service Regulations, 1979, was considered by the Honourable SupremeCourt and in paragraph 13 it is held thus,"13........... whether under the Regulations, the authorities concerned arerequired to give reasons for their decisions. Regulation 68(3) lays down the procedure thedisciplinary authority is required to follow afterit receives the proceedings of the enquiryincluding the report of the Inquiry Officer. Oncareful perusal thereof we find that only in thosecases where the disciplinary authority considersit necessary to direct fresh or further enquiry ordisagrees with the findings of the InquiryOfficer, it has to record the reasons for its suchdirections, but there is no such obligation if itagrees with the findings of the Inquiry Officer. It can, therefore, be legitimately inferred thatwhen express provisions have been made in the Regulations for recording reasons in only thefirst two of the three fact situations — and notthe other — there is no implied obligation also torecord the reasons in case of concurrence with thefindings of the Inquiry Officer. Even if weproceed on the basis that such an obligation isimplicit, still the order of the disciplinaryauthority cannot be held to be bad as, on perusalthereof, we find that before concurring with thefindings of the Inquiry Officer it has gonethrough the entire proceeding and applied its mindthereto. In our considered opinion, when thedisciplinary authority agrees with the findings ofthe Inquiry Officer and accepts the reasons givenby him in support of such findings, it is notnecessary for the punishing authority toreappraise the evidence to arrive at the samefindings. We are, therefore, unable to accept thecontention of Mr Dutta that the order ofpunishment was liable to be struck down as it wasa non-speaking order and did not contain anyreason. "(Emphasis Supplied)

The service regulation of the respondent Bank is similar tothe service regulation, which was considered by the Supreme Court inthe decision referred above. Regulation No.7 of the Canara BankOffier Employees' (Discipline and Appeal) Regulations, 1976, isextracted hereunder for proper appreciation: https://hcservices.ecourts.gov.in/hcservices/

7. Action on the inquiry report. (1)The Disciplinary Authority, if it is notitself the inquiring authority may, for reasons tobe recorded by it in writing, remit the case tothe inquiring authority for fresh or furtherinquiry and report and the inquiring authorityshall thereupon proceed to hold the furtherinquiry according to the provisions of regulation6 as far as may be. (2)The Disciplinary Authority shall, if itdisagrees with the findings of the inquiringauthority on any article of charge, record itsreasons for such disagreement and record its ownfindings on such charge, if the evidene on recordis sufficient for the purpose. (3)If the Disciplinary Authority, havingregard to its findings on all or any of thearticles of charge is of the opinion that any ofthe penalties specified in regulation 4 should beimposed on the officer employee it shall, notwithstanding anything contained in regulation8, make an order imposing such penalty. (4)If the Disciplinary Authority havingregard to its findings on all or any of thearticles of charge, is of the opinion that nopenalty is called for, it may pass an orderexonerating the officer employee concerned. "

In the light of the above judgment of the Supreme Court, ifthe Disciplinary Authority agrees with the findings of the EnquiryOfficer, there is no implied obligation to record reasons forconcurrence. On the basis of the above regulation as well as thejudgment of the Supreme Court, there is no substance in thecontention of the learned Senior Counsel for the petitioner that thethird respondent has not given any reason to impose the order ofdismissal while concurring with the Enquiry Officer's findings.

The Appellate Authority considered and discussed about thefindings given by the Enquiry Officer by a detailed order and heldthat there is no point in interfering either with the findings of the Enquiry Officer or with the orders of the Disciplinary Authority andconfirmed the punishment. Regulation No.17 deals with disposal ofappeals by the appellate authority. As per the said regulation, theappellate authority shall consider whether the findings are justifiedor whether the penalty is adequate or inadequate and pass appropriateorders. From the perusal of the order of the appellate authority itis evident that the appellate authority has considered the findings https://hcservices.ecourts.gov.in/hcservices/ of the Enquiry Officer and also considering the gravity of thecharges proved, confirmed the punishment of dismissal from service.

The first respondent, who is the reviewing authority alsofound that the charges of misappropriation and misrepresentation forrenewal of loans to gain undue pecuniary advantage having beenproved, which touch upon the petitioner's honesty and integrity. Therefore the first respondent also found that there is no reason tointerfere with the findings of the Enquiry Officer or the Disciplinary Authority.

The scope of judicial review with regard to theinterference in the disciplinary matters is very limited as held bythe Supreme Court in the decision reported in (2006) 6 SCC 794 (Unionof India v. K.G.Soni) and in paragraphs 14 and 15 it is held thus,"14........... the court should notinterfere with the administrator’s decision unlessit was illogical or suffers from proceduralimpropriety or was shocking to the conscience ofthe court, in the sense that it was in defiance oflogic or moral standards. In view of what has beenstated in Wednesbury case the court would not gointo the correctness of the choice made by theadministrator open to him and the court should notsubstitute its decision to that of theadministrator. The scope of judicial review islimited to the deficiency in the decision-makingprocess and not the decision.15. To put it differently, unless thepunishment imposed by the disciplinary authorityor the Appellate Authority shocks the conscienceof the court/tribunal, there is no scope forinterference. Further, to shorten litigations itmay, in exceptional and rare cases, imposeappropriate punishment by recording cogent reasonsin support thereof. In the normal course if thepunishment imposed is shockingly disproportionate, it would be appropriate to direct the disciplinaryauthority or the Appellate Authority to reconsiderthe penalty imposed. "(Emphasis Supplied)In the decision reported in (2007) 7 SCC 257 (Union of India v.S.S.Ahluwalia) the Supreme Court considered the scope of Judicialreview in disciplinary proceedings. https://hcservices.ecourts.gov.in/hcservices/

The respondents also found that the petitioner, who was abank employee lost the confidence of the bank. When the employer canlose confidence of an employee, is explained by the Supreme Court inthe decision reported in (2001) 9 SCC 609 (Kanhaiyalal Agrawal v.Factory Manager, Gwalior Sugar Co. Ltd.) and in paragraph 9 held asfollows: "9. Substantial contention on the merits ofthe case by the employer in these appeals is thatthe finding of loss of confidence in the employeeby the Labour Court has been reversed in appeal bythe Industrial Court on unreasonable grounds. Whatmust be pleaded and proved to invoke the aforesaidprinciple is that (i) the workman is holding aposition of trust and confidence; (ii) by abusingsuch position, he commits acts which results inforfeiting the same; and (iii) to continue him inservice would be embarrassing and inconvenient tothe employer or would be detrimental to thediscipline or security of the establishment. Allthese three aspects must be present to refusereinstatement on the ground of loss of confidence. Loss of confidence cannot be subjective based uponthe mind of the management. Objective facts whichwould lead to a definite inference of apprehensionin the mind of the management regardingtrustworthiness or reliability of the employeemust be alleged and proved. Else, the right ofreinstatement ordinarily available to the employeewill be lost. "

It is also well settled in law that once the charge ofmisappropriation is proved, the only punishment that could be givenis dismissal from service and nothing less than that. (a)In J.T. (1996) 3 SC 96 (Municipal Committee, Bahadurgarh v.Krishnan Behari and Others), the Honourable Supreme Court held thatin cases of misappropriation, there cannot be any other punishmentother than dismissal. It is further held that any sympathy shown insuch cases is totally uncalled for and opposed to public interest andthat the amount misappropriated may be small or large, but it is theact of misappropriation that is relevant. (b)In AIR 2000 SC 3129 (Janatha Bazar v. Secretary, SahakariNoukarara Singh), it is held that once the act of misappropriation isproved, may be for a small or large amount, there is no question ofshowing uncalled for sympathy and reinstalling the employee inservice. https://hcservices.ecourts.gov.in/hcservices/ (c)The Supreme Court in the decision reported in (2006) 1 SCC63 (Karnataka Bank Ltd. v.