A.Suresh Muthu v. State Bank of India

IN THE HIGH COURT OF JUDICATURE AT MADRASDated: 23-01-2009Coram:The Honourable Mr.Justice M.JAICHANDRENW.P.No.1855 of 2003A.Suresh Muthu.. Petitioner.Versus1.Chief General Manager(Appellate Authority)State Bank of India(Local Head Office)Chennai-600 006.2.General Manager (D&PB)Appointing AuthoritySBI Local Head Office,Chennai-600 006... Respondents.Prayer: Petition filed seeking for a writ of Certiorarified Mandamus,to call for the records made in Order No.A&R/34, dated 30.9.2002, bythe 1st respondent confirming the order made in No.Dis./Con/059,dated 7.5.2001/14.5.2001, passed by the 2nd respondent and quash theentire proceedings as null and void an direct the respondents torestore the reduction in basic pay by two stages for two years andtreat the period of suspension as duty and extend all other attendantbenefits. For Petitioner : Mr.P.M.Subramaniam for Mr.A.Kuppuswamy For Respondent : Mr.K.S.SundarO R D E RHeard the learned counsel appearing for the petitioner and thelearned counsel appearing for the respondents.2. It has been stated that the petitioner was working asAssistant Manager (Advances – SIB), State Bank of India, ChengleputBranch, during the period, from 7.1.93 till 4.8.95. While so, thepetitioner was issued with a memorandum of charges, inDIS/CON/RR/560, dated 28.8.99, containing three charges, issued bythe second respondent, pointing out certain alleged unfair practices https://hcservices.ecourts.gov.in/hcservices/ in the sanction of loan and credit limits. The petitioner hadsubmitted a suitable reply, on 13.10.99. However, the secondrespondent had issued an amended charge memo, on 13.3.2000, omittingthe sentence "you had used middle men for sanction of advances".Charges 2 and 3 had remained unamended. 3. The amended Charge No.1 had stated that the petitioner hadresorted to unfair practices in the sanction of credit limits toM/s.Devi Tyres. The second charge had stated that the petitioner hadfailed to monitor the creation of assets by M/s.Sathish Broiler forthe loans availed by them. The third charge related to thedisbursement of cash credit limit of Rs.3 lakhs sanctioned to M/s.NewRiver Annai Selva Educational Trust, contrary to the instructionsissued in that regard. 4. It has been further stated that the petitioner had beensuspended from service, on 22.10.96, pending initiation ofdisciplinary proceedings. The petitioner had been reinstated inservice, on 15.12.97. No charge memo had been served on him at thattime. However, the charge memo, dated 28.8.99, had been received bythe petitioner only on 15.9.99, after a lapse of 2 years and 11months of suspension. Further, the amended charge memo, based onwhich the enquiry had been held, was issued to the petitioner only,on 15.3.2000, after a lapse of 3 years and 5 months from the date ofhis suspension from service. The delay was not due to the petitioner.The inordinate and unexplained delay in issuing the charges hadcaused grave prejudice and mental agony to the petitioner. 5. It has been further stated that since there is no financialloss to the Bank the second respondent ought to have conducted aproper preliminary enquiry, relating to the details contained in theCharge Memo. The statement of P.W.4 had been obtained behind the backof the petitioner and therefore, it does not have the sanctity in theeye of law. Since the manager of the Bank is the final authority withregard to the sanctioning and the disbursement of the loans and othermonetary dealings, he should have been treated as a co-delinquent,along with the petitioner. However, he had been made a witness onbehalf of the management of the Bank, as P.W.3. He was let-offwithout any punishment, contrary to the service rules and the conceptof equality enshrined in the Constitution of India. The secondrespondent had failed to consider that the evidence of P.W.3 is notan independent evidence. The second respondent had failed to takenote of the fact that there was no oral or documentary evidence toprove the charges levelled against the petitioner. Therefore, thefindings of the second respondent are perverse and illegal. Further,the second respondent had violated the principles of natural justice,while disagreeing with the findings of the enquiry officer, withregard to Charge No.1. The second respondent had communicated to thepetitioner stating that Charge No.1 had been conclusively proved, by https://hcservices.ecourts.gov.in/hcservices/ his letter, dated 23.11.2000. Thus, the opportunity said to have beengiven to the petitioner thereafter, was only an empty formality. Infact the second respondent ought to have communicated the tentativereasons for his disagreement. Thereafter, the second respondent oughtto have given the petitioner an opportunity to put forth his case,before coming to his conclusions. 6. It has been further stated that the first respondent AppellateAuthority ought to have disposed of the appeal of the petitioner,within a period of two months from the date of receipt of the appeal,as per the regulations in force. The delay caused by the firstrespondent Appellate Authority was arbitrary, unreasonable andillegal. Since there was no financial loss to the bank, the quantumof punishment to be imposed on the petitioner ought to have beenconsidered by the first respondent Appellate Authority. Since thevital documents like the inspection register, lock book of retainertaxi etc., had not been given to the petitioner in spite of hisrepeated requests, the action initiated against the petitioner hasbecome null and void. Further, the second respondent had failed toconsider that the borrower had already furnished the relevantdocuments relating to the assets and the machinery and as such it isclear that the necessary assets had been created by the borrower. 7. The enquiry officer had found that the first charge againstthe petitioner had not been proved. He had held that Charge Nos.2 and3 had been proved beyond doubt. It has been further stated that theappointing authority, the second respondent herein had held by hiscommunication, dated 23.11.2000, that Charge No.1 had been wellestablished and that it had been conclusively proved. Therefore, apenalty of "Reduction in basic pay, by two stages, for two years,with the period of suspension treated as suspension only", under RuleNo.67(f) of State Bank of India Officers' Service Rules, 1992, hadbeen issued by the second respondent. 8. It has also been stated that as the period of suspension wastreated as suspension only, the petitioner was not eligible forpromotion, seniority and increment, for the period of suspension.Being aggrieved by the order of the second respondent, the petitionerhad preferred an appeal before the first respondent AppellateAuthority. The first respondent Appellate Authority, by his order,dated 30.9.2002, had rejected the appeal, confirming the penaltyimposed on the petitioner, stating that the penalty imposed wascommensurate with the gravity of the charges. In such circumstances,the petitioner had preferred the present writ petition before thisCourt, under Article 226 of the Constitution of India. 9. In the counter affidavit filed on behalf of the respondentsthe averments made by the petitioner had been denied. It has beenstated that the petitioner was working as Assistant Manager(Advances) in the Branch Office at Chengleput, during the years 1993 https://hcservices.ecourts.gov.in/hcservices/ to 1995. In the course of the Branch audit it was revealed that thepetitioner had committed certain acts of misconduct. Hence, thedisciplinary authority had placed the petitioner under suspension,pending initiation of disciplinary proceedings, by an order, dated22.10.96. Since the charge sheet and the imputations could not befinalised, promptly, the suspension had been revoked by an order,dated 15.12.97. However, after the relevant records could not becollected the charge sheet, dated 28.8.99, had been issued and it wasserved on the petitioner, on 15.9.99. Since the sentence that thepetitioner had used middlemen for sanction of advances was to beomitted, an amended charge sheet, dated 13.3.2000, had been issued. 10. It has been further stated that even though the acts leadingto the framing of the charges were of the year 1994, the charges wereframed only on the basis of a complaint given by the affectedborrower. Therefore, the charge sheet had been issued, on 15.9.99,and the amended charge sheet had been issued, on 13.3.2000. Since theenquiry officer appointed to conduct the enquiry had gone on leave,another enquiry officer had been appointed, on 6.7.2000, and theenquiry was conducted, from 19.1.2000 to 21.7.2000. The petitionerhad submitted his defence brief, on 20.11.2000, after the submissionof the enquiry report by the enquiry officer, on 17.11.2000. However,the disciplinary authority did not accept the findings of the enquiryofficer that the first charge had not been proved. Therefore, thedisciplinary authority had recorded the tentative reasons holdingthat Charge No.1 had also been proved. Hence, the petitioner had beengiven an opportunity by the disciplinary authority to put forth hiscase. The petitioner had submitted a reply statement, on 29.12.2000,to the disciplinary authority. Based on the recommendation of thedisciplinary authority, the appointing authority had passed an orderof punishment, dated 14.5.2001, imposing the punishment of "Reductionin basic pay by two stages, for two years, with the period ofsuspension treated as such". 11. It has been further stated that the petitioner had preferredan appeal to the first respondent, on 12.7.2001. While the appeal waspending the petitioner had moved this Court by way of a writpetition, in W.P.No.31904 of 2002, for a direction to dispose of theappeal. Pursuant to the direction issued by this Court, the appealhad been considered on merits and rejected. It has been stated thatthe first charge was found proved not merely on the statement ofP.W.4, S.Prasannan, as contended by the petitioner. The first chargewas held to have been proved by the disciplinary authority based oncircumstantial and material evidence. One of the customers of theBank had alleged that a sum of Rs.50,000/- had been withdrawn by thepetitioner. The petitioner had admitted his writings in the voucherfor the said withdrawal. Hence, the charge made against thepetitioner has been held to be proved. Based on the evidence let inby the six witnesses who had been examined and the documents whichhad been marked, it was held that all the three charges levelled https://hcservices.ecourts.gov.in/hcservices/ against the petitioner had been proved. The petitioner wasrepresented by his defence representation and he had cross examinedthe witnesses and availed full opportunity during the enquiry. 12. It has been further stated that since K.S.Ramalingam (P.W.3),the Branch Manager of Chengleput Branch, was on over all supervisionof the advances, the petitioner cannot claim that P.W.3 should bemade responsible or accountable for the lapses and irregularitiescommitted by the petitioner. The petitioner, as the Assistant Manager(Advances), was the person who was responsible for the irregularitiescommitted. The fact that no financial loss had been caused to theBank does not in any way absolve the petitioner of the lapses andirregularities committed by him. There are no rules which provide fora preliminary enquiry being conducted before placing an official ofthe Bank under suspension. A copy of the prosecution brief had beensent to the defence representative of the petitioner by the enquiryofficer, on 12.8.2000. Reminders had been sent to him, on 25.9.2000and 9.11.2000 and copies of which had been endorsed by thepetitioner. Thus, it is clear that sufficient opportunity had beenprovided to the petitioner to defend himself. In fact the orderimposing the penalty on the petitioner had been issued by the secondrespondent only after considering the submissions made by thepetitioner, in his letter, dated 29.12.2000, and the order, dated7.5.2001, had been served on the petitioner. The appeal preferred bythe petitioner, on 12.7.2001, could not be disposed of within thestipulated time due to circumstances beyond the control of the firstrespondent. The delay was not intentional or malafide in nature. Thefirst respondent Appellate Authority had applied his mind and hadtaken a decision after an independent examination of the entire factsand circumstances of the case and on considering the issues raised bythe petitioner in the appeal. In such circumstances, the writpetition is devoid of merits and therefore, it is liable to bedismissed.13. The main contentions of the learned counsel appearing onbehalf of the petitioner are that there has been an unexplainedextraordinary delay in conducting the enquiry against the petitioner,based on the charges levelled against him. No charges had been framedagainst the Manager of the Bank in which the petitioner had beenemployed, even though he is the final authority responsible for themonetary dealings of the Bank. Even though the enquiry officer hadfound that the first charge against the petitioner had not beenproved, the disciplinary authority had held that the said charge hadbeen proved beyond doubt. In spite of repeated requests made by thepetitioner the relevant documents pertaining to the charges levelledagainst him had not been furnished to the petitioner. Thedisciplinary authority had not given an opportunity to the petitionerbefore arriving at his conclusions, holding that all the threecharges levelled against the petitioner had been proved. Thepunishment imposed on the petitioner, with regard to the charges https://hcservices.ecourts.gov.in/hcservices/ alleged against him, is disproportionate in nature. The AppellateAuthority had disposed of the appeal filed by the petitioner, withoutapplication of mind to the issues involved. There has been a longdelay in the disposal of the appeal. The petitioner has beenprejudiced due to the delays caused in conducting the enquiry againsthim and in the disposal of the appeal filed by him before the firstrespondent Appellate Authority, challenging the order of the secondrespondent, imposing the punishment on the petitioner.14. The learned counsel for the petitioner had also contendedthat it was open to the disciplinary authority to arrive at tentativeconclusions but he cannot make a final conclusion before giving thepetitioner a reasonable opportunity to put forth his case. It hasalso been submitted that the respondents have not followed theprovisions of the State Bank of India Officers Service Rules, 1992,framed in accordance with the State Bank of India Act, 1955, whileimposing the punishment on the petitioner. 15. The learned counsel appearing on behalf of the petitioner hadrelied on the following decisions in support of his contentions:15.1. In State of Madhya Pradesh v. Chintaman SadashivaWaishampayan (AIR 1961 SC 1623), the supreme Court had held that ifcopies of relevant documents had not been given to the person who isentitled to them, it would mean that the enquiry conducted againstthe person had not been held in accordance with the rules of naturaljustice. 15.2. In State Bank of India and others Vs. D.C.Aggarwal andanother (1993 (1) SCC 13), the Supreme Court had held that thedisciplinary authority, while imposing the punishment, cannot act onmaterials which were neither supplied nor shown to the delinquent.Imposition of punishment on an employee, on materials which were notonly not supplied but were not disclosed to him, cannot becountenanced. Procedural fairness is as much an essence of right andliberty as the substantive law itself.15.3. In M.Rajamanickam Vs. Bharat Heavy Electricals, Ltd., andanother (1997(3) L.L.N. 550), it was held that an order of punishmentimposed on a delinquent can be interfered with if it is found to havemade hostile discrimination between delinquents facing enquiry on thesame charges and if it is harsh or disproportionate to the provedmisconduct. It would suffer from the vice of arbitrariness, violatingArticle 14 of the Constitution of India, if similarly placeddelinquents had been let off with minor punishments. 15.4. In Punjab National Bank and others Vs. Kunj Behari Misraand another (1998 II LLJ Supreme Court 809) the Supreme Court hadheld that the disciplinary authority, while differing with thefindings of the enquiry authority, has to follow the principles of https://hcservices.ecourts.gov.in/hcservices/ natural justice by giving an opportunity of hearing to the delinquentofficer 15.5. In State Bank of India and others vs. Arvind K.Shukla (AIR2001 SCC 2398), it was held that the disciplinary authority, whiledisagreeing with the conclusions and findings arrived at by theenquiry officer, is required to record its tentative reasons for thedisagreement. Non-furnishing of reasons to the delinquent officer isfatal and vitiates the ultimate order of dismissal. 15.6. In State Bank of India and others Vs. K.P.Narayanan Kutty(2003(2) SCC 449) it has been held that when the punishing authorityis not persuaded to accept the favourable conclusions of the enquiryofficer an opportunity should be afforded to the delinquent employee,irrespective of whether or not some prejudice is shown to have beencaused by the denial of such opportunity. 15.7. In Bongaigaon Refinery & P.C.Ltd., & Ors. Vs. GirishChandra Sarmah (2007 AIR SCW 5185), the Supreme Court had held thatif the respondent had been charged of dishonestly selecting andrecommending purchase of certain lands and when the decision topurchase the land, selected by the respondent, had been taken afterit was unanimously accepted by three committees, it cannot be saidthat the respondent alone was responsible for the purchase of theland. Making the respondent alone as the scapegoat would bediscriminatory and perverse in nature. 15.8. In A.Obaidhullah and others Vs. State of Tamil Nadu (2006(1) L.L.N. 300), a Division Bench of this Court had held that delayvitiates disciplinary proceedings, defeats justice and causesprejudice to the delinquent employee, if there is no satisfactoryexplanation for such delay. 15.9. In N.Nandagopalan V. Secretary to Government, (2006(3)M.L.J. 191), this Court has held that it is well settled in law thatif employees are involved in the same incident, the department shouldproceed against all. There is no discretion to the Department toproceed against some of the employees and not to take any actionagainst the others identically placed. 15.10. In T.Shanmugasundaram Vs. Commissioner, PollachiMunicipality (2008(6) MLJ 621), this Court had held that, as per theSupreme Court, the disciplinary authority has to give reasons fordiffering from the enquiry officer's conclusions and the delinquentis to be given an opportunity to submit his objections. If suchopportunity is not given, it would amount to violation of theprinciples of natural justice. 15.11. In M.D.Parmar Vs Y.B.Zala (1980 1 L.L.J. 260), the GujaratHigh Court had held that a delay of about one and half years must be https://hcservices.ecourts.gov.in/hcservices/ considered fatal in the point of view of affording reasonableopportunity to the employee to show cause against the chargeslevelled against him. The very delay in initiating the proceedingsmust be held to constitute a denial of reasonable opportunity todefend himself. It would amount to violation of the principles ofnatural justice. 16. Per contra the learned counsel appearing on behalf of therespondents had contended that the first charge against thepetitioner was held as not proved by the enquiry officer. However,the other two charges levelled against the petitioner had been provedbased on the evidence available on record. The disciplinary authorityhad differed from the findings of the enquiry officer, with regard tothe first charge and had come to the conclusion that all the chargesagainst the petitioner had been proved beyond doubt. The dissent notehad been recorded by the disciplinary authority and it had been sentto the petitioner. The petitioner was given sufficient opportunity toput forth his case, both before the enquiry officer, as well as thedisciplinary authority. The petitioner had availed the opportunitiesgiven to him, without any protest. The grounds raised by thepetitioner before this Court had not been raised by him at theearlier stages, even though he had sufficient opportunity to do so.All the relevant documents had been given to the defencerepresentative of the petitioner. 17. It has been further stated that the petitioner had not shownthat substantial prejudice had been caused to him due to the delay inthe holding of enquiry proceedings against the petitioner and in thedisposal of the appeal. There has been no mention of the delay in thereply submitted by the petitioner, dated 13.10.1999, at the time whenthe charges had been levelled against him. Further, there is noprejudice caused to the petitioner due to the fact that the managerof the Bank had not been charged with misconduct. The petitioner hasmerely stated that the relevant documents had not been furnished tohim. He had not specified the documents which were not supplied tohim or to his defence representative. Unless prejudice is shown tohave been caused and unless it goes to the root of the matter itcannot be stated that the procedures followed by the respondents, inimposing the punishment, would be arbitrary and illegal. In fact theRules governing the service of the petitioner had been followed andthe respondents have the necessary power and jurisdiction to imposethe appropriate penalty on the petitioner. The penalty imposed on thepetitioner cannot be said to be disproportionate in nature to thecharges proved against him. A reading of the State Bank of IndiaOfficers' Service Rules, 1992, do not show that the petitioner wouldhave the privilege of filing a written brief after the enquiryofficer had made his report. In such circumstances, the writ petitionfiled by the petitioner cannot be sustained in the eye of law. https://hcservices.ecourts.gov.in/hcservices/

18. The learned counsel appearing for the respondent had reliedon the following decisions in support of his contentions:18.1. In Union Bank of India Vs. Vishwa Mohan (1998 (4) SCC 310),the Supreme Court had held that if the enquiry report had not beensupplied to the delinquent employee before the penalty had beenimposed by the disciplinary authority, but if it had been madeavailable to the charged employee before he had submitted the appealand if the employee had an opportunity to assail the enquiry reportin the appeal, and if no prejudice is shown to have been caused tothe employee, the non-supply of the report before the imposition ofthe penalty by the disciplinary authority would not vitiate theenquiry. 18.2. In The High Court of Judicature at Bombay V. ShashikantS.Patil (1999 LAB.I.C. 3833), the Supreme Court had held as follows:"Interference with the decision of departmentalauthorities can be permitted, while exercising jurisdictionunder Article 226 of the Constitution if such authority hadheld proceedings in violation of the principles of naturaljustice or in violation of statutory regulationsprescribing the mode of such inquiry or if the decision ofthe authority is vitiated by considerations extraneous tothe evidence and merits of the case, or if the conclusionmade by the authority, on the very face of it, is whollyarbitrary or capricious that no reasonable person couldhave arrived at such a conclusion, or grounds very similarto the above. However, it cannot be overlook that thedepartmental authority is the sole judge of the facts, ifthe inquiry has been properly conducted. The settled legalposition is that if there is some legal evidence on whichthe findings can be based, then adequacy or evenreliability of that evidence is not a matter for canvassingbefore the HIgh Court in a writ petition filed underArticle 226 of the Constitution."18.3. In Canara Bank V. Shri Debasis Das (2003 AIR SCW 1561), itwas held that the delinquent has to show that prejudice had beencaused if the enquiry officer had made his report before the filingof the written brief. Moreover if a personal hearing has been givento the delinquent by the Appellate Authority it would be sufficientpost decisional hearing and therefore, there would be no violation ofthe rules of natural justice.18.4. In Canara Bank Vs. V.K.Awasthy (2005 (6) SCC 321) theSupreme Court had held that the employee need to show that prejudicehad been caused due to lack of pre-decisional hearing. If adequatepost decisional hearings were granted, including a personal hearingby the Appellate authority and an opportunity to challenge thefindings of the enquiry officer as well as the disciplinary officer, https://hcservices.ecourts.gov.in/hcservices/ there would not be any violation of any principles of naturaljustice. In such circumstances, useless formality theory would applywhere recourse to the principles of natural justice does not improvethe situation.19. In view of the contentions raised on behalf of thepetitioner, as well as the respondents and the decisions cited and ona perusal of the records available, this Court is of the consideredview that the petitioner has not shown sufficient cause or reason tointerfere with the impugned orders passed by the respondents,imposing the penalty of "Reduction in basic pay by two stages for twoyears with the period of suspension treated as such" on thepetitioner. The petitioner has not been in a position to show thatsubstantial prejudice had been caused to him by the delay caused inthe framing of charges and the initiation of the enquiry proceedingson the charges levelled against him or in the disposal of the appealfiled by the petitioner before the first respondent AppellateAuthority. 20. It has not been shown by the petitioner that he was not givena reasonable opportunity to defend himself against the charges.Further, it is seen that the relevant records, relating to the issuesinvolved in the case, had been furnished to the petitioner throughhis defence representative. The enquiry report had been given to himand he had an opportunity to submit his explanation, with regard tothe findings of the enquiry officer. It cannot be said that theopportunity granted to the petitioner, by the disciplinary authority,was a mere formality. Further, the petitioner had availed theopportunity of challenging the impugned order of the secondrespondent, by way of an appeal, before the first respondentappellate authority. The petitioner has not shown that he hadquestioned the delay in the framing of the charges against him and inthe conducting of the enquiry based on the said charges, at theearliest point of time. After this Court had directed the firstrespondent to dispose of the appeal filed by the petitioner, onmerits, the question of delay would not arise at the stage of thedisposal of the appeal. The punishment imposed on the petitionercannot be said to be disproportionate to the charges levelled againsthim. 21. Merely for the reason that the manager of the Bank had notbeen proceeded against for the alleged misconducts, as was done inthe case of the petitioner, it cannot be said that the petitionerwould be prejudiced by such inaction on the part of the respondents.If the disciplinary authority has sufficient reasons for differingfrom the findings of the enquiry officer, such an option exercised bythe disciplinary authority cannot be said to be prejudicial ormalafide in nature, unless it is clearly shown that the decision ofthe disciplinary authority is perverse or based on no evidence orthat it was arbitrary or malafide in nature. Since the petitioner has https://hcservices.ecourts.gov.in/hcservices/ not been able to establish his claims, this Court finds no cause orreason to grant the reliefs, as prayed for by the petitioner, in thepresent writ petition. Hence, the writ petition stands dismissed. Nocosts. Sd/Asst.Registrar/true copy/Sub Asst.Registrarcsh1.The Chief General Manager(Appellate Authority)State Bank of IndiaChennai-600 006.2.The General Manager (D&PB)Appointing AuthoritySBI Local Head Office,Chennai-600 006.1 cc To Mr.K.S.Sundar, Advocate, SR.30271 cc To Mr.A.Kuppuswamy, Advocate, SR.3114W.P.No.1855 of 2003LA(CO)SRA(13/02/2009)