SHRI. SUBRAYA R HEGDE v. CANARA BANK

dated 06.06.2018 has affirmed the Disciplinary Authority's order. These orders are after conclusion of the inquiry proceedings with the Inquiry Officer filing his report on 21.04.2017 opining that the charges against the petitioner are proved.

2. The petitioner's grievance against these impugned orders must be examined in the light of the canvass before this Court and certain undisputed material facts. After the petitioner attained the age of superannuation with effect from 30.04.2016, he is served with article of charges imputing that while he was working at Deccan Gymkhana Branch, Pune during the period 10.07.2014 and 04.03.2016, he has issued Letter of Credit for Rs.300 crores to a - 4 - NC: 2024:KHC:25203 WP No. 15294 of 2020 private enterprise beyond his powers and without entry in the Bank's book. It is also alleged that Letter of Credit is issued manually when the relevant Regulation/norms required the Letter of Credit to be issued digitally.

3. The CBI, ACB, Pune has investigated into the complaints filed against the petitioner, the subject enterprises and certain others, and it has filed charge sheet against these persons [including the petitioner]. The concerned Special Court has convicted the petitioner for the offences punishable under Section 13(i)(d) and 13(ii) of the Prevention of Corruption Act, 1988 [for short, the ‘PC Act’] and Section 120B of IPC. The petitioner has filed his appeal as against this judgment and conviction, and the appellate Court has suspended the sentence.

4. Sri G.K. Bhat, the learned Senior Counsel for the petitioner, submits that the Regulations 43 and 45 of the Pension Regulations could not have - 5 - NC: 2024:KHC:25203 WP No. 15294 of 2020 invoked impose the punishment of withdrawal of pension because the petitioner was not found guilty as of the date of the Disciplinary Authority's order and if the petitioner as of that date was not found guilty by the concerned Court, the Disciplinary Authority could have only invoked Regulation 48 of the Pension Regulations provided that the Bank could assert any pecuniary loss caused because of the criminal breach of trust or forgery with prior consultation with the Bank's Board.

5. Sri G.K. Bhat emphasizes Disciplinary Authority has opined that no financial loss is caused to the Bank and that it cannot be gainsaid that the Disciplinary Authority has not consulted the Board invoking the Pension Regulations for withdrawing the pension. The learned Senior Counsel also contends that the concerned Court has not convicted the petitioner for breach of trust. - 6 - NC: 2024:KHC:25203 WP No. 15294 of 2020

6. Sri T.P. Muthanna, the learned counsel for the respondents, on the other hand, submits that the Disciplinary Authority has opined that the petitioner attempted fraud in issuing manually the Letter of Credit without reflecting the same in the records giving room for a claim of Rs.300 crores against the Bank. The learned counsel submits that this opinion cannot be construed as being conclusive on the financial loss to the Bank inasmuch as in the proceedings before the Dispute Resolution Committee over the inter se dispute between the Bank and Bank of India was pending.

7. Sri T.P. Muthanna submits that the Dispute Resolution Committee has recently recommended that the Bank should pay a sum of' Rs.225 crores to the Bank of India and remaining amount should be borne by the aforesaid Bank by itself. In fact, the learned counsel has placed on record a copy of the proceedings of the Committee - 7 - NC: 2024:KHC:25203 WP No. 15294 of 2020 dated 11.09.2003 to buttress his case in this regard and refute the assertion that the Bank has not suffered any financial loss.

8. Sri T.P. Muthanna, as regards the canvass that if at all any punishment could be, it should have been only under Regulation 48 of the Pension Regulations after consulting the Board and not under Regulations 43 and 45 thereof, submits that: [a] it would be within the jurisdiction of the competent authority withhold/withdraw pension [either permanently or for a specified period] under Regulation 43 of the Pension Regulations for reasons, amongst others, [i] that the concerned is prima facie found guilty of grave misconduct or [ii] that the concerned is found guilty or is convicted for a serious crime, and [b] in case where the concerned is prima to be guilty of grave misconduct, Regulation 45 stipulates the procedure specified in Canara Bank - 8 - NC: 2024:KHC:25203 WP No. 15294 of 2020 Officer Employees' [Discipline and Appeals] Regulation, 1976 must be followed before withholding/ withdrawing pension. The learned counsel argues that in the present case with the petitioner being found prima facie guilty, show cause notice is issued on 12.09.2016, that the departmental proceedings are instituted with the article of charges being served on the petitioner on

28.11.2016 and that the impugned orders are the result of the conclusion in the Inquiry Report and consideration thereof by the Disciplinary Authority.

9. In the light of these rival submissions, the only question for consideration is: Whether the Disciplinary Authority could have denied pension to the petitioner under Regulation 43 and 45 of the Pension Regulation without consulting the Board as contemplated under Regulation 48 thereof. - 9 - NC: 2024:KHC:25203 WP No. 15294 of 2020

10. The provisions of Regulation 43 of the Pension Regulations read as under:

43. Withholding or withdrawal of pension: The Competent Authority may, by order in writing, withhold or withdraw a pension or a part thereof, whether permanently or for a specified period, if the pensioner is convicted of a serious crime or criminal breach of trust or forgery or acting fraudulently or is found guilty of grave misconduct. Provided that where a part of pension is withheld or withdrawn the amount of such pension shall not be reduced below the minimum pension per mensem payable under these Regulations."

44. Conviction by Court: - Where a pensioner is convicted of a serious crime by a Court of Law, action shall be taken in the light of the judgement of the court relating to such conviction.

45. Pensioner guilty of grave misconduct: - - 10 - NC: 2024:KHC:25203 WP No. 15294 of 2020 In a case not falling under Regulation 44 if the Competent Authority considers that the pensioner is prima facie guilty of grave misconduct, it shall, before passing an order, follow the procedure specified in Canara Bank Office Employees' (Discipline and Appeal) Regulation, 1976 or Settlement as the case may be.

11. This Court must opine that the provisions of Regulation 43 that the power to withhold pension is when the concerned is [a] convicted of a serious crime or criminal breach of trust or forgery or acting fraudulently or [b] when the concern is found guilty of grave misconduct. The provisions of Regulations 44 and 45 correspondingly indicate that if the conviction [for the offences as mentioned in the first category] is by a Court of law, the decision to withhold pension must be in the light of such decision, but in the case where the concerned is found prima facie guilty of grave misconduct, the decision must be subject to the procedure contemplated under the Discipline - 11 - NC: 2024:KHC:25203 WP No. 15294 of 2020 Regulations. These provisions cannot be read to hold that the power under Regulation 43 could be invoked only when the pensioner is convicted of a serious crime or criminal breach of trust or fraud or forgery, and if these provisions are read accordingly, the provisions of Regulations 44 and 45, and the significance thereof, would be negated.

12. The provisions of Regulation 48 of the Pension Regulations read as under

48. Recovery of Pecuniary loss caused to the Bank- (1) The Competent Authority may withhold or withdraw a pension or a part thereof, whether permanently or for a specified period and order recovery from pension of the whole or part of any pecuniary loss caused to the Bank if in any departmental or judicial proceedings the pensioner is found guilty of grave misconduct or negligence or criminal breach of trust or forgery or acts done fraudulently during the period of his service: Provided that the Board shall be consulted before any final orders are passed: - 12 - NC: 2024:KHC:25203 WP No. 15294 of 2020

13. The Madras High Court in the decision in P. Mathivanan Inbaraj v. Canara Bank1, while considering these very regulations and the interplay, has opined the Regulations 45 [and therefore Regulations 43 and 44] and Regulation 48 do not lean on each other and has concluded thus: "54. However, intention of competent authority is not to recover, from pension, the pecuniary caused to the bank, there is no necessity for the competent authority to resort to Regulation 48 and the competent could very well resort to Regulation 45 circumstances, departmental proceedings could be initiated by following the procedure prescribed under the DA Regulations and subject to the outcome of the enquiry, the 1 2023 SCC OnLine Mad 594 - 13 - NC: 2024:KHC:25203 WP No. 15294 of 2020 competent authority can pass orders under Regulation 43 without resorting for any consultation with the Board. In the aforesaid scenario, by no means could Regulation 43 and 48 be read in conjunction and both the Regulations isolation and are to be invoked in the scenarios, which the competent authority decides, subject to what the competent authority intends to do on the outcome of the proceedings, if any, initiated against the pensioner."

14. This Court is in respectful agreement with this conclusion. This Court must opine that the true import of these Pension Regulations, when the concerned is found guilty of misconduct after the proceedings under the Canara Bank Officer Employees' [Discipline and Appeals] Regulation, 1976, is that the Competent Authority can invoke the jurisdiction under Regulation 43 to withdraw or withhold pension, and it need not be under Regulation 48. - 14 - NC: 2024:KHC:25203 WP No. 15294 of 2020

15. In the present case, the proceedings are instituted as is contemplated under Regulation 45 of the Pension Regulation resulting in the impugned orders by the Disciplinary and the Appellate Authorities. Indeed, the petitioner faced only investigation and trial as of the date of the impugned orders and he is convicted subsequently for the offences under the provisions of the PC Act and Section 120-B of the IPC but that cannot be a reason to hold that the power under Regulation 48 of the Pension Regulations had to be invoked or that the Board’ had to be consulted for denying pension to the petitioner. In the light of the afore, the question for consideration is answered against the petitioner and the petition is rejected. Sd/- (B M SHYAM PRASAD) JUDGE SA ct:sr