The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.8657 of 2010 (An application under Articles 226 & 227 of the Constitution of India) Akshaya Kumar Dash … Petitioner -versus- Odisha Gramya Bank, Bhubaneswar and others … Opposite Parties For Petitioner : Mr. A.K.Mohapatra, Advocate For Opposite Parties : Mr. K.C.Kanungo, Advocate CORAM: HON’BLE MR. JUSTICE G. SATAPATHY DATE OF HEARING :14.11.2024 DATE OF JUDGMENT:13.02.2025 G. Satapathy, J. 1. The petitioner by filing this writ petition has invoked the jurisdiction of this Court under Articles 226 & 227 of the Constitution of India calling in question the legality of the charge sheets issued to him on 26.09.2003 and 16.06.2004 as well as the consequent orders passed thereon by OP No.2 on 17.12.2005 and by the Board of Directors on 29.01.2007. W.P.(C) No.8657 of 2010 Page 1 of 22 In essence, the petitioner in this writ petition has prayed to quash the above two charge sheets and the consequent orders obtained thereon, but by the charge sheet No.CH/Vig/74/2003 dated 26.09.2003 under Annexure-9 and the additional charge sheet No.CH/Vig/54/2004 dated 16.06.2004 under Annexure-11, a Departmental Proceeding was initiated by OP No.2 against the petitioner for alleged misconduct committed by him for violation of the Regulations 17, 19, 21 & 42 of the Puri Gramya Bank(Officers and Employees) Service Regulation, 2001 (for short the “Regulation”) while working as Branch Manager of Rasulgarh Branch of erstwhile Puri Gramya Bank, presently ameliorated as Orissa Gramya Bank and accordingly, in the enquiry in such Departmental Proceeding, the Enquiring Officer (in short, ”EO”) found the charges under Annexure-9 and all the charges of Annexure-11 except charge No.4 to have been established against the petitioner. After conclusion of the enquiry, the petitioner was asked to submit his representation to the findings of the EO by supplying a W.P.(C) No.8657 of 2010 Page 2 of 22 copy of such enquiry report. Accordingly, on consideration of the findings of the EO together with the representation of the petitioner, OP No.2 by concurring the findings of the EO issued a show cause notice to the petitioner on 17.12.2005 vide Annxure-14 on proposed punishment calling upon the petitioner to submit his reply/representation within ten days. Upon consideration of the reply to the show cause as received from the petitioner, OP No.2 passed the final order of punishment vide Annxure-17 awarding major penalty of removal from service which shall not be a disqualification for future employment and recovery of Rs.78.42 Lakhs due to him for the loss caused to the bank. Against the aforesaid order of major penalty, the petitioner carried an appeal to the appellate forum i.e. Board of Director, Puri, Gramya Bank through Chairman under Annexure-18, but such appeal of the petitioner was rejected with due communication to him vide Annxure-19. W.P.(C) No.8657 of 2010 Page 3 of 22 2. The undisputed facts involved in this writ petition as recapitulated in brief are that the petitioner being duly appointed had entered into service on 15.10.1976 as Field Officer under OP No.2 and he was accordingly transferred and posted as Manager in the new Rasulgarh Branch, Bhubaneswar in the District of Khurda on 15.08.1998 and while working there as such, he was called to the Head Office on 15.06.2002 for discussion regarding recovery of debts of the Branch and for regularization of loan account in terms of the inspection report dated 13.03.2002 and the petitioner was directed to regularize the objections pointed in such inspection. However, OP No.2 by an order dated 25.06.2002 transferred and posted the petitioner in the area office of the bank and consequently, the petitioner was relieved from Rasulgarh Branch w.e.f. 02.08.2002, but as on the date of his relieve, the deposit figure of the Branch was Rs.4,83,58,367.087 as against the advance figure of Rs.3,74,78,511.94 and there was no Non-Performing Account in the Branch. W.P.(C) No.8657 of 2010 Page 4 of 22 After the petitioner joined in the new place of posting, OP No.2 by a letter dated 23.10.2002 deputed the petitioner to Rasulgarh Branch to ensure recovery of the debt of the Branch, however, there was no allegation of misconduct or negligence of duty against the petitioner till then, rather OP No.2 appreciated his contribution towards growth of the business of the Branch and pursuant of the aforesaid letter, the petitioner recovered a sum of Rs.30,57,802/-. While the matter stood thus, OP No.2 by an order passed on 10.03.2003 placed the petitioner
Legal Reasoning
under suspension and deputed Sri R.R.K. Nayak, Sr. Manager, for inspection of the Branch and Mr. Nayak accordingly submitted a list of 68 loan accounts with total loan amount of Rs.48.48 Lakhs by observing therein that there is complete failure of area office of the Bank in monitoring and supervising the bank work due to lack of proper follow up and monitoring by Head Office. Accordingly, OP No.2 issued charge sheets under Annexures-9 & 11 against the petitioner for committing certain omission and commission in contravention of W.P.(C) No.8657 of 2010 Page 5 of 22 Regulation Nos.17, 19, 38 and 42 of the Regulation and in the meantime, OP No.2 also lodged an FIR against the petitioner with the CBI for criminal misconduct in terms of Regulation No.42 of the Regulation vide R.C. No. 15 of 2004 in which CBI after conducting investigation and finding no criminal intent, submitted a final report against the petitioner on the ground that the charge against the petitioner could not be established and accordingly, the concerned Court accepted such final report and closed the case, but Departmental Proceeding was initiated against the petitioner and pursuant to enquiry conducted in such Departmental Proceeding, the petitioner was awarded with major penalty of removal of service and recovery of Rs.78.42Lakhs which was confirmed in the appeal. Finding no alternative, the petitioner has approached this Court in this writ petition praying to quash Annexures-9, 11, 17 and 19 on the ground that the same were arbitrary and bad in the law. 3. In the course of hearing of the writ petition, Mr. A.K. Mohapatra, learned counsel for the W.P.(C) No.8657 of 2010 Page 6 of 22 petitioner has submitted that not only the charge sheet reveal no definite allegation against the petitioner, but also the acts said to have been committed by the petitioner has not been substantiated in the domestic enquiry. It is further submitted that there was complete failure on the part of the Head Office in proper monitoring and supervising the Branch and to buttress his contention, Mr. Mohapatra has drawn attention of the Court to point Nos.11 to 13 of Annxure-7. It is further submitted by him that without following the procedure of Regulation No.42, the charge thereunder has been considered to have been established by the Department, but the criminal case as initiated by the Bank by way of lodging FIR with CBI having been ended without implicating the petitioner or anyone by submitting a final report therein, thereby the charge being in violation of Regulation No.42, it can by no stretch of imagination be said to have been established against the petitioner and therefore, such finding of the EO (E.O.) being unsustainable and without any basis and evidence, the enquiry report together with penalty W.P.(C) No.8657 of 2010 Page 7 of 22 imposed there under vide Annuxre-17 being unsustainable, is liable to be quashed. It is also submitted by Mr. Mohapatra that Annexure-B attached to the further affidavit filed by opposite party itself discloses that the allegation of criminal misconduct on the part of the petitioner has not been proved and no action therein being recommended against the petitioner, the penalty as imposed so also the charge sheets filed against him under Annxures-9 & 11 needs to be quashed. Accordingly, Mr. Mohapatra has prayed
Decision
to allow the writ petition by quashing Annexures-9, 11, 17 and 19. In support of his argument, Mr. Mohapatra has relied upon the decisions in (i) Surath Chandra Chakravarty vs. State of West Bengal; AIR 1971 SC 752, (ii) U.P. State Road Transport Corporation & Others vs. Mahesh Kumar Mishra & Others; AIR 2000 SC 1151, (iii) Allahabad Bank vs. Krishna Narayan Tewari; AIR 2017 SC 330, (iv) G.M. Tank vs. State of Gujarat & Another; AIR 2006 SC 2129. Further, Mr. Mohapatra by relying upon the decision in Nicholas Piramal India Ltd. vs. Hari Singh; AIR W.P.(C) No.8657 of 2010 Page 8 of 22 2015 SCW 3159 submits that the penalty of dismissal of the petitioner from service and recovery of such huge amount of Rs.78.42 Lakhs, out of which substantial amount having already been recovered with remaining meager amount of Rs.4,89,420/- which includes Rs.2,20,226/- loan sanctioned by Head Office, is shockingly disproportionate and at best the petitioner is liable for some minor penalties. 4. In reply to the aforesaid submissions, Mr. K.C. Kanungo, learned counsel appearing on behalf of opposite party has submitted that not only the charge sheets are definite, unambiguous and complete, but also the misconduct of the petitioner is well established in the Departmental enquiry and the petitioner having duly afforded with reasonable opportunity in the Departmental enquiry, there is no violation of principle of natural justice. It is further submitted by Mr. Kanungo that mere casual remarks as stated in point Nos. 11 to 13 of Annxure-7 would not absolve the petitioner from the charges of misconduct, especially when the inspection report therein vide SL Nos. 1 to 10 W.P.(C) No.8657 of 2010 Page 9 of 22 incriminates the petitioner for the misconduct committed by him. Further, Mr. Kanungo submitted that although the CBI has submitted a final report in the criminal case, but the CBI only conducted investigation in respect of 51 numbers of loan accounts and the petitioner’s involvement being in large number of accounts which was subject matter of Disciplinary Proceeding and the petitioner having found guilty of those charges, he cannot be exonerated from the penalty, merely because the criminal misconduct was not substantiated by the CBI and the petitioner having admitted the irregularity committed by him in his representation to OP No.1 vide Annxure-8 itself speaks in volume and the petitioner cannot escape from the liability of the punishment, more so when he was having tainted career with imposition of punishment of stoppage of one increment way back on 03.07.1997. Mr. Kanungo has also highlighted that merely because a person is exonerated in criminal proceeding, he can still be proceeded in Departmental Proceeding, since the standard of proof and objective of both the W.P.(C) No.8657 of 2010 Page 10 of 22 proceedings are different and therefore, even though the CBI has not filed any charge sheet against the petitioner for criminal misconduct, but the opposite party having found the petitioner to have committed misconduct by sanctioning loan in clear violation of Regulations 17 & 19 is liable for penalty for causing a huge loss to the bank which was firmly established by the bank in the domestic enquiry. In summing up his argument, Mr. Kanungo has prayed to dismiss the writ petition. 5. After having considered the rival submissions upon perusal of the record, there appears no dispute about the penalty imposed on the petitioner for dismissal of service and recovery amount of Rs.78.42 Lakhs, but the scope of judicial review by the Courts against the order passed in Departmental Proceeding is not only very limited, but also is required to be exercised in exceptional circumstance where the penalty awarded by the Disciplinary Authority or the employer is wholly disproportionate and shakes the conscience of the Court. Law on this score is well W.P.(C) No.8657 of 2010 Page 11 of 22 settled and the scope of interference by the High Court under Article 226 of the Constitution of India in the matter relating to Disciplinary enquiry has been clarified in the decision in Government of A.P. vs. Mohd. Nasrullah Khan; AIR 2006 SC 1214 wherein the following principle has been laid down by the Apex Court which reads as under:- review under Article 226 of “11. By now it is a well-established principle of law that the High Court exercising power of the judicial Constitution does not act as an Appellate Authority. Its jurisdiction is circumscribed and confined to correct errors of law or procedural error, if any, resulting in manifest miscarriage of justice or violation of principles of natural justice. Judicial review is not akin to adjudication on merit by re-appreciating the evidence as an Appellate Authority.” 6. It is quite obvious that the role of the High Court in dealing with the Disciplinary Proceeding in writ jurisdiction should not be equated with the power of the Appellate Authority sitting in an appeal over factual findings in a Disciplinary Proceeding, since the High Court by no stretch of imagination is expected to act as an Appellate Court over the factual findings recorded in a Disciplinary Proceeding. All that the High Court is W.P.(C) No.8657 of 2010 Page 12 of 22 required to examine in such cases while exercising writ jurisdiction is to find out whether there were any errors of law or procedure resulting in manifest miscarriage of justice or violation of the principle of natural justice. True it is that the petitioner in this case had although borne the initial rigor of criminal case, when OP No.2 lodged an FIR against the petitioner before the CBI, but on due investigation, CBI having subsequently found no mens rea on the part of the petitioner submitted a final report by stating inter alia that allegations of criminal misconduct on the part of the accused A.K. Dash (petitioner) are not proved and no action is, therefore, recommended against Mr. Dash as revealed from Annexure-B filed by the opposite party in the further affidavit dated 28.03.2024. Thus, the petitioner was never sent up to face a criminal trial for committing any criminal misconduct. Admittedly, the petitioner has been issued with charge sheets under Annxures-9 & 11 on the ground that he has committed certain omission and commission in contravention of Regulation Nos.17,19 & 42 of the Regulation which is punishable W.P.(C) No.8657 of 2010 Page 13 of 22 under Regulation 38, but the petitioner was found guilty of the charges except charge No.4 of Annxure- 11, however, neither it was specifically held by the EO nor by the Disciplinary Authority that the petitioner is guilty of Regulation No.42 which describes corrupt practices. Further, the explanation appended to Regulation No.42 of the Regulation makes it very clear that an officer or employee shall be deemed to be guilty of corrupt practices if he has committed an act of criminal misconduct as defined in Sections 13, 14, 15 & 16 of the Prevention of Corruption Act, 1988 or he has acted for an improper purpose or in a corrupt manner or had exercised or refrained from exercising his powers with an improper or corrupt motive. Although, charge sheets under Annexures-9 & 11 contains specific allegation against the petitioner for not abiding by Regulation and orders of the bank and not obliging to promote bank’s interest, but no specific allegations were made therein about petitioner practicing corrupt practices, much less the findings of the EO which were agreed by the Disciplinary Authority vide its final order W.P.(C) No.8657 of 2010 Page 14 of 22 under Annexure-17 do not disclose any finding against the petitioner for corrupt practices which in the circumstance of Annexure-B submitted by the CBI itself denotes that neither there was any specific charge against the petitioner for corrupt practice as defined under Regulation 42 nor was there any evidence thereon nor any finding arrived at by any of the authority and thereby, the charge under Regulation 42 cannot be held to be established against the petitioner. The above observation of the Court cannot be considered to have been arrived at any appreciation of evidence or materials on record, but the same having been found out on a bare perusal of documents which if left out would definitely manifest a miscarriage of justice, inasmuch as, the allegation of corruption not only demonstrates a situation in demolishing the integrity of an employee, but also makes him liable for criminal prosecution and penalizing him thereon, but holding an employee guilty of corrupt practices in absolute absence of any material or evidence, much W.P.(C) No.8657 of 2010 Page 15 of 22 less with no evidence would definitely shake the conscience of the Court. 7. It is obviously true that even though the allegation of corrupt practice is not found to have been established against the delinquent-employee, but the other charges can still be established against the delinquent-petitioner for violation of Regulation Nos. 17 & 19 which is punishable under Regulation 38, inasmuch as merely because the petitioner was found out to have not committed any criminal misconduct would not ipso facto render him not liable for other misconduct committed by him. Law is also well settled that acquittal/discharge of the delinquent by a criminal Court shall not incur any disqualification on the part of an employer to conduct Departmental Proceeding in accordance with Rules and Regulations since the two proceedings, either criminal or Departmental, are entirely different and they operate in different fields and have different objectives. In Disciplinary Proceedings, the question is whether the delinquent is guilty of misconduct which if proved may also incur W.P.(C) No.8657 of 2010 Page 16 of 22 removal from service or lesser punishment, whereas the criminal proceedings operates in a different sphere/question of proof of action of the delinquent as a penal offence beyond all reasonable doubt and if such penal offence is established against the delinquent, it would incur corporeal/pecuniary punishment. However, a careful and studied scrutiny of the enquiry report and other materials placed on record together with the submission of the delinquent-petitioner to the findings of the EO, it appears that the learned Disciplinary Authority has rightly concurred the findings of the EO except the findings on corrupt practices while issuing 2nd show cause to the delinquent-petitioner on the proposed punishment, inasmuch as the charge of corrupt practices has not been substantiated by the Bank in terms of the Regulation 42 of the Regulations which is very much clear from the final report accepted by the Court under Annexure-10. Additionally, the ingredients as stated in Regulation 42(i)(ii)(iii)&(iv) of the Regulations together with explanation are not at all made out by any evidence received in the domestic W.P.(C) No.8657 of 2010 Page 17 of 22 enquiry and without any evidence the Disciplinary Authority has concluded while accepting the enquiry report to issue 2nd show cause on proposed punishment that the delinquent-petitioner had adopted corrupt practice, but the same is without any reference to Regulation 42 of the Regulations. 8. Be that as it may, it is found from the order passed by the Disciplinary Authority in issuing 2nd show cause on proposed punishment that the delinquent- petitioner in his defence statement had admitted the facts of sanctioning loans beyond his discretion and in violation of Bank’s prescribed guidelines which was never denied by the delinquent-petitioner. Further, the delinquent employee (petitioner) in his 2nd show cause to the proposed punishment has stated that it is always difficult to avoid certain minor errors, which are caused without knowledge in the case of writing/posting and the charge sheet officer has taken the responsibility of recovery of the over drawn amount which is a self admission of fact. It is, therefore, clear that the findings recorded by the Disciplinary Authority holding the W.P.(C) No.8657 of 2010 Page 18 of 22 petitioner guilty of misconduct involving loss to the Bank appears to be correct and is based on evidence, but the petitioner although found to be guilty of the charges for violation of Regulation 17 & 19 of the Regulations which prescribes the liability of every officer of the Bank to abide by the Regulations and orders and obligation to promote the Banks interest, but the petitioner cannot be held liable for violating Regulation 42 of the Regulations which finding of the Disciplinary Authority is unsustainable in the eye of law. 9. The next issue is the magnitude of penalty in the Disciplinary Proceeding. In this case, the petitioner has been awarded with following penalties:- (i) Removal from service which shall not be a disqualification for future employment, and (ii) Recovery of Rs.78.42 lakhs being the pecuniary loss caused to the Bank from emoluments or such other amounts as may be due. The aforesaid two penalties are within the parameters of the Regulation 38 of the Regulations, but fact remains that the OP-Bank on being requested informs the Court by way of an affidavit that on W.P.(C) No.8657 of 2010 Page 19 of 22 verification, it is found that out of the accounts for which the petitioner was charge sheeted, 52 accounts are still outstanding with total outstanding dues of Rs.24,71,856.15. It is, therefore, very clear that the petitioner had sanctioned some loans violating the Bank’s guidelines and thereby caused loss to the Bank, but the petitioner has neither been charged nor found to have misappropriated any amount and whatever loan he had sanctioned violating the Bank’s guidelines are in the process of recovery and the pecuniary loss to the Bank has considerably reduced from Rs.78.42 lakhs to Rs.24,71,856.15. In the aforesaid situation, this Court does not find any impropriety in handing over the first punishment of Removal from Service, but the penalty of recovery of Rs.78.42 lakhs is quite shocking and disproportionate, inasmuch as the Bank has not suffered any loss to that extent and the Bank is in the process of recovery of unpaid loan amount which at present Rs.24,71,856.15 which may further reduce in future and, therefore, the recovery amount as ordered against the petitioner being disproportionate and W.P.(C) No.8657 of 2010 Page 20 of 22 grossly in excess cannot claim the immunity and remains open for interference under the limited scope for judicial review. Further, it is not the intention of the Regulation to get the entire loan amount recovered from the employee who had sanctioned the same, unless the same is found to be misappropriated and swindled off from the Bank, otherwise no Bank employee would dare to sanction loan to promote the interest of the Bank in case such employee is held liable to give recovery for the unrecovered loan amount. In this case, the petitioner rightly or wrongly had sanctioned loan in violation of the Bank’s guidelines, but his criminal intent has never been established and although he is guilty of causing loss to the Bank for sanctioning loan to different account holder without following the prescribed procedure, but he having been sufficiently punished by removal from the service, no further penalty shall be imposed upon him for recovery of the unrecovered loan amount as a loss to the Bank, because the recovery process is on and the Bank might recover the whole loan amount by the petitioner. Thus, W.P.(C) No.8657 of 2010 Page 21 of 22 on a careful analysis of the penalty imposed on the petitioner in the norm of Bank’s Regulation and the petitioner having already been penalized with a major penalty of removal from service, this Court considers it unreasonable to stamp its approval for recovery of Rs.78.42 lakhs from the petitioner and accordingly, interferes in the penalty of the petitioner, who is let off from paying any amount of recovery and his penalty from the removal of service stands confirmed. 10. In the result, the writ petition stands dismissed on contest, but no order as to costs. Consequently, the penalty imposed upon the petitioner is modified to the extent of only removal from service which shall not be a disqualification for future employment. Signature Not Verified Digitally Signed Signed by: KISHORE KUMAR SAHOO Designation: Secretary Reason: Authentication Location: High Court of Orissa Date: 13-Feb-2025 14:18:20 Orissa High Court, Cuttack, Dated the 13th day of January, 2025/Kishore W.P.(C) No.8657 of 2010 (G. SATAPATHY) JUDGE Page 22 of 22