Vishnu Kumar Gupta vs Hindon Gramin Bank & Others
2011 Latest Caselaw 3734 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

AFR
 

 
Judgment reserved on 09.03.2011
 
Judgment delivered on 12.08.2011
 

 

 
Civil Misc. Writ Petition No.5041 of 2003
 
Vishnu Kumar Gupta  Vs. Hindon Gramin Bank & Ors.
 

 

 
Hon. Sunil Ambwani, J.

Hon. K. N. Pandey, J.

1. We have heard Shri Yogesh Agrawal, learned counsel for the petitioner. Shri R.N. Singh appears for the respondent bank.

2. The petitioner served as officer incharge of the Branch Office, Bihta of the Hindon Gramin Bank, Ghaziabad. He was suspended by order dated 18.9.1993, and was served with charge sheet on 12.2.1994, for major penalty. Another chargesheet was issued to him on 17.1.1994. By the impugned order dated 5.11.2001 passed by the Chairman (Disciplinary Authority of the bank), the petitioner had been punished with removal from service, which shall not be disqualification for future employment. The petitioner's appeal was dismissed by the Board of Directors of the Bank.

3. The charge sheet dated 17.1.1994 was served upon him for facilitating misutilisation and misappropriation of Bank's funds against Bank's interest on 26 counts. Subsequently misappropriation of 72 counts were revealed, on the basis of which the second charge sheet was issued on 12.2.1994. The proceedings on the basis of the first chargesheet dated 17.1.1994 were kept in abeyance by order dated 25.2.2002 till disposal of the proceedings on the basis of the second chargesheet dated 12.2.1994.

4. The report of the chargesheet dated 12.2.1994 served on the petitioner gives the details of the departmental enquiry, which may be summarised as below:-

1. The enquiry on chargesheet dated 12.2.1994 was ordered on 16.4.1994 vide the Bank's Head Office letter dated 16.6.1994. The oral enquiry on the chargesheet dated 12.2.1994 was started on 1.1.1997 conducted on various dates at the headquarters of the Bank at Raj Nagar and Branch Office Chola BSR. The petitioner remained absent in the enquiry from 17.10.1997 to 20.12.1997, on 6 dates. He had notice of the dates fixed by the enquiry officer. The proceedings of each hearing was sent to him.

2. The petitioner appeared on 30.10.1998 onwards and was permitted to participate in the proceedings. The enquiry continued upto 11.5.1999 after which the briefs were received from presenting officer on 20.1.2000 and the petitioner on 8.4.2000.

5. The enquiry report discloses that the management presented documents marked as MEX-P-1 to MEX-P-604 and witnesses as MW-2, 3, 5, 6, 8, 9, 10, 11, 12 in support of the chargesheet. The petitioner was provided DEX-D-1 to D-139 during the enquiry. He was given certain photocopies of the document on 10.5.1999 (Ex.D-140 to 182), which was ruled as irrelevant and not worth considering. The petitioner signed the proceedings with the prefix 'under protest'. He was supplied various documents on various dates, i.e. on 15th, 18th, 24th and 25th March and thereafter on 10th May, 1999 as per the relevancy of the chargesheet. He refused to receive management exhibits, and sought adjournments in the enquiry on 22.12.1998, 24.12.1998 and 4.1.1999. He, however, received these documents on 18.3.1999.

6. Articles 1 to 4 of the Statement of Articles of Charges against the petitioner given in chargesheet dated 12.2.1994 are quoted as below:-

"Shri Vishnu Kumar Gupta while working as Manager at B.O. Chola is alleged to have committed the following misconduct:

Article-I

He sanctioned and disbursed loans to large number of borrowers in connivance with the middlemen/ purported suppliers/ borrowers to facilitate misutilization/ misappropriation of subsidy and Loan amounts to the detriment of bank's interest.

Article-2

He sanctioned loans to various borrowers without conducting/ confirming pre-sanction appraisal himself jeopardising bank's interest.

Article-3

He made payment of the loans sanctioned and disbursed under IRDP Scheme after 27.9.1991 to middlemen/ purported suppliers instead of making payment in Cash direct to the borrowers thereby jeopardising bank's interest.

Article-4

He disbursed Loans against buffaloes to large number of borrowers (under IRDP Scheme) for purchase of two buffaloes in a single installment in connivance with the middlemen/ purported suppliers/ borrowers to the detriment of bank's interest.

Shri Gupta thus did not discharge his duties with utmost honesty, devotion and diligence and failed to take all possible steps to ensure and protect the interests of the bank and committed misconduct in terms of Regulation 17 & 19 of Chapter 4 of Hindon Gramin Bank (Staff) Service Regulations, 1988."

7. The charges in Article-1 were of misappropriation and mis-utilisation of the amount of loan along with subsidy in all the accounts. The security inspection reports of the three accounts namely Ex.P-52, 53 and 54 indicated that the animal hulias on the basis of the quest letter addressed to contractor of Painth Maweshi Kothi Bagh, Gulaothi, Bulandshahar (Somvar) were not genuine. None of these hulias were issued by Panth, which means that they were fake. No security was purchased. The total amount in each case was paid to middlemen/ purported supplier in single installment as payment of buffaloes. The petitioner's defence with regard to these documents and the mode of preliminary investigation was considered. The enquiry officer found that Ex.P-404 presented by the management proved without any doubt that the hulias attached with the document of loan accounts maintained were fake. Further it was found that no security namely the buffaloes were purchased. The supplies were made to middlemen in single installment. The charge No.1-(i) was thus proved.

8. In respect of charge in Art.1 (ii) it was found from the request letter written to Pashu Mela Zila Parishad, Bulandshahar and Panth Maweshi Kothi Bagh Gulaothi, Bulandshahar that various hulias attached with the letters P-403/404, Ex.P-125, 126, 135, 136, 142, 143, 151, 152, 160, 161, 170, 171, were fake and were forged. The Article of Charge 1 (ii) was also found established.

9. In respect to Art.1 (iii) regarding the boring certificates (in respect to the term loans pumping set/ diesel engine) on which the accounts were sanctioned and the loan was disbursed, it is found that only part amount of loan and subsidy was paid to the borrowers through middlemen/ purported suppliers and the rest was misappropriated in connivance with the purported supplier/ middlemen/ borrower. The charge was found established.

10. Article 1 (iv) in respect of 12 term loan accounts on which the petitioner had sanctioned and shown disbursement of the loan against the same pumping set/ diesel engine to the borrowers, who had already disbursed the loan. The pumping set was not purchased even in a single account out of 6 and that fake bills based on testing report were placed on Bank's records. The enquiry officer found from the documentary evidence that the same Engine no.4751 with same testing report no.6617, was shown for 3 times namely 136/91, 134/91 and 19/91. Similar Engine no.4858 in Document No.99/91, was mentioned in the report no.6366, while in document no.130/91 the same Engine number and testing report was relied upon. The testing report was different but with same engine number. The charge was thus established.

11. In respect of charge of Article 1 (v) the enquiry officer found on the assessment of the management presentation and defence presentation, that same engine number, which was financed to the bank was also financed by U.P. Rajya Sahkari Gramine Vikas Bank, Sikandrabad. The document indicated that no purchase was made and no boring was done. The confirmation letters did not relate to the bank. No testing report, which is essential part of diesel engine's case was available. This charge was also proved.

12. In respect of charge on Article1-1 (vi) it was found by the enquiry officer that no boring was mentioned in various accounts. The test forms placed in the documents of these loans were fake as per noting of issuing department.

13. On Article 1 (vii) after considering the management presentation and defence presentation the enquiry officer found that sureties were not commensurate with the record. The confirmation letter were addressed to U.P. Rajya Sahkari Krishi Gramin Vikas Bank, Sikandarabad.

14. Charge No.2 related to sanction of loan to various borrowers without conducting/ confirming pre-sanction appraisals jeopardising the Bank's interest. The enquiry officer found from the letters issued by the U.P. State Agro Industrial Corporation, Bulandshahar, that boring certificate kept in documents were not issued by their office. They were forged and if the pre-sanction appraisal was made by the petitioner, the forged and fake document could have been detected. Pre-sanction appraisal was not made by the petitioner himself before sanctions jeopardising bank's interest.

15. Charge on Article 3 related to disbursing loans under IRDP Scheme after 27.9.1991 to middlemen / purported suppliers instead of making payment in cash directly to the borrowers. The enquiry officer found that in respect of various loans payments were made to middlemen/ purported suppliers. MW-2 and MW-3 in their evidence refer to in enquiry proceedings at page 46-61 and MW-5, 6, 9 and 10 at page 66 to 85 supported these allegations. The charge was found to be proved. In respect of 4th and last charge relating to disbursing of loans against buffaloes large number of borrowers under IRDP scheme it was found that against the provisions of the scheme in which the loans were to be disbursed for buffaloes in two installments with a gap of 4 to 5 months, all the loans were disbursed in single installments to the middlemen/ purported supplier.

16. The petitioner was given copy of the enquiry report, which the petitioner did not annex to the writ petition. It was made available during the time of arguments.

17. In his reply to the chargesheet the petitioner had submitted his defence on 30.3.1994 alleging that no document was annexed to the chargesheet supporting the charges; no report was given before the charged officer at the time of inspection of document substantiating the charges, and even the document/ reports required by the charged officer for his proper defence were not produced at the time of inspection of document.

18. In respect of findings against him the petitioner admitted that the service of supplier were taken into account to the choice of the borrower in his best interest. The loans were sanctioned after the recommendation to the heavily paid field staff of the bank and they were responsible. They are responsible staff working under CDO. The petitioner acted in to speed up the scheme of the bank as the superior staff also wanted that needy persons must get loan quickly so that poor persons may become useful citizen and uplift themselves from below poverty line. On Article Nos.3 and 4 the petitioner submitted that he acted in the best interest of the borrower and tried his level best to avoid irregular transactions and securities. With regard to disbursement of loan in IRDP Scheme in single installment the petitioner alleged that there was no malpractice in giving loan in single installment for one buffalo as in such case the borrowers could not have run dairies with only single buffalo on commercial basis.

19. The petitioner's reply was considered by the disciplinary authority in finding that the charges were proved and in punishing the petitioner.

20. Shri Yogesh Agrawal submits that the documents relating to the charges were not supplied to him, and that the appellate authority has in violation of Rule 23 of the Guideline Procedures to be Adopted for Disciplinary Action in Regional Rural Banks, issued by Circular Letter No.14/90 dated 15.9.1990, has not followed, as no reasons are given in dismissing the appeal, and no justification for the penalty imposed.

21. So far as supply of document is concerned, there are clear recitals in the enquiry report, which has not been denied that the petitioner that he had inspected all the documents. The petitioner had participated in the enquiry and did not raise any objection that any document was not allowed to be inspected by him. The petitioner relied upon certain reports, which also were part of record. The argument thus has no substance at all. In para 7 of the counter affidavit it is clearly stated that all the relevant documents in respect of chargesheet were shown to the petitioner and were subsequently supplied to him also. Prior to the reply to the chargesheet the petitioner was also permitted to inspect these documents. The preliminary enquiry proceedings conducted by the vigilance officer of the bank were internal proceedings and were not required to be communicated to the petitioner. He was not prejudiced in any manner as the preliminary enquiry proceedings were not relied upon by the enquiry officer in proof of the charges.

22. So far as the reasons to be given by the appellate authority is concerned, it is settled that where appellate authority agrees with the reasoning given by the disciplinary authority, no separate and elaborate reasons are required to be given. The appeal was made to the Board of Directors of the bank. The guideline No.23 of Circular No.14/90 circulated on 15.9.1990 is quoted as below:-

"23. APPEAL

An official has right of appeal to the Board of Directors of the bank against the order passed by the Disciplinary Authority vide Regulation 32 to 34 of the (Staff) Service Regulations. Any appeal against the final order of the Disciplinary Authority should be preferred within 30 days of the date of service of the order appealed against. The appeal shall:

i) be in writing and couched in polite and respectful language;

ii) contain all material statements and arguments relied upon shall be complete in themselves;

iii) specify the relief desired.

The Appellate Authority shall consider whether the findings of the Disciplinary Authority are justified and the penalty imposed adequate and pass suitable orders as early as possible, say within two months from the date of receipt of the appeal."

23. In this case the Board of Directors not only perused the records vis-a-vis contentions to be verified by the petitioner in his appeal, but also permitted personal hearing before the Board of Directors, on 15.11.2002 on his own request.

24. The appellate order, shows application of mind in deciding the appeal. The Board of Directors in deciding the appeal have stated in their order:-

"APPEAL PREFERRED BY SH VISHNU KR GUPTA AGAINST THE ORDER DATED 25.02.2002 OF CHAIRMAN, DISCIPLINARY AUTHORITY OF HINDON GRAMIN BANK, GHAZIABAD INFLICTING UPON HIM PUNISHMENT OF "REMOVAL FROM SERVICE WHICH SHALL NOT BE A DISQUALIFICATION FOR FUTURE EMPLOYMENT"

For this item during the Board Meeting on 15/11/02 Sh. R.K. Gureja, Director (Sponsor Bank Nominee), Punjab National Bank, Priority Sector & Lead Bank Division, Head Office, Parliament Street, New Delhi chaired the meeting and Sh. Tejinder Ahluwalia, Chairman and Disciplinary Authority did not participate in the meeting as appeal in question was preferred against his order dated 25.02.02.

Board pursued the relevant records of the case vis-a-vis the contentions put forth by Sh. Vishnu Kumar Gupta on his appeal dated 21/03/2002 Sh. Vishnu Kumar Gupta was also given personal hearing before the Board of Directors on 15/11/02 as per his request in his appeal dated 21/03/02. During his personal hearing before the Board of Directors on 15/11/02 Sh. Vishnu Kumar Gupta neither submitted any fresh document/ evidence nor raised any new point in support of his appeal/ defense which may require consideration to review the decision/ order dated 25/01/02 of Chairman, Disciplinary Authority of Hindon Gramin Bank, Ghaziabad.

In view of the facts and circumstances of the case appeal preferred by Sh Vishnu Kumar Gupta does not merit any consideration and hence rejected.

(R.K. Gureja)      (M.S. Raghav)      (Om Bir Singh)      (Pradeep Garg)
 
Director                Director                      Director                    Director"
 

 
25.	Shri Yogesh Agrawal submits that the Board of Directors has not considered and  recorded its opinion on the adequacy  of the punishment,   and thus   the orders vitiated. 
 
26.	It is correct that Board of Directors while deciding the appeal has not recorded any specific opinion with regard  to adequacy    of the penalty imposed, but that   we do not   find that the Board of Directors committed   any illegality   in not doing so, in as much    as on the findings recorded by the enquiry officer in which all the charges relating to gross   violation of the bank rules and consequent misutilisation   and misappropriation  of the  subsidy were proved, the punishment of removal   of service was not unjustified.  An officer of the bank is required to  be honest, and must be   of proven integrity  Where he violates banks norms, which not only jeopardises bank interest, but also results into mis-utilisation and embezzlement   of the bank funds, the punishment  of removal of service cannot be said to be unjustified.
 
27.	The writ petition is dismissed.
 

 
Dt.12.08.2011
 
SP/