Dinesh Kumar Sayal vs Bhagirath Garamin Bank
2011 Latest Caselaw 4955 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
 
 

		      							Reserved                        
 
           
 
Writ Petition No.813 (SB) of 1994
 

 
Dinesh Kumar Syal			---				Petitioner
 
Versus
 
Bhagirath Gramin Bank & others	---				Respondents
 

 

 
	Counsel for Petitioner		-	Shri Amit Bose, Shri A.R. Khan, 								Shri D.C. Mukherjee, Shri J.C. 								Shrivastava, Shri Pankaj Awasthi, 								Shri S.C. Shukla &                       								Shri Virendra Mishra
 

 
	Counsel for Respondents		-	Shri Asit Kumar Chaturvedi
 

 
******
 
Hon'ble Uma Nath Singh, J.

Hon'ble S.C. Chaurasia, J.

(Per Uma Nath Singh, J)

This writ petition has been filed to seek the quashment of order dated 28.09.1993 (Annexure-1), passed by the Chairman, Bhagirath Gramin Bank, Sitapur (hereinafter referred to as 'the Bank'), removing the petitioner from service, and the order dated 11.03.1994 passed by Board of Directors of the Bank rejecting the appeal of petitioner preferred against the order of removal passed by the Chairman, and also to seek direction, in the nature of mandamus to retain the petitioner as a full-fledged Supervisor with further direction to pay the arrears of salary and allowances. Petitioner has also sought a direction to restrain the respondents from enforcing the provisions of Bhagirath Gramin Bank Staff Service Regulations, 1980, after declaring them as ultra vires, on the ground that the Board of Directors which has framed the Regulations was not competent under Section 30 of the National Rural Bank Act, 1976.

It appears from rival submissions of the parties as well as the record that the petitioner was initially appointed as Clerk-cum-Cashier on 08.03.1978, and later, promoted to the post of Senior Clerk on 27.01.1983. He was re-designated as Field Supervisor vide letter dated 30.11.1983. He was asked to explain vide the letter dated 30.11.1990 some wrong entries made in the Bank records during his posting at Maharaj Nagar Branch of the Bank. Petitioner submitted his reply on 12.12.1990 and assured that the entries would be adjusted within a month. On 21.12.1990, petitioner was advised to inspect the documents at Head Office and also at Maharaj Nagar Branch and submit a detailed explanation by 09.01.1991. Petitioner inspected the documents at Head Office on 28.12.1990, and at Maharaj Nagar Branch on 08.01.1991, and submitted a detailed reply vide his letter dated 21.01.1991. However, not being satisfied with the reply of petitioner, the respondent Bank placed him under suspension on 22.04.1991 in contemplation of a departmental enquiry in respect of a misconduct committed during his posting as Field Supervisor at Sita Rasoi Branch of Bhagirath Gramin Bank, now known as Lucknow Kshetriya Gramin Bank. A charge sheet was issued on 12.06.1991 and served on the petitioner on 14.06.1991. On 25.06.1991, the petitioner requested for inspection of documents, accounts and vouchers relating to the charges. On 05.07.1991, the vigilance department of Bank informed the petitioner that he can inspect all the documents as demanded by him, on 13.07.1991 at Head Office. On 13.07.1991, the petitioner inspected all the documents as demanded by him at the vigilance cell of Head Office. On 17.07.1991, the petitioner demanded inspection of additional documents, and on 19.07.1991, he was permitted to do so, and was also directed to submit his reply by 01.08.1991. On 25.07.1991, petitioner inspected all the documents as required by him at Maharaj Nagar Branch, Sitapur. On 29.07.1991, he requested for further time till 15.08.1991 for submitting a reply to the charge sheet dated 12.06.1991 on the ground of illness without submitting a medical certificate. After considering the request dated 29.07.1991, since the petitioner had not submitted a medical certificate about his illness, a departmental enquiry was instituted and thus, an Enquiry Officer and Presenting Officer were nominated on 03.08.1991. On 08.08.1991, the Enquiry Officer informed the petitioner about the departmental enquiry to be conducted against him and directed him to appear during the enquiry proceedings on 21.08.1991 at 10.00 AM at Head Office, Sitapur. On 14.08.1991, the petitioner submitted an application to the Chairman of the Bank requesting to review the order dated 03.08.1991, which was replied vide letter dated 22.08.1991. On 19.08.1991, the petitioner requested the Enquiry Officer to keep the enquiry proceedings in abeyance. On 21.08.1991, the Enquiry Officer, after taking into consideration petitioner's letter dated 19.08.1991, decided to proceed with the enquiry further. Thereafter, the Presenting Officer submitted a list of documents and witnesses and fixed the next date for 03.09.1991. The Chairman of Bank passed an order dated 22.08.1991 directing the petitioner to act in accordance with the Regulations, 1980, and for seeking adjournment, he was advised to contact the Enquiry Officer. The Enquiry Officer vide letter dated 22.08.1991 informed the petitioner that the next date fixed for enquiry was 03.09.1991. The Petitioner submitted an application dated nil alongwith medical certificate for the period from 29.08.1991 to 18.09.1991 and requested for adjournment on 03.09.1991 of the enquiry proceedings. The Enquiry Officer, in response to the letter submitted by the petitioner alongwith medical certificate, adjourned the enquiry proceedings till 18.09.1991 and fixed the next date of hearing for 19.09.1991. On 19.09.1991, the petitioner requested the Chairman-cum-Disciplinary Authority for personal hearing and also requested the Enquiry Officer for sending his request of personal hearing, before holding the disciplinary proceeding, to the Chairman and the same was allowed. Thus, the proceeding dated 19.09.1991 was adjourned. Personal hearing before the Disciplinary Authority was held on 27.11.1991, whereupon it was concluded that as the petitioner was not able to put across any logical submission in his defence, the departmental enquiry should continue. The decision was conveyed to the petitioner through letter dated 27.11.1991. On 23.10.1991, the Presenting Officer informed the Enquiry Officer through letter that the attested copies of documents as per the list submitted by the management be delivered to the petitioner. On 31.10.1991, the Enquiry Officer informed the petitioner to appear along with his defence assistant on 13.11.1991 at 10.00 a.m. at Head Office for inspecting the documents, and also for submitting a list of defence documents and witnesses. On 13.11.1991, the Enquiry Officer conducted the enquiry and directed the petitioner to file the list of defence documents as well as of witnesses on 14.11.1991. The petitioner during the course of enquiry proceedings urged that he would present his case himself and Disciplinary Authority, thus, fixed the date for personal hearing on 27.11.1991. On 14.11.1991, the enquiry was adjourned on the ground of illness of petitioner. However, the personal hearing was given on 27.11.1991, but the application submitted by petitioner dated 19.09.1991 was rejected by the Disciplinary Authority. On 10.12.1991, the Enquiry Officer directed the petitioner to inspect all the documents till 25.12.1991, and the next date of hearing was fixed for 30.12.1991. On 23.12.1991, the petitioner submitted a list of documents and also requested for the inspection of documents, with assurance that after the inspection, the list of defence witnesses would be submitted. A letter to that effect was received by the Enquiry Officer on 26.12.1991. On 23.12.1991, the petitioner submitted a letter complaining therein that he had not been provided the copies of certain documents as mentioned in the provisional list enclosed with the letter dated 21.08.1991 issued by the Enquiry Officer. On 26.12.1991, the petitioner appeared before the Presenting Officer and inspected all the documents. A certificate was given about the inspection of list of documents. On 30.12.1991, enquiry proceedings were held, which were attended by the petitioner. The Presenting Officer informed the Enquiry Officer that the petitioner had also been permitted to inspect the remaining documents at Maharaj Nagar Branch, Sitapur. Still, the Enquiry Officer directed the Presenting Officer to make available the documents of Maharaj Nagar Branch, Sitapur, which the petitioner wanted to inspect. Copies of all the documents asked for were made available by the Management to the petitioner during the enquiry proceedings. On 10.01.1992, the petitioner thus inspected all the documents towards the demand raised in his application dated 30.12.1991 at Maharaj Nagar Branch on different dates as mentioned hereinbelow:

14.1.1992: Petitioner issued a certificate of inspection of documents at Branch Maharaj Nagar, Sitapur (Annexure No. CA-7 to the counter affidavit.)

16.1.1991 Petitioner issued a certificate of inspection of documents at Branch Maharaj Nagar, Sitapur (Annexure No. CA-8 to the counter affidavit.

17.1.1992 Petitioner issued a certificate of inspection of documents at Branch Maharaj Nagar, Sitapur (Annexure No. CA-8 to the counter affidavit.

18.1.1991 Petitioner issued a certificate of inspection of documents at Branch Maharaj Nagar, Sitapur (Annexure No. CA-9 to the counter affidavit.

19.1.1991 Petitioner issued a certificate of inspection of documents at Branch Maharaj Nagar, Sitapur (Annexure No. CA-10 to the counter affidavit.

20.1.1991 Petitioner issued a certificate of inspection of documents at Branch Maharaj Nagar, Sitapur (Annexure No. CA-6 to the counter affidavit.

21.1.1992 Petitioner issued a certificate of inspection of documents at Branch Maharaj Nagar, Sitapur (Annexure No. CA-11 to the counter affidavit.

On 23.01.1992, the petitioner again submitted a list of additional documents for supply and inspection and on 27.1.1992, the Enquiry Officer allowed the request for inspection on 07.02.1992, at Maharaj Nagar Branch, Sitapur at 10 a.m. On 10.02.1992, the petitioner again submitted an application and demanded additional documents for inspection. On 17.02.1992, the Presenting Officer informed the petitioner that he may inspect all the documents which have been permitted by the Enquiry Officer at Maharaj Nagar Branch on 18.02.1992. On 18.02.1992, the petitioner inspected the said documents and on 14.05.1992, he was informed by the Enquiry Officer about the next date of proceedings i.e. 01.06.1992. On 01.06.1992, enquiry proceedings were postponed and on 19.06.1992, enquiry was held and the next date was fixed for 16.07.1992 for evidence of MW-1 Shri O.P. Awasthi. On 16.07.1992, examination-in-chief of MW-1 Shri O.P. Awasthi was completed and cross-examination was deferred. On 17.07.1992, examination-in-chief of MW-2 Shri S.K. Shrivastava was completed and cross-examination was deferred on the request of petitioner. During the proceedings, the Presenting Officer informed that all the desired documents except those which were not available had been provided to the petitioner. The Presenting Officer also added that the documents, which were not in existence, were not to be included as management documents. The petitioner also admitted that he had received all the available documents. On 27.07.1992, the petitioner submitted a representation before the Enquiry Officer requesting for an opportunity to inspect the documents in order to cross-examine the management witnesses. On 03.08.1992, 04.08.1992 and again on 05.08.1992, Shri O.P. Awasthi, MW-1, was cross-examined and the same day i.e. 05.08.1992, cross-examination of Shri S.K. Shrivastava, MW-2, was also completed. On 12.08.1992, the petitioner submitted a reminder application in respect of his earlier application dated 18.02.1992. On 13.08.1992, 17.08.1992,18.08.1992 and again on 16.09.1992, the petitioner inspected all the documents which were required by him, through his applications dated 12.08.1992 and 18.02.1992, at Head Office Sitapur and Maharaj Nagar Branch of the Bank. On 24.08.1992, proceedings were held and the relevancy of D-1 i.e. list of defence documents was discussed. On 16.09.1992, during the enquiry proceedings, defence documents were enlisted and copies of documents as asked for were provided to the petitioner. Shri Radhey Shyam (DW-1) was examined and cross-examined on that date. On 08.10.1992, petitioner admitted during the course of enquiry proceeding that all the documents were supplied to him and the same day, examination and cross-examination of DW-2 Shri Bal Krishna Sharma was held. On 26.12.1992, the Presenting Officer submitted his written brief. On 23.01.1993, the petitioner submitted his written brief in respect of charge-sheet dated 12.06.1991. On 22.02.1993, the enquiry report was submitted by the Enquiry Officer after having examined 88 management documents, 12 defence documents, two management witnesses, three defence witnesses and after conducting the enquiry proceedings on thirteen different dates, that is to say, between 21.8.1991 and 18.10.1992 and also after going through the written brief of the Presenting Officer and the petitioner. On 09.07.1993, a second show cause notice was issued by the Bank to the petitioner and on 19.07.1993, the petitioner submitted his reply to that notice and requested for personal hearing. Personal hearing was granted on 12.08.1993 and finally, on 28.09.1993, the petitioner was visited with the punishment of removal from service by the Chairman of the Bank vide Annexure-1. Petitioner filed an appeal against the removal order before the Board of Directors of the Bank. On 11.02.1994 a meeting of the Board of Directors of the Bank was held and decision was taken. After a month on 11.03.1994, the Board of Directors of the Bank, after a close scrutiny of the appeal records found no merit therein, and thus, rejected it. The said decision was communicated to the petitioner.

We have heard learned counsel for parties and carefully perused the records.

Learned counsel for petitioner inter alia submitted that the petitioner was not given reasonable opportunity to defend himself as the documents asked for were not supplied; that, the petitioner was compelled to cross examine the management witnesses in the absence of documents; that, the Enquiry Officer illegally rejected the defence documents of petitioner without recording any reason for rejecting them; that, there was dearth of evidence; that, entries made in the handwriting of the petitioner did not lead to the conclusion that he had received the forged amount; that, no effort was made by the Enquiry Officer to get the entries examined by a handwriting expert for comparison; that, the impugned order does not indicate as to whether the Chairman of the Bank considered the defence contentions raised by the petitioner in his reply to the charge sheet or not; that, under the Staff Service Regulations an appeal would lie against the order of punishment passed by the Chairman of the Bank, to the Board of Directors but the Chairman is also the Chairman of the Board of Directors; that, though the Chairman did not attend the meeting of the Board of Directors which considered the appeal of the petitioner but the fact remains that he is the head of the Board of Directors, thus, there was a possibility of Board of Directors being influenced by the decision of the Chairman; that, the Staff Service Regulations has been framed by the Bank beyond its competence of Regulations making power vested in the Bank under Section 30; that, the power to determine the terms and conditions of service of employees or officers is not a power for giving effect to the provisions of the Act but is a power for carrying out the provisions of the Act; that, the power to give effect to the provisions of the Act is specifically entrusted to the Central Government under Section 29(1) of the Act; that, it could not be the intention of the Parliament to confer the power of determining the terms and conditions of employees or officers of each Regional Rural Bank to the Bank itself and thereby to empower each Bank to lay down different terms and conditions for its employees and; that, in matters which are covered by Section 29(1) of the Act, powers conferred under Section 30 of the Act cannot be exercised as it could also not be the intention of the Parliament to vest concurrent powers in the Central Government as well as the Board of Directors of each Regional Rural Bank in the same manner.

Learned counsel for the petitioner also submitted that the removal order passed against the petitioner is arbitrary and unjustified. According to learned counsel, a departmental enquiry is in the nature of quasi judicial proceedings. In support of his submission, learned counsel has placed reliance on a latest judgment of the Apex Court, reported in (2009) 2 SCC 570: Roop Singh Negi vs. Punjab National Bank and others. It is further submitted that the petitioner was not working as a Cashier and he was only a Field Supervisor and, therefore, if the requisite entry was missing in the Ledger Book and the money taken was not deposited in the account or scroll book or log book, then at the most, cashier should have been held responsible. Further, this is a case of petitioner that initiation of disciplinary proceedings should be bona fide, reasonable and fair, and further, that in awarding punishment, the doctrine of reasonableness should apply. In support of his argument, learned counsel for petitioner submitted a list of judgments for perusal of the Court. They are: (1) (2001) 3 All ER 433 - R. vs. Secretary of State of the Home Deptt., (2) (2005) 3 All ER 435 - Huang vs. Secretary for State for the Home Department, (3) (2006) 3 SCC 173- Commissioner of Police vs. Syed Hussain, (4) (2006) 3 SCC 276 - State of U.P. vs. Sheo Shankar Lal Shrivastava and (5) (2008) 4 SCC 1 - Union of India vs. Naman Singh Shekhawat.

Learned counsel also referred to a judgment reported in AIR 1967 SC 1058: Chandradhar Goswami vs. Gauhati Bank Ltd., to elucidate Section 4 of the Bankers Book Evidence Act, 1981. According to him, mere entries from books of account or mere copies thereof are not sufficient to charge person with liability except where person concerned accepts correctness of entries.

Learned counsel further more submitted that the judicial review of administrative action is available in cases of no evidence and the High Court in exercise of powers under Article 226 of the Constitution can interfere in cases where there is no evidence in support of the charges. He again submitted a list of judgments on this point as: (1) (1975) 2 SCC 557 - State of A.P. vs. Chitra Venkata Rao, (2) (1978) 3 SCC 366 - Nand Kishore Prasad vs. State of Bihar, (3) (1998) 9 SCC 553 - Secy. To Govt., Home Dept. vs. Shrivaikundathan, (4) (1999) 1 SCC 759- Apparel Export Promotion Council vs. A.K. Chopra, (5) (1999) 2 SCC 10 - Kuldeep Singh vs. Commissioner of Police, (6) (1999) 7 SCC 51 - Yoginath D. Bagde vs. State of Maharashtra, (7) (1999) 8 SCC 90 - R.S. Saini vs. State of Punjab, (8) (2001) 1 SCC 182 - Kumaon Mandal Vikas Nigam Ltd. vs. Girija Shankar Pant, (9) (2001) 9 SCC 575 - Syed Rahimuddin vs. Director General, CSIR, (10) (2002) 7 SCC 142 - Sher Bahadur vs. Union of India and (11) (2003) 3 SCC 583 - Lalit Popli vs. Canara Bank.

On the other hand, learned counsel for the Bank Shri Asit Kumar Chaturvedi submitted that from the list of dates and events, this would be evident that there was no procedural lapse or violation of principles of natural justice on the part of Enquiry Officer or the disciplinary authority during the course of enquiry. This is not a case of 'no evidence' and looking to the nature of fiduciary relationship and the nature of duty of the employee of Banking Sector, the punishment awarded, in the obtaining circumstances, appears to be fully justified. Shri Chaturvedi also submitted that Bankers Book Evidence Act, 1891, would not apply in the instant case. Learned counsel contended that the judgment referred to in respect of Doctrine of Proportionately which should give way to reasonableness again would not be relevant in the present case for the reason that departmental enquiry proceeding was conducted in accordance with the Bhagirath Gramin Bank Staff Service Regulations, 1980 and principles of natural justice. Initiation of departmental disciplinary enquiry proceedings after suspension and serving of charge sheet is bonafide, reasonable and fair. It is not a case of no evidence which is amply clear from the materials as contained in the enquiry report. On the contrary, the enquiry report is full of substantial evidence and thus the judgments as referred to in the submission of learned counsel for petitioner would not be applicable for the purpose of adjudication of the case. In the case of misappropriation of Bank fund the punishment of removal from service cannot be said to be disproportionate.

On due consideration of rival submissions, we do not find any force in the writ petition for the reason that the petitioner was asked to explain some wrong entries made in the banks records of Maharaj Nagar Branch on 30.11.1990 and he was visited with punishment of removal from service after giving him sufficient opportunities of defence on 28.09.1993. The petitioner demanded the documents to meet the charges levelled against him for the first time on 25.06.1991 and thus he was supplied all such documents which were available with the bank and which alone were referred to substantiate the charges against the petitioner. The petitioner also admitted on 8.10.1992 that all the documents which were relied upon by the Management of Bank and which he had asked for till that day were supplied to him. Coming to the competence of Bank to frame Regulations, such powers have been conferred under Section 30 of the Regional Rural Banks Act, 1976, which is reproduced as under:

"30. Power to make regulations. - 2*[(1)] The Board of directors of a Regional Rural Bank may, after consultation with the Sponsor Bank and the 3*[National Bank] and with the previous sanction of the Central Government 4*["by notification in the Official Gazette,] make regulations, not inconsistent with the provisions of this Act and the rules made thereunder, to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of this Act.

5*[(2) Every regulation shall, as soon as may be after it is made under this Act by the Board of directors, be forwarded to the Central Government and that Government shall cause a copy of the same to be laid before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the regulation or both Houses agree that the regulation should not be made, the regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that regulation."]"

Besides, the petitioner participated on 13 dates between 21.08.1991 and 18.10.1992 in the enquiry and he also did not take objection to the competence of Bank to frame the regulations, nor did he challenge the enquiry on that count. The petitioner did not raise any objection when the Chairman being the Disciplinary Authority asked the petitioner on 22.08.1991 to act in accordance with the Banking Regulations of 1980. Insofar as the allegation of bias in the mind of Chairman is concerned, it appears to be absolutely unfounded because on a request made by the petitioner, the Chairman gave him personal hearing in the midst of enquiry on 27.11.1991 and after hearing the petitioner found that he was not able to make any logical submission for dropping the enquiry. The petitioner was granted adjournments as and when he requested for and that is why the entire enquiry process took a considerable time between November, 1990 (when the petitioner was asked to explain certain entries in the banks records of Maharaj Nagar Branch) and 28.09.1993 (when the punishment order was passed). The petitioner was issued show cause notices twice and was also given personal hearing on two occasions, the second one before passing the impugned punishment order on 28.09.1993. It is not a case of no evidence and the enquiry report was submitted on the basis of 88 management and 12 defence documents and after examining 2 management and 3 defence witnesses on 13 dates and also after giving sufficient opportunities to cross-examine the management witnesses. Admittedly, the Chairman did not participate in the meeting of the Board which while acting as the Appellate Authority considered and rejected the appeal of petitioner filed against the punishment order of removing him from service passed by the Chairman. The petitioner has not placed any material on record to show that the Chairman had ever harboured any bias against him. Moreover, if the petitioner participated in the enquiry on 13 dates after having taken a number of adjournments in addition, it would not be open for him to criticise the enquiry proceeding and question the constitution of Board. Admittedly, the Chairman recused from participating in the meeting of the Board which rejected petitioner's appeal on 11.03.1994. Insofar as the legal propositions advanced by learned counsel for petitioner are concerned, there is no quarrel about them, but the moot question is as to whether on the materials available on record, the same would be attracted or have not been complied with. In our opinion, there is no such material to accept the contention made on behalf of the petitioner.

Thus, we do not find any merit in the writ petition and it is accordingly dismissed.

Dated: 30.09.2011 (S.C. Chaurasia, J) (Uma Nath Singh, J)

A. Katiyar