Rakesh Kumar Pal vs Assistant General Manager (Ir) ...
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HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

Reserved
 
Court No. - 33								AFR
 

 
Case :- WRIT - A No. - 29780 of 2011
 

 
Petitioner :- Rakesh Kumar Pal
 
Respondent :- Assistant General Manager (Ir) Ubi And Others
 
Counsel for Petitioner :- Rakesh Bahadur; D.N.Joshi; Praful Bahadur
 
Counsel for Respondent :- Vivek Ratan
 

 
Hon'ble Manoj Misra, J.

Hon'ble Ved Prakash Vaish, J

(Delivered by Hon'ble Manoj Misra, J.)

The instant petition has been filed for quashing the orders dated 23.01.2010 and 08.09.2010 passed by the Disciplinary Authority and the Appellate Authority, respectively, by which the petitioner has been dismissed from service and the appeal preferred against the order of dismissal has been dismissed.

To have a better understanding of the controversy it would be apposite to narrate the facts in brief.

The petitioner was appointed on 22.10.2001 as a Probationary Officer in Union Bank of India (in short the Bank), which is a public sector bank in which the Government of India has controlling stake. On 14.11.2015, the petitioner came to be posted as a Branch Manager at Sarsena Branch of the Bank in District Mau. An audit of the Sarsena Branch was held in connection with which certain queries were made from the petitioner regarding certain transactions in his COD (overdraft facility) and SB (savings bank facility) accounts. Thereafter, on 14.07.2008, the petitioner was transferred to Padrauna Branch at district Kushinagar. Subsequently, the petitioner was placed under suspension and served a charge sheet on 08.06.2009. In the statement of allegations appended to the charge sheet it was alleged that during his tenure as Branch Manager, Sarsena, the petitioner indulged in various fraudulent activities and committed numerous fictitious transactions. There were large number of debit/ credit entries in his SB/COD accounts whereby funds were transferred from his account to customers account and vice versa. It was alleged that he indulged in lending / borrowing to / from the customers. It was also alleged that he accommodated one of the defaulting borrower, namely, Sudhir Singh, and thereby violated lending norms of the Bank. It was alleged that he availed TE / LFC advance on various occasions and did not submit requisite TE bills in time. The charge sheet was accompanied by statement of allegations, which ran into several pages, specifically disclosing the acts and omissions on the part of the petitioner that formed basis of the charge. On the basis of the statement of allegations, which were supported by details given in the enclosures, the petitioner was charged with following acts of misconduct:-

"Failure to discharge duties with utmost honesty and integrity.

Failure to discharge duties with utmost devotion and diligence.

Acting otherwise than in best judgment in performance of official duties.

Failure to take all possible steps to ensure and protect the interest of the Bank."

The statement of allegations, which formed basis of the charge, bereft of enclosures, are extracted below:-

"STATEMENT OF ALLEGATIONS

The following acts of omission & commission have been observed on the part of Shri R.K. Pal, Asst. Manager (U/S) Padrauna branch during his tenure as Branch Manager, Sarsena Branch:

That Shri Pal is maintaining SB A/c 50112 and SOD No.10005 with Sarsena branch. In both the aforesaid accounts, various credit entries consisting of cash deposit, transfer entries representing transfer of funds from the accounts of different customers and debit entries consisting of cash withdrawals, transfer of funds from various customers have been observed.

i) There are as many as 24 cash deposit entries aggregating to Rs.6.74 lacs in both the aforesaid accounts of Shri Pal during the period from 8.4.06 to 21.5.08. The details of these entries are given in Annexure A. Out of these 24 credit entries, pay-in-slips in respect of 20 entries do not bear the signatures of depositor but they were filled in by Shri Pal himself. In remaining 4 entries (aggregating to Rs.1,34,500/-), the relevant pay-in-slips were signed by the customers namely S/Shri Ram Narain Gupta, Pankaj Singh, Sudhir Singh and Dharmendra Maurya.

ii) Similarly, there are 24 Dr. / Cr. entries aggregating to Rs.13.90 lac in aforesaid SOD / SB a/cs of Shri Pal during the period between 3.10.06 to 12.5.08. The details of these entries are given in annexure B. The close scrutiny of these transactions reveals that the funds were transferred from SOD A/c of Shri Pal to his SB A/c during quarterly closing as of 30.03.07, 30.06.07, 28.12.07, 29.03.08 to resort to window dressing. It is further revealed that after closing, the funds were transferred back to his SOD a/c.

iii) In addition to above, another 24 debit / credit entries (aggregating to Rs.3,58,270/-) representing transfer of funds from the SB /SOD a/c of Shri Pal to customers a/c and vice-versa were also observed. All such transfer of funds were made through plain debit vouchers prepared by Shri Pal himself and in 22 cases debit confirmation of concerned account holders were not obtained. This evidences that Shri Pal was in habit of taking money from the customers and lending it to others. The details of these 24 entries are given in Annexure C.

Irregular transactions in UGC loan account of Shri Sudhir Singh and Shri Sudarshan Singh

- Shri Sudhir Singh had availed UGC loan (A/c No.5130) from the Bank and over a period it became irregular / overdue. He was, therefore, issued legal notice dated 8.11.07 advising him to adjust the same.

- On 19.11.07, an amount of Rs.30,000/- was deposited in UGC loan a/c no.5130 of Shri Sudhir Singh by way of transfer of fund from SB a/c no.3698 of Shri Sudarshan Singh through plain debit voucher without obtaining debit confirmation from a/c holder i.e. Shri Sudarshan Singh.

- On 19.11.07, Shri Pal sanctioned UGC loan of Rs.30000/- a/c no.5217 to Shri Sudarshan Singh and the proceeds were immediately transferred to his SB a/c no.3698. The amount so credited to his SB a/c was then transferred/credited to overdue UGC loan a/c 5130 of Shri Sudhir Singh for its closure/adjustment.

-On 22.11.07 i.e. immediately after adjustment of his earlier overdue UGC loan, fresh UGC loan of Rs.22,500/- was sanctioned / disbursed to Shri Sudhir Singh and the proceeds were credit to his SB a/c no.148 which were immediately withdrawn in cash and deposited in SOD a/c of Shri Pal.

- On 06.12.07 Rs.32,500/- was credited to UGC loan a/c of Shri Sudarshan Singh by debiting Rs.22,500/- from SOD a/c no.10005 of Shri Pal and Rs.10,000/- from SB a/c no.3698 of Shri Sudarshan Singh.

- All the vouchers relating to the aforesaid transactions were prepared and signed by Shri Pal.

It is, thus, evident that Shri Pal accommodated Shri Sudhir Singh and adjusted his overdue UGC loan a/c by sanctioning UGC loan of Rs.30000/- to Shri Sudarshan Singh on 19.11.07 and immediately thereafter sanctioned him fresh UGC loan of Rs.22,500/- on 22.11.07 within two days of adjustment of earlier loan. The proceed of this fresh UGC loan was transferred to SOD a/c of Shri Pal on the same day through his SB a/c and it was credited to UGC loan a/c of Shri Sudarshn only on 06.12.07. Shri Pal, therefore, flouted the lending norms of the bank and allowed misuse of loan amount for the purpose other than for which it was sanctioned.

Lending/borrowing

Shri Pal was in habit of borrowing money from the customers and lending it to the others and thus he indulged in parallel banking against the rules of the Bank. Some of the instances of such lending / borrowings are as under:-

- On 30.07.07, Rs.25000/- was transferred from CD a/c of Maa Sharda Kirana Stores (MSKS) to SOD a/c of Shri Pal and the same was repaid in instalments as under:

Amount

Entry Date

Debited from

Credited to

Rs 20000/-

26.12.07

SOD A/c of Mr. Pal

CD a/c of MSKS

Rs 1500/-

05/03/08

-do-

SB A/c 6854 of Pramod Kr Jaiswal

Rs 3500/-

10/03/08

-do-

SB A/c 6854 of Pramod Kr Jaiswal

Shri Pal had lent Rs.20000/- to Shri Pankaj Kumar Singh (Customer) by transferring Rs.10,000/- each on 7.11.06 and 23.02.07 from his SOD a/c 1005 and SB a/c 500122 respectively. As a repayment of this, Shri Singh deposited cash of Rs.10000/- on 26.03.07.

A secured loan of Rs.45,000/- was sanctioned to one Shri Shambhu Nath Singh on 08.12.07 and the amount was credited to his SB A/c No.7319. On the same day, the said amount was transferred from the SB a/c of the customer to SOD a/c of Shri Pal. The secured loan of Shri Shambhu Nath Singh was subsequently adjusted in full on 10.04.08 by transferring Rs.51,470/- from SOD a/c of Shri Pal. Shri Pal has also confirmed vide his letter dated 28.07.08 having borrowed money from Shri Shambhu Nath Singh.

Big amount debit entries in SOD / SB a/cs of Shri Pal

- There are as many as 9 big amount debit entries aggregating to Rs.3,19,293/- in SOD / SB A/c of Shri Pal as detailed below:

DATE

AMOUNT

PARTICULARS

29.03.07

7400/-

Amt debited to SB A/c 500122 of Shri R.K. Pal and Rs.6500/- credited to Exp. A/c Misc. & 900/- to Susp. A/c Misc.

26.07.07

48960/-

DD issued in favour of Escrow A/c CBI IPO-R

13.09.07

26000/-

DD issued in favour of Escrow A/c Power Grid Corpn.

22.11.07

100000/-

DD issued in personal name drawn on New Delhi

20.12.07

10000/-

DD issued in favour of HDGC SLIC

17.01.08

12135/-

DD issued on Lucknow in favour of Reliance Power IPO-R

43200/-

Cheque dtd 28.03.06 in favour of LIC - date payment not ascertained

24.05.07

43199/-

Cheque issued in favour of LIC of India

30.04.08

43199/-

Cheque issued in favour of LIC of India

Total

326693/-

The scrutiny of aforesaid debit entries reveal that these withdrawals were made for issuing DD towards application money for IPOs payment made to LIC, purchase of DDs for other purposes etc. The aforesaid transactions are disproportionate to the known source of income of Shri Pal.

Fictitious entries in Impersonal Accounts

- On 29.03.07, Shri Pal debited his SB a/c no.500122 for Rs.7400/- and credited Expenditure A/c - Misc. Expenses by Rs.6,500/- and Suspense A/c by remaining amount of Rs.900/-. The vouchers pertaining to this transaction were prepared by Shri Pal without giving any narration / particulars.

T.E. Advance

- During the period from 05.07.07 to 02.05.08 Shri Pal availed TE advance aggregating to Rs.21,000/- on 11 occasions as detailed below:

Date

Amount

Purpose of Advance

Amt of Bill

Present Status

05/07/07

1000/-

Submission of Closing sets

558/-

Return for want of Tour Programme

02/10/07

1000/-

Submission of Closing sets

558/-

Return for want of Tour Programme

05/11/07

1000/-

To attend Review Meeting

558/-

Return for want of Tour Programme

05/11/07

3000/-

Attend front line training

No bill found on record

11/12/07

3000/-

To attend workshop

958/-

Rs.958/- sanctioned

01/01/08

1000/-

Submission of closing sets

558/-

Returned for want of Tour Programme

04/01/08

1000/-

To attend Review Meeting

558/-

Tour Programme

11/02/08

5000/-

For CBS Training

3971/-

2471/- sanctioned

02/04/08

1000/-

Submission of closing sets

558/-

Returned for want of tour programme

04/04/08

3000/-

Promotional test

2947/-

2947/- sanctioned

02/05/08

1000/-

BM/s meeting

558/- sanctioned

- No TE bill for advance of Rs.3,500/- taken on 05.11.07 is available on branch's record as well as RO Gorakhpur.

- Shri Pal was in habit of availing TE advance exceeding his actual traveling expenses and not refunding the excess amount in time.

- He was also in habit of submitting his TE bill belatedly.

- TE bill related to advance taken on 02.05.08 though sanctioned by RO, the copy of the same is not available on branch record.

LFC Advance

- On 11.10.07, Shri Pal availed LFC advance of Rs.15,000/- without any prior approval of competent authority and without getting his leave sanctioned.

Festival Advance

- In the year 2007, Shri Pal had availed Festival advance of Rs.10,000/- on two occasions i.e. on 23.02.07 and 12.11.07 against the rules of the Bank."

The petitioner submitted his reply to the charge sheet in which he did not specifically deny the debit/credit entries in his SB and SOD account that indicated transfer of funds from his account to customers account and vice versa. The explanation offered by the petitioner was that in all there were sixteen such persons including two staff members, who were well known to him, whom he helped in their hour of financial difficulty; that these transactions were bona fide and were reflected by debit/credit entries in his SB and SOD accounts; and that he received financial help from Shambhu Nath Singh Yadav and Sudarshan Singh in his hour of financial difficulty. He submitted that by such transactions it could not be inferred that he was running parallel banking of lending/ borrowing because these transactions were purely on humanitarian ground. As regards accommodating the defaulting borrower Sudhir Singh, he stated that UGC loan account of Sudhir Singh had become overdue and irregular, for want of recovery in the account from last two crop seasons, therefore notice was issued to Sudhir Singh to adjust the overdue amount, upon which, Sudarshan Singh, who resides in the same village as Sudhir Singh, approached the petitioner and, as a friend, came forward to help Sudhir Singh, in adjusting overdue amount in his UGC account, from his SB Account No.3698. The adjustment was thereafter made with the help of Sudarshan Singh. It was claimed that by such adjustment, the petitioner prevented an irregular and overdue UGC loan account from falling in NPA category. It was claimed that after adjustment of his loan, Sudhir Singh insisted on sanctioning of a fresh loan, which was sanctioned as per norms. As regards submission of bills and adjustment of TE advance entries and LFC advance, the petitioner submitted that he could not submit the bills in time because of burden of official work but all the TE advance and LFC advance entries have been adjusted and there is no outstanding entry in suspense account against his name. After submitting explanation as above, it was pleaded by the petitioner that the petitioner was an Ex-Air Force Personnel and had a clean record and that the acts done by him were in good faith without any mala fide intention to harm bank's interest and that no loss had been caused to the Bank. With respect to personal dealing with proprietor of "Maa Sharda Kirana Store", it was stated that the petitioner had to remain in the Branch up to 10 O'clock in the night and for such long hours of sitting, generator services were required which were under the control of Pramod Kumar Jaiswal i.e. proprietor of the firm "Maa Sharda Kirana Store", and, therefore, he had to oblige him by helping him out in his hours of financial difficulty, as a result, there were few financial transactions between him and "Maa Sharda Kirana Store" but on that basis it cannot be said that the petitioner had indulged in lending to customers and thereby running a parallel banking.

After submission of petitioner's reply, the inquiry proceeded. From the minutes of the inquiry it appears that the petitioner was given adequate opportunity of hearing and the documents relied upon were duly exhibited and perused by the petitioner. The Assisting Officer representing the petitioner made a statement that he does not want to examine CSO (the petitioner) as defence witness. He also stated that he does not wish to produce or examine any other defence witness. He further stated that he would submit only a written statement of defence on behalf of CSO. On the statement made by the Assisting Officer, appearing for the petitioner, the inquiry proceedings were closed by the Inquiry Officer with following remark:-

"Since, the parties have closed their cases; they are also advised to submit their written arguments, if any, so as to reach IA at his Delhi address i.e. R.O (N) Bq. Market, Shalimar Bagh, by 20.11.2008. The PO shall submit his written brief first with a copy to CSO/AO by 13.11.2008 in case these are not received by the stipulated date, it shall be assumed that they do not want to submit these. The AO states that they shall cover their whole defense case i.e. written satisfactory of defense as well as arguments in the written statement of defense on the receipt of written arguments of the PO.

Accordingly enquiry proceedings closed.

06.11.2009."

Thereafter, written brief cum arguments were submitted. In the written arguments submitted by the petitioner, in paragraph no.15, it was stated that "it is a matter of great concern that still as on date I have not been provided full statement of my SB A/c 500122 covering neither the tenure of my service at Sarsena branch from 15.11.2005 to 14.07.2008 nor the certificate of the period for which management is not able to provide the said statement. This being the most important document for proving my innocence."

The Enquiry Officer submitted his inquiry report, dated 05.12.2009, finding: (a) that the petitioner indulged in lending / borrowing money from the customers; (b) that the petitioner had allowed loan to be misutilizsed; (c) that there were very heavy transactions in petitioner's bank accounts which were disproportionate to the known source of his income; (d) that the petitioner was in a habit of availing TE advance exceeding his travel expenses and did not refund the excess amount in time; (e) LFC advance was taken without prior approval; and (f) festival advance was taken twice in a calender year when it could be availed only once. On the basis thereof all four charges were found proved, as follows:-

"Failure to discharge his duties with utmost honesty and integrity.					- PROVED
 
Failure to discharge his duties with utmost devotion and diligence.					- PROVED
 
Acting otherwise than in his best judgment in performance of his official duties.					- PROVED
 
Failure to take all possible steps to ensure and protect the interest of the Bank.				- PROVED"	
 

 

A perusal of the inquiry report would reveal that various transactions that were enumerated in the statement of allegations were all proved by production of bank records of which there could be no denial.

The thrust of the defense of the petitioner was not that the enumerated transactions had not taken place but was that no financial loss was caused to the Bank; that no complaint was made by any customer of the Bank; and that the transactions were bona fide and in good faith. The said defense was discarded by the inquiry officer by observing that the purpose of such transactions remains not only doubtful but they were against the interest and image of the Bank. The Inquiry Officer observed that there were large number of debit / credit entries in Charge-sheeted Officer's (CSO's) SB/SOD account whereby funds were transferred from his account to customers account and vice versa and, that apart, he indulged in lending / borrowing to/from the customers. Not only that he accommodated one defaulting borrower, namely, Sudhir Singh, in violation of Bank's lending norms, which amounted to fraudulent / fictitious transaction. In addition to above, he availed TE/LFC advance on various occasions but did not submit requisite TE bills in time.

The inquiry report was forwarded to the petitioner for inviting his comments. Whereupon, the petitioner submitted his reply. After considering the reply of the petitioner, the disciplinary authority, by impugned order dated 23.01.2010, imposed major penalty of dismissal from service of the Bank with further observation that the petitioner shall not be entitled for any pay and allowances for the period of his suspension save and except the subsisting allowance already paid to him. Against the order of dismissal, an appeal was preferred by the petitioner which was considered and dismissed by the appellate authority by impugned order dated 08th September, 2010.

We have heard Sri Rakesh Bahadur for the petitioner; and Sri Vivek Ratan Agrawal for the Bank (respondents).

Sri Bahadur submitted that though there was no dispute as regards transfer from SOD account to the SB account of the petitioner and vice versa as also in respect of transfers made from those accounts to the account of customers of the Bank but the explanation of the petitioner, which is that such transactions were bona fide; not prohibited by law; and resulted in no loss to the bank, have not at all been addressed by the Inquiry Officer and arbitrarily inference has been drawn that the petitioner had violated banking norms and thereby have not served the Bank with utmost devotion and diligence as is expected from a Bank Officer.

Sri Bahadur submitted that the overdraft limit was never crossed by the petitioner. The transfer from overdraft account to the SB account is not prohibited by law and lending to, or taking money from, friends is also not prohibited by law therefore in absence of any loss to the Bank how could it be inferred that the petitioner was guilty of the charges. It was submitted that in so far as TE and LFC bills are concerned, any delay in submitting those bills by itself would not be a ground to impose a major penalty. Likewise other charges were also minor irregularities which in day to day functioning of the Bank are liable to be ignored. It was submitted that in so far as accommodation of defaulter Sudhir Singh is concerned, that was at the behest of one Sudarshan Singh, who came forward to help Sudhir Singh, and therefore adjustment of the loan account of Sudhir Singh would not be misconduct much less serious misconduct to warrant major penalty of dismissal. It was submitted that there is nothing on record to show that all these transactions were done with dishonest intention of making any personal gain or causing any loss to the Bank. It was further submitted that from these transactions no inference could be drawn that the petitioner indulged in parallel banking.

Sri Bahadur further submitted that every Banker indulges in window dressing to show good performance of his branch and therefore if, by transfer of funds from the SOD account to SB account and vice versa, the petitioner had increased the volume of business of the branch by showing deposit in SB account at the end of each quarter that by itself cannot be taken as an act of misconduct to warrant major penalty.

Sri Bahadur also submitted that the explanation of the petitioner offered for the transactions has not been properly considered either by the Inquiry Officer or by the Disciplinary Authority much less by the Appellate Authority. It is thus the case of the petitioner that in the facts of the case, the orders impugned deserve to be set aside and the petitioner reinstated in service.

In addition to above, it was submitted that, despite demand, the entire statement of petitioner's bank account was not supplied, and the entire enquiry was completed on a single day i.e. 6.11.2009 therefore, on that ground alone, the inquiry stood vitiated.

In support of his submissions, the learned counsel for the petitioner has placed reliance on the following authorities:-

(a) (2011) 4 SCC 584: State Bank of Bikaner and Jaipur Vs. Nemi Chand Nalwaya wherein the Apex Court had, upon finding that the proven charges did not involve either misappropriation or fraudulent conduct, substituted the punishment of dismissal with compulsory retirement. It was also observed in that judgment that the courts can interfere with the findings recorded in departmental inquiries where such findings are based on no evidence or are clearly perverse; and the test to find out perversity is to see whether a tribunal acting reasonably could have arrived at such finding on the basis of material on record.

(ii) AIR 1983 SC 454: Bhagat Ram Vs. State of Himachal Pradesh and others wherein the Apex Court had held that interference with finding of disciplinary authority can be made where the findings are perverse.

(iii) A Division Bench decision of this Court dated 25.04.2017 in Writ-A No.43864 of 2009: Krishana Jeevan Mani Tripathi Vs. Assistant General Manager, the New India Assurance Co. Ltd. and others where it was observed that documents that form basis of the charge must be supplied to the person facing enquiry; and those documents must also be proved by its author. It was also held therein that after closure of employer's evidence another date be fixed to enable defence to lead evidence; and, further, the inquiry report must reflect with reference to the evidence collected as also the rival submissions as to how charges were found proved.

In response to the above submissions, Sri Vivek Ratan Agrawal, learned counsel for the respondent-Bank, submitted that it was a case where transactions noticed in the statement of allegations were not denied. Therefore no prejudice whatsoever was suffered by the petitioner on non supply of complete statement of bank account. Otherwise also, the petitioner could not demonstrate as to what prejudice he suffered by non supply of entire statement of bank accounts, particularly, when the debit and credit entries in his accounts, that were mentioned in the statement of allegations, were not disputed. It was submitted that the inquiry was closed on a single date with the consent of the Assisting Officer representing the petitioner and the petitioner, as they voluntarily chose not to lead evidence but only to submit written brief. Under the circumstances, the petitioner cannot now raise any grievance about completion of inquiry in a single sitting. It was submitted that as the transactions noticed in the statement of allegations were not disputed, the main object of the inquiry was to find out the true import of those transactions as could be logically inferred therefrom. He cited Rules 14 and 15 of the Union Bank of India Officer Employees' (Conduct) Regulations, 1976 (in short Conduct Regulations), which provide as follows:-

"14. ACCEPTANCE OF GIFTS:

(1) Save as otherwise provided in these regulations, no officer employee shall accept or permit any member of his family or any person acting on his behalf to accept any gift.

Explanation: The expression "gift" shall include free transport, boarding, lodging or other service or any other pecuniary advantage when provided by any person other than a near relative or a personal friend having no official dealings with the officer employee.

Note: A casual meal, lift or other social hospitality shall not be deemed to be a gift.

(2) On occasions such as marriages, anniversaries, funerals or religious functions, when the making of gifts is in conformity with the prevailing religious or social practice, an officer employee may accept gifts from his near relatives but he shall make a report to the competent authority if the value of the gifts exceeds Rs.500/ .

(3) On such occasions as specified in sub-regulation (2) an officer employee may also accept gifts from his personal friends having no official dealings with him but he shall make a report to the competent authority if the value of such gifts exceeds Rs. 200/-.

(4) In any other case, the officer employee shall not accept any gifts without the sanction of the competent authority if the value of the gifts exceeds Rs. 75/-.

Provided that when more than one gift has been received from the same person or concern within a period of 12 months, the matter shall be reported to the competent authority if the aggregate value thereof exceeds Rs. 500/-.

Note: As a normal practice an officer employee shall not accept any gift from any person or institution having official dealings with the officer employee.

(5) No Officer employee shall

(A) Give or take or abet the giving or taking of dowry; or

(B) demand, directly or indirectly from the parents or guardian of the bride or bridegroom, as the case may be, any dowry.

EXPLANATION: For the purposes of this Regulation ''dowry' has the same meaning as in the Dowry Prohibition Act, 1961 (28 of 1961) .

15. LENDING AND BORROWINGS :

No officer employee shall, in his individual capacity-

(i) borrow or permit any member of his family to borrow or otherwise place himself or a member of his family under a pecuniary obligation to a broker or a money lender or a subordinate employee of the bank or any person, association of persons, firm, company or institution, whether incorporated or not, having dealings with the bank:

(ii) buy or sell stocks, shares or securities of any description without funds to meet the full cost in the case of purchase of scripts or delivery in the case of a sale:

(iii) incur debts, at a race meeting:

(iv) lend money in private capacity to a constituent of the bank or have personal dealings with such constituent in the purchase or sale of bills of exchange, Government paper or any other securities; and

(v) guarantee in his private capacity the pecuniary obligations of another person or agree to indemnify in such capacity another person from loss except with the previous permission of the Competent Authority:

Provided that an officer employee may give to or accept from a relative or personal friend a purely temporary loan of a small amount free of interest, or operate a credit account with a bonafide tradesman or make an advance of pay to his private employee:

Provided further that an officer employee may obtain a loan from a Co-operative Credit Society of which he is a member or stand as a surety in respect of a loan taken by another member from a Co-operative Credit Society of which he is a member."

Sri Agrawal submitted that acceptance of gifts as well as lending and borrowing could only be within the four corners of the provisions of Regulations 14 and 15. It was submitted that an officer employee may give to, or accept from, relative or personal friend a purely temporary loan of a small amount free of interest, or operate a credit account with a bona fide tradesman or make an advance of pay to his private employee. It was submitted that, admittedly, the persons with whom transactions were made were not relatives, rather they were bank customers. They cannot partake the character of personal friends, inasmuch as, the petitioner was admittedly not a resident of that place where he was posted as a Branch Manager and, according to his own admission in the written statement, he was residing 70 kilometer away from the branch, therefore how could those persons, who were customers of the Bank, be treated as personal friends of the petitioner.

Sri Agrawal further submitted that the act of adjusting the UGC loan account of one Sudhir Singh by transfer from account of Sudharshan Singh, after granting UGC loan to Sudarshan Singh, clearly demonstrates that the petitioner flagrantly violated the banking norms, inasmuch as, UGC loan is to be granted only for a specific purpose and not as a personal loan therefore grant of such loan to square off loan taken by another person, defeats the very purpose for which such loan is to be provided and since all these transactions were sanctioned by the petitioner, it clearly reflects that the petitioner had flagrantly violated the norms of the Bank and dealt with bank's fund as it were petitioner's personal property.

Sri Agrawal pointed out that the petitioner had not only violated Rules 14 and 15 of the Conduct Regulations but had also indulged in fraudulent transactions such as sanctioning of loan for the purpose of squaring off another person's loan, hence, the penalty of dismissal cannot be said to be too harsh or disproportionate to the charges proved and, as such, the petition deserves to be dismissed.

Sri Agrawal also pointed out that the petitioner had a salary of about Rs.15,000/- per month but transactions in his account ran into lakhs on account of transfer from one account to the other including transfer to and from account of bank customers which clearly reflected that the petitioner was indulging in parallel banking in the sense he was lending and borrowing money which was strictly prohibited by the Conduct Regulations.

Sri Agrawal further submitted that causing loss to the Bank is not an essential requirement for imposing a major penalty of dismissal. He submitted that the role of a Branch Manager is one of confidence and trust and, therefore, breach of discipline and banking norms can be made basis to impose major penalty. In support of his submissions, the learned counsel for the respondent placed reliance on the following decisions:-

A. (1996) 9 SCC 69: Disciplinary Authority-Cum-Regional Manager and others Vs. Nikunja Bihari Patnaik wherein the Apex Court had repelled the contention made on behalf of bank employee that by his conduct no loss was caused to the Bank, and on some occasion it also resulted in profit to the bank, by observing as follows:-

"True, it is that in some cases, no loss has resulted from such acts. It is also true that in some other instances such acts have yielded profit to the Bank but it is equally true that in some other instances, the funds of the Bank have been placed in jeopardy; the advances have become sticky and irrecoverable. It is not a single act; it is a course of action spreading over a sufficiently long period and involving a large number of transactions. In the case of a bank -- for that matter, in the case of any other organisation -- every officer/employee is supposed to act within the limits of his authority. If each officer/employee is allowed to act beyond his authority, the discipline of the organisation/bank will disappear; the functioning of the bank would become chaotic and unmanageable. Each officer of the bank cannot be allowed to carve out his own little empire wherein he dispenses favours and largesse. No organisation, more particularly, a bank can function properly and effectively if its officers and employees do not observe the prescribed norms and discipline. Such indiscipline cannot be condoned on the specious ground that it was not actuated by ulterior motives or by extraneous considerations. The very act of acting beyond authority -- that too a course of conduct spread over a sufficiently long period and involving innumerable instances -- is by itself a misconduct. Such acts, if permitted, may bring in profit in some cases but they may also lead to huge losses. Such adventures are not given to the employees of banks which deal with public funds. If what we hear about the reasons for the collapse of Barings Bank is true, it is attributable to the acts of one of its employees, Nick Leeson, a minor officer stationed at Singapore, who was allowed by his superiors to act far beyond his authority. As mentioned hereinbefore, the very discipline of an organisation and more particularly, a bank is dependent upon each of its employees and officers acting and operating within their allotted sphere. Acting beyond one's authority is by itself a breach of discipline and a breach of Regulation 3. It constitutes misconduct within the meaning of Regulation 24. No further proof of loss is really necessary....."

B. (1977) 2 SCC 491: State of Haryana and another Vs. Rattan Singh wherein it was observed that in a domestic inquiry the strict and sophisticated rules of evidence under the Evidence Act may not apply and the sufficiency of evidence in proof of the finding by a domestic tribunal is beyond scrutiny though absence of any evidence in support of a finding is certainly available for the court to look into because it amounts to an error of law apparent on the record.

C. (2011) 4 SCC 584: State Bank of Bikaner & Jaipur Vs. Nemi Chand Nalwaya wherein the Apex Court had observed that in matters of disciplinary proceedings, the court cannot act as an appellate court to reassess the evidence produced in the domestic inquiry besides that it cannot interfere with the ground that another view is possible on the material on record. It was also held therein that when punishment has been imposed upon an employee after holding of an inquiry, the courts have restricted powers of judicial review only on the ground that findings are perverse or based on no evidence or that there has been violation of principles of natural justice.

D. 2015 (144) FLR 1003: G.M. (Operations), SBI and another Vs. R. Periyasamy where again the Apex Court had observed that inadequacy or insufficiency of evidence would not be ground of judicial review of a disciplinary action taken after due inquiry.

E. 2012 (109) AIC 79: State Bank of India Vs. Ram Lal Bhaskar and another in which the Apex Court had observed that the High Court cannot sit as an appellate authority and re-appreciate the evidence and interfere with the finding by arriving at an independent finding of its own.

Upon consideration of the rival submissions and perusal of the record, we find that there is no dispute as regards the transactions which formed the basis of the statement of allegations that constituted part of the charge sheet. The dispute was as regards the inference that could be drawn on the basis of those transactions. It is noticed that the petitioner neither in his reply nor anywhere else denied the various transactions which have been noticed in the statement of allegations though he has tried to justify those transactions by saying that transfer from SOD account to the SB account is not prohibited by law; that sanction of loan or credit facility was within the authority of the petitioner; that giving money to a friend is permissible in law; that the transactions by itself did not create any loss or liability for the Bank; that no dishonest intention of the petitioner could be established and, therefore, there could be no plausible reason either for the Inquiry Officer or for the Disciplinary Authority to come to a conclusion that the petitioner had made fraudulent transactions to accommodate a borrower or had indulged in parallel banking; and that the allegation that the petitioner did window dressing has no legs to stand because transfer from SOD account to SB account and vice versa is permissible, therefore, if, at the end of each quarter, the transfer was made to reflect adequate deposit at the branch level no misconduct could be alleged on the part of the petitioner. In nutshell, the thrust of the submission of petitioner is that whatever the petitioner has done is not reflective upon his integrity or fraudulent intention as such there was no justification to impose major punishment of dismissal.

Having noticed the judgments cited by both sides counsel, the settled principle of law that emerges is that appreciation of evidence led in departmental proceeding is the domain of the disciplinary authority including the inquiry officer and the appellate authority whereas, in that regard, the power of judicial review is limited to find out whether there is any perversity in arriving at such conclusion on the basis of material on record. However, where there is infraction of prescribed disciplinary procedure or violation of the principles of natural justice the courts, in exercise of their power of judicial review, can always interfere.

In the instant case, in respect of violation of principles of natural justice, the stand of the petitioner is that full statement of bank accounts of the petitioner was not supplied despite demand; and that the enquiry was completed on a single date. Apart from that there is no other allegation as to how the prescribed procedure or principles of natural justice were violated.

The contention of the learned counsel for the petitioner that the entire statement of bank account was not supplied to the petitioner and therefore there had been violation of the principles of nature justice vitiating the disciplinary action, is not acceptable for the reason that no specific plea has come on the record to show as to what prejudice has been caused to the petitioner on account of non supply of the entire statement of his own account. The Bank had placed reliance on multiple transactions that took place in petitioner's own bank account of which there was no denial by the petitioner in his reply or even in the course of the inquiry proceedings. The documents evidencing those transactions were duly exhibited and supplied to the petitioner or at least shown to him. There is no pleading that the Bank placed reliance on any document which was neither supplied nor shown to the petitioner. In such circumstances, even if the entire statement of bank account of the petitioner was not supplied to the petitioner, as alleged by the petitioner, in our considered view, no prejudice could be said to have been caused to the petitioner. It is well settled that mere non supply of document, on which no reliance is placed in the enquiry, would not vitiate the disciplinary action unless the charged employee pleads and proves prejudice on account of its non supply (vide Chandrama Tewari v. Union of India, 1987 Supp SCC 518; State of U.P. v. Ramesh Chandra Mangalik, (2002) 3 SCC 443; Suresh Pathrella v. Oriental Bank of Commerce, (2006) 10 SCC 572)

The contention of the learned counsel for the petitioner that as the enquiry proceeding was completed in a day therefore principles of natural justice were violated also deserves to be rejected because from the minutes of the inquiry, which are on record, the petitioner's assisting officer / petitioner himself agreed to close the proceeding as he did not want to lead evidence. Rather he opted to file only written arguments. Under the circumstances, the decision of this court in Krishana Jeevan Mani Tripathis's case (supra) is of no help to the petitioner.

The contention on behalf of the petitioner that transfer from one account to the other is legally permissible and therefore that by itself would not constitute misconduct is also not acceptable. Because here the transactions were not simply from one account of the petitioner to his other account. There were transactions between the petitioner and Bank's customers as well. Even assuming that helping a Bank's customer on one or two occasions may not be eyed seriously and, in a given situation, may not warrant major penalty but here the accounts disclosed multiple such transactions. Lending and borrowing by bankers is prohibited by the Conduct Regulations to serve a purpose. Bankers being custodian of public money are in a position of trustee and are therefore required to maintain strict discipline. If they themselves indulge in lending and borrowing by using the funds made available to them through facility of an overdraft account, which is for their personal use, the interest of the bank would be jeopardized as it would lose interest income on advances. The overdraft facility to a banker is for his own use and not for the purpose of making withdrawal to privately lend to the customers of the Bank. Likewise accepting gifts from customers may lead to favoritism thereby exposing the bank to financial risk. It is for these reasons that lending/ borrowing /accepting gifts by Bankers is prohibited and is allowed only for a limited purpose to cater to the need of relatives or personal friends.

By prefixing the word "personal" to the word "friend" the intention of the Conduct Regulations becomes clear, which is to exclude friends or acquaintances that would not fall in the category of personal friend. A person who becomes a friend by virtue of his relationship with the Bank as a customer thereof cannot be called a personal friend of the Banker. There is no embargo on a Banker in making a customer his friend but that customer would not qualify as a personal friend of the Banker. Because here the friendship has arisen not on account of personal relationship between the two but on account of relationship between a Banker and a customer. The explanation offered by the petitioner that such lending/borrowing transactions were undertaken to help each other in their hour of financial distress is not acceptable and therefore, the inference drawn by the Inquiry Officer as well as by the Disciplinary Authority, upon consideration of the entire material brought on record, that the petitioner had indulged in parallel banking cannot be said to be perverse or without any material basis so as to warrant interference with the finding in exercise of power of judicial review.

The last contention of the learned counsel for the petitioner was that on the basis of proven charge, punishment of compulsory retirement could have been awarded in place of dismissal because no loss was caused to the bank. It is trite law that as to what punishment is to be imposed is in the domain of the disciplinary authority. Only where punishment is shockingly disproportionate to the gravity of misconduct interference is warranted. According to us, one of the proven allegations against the petitioner is very serious. Which is, the manner in which he handled the UGC loan account of Sudhir Singh and Sudarshan Singh. Sudhir Singh was a loan defaulter and a notice had been served upon him. To successfully close the account of Sudhir Singh, the petitioner sanctioned UGC loan to Sudarshan Singh, credited the proceeds to Sudarshan Singh's bank account and, thereafter, transferred the funds from SB account of Sudarshan Singh to the loan account of Sudhir Singh to show successful closure of the loan account. Immediately, thereafter, he granted a fresh loan to Sudhir Singh and, thereafter, money was withdrawn in cash and deposited in petitioner's own account. Thereafter, the loan account of Sudarshan Singh was credited by debiting the money from the own account of the petitioner. This clearly disclosed that the petitioner flagrantly violated the lending norms of the Bank by allowing misuse of loan. These transactions were made under the authority of the petitioner, while he acted as a Branch Manager. These transactions are manifestly fraudulent and reflects lack of bona fides on the part of the petitioner and is sufficient enough for the Bank to lose confidence in the petitioner justifying major penalty of dismissal. No doubt, the petitioner may not have caused loss to the bank, at least on paper, but indulging in such private parallel banking, per se, damages the image of the Bank and may encourage customers to adopt unlawful means for getting loans/ advances.

Thus, keeping in mind that the petitioner had literally created his own world of banking by indulging in personal lending and borrowing to and from bank's customers as also authorizing fraudulent loan to close another loan, as noticed above, the penalty of dismissal cannot be termed shockingly disproportionate to the proven misconduct.

For all the reasons recorded above, the petition deserves dismissal and is, accordingly, dismissed. There is no order as to costs.

Order Date :- 12.10.2018

AKShukla/-

(V.P. Vaish, J.)        (Manoj Misra, J.)