Calcutta High Court
Arun Kumar Ghosh vs Canara Bank And Others on 29 August, 2024
Author: Debangsu Basak
Bench: Debangsu Basak
1
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
Original Side
APOT 254 of 2024
IA GA 1 of 2024
IA GA 2 of 2024
Arun Kumar Ghosh
Vs.
Canara Bank and Others
Present:
The Hon'ble Justice Debangsu Basak
And
The Hon'ble Justice Md. Shabbar Rashidi
For the Appellant : Mr. Partha Sarathi Bhattacharya, Sr. Adv.
Mr. Debashis Banerjee, Adv.
Mr. Rakesh Jana, Adv.
For the Respondent Bank : Ms. Reshmi Ghosh, Adv.
Mr. Ranjit Singh, Adv.
Mr. Amal Singh, Adv.
Ms. Tutul Das, Adv.
Ms. Pooja Seth, Adv.
Mr. Ratul Deb Banerjee, Adv.
Hearing concluded on : August 20, 2024
Judgment on : August 29, 2024
DEBANGSU BASAK, J. :-
1. Appellant has assailed the judgement and order dated May 21,
2024 passed by the learned single judge in WPO No. 401 of 2012.
2. By the impugned judgement and order learned single judge has
Signed By :
dismissed the writ petition of the appellant challenging a decision
SUBHA
KARMAKAR
High Court of
Calcutta
29 th of August
arrived at against the appellant in the disciplinary proceedings.
2024 02:23:36 PM
3. Learned senior advocate appearing for the appellant has
contended that, there have been serious breach of the principles of
natural justice so far as the appellant is concerned, in the
disciplinary proceeding resulting in prejudice to the appellant. In
support of such contention, he has drawn the attention of the court
to the chargesheet issued as against the appellant. He has
contended that, in the disciplinary proceeding, appellant requested
for specified documents. He has referred to regulation 6 of the
service regulations governing the disciplinary proceedings. He has
contended that, request for documents had been wrongfully turned
down resulting in prejudice to the appellant. In this regard, he has
referred to the correspondence of the appellant and the response of
the enquiry officer. He has also referred to Regulation 6 (11) of the
Canara Bank Officer Employees (Discipline and Appeal)
Regulations, 1976 in this regard and contended that, the inquiring
authority did not adhere to the procedure prescribed for grant of
requested documents to the appellant resulting in breach of
principles of natural justice and serious prejudice to the appellant.
4. Learned senior advocate appearing for the appellant has
referred to the enquiry report. He has also drawn the attention of
the court to the 2nd show cause notice issued to the appellant as
also the response of the appellant thereto.
5. Learned senior advocate appearing for the appellant has drawn
the attention of the court to the order of the disciplinary authority
dated November 26, 2008. He has contended that, the same does
not contain any reason as to why the disciplinary authority arrived
at the finding of guilt as against the appellant. Points that the
appellant had raised in the response to the 2nd show cause notice
have not been dealt with by the disciplinary authority in the order
dated November 26, 2008.
6. Learned senior advocate appearing for the appellant has
submitted that, after the disciplinary authority imposed the
punishment of compulsory retirement, appellant by a letter dated
May 11, 2009 filed an appeal to the appellate authority under
Regulation 17 of the Canara Bank Officer Employees (Discipline
and Appeal) Regulations, 1976 with a prayer for condonation of the
delay. The appellant had by a letter dated July 8, 2009 requested
for terminal dues without prejudice to the rights and contentions in
the appeal. Canara Bank had by a letter dated August 4, 2009 has
observed that, in view of the financial loss caused to the bank by
the appellant the gratuity and the bank's contribution of provident
fund have been impounded.
7. Learned senior advocate appearing for the appellant has
contended that, in the chargesheet, no charge had been framed as
against the appellant for alleged financial loss nor has any figure of
loss allegedly caused by the appellant to the bank, quantified
during the disciplinary proceedings. He has referred to the order of
the appellate authority and contended that, the appellate authority
also did not quantify any loss to have been suffered by the bank.
Therefore, according to him, no amount receivable by the appellant
on compulsory termination of services can be withheld by the bank.
According to him, causing of loss has not been alleged in the
chargesheet. During the enquiry proceedings, no attempt had been
made by the bank to quantify the alleged loss. Neither the
disciplinary authority nor the appellate authority has quantified the
alleged loss allegedly caused by the appellant to the bank.
Therefore, withholding of service benefits on compulsory retirement
is wrong.
8. Learned advocate appearing for the bank has referred to the
chargesheet. She has contended that, the chargesheet alleges loss
being caused by the appellant to the bank by reason of the
appellant granting credit facilities in violation of the scheme of the
bank. She has referred to the order dated November 26, 2008
passed by the disciplinary authority with regard to the
quantification of the loss caused by the appellant to the bank.
Learned advocate appearing for the bank has referred to the letter
dated August 17, 2009 issued by the bank to the appellant. She
has submitted that, the request for gratuity and bank's
contribution of provident fund had been turned down in view of
Regulation 19 of the Canara Bank Staff Provident Fund Regulations
which allows the bank to deduct the financial loss sustained by the
bank from the bank's contribution to the provident fund. She has
also referred to the response of the appellant dated August 27,
2009.
9. Learned advocate appearing for the bank has referred to the
Canara Bank Officer Employees (Discipline and Appeal)
Regulations, 1976 and in particular to regulation 4 (h) and
contended that, bank was entitled to impose compulsory retirement
as a major punishment.
10. Learned advocate appearing for the bank has referred to
Canara Bank Officer Employees (Conduct) Regulations, 1976 as
also Canara Bank Staff Provident Fund Regulations and contended
that, both gratuity as well as bank's contribution of provident fund
can be withheld for the financial loss caused by an employee.
According to her, the appellant had caused financial loss to the
bank and that, such financial loss was quantified during the
enquiry proceeding.
11. In support of her contentions that, the decision arrived at by
the bank in the disciplinary proceeding up to the appellate
authority stage and the decision of withholding of gratuity and
bank's contribution of provident fund should be upheld, learned
advocate appearing for the bank has relied upon 2018 Volume 9
Supreme Court Cases 529 (Union Bank of India and others
versus CG Ajay Babu and Another).
12. Appellant had been working as a manager of the Asansol
branch when he suffered a chargesheet dated October 8, 2007 for
alleged misconduct while he was working as Manager in Charge of
Berhampore branch of the bank.
13. In the chargesheet, 13 heads of charges had been levelled
against the appellant. It had been alleged that appellant during his
tenure as such Manager in Charge for the period from December 8,
2005 till August 12, 2006 sanctioned various credit facilities. A
detailed investigation had been conducted which revealed a
number of irregularities such as credit investigation not been
conducted, pre-/post sanction inspection not being done, credit
requirement not being properly assessed, loans sanctioned through
middlemen etcetera and the accounts becoming NPA. Article of
charges had also alleged that, the appellant exposed the bank to
financial loss/risk without quantifying the quantum of loss
allegedly suffered.
14. Although allegation of causing financial loss/risk to the bank
had been made in the chargesheet, no amount of financial loss
caused to the bank had been quantified in the chargesheet.
Statement of imputation forming part of the chargesheet had noted
various credit facilities with the liability of such credit facility.
Imputation of charge however has not alleged that the liability of
the borrower standing in the respective accounts of such borrower
was the financial loss/risk which the bank had suffered. It had
merely alleged that, lapses allegedly made by the appellant had
exposed the bank to huge financial loss/risk without attempting to
quantify such financial loss/risk.
15. Appellant had submitted a detailed reply dated November 10,
2007 to the chargesheet. He had denied all allegations levelled
against him in the chargesheet. During the inquiry, appellant had
requested for various documents by a letter dated November 20,
2007. The documents that the appellant had requested for involves
copies of current account opening forms, latest branch inspection
report, copy of annexure 4, 3 to 13 verifying the signatures of the
concerned persons for the relevant period, copies of documents
relating to visit to the branch during the period, copies of
investigation findings, copies of registers maintained by the
appellant in ordinary registers for non-supply of appropriate
register/format on spot visit, all periodical statements relating to
special watch/NPA for the period, copies of stock statement
received from the parties for the relevant period, copies of interface
reports for the relevant period.
16. Appellant had by another writing dated January 16, 2008
requested for details of loan sanctioned by the bank after his
transfer from the branch including enhancement of limits if there
be any in the accounts covered by the chargesheet as also the reply
given by DGM to the letter dated October 10, 2006 referred to in
the chargesheet.
17. The response of the inquiring authority to the request for
documents made by the appellant is contained in the writing dated
February 6, 2008. Such response has dealt with the letter dated
January 16, 2008 of the appellant. The response for the request of
documents is that, the appellant may obtain such documents from
the branch personally at his own cost after obtaining appropriate
category of leave from the competent authority. Immediately,
appellant had by a letter dated March 4, 2008 informed the
inquiring authority that it was difficult for him to attend the
concerned branch due to personal safety, availing leave was
difficult and that there was cost of travel involved. In such view, he
had made a request that the documents sought for be made
available by the bank to him.
18. Inquiring authority had dealt with the request for documents
in the meeting held on April 29, 2008. Inquiry authority had held
that the appellant was given enough time for personal visit to the
concerned branch to verify the documents as well as obtain copies
of the documents. Branch had been suitably instructed to provide
necessary assistance to the appellant for obtaining copies of the
required documents. Consequently, inquiring authority had
decided to proceed without the documents requested for by the
appellant being furnished to him.
19. Canara Bank Officer Employees (Discipline and Appeal)
Regulations, 1976 has laid down an elaborate procedure for a
disciplinary proceeding and its appeal. In Regulation 6 it has laid
down the procedure for imposing major penalties. Regulation 4 has
specified the major penalties with Regulation 4 (h) specifying
compulsory retirement as a major punishment that can be imposed
in the disciplinary proceeding.
20. It would be appropriate to set out Regulation 6 (11) of the
Regulations of 1976 which is relevant herein :-
"11) The Inquiry Authority shall, on receipt of the notice for
the discovery or production of the documents, forward the
same or copies thereof to the authority in whose custody or
possession the documents are kept with a requisition for the
production of the documents on such date as may be
specified."
21. Regulation 6 (11) has cast an obligation on the inquiring
authority on receipt of the notice for discovery of production of
documents. It has specified that, the inquiring authority shall, on
receipt of the notice for the discovery or production of the
documents, forward the same or copies thereof to the authority in
whose custody or possession the documents are kept with a
requisition for the production of the documents on such date as
may be specified.
22. In the facts and circumstances of the present case, inquiring
authority had received requisition for discovery and production of
documents contained in the letter dated January 16, 2008 from the
appellant. It had dealt with such requisition by a writing dated
February 6, 2008. In its letter dated February 6, 2008, inquiring
authority did not allude to Regulation 6 (11) of the Regulations of
1976. It did not ascribe any reason as to why it was not adhering to
the prescription in such regulation requiring the inquiring
authority to make such documents available to the delinquent. No
reason has been ascribed by the inquiring authority in its letter
dated February 6, 2008 as to why it was deviating from the
prescription laid down in Regulation 6 (11) of the Regulations of
1976.
23. Even if one has to read Regulation 6 (11) of the Regulations of
1976 to be directory in nature and not mandatory, despite the user
of the word "shall" therein, then also, inquiring authority must
ascribe sufficient reason as to why it was deviating from the
procedure prescribed by such provision.
24. In our understanding of Regulation 6 (11) of the Regulations of
1976, enjoins a mandatory obligation upon the inquiring authority
to forward the notice for discovery or production of documents or a
copy thereof, on receipt thereof, to the authority in whose custody
or possession the documents are kept with a requisition for the
production of the documents on such date as may be specified.
25. It is therefore, the obligation of the inquiring authority to
requisition the documents sought for by the delinquent, from the
authority in whose custody or possession such documents are
lying, for production of the same on the date specified. We hasten
to add that, inquiring authority has the power to deviate from the
procedure prescribed in Regulation 6 (11) of the Regulations of
1976 but must do so only if circumstances mandate a deviation
and after recording the reasons for deviating from the prescribed
procedure.
26. In the facts and circumstances of the present case, the
inquiring authority not only deviated from the procedure prescribed
under Regulation 6 (11) of the Regulations of 1976 but also did not
ascribe any reason as to why it was deviating therefrom, in its
response dated February 6, 2008 or in the minutes of the meeting
dated April 29, 2008.
27. Appellant had asked for documents which are relevant to the
charges. Inquiring authority has not denied production of such
documents requisitioned on the ground of irrelevance. In fact, the
response of the inquiring authority was that, the appellant may
collect the same at his own cost. Therefore, such documents being
relevant and relating to each of the charges levelled as against the
appellant, nonproduction of the same during the inquiry obviously
had breached the principles of natural justice coupled with causing
prejudice to the appellant in the inquiry proceeding. Appellant had
been prevented unreasonably from meeting the charges levelled
against him in the enquiry proceeding.
28. The Inquiring Authority submitted a report dated July 3, 2008
where, Inquiring Authority has held the appellant guilty to the
extent of charge No. 1, 2, 3 to 11 and 13, partially 12. The Inquiry
report has not quantified the alleged loss or damage allegedly
suffered by the bank at the behest of the appellant.
29. Upon such Inquiry Report having been furnished to the
appellant, he had submitted a response thereto by a letter dated
September 8, 2008. Disciplinary Authority had taken a decision on
the Inquiry Report and the response of the appellant dated August
8, 2008, by an order dated November 26, 2008. In the 2nd
paragraph of the order of the Disciplinary Authority dated
November 26, 2008, Disciplinary Authority has noted that the
liability in the account of the borrower stood at Rs. 1.58 crores at
that point of time. Disciplinary Authority has not arrived at a
finding, at least, the order dated November 26, 2008 does not state
that, bank has suffered a loss of Rs. 1.58 crores at the behest of
the appellant.
30. Disciplinary Authority had imposed a punishment of
compulsory retirement as envisaged under Regulation 4 (h) of the
Regulations of 1976.
31. Appellant had preferred an appeal against the order of the
Disciplinary Authority on May 11, 2009. In such appeal, appellant
had inter alia taken the point of requisition of several documents
and the denial thereof by the Inquiring Authority.
32. Appellant had filed a writ petition being WP No. 20673 (W) of
2009 claiming release of retiral benefits. Such writ petition had
been disposed of by an order dated May 10, 2010 noticing that the
appellant had preferred an appeal and directing the Appellate
Authority to dispose of such appeal in accordance with law.
33. Appeal of the appellant had been disposed of by an order dated
April 16, 2010. Appellate Authority did not deal with the point
raised by the appellant as to non-furnishing of relevant documents
although it has held, appellant failed to produce any documents in
support of his claim. Appellate Authority had dismissed the appeal
after returning a finding that there was no reason to interfere with
the order of the Disciplinary Authority.
34. Appellant had submitted a review under Regulation 18 of the
Regulations of 1976 against the order of the Disciplinary Authority
and the confirmation thereof by the Appellate Authority, by a letter
dated October 18, 2010. Such Review Application had been kept
pending and the appellant issued reminders on December 29,
2010, May 21, 2011 and on July 12, 2011.
35. Appellant had filed an application for review being RVW 85 of
2010 seeking review of the order dated May 10, 2010 passed in WP
No. 20673 (W) of 2009. Appellant had filed an application therein.
Both the application and memorandum of review had been
disposed of by an order dated April 18, 2011 by holding that, all
points were kept open for consideration by the Appellate Authority
at the time of hearing of the statutory appeal.
36. The Review Authority by a writing dated October 26, 2011 had
rejected the review petition.
37. The decision of rejection of the Review Petition had been
communicated to the appellant by a writing dated October 26,
2011. Such decision does not contain any reason as to the rejection
of the review petition.
38. Terminal benefits of the appellant has been withheld on the
ground of bank allegedly suffering loss at the behest of the
appellant. As has been noted above such was not the charge as
against the appellant. Inquiring Authority has not quantified the
alleged loss allegedly suffered by the bank at the behest of the
appellant. It also did not find the appellant to have personally
benefited out of the loans sanctioned. Disciplinary Authority has
not arrived at a conclusive finding that, the bank had suffered on
specified amount of loss at the behest of the appellant.
39. CG Ajay Babu and Another (supra) had dealt with the issue
of permissibility of forfeiture of gratuity in the context of the
Payment of Gratuity Act, 1972 and a bipartite agreement existing
between the workmen and the management of Union Bank of India.
It has observed that, gratuity can be kept forfeited only to the
extent of damage or loss caused to the bank. It has also held that,
forfeiture of gratuity is not automatic on dismissal from service.
Forfeiture of gratuity is subject to sub-section (5) (6) of Section 4 of
the Payment of Gratuity Act, 1972.
40. In Ramchandra S. Joshi (supra) the delinquent had been
charged with the issue of loss caused to the bank by the
delinquent. The Disciplinary Authority therein had recorded a
finding and directed forfeiture of the employee's contribution of
provident fund and gratuity from the terminal benefits receivable
by the delinquent. Such is not the case here. On the contrary,
Disciplinary Authority did not quantify the loss nor did it direct
recovery of such loss from the terminal benefits receivable by the
appellant.
41. Issue of release of terminal benefits was raised by the appellant
subsequent to the order of the Disciplinary Authority. Such issue
was sought to be answered by the bank by claiming that it had
suffered loss and that, it was withholding the terminal benefits
towards satisfaction of such loss.
42. As noted above, neither the chargesheet had quantified any
loss allegedly suffered by the bank at the behest of the appellant
nor did the Inquiry Authority or the Disciplinary Authority quantify
it and require realization thereof from the terminal benefits
receivable by the appellant.
43. Withholding of terminal benefits therefore cannot be sustained
in the facts and circumstances of the present case, in view of the
discussions above.
44. The Inquiring Authority having not dealt with the request for
production and discovery of documents made by the appellant
before it, in accordance with law, the entire inquiry proceedings
stand vitiated. The decision of the Inquiring Authority consequently
also stands vitiated.
45. The appellant has established that he suffered prejudice by
reason of the inquiring authority not dealing with his request for
production and discovery of documents made at the inception of
the inquiry proceedings.
46. Since the inquiry proceedings as also the decision arrived at on
the basis of such proceeding stands vitiated, the decision of the
Disciplinary Authority, based on the report of the Inquiring
Authority, the decision of the Appellate Authority as also the review
authority, cannot be sustained.
47. Having arrived at a finding that, the decision taken in the
disciplinary proceedings up to the review stage cannot be
sustained, we have to consider whether or not to remand the
disciplinary proceeding from the stage of the inquiry.
48. In the facts and circumstances of the present case, the
appellant before us had superannuated on December 31, 2013.
Moreover, the materials placed before us have established that, the
management was acting with a closed mind as against the
appellant. Charge as against the appellant is one of acting in excess
of his powers as the Branch in charge during a specific period of
time. Although, management had claimed to have suffered loss, no
material had been placed to suggest let alone establish the actual
quantum of loss suffered. Management has alleged that, since there
were outstanding in the loan accounts sanctioned by the appellant,
therefore, the bank was exposed to loss/risk. Any loan granted by
the bank necessarily exposes the bank to loss/risk. It has neither
been alleged nor established during the inquiry proceedings that,
appellant had derived any personal gains out of the loan accounts
sanctioned by him as the Branch in charge. All errors of
judgements are not negligence. Significantly, appellant had
requested for documents post his release from the branch in
question with regard to the loan accounts sanctioned by him in
order to find out whether the same remained outstanding or not.
The Inquiring Authority did not call for such documents.
49. Notwithstanding no charge being framed quantifying the loss of
the bank and no such loss being quantified in the report of the
Inquiring Authority, bank had proceeded to withhold the terminal
benefits of the appellant on the ground of alleged sufferance of loss
at the behest of the appellant.
50. In our view, bank has disclosed a closed mind of not only
terminating the services of the appellant but also ensuring that he
does not receive any terminal benefits. In such circumstances,
remanding the disciplinary proceedings to the stage of the inquiry
would not subserve the interest of justice. Consequently, we quash
the entire departmental proceedings initiated as against the
appellant.
51. Having quashed the disciplinary proceedings, the next issue
that we need to answer is whether the appellant is entitled to
reinstatement with full back wages or not. Full back wages on
reinstatement is not automatic. The quantum of compensation
would depend on the facts and circumstances of each case.
52. As has been noted above, appellant superannuated on
December 31, 2013. Consequently, reinstatement at this stage is
ruled out. The next issue is the entitlement of the appellant post
the order of compulsory retirement issued by the bank.
53. In the facts and circumstances of the present case, interest of
justice would be subserved by directing the bank to grant notional
benefits of the service career of the appellant till his
superannuation. Bank will disburse the retiral and other benefits of
the appellant, within 4 weeks from date, treating the appellant to
be in service till his date of superannuation and as if he did not
suffer any disciplinary proceedings and by granting him all benefits
accruing to the appellant, notionally.
54. In view of the discussions above, impugned judgement and
order dated May 21, 2024 is set aside.
55. APOT 254 of 2024 along with all connected applications are
disposed of accordingly without any order as to cost.
[DEBANGSU BASAK, J.]
56. I agree.
[MD. SHABBAR RASHIDI, J.]
