R.P. Chhabra vs Punjab National Bank
2004 Latest Caselaw 591 Del

JUDGMENT

Pradeep Nandrajog, J.

1. Petitioner challenges the order dated 7.3.1988 passed by the disciplinary authority imposing the penalty of removal from service which shall not be a disqualification for future employment as well as the decision dated 3.1.1989 of the Appellate Authority i.e. the Board of Directors of the respondent bank, rejecting the appeal filed by the petitioner as communicated to the petitioner under cover of letter dated 13.1.1989.

2. Petitioner was posted as Zonal Manager, London of the respondent bank from 12th December, 1984 up to end of March, 1985. Pertaining to his functioning as the Zonal Manager, London, under cover of memorandum dated 8.4.1986, a charge-sheet was served upon the petitioner. The said charge-sheet listed the following charges against the petitioner:-

"ARTICLE OF CHARGE AGAINST SHRI R.P. CHHABRA, DY.GENERAL MANAGER, HO NEW DELHI PREV.ZONAL MANAGER, U.K.

Shri RP Chhabra while working as Zonal Manager, London committed following irregularities:

i) Allowed/sanctioned advances to certain borrowers when the facilities to the group companies accounts of the borrowers were sanctioned by Board.

ii) Allowed unauthorised/irregular advances to certain borrowers over and above the limits sanctioned/drawing powers/value of security available in the account.

iii) Sanctioned facilities in certain accounts when the group companies accounts were already substantially irregular and doubtful of recovery.

iv) Failed to obtain proper documents from the borrowers.

v) Failed to obtain proper securities in certain loan accounts.

vi) Failed to obtain proper valuation reports on the properties proposed to be mortgaged to the bank.

vii) Failed to ensure compliance of bank's procedure with regard to various accounts.

viii) Failed to ensure compliance of terms and conditions in certain loan accounts.

ix) Allowed utilisation of facilities under lapsed sanction.

x) Failed to report unauthorised/irregular advances to HO and obtain confirmation of action.

xi) Allowed payment of expenses to the debit of Bank's revenue without obtaining proper sanction.

As such, Shri RP Chhabra failed to protect the interest of the Bank and discharge his duties with utmost devotion and diligence and committed misconduct in terms of Regulation 3(1) of PNB Officer Employees (Conduct) Regulations, 1977."

3. Since counsel for the petitioner argued at length on the alleged perversity in the findings of the enquiry officer who was appointed to enquire into and submit a report pertaining to the charge-sheet in question, I would be advised to set out, in a little more detail, the statement of imputations in support of the charge-sheet.

4. Statement of imputation alleged, against the petitioner, the following :-

i. M/s Primlaks Holding Co. (PANAMA) Inc. (Primlaks Group)

M/s Primlaks Holding Co.(PANAMA) Inc. was sanctioned a letter of guarantee facility of US $ 5m by the Board on 20th April, 1983 to cover liabilities of 4 associate companies in Nigeria. It was a term of the sanction that a counter indemnity from the associate company whose liabilities were intended to be covered would be obtained. Further, cash margin of 33% was to be obtained. On 1.2.1985, the Manager of London Branch put up a note to the petitioner for issuance of a letter of credit for US $ 1m on behalf of Primlaks (Europe) S.A. covering liabilities of M/s PEEKAY (USA) Inc. against 30% margin. Petitioner sanctioned the same.

Based on the facts alleged as noted above, statement of imputation highlighted following irregularities:-

a) As against the Board sanctioning a letter of guarantee, a letter of credit was permitted to be opened for which there was no sanction.

b) In terms of the loaning power, sanction was beyond the scope of authority vested with the Zonal Manager, London pertaining to issuance of letter of credit.

c) Guarantee limit was sanctioned for one year on 20.4.1983. It had lapsed at the time when letter of credit was issued. In other words, even the facility of obtaining letter of guarantee limit was not available for utilization.

d) Facility was sanctioned by the Board to cover liabilities of 4 associate companies in Nigeria, and therefore, there was no question of issuing a letter of guarantee or letter of credit for Primlak (Europe) S.A. Issuance of letter of credit in favor of M/s PEEKAY (USA) Inc. was outside the scope of terms of sanction of guarantee facilities, as M/s PEEKAY (USA) Inc. was not one of the 4 associate companies permitted in terms of sanction.

e) Guarantee of the holding company and counter indemnity of the associate company was not obtained.

f) 30% cash margin was contrary to the stipulation of 33% cash margin in terms of Board sanction.

g) When the Board sanctioned the facility, the financial position of the 4 associate companies were considered by the Board. Petitioner did not consider the financial position of the beneficiary of the letter of credit when the same was allowed to be opened.

h) Previously also, 2 guarantees of US $ 1m each covering liabilities of Primlaks Financiers Consultants Ltd. were issued. Said company was not one of the approved companies in terms of the Board sanction.

i) The Board, while sanctioning the facilities to Primlaks Group had considered the financial status of the group companies. In April, 1983, Primlaks Trading Company (PANAMA) Inc. transferred its assets and liabilities to 4 newly formed subsidiary companies. This position was not reported to the Head Office.

ii. TRANSATLANTIC BUSINESS LTD.

Facility of US $ 10m was sanctioned by Head Office for adding confirmation to Letters of Credit issued by banks in Nigeria for utilisation by various borrowers. Petitioner permitted utilisation of this limit up to US $ 1.74m in the account of Transatlantic Business Ltd. and while so doing committed following irregularities:-

a) Purpose of sanction was to make available the facility to the existing customers of the bank dealing with Nigeria and who had received Letters of Credit in their favor issued by the bank in Nigeria. M/s Transatlantic Business Ltd. did not have any previous dealings with either the respondent bank or with any party in Nigeria.

b) The company, not only did not have any previous dealing with the bank, but the petitioner did not obtain the status report from the previous banker of the company. No confidential report was complied on the party.

c) Facility was for adding confirmation to the Letters of Credit opened by the banks in Nigeria. It was permitted, unauthorizely, for opening back to back Letters of Credit in all cases and in certain cases without even adding confirmation to the Letters of Credit.

d) Confirmation was allowed to be added to Letters of Credit in spite of the fact that there was no request from the opening bank. It was one of the conditions of sanction that there should be a request from the opening bank.

e) It was a term of the sanction by the Head Office that names of the opening banks which opened the letters of credit would be got approved from the Head Office before adding confirmation to their Letters of Credit. No approval as stipulated was obtained from the Head Office.

f) Term of the sanction requiring 10% cash margin to be obtained was violated.

g) Commission and other charges were not recovered from the party, instead amounts were debited to the parties current account resulting in overdraft being created without any security with the bank. In case of 2 letters of credit opened by the United Bank of Africa, Lagos for D.M. 1.121m and Pound 0.182m, back to back letters of credit were permitted to be opened without confirmation being added from any bank or branch office, London. This was not as per terms of sanction. 2 Letters of Credit opened by the United Bank of Africa, Lagos of US $ 0.302m each, a back to back letter of credit for Pounds 0.528m was permitted to be issued. Not only was the letter of credit allowed to be opened in a currency different from the currency of the letters of credit received from Nigeria, no margin was obtained to meet the deficit in the event of adverse fluctuations in exchange rates. The exchange rates later changed adversely. The deficit in the account was not backed by any security.

h) M/s Transatlantic Business Ltd. was a company floated by Mr.Mahender Pujara. His Group Companies i.e. Pujara Group were already running deficit accounts. In spite of this, facility was permitted to be used by a new company of the Pujara Group.

i) Even the back to back letters of credit issued on the basis of letters of credit received from Nigeria were in favor of group companies of Mr.Pujara.

j) The amount of Pound 0.134m and D.M. 0.042m was recoverable from the borrower as on 14.2.1986 and the recovery was proving difficult.

iii. TRANSATLANTIC TRADERS (PUJARA GROUP).

The party was sanctioned an overdraft facility of US $ 5m against security of charge on immovable properties. On 31.12.1984, the then Zonal Manager sanctioned an additional overdraft of US $ 3m. This was beyond his powers. Petitioner had joined on 12.12.1984. His predecessor-in-interest was relieved from the office on 2.1.1985. The advance was released to the party on 3.1.1985. Following were the irregularities alleged:-

a) Sanction was by the then General Manager in spite of the petitioner being in the office for more than a fortnight. Advance was released on 3.1.1985. Petitioner should not have released the advance as the sanction itself was not within the powers of the Zonal Manager.

b) The sanction and release was reported to the Head Office on 4.3.1985.

c) Though release of facility could not be without knowledge of the petitioner, assuming it was, record showed that on 8.1.1985, it came to his notice when the account position as on 4.1.1985 was put up to him. Petitioner took no serious note and dealt with the matter even thereafter in a casual manner.

d) Facility was extended as it was expected that an inward remittance of US $ 3.5m would be received. No remittance was received and there was no follow up for ensuring receipt of the expected remittance. It was incorporated as a term in the sanction that in case of non-receipt of remittance, advance would be adjusted by the party within one month. The overdraft was not adjusted and there was no follow up.

iv. M.P. PUJARA (PUJARA GROUP).

On 8.2.1985 petitioner sanctioned an overdraft limit of Pound 0.12m. Following irregularities were committed:-

a) The account of Mr.M.P. Pujara is one of the group company accounts of Sh.Pujara. The facilities to M/s Transatlantic Traders Ltd., one of the companies of the group were already sanctioned by the Board. The sanction of facility in the account of Mr.M.P. Pujara was, therefore, unauthorised.

b) Pujara Group was running substantially irregular and partly doubtful recovery accounts. In spite of the same, facility was sanctioned to Mr.M.P. Pujara.

c) Drawings in excess above the sanctioned limits were allowed.

d) Facility was released without obtaining proper valuation report in respect of the property proposed to be mortgaged.

e) Advance was released without getting bank's charge registered on the property. Even insurance on the property was not obtained.

v. International Builders & Property Developers Inc.

Petitioner sanctioned an overdraft facility of US $ 0.70m on 1.3.1985. Following irregularities were committed:-

a) Company stood incorporated in USA. Facility was sanctioned and released in London.

b) Facility was sanctioned on the basis of unaudited and incomplete balance-sheet.

c) Facility was sanctioned in spite of various deficiencies in the proposal. Deficiencies were that as per the bye-laws of the company, it was to have a minimum of 4 Directors while it had only 2 at the time of sanction and secondly Resolution of the company for raising the loan was not properly worded. Facility was released in anticipation of completion of documents and registration of banks charged on the property. No instructions were given to the Manager for holding the release of the facilities till the formalities were completed.

d) Valuation report was not obtained from an approved valuer.

e) Property was not get insured.

f) The facility was sanctioned even though the formalities in the account of International Developers Inc. had not been completed.

vi. Miscellaneous Expenditures:

Petitioner permitted payment to a firm named "Broad Street Associates" in the sum of Pounds 6534.96 and Pounds 5750. There was nothing on bank's record to prove that the firm rendered any service.

5. Petitioner submitted his reply to the charge-sheet on 24.9.1985. As noted above, since counsel for the petitioner had argued at length on the issue of perversity in the report of the enquiry officer, which led me to, in-extenso, take note of statement of imputation in support of the charge-sheet, it would be advisable to follow the same course of action in respect of the reply.

i. M/s Primlaks Holding Co. (PANAMA) Inc.

(Primlaks Group)

a) Petitioner stated that to his understanding the only difference between a letter of credit and letter of guarantee is that the former authorises the advancing bank to make payment to the beneficiary against representation of documents and a guarantee authorises the bank to make payment in case of default by the named person in the guarantee. Petitioner stated that the particular transaction permitted by him was in fact a financial guarantee. The instrument issued was described as a letter of credit on account of misunderstanding with the borrower who requested for a letter of credit. (I may note that finally a different line of defense on this issue was adopted)

b) In terms of reply to (a) above, petitioner stated that allegation (b) was baseless.

c) The fact that the sanction had lapsed was within his knowledge, but in almost all accounts sanction had lapsed. Petitioner stated that the bank could not afforded to sit idle and wait for renewal of sanction, particularly in cases of first class parties like Primlaks Group. Petitioner stated that what he had done was in the best interest of the bank.

d) Petitioner stated that the Primlaks Holding Co. had transferred its assets and liabilities to 4 newly formed subsidiaries. Primlaks (EUROPE) S.A. was one of such subsidiaries. Petitioner, therefore, stated that according to him Primlaks (Europe) S.A.could be treated as the successor-in-interest of Primlaks Holding Co. to which the Head Office had sanctioned credit facilities.

e) Petitioner stated that the note put up to him by the Branch Manager did not mentioned company "PEEKAY (USA) INC." He stated that his sanction did not permit any deviation on this account. However, petitioner admitted that the note mentioned that liabilities will be undertaken in USA as distinct from Nigeria. Petitioner defended by stating that it was good business in a first class country on a sanction of facility available for a difficult country like Nigeria.

f) Petitioner stated that formalities of documentation were the responsibility of the Branch Manager.

g) Petitioner stated that the Branch Manager did not bring to his notice that the term of the sanction by the Head Office required a cash margin of 33% to be obtained, and therefore, it escaped its attention. Further, petitioner stated that the difference of 3% was marginal and was very small.

h) Petitioner stated that he gave a general permission and it was the responsibility of the Branch Manager to ensure compliance with terms of sanction. Petitioner further stated that status report was not sought by him as it was not necessary in view of the fact that M/s Primlaks (Europe) S.A. was one of the subsidiaries of the borrower to whom facilities were sanctioned and the borrower had transferred its assets and liabilities to 4 subsidiary companies which included Primlaks (Europe) S.A.

i) Petitioner stated that the two previous guarantees issued in the account being not covered in terms of sanction was a fact not within his knowledge nor brought to his notice by the Branch Manager.

j) Petitioner stated that the note put up to him mentioned that the Primlaks Trading Co.(PANAMA) Inc. had transferred its assets and liabilities to 4 subsidiary companies. Petitioner, however, stated that it was not brought to his notice that the Board, while sanctioning facilities to the Primlaks Group had taken into account the financial status of Primlaks Holding Co. (PANAMA) Inc.

ii. TRANSATLANTIC BUSINESS LTD.

a) Petitioner stated that the sanction to add confirmation of letters of credit issued by the banks in Nigeria was meant to be utilised on certain basic principles which were discussed and conveyed to the Branch Manager. He defended extension of the facility to M/s Transatlantic Business Limited because he and the Branch Manager both agreed that though said company was not having any account with the bank, it being a group company of the Pujara Group should be extended the benefit as other companies of Pujara Group were maintaining an account with the bank. Petitioner further justified his action by stating that the Group Companies of the Pujara Group were running irregular accounts and he was of the opinion that income generated by M/s Transatlantic Business Limited and credited in the account with the bank could be utilised to adjust the other irregular accounts. Petitioner emphasised that "what always should count for this purpose is the group and not a new company in the group."

b) Petitioner admitted not obtaining a status report but defended by saying that he did not consider it necessary as the Group was already dealing with the bank for quite some time and substantial facilities were already sanctioned to the group. As regards the charge of compilation of confidential reports, petitioner stated that at London, there was never a system to compile a confidential report.

c) Petitioner stated that a back to back letter of credit is not an additional exposure and the bank does not undertake any additional financial liabilities. Petitioner stated that once a letter of credit was confirmed, opening of back to back letter of credit was a natural corollary.

d-h) Petitioner stated that it was for the Branch Manager to ensure compliance with formalities. He stated that he did not grant approval to individual cases. It was for the Branch Manager to obtain the requisite margins.

i) Petitioner defended extension of facility to M/s Transatlantic Business Ltd. by saying that his intention was to utilize the surplus in these transactions for adjustment of irregularities and deposits in the group company accounts.

j) Petitioner stated that individual transactions were not approved by him and he had only given general sanctions. It was the responsibility of the Branch Manager, London to ensure compliance with formalities in individual cases.

k) Since petitioner shifted the liability to the allegation in sub-para (f), he denied the allegation in sub para (k) and shifted the responsibility to the Branch Manager.

iii. TRANSATLANTIC TRADERS (PUJARA GROUP).

a) Petitioner stated that the charge was baseless. He stated that he had been in office for more than a fortnight and had nothing to do with the sanction or the release. The previous Zonal Manager had sanctioned the facility and the release there under was by the Branch Manager.

b) Petitioner stated that he learnt of the irregular nature of the account from the note which was put up to him on 9.1.1985. He caused enquiries to be made as he noted that the account was highly irregular. He kept on following up the matter continuously and obtained the exact information by end of January. He stated that he persistently followed up the matter with the Branch Manager and required him to report the sanction and release to the head office. Petitioner stated that he telephonically informed Mr.K.C. Beri, the then General Manager, Head Office but lamented that unfortunately Mr.Beri was no longer available.

c) In view of reply (a) and (b) above, petitioner denied the allegation in sub-para (c).

d) Petitioner stated that the irregularity came to his notice on 16.1.1985. He stated that he repeatedly met Mr.Pujara on 24.1.1985, 12.2.1985, 25.2.1985 and 1.3.1985. Petitioner stated that though he had no role in sanction of the facility to Transatlantic Traders which was sanctioned by Sh.Amarjeet Singh, the then Zonal Manager, he took vigorous action to ensure that the amount was recovered.

e) In view of reply (d) above, petitioner denied the allegation.

By way of a foot note to the reply to this part of the statement of imputations, petitioner stated that it was a conspiracy between the previous Zonal Manager and the Branch Manager.

iv. M.P. PUJARA (PUJARA GROUP).

a) Petitioner admitted sanctioning the overdraft to Mr.M.P. Pujara on 8.2.1985 but defended the same by saying that it was a small amount compared to the outstanding in the Group Companies accounts, against security of at least double the amount of advance. Petitioner further stated that since requirement of the party was urgent, he accorded sanction.

b) Petitioner stated that since the accounts of the group companies of Pujara Group were irregular, his intention in sanctioning the advance was to adjust the profits of the new company which would be credited to the said account to be utilised for adjusting the irregular accounts of the group firms.

c) Petitioner stated that drawings in excess of the overdraft sanctioned by him were an act of the Branch Manager and he had no role.

d) Petitioner admitted that he accorded sanction without obtaining a proper valuation report but stated that the property was in a very prestigious locality in London and he had personally visited the property and that he had verified its value from the valuation of other properties in the same area charged to the bank. Petitioner defended his self-valuation by stating that the amount involved was very small.

e) Petitioner stated that since the amount was small and facility was for a temporary period, title deeds of the property were got deposited with the bank. In other words, petitioner stated that an equitable charge was created.

v. International Builders & Property Developers Inc.

a) Petitioner stated that it was a common feature in U.K. to sanction facilities to companies incorporated outside U.K.

b) Petitioner admitted that he acted under the unaudited balance-sheet. He, however, stated that the party promised to submit an audited balance-sheet. He stated that in India it was a common feature to accept unaudited balance-sheet. He further stated that the Branch Office should have followed up with the party to have obtained the audited balance-sheet.

c) Petitioner stated that the deficiencies were noted as indicated in the statement of imputations but stated that they were of such nature that they could be rectified very easily. He stated that responsibility for removal of deficiencies vested with the Branch Manager.

d-f) Petitioner stated that these allegations were purely of operational nature and it was the responsibility of the Branch Manager to complete the formalities. He further stated that irregularities in other group company accounts were not brought to his notice by the Branch Manager. He stated that the changed property being vacant land, it was not to be insured.

vi. Miscellaneous Expenditures:

Petitioner defended release of payment to the firm "Broad Street Associates", a public relation firm. He stated that during his brief stay in U.K., he had as many as 8 meetings with the Press and during each of the meetings, the Public Relation Officer of the firm was present. He stated that services of the firm were requisitioned by the previous Zonal Manager and he had continued with the previous arrangement.

6. Considering the reply submitted by the petitioner and being of the opinion that the defense merited a regular enquiry, the competent authority appointed an enquiry officer to enquire into the charge-sheet served upon the petitioner and to submit his report.

7. Enquiry officer appointed was from the Central Vigilance Commission. 6.6.1986 was intimated to the parties as the date for a preliminary hearing. As per petitioner, he had contacted one Sh.R.K. Gupta, Manager (Computer Planning and Policy Division), Punjab National Bank as his defense assistant. According to the petitioner, said Shri R.K. Gupta started preparing his defense but on 6.6.1986, i.e. the date of the preliminary hearing, Sh.R.K. Gupta expressed his inability to act as the defense assistant. Petitioner states that since he was to appear at the preliminary hearing on 6.6.1986, he had got prepared a letter dating the same as 6.6.1986, addressed to the enquiry officer, intimating that Sh.R.K. Gupta would be his defense assistant. Since, as per the petitioner, on 6.6.1986, in the morning, Sh.R.K. Gupta expressed his inability to act as the defense assistant, on the letter dated 6.6.1986, by hand, petitioner made an endorsement to the effect that since Sh.R.K. Gupta who was preparing his defense had withdrawn his consent to act as the defense assistant, his request that Sh.S.N. Banerjee be appointed as the defense assistant be considered.

8. On 6.6.1986, petitioner appeared along with Sh.S.N. Banerjee at the enquiry. Petitioner denied the charges. A preliminary hearing was held in which a time bound schedule was fixed by the enquiry officer.

9. On 5.6.1986 a letter was addressed to the Chief of the Computer, Policy and Planning Division, Punjab National Bank intimating him that Sh.R.K. Gupta had been appointed to assist the presenting officer i.e. Sh.K.C. Gupta in the enquiry against the petitioner. When the petitioner learnt about the same, he claims to have addressed a letter dated 14.6.1986 to the Chairman and Managing Director of the Bank. As per the said letter, petitioner claims that he intimated to the Chairman and Managing Director the fact that Sh.R.K. Gupta had been preparing his defense, and therefore, it would be against cannone of ethics and justice that he should be assisting the presenting officer. The said letter remained unresponded.

10. Since, as per order dated 6.6.1986, the enquiry officer had permitted the petitioner to submit his list of documents on which he relied for the defense as also the list of defense witnesses, petitioner wrote a letter dated 5.7.1986 to the Chairman and Managing Director of the Bank with copy to the enquiry officer. As per the said letter, petitioner sought inspection of the record at London. Petitioner, inter alia, wrote:-

"In order to identify the documents to be so listed by me I would request that an opportunity be granted to me to verify the relevant records particularly loan files of all accounts mentioned in the charge sheet and their associates in particular and loan files of other parties in general, statement and control returns received from London Office and appraisal there of, minutes of the meetings held between senior officers of London and Head Office at Delhi, London and other places, correspondence files relating to systems and procedures and the organizational structure of our overseas offices, loan files of the parties maintained at London Office, organizational structure of London Office and the job requirements of each individual, all orders passed for systems and procedures at London office, minutes of the meetings held with the loan parties at London etc."

11. The bank replied to the petitioner's aforesaid letter under cover of bank's letter dated 8.7.1986. The bank wrote, inter alia, as under:-

"You are advised to give the list of specific documents relevant to the charge-sheet dated 8.4.1986 so that the same may be shown to you for preparing your defense."

12. Petitioner wrote back as under:-

"The problem stated in my letter is of knowing the specific documents only. I have not had any opportunity earlier to refer to the records in respect of the charges against me and hence specific documents cannot be named unless such a reference is permitted to be made. It is in this background that I have listed the specific areas of records such as the loan files and control statements from London office. I can prepare my defense only if I go through this record and identify the various documents for which a list is to be provided to the Enquiry Officer by 11th July, 1986. I hope you will get the necessary permission from the Disciplinary Authority in this regard."

13. Petitioner's letter aforesaid was replied by the bank on 9.7.1986. Inter alia, the bank responded as under:-

"The imputations in support of the articles of charge in the above charge sheet are specific. As such, you are advised to list out the relevant/specific documents so that the same may be shown to you for preparing your defense."

14. Since, vide order dated 6.6.1986, the enquiry officer had directed the petitioner to submit his list of documents relied upon by him as well as the list of witnesses, on 10.7.1986, petitioner forwarded the list of documents relied upon by him as also the list of witnesses. However, petitioner brought to the notice of the enquiry officer that it was virtually impossible for him to specify the documents on which he relied without seeing the record and the relevant files. Petitioner pointed out to the enquiry officer the correspondence exchanged between him and the bank on this issue. Petitioner requested that a direction should be issued to the bank permitting the petitioner to inspect the record.

15. The list of documents relied upon by the petitioner under cover of his letter dated 10.7.1986 would reveal that pertaining to M/s Primlaks Holding Inc.(PANAMA), petitioner relied upon 45 documents covering the entire field of grant of facility by the bank to the said company, status of letter of credit and letter of guarantee in international market, effect of lapsed sanctions and procedural matters, practice and procedure in London, availability of amounts as margin, risk factors involved, systems of approving the subsidiaries, acceptability of documents, job description and responsibilities, procedural practices in the matter of guarantees, rules regarding renewal information and the job profile and responsibilities of the Zonal Manager and the Branch Manager.

16. Pertaining to M/s Transatlantic Business Limited, petitioner relied upon 15 documents covering the field of procedure of allowing the line of credit to foreign banks, status of banks, procedure of complying confidential reports and status reports, risk factor between letter of credit and letter of guarantee, status of in-house business, procedures and practices followed in London and follow up matters and meetings which the petitioner held with different parties.

17. Pertaining to M/s Transatlantic Traders Inc., petitioner relied upon 19 documents pertaining to the field of status of group companies and their account position, status of the group and the existing irregularities, accountability of various officers and their role description, reporting system followed including treatment to report from London Office and follow up measures.

18. Pertaining to International Builders and Property Developers, petitioner relied upon 8 documents covering the field of status of the group company accounts, status of Sh.R.K. Gupta, practice and procedure for allowing advances outside London office, status of the group companies, acceptability of valuers' report and the procedural requirement of the bank.

19. Pertaining to Mr.M.P. Pujara, petitioner relied upon 8 documents. The 8 documents covered the field of practice and procedures followed in London Office, acceptability of certain practices and procedures, risk factors and completion of formalities. Accountability for procedural matters and credibility of the valuers.

20. Pertaining to Miscellaneous Expenses, petitioner relied upon 10 documents covering the field of end use of the service of PRO. Acceptability of services of PRO and power to sanction expenses to the professionals.

21. Petitioner submitted a list of 7 witnesses whom he wanted to examine as defense witnesses. Relevance of the 7 defense witnesses along with their names, as indicated by the petitioner in his letter, is as under:-

a) Sh.G.D. Golani, Officiating General Manager, Zonal Office, London: Relevance being to prove the practice and procedures prevalent in London Office. Sh.Golani was the officer who inspected the London Office and on whose report the charge-sheet was served upon the petitioner. It was indicated by the petitioner that Sh.Golani would be the fit person to witness most of the imputations in the charge-sheet.

b) Ms.S.P. Anand, Clerk, London Office: Relevance stated was that she was the petitioner's secretary at London and was a witness to the follow up action taken by the petitioner. It was stated that this witness would be relevant to establish the correctness of the diary maintained by the petitioner. (The diary of the petitioner was an admitted defense document).

c) Sh.A.L. Uppal, Manager, Zonal Office, Delhi: Relevance of this witness was that he was Manager of London Office at the relevant time and for most of procedural matters qua which petitioner was charge-sheeted, evidence of this witness was important.

d) Sh.S.N. Banerjee, Office Principal, Staff Training College, Delhi: Relevance of this witness was that Sh.Banerjee had visited the office of the bank in U.K. and was acquainted with systems and procedures. He had served as Chief of the International Banking Division and hence was an expert witness on procedures followed in international banking business.

e) Sh.K.C. Gupta, Chief International Banking Division, Head Office: Relevance of this witness was the same as indicated for Sh.S.N. Banerjee. In adition, it was stated that Sh.K.C. Gupta had witnessed the follow up matters and the status of the parties and subsequent events in respect of the accounts listed in the charge-sheet.

f) Sh.A.L. Chawla, Regional Manager, Chandigarh: Relevance stated was that he was an expert witness of systems and procedures of the bank in respect of accountability vis-a-vis the branch reporting to the management control office.

g) Sh.R.S. Wadhva, AGM, Credit Administration Division, Head Office: Relevance stated was that he was an expert witness pertaining to loaning systems and procedures followed in the banking industry.

22. On 18.7.1986, following order was passed by the enquiry officer on the letter on the letter dated 10.7.1986 sent by the petitioner:-

"I have received a letter dated 5.7.86 from the P.O. with the information that the charged officer has inspected all the listed documents. The CO has submitted a list of additional documents in his letter dt.10.7.86. It is not clear if a copy has been given to the PO. If not, the CO will, do the same at once. I have considered the relevance of the documents mentioned by the CO in his letter. The documents mentioned therein are considered relevant. The PO will collect these documents and inform me after the documents are collected by them.

The CO will let me know the relevance of the 7 witnesses, to the charges as per his list of witnesses (Annx.G of his letter).

The CO has stated that he has not been given to see certain records. It is not clear as to which records he is referring to. The records which are relied upon by the prosecution have already been seen by him. Until and unless the CO gives the specific details of the records, it is not possible to give any order in this regard.

In his letter in the last but one para, the CO has sought for permission to submit additional documents. The CO has already been given an opportunity to submit a list of addl. Documents. However, to give him the maximum opportunity, he is allowed to submit another list but this should reach me positively by 24.7.86. If it is not reached by that time, no further list will be considered. This is also true of the list of defense witnesses.

A copy of the order-sheet is sent to PO & CO."

23. Order dated 18.7.1986 would reveal that:-

a) Petitioner had inspected all the listed documents.

b) The documents relied by the petitioner were held to be relevant and the presenting officer was directed to produce the said documents.

c) Petitioner was directed to show the relevance of the 7 witnesses which he wanted to summon.

d) Petitioner's grievance that he was not allowed to see certain records was noted. It was recorded that it was not clear as to which record was the petitioner referring to.

e) Petitioner was directed to give specific details of the records which he wanted to inspect and in the absence of material particulars, enquiry officer noted that it was not possible to pass any orders.

f) Relied upon documents by the prosecution were given to the petitioner.

24. Pertaining to the list of witnesses submitted by the petitioner, to be produced as defense witnesses and in relation to another letter dated 23.7.1986 sent by the petitioner seeking to rely on additional documents, following order was passed:-

"Letter dt.23.7.86 has been received from the charged officer. The CO has given another list of additional documents in Serials No.3(a) to 3(i); none of these can be considered as because particular of the documents and the relevance were not given. Further, the CO already submitted a list of addl. documents in his letter dt.10.7.86 which was considered in my order-sheet dt.18.7.86. In that order-sheet, I clearly stated that no further list will be entertained. Of the list of witnesses submitted by the charged officer, I consider the witness mentioned at Sl.No.1 & 2 as not relevant. As per the charged officer, the witness at Sl.No.1 was to confirm the practice and procedures for which the CO has mentioned another witness at Sl.No.4. Hence, the witness at Sl.No.1 is not being summoned. The witness at Sl.No.2 is not being summoned as the follow-up action of the CO of the imputations has got nothing to do with the imputations themselves. The witness mentioned at Sl.No.5 is the P.O. himself and he cannot give evidence as a defense witness. Summons will, therefore, be sent only to the witnesses at Sl. Nos. 3, 4, 6 & 7.

Copy of the order-sheet to PO & CO."

25. Order dated 23.7.1986 would reveal that:-

a) Additional list of documents to be relied by the petitioner, in the absence of relevance being stated was disallowed.

b) Of the 7 witnesses sought to be summoned as defense witnesses, witnesses at serial No.3, 4, 6 & 7 were permitted to be summoned.

c) Witness at serial No.1, whose relevance was to confirm the practice and procedures at London Branch was not permitted to be summoned as witness at serial No.4 was sought to be produced for same purpose and witness at serial No.4 was permitted to be summoned as a defense witness.

d) Witness at serial No.2 was not summoned because it was held that his relevancy was to establish the follow up action allegedly taken by the petitioner, it being held that follow up action had nothing to do with the imputations themselves.

e) Witness at serial No.5 was the presenting officer himself, and therefore, it was held that he could not give evidence as defense witness.

26. 6.10.1986 had been intimated to the parties as the date of regular hearing. Petitioner appeared without his defense assistant. Sh.K.C. Gupta appeared as the presenting officer for the bank. Following order was passed on 6.10.1986.

"Regular hearing started. The CO stated that his Def.Asstt.Sh.S.N. Banerjee was not released by the Bank in spite of the CO's approach to the GM(Admn.) on 3.10.86. The CO argued that earlier he suggested the name of Sh.R.K. Gupta to be appointed as a Def.Asstt. but he withdrew on the instructions of the disc.authority. No such correspondence from disc.auth. regarding Sh.R.K. Gupta was received by me. The CO further argued that although the GM (Dm.) enquired about the willingness of Sh.Banerjee to work as Def.Asstt. and although the CO himself had intimated the Bank about Sh.Banerjee's willingness, yet the Bank at a later stage raised objection to the nomination of Sh.Banerjee as Def.Asstt. The PO argued that Sh.Banerjee did not approach the Bank at any stage for permission to work as Def.Asstt. He also stated that he was not aware if the CO had approached the bank for granting the permission to Sh.Banerjee to work as Def.Asstt. Although the CO could not produce any letter vide which Sh.Banerjee approached the competent authority for necessary order permitting him to act as Def.Asstt., yet I find that Sh.Banerjee assisted the CO during the preliminary hearing held on 6.6.86 and the PO did not raise any arguments about the necessary permission from the Bank for the presence of Sh.Banerjee. The CO prayed that the disc.authority's attitude of not permitting Sh.Banerjee to act as Def.Assistant should be noted. The CO however, stated that he would not like to have an adjournment of the hearing and he would like to argue the defense case himself. The regular hearing started in the absence of the defense assistant.

The listed and addl.documents were produced by the PO. The CO did not object to their authenticity. The listed documents were marked as Ex.S-1 to S-40. The defense documents were marked as Ex.O-1 to O-78 of which Ex.O-44 has too parts 44A and D-44B. The PO stated that the documents at Sr.Nos.20, 35, 37, 38, 40 regarding the account of primlaks holding INC., the documents at Sr.Nos.11, & 19 in the account of Trans Atlantic Traders, the documents at Sr.Nos.7 & 8 of the account of International Builders and Property Developers and the documents at Sr.Nos.6 & 7 of the account of Sh.M.P. Pujara, the document at S.No.4 of the account of Misc. expenses were not available. All these documents were addl.documents mentioned in CO's letter dt.10th July, 1986. SW-1 was examined and his deposition was recorded. The cross-examination of SW-1 will continue tomorrow. Hearing adjourned from 10.30 a.m. on 7.10.86. Copy of the order-sheet and deposition handed over to PO&CO."

27. Perusal of the order dated 6.10.1986 would reveal:-

a) Except for 11 documents, all documents relied upon by the petitioner were produced by the bank and were exhibited.

b) All the relied upon documents by the Bank were available with the petitioner and were marked as Ex.S-1 to S-40.

c) Sh.S.N. Banerjee, defense assistant did not appear on the date fixed. Petitioner raised a grievance before the enquiry officer that the bank had not released Sh.S.N. Banerjee to act as the defense assistant.

d) The presenting officer stated that whether the petitioner or Sh.S.N. Banerjee had approached the bank to act as the defense assistant was not known to him, but it was for them to have ensured that the necessary formalities were completed.

e) Petitioner, far from seeking adjournment to have the issue sorted out, himself stated that he would not like to have an adjournment and would like to defend the case himself.

28. In respect of the documents relied upon by the petitioner and held to be relevant but not produced by the bank, position was explained to the petitioner by the bank under cover of its letter dated 30.7.1986 copy whereof was marked to the enquiry officer. It was explained to the petitioner as under:-

A/c.Primlacs Holding (PANAMA) Inc.

Reasons for Non-Production

Item No.20

Letter from HO calling explanation/comments from London allowing facilities against lapsed LG facility as per the renewal note in the a/c.

We have not come across any such letter on the records. The relevant file has also been seen by the CO and no such letter has been pinpointed.

Item No.35

Reply of London office to the inspection report of 1984.

No reply to Inspection Report of 1984 was received at Head Office.

However, from the records, it is observed that inspection report as on 2.3.84 was submitted by inspecting officials on 24.8.84 and copy of report was forwarded on 17.10.84 to London office for comments.

However, the branch was put under fresh inspection on 22.3.1985.

Item 37

Minutes of meeting in London of General Manager London and visiting Chairman as received from London in 1984.

It appears that no minutes were recorded and formulized.

Item 38

Minutes of meeting in Delhi in the year 1984 on visit of London GM between London GM, ED and Chairman.

- do -

TRANSATLANTIC TRADERS INC.

Item No.11

Telex message from London stating that all loan accounts were being handled by Sh.Harwant Singh.

No such telex message appears to have been received from London. The file of the captioned account has been gone through by Co.

Item No.19

Copy of FIR/Information note given to CBI against Sh.AJ Singh in allowing the clean overdraft of $ 3 Million in this case.

Neither any FIR has been lodged nor any information note given to CBI.

A/C INTERNATIONAL BUILDERS & PROPERTY DEVELOPERS

Item No.7

Codified set of instructions fro the working of London Office.

No specific codified set of instructions for the working of London office has been framed as the branches in UK work on the basis of rules and guidelines prevalent in India.

Item No.8

Note relating to appointment of expert to draft the above instructions.

No such note is available.

M P PUJARA

Item No.5

List of approved valuers maintained at Head Office/London Office.

The list of approved valuers maintained at BO: London has been provided. However, no such list is maintained at Head Office.

Item No.6

List of accredited valuers

No list of accredited valuers has been drawn

MISCELLANEOUS EXPENSES

Item No.4

List of approved advocates with their fees as per power chart.

Fees in respect of the London Advocates has not been approved by the Head Office as the same depends upon the nature of work handled by solicitors and the time spent.

You are requested to issue a certificate to the undersigned having examined all the documents as per the directions of the E.O. given in Daily Order sheet dtd.6.6.86."

29. Record of the enquiry would reveal that on 6.10.1986, evidence of the witnesses of the bank commenced. It was continued on 7.10.1986. The bank produced only one witness being SW-1 who was examined, cross-examined and re-examined. On 7.10.1986, the presenting officer closed the prosecution case. On 7.10.1986 itself, the petitioner submitted a written statement of his defense and examined two witnesses. Proceedings continued on 8.10.1986 when cross-examination of the second witness produced by the petitioner was completed. Petitioner after leading evidence of 2 witnesses stated that he does not want to produce any further witness. He further stated that he did not want to appear as his own witness. Enquiry Officer put general questions to the petitioner and recorded his replies. Presenting Officer was directed to submit his written briefs by 20.10.1986 with advance copy to the petitioner. The petitioner was directed to submit his written briefs by 28.10.1986.

30. For record, it may be noted that the witness produced by the Bank, SW-1 was Sh.R.K. Gupta. The two witnesses produced by the bank in defense were Sh.R.S. Vadhwa, DW-1 and Sh.S.N. Banerjee, DW-2.

31. Presenting Officer submitted his written brief. The petitioner submitted his written response. The enquiry officer submitted his report on 24.11.1987. Few allegations were held to be not proved, but by and large, petitioner was indicted.

32. The first and foremost contention urged by Sh. Adarsh B.Dayal, learned Senior Counsel for the petitioner was that the entire proceedings are vitiated on three counts. Firstly, petitioner was denied the benefit of a defense assistant at the enquiry. Secondly right of inspection was denied and the petitioner, if granted inspection, may have spotted documents which were relevant for his defense. Thirdly 3 witnesses were not summoned, it prejudiced the defense.

33. Is there a denial of the defense assistant? Before the enquiry proceeded, Sh.R.K. Gupta had expressed his non availability to act as defense assistant for he had been nominated by the bank to assist the Presenting Officer. It be also noted that Sh.R.K. Gupta appeared as the bank's witness. Petitioner, therefore, nominated Sh.S.N. Banerjee as his defense assistant who in fact appeared as the defense assistant on 6.6.1986. Qua non-appearance of Sh.S.N. Banerjee as the defense assistant on 6.10.1986, record of the enquiry officer would reveal that petitioner had produced a copy of letter dated 3.10.1986 addressed by him to the General Manager (Administration) with a request that Sh.S.N. Banerjee, Vice Principal, Staff Training College, New Delhi be relieved in the afternoon of 4.10.1986 so that he could defend the petitioner at the enquiry which was scheduled to be held on 6.10.1986. Since, on 6.10.1986, as noted from the order above, position was not clear as to what action was taken by the bank. The bank clarified the position by producing the said letter dated 3.10.1986. Position which emerges is that the General Manager (Administration) put a query on 3.10.1986 whether Sh.S.N. Banerjee had agreed to act as a defense assistant? A note stands appended on the letter itself: "Yes. He has attended one proceeding already." On 8.10.1986, the presenting officer submitted a written response to the enquiry officer to the effect that the General manager (Administration) had advised the Principal of the Staff Training College to relieve Sh.S.N.Banerjee, if Sh.S.N.Banerjee had made a written request to that effect. Nothing has been brought on record as to what happened thereafter. What is relevant is that petitioner, who under the circumstances could have sought for an adjournment, on the contrary stated that he does not want the matter to be adjourned and would himself argue the matter. For record, I may only note that Sh.S.N. Banerjee had appeared at the enquiry on 7.10.1986 but as a defense witness. He was obviously released by the bank. On facts, I do not find that there is any denial of the right to be represented at the enquiry by a defense assistant of the petitioner's choice.

34. Is there a violation of the principles of natural justice in not granting inspection of the record as sought by the petitioner? It may be noted that the documents relied upon by the bank were supplied to the petitioner and that the enquiry officer has relied upon only such documents which were proved at the enquiry. We have no grievance from any side on this count. As noted in para 10 above, vide letter dated 5.7.1986, petitioner sought inspection of documents to enable him at his defense. The letter would reveal that petitioner had sought inspection of the following:-

i) Loan files of all accounts mentioned in the charge sheet and their associates.

ii) Loan files of other parties in general.

iii) Statement and control returns received from London Office.

iv) Minutes of the meetings held between senior officers of London Office and Head Office.

v) Correspondence files relating to systems and procedures and the organizational structure of overseas offices.

vi) Loan files of parties maintained at London Office.

vii) Organization structure of London Office and duties of each individual.

viii) Orders passed for systems and procedures at London Office.

ix) Minutes of meetings held with the loan parties at London.

35. Virtually, the entire record of the London Office was sought to be inspected. The bank, and in my opinion rightly, vide letter dated 8.7.1986 (noted in para 11 above) requested petitioner to be specific. The bank specified to the petitioner that allegations were specific and the petitioner should indicate, in the light of the allegations, the documents which he wanted to inspect with specific description. On 8.7.1986 itself, petitioner reiterated that only after perusing the entire record could he decided what he wanted. On 9.7.1986, the bank reiterated its stand.

36. There is no material on record as to what happened, but oral resolution of this issue appears to have taken place evidenced by the fact that an inspection was given and the petitioner specified that documents which he required the bank to produce and which were produced, save 11 which did not exist or were not available.

37. Documents which were sought to be got produced after inspection are broadly noted by me in paras 15 to 19 above. From the documents brought on record, at request of the petitioner after inspection, it is evident that:

(i) Loan files and all correspondence pertaining to the 5 parties and their associate group companies, in respect of which parties petitioner was charged with the misconduct, were given inspection of.

(ii) Systems and procedure files were given inspection of.

(iii) Practice and procedures in London, international market practice as documented were given inspection of. And

(iv) Job description and responsibilities of Zonal Manager and Branch Manager, as documented, were given inspection of.

38. Documents brought on record covered the entire field of grant of facilities to the listed parties, head office sanction, correspondence between head office and London Office and the London Branch qua said parties, status of L.C. and L.G. in international market, effect of lapsed sanctions and procedural matters, practice and procedures in London, availability of amounts as margin, risk factors involved, systems of approving the subsidiaries, job description and responsibilities of the Zonal Manager and Branch Manager, procedure for allowing line of credit to foreign banks, procedure of compiling confidential reports and status reports, status of in-house business, status of group companies and their account position, reporting system at London and finally the documents from the files of the listed accounts.

39. Learned counsel for the petitioner could neither show any specific pleadings nor could orally state as to what possible relevant document could be brought on record other than the ones brought on record. Counsel contended that this was not the way to look at the matter. Counsel contended that what mattered was the petitioner's right. Possibility of petitioner locating a relevant document on inspection could not be ruled out. Counsel relied upon Surat Singh & Ors. V. S.R. Bakshi & Ors, AIR 1961 SC 1623 State of M.P. V. Chintaman Sadashiva Waishampayan, 1967 S.L.R. 759 Trilok Nath Vs. U.O.I., and 2nd 1987 (1) Delhi 55 H.L. Sonar V. Kendriya Vidhyalaya Sangthan.

40. None can dispute the right of a charged officer to have a fair defense at a departmental enquiry. This would include the right to inspect the relevant record and have the same produced. In my judgment delivered on 10.2.2004 in WP(C) NO.384/1981 Sh.D.P. Mahajan Vs. PNB, considering law on the subject of principles of natural justice and noting 1964 AC 40 Ridge v. Baldwin, 1968 (1) WLR 1278 M. Vasudevan Pallai Vs. City Council of Singapore, 1990 (2) AC 876 Al Mehdawi V. Secretary of State, (1971) 2 All ER 1278 Maloch v. Aberdeen Corpn., 1981 AC 75 Bushell v. Secretary of State, (1987) 1 All ER 161 R V. Secretary of State for Transport, AIR 1958 SC 86 State of UP V. Mohd. Nooh, Janakinath Sarangi Vs. State of Orissa and Managing Director ECIL V. B.Karunakar, I had held:-

"The legal position would, therefore, be that since the object of principles of natural justice is to ensure a fair hearing and a fair deal to the part whose rights are going to be affected, every case has to be examined on its own facts, keeping in view the nature of the enquiry, to determine whether prejudice has been caused to the person affected. Distinction has to be drawn between: (a) no notice, (b) no hearing, and (c) no adequate hearing. In case of no notice, the violation would be fundamental and fatal. That by itself is prejudice, none further need be shown. Ridge vs. Baldwin applies. No hearing, if rectified at appellate stage would be fair procedure unless prejudice is shown. M. Vasudevan Pallai is attracted. No adequate hearing would require, prejudice having been caused to be shown. Malloch's case is attracted.

In , State Bank of Patiala vs. S.K.Sharma, in the context of service jurisprudence following principles pertaining to natural justice were extracted in para 32:

i) violation of a rule by itself would not invalidate the enquiry;

ii) violation of a substantive rule would ipso facto invalidate the enquiry and the theory of substantial compliance or test of prejudice to be shown would not apply;

iii) Violation of a procedural provision, if it falls in the category of no notice or no hearing would by itself invalidate an enquiry;

iv) Violation of a procedural provision falling in category of cases of no adequate hearing would have to be considered from two further aspects:

a) If the procedural provision is of a non-mandatory character it has to be seen whether there is substantial compliance or not and whether prejudice has been caused to the employee or not;

b) If the procedural provision is mandatory and is not waived by the employee, violation per se invalidates the enquiry save and except where public interest is involved.

Another aspect of the law be also noted. Many a cases are brought to court predicating the challenge on the ground that some material document was either not brought on record or if brought on record, it was not validly proved or that right to cross examine was denied. Strictly speaking, these cases would fall in the category of cases of 'no adequate hearing'. But one aspect needs to be clarified. As held in 1984 SC 273, KL Tripathi vs. State Bank of India: where the version given by a party is in dispute, right to cross examine is a valuable right before anything said by the person is looked into. But where there is no dispute regarding the facts but certain explanation of circumstances is needed, there is no requirement of cross-examination to be fulfillled to justify fair play in action.

Thus, if a fact is not in dispute, there is no need to test anybodys veracity. No cross examination is needed. Inference has to be drawn from the admitted fact. Party has to give explanation. It is for him to bring on record material to justify his explanation and in light thereof, call upon the enquiry officer to draw inferences."

41. Out of the four judgments relied upon by counsel for the petitioner (noted in para 39), I need not note the same in detail as settled principles of law were stated therein. Trilok Nath (Supra) dealt with a case where a material document was withheld. Its inspection was not granted. It was held that enquiry stood vitiated. In State of M.P. V. Chintaman (Supra), again, materia documents were withheld in spite of being asked for by the charged officer. It was held that the enquiry was vitiated. In Surat Singh's case (Supra), relevant documents specified for inspection were refused. Enquiry was held to be vitiated.

42. In each of the 3 decisions, documents sought to be either inspected or produced were specified by the charged officer and were proved to be relevant. Yet they were either not produced or inspection not granted. On said finding, enquiry was held to be vitiated.

43. In H.L. Sonar's Case (Supra), an ex-parte enquiry was quashed as rule 14 (11) of CCS (CCA) Rules 1965 was not followed. The learned single Judge, following the decision of the Supreme Court in AIR 1981 SC 138 S.L. Kapoor V. Jagmohan held that wherever principles of natural justice were violated, that by itself was enough to quash the proceedings without anything more to be looked into.

44. S.L. Kapoor's case relied upon was a case where no show cause notice was issued. The learned single Judge, with respect, failed to notice said fact. In any case, decisions of the Supreme Court in B.Kuranakar's case (Supra) and S.K. Sharma's case (Supra) have clearly established that if prejudice caused is not shown, infraction of a particular facet of natural justice is irrelevant until and unless it is a case of no hearing.

45. Natural justice guarantees fair procedure to be followed but does not guarantee the most favorable procedure that can possibly be imagined. If one looks at the record of the enquiry it would be apparent that all possible material documents were before the enquiry officer. In any case, it has not been pointed out as to which material document was withheld. Petitioner's request for a roving and a fishing inspection was rightly declined. Petitioner was wanting an inspection of almost entire record of the London Office. In the decision reported as 1996 Lab.I.C. 2069 State of T.N. V Thiru K.V. Perumal , it was held that at a domestic enquiry the only obligation is to supply relevant documents and not each and every document asked for by the delinquent officer. I accordingly reject the plea of the petitioner that the enquiry is vitiated on the ground that inspection of record as sought was not granted.

46. 3 out of 7 witnesses were not summoned. Petitioner says that his defense was prejudiced. Witnesses not summoned were Sh.G.D. Golani, Ms.S.P. Anand and Sh.K.C. Gupta. Reasons given by the enquiry officer were:-

a) Purpose of examining Sh.G.D. Golani was to prove the practice and procedures at London Office. Another witness, Sh.S.N. Banerjee for same purpose was listed at S.No.4. Since Sh.S.N. Banerjee was being permitted to be summoned, there was no need for duplication.

b) Ms.S.P. Anand was sought to be examined as petitioner wanted to prove follow up action taken by him. Failure to take follow up action was not a part of the statement of imputation and hence her evidence was not needed.

c) Sh.K.C. Gupta could not be a defense witness as he was assisting the P.O.

47. Prima facie, duplication of evidence serves no purpose. If G.D. Golani and S.N. Banerjee were to prove the same facts, it was fair enough to permit only 1 to be summoned. Sh.Adarsh B.Dayal, learned Senior Counsel contended that Sh.G.D. Golani had inspected the London Office and had given an inspection report and to that extent could have thrown more light on the controversy as he had some personal knowledge of the affairs.

48. Report of Sh.G.D. Golani was an exhibited document at the enquiry. Therefore, grievance on ground that G.D. Golani could have thrown more light on the controversy, by and large gets mitigated. If petitioner had duplicated witnesses on the same subject matter, but he intended to prove something more from one witness, surely petitioner could have stated before the enquiry officer that he preferred to have G.D. Golani summoned as a witness rather than have S.N. Banerjee summoned. One cannot adopt a predatory tactic. Be that as it may, on the factual aspect of the allegations, documentary evidence was brought on record and findings of the enquiry officer are based on documentary evidence. Indeed, in a banking business, transactions are documented. Allegations show that they pertain to what emerges from documents. Oral evidence was a mere formality save and except on banking practices which would be in the nature of expert evidence. In view of the fact that substratum of the allegations was documentary evidence, I do not find any error in the decision of the enquiry officer to disallow G.D. Golani as a defense witness.

49. Ms.S.P. Anand was the petitioner's P.A. at London. She was not summoned as a defense witness. I shall be dealing with relevance of her evidence and result of her not being summoned while dealing with the report of the enquiry officer, as her relevance was limited to dis-prove, in defense, only a part of the allegations that petitioner did not take effective follow up action.

50. Sh.K.C. Gupta as stated to be a relevant witness and reason for relevance was same as that of Sh.S.N. Banerjee. That apart, K.C. Gupta was assisting the P.O. He was, therefore, rightly disallowed as a defense witness.

51. I may venture into the enquiry report and deal with the challenge to the same. Counsel for the parties, during arguments, stated that for a better appreciation of the case, it would be advisable to refer to the statement of imputation as the actual charges, for the reason that 11 charges which were alleged against the petitioner were generic and the statement of imputation was specific. Further, the defense was given at seriatim to the statement of imputation. The report of the enquiry officer also followed the sequence of the statement of imputation.

52. Statement of imputation noted in para 4 above, would reveal that petitioner was alleged to have committed various acts of commission and omission, classified under 6 heads, each of which had further tertiary limbs, some independent and some inter-related.

53. Head No.1 related to M/s Primlaks Holding Co. As noted in para 4(i) above, it had 10 limbs. Gist of the limbs of the allegations are noted by me in sub-paras (a) to (i) of para 4(i) above. Gist of the defense of the petitioner is noted in sub paras (a) to (j) of para 5(i) above. Enquiry officer held the petitioner guilty of all the acts and omissions alleged against him as per the statement of imputation under this head. Learned counsel for the petitioner challenged the finding by stating that the enquiry officer had no knowledge of the banking business and was, therefore, unable to comprehend the issues which arose for consideration under this head. Counsel further contended that this would be evident from the fact that the enquiry officer did not understand the contents of Ex.D-3 i.e. the booklet of UCPDC which clearly brought out that the stand-by letter of credit is nothing but guarantee only and have been included in UCPDC because USA banks are not permitted to issue letter of guarantee. Counsel further contended that the enquiry officer could not understand, much less appreciate the evidence of DW-2 wherein he clearly deposed that liability between a stand-by letter of credit and letter of guarantee is more or less identical. Further, the enquiry officer totally ignored the report of Sh.G.D. Golani, the then Dy.General Manager being Ex.D-4, wherein he too had opined that the letter of credit in issue was of the same nature as letter of guarantee. Counsel further contended that the enquiry officer ignored the testimony of SW-1 who clearly deposed that though the instrument was named as irrevocable letter of credit, the purpose, however, appears to be the same as that of a letter of guarantee. Counsel, therefore, contended that the first two limbs of this head were, therefore, just not understood by the enquiry officer and, therefore, the report is perverse. Pertaining to the third limb of this head, counsel contended that testimony of SW-1 and DW-2 clearly brought out that almost all accounts were running beyond the period of sanction and at the London Branch, merely because sanctions had lapsed, accounts were not frozen. Counsel contended that the enquiry officer ignored Exhibit D-6 and Exhibit D-8 which clearly established that at the London Branch, accounts were continued to be operated beyond the period of sanction. Pertaining to limbs iv, v, vi and vii, counsel contended that the enquiry officer failed to take into account the fact that facts alleged pertaining to these limbs related to the working of the Branch Manager and not the petitioner. Pertaining to limbs viii, ix and x, counsel contended that the enquiry officer totally ignored documents being Ex.D-10, D-18 and D-32 which would establish that to ascertain the financial status of a company, the totality of transactions and the profits earned should be kept in mind and if this exercise is done, a formal balance-sheet may not he very important.

54. Before proceeding to analyze the aforesaid submissions and submissions made by the counsel for the petitioner in respect of the other heads, I may note that law on the subject pertaining to jurisdiction of this court exercising power under Article 226 of the Constitution of India in respect of departmental enquiries, prohibits this court to sit like a court of appeal and re-appreciate the evidence. It would not lie within the jurisdiction of this court to re-read the evidence and come to conclusions whether the findings can be sustained or not. This court would have limited jurisdiction to determine whether on the evidence on record, no reasonable person would come to the conclusions arrived at or whether the findings are based on no evidence. See Bank of India v. Degala Suryanarayana. Further as held in Apparel Export Promotion Council V. A.K. Chopra, court should not interfere with findings of fact at a departmental enquiry unless such findings are based on no evidence or were wholly perverse and/or legally untenable. Question of adequacy of evidence is outside the purview of a court. Further, the court cannot substitute its own conclusions as to the guilt. As stated in State of Haryana V. Rattan Singh, point of evidence or no evidence has to be considered not in the sense of the technical rules governing regular court proceedings but in a fair commonsense way as men of understanding and worldly wisdom will accept. Hearsay evidence, provided it has reasonable nexus and credibility is good evidence at a departmental enquiry.

55. One further legal proposition needs to be noted. As held in the decision reported as Krishna Chandra Tandon Vs. UOI, if in a few items it is found that the enquiry report is vitiated, that would make no difference if the order of punishment could be supported on any findings as to the substantial misdemeanour for which the punishment can lawfully be imposed. It is not within the jurisdiction of the court to consider whether that ground alone would have weighed with the authorities in dismissing the public servant.

56. Perusal of the report of the enquiry officer pertaining to this head would reveal that the enquiry officer has relied upon documentary evidence being Exhibit S-1 to S-8 while returning the finding of guilt against the petitioner.

57. Document Exhibit S-1 is the sanction dated 24.3.1983 by the Head Office in respect of Primlaks Holding Co. (PANAMA) Inc. It contains the terms and conditions under which the Head Office sanctioned grant of certain facilities to the company. Exhibit S-1 would reveal that the Board had noted the names of the subsidiary companies as well as the names of the associated companies. The Board had also taken into account the financial position of the company and its subsidiary companies. After considering the financial status of the company and its subsidiary companies, names whereof have been set out in the document, a facility of up to US $ 5m was granted in favor of the company and its subsidiary companies. The sanction was clearly stated to be for "letter of guarantee". Sanction clearly stipulates that the purpose of the sanction was to enable the 4 associate companies being (a) Universal Fishing Company Limited, Lagos, Nigeria; (b) Best Stores Limited, Lagos, Nigeria; (c) Intra Fisheries Limited, Lagos, Nigeria; and (d) Universal Associates Company Limited, Lagos, Nigeria to obtain facilities in the country of their operations. The document clearly stipulates that 33% margin in cash should be obtained and by way of security, counter indemnity from the associated companies and guarantee of the holding company should be obtained. The Board Resolution further reveals that the financial position of the 4 companies noted hereinbefore was taken note of by the board. The sanction was to ensure for a period of one year.

58. The sanction had lapsed. Exhibit S-2 would reveal that the Branch Manager of London Branch had put up a note to the petitioner for his approval for issuance of a letter of credit for US $ 1m on behalf of Primlaks (Europe) S.A. The note reads as under:-

"We have been requested by Primlaks (Europe) S.A. to issue a letter of credit for USD 1,000,000 against a margin of 30%. The letter of credit is in the form of a clean letter of credit and has been opened in favor of VEREINS UND West Bank, Miami, USA.

Primlaks Holding Company is enjoying letter of guarantee facility of USD 5m which can be used by its Nigerian subsidiaries also. But the sanction stands expired. Primlaks (Europe) S.A. is a company formed as:-

"On April 01, 1983, Primlax Holding Co. (PANAMA) Inc. transferred its assets and liabilities to 4 newly formed wholly owned subsidiaries: (1) Primlaks (Europe) S.A.; (2) Primlaks (Africa) S.A.; (3) Primlaks (America) S.A.; (4) Primlaks (East) S.A.

We may issue the letter of credit format against 30% margin in the form of enclosed cash deposit.

Sd/-

(A.L. Uppal)

Manager"

59. On 1.2.1985, petitioner granted approval by noting: "I agree".

60. Exhibit S-3 is the delegation of power to the Zonal Manager, London by the Board of Directors. It would reveal that for a letter of credit and letter of guarantee, different limit within which power has to be exercised has been specified. Exhibit S-4 is a fax message dated 16.1.1985 sent by the Branch Manager, London to the Head Office intimating that sanction of the facility to Primlaks Holding Company has lapsed and it should be renewed. Since, the fax message was cryptic, vide Exhibit S-5, being the Telex Message dated 21.1.1985 sent by the Head Office to the London Branch, the Head Office intimated to the London Branch that the facility was available for one year and if renewal was wanted by the beneficiary, complete renewal proposal Along with up to date review and accounts, balance-sheet should be sent. Exhibit S-6 is the response of the London Branch to the Head Office informing that it was awaiting balance-sheet of the holding company and would revert shortly.

61. Enquiry Officer, in view of Exhibit S-1 held that the sanction by the Board was for availing benefit of letter of guarantee and not letter of credit. She also held that the subsidiary companies as well as the associate companies were set out in the resolution. She also held that the four Nigerian companies which were associate companies, names whereof were mentioned in the resolution could avail the benefit under the sanction. She accordingly held that no company other than the company whose name found mentioned in the Board Resolution could avail the benefit. She further held that as per the Board Resolution, 33% cash margin was to be obtained and security in the form of counter indemnity from the associated companies and guarantee of the holding company was to be obtained. Enquiry Officer further held that in view of Exhibits S-4 to S-6, since the Branch had written to the Head Office to extend the facility and the Head Office had responded by saying that the facility was available for one year and if extension was sought by the party, complete renewal proposal Along with up to date review and accounts balance sheet be sent, meant that the petitioner ought not to have done what he did i.e. petitioner ought not to have accorded approval to the note being Exhibit S-2. In effect, Enquiry Officer held that the petitioner abused his power.

62. Learned counsel for the petitioner in the context of Exhibit D-5 being the letter of credit which was opened, may have a point that the Enquiry Officer did not understand, in the context of banking business as to what a letter of credit or a letter of guarantee was.

63. Certain States in the United States of America do not recognize a letter of guarantee and the UCPDC Rules clarify that stand-by credit is issued in lieu of performance guarantee and have been included in UCPDC because USA Banks are not permitted to issue letter of guarantee. Further, a stand-by letter of credit is nothing but guarantee only. However, in my opinion this was not the main essence of the allegations against the petitioner. The gravement of the allegations was that the guarantee limit facility had lapsed; the sanction by the Board pertained to the subsidiary companies and associate companies in Nigeria, all of which were named in the Board Resolution. Primlaks (Europe) S.A. was not named as one of the company in the Board Resolution. Further, it was a condition of the Board Resolution that benefit, if availed of, would be secured by 33% cash margin and counter-indemnity from the associated companies and guarantee of the holding company. Admittedly, petitioner permitted opening of a letter of credit on behalf of a company not named in the Board Resolution. Further, petitioner permitted issuance of letter of credit against 30% cash margin. Other conditions as per board resolution were also not adhered to.

64. defense of the petitioner was that Primlaks Holding Co. was split into 4 companies and he, therefore, was justified in permitting one of the newly formed 4 companies to avail of the benefit. The Enquiry Officer, in the context of the Board Resolution has held that since the board had considered the financial status of the holding company, it was a relevant consideration as to what was the financial position of the holding company and subsidiary company which led the Board to grant the facility.

65. This finding can neither be said to be perverse nor can it be said to be a finding without evidence. Even otherwise, was it not the job of the petitioner as a prudent banker to see as to where were the assets of Primlaks Holding Co. assigned after it was split into 4 companies. Benefit of the facility was granted to Primlaks (Europe) S.A. Was it not for the petitioner to at least verify as to what part of assets of Primlaks Holding Co. got assigned to Primlaks (Europe) S.A? Further, vide the note being Exhibit S-2, when it was brought to the notice of the petitioner that the sanctions stand expired, was it not for the petitioner to query and seek a response from the Manager whether any steps were being taken for renewal of the sanction? Further, when the holding company which had obtained the facility itself had ceased to exist, was it not prudent for the petitioner to have referred the matter to the Board? Though, the Enquiry Officer has not posed these questions and has hence not answered them, but they certainly arise for consideration. In my opinion, the conclusions arrived at by the Enquiry Officer cannot be faulted, though, she may have taken a different line of reasoning. Further, the note Exhibit S-2 which was put up by the Manager recommended grant of the facility against a cash margin of 30%. Was it not for the petitioner to ensure whether this figure of 30% was the figure recommended when the original sanction was approved by the Board? Petitioner cannot take refuge behind the plea that it was for the Manager of the Branch to ensure compliance with the Board Resolution. In my opinion, the minimum prudence required from the side of the petitioner was to see the terms of the Board sanction. Further, the note did not indicate that by way of security, counter indemnity from the associated companies and guarantee of the holding company should be obtained. Had the petitioner requisitioned the original Board Sanction, he could have noted that the note put up to him omitted certain conditions which were put by the Board. This assumes significance because it is not a case of granting continued facility to an existing beneficiary. Benefit sought was for a new company and the note put up to the petitioner by the manager clearly stated that the Board Sanction was in favor of Primlaks Holding Co. but the request was from a different Co. being Primlaks (Europe) S.A. The least which a prudent banker, placed in the situation in which the petitioner was, was to at least put a note that if at all, benefit under the expired facility was to be granted to the new company, the financial status of the new company be brought on record. Further, the least which was expected from the petitioner, was to make it a term of his permission that the letter of credit be issued on the same terms and conditions as were incorporated in the Board Resolution.

66. Finding of the enquiry officer span from pages 3 to 16 of the enquiry report (pages 83-96) of the paper book.

67. Except on the first two limbs where one could hold that the enquiry officer has acted pedantically and has not appreciated the law on the subject, rest of the findings cannot be said to be unsustainable. It is not for this court to re-appreciate the evidence. Report of the enquiry officer on the said limbs of the statement of allegations as per the imputation pertaining to Head No.1 cannot be interfered with in exercise of jurisdiction under Article 226 of the Constitution of India.

68. Head No.2 of the allegations pertained to Transatlantic Business Ltd. The allegations had 11 limbs. Except for limb No.10, all others were held established. As noted in sub paras (a) to (k) of para 5 (ii) above, petitioner justified his action pertaining to limbs 1 to 3 and 9. Qua the rest, petitioner shifted the liability on the Branch Manager.

69. Issue centered around the head office decision dated 18.2.1985. It was exhibited as Ex.S-10. Due to fiscal crises in Nigeria, Letters of Credit issued by Nigerian Banks were not being accepted by parties/banks in England. Head office noted:

"Our London office has been approached by one of the banks in Nigeria for extending them a line for confirming letters of credit issued in favor of exporters in london.

.................

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A substantial part of our London branch business in the past has been with Nigeria as all our major clients have business dealings with Nigeria. On one of our notes placed before Board in December 1983, Board had advised that no further commitment should be made by way of negotiation/purchase of bill on Nigeria. Keeping in view the nature of our business and the clientele, we do not wish that a total embargo is placed on Nigerian business.

....................

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We recommend for sanction of a line of credit of US Dollars 25m for adding confirmation to the Letters of Credit issued by Banks in Nigeria in favor of exporters in UK on following terms and conditions:

1. The opening bank would be requesting us each time when our confirmation is to be added to a Letter of Credit issued by them.

2. Confirmation commission at the rate of 3% would be charged by us.

3. Negotiation commission at the rate of 3% would be charged by us at the time of negotiation under each Letter of Credit confirmed by us under the facility.

4. All our of pocket expenses to be born by opening bank.

5. Interest to be charged at 2.5% over LIBOR till the date of payment.

6. Separate agreement to be executed with the beneficiaries to keep recourse against them.

7. The branch to keep cash margin of at least 10%.

8. Exposure to Nigeria and high risk countries will not exceed the present limit fixed at 30%.

70. Following was the decision taken:

"Reference enclosed note prepared for Board for its meeting scheduled for 18/2/85. The note could not be considered because of adjournment of Board meeting on 18.2.85.

We had recommended for sanction of a line of credit of US$ 25 million for adding confirmation to the Letters of Credit issued by banks in Nigeria in favor of exporters in UK on various terms & conditions as mentioned in the note.

Since Letters of Credit issued by Commercial banks in Nigeria before 31st December, 1984 will automatically expire if the shipments there under are not make on or before 28.02.85, we recommend for sanction of facility of US$ 10 million immediately in anticipation of approval by Board. Our note dated 14.2.85 would be placed before the Board in the next meeting."

71. Vide telex message Exhibit S-11, London office was intemated as under:-

"In anticipation of approval by Board, Chariman has sanctioned line of credit of USDLRS 10 Million (Ten Million) subject to following conditions:

1. Line of Credit will be available to reputed Nigerian banks(.) Banks will be approved by Head Office and Sublimit will be fixed by Head Office(.) Kindly move accordingly.

2. The opening bank would request us each time when confirmation is to be added to a letter of credit issued by them.

3. Confirmation commission at the rate of 3% would be charged.

4. Negotiatin commission at the rate of 3% would be charged at the time of negotiation under each letter of credit confirmed under the facility.

5. All out of pocket expenses to be borne by opening bank.

6. Interest to be charged at 2.5% over libour till the date of payment.

7. Separate agreement to be executed with the beneficiaries to keep recourse against them.

8, The Branch to keep cash margin of at least 10%.

9. Exposure to Nigeira and high risk countries will not exceed the present limit fixed at 30%. Our Ref = L-183."

72. Gist of the allegations against the petitioner was that purpose of sanction was for benefit of existing customers but he allowed part limit to be utilised by Transatlantic Business Ltd. which neither had any previous dealings with the bank or any party in Nigeria. Further, neither status report nor confidential report was complied on the party. Further, facility was for adding confirmation to the L.C's opened by the banks in Nigeria but was used for opening back to back Letters of Credit. Condition of sanction that there should be request from opening bank was ignored as there was no request from opening bank. Term of sanction that name of opening bank be got approved from head office and 10% cash margin be obtained was ignored. Further, commission and other charges were not recovered and instead amounts were debited to the account of the party which was contrary to the term of the sanction. Transatlantic Business Ltd. was a company of Pujara Group which group companies were running deficit accounts. Amount of Pound 0.134m and D.M. 0.042m had become doubtful recovery.

73. Learned counsel for the petitioner, challenged the findings by arguing that enquiry officer erred in not noting that head office decision did not mention the purpose and that adding confirmation was the responsibility of the Manager. Document Exhibit D-9 was ignored. Exhibit D-9 is the inspection report of London Office by Sh.G.D. Golani where no such irregularity has been noted. Enquiry Officer ignored that the company was a group company of M/s. Peekay Group which group was having dealing with the bank since long. Counsel contended that the facility was in favor of approved Nigerian Bank and not in favor of an exporter and hence it was irrelevant to obtain financial status of an exporter. Counsel contended that enquiry officer ignored that other allegations were operational in nature and were the responsibility of the Branch Manager.

74. Before dealing with the enquiry report, two issues need to be cleared. Merely because the inspection report of Sh.G.D. Golani did not notice the alleged irregularities is of no consequence, if otherwise evidence exists of same being committed. Further, condition of the sanction that 10% cash margin be obtained and 3% confirmation commission be charged makes it clear that the beneficiary of the facility is the exporter. Condition No.7 of the telex message being Ex.S-11 required 'separate agreement to be executed with the beneficiaries to keep recourse against them.' The exporter who has an L.C. from a Nigerian bank, on request from the bank could obtain confirmation from the respondent bank on the L.C. Therefore, financial status of the exporter is not altogether an irrelevant factor. More so, when 10% cash margin was not obtained and 3% commission was charged by debiting the account of the exporter.

75. Findings of the enquiry officer in respect of the individual limbs of the allegations are as under:-

"(i) It is not disputed that M/s Trans Atlantic Business Limited was a Pujara Group of Company. This group were having dealings with the Bank earlier. But the company was no doubt a new one. The charged officer could not produce any evidence that the board's decision of not making future commitments by way of negotiation of bills was followed. In Ex.S.16 it was brought to the notice of the charged officer that there were a number of irregularities in the account of Pujara Group and the party could not regularise the account. In spite of that the charged officer permitted utilisation of limit to this account. Further there was no evidence that the company had dealings with Nigeria. This part of the charge is proved."

"(ii) Although in the adding confirmation to Letter of Credits the exporter is not directly allowed the facility yet the facility was indirectly enjoyed by the party. It was necessary to check the legal status of the party and its financial position because M/s Trans Atlantic Business Ltd. was permitted the facility. It is therefore proved that the charged officer's contention that no financial report was necessary in this case is not correct. This part of the charge is established."

"(iii) In the next part of the charge it was alleged that although the facility was sanctioned for adding confirmation is the Letter of Credits opened by the Banks in Nigeria yet the charged officer permitted the facilities to be utilised for opening back to back Letter of Credits for which there was no power vested with the charged officer. The power chart Ex.S.3 was produced in this connection which does not indicate any power of an officer to permit back to back Letter of Credits. The prosecution pointed out that due to this irregular permission for opening back to back Letter of Credits the outstanding in the Bank reached US Dollar 0.25 million. In doing so the charged officer also did not add confirmation to the letter of Credit.

The charged officer argued that the facilities were not allowed by him and therefore he was not responsible for permitting the opening back to back Letter of Credits. Therefore, it is clear that charged officer indirectly admitted that back to back Letter of Credits was allowed to be opened and adequate margin was not kept. Although it is true that the Branch Manager was mainly responsible this irregularity as pointed in Ex.D-52 (which is a charge-sheet against the concerned Branch Manager for allowing the opening back to back Letter of Credits) the fact remains that being the Zonal Manager he did not exercise supervisory authority over the proper utilization of the sanction as stipulated in the Head Office letter. This part of the charge is proved."

"(iv) In the forth part of the charge it was alleged that the confirmation was allowed to be added to the Letter of Credits in certain cases without obtaining request from the letter of Credit opening bank in Nigeria. The prosecution referred to Ex.S.11 which is the telex message from the International Banking Division, Head Office, to the charged officer in which it was stated that the opening bank should request each time when conformation was to be added to a Letter of Credit but this was not done by the charged officer. The charged officer in his defense argued that the facility was not allowed by him. Thus, the charged officer has not actually disputed the charge but merely transferred the responsibility to the Branch Manager. When the Ex.S.11 was addressed to the charged officer, he was responsible for carrying out the instructions conveyed in it. The part of the charge is proved."

"(v) The Presenting Officer argued that although the opening Banks in Nigeria were to be approved by the Head Office yet from Ex.S-17 it was clear that the facility was allowed to Habib Bank of Nigeria etc. which were not approved by the Head Officer. It is seen from Ex.S.12 that the charged officer sent a telegram to the Chief of International Banking expressing his disagreement with the condition imposed by the International Banking Division that the Bank should be approved by the International Banking Division only. In this telegram the charged officer intimated that they have already sent a formal facility letter to the United Bank for Africa Ltd. for Letter of Credit confirmation facility of US dollar 6 million. Therefore, the charged officer sought confirmation to approve the United Bank for Africa for such facilities. The prosecution observed that the charged officer should have got confirmation regarding the other Banks like Habib Bank of Nigeria also besides it was argued that the list of approved Bank available in the Head Office circular Ex.D-38 cannot be accepted as on evidence supporting the regularity of allowing Letter of Credit facility with any bank without approval of Head office. In this circular it was stated that any bank not included in the list should not be allowed transaction without prior approval from International Banking Division.

The charged officer argued that the name of United Bank of Africa was specifically got approved from Head Office because the sanction of the facility was made at the request of this Bank. The argument of the charged officer is irrelevant as he could not explain why the Head Office circular Ex.D-39 was violated by him by not seeking approval of Head Office before making transaction with any outside Bank. This part of the charge is proved."

"(vi) It has been alleged that the cash margin of 10% and recovery of commission and charges from the party as required under the terms of the sanction was not ensured. This condition was clearly indicated in the Board's sanction letter i.e. Ex.5. Page-3 item-7. But no margin was ever obtained. No commission was charged. The charged officer argued that this was the job of the Manager. But when the sanction letter was sent to him it was incumbent on him to ensure that the conditions are obeyed, specifically when even the telex (Ex.S.11) incorporating the terms regarding the cash margin etc. was addressed to the charged officer. This part of the charge is proved."

"(vii)The charged officer stated that the Letter of Credits were opend by the United Bank of Africa which was an approved Bank. As the Letter of Credits were available for negotiations, these had nothing to do with Letter of Credits being accommodated under the line of credit. This contention of the charged officer cannot be accepted as because the terms of sanction were very clearly spelt out that the line of credit should be only established for adding confirmation to the Letter of Credits opened by Banks in Nigeria. Any deviation from this therefore is beyond the competence of the charged officer. This part of the charge is proved."

"(viii)From this argument of the charged officer, it is clear that he did not deny the necessity of taking precaution when there is possibility of fluctuation in the foreign exchange. But as direct supervisory officer over the Sr.Manager, London Branch, the charged officer should have therefore, ensured that adequate margin was obtained before permitting back to back Letter of Credit to be opened in a currency which was different from the currency in the Letters of Credit received from Nigeria. This part of the charge is proved."

"(ix) The charged officer, however, argued that the deficit was due to the failure of the Sr.Manager for not taking adequate precaution. But he could not explain what precaution he himself suggested when the adverse position in the accounts was brought to his notice by the Sr.Manager in Ex.S.16. From the negative approach of the charged officer and also from the lack of any guideline given on Ex.S.16 to guard against further losses of the Bank by the charged officer, it is clear that the charge in this part is justified."

(x) Head not proved.

"(xi) In this part of the charge the loss of the Bank in this account has been calculated as $ 0.134 million and D.M. 0.042M. The amount is difficult of recovery. The prosecution produced Ex.S.16 to substantiate the loss of the Bank. The charged officer shifted the responsibility to the Sr.Officer not taking adequate margin. But although the direct responsibility is definitely with Sr.Manager yet from all the documentary evidence it is clear that the charged officer was always kept informed/associated in the transactions. Hence, he cannot avoid the responsibility totally for the loss suffered by the Bank as even when the alarming position in the account was brought to his notice, he did not suggest any proper course of action."

76. Findings of the enquiry officer are based on documentary evidence. A clear and logical line of reasoning is discernable. It is not for this court to re-appreciate the evidence. On the material on record, the findings can neither be called perverse nor based on no evidence.

77. Head No.3 of the allegations pertained to Transatlantic Traders (Pujara Group). The various limbs of the allegations could be put under 3 categories:-

a) Though sanction was by petitioner's predecessor, release took place when petitioner took charge. Since sanction was irregular, petitioner should not have permitted release.

b) Petitioner learnt about the illegality on 8.1.1985. He delayed intimation to the head office and reported the same only on 4.3.1985.

c) Petitioner dealt with the matter casually, in that, he did not correctly instruct the Manager about follow up action and even himself did not actively follow up the recovery.

78. First limb has been held not proved and I may, therefore, proceed to analyze the other two.

79. Findings of the enquiry officer are as under:-

"ii & iii. It has been alleged that the above sanction and release of advance was not reported to the Head Officer till 4th March, 1985. The charged officer argued that the accountability for reporting rested with the Branch Manager, as it was the Br.Manager who suggested the sanction of overdraft facility deviating from the rule. The charged officer also argued that apart from the Branch Manager it was the duty of the sanctioning authority to inform the higher authorities about the irregular sanction. The charged officer denied having knowledge of the irregularity before 8.1.85 when the position in the Pujara group of accounts was placed before him vide Ex.S.24. It is seen from Ex.S.24 that the charged officer asked the Br.Manager to comment on the deficit in party's account but no serious note of the matter was taken by him as because in Ex.S.24 there was no such remark by the charged officer. The charged officer himself admitted at page-82 of his defense brief that the report was put up to him for the first time on 9.1.95. But he remained silent on the issue as to why no report was sent by him to the competent authorities till 4.3.83 vide Ex.S.23. The charged officer took the plea that he was away on tour. But when he came to know of the irregular position of the account, he should have instructed the Branch Manager on Ex.S.24 itself about reporting the matter to the higher authorities. This was not done. The charge is established that the charged officer did not take proper action as he did not instruct the Sr.Manager properly and he did not intimate about the irregular sanction of the facility by his predecessor. The charges in part iii in this account are proved.

iv. In this part of this charge it was alleged that in the proposal for sanction of overdraft facility to the General manager, London (Ex.S-19) it was mentioned that Mr.Pujara had been expecting a remittance of US dollar 3.5 million from Middle East Bank. When no such remittance was received, no follow up action was taken by the charged officer. The charged officer argued that he held meetings with Mr.Pujara, Middle East Bank and the Press. For this purpose he produced his official diary as Ex.D-44. Such a personal diary however, does not have much of evidential value as because this was in the personal custody of the charged officer and the entries therein can not be cross-checked. However, there was no document indicating that the charged officer at any point of time intimated the Head Office that the matter was being pursued by him. The fact remains that the remittance was not received. This part of the charge is proved.

v. It was mentioned in the sanction proposal that in case of non-receipt of remittance the advance would be adjusted by the party from its resources within a month. This was not done by the party and the branch did not take up follow up action. The documentary evidence supporting the allegation is available in Ex.S.19 & S-23. In Ex.S.19 while placing the proposal before the General Manager it was indicated that in case the payments were not adjusted within a month due to receipt of remittance from Dubai Mr.Pujara assured adjusting the amount from his own resources. But even on 5.3.85 when the telex message was sent from London Branch to Chief of International Banking Division, Punjab National Bank it was not indicated that the party full-filled the assurance. The charge is therefore proved that the charged officer failed to exercise proper control over the loan amount of the party."

80. Challenging the findings as perverse, counsel for the petitioner contended that while absolving the petitioner of the first limb of the allegations, the enquiry officer, in light of inspection report of Sh.G.D. Golani, being Ex.D-54 held:

"Besides from the fact Inspection Report of Sh.G.D. Golani (Ex.D-54) it is evident that Inspection Officer accepted that the charged officer made efforts to protect the Bank's interest. Hence this part of the charge is not proved."

81. Counsel contended that while indicting the petitioner qua limb 2 and 3 of the allegations, aforesaid findings have been contradicted. Counsel contended that qua these limbs, the enquiry officer has ignored the inspection report. Counsel further urged that these findings even otherwise had to be quashed as Ms.S.P. Anand, petitioner's P.A. at London was not permitted to be summoned as a witness by the enquiry officer, as vide order dated 23.7.1986 (noted in para 23 above), enquiry officer had declined to summon her by holding that 'follow-up action of the CO of the imputation has got nothing to do with the imputations themselves.' Counsel contended that this assumes significance because petitioner's personal diary Ex.D-44 was held to be of not much evidentiary value because it was in the personal custody of the petitioner and its enteries could not be cross checked. Counsel urged that had Ms.S.P. Anand been examined, she would have corroborated the entries in the diary.

82. Counsel for the bank rebutted the submissions by urging that scope of interference under Article 226 of the Constitution of India being limited, this court would not re-appreciate the reasoning of the enquiry officer. In any case, counsel contended, that the 2 limbs had 2 facets. One being casual in not informing the head office and the other being not taking follow up action. Counsel urged that at best second facet may fall, but admittedly the first facet would stand.

83. How else would the petitioner establish that he held various meetings with the party as a follow up, except by proving his diary maintained by him? In my opinion, by two methods. Firstly by proving his official diary maintained by his P.A. at London and secondly by examining his P.A. Petitioner made an attempt to requisition his official diary maintained by his P.A. at London. Ex.D-60 is the response of his P.A. sent by official channel, that said diary could not be located. Thus non summoning of Ms.S.P. Anand became fatal to the defense of the petitioner.

84. I hold in favor of the petitioner that pertaining to the follow up action alleged to be not taken by him, there is a denial of a right of fair defense. Non summoning of Ms.S.P. Anand has resulted in a violation of principles of natural justice causing prejudice to the petitioner. Further, the other intrinsic evidence being the inspection report of Sh.G.D. Golani, relied upon to absolve the petitioner of the first limb of the allegation has been ignored by the enquiry officer. Finding that petitioner did not effectively follow up the matter is accordingly quashed.

85. The other facet, namely, that petitioner delayed intimation of the irregularity to the head office is upheld. Admittedly, petitioner learnt about the irregularity on 9.1.1985. Admittedly, head office was intimated on 4.3.1985. Reasoning of the enquiry officer that the least the petitioner ought to have done was to immediately inform the head office or instruct the branch manager to so do is rational and reasonable. By no stretch of reasoning can it be labelled as perverse.

86. Head No.4 of the allegations against the petitioner pertained to Sh.M.P.Pujara (Pujara Group). As noted in para 4 (iv) above, it had 5 limbs. First limb has been held to be not proved. Counsel battled it out qua the other four limbs.

87. The four limbs of the allegations held to be proved were that in spite of the fact that Pujara Group was running highly irregular accounts and partly doubtful recovery accounts, facility was sanctioned to Sh.M.P. Pujara for overdraft of Pound 0.12m. Further, overdraft was allowed in excess of the sanctioned limits. Further, no valuation report was obtained in respect of the property proposed to be mortgaged and advance was released without getting the bank's charge registered. Even insurance was not obtained.

88. defense of the petitioner as noted in para 5 (iv) above was that he was aware that the accounts of the group were irregular, but he acted in bank's interest in sanctioning the overdraft as parties need was urgent and he intended to adjust the profits of the new company which would be credited to the said account, to be utilised for adjusting the irregular accounts of the group firm. Overdraft, in excess above the sanctioned limit was shifted to the shoulders of the Branch Manager. Not obtaining valuation report was explained by stating that he had personally seen the property and had verified its value from the valuation of other properties in the same area charged to the bank. Non- registration of the change was explained by stating that since amount was small and overdraft temporary, equitable mortgage by deposit of title deeds was resorted to.

89. Enquiry officer has held that once it was admitted by the petitioner that the accounts of the group were highly irregular, his permitting a fresh sanction was an illegal act and jeopardized the interest of the bank. She further held that this was not the act of a prudent banker. She further held that since existing accounts were irregular, petitioner ought to have monitored the new account and had he done so, overdraft above the sanctioned limit could have been avoided. She concluded that petitioner failed to exercise proper supervision over the branch manager. On the issue of valuation, it was held that part of the allegation was not proved, in that, she held that the bank had not proved that it had any list of approved valuers for London Branch. She however held that petitioner had acted on a valuation report Ex.S-28 which was addressed to Sh.M.P. Pujara and not the bank. She noted that there was a disclaimer in the report to the effect that the report was intended for the person to whom it was addressed and not any third person. In view thereof, she held that it was improper for the petitioner to have acted on the report as it was worthless to the bank as its author had disclaimed responsibility of its contents to any third party. She held that since the Pujara Group was running highly irregular accounts, petitioner should have ensured creation of a registered charge.

90. In the decision reported as Disciplinary Authority-cum-Regional Manager & Ors Vs. Nikunja Bihari Patnaik it was held that acting beyond one's authority is misconduct and proof of loss is not necessary. It was observed:

"The findings of the inquiry officer which have been accepted by the disciplinary authority, and which have not been disturbed by the High Court, clearly show that in a number of instances the respondent allowed overdrafts or passed cheques involving substantial amounts beyond his authority. 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 chaotic and unmanageable. Each officer of the bank cannot be allowed to carve out his own little empire wherein he dispenses favors 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 them 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 Baring 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." (Emphasis underlined)

91. In view of the observations of the Supreme Court noted above, it is no defense that he intended the good of the bank. Ex.S-16 clearly establishes that petitioner was aware that as against the sanctioned limit of US $ 5m, the Pujara Group had excess overdraft of US $ 4.103m. Petitioner clearly abused his position to allow overdraft in a new account. This abuse gets accentuated when petitioner did not supervise the operations in the new account which also resulted in over withdrawal.

92. Head No.5 of the allegations pertained to International Builders & Property Developers. Out of six limbs, only limb (ii) and (v) were held proved. Said limbs were (i) that petitioner acted on an unaudited balance sheet and (ii) that petitioner did not get the changed property insured.

93. defense was that if creditworthiness of a party was otherwise established, there was no need of obtaining audited balance sheets and qua the other allegation it was stated that vacant land was not got insured and that in any case, it was a procedural matter to be followed up by the branch manager.

94. Findings of the enquiry officer on the two allegations are as under:-

'The charged officer argued that in London there was no system of getting the audited balance-sheet and when the parties were known to the Bank and their past record was excellent, audited balance-sheet are not insisted upon. He also pointed our that the executives in London were to ensure the creditworthiness of the parties. As the Group company had already dealings with bank, insistence on balance-sheet was not required. It is clear that he has accepted the charge that the balance-sheet was unaudited. This might have been a common feature in London as argued by the defense, yet the provisional balance-sheet that was accepted by the charged officer should have been followed up with efforts to obtain audited balance-sheet. The balance-sheet is a financial statements of a particular firm giving the details of its assets and liabilities, income from different sources like sales and operation etc. Therefore, this is a valuable document to know the means and standing of the party. The charged officer could not prove that he made any effort to get any audited and complete balance-sheet. Therefore, the sanction of the facility on the basis of unaudited balance-sheet was not in the best interest of the Bank."

"The charged officer argued that there was no need to obtain the insurance as the property was a vacant land which was to be developed. The charged officer also pleaded it to be responsibility of the Branch Manager. The charged officer insisted that the question of insurance of the property arises only when there is a structure on it. In the instant case there was no structure, hence there is no need of insurance. It is difficult to accept the argument of the charged officer as the charged officer could not put forward any supporting ruling that the insurance is required only when there is a structure on the property charged to the Bank. It is seen from Ex.S.13 that the advance was sanctioned only on security of mortgage of property. Even if for argument's sake we accept that a land need not be insured, the charged officer failed to explain how the Bank's finance will be kept secured in the case of any eventual loss or damage. Besides, in page-15 of the deposition file, SW.1 Sh.R.K. Gupta who conducted the inspection of the London Branch mentioned that the moment an advance is made, the security in the hands of the Bank should be insured. Thus, from the deposition of this witness it is clear that obtaining insurance was an accepted procedure, it is true, as pointed out by the charged officer, that the Branch Manager was responsible for observing this requirement but being at the helm of affairs, he cannot just shed all the responsibility, specially when the overdraft facility was sanctioned by him. Moreover, from the deposition of the SW-1, it is found that the charged officer's argument that no insurance was required for a vacant land, is not established. The charge is proved."

95. It is trite to say that one cannot be charged of an allegation and held guilty of another. Allegation was that petitioner failed to protect the interest of the bank by acting under an unaudited balance sheet. It was not the allegation that petitioner could have acted on the basis of an unaudited balance sheet but thereafter ought to have followed up the matter to obtain an audited balance-sheet. Once the enquiry officer held that petitioner has established that it was a common practice to act on an unaudited balance sheet, that was the end of the matter. In the absence of any allegation that it was the duty of the petitioner to later on obtain an audited balance sheet, to hold against the petitioner on said count cannot be countenanced in law. Finding against the petitioner to this extent is quashed.

96. Finding against the petitioner pertaining to not obtaining insurance of the vacant land has two facets. Firstly, whether vacant land is to be got insured and secondly, was it the duty of the petitioner to see that it was got insured (if vacant land was to be got insured).

97. Vacant land is capable of being insured. Insurance risk can cover loss by earthquake and flood. Finding by the enquiry officer that it was for the defense to establish that in banking industry vacant land was never got ensured cannot be said to be perverse.

98. It may be true that it was for the Branch Manager to ensure that procedural formalities are complied with. But it is equally true that a sanctioning authority also has an obligation to ensure that its subordinates carry out the mandate of the sanction. Why else do we have a hierarchy of officers in an organization? Was it not a part of the petitioner's job as a Zonal Manager at London to supervise the working of the London Branch? It certainly is the duty of every sanctioning authority to exercise supervisory control over its subordinates and in particular to seek compliance report with the terms of its sanction.

99. Sixth head of the allegations pertained to sanction of payments to a public relation firm. Amounts involved are petty. Indeed, counsel for the bank conceded that if other findings are set aside, findings against the petitioner under this head would not be capable to sustain the punishment. Likewise counsel for the petitioner conceded that if other findings are sustained, fully or substantially, ignoring this finding would have no bearing. I, therefore, need not waste myself on this issue.

100. To conclude on the report, only findings pertaining to first 2 limbs of the allegations relating to M/s. Primlaks Holding Co. and the petitioner not following up the recovery pertaining to Transatlantic Traders (Pujara Group) and the findings pertaining to acting under an unaudited balance-sheet qua International Builders & Property Developers are set aside. Rest of the report is sustained.

101. In the decision reported as , Krishna Chandra Tandon v. The Union of India, the Supreme Court had held:

"12. . . . . . . . . . .The learned judges correctly informed themselves that they could not examine the evidence as if they were sitting in appeal over the findings of the Commissioner. All they could do was to consider whether the order was based on no evidence. Except in a few items the learned judges found that the Commissioner of Income-Tax had evidence for the findings he had recorded. That, however, did not make any difference to the punishment inflicted by the Commissioner because as pointed out by this Court in the State of Orissa v. Bidyabhushan Mohapatra, an order of punishment can be supported on any finding as to the substantial misdemeanour for which the punishment can lawfully be imposed and it was not for the court to consider whether that ground alone would have weighed with the authority in dismissing the public servant."

102. In , Union Bank of India v. Vishwa Mohan in the context of banking business it was observed:-

"12. . . . . . . . . . .It needs to be emphasised that in the banking business absolute devotion, diligence, integrity and honesty needs to be preserved by every bank employee and in particular the bank officer. If this is not observed, the confidence of the public/depositors would be impaired."

103. In 1979 SCC (L & S) 197 UOI Vs.J.Ahmed, it has explained the following constitutes misconduct:

a. Lack of integrity.

b. An act or omission which runs counter to the expected code of conduct.

c. An act or omission contrary to the written norms, guidelines or practice followed.

d. Gross negligence and carelessness where degree of culpability is high is misconduct. As observed in the judgment, carelessness can often be productive of more harm than deliberate wickedness or malevolence.

e. Failure to maintain devotion to duty i.e. conducting self in a way inconsistent with due and faithful discharge of duty in service.

104. As noted in para 90 above, in the decision reported as Disciplinary Authority cum Regional Manager & Ors. Vs. Nikunja Bihari Pathak, it was held that acting beyond authority is by itself a breach of discipline. It was held that such indiscipline cannot be condoned on the specious ground that it was not actuated by ulterior motives or by extraneous considerations. It was held that such acts may bring in profits in some cases but may lead to losses in some other. It was held that such adventures are not given to bank employees who deal with public funds. Indeed, discipline of a bank depends upon each officer acting and operating within his allotted sphere.

105. On the basis of the report of the enquiry officer and agreeing with the same, disciplinary authority passed an order on 7.3.1988 imposing the penalty noted in para 1 above. Counsel for the petitioner contended that no reasons have been set out in the said order and the same is, therefore, liable to be quashed.

106. Order dated 7.3.1988, inter alia, records as under:-

"I have gone through the enquiry report and the records of the enquiry proceedings submitted by the enquiry officer. On careful consideration of the report of enquiry officer and records of the enquiry proceedings, I agree with the findings of the enquiry officer that the following charges stand proved against Sh.Chhabra during the enquiry proceedings:-"

107. Law is clear. Where the disciplinary authority disagrees with the findings of the enquiry officer, order of the disciplinary authority must contain the reasons. The reason for stating reasons, in such situation would be that the mind of the disciplinary authority would need to be reflected in its order. This reflection can take place through the media of the reasons. If, however, the disciplinary authority agrees with the reasons recorded by the enquiry officer and his findings based thereon, law does not require the disciplinary authority to support its decision by reasons. It is enough for the disciplinary authority to satisfy that it has applied its mind. In the decision reported as Tara Chand Khatri Vs. MCD (refer para 20), the Supreme Court observed "that it would be laying down the proposition a little too broadly to say that even an order of concurrence must be supported by reasons. It cannot also, in our opinion, be laid down as general rule that an order is a non-speaking order simply because it is brief and not elaborate. Every case has to be judged in the light of its own facts and circumstances."

108. Learned counsel for the petitioner relied upon a decision of a learned single Judge of this court reported as T.A. Laxmanan Vs. D.A.A.I. & Anr. to contend that where reasons are not recorded in the order of the disciplinary authority, the order would be violative of principles of natural justice.

109. A perusal of the decision would reveal that it was a case where the disciplinary authority had dis-agreed with some of the findings of the enquiry officer and it was in said context that this court held that reasons for dis-agreement should have been recorded, absence of which rendered the order as violative of principles of natural justice. Order of the appellate authority, which again contained no reasons was set aside on the facts of the said case. The facts were that before the appellate authority, the officer concerned had submitted an appeal on 19.6.1987 followed by supplementary grounds on 6.7.1987. Order of the appellate authority only referred to the appeal dated 6.7.1987. It was in said context that the appellate order was found to be faulty as it did not indicate that the appellate authority had considered the contentions urged in the appeal filed on 19.6.1987.

110. In view of the law laid down by the Supreme Court on the issue as noted above, it cannot be said that the order of the disciplinary authority is violative of the principles of natural justice. As noted, the disciplinary authority has recorded in the order that it has considered the report of the enquiry officer as also the record of the enquiry.

111. Appeal filed by the petitioner was rejected by the appellate authority i.e. Board of the Bank on 3.1.1989. Counsel for the petitioner challenged the decision of the appellate authority by urging that personal hearing was not granted.

112. The service rules of the respondent bank do not stipulate that an oral hearing has to be granted by the appellate authority. Thus, the appellate authority has not faulted any statutory rules. Hearing does not mean oral hearing in every case. Hearing would also include a written representation being considered. Petitioner had submitted his appeal in writing. In the appeal, copy whereof has been annexed with the writ petition, in a tabular form, petitioner has, in 5 columns listed out the articles of charge, findings of the enquiry officer and his defense in appeal. Petitioner has juxtaposed the 3 i.e. the charge, the findings and his defense in appeal in a tabular form. The decision of the Board, which is in the form of a resolution, reads as under:-

"The Board carefully considered the grounds of appeal preferred by Sh.R.P. Chhabra Along with the record of the case and after detailed discussions observed that the appellant has not brought out any case based on merits, which warrants interference with the decision of the disciplinary authority. As such the Board decided to confirm the punishment of major penalty of removal from bank's service imposed upon Sh.R.P. Chhabra by the disciplinary authority and rejected the said appeal."

113. Resolution clearly records that the grounds of appeal Along with the records of the case have been considered by the Board. It has been recorded that the matter was discussed and decision arrived at was that no case was made out warranting interference.

114. Challenge to the decision of the appellate authority must fail.

115. Since counsel for the petitioner had made a grievance that the enquiry officer was an employee of Central Vigilance Commission and was not well versed in international banking procedures, she could not comprehend the nitty-gritties of the case. Counsel had contended that the order of the disciplinary authority as well as the order of the appellate authority contained no reasons and the possibility of miscarriage of justice could not be ruled out. Considering that the matter related to international banking procedures and that the enquiry officer was an employee of the Central Vigilance Commission, as would be evident from my decision aforesaid, I had examined the record of the disciplinary authority. Lest it be contended that this court has set a new precedent of examining the record of the disciplinary proceedings in a judicial review proceedings, I would like to make it clear that exercise conducted by me of examining the record of the disciplinary proceedings was not with a view to make out or re-construct the case afresh but only to satisfy the judicial conscience whether there was evidence of the primary facts relied upon by the enquiry officer in support of its conclusion.

116. The last challenge was predicated on the ground that the penalty was dis-proportionate to the gravity of the offence. Counsel contended that no loss was caused to the bank.

117. What penalty should be visited upon an erring employee is the jurisdiction of the disciplinary authority. A writ court would not sit in judgment over the penalty inflicted by the disciplinary authority, save and except where in a given set of facts the quantum of punishment imposed when weighed against the gravity of the offence is shocking to the conscience of the court, it can be interfered with. Decisions of the Supreme Court reported as Bhagat Ram Vs.State of M.P., Ranjit Thakur Vs. UOI, UPSRTC Vs. Mahesh Kumar Mishra & Ors. may be noted.

118. Merely because a loss is not quantified would not mean that a loss has not been caused to the bank. Findings of the enquiry officer would reveal that many a recovery had become doubtful. It has also to be taken note of that when the enquiry was conducted, limitation had not expired and the bank had yet to initiate action for recovery under the defaulting accounts. Mr.Raj Birbal, Sr.Advocate appearing for bank on instructions stated that a loss was caused. The same was in the vicinity of approximately Rs.50 crores. Be that as it may, an act or omission which runs counter to the expected code of conduct is a misconduct. Acting beyond one's authority and that too in a bank is a serious misconduct. If it is not ensured that bank officers act within the bounds of their power, confidence of the public/depositors would be impaired. As observed in J.Ahmed's case (Supra) where degree of culpability is high, gross negligence and carelessness would be a serious misconduct, as such negligence or carelessness can be productive of more harm than deliberate malevolence.

119. Notwithstanding my finding that on three counts, report of the enquiry officer is vitiated, but in view of my findings pertaining to the enquiry report as to the substantial misdemeanour for which the punishment could lawfully be imposed, I am of the opinion that no interference is called for in respect of the impugned orders.

120. The writ petition is dismissed. The Rule is discharged.

121. No costs.