K.Raj Arora vs State Bank Of India & Ors
2008 Latest Caselaw 2148 Del

*           IN THE HIGH COURT OF DELHI AT NEW DELHI


+                         LPA 70/2007


                                              Reserved on: 12.11.2008
%                                          Date of decision: 04.12.2008


K.RAJ ARORA                                        ...APELLANT

                     Through:    Mr.I.C.Kumar, S.N.Jha and K.K.Misra,
                                 Advocates.


                                  Versus


STATE BANK OF INDIA & ORS                          ...RESPONDENTS

                     Through:    Mr.Sanjay Kapur, Mr.Rajiv Kapur and
                                 Ms.Neha S.Verma Advocates


CORAM:
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON'BLE MR. JUSTICE MOOL CHAND GARG

1.        Whether the Reporters of local papers
          may be allowed to see the judgment?           Yes

2.        To be referred to Reporter or not?            Yes

3.        Whether the judgment should be                Yes
          reported in the Digest?

SANJAY KISHAN KAUL, J.

1. The appellant rose from the rank of a clerk in the

respondent no.1-Bank to the position of a Branch

Manager. The trevails of the appellant began when

departmental action was proposed against him on receipt

of a Special Inspection Report dated 01.05.1986. The

appellant was suspended on 19.08.1987 and the result of

the Promotion Board was also kept in a sealed covered.

The appellant submitted his explanation and the

respondent no.1-Bank served a charge sheet on the

appellant ultimately on 17.12.1991 after receipt of the

advice from the Central Vigilance Commission ('CVC' for

short) as a vigilance angle was involved in the matter.

2. The statement of imputation of charges was on account

of the alleged failure of the appellant to discharge his

duties with utmost devotion and diligence while working

as a Branch Manager from October, 1980 to November,

1982 at Sarai Khawaja Branch (Faridabad). It was not

only unbecoming of a bank official but highly prejudicial

to the interest of the Bank. The company in respect of

which such charges were made were the family of

Sh.V.P.Khanna and his two sons. The Inquiry Officer

submitted a report dated 29.09.1993 holding that the

three charges were proved, two charges partially proved

while four charges were not proved. The Inquiry Report

was served on the appellant on 16.02.1994.

3. The Disciplinary Authority, however, tentatively

disagreed with the findings of the Inquiry Officer and the

reasons for the same were communicated to the

appellant on 02.04.1994 giving an opportunity to the

appellant to represent his case. The appellant submitted

a reply dated 11.04.1994. The appellant, in the

meantime, filed a WP(C)4997/1994 before this Court on

26.11.1994. The Disciplinary Authority imposed a

punishment of dismissal form service on the appellant on

20.12.1994 and the said writ petition was thus dismissed

with liberty to the appellant to avail of the alternative

remedy of departmental appeal.

4. The appeal filed by the appellant on 06.01.1997 was not

favourably considered by the Appellate Authority vide its

order dated 29.11.1997 and the review filed by the

appellant also met with a similar fate on 23.09.1999. It is

thereafter that the appellant filed a WP(C)154/2000

before this Court. The learned Single Judge of this Court

by the impugned order dated 08.09.2006 has dismissed

the writ petition.

5. Learned counsel for the appellant, conscious of the

limitation of the scrutiny by a judicial forum in respect of

the departmental proceedings, and more so, in view of

this Court exercising jurisdiction as a letters patent court,

rightly confined his submissions to certain aspects. The

submissions were thus on the following aspects:

i) Delay vitiating the disciplinary proceedings;

ii) Whether a personal hearing was mandatory before

the Disciplinary Authority on account of the

Disciplinary Authority disagreeing with some of the

findings of the Inquiry Officer; and

iii) Disproprotionality of punishment.

6. It may be noticed at this stage that the impugned

judgment of the learned Single Judge is a detailed one

dealing with the different submissions advanced by the

learned counsel for the parties.

DELAY IN INITIATING DISCPLINARY PROCEEDINGS

7. The thrust of the argument of the learned counsel for the

appellant was that the appellant remained under

suspension for over four years without even

commencement of disciplinary proceedings. However, it

cannot be lost sight of that the matter had a vigilance

angle for which there was certain advice sought from the

CVC which itself took considerable time. An important

aspect to be considered is whether the delay caused any

prejudice.

8. Learned counsel for the appellant relied upon the

judgments in :

i) Mohan Bhai Dungarbhai Parmar v. Y.B.Zala & Anr;

1979(3) SLR Page 130 (Gujarat High Court)

ii) State of Andhra Pradesh V. N.Radhakrishan;AIR 1998 SC 1833

iii) M.V.Bijlani v. Union of India & Ors; (2006) 5 SCC 88.

On the other hand, learned counsel for the respondent

referred to the pronouncements in P.D.Agrawal v. State

Bank of India & Ors; (2006) 8 SCC 776 and PWSSB

v.Ram; (2007) 9 SCC 86. The ratio which undoubtedly

emerges from the aforesaid judgments is that as to

whether a particular delay is too long or not would

depend on the facts of each case and that prejudice

should have been caused to the Delinquent Officer.

9. The second aspect is apparent from the judgment in

Addl.Supdt. of Police v. T.Natarajan; 1999 SCC (L&S)646,

which principle stands reiterated in P.D.Agrawal v. State

Bank of India & Ors's case (supra). The appellant had full

opportunity to defend himself before the Inquiry Officer

and subsequently before the Disciplinary, Appellate and

Review Authorities (subject to plea of adequacy of

hearing dealt with hereinafter) and thus it cannot be said

that the delay has caused such a prejudice as to quash

the Inquiry proceedings itself. The aforesaid plea of the

appellant is thus rejected.

Whether a personal hearing was mandatory before the Disciplinary Authority on account of the Disciplinary Authority disagreeing with some of the findings of the Inquiry Officer

10. It is a settled principle of law that where the Disciplinary

Authority differs with the findings of the Inquiry Officer,

the Delinquent Officer must have an opportunity to

represent himself since the findings are in his favour

before the Inquiry Officer. The Disciplinary Authority is

required to indicate to the Delinquent Officer tentative

reasons for disagreeing with the report of the Inquiry

Officer so that the Delinquent Officer has adequate

opportunity to meet the point. Learned counsel for the

appellant in this behalf has referred to the judgments in :

i) Punjab National Bank & Ors v. Kunj Behari Misra;

AIR 1988 SC 2713;

ii) Yogi Nath D.Bagde v. State of Maharashtra & Anr;

AIR 1999 SC 3734; and

iii) Ram Niwas Bansal v. State Bank of Patiala & Anr;1998(4) SLR 711 (Punjab & Haryana High Court, Full Bench)

11. Learned counsel for the appellant also relied upon the

observations made by the Supreme Court in Ram

Chander v. Union of India & Ors; 1986(3) SCC 103 to the

effect that an objective consideration is possible only if a

Delinquent Officer is heard and given a chance to satisfy

the Disciplinary Authority regarding the final order that

may be passed on his appeal. In this behalf, learned

counsel has sought to emphasize that the meaning of

the expression 'hearing' necessarily mandates a chance

to speak and thus an opportunity to merely make a

representation would not suffice. In this behalf, learned

counsel relied upon the judgment in Ramdas Shankar

Rae Digraskar v. Union of India; 2007(2) Mh.L.J.211.

12. We have gone through the aforesaid judgments and we

see no reason to differ with the conclusion arrived at by

the learned Single Judge in this behalf. The judgment in

Punjab National Bank & Ors v. Kunj Behari Misra' case

(supra) has been appreciated in the proper perspective.

The factual matrix of that case was that the Disciplinary

Authority had disagreed with the Inquiry Officer and

straightway proceeded to impose the penalty of dismissal

on the charged officer. It is in that context that the

question arose about an opportunity to be made

available to the charged officer by the Disciplinary

Authority and the Supreme Court had observed that the

natural justice would demand an opportunity of hearing

to be given. However, the observations made in para 18

and 19 of the judgment throw light as to what the

Supreme Court meant while observing that an

opportunity of hearing should be granted. It is in that

context it was observed by the Supreme Court that in

any such situation, the charged officer must have an

opportunity to represent himself before the Disciplinary

Authority before final findings on the charges are

recorded and punishment imposed. To the same effect

are observations in para 19 of the judgment of the Apex

Court that the Disciplinary Authority must give tentative

reasons for disagreement and give an opportunity to the

Delinquent Officer to represent himself before it records

its findings. This aspect has been succinctly dealt with in

para 12 of the impugned judgment. The ratio which thus

emerges is that an opportunity to the Delinquent Officer

must be given to represent himself before findings are

recorded by the Disciplinary Authority. Undisputedly the

appellant did have an opportunity to make a

representation after the tentative reasons were

communicated to him and it is only thereafter that the

Disciplinary Authority has recorded its findings and

imposed the punishment. We thus find no merit in this

ground.

Disproprotionality of punishment.

13. The aspect of disproportionality of punishment was

emphasized by learned counsel for the appellant in the

context of there not being any financial loss to the Bank

as alleged. Learned counsel for the appellant submitted

that even the Disciplinary Authority observed the

likelihood of loss of Rs.70,31,234.19. Learned counsel for

the appellant further submitted that no such loss was

caused then, nor was such loss caused subsequently and

the Bank continued to deal with the customers. On the

other hand, learned counsel or the respondents has

drawn the attention of this Court to the averment made

in the counter affidavit in para 1 of the parawise reply

where there is an averment about such financial loss. It is

also the stand of the respondents that as per the available

records, the respondent no.1-Bank is not dealing with the

firms. In respect of one of the firms Ms.Chinta Mani Metal

Udyog alone the bank suffered a loss and could not

recover Rs.23.33 lakhs. It has already been noticed

above that this aspect has been emphasized while dealing

with the aspect of proportionality of punishment. Learned

counsel for the appellant emphasized that the appellant

had a blemishless career of 28 years and the punishment

must be commensurate with the gravity of the offence.

Learned counsel referred to various pronouncements on

this aspect, which are:

i) Bhagat Ram V. State of Himachal Pradesh; 1983 (2) SCC 442

ii) Ranjit Thakur v. Union of India; 1987(4) SCC 611;

iii) Ram Chander v. Union of India & Ors's case (supra)

iv) Ex.Naik Sardar Singh v. Union of India & Ors; 1991(3) SCC 213;

v) S.K.Giri v. Home Secretary, Ministry of Home Affairs & Ors; 1995 Supp.(3)SCC 519;

vi) Kailash Nath Gupta v. Inquiry Officer (R.K.Rai), Allahabad Bank & Ors; 2003(9)SCC 480;

vii) Harjit Singh & Anr.v.State of Punjab and Anr;2007(2) SCC (L&S) 997; and

viii) B.C.Chaturvedi v. Union of India & Ors; 1995(6) SCC

14. A dismissal on trivial charges of negligence which

resulted in no loss was held to be disproportionate and

excessive. The punishment should not be vindictive or

unduly harsh so as to shock the conscience of the Court;

yet, it cannot be lost sight of that this Court does not sit

as a Court of appeal in respect of any departmental

proceedings including on the aspect of punishment. It is

in this perspective that it has been observed in SBI

v.Ramesh Dinkar Punde; (2006) 7 SCC 212 that it is

impermissible for the High Court to re-appreciate the

evidence which has been considered by the Inquiry

Officer, Disciplinary Authority and the Appellate Authority.

15. In order to appreciate the plea of disproportionality of

punishment, the aspects which have been found against

the appellant must be taken note of. The allegations

proved are of grant of clean overdrafts beyond

discretionary powers, grant of credit facilities while he

was under transfer without obtaining tangible collateral

security, consideration of a limit on the basis of pending

orders when no confirmed orders were in hand. Not only

that in respect of the facilities granted to Ms.HMAC, the

appellant is stated to have ignored categorical

instructions of the Controlling Authority. The drawing was

to be permitted only for purchase of raw material after

ensuring that the first charge over assets of the company

was registered. This condition was violated. There were

irregular drawings permitted to Ms.RSHM. An equitable

mortgage of the immoveable property was stipulated by

the Controlling Authority, which condition was not

complied with. Not only that the appellant while posted

as a Branch Manager, Ballabhgarh reviewed/permitted

sanction of Ms.PCEL, a unit enjoying facilities at Sarai

Khwaja Branch, where the same persons who were

partners of Ms.RSHM were the Directors. The important

allegation substantiated which has a colour of a personal

favour is the purchase of a car by the appellant from

Smt.Reeta Khanna wife of Rajendra Khanna, one of the

sons of Sh.V.P.Khanna. The said purchase was when the

loan proposal was in the process of sanction and the

purchase took place without prior permission from the

Controlling Authority which is contrary to Rules. Not only

that Smt.Khanna did not own or possess the car when it

was sold to the appellant, but was transferred in her

name on 26.10.1982, the same date when the transfer

was effected in the name of the appellant.

16. The aforesaid are thus not individual irregularities but are

recurring irregularities in respect of one group of

companies managed by the same family. It is this which

seems to have been the basis for a harsh punishment

imposed by the Disciplinary Authority.

17. The aforesaid incidents cannot be said to be trivial or

merely on account of negligence. They are repeated

incidents and by a person like a Bank Manager who has a

fiduciary capacity and knows the significance of caution in

commercial transactions. It is in view of the aforesaid

factual position that learned counsel for the respondents

referred to the judgments in :

i) Disciplinary Authority-cum- Regional Manager & Ors; v.Nikunja; (1996)9 SCC 69

ii) Regional Manager, U.P. SRTC v.Hotilal; (2003) 3 SCC 605;

iii) State Bank of Indore v.Govindrao; (1997) 2 SCC 617;

iv) V.Ramana v. A.P.SRTC; (2005) 7 SCC 338; and

v) Ramesh Chandra Sharma v. PNB; 2007(9)SCC 15.

to emphasize that a more stringent norm is applicable

while dealing with the Bank. A Bank Officer has thus to

observe the prescribed norms and discipline and where

such a person holds a position of trust where honesty and

integrity are inbuilt requirements, the matter cannot be

dealt with leniently. Thus, a Bank cannot permit flouting of

its existing Rules.

18. If the matter is considered in the aforesaid

conspectus, it cannot be said that aberrations were of trivial

nature. There is, however, some doubt about the aspect of

financial loss as there is no material placed on record before

us of such financial loss and at the initial stage only a

prospect of loss was discussed.

19. It is trite to say that in view of the aforesaid principles,

unless the punishment is shocking to the conscience of the

Court, the same would not call for any interference.

20. In the end, learned counsel for the appellant had made an

impassioned plea that the appellant had a blemishless

career of 28 years and has nothing to fall back upon on

account of the punishment of dismissal from service. The

appellant is stated to have suffered a paralytic stroke during

the pendency of the proceedings in the year 2006-07.

21. In view of the aforesaid all that we can observe is that the

Appellate Authority may have a relook at the matter limited

to the aspect of reduction of sentence to a punishment

where the appellant may be entitled to pensionary benefits

or part thereof if no excessive financial loss has been

caused to the respondent no.1-Bank. The decision in this

behalf may be taken within a period of three months from

today.

22. The appeal is dismissed with the aforesaid directions.

SANJAY KISHAN KAUL, J.

December 04, 2008                        MOOL CHAND GARG, J.
dm