R.N. Rattan vs M/S Oriental Bank Of Commerce & ...
2011 Latest Caselaw 345 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI
+                       WPC No. 6130/1999

%                                       Date of Decision: 20th January, 2011

#      R.N. RATTAN                                          ...Appellant
!                 Through: Mr. R.M. Bagai & Mr. Sunil Bagai, Advocates

                               versus

$      M/S ORIENTAL BANK OF COMMERCE & ANR.            ...Respondents
^                Through:Mr. Jagat Arora & Mr. Rajat Arora, Advocates


       CORAM:
*      HON'BLE MR. JUSTICE P.K.BHASIN

1. Whether Reporters of local papers may be allowed to see
   the Judgment? (No)
2. To be referred to the Reporter or not? (No)
3. Whether the judgment should be reported in the digest? (No)

                          JUDGMENT

P.K.BHASIN, J

The petitioner has challenged the termination of his services with

the Oriental Bank of Commerce, respondent no.1, by way of imposition of

penalty of dismissal imposed upon him by his Disciplinary Authority vide

order dated 21st December, 1998 after he had been found guilty in a

departmental enquiry of some fraudulent/unauthorised acts committed

by him while he was posted as Chief Manager at the Mahipalpur branch

of the bank in Delhi.

2. The relevant facts may briefly be noticed before proceeding further

to consider the grounds of challenge taken by the petitioner in this

petition. The petitioner had joined the Oriental Bank of Commerce

(hereinafter to be referred as 'the Bank') as a clerk in the year 1974 and

thereafter he had been getting promotions from time to time. He was

promoted as Chief Manager in the year 1994 and during the period of his

posting as the Chief Manager at the Mahipalpur branch he was served

with a suspension order dated 5th March, 1997 as he was reported to

have committed certain fraudulent acts which had exposed the bank to a

considerable risk of loss of money. Then vide letter dated 17th November,

1997 he was informed by the bank the acts of misconduct committed by

him and his explanation was sought to those allegations. The petitioner

submitted his reply denying each and every allegation but the same was

not found to be satisfactory by the Disciplinary Authority. On 23rd

January, 1998 the petitioner was served with a charge-sheet on same

allegations which had been mentioned in the bank's earlier letter of 17th

November, 1997.

3. The allegations made against him in the charge-sheet were that:-

Charge 1

He unauthorisedly purchased two cheques of Rs. 50 lacs each on 26.3.93, in the account of Shri Rakesh Kumar (a fictitious account). The said cheques were not sent for collection to the drawee bank and the

proceeds were converted into term deposits at Extension Counters attached to B/O Mahipalpur. Subsequently, drafts in hand ac/ entries of the said cheques were reversed on 16.4.1993 from the proceeds of a demand loan of Rs. 1 crore raised in the name of Shri Rakesh Kumar B/O Basant Lok with the connivance of Incumbent-in-charge of that Branch namely Shri S.K. Arora (since removed from Bank's service for his fraudulent acts). The said loan standing at B/O Basant Lok was adjusted out of the proceeds of term deposits which were originally made after discounting above cheques.

By his above acts Shri R.N. Rattan did not discharge his duties with integrity, honest, devotion and diligence and acted in a manner which is unbecoming of a Bank Officer. Thus, he violated Regulation 3(1) of Oriental Bank of Commerce Officer Employees' (conduct) Regulation, 1982 which read with Regulation 24 of the said Regulations constitutes misconduct punishable under Oriental Bank of Commerce Officer Employees' (Discipline and Appeal) Regulations, 1982.

Charge 2

He unauthorisedly debited Rs. 22,537/- and Rs. 17,463/-(total Rs. 40,000/- to interest paid account (CDR) on 25.7.95 without mentioning any detail of any CDR in the voucher and fraudulently credited the funds to the current account of Shri Rajeev Aggarwal (CA No. 955) and M/s Mool Chand Motors (CA No. 1121) respectively.

By his above acts Shri R.N. Rattan did not discharge his duties with integrity, honesty, devotion and diligence and acted in a manner which is unbecoming of a Bank Officer. Thus the violated Regulation 3(1) of Oriental Bank of Commerce Officer Employees' (Conduct) Regulations, 1982 which read with Regulation 24 of the said Regulations constitutes misconduct punishable under Oriental Bank of Commerce Officer Employees' (Discipline and Appeal) Regulations, 1982.

Charge 3

He had allowed fictitious loands aggregating to Rs. 58 lacs on 10.5.1995 in the names of three non-existing persons as per details given hereunder:-

         Date of Advance          Name of Fictitious Account   A/C of Loan

         10.5.1995                Shri Moti Ram                Rs. 20.20 lacs
         10.5.1995                Shri Kulwant Singh           Rs. 27.00 lacs
         10.5.1995                Marry Jones                  Rs. 10.80 lacs
                                  Total                        Rs. 58.00 lacs

The proceeds of all the above accounts were credited to current Account No. 955 of Shri Rajeev Agarwal from where the total amount of Rs. 58 lac was transferred to Loan Account Rs. 228 of one Shri Rajeev

Agarwal(of M/s Mool Chand Motors) which was unsecured and clean in nature.

By his above acts Shri R.N. Rattan did not discharge his duties with integrity, honesty, devotion and diligence and acted in a manner which is unbecoming of a Bank Officer. Thus he violated Regulation 3(1) of Oriental Bank of Commerce Officer Employees' (Conduct) Regulations, 1982 which read with Regulation 24 of the said Regulations constitute misconduct punishable under Oriental Bank of Commerce Officer Employees' (Discipline and Appeal) Regulations, 1982.

Charge No.4

He had unauthorisedly allowed/sanctioned advances to M/s Mool Chand Motors and its Associates as per details given below:

(a) He unauthorisedly sanctioned OD limit of Rs. 4.12 lacs to M/s Mool Chand Motors (CA -1048) on 03.05.94 against FDR for Rs.5.50 lacs favouring Sh. Moti Ram ( a fictitious account).

(b) He sanctioned CC limit of Rs.5 lacs (CC A/C No. 23) + to M/s Mool Chand Motors against stock without obtaining stock statement and charging any security and unauthorisedly accommodated upto Rs. 9 lacs during the period 25.06.94 to 06.09.94.

(c) He unauthorisedly allowed a working capital term loan of R.7.47 lacs to M/S Mool Chand Motors on 06.09.94 beyond the lending powers vested with him.

(d) He sanctioned limit of Rs.10.50 lacs to M/S Mool Chand Motors (OD A/c No. 1121) and unauthorisedly accommodated upto Rs.16 lacs. He also unauthorisedly allowed clean OD to the said firm ranging from Rs.8 lacs to 24 lacs during the period 01.06.95 to 31.07.95.

(e) Sh. Rattan sanctioned OD limit of Rs.10.97 lac to M/s Shivam Oil Co. (Prop.M/S Rajeev Aggarwal) but unauthorisedly accommodated from Rs.15 lacs to Rs.37.88 lacs during the period 22.12.93 to 06.01.94.

(f) He unauthorisedly allowed demand loan of Rs.52.50 lacs to Sh. Rajeev Aggarwal in irregular manner on 08.01.94 against FDR No. 11/94 dated 07.01.94 for Rs.70 lacs issued by B/O Basant Lok, New Delhi in the name of the "Ram Jan Bhumar" a non-existent entity. He also unauthorisedly verified the signatures of said 'Ram Jan Bhumar" on the back of FDR knowing very well that the said named person is fictitious.

(g) Sh. Rattan unauthorisedly credited the proceeds of following CDRs:

       No.                  Amount               Favouring
       185/94               Rs.22.05 lac         Sh. Kamal
       268/94               Rs. 7.90 lac         Sh. Rajeev




         860/94               Rs.1.50 lac           Sh. Rajeev
        1046/94              Rs.4.00 lac           Sh. Kamal

To the current account no. 955 of Sh. Rajeev Aggarwal without any mandate from the customers.

(h) He unauthorisedly allowed clean OD to M/S Rajeev Aggarwal in CA No. 955 ranging from Rs.2.25 lacs to Rs.16 lacs during the period 25.01.94 to 24.11.94. Subsequently he sanctioned an OD limit of Rs.13.50 lac against deposit in the said account but unauthorisedly accommodated upto Rs.26.51 lacs during the period 31.05.95 to 15.04.96.

By his above acts Sh. R.N. Rattan did not discharge his duties with integrity, honesty, devotion and diligence and acted in a manner which is unbecoming of a Bank Officer. Thus, he violated Regulation 3(1) of Oriental Bank of Commerce Officer Employees' (conduct) Regulations, 1982 which read with Regulation '24' of the said Regulations constitutes misconduct punishable under Oriental Bank of Commerce Officer Employees' (Discipline & Appeal) Regulations, 1982.

4. The petitioner in his reply dated 9th February, 1998 had generally

denied the allegations. In view of his denial of the allegations it was

decided by the bank to conduct a regular departmental enquiry. One Mr.

S.P.N. Singh was appointed as the enquiry officer who conducted the

enquiry and vide his report dated 30th October, 1988 held the petitioner

guilty of all the four charges mentioned in the charge-sheet. The

petitioner was then given an opportunity to make a representation

against the enquiry officer's report which he did but the same was also

not accepted and the Disciplinary Authority vide its order dated 21st

December, 1998 imposed upon him major penalty of dismissal from

service which penalty was further made to be ordinarily a disqualification

for future employment.

5. The petitioner thereafter filed an appeal before the Appellate

Authority of the bank and before the Appellate Authority he took the

same grounds which he had taken in his earlier representations to the

Disciplinary Authority in response to the enquiry officer's report. The

Appellate Authority, however, did not dispose of his appeal for

considerable time and feeling aggrieved with the non-dismissal of the

appeal, the petitioner filed a writ petition in this Court (being CWP No.

2415/1999) challenging his dismissal from service. However, that writ

petition was dismissed in limine on the ground that the same was pre-

mature as his appeal was pending before the Appellate Authority.

However, the Appellate Authority did not take any decision on his appeal

for another period of five months after the dismissal of his writ petition

and then the petitioner once again approached this Court by filing the

present writ petition impleading the bank as well as the Appellate

Authority and challenged the impugned order dated 21st December, 1998

passed by the Disciplinary Authority dismissing him from bank's services.

The petitioner had prayed for a writ of Certiorari quashing his dismissal

order dated 21st December, 1998 and also for issuing a writ of Mandamus

directing the bank to re-instate him in service with all consequential

benefits.

6. It appears that during the pendency of the present writ petition the

Appellate Authority rejected the petitioner's appeal and confirmed the

punishment imposed upon him by the Disciplinary Authority. That

decision of the Appellate Authority was communicated to the petitioner

vide bank's letter dated 25th February, 2000. The petitioner, however,

does not appear to have raised any challenge to the order passed by the

Appellate Authority by amending his writ petition. However, his counsel

Sh. R.M. Bagai urged before this Court that the order of the Disciplinary

Authority dismissing the petitioner from service was unsustainable as also

the enquiry officer's findings in respect of each one of the four charges of

misconduct levelled against the petitioner. Mr. Bagai contended that

findings of the enquiry officer on all the charges are perverse and had

been arrived at by relying upon the evidence of those witnesses who

themselves were also equally involved in the so-called dubious

transactions done by the petitioner, if at all he had done that, and those

findings cannot be sustained at all. The petitioner in this regard has

sought support from an inspection report in respect of his branch by Shri

O.P. Sharma, who later on was presenting the case of the bank during the

enquiry also against the petitioner. Copy of some extracts from that

report were annexed with the petition as Annexure 'P-9' which shows

that SW-3 Reeta Grover was also found to be involved in the transaction

of purchase of two cheques in question besides the petitioner, Mr. S.K.

Arora and one Mr. Seth, Manager of the Extension Counter at Kathuria

Public School and Mr. R.K.Gupta, Manager of Extension Branch at Air

Force Station and who had also appeared in the present enquiry as SW-

2. It was contended by Mr. Bagai that the innocence of the petitioner was

evident from the fact that no financial loss whatsoever was caused to the

bank from the impugned transactions and the entire money advanced in

different accounts was received back and on this ground alone the

petitioner deserved to be exonerated and reinstated in service. It was

also submitted by the learned counsel for the petitioner that even if this

Court comes to the conclusion that no interference whatsoever is called

for in the present matter as far as the guilt of the petitioner is concerned

the punishment of dismissal from service imposed upon him certainly

deserves to be set aside and substituted with a lesser punishment

considering the fact that no financial loss had occurred to the bank. Mr.

Bagai had also cited some judgments of the Supreme Court in support of

his submissions.

7. A perusal of the representations made by the petitioner to the

Disciplinary Authority against the enquiry officer's findings and to the

Appellate Authority against the decision of the Disciplinary Authority

shows that the main thrust of the petitioner even then was to get an

order of exoneration mainly on the ground that no actual loss had

accrued to the bank by his so-called unauthorized acts found in the

enquiry to have been established and also because those acts were as per

the prevalent practices in the banks and the impugned transactions were

commercially viable and beneficial for the bank and had earned

handsome amount of interest. I am re-producing below what exactly he

had submitted before the Disciplinary Authority:

"However, in actual working some valued customers are allowed occasional accommodation to meet their urgent requirement.......The CDI has apparently not appreciated the actual banking practice and the commercial gain drawn by the bank from its valued customers by such short term, fully secured accommodation...........The CDI has gravely erred in not appreciating the practices prevalent in the banking system and in holding the charge proved on technical ground particularly when no loss of revenue had accrued to the bank nor any undue gains had accrued to the undersigned in the aforesaid transactions.......However, any procedural or technical lapse in my zealous endeavour to earn profit for the bank is regretted but in all circumstances the financial interest of the bank were fully protected without any leakage o revenue or loss."

Same submissions were reiterated by the learned counsel for the

petitioner before this Court also and additionally it was also contended

with great emphasis that the petitioner had joined the Mahipalpur

branch of the bank at a time when its deposits were approximately five

crores only but in a short span of five years after his taking over the

charge in the year 1990 the deposits had gone upto 67 crores

approximately and advances to 30 crores as against earlier advances of

50 lacs only when he had joined that branch and that showed that he was

only interested in the welfare of his branch and not for any undue gains

for himself. It was also submitted that the fact that the petitioner had

been getting promotions from time to time and he had risen from the

post of a mere clerk to that of Chief Manager was also reflective of his

integrity and loyalty towards the bank.

8. As far as the plea raised by the petitioner, that his innocence

should be inferred from the mere fact that no financial loss was caused to

the bank due to the alleged acts of granting financial facilities to some

parties even if it is accepted that those parties were non-existent as held

by the enquiry officer, is concerned the same has no merit. It is now well

settled that in cases of disciplinary proceedings against bank employees

for some fraudulent transactions which are established in an enquiry the

fact that actually no loss accrued to the bank is totally irrelevant. In this

regard I may make a useful reference to the following views of the

Supreme Court expressed in "Damoh Panna Sagar Rural Regional Bank and

Another v. Munna Lal Jain, (2005) 10 SCC 84" :

"17. A bank officer is required to exercise higher standards of honesty and integrity. He deals with money of the depositors and the customers. Every officer/employee of the bank is required to take all possible steps to protect the interests of the bank and to discharge his duties with utmost integrity, honesty, devotion and diligence and to do nothing which is unbecoming of a bank

officer. Good conduct and discipline are inseparable from the functioning of every officer/employee of the bank. As was observed by this Court in Disciplinary Authority-cum-Regional Manager v. Nikunja Bihari Patnaik, there is no defence available to say that there was no loss or profit resulting in case, when the officer/employee acted without authority. The very discipline of an organisation more particularly a bank is dependent upon each of its officers and officers acting and operating within their allotted sphere. Acting beyond one's authority is by itself a breach of discipline and is a misconduct. The charges against the employee were not casual in nature and were serious. These aspects do not appear to have been kept in view by the High Court."

9. Reference can also be made with advantage to the decision of the

Supreme Court in "Disciplinary Authority-cum-Regional Manager v. Nikunja

Bihari Patnaik", (1996) 9 SCC 69 which was relied upon by the Supreme

Court in its judgment noted in the preceding para. In the said case the

delinquent employee of the bank had withdrawn some money

unauthorizedly while functioning as a branch manager. Since that

withdrawal was considered to be unauthorized he was proceeded against

departmentally. His defence was that he had withdrawn the money since

he required it urgently because of the illness of his wife but had repaid to

the bank the withdrawn amount with interest. When the matter reached

the Apex Court this defence was rejected and it was observed as under:

"7. It may be mentioned that in the memorandum of charges, the aforesaid two regulations are said to have been violated by the respondent. Regulation 3 requires every officer/employee of the bank to take all possible steps to protect the interests of the bank and to discharge his duties with utmost integrity, honesty, devotion and diligence and to do nothing which is unbecoming of a bank officer. It requires the officer/employee to maintain good conduct and discipline and to act to the best of his judgment in performance of his official duties or in exercise of the powers conferred upon him. Breach of Regulation 3 is 'misconduct' within the meaning of Regulation

24. 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 would become chaotic and unmanageable. Each officer of the bank cannot be allowed to carve out his own little empire wherein he dispenses favours and largesse. No organisation, more particularly, a bank can function properly and effectively if its officers and employees do not observe the prescribed norms and discipline. Such indiscipline cannot be condoned on the specious ground that it was not actuated by ulterior motives or by extraneous considerations. The very act of acting beyond authority -- that too a course of conduct spread over a sufficiently long period and involving innumerable instances -- is by itself a misconduct. Such acts, if permitted, may bring in profit in some cases but they may also lead to huge losses..................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 supplied)

10. Now, I shall be examining the petitioner's challenge to the findings

of the enquiry officer. The first charge, as has been noticed already,

against the petitioner was that on 26th March, 1993 when he was working

as the Chief Manager of the bank's Mahipalpur Branch he showed in the

records to have purchased two cheques of ` Rs.50 lacs each in a fictitious

account in the name of one Rakesh Kumar and had got issued two term

deposits of Rs.50 lacs each in the name of Rakesh Kumar from the

extension counters of the bank at Kathuria Public School and Air Force

Station, Palam which were attached to the Mahipalpur Branch. During

the enquiry the petitioner had taken the stand that he had sought

telephonic permission/confirmation from the regional office for purchase

of two cheques in question and in his representation to the Disciplinary

Authority against the enquiry officer's report also he had stated that he

had obtained telephonic permission/confirmation from the Regional

Manager Sh.Lakhina for purchase of the two cheques at par. Similarly

when he had filed an appeal against the order of the Disciplinary

Authority dismissing him from service he had taken the same plea that

when the two cheques were brought to his branch for being purchased

he had obtained telephonic permission/confirmation from Sh. Lakhina. It

is thus an undisputed position that the petitioner himself had no

authority to purchase the two cheques of Rs.50 lacs each and he required

the permission from the regional office. However, when the petitioner

was served with bank's letter dated 17th November, 1997 prior to the

issuance of formal charge-sheet and he had been informed of the said

allegation of his having purchased the two cheques of Rs.50 lacs each

unauthorizedly he had not claimed in his reply dated 27th November,

1997 (copy of which had been annexed by him with the present petition

as Annexure P-3) that he had purchased the two cheques after getting

telephonic permission from the Regional Head. The enquiry officer had

taken note of this defence of the petitioner in his report but had rejected

the same. Enquiry officer's report shows that the petitioner had not

examined any witness to substantiate his defence.

11. It was the stand of the petitioner that two cheques of Rs.50 lacs

each had been brought to the extension counters by Mr.S.K. Arora,

Branch Manager of the bank's other branch at Basant Lok after having

instructions from the Regional Head to have that money deposited at the

extension counters where the deposits were less than the desired targets

and since the cheques could not be purchased by the extension counters

Mr. Arora had brought them to Mahipalpur branch and then

he(petitioner) had purchased those cheques at par and in good faith he

had handed over those cheques to Mr. Arora for being sent to the

drawee bank's branch in Hyderabad through courier for realisation. This

kind of defence was too weak to be accepted by anyone. If the whole

transaction was genuine and the cheques did exist the same could be

purchased at the Basant Lok branch itself where Mr. S.K.Arora was

posted. It was the bank's case that Mr. Arora and the petitioner were in

league with each other and that Mr. Arora also was dismissed from

service for his such like fraudulent acts and that case appears to be very

much probable. If any cheques had been presented to the petitioner for

purchase the same would have been in routine sent for clearing to the

drawee bank but the petitioner did not do that but he claims to have

handed over those cheques to Mr. Arora. In routine, any cheque

purchased by a Manager of any branch of the bank was not expected to

be handed over just like that to any other Branch Manager for getting the

same cleared from the drawee bank. The normal procedure is to send the

same for realization through the purchasing branch's dak. It was the

bank's case that it was a fictitious transaction and two FDRs had been

made for Rs.50 lacs each in the name of Rakesh Kumar by showing

purchase of two cheques. That those cheques never existed and it was a

fake transaction becomes evident from the fact that the amount of one

crore for which two FDRs were prepared was admittedly received from

the Basant Lok branch of the bank and not from the drawee bank of the

two cheques which the petitioner claims to have actually purchased. All

these tell-tale circumstances justify the inference that Mr. Arora and the

petitioner were acting in connivance with each other and nothing was

done by the petitioner in good faith and in reality no cheques were

purchased and only on papers that transaction was shown. In fact,

admittedly the details of the two cheques were also not mentioned

anywhere in the records of the bank and not only that even signatures of

Rakesh Kumar, who appears to be a ghost customer, did not appear on

any document relating to the transaction in dispute. The petitioner claims

that to be an inadvertent omission. That explanation hardly was

convincing and was rightly not accepted by the authorities. The

petitioner had sought advantage from that fact that his branch had not

suffered any loss because money of the two FDRs had been received back

finally from Basant Lok branch through Mr. Arora on 16/04/93. The

question, however, is not that the bank's branch had not suffered any

loss in this transaction but what bothers is why all that was done and I do

not find any circumstance brought on record from which it could be said

that the transaction was genuine. These kind of transactions cannot be

within the authority of any bank Manager even if the bank does not

suffer any loss. Here, in any case the amount of one crore in the form of

two FDRs was utilized by someone and returned without payment of any

interest which was definitely a loss to the bank and the transaction also

exposed the bank to the risk of loss of that much amount because of the

act of the petitioner.

12. There is no doubt that in the inspection report pertaining to the

Mahipalpur Branch prepared by Mr. O.P. Sharma, copy of which has been

filed by the petitioner as an Annexure 'P-9' to his writ petition, it had

been found mentioned that Mrs. Reeta Grover and Mr. R.K. Gupta, both

of whom had appeared in the present enquiry against the petitioner were

also involved in the transaction covered under charge 1 and the bank had

not taken any action against them and instead both of them had been

examined as witnesses in the enquiry. However, that fact will not in any

way help the petitioner since the facts which were required to be

established for proving the first charge against the petitioner stood

almost established from the petitioner's own defence versions put up

before the Disciplinary Authority as well as the Appellate Authority and

the case against the petitioner can be said to have been established even

if the evidence of SW-2 and 3 were to be ignored since all that they had

claimed in the enquiry was that certain documents relating to the

transaction of purchase of two cheques at the Mahipalpur Branch had

been prepared by them on the instructions of the petitioner. It may be

possible that both of them were also in league with the petitioner and

Mr. S.K. Arora and had decided to give evidence against the petitioner to

save their own skin, as is the petitioner's grievance, but the petitioner

cannot seek exoneration on that ground and since it cannot be said that

evidence of those two witnesses was no evidence in the eyes of law. In

fact it is quite strange that on the one hand the petitioner claims that

they were tainted witnesses but when it comes to the question whether

the petitioner had sought any permission from his regional head Mr.

Lakhina, as was being claimed by him, he wants the evidence of these

two witnesses to be believed since in their evidence they had admitted

that the petitioner had talked to Mr. Lakhina on telephone and had

sought his permission for purchase of two cheques. In any event, it is

more than apparent that the entire story of purchase of two cheques in

the name of Rakesh Kumar and issuance of two FDRs against the

proceeds of those cheques was not a genuine storey and had been

credited only to justify the grant of loan by Mr. S.K. Arora in his branch at

Basant Lok to one Mr. Rakesh Kumar against the security of the two FDRs

of ` 50 lacs each prepared at the two extension counters attached to

Mahipalpur Branch of the bank. This fact also appears from the

petitioner's own document placed on record as Annexure 'P-9' to the

present writ petition. All these facts further lend strength to the

conclusion that the acts of the petitioner had certainly exposed the bank

to the risk of loss of a crore of rupees at least, if not more. In my view, the

finding of guilt in respect of this charge against the petitioner itself is

sufficient to sustain the penalty of his dismissal from service.

13. Charge no. 3 was that the petitioner had opened three fictitious

loan accounts in the names of Moti Ram, Marry Jones and Kulwant Singh

and the total loan advanced in those accounts was ` 58 lacs. All these

accounts were opened on 10th May, 1995 and the entire loan amount of `

58 lacs was transferred to current account no. 955 of one Mr. Rajeev

Agarwal. While replying to the bank's letter dated 7th November, 1997,

the petitioner had in response to this charge had only claimed that the

loans were allowed against the bank's own fixed deposit receipts and

cumulative deposit receipts details of which were also given by him.

However, he had not refuted the allegation that three loan accounts

opened by him were fictitious. As in respect of charge no. 1, he had

claimed in respect of charge no. 3 also that no loss had accrued to the

bank because of his granting loan of ` 58 lacs in the names of three

persons mentioned above. Even in the enquiry the petitioner had simply

claimed that the loans given to Kulwant Singh and Marry Jones had been

given against third party FDRs issued from the bank's branch at Basant

Lok, where, as noticed already, one Mr. S.K. Arora was posted as Manager

and who has also been dismissed from service for his fraudulent acts.

Regarding the third loan in the name of Moti Ram he had claimed that it

was also given against third party FDRs which, however, had been issued

from his own branch at Mahipalpur and its proceeds had been adjusted in

the loan account of Moti Ram. He had further claimed that various loan

documents had been prepared by the loan department of his branch and

had been duly signed by the Loan Manager and in that process he was

not involved. He had, however, not disputed that the entire proceeds of

all three loan amounts of ` 58 lacs had been credited immediately to

current account no. 955 of one Mr. Rajeev Agarwal. The enquiry officer

had after examining the loan documents had found that none of them

had the addresses of the borrowers, signatures of the persons on the

FDRs which had been taken as security for the three loan accounts nor

was there any mandate of the so called loanees for transferring the loan

amount to the current account of Rajeev Agarwal. He had also found that

even account opening forms were not there in respect of the loan

accounts. It was further observed by the enquiry officer that even the

FDRs on the basis of which loan accounts were opened and which had

been issued by the Basant Lok Branch had already matured and the

petitioner himself had extended the validity period of those FDRs without

any authority since the same could be renewed only by the branch which

had issued them. It was also found by the enquiry officer that while

accepting the FDRs of Basant Lok Branch the petitioner had also not

ensured that lien of his branch over those FDRs was noted in the records

of the Basant Lok Branch so that the same could not be encashed

unauthorizedly. The petitioner had not disputed that the FDRs which he

had kept with his branch in respect of the loan of Kulwant Singh and

Marry Jones were encashed by the Basant Lok Branch Manager. That

shows that Mahipalpur branch's lien had not been got noted in the

Basant lok branch and because of that lapse the FDR came to be

encashed/misappropriated. The petitioner has claimed that the bank had

filed civil suit for recovery of the amount of the FDRs which had been

unauthorizedly encashed by Mr. S.K. Arora, the dismissed branch

Manager. Thus, it cannot be said that because of the acts of the

petitioner no loss had occasioned to the bank. The petitioner in any case

had not adduced any evidence before the enquiry officer to show that

the loan accounts in the names of Kulwant Singh, Moti Ram and Marry

Jones were not fictitious which he could have very well established by

producing those persons if at all they existed in reality. Learned counsel

for the petitioner had argued that the Loan Manager Mr. Subhash Aghi

(SW-7) was in fact the real culprit of these transactions since he had done

the documentation and against him also an enquiry was held and he was

found guilty but was let off with a very minor punishment. However, in

my view nothing turns around this argument since the enquiry officer has

given cogent reasons for coming to the conclusion that the petitioner had

acted unauthorisedly while opening the three loan accounts in question

and allowing the entire loan amount to go to some third party's account.

SW-7 having also been found guilty would only show that he was also in

league with the petitioner like Mr. S.K. Arora. However, his evidence

during the enquiry against the petitioner could not have been ignored for

this reason. I, therefore, do not find any perversity in the conclusion of

the enquiry officer in respect of charge no. 3 also.

14. Similarly, after having gone through the enquiry officer's findings in

respect of charges no. 2 to 4, I find that the findings cannot be said to be

perverse and based on no evidence. In respect of these charges also the

main defence of the petitioner was that there was no loss to the bank.

That defence has already been held by me to be of no consequence. The

conclusions in respect of these charges were arrived at by the enquiry

officer after fully appreciating the evidence adduced before him and no

perversity in his conclusions is found.

15. As a result of the foregoing discussion and conclusions, this writ

petition is dismissed but without any order as to costs.

P.K. BHASIN, J

January 20, 2011/pg