S.S.Tyagi vs Punjab National Bank
2011 Latest Caselaw 533 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                  Judgment Reserved on: 27.01.2011
                  Judgment Delivered on: 31.01.2011


+                  RSA No.216/2003


S.S.TYAGI                           ...........Appellant
                   Through:    Mr.Som Dutt Sharma, Advocate.

                   Versus

PUNJAB NATIONAL BANK                ..........Respondent
             Through:          Mr.Jagat Arora, Advocate.

       CORAM:
       HON'BLE MS. JUSTICE INDERMEET KAUR

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

     2. To be referred to the Reporter or not?                Yes

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

INDERMEET KAUR, J.

1.     This appeal has impugned the judgment and decree dated

01.4.2003 which had endorsed the finding of the trial judge dated

21.10.2000 whereby the suit of the plaintiff S.S.Tyagi seeking a

declaration and an injunction to the effect that the report of the

Enquiry Officer dated 26.12.1986 endorsed by the Disciplinary

Authority and the Appellate Authority imposing punishment of

compulsory retirement upon the plaintiff be set aside had been

dismissed.


2.     The plaintiff was posted as Branch Manager in Jalalpur

Branch, Punjab National Bank in District Bijnor. He was in service

since more than 27 years. On 5.6.1984 he was served with a

charge sheet pointing out certain irregularities.   On 23.6.1984 a

second charge sheet on similar grounds was served upon him.
RSA No.216/2003                                     Page 1 of 16
 Charges were denied.          Enquiry proceedings culminated in the

report of the Enquiry Officer dated 01.8.1985.              Since there was an

ex-parte order it was set aside by the Appellate Authority. Enquiry

Report     dated   26.12.1986      held    him    guilty.    The    Disciplinary

Authority imposed penalty of compulsory retirement and this was

endorsed by the Appellate Body. The order of the Appellate Body

is dated 8.8.1987.         The present suit was thereafter filed on

21.8.1987 challenging the aforenoted orders.                It was stated that

the findings of the Enquiry Officer were vitiated for the reason that

there was an unexplained delay in holding the enquiry; the charges

related to period 1979 to 1981 whereas the charge sheets had

been filed in the year 1984. Documents had not been furnished to

the delinquent in time thereby prejudicing his defence as he was

not able to give an effective reply to the charges which had been

leveled against him.      The Disciplinary Authority and the Appellate

Body had given non-speaking orders without disclosing any

reasons.


3.    In the written statement these submissions were countered.

It was stated that there has been no violation of principles of

natural justice and no prejudice has been suffered by the

delinquent. It was specifically denied that there was any delay in

initiating the enquiry or that the documents have not been

furnished to the delinquent. It was denied that the orders of the

Disciplinary Authority and the Appellate Body were non-speaking

order or non-reasoned orders.


4.    The trial judge had framed the following four issues:

      "1. Whether the plaintiff is entitled for declaration? OPP

RSA No.216/2003                                                Page 2 of 16
       2. Whether the plaintiff is entitled for injunction? OPP

      3. Whether the suit is maintainable? OPP

      4. Relief."

5.    Oral and documentary evidence was led.                     The trial judge

affirmed the findings of the enquiry proceedings.                   The suit was

dismissed. The impugned judgment had endorsed this finding


6.    This is a second appeal. After its admission on 03.11.2004,

the following substantial question of law was formulated; it reads

as follows:

      "Whether the order of dismissal dated 2nd August, 1985 upheld by
      the Appellate Authority on 8th August, 1987 is valid in law?"

7.    On behalf of the appellant, arguments have been urged at

length. It has been argued that there was an inordinate delay in

filing the charge sheet.      The charges for which the delinquent has

been charge-sheeted all relate to the year 1979 to 1981; not only

the delay has to be explained but this explanation has to be

accepted before the penalty could have been imposed upon the

delinquent.       For this proposition reliance has been placed upon

(1998) 4 SCC 154 State of A.P. Vs. N. Radhakishan as also another

judgment reported in (1995) 2 SCC 570 State of Punjab Vs.

Chaman Lal Goyal.        It is pointed out that the charge sheet had

been filed in 1984; documents had not been furnished to the

delinquent up to 1986; this had prevented him from giving an

effective reply to the charges leveled against him which has

created a bias and prejudice against him.                    To support this

proposition reliance has been placed upon (1998) 6 SCC 657 State

of UP Vs. Shatrughan Lal & Ors.                 It is pointed out that the

Appellate Body had also recorded no reasons for arriving at the
RSA No.216/2003                                                  Page 3 of 16
 finding and endorsing the stand of the Disciplinary Authority.

Natural justice had not been adhered to.           For this proposition

reliance has been placed upon AIR 1990 SC 1984 S.N.Mukherjee

Vs. Union of India.

8.    Arguments have been countered. It is stated that there has

been no delay on the part of the department.           The parameters

which have to be taken into account to adjudge this issue has been

dealt with by the Apex Court time and again and unless the delay

causes prejudice to the charged employee, benefit of the same

cannot be taken by him.           Reliance has been placed upon a

judgment    of    this   Court   delivered   on   30.8.2010    in      WP(C)

No.9493/2009 titled as Union of India Vs. Anil Puri to support this

submission. It is submitted that the documents had been given in

time i.e. on the first date of hearing of the enquiry. No bias has

been suffered by delinquent. To support this submission, reliance

has been placed upon a judgment reported in 2006 (1) LLN 881

Syndicate Bank Vs. Venktesh Gururao Kurati as also another

judgment of this Court decided on 03.3.2010 on the LPA

No.959/2004 B.D. Luthra Vs. The Chairman & Managing Director.

It is submitted that the present case is also not a case of a non-

speaking order; the Appellate Body had given sound reasons.

Besides this where the punishing authority agrees with the finding

of the Enquiry Officer and the reasons given by him, it is not

necessary for the Disciplinary Authority to again discuss the

evidence and come to the same finding as that of the enquiry

officer. The scope of judicial review is limited; as has been held in

AIR 205 SC 584 Damoh Panna Sagar Rural Regional Bank

Vs.Munna Lal Jain        as also a subsequent judgment of the Apex
RSA No.216/2003                                         Page 4 of 16
 Court reported in (1996) 9 SCC 69 Disciplinary Authority cum

Regional Manager Vs. Nikunja Bihari Patnaik.

9.    Record has been perused. The order of the Disciplinary

Authority upholding the finding of the Enquiry Officer and

imposing penalty of dismissal is dated 26.12.1986. This was upheld

by the Appellate Body vide order dated 8.8.1987. Two charge

sheets had been issued to the delinquent; first is dated 5.6.1984

and the second charge sheet is dated 23.6.1984.        Allegations in

both the charge sheets have been perused.


10.   In the first charge sheet five charges have been levelled

against the delinquent. Except for charge No.2 which relates to

period 09.4.1978 to 15.5.1979; all other charges are relate to

periods after February 1980 up to September 1981. The second

charge sheet has levelled seven charges against the delinquent all

of which relate to the periods between September 1982 up to April

1983. These were by and large advances and loans sanctioned to

parties without following the due procedure which were alleged to

be serious irregularities and lapses on the part of the delinquent.


11.   The reply filed by the delinquent to the first charge sheet is

dated 14.8.1984. It is a bare denial of all the charges; simplicitor

being denied and not admitted.     The reply to the second charge

sheet is also similarly worded.    There has been a denial and no

admission of the charges levelled against him; it is stated that

there has been no breach or commission of any misconduct by the

delinquent.


12.   It is relevant to state that in none of the replies filed by the

appellant/delinquent has there been any reference to the averment
RSA No.216/2003                                      Page 5 of 16
 that the charge sheet is either a delayed charge sheet or that the

delinquent for one reason or the other including non-supply of

relevant documents is not in a position to give an effective reply.


13.   The contention of the defendant that there was an inordinate

delay in filing this charge sheet had been answered by the

defendant in his written statement. Defence was that as per the

regular   procedure     adopted   in   nationalized   banks,         branch

inspections are carried out periodically. It is only when the

inspection report is received and evaluated by the appropriate

authority and when the discrepancies/irregularities come to light.

In this case the charge sheet had been issued almost forthwith on

this information of these irregularities which had been noted by the

department.       As already noted supra the allegation in both the

charge sheets relate to periods 1980 to 1983; all the charges

leveled against the delinquent are of the aforestated period except

one or two lone instances which relate to the later part of 1979.

The two charge sheets had been filed in the month of June 1984.

The explanation furnished by the department is not only adequate

but also satisfactory. There is no inordinate or unexplained delay

in filing the aforestated charge sheets for the aforenoted periods.

The facts in the judgment of N. Radhakishan (supra) are distinct; in

the said case the charge sheet had been filed after a delay of 6½

years. In the case of Chaman Lal (supra) the incident was dated

1987; case of the delinquent was to be considered for promotion in

the year 1992; there was a delay of 5½ years. Both these

judgments are inapplicable.




RSA No.216/2003                                       Page 6 of 16
 14.      In this context a Bench of this Court while deciding LPA

No.39/1999 on 29.10.2003 in the case of DDA Vs. D.P.Bambah &

Anr. had held as follows:

      "15. In our opinion the legal position, when an action is brought seeking
      quashing of a charge- sheet on grounds of issuance of the charge-sheet or
      grounds of inordinate delay in completion of the disciplinary inquiry may be
      crystalised as under:-

      (i)Unless the statutory rules prescribe a period of limitation for initiating
      disciplinary proceedings, there is not period of limitation for initiating the
      disciplinary proceedings;

      (ii) Since delay in initiating disciplinary proceedings or concluding the same are
      likely to cause prejudice to the charged employee, courts would be entitled to
      intervene and grant appropriate relief where an action is brought;

      (iii)If bone fide and reasonable explanation for delay is brought on record by the
      disciplinary authority, in the absence of any special equity, the court would not
      intervene in the matter;

      (iv) While considering these factors the court has to consider that speedy trial is
      a part of the facet of a fair procedure to which every delinquent is entitled to vis-
      a-vis the handicaps which the department may be suffering in the initiation of
      the proceedings. Balancing all the factors, it has to be considered whether
      prejudice to the defence on account of delay is made out and the delay is fatal,
      in the sense, that the delinquent is unable to effectively defend himself on
      account of delay.

      (v) In considering the factual matrix, the court would ordinarily lean against
      preventing trial of the delinquent who is facing grave charges on the mere
      ground of delay. Quashing would not be ordered solely because of lapse of time
      between the date of commission of the offence and the date of service of the
      charge-sheet unless, of course, the right of defence is found to be denied as a
      consequences of delay.

      (vi) It is for the delinquent officer to show the prejudice caused or deprivation of
      fair trial because of the delay.

      (vii) The sword of damocles cannot be allowed to be kept hanging over the head
      of an employee and every employee is entitled to claim that the disciplinary
      inquiry should be completed against him within a reasonable time. Speedy trial is
      undoubtedly a part of reasonableness in every disciplinary inquiry."

15.      The department had needed time to collect the necessary

material and to verify the correctness of the allegations against the

employee before he could be charge-sheeted.                               The concurrent

finding of the two Courts below is upheld on this score. Both the

RSA No.216/2003                                                            Page 7 of 16
 Courts below had dealt with this contention while disposing of the

issues; it was a justifiable delay.


16.      The next contention urged by the learned counsel for the

appellant is that the documents had not been furnished to the

delinquent at the time when he had filed his reply to the charge

sheet, the details of which have been aforenoted supra.


17.      As noted above it was never contended by the delinquent that

the documents had not been furnished to him which have

prejudiced him thereby preventing him from giving an effective

reply.     The record shows that in the first charge sheet i.e. the

charge sheet dated 5.6.1984 the documents including the list of

witnesses and their statements were furnished to the delinquent on

the date when the cognizance was taken i.e. on 06.3.1986; qua the

second charge sheet dated 23.6.1984, documents i.e. list of

witnesses and statement of witnesses had been furnished on the

first date of hearing i.e. on 05.4.1986. There is no dispute about

these dates.      It has also come on record that the plaintiff had

sought inspection of the documents which was permitted to him

and for this purpose adjournment had been granted by the Enquiry

Officer to the delinquent.       On 09.5.1985 the delinquent was

permitted to inspect the record at Muzzafar Nagar branch.

Regulation 6(5)(iii) of the Discipline and Appeal Regulations 1977

which are the statutory Regulations governing the defendant bank

also do not provide for supply of copy of documents at the time of

giving of charge sheet. No prejudice had been suffered.




RSA No.216/2003                                      Page 8 of 16
 18.    The Supreme Court in AIR 2002 SC 3276                      Debotosh Pal

Chaudhary Vs. Punjab National Bank had the occasion to examine

Regulation 6(5)(iii) of the Punjab National Bank Officer Employees

(Discipline and        Appeal) Regulations 1977 and in this context it

noted as follows:


   "4.Regulation 6(5) of the Regulations which requires the Disciplinary
   Authority shall, where it is not the inquiring authority, forward to the
   Inquiry Authority the following documents:-

   1. A copy of the articles of charge and statement of imputations of
   misconduct or misbehavior;

   2. A copy of the written statement of defence, if any, submitted by the
   officer employee;

   3. A list of documents by which and list of witnesses by whom the
   articles of charge are proposed to be substantiated;

   4. A copy of the statement of the witnesses, if any;

   5. Evidence proving the delivery of the articles of charge under sub-
   regulation (3); and

   6. A copy of the order appointing the 'Presenting officer' in terms of
   sub-regulation (6).

   Fulfillment of some of the requirements of this Regulation is purely
   procedural in character. Unless in a given situation, the aggrieved
   party can make out a case of prejudice or injustice, mere infraction of
   this Regulation will not vitiate the entire enquiry."




19.    The Apex Court while dealing with such a contention in

Syndicate Bank (supra) had held as follows:

       "Even then, the non-supply of those documents prejudice the case of
delinquent officer must be established by delinquent officer.        It is well
settled law that the doctrine of principles of natural justice are not embodied
rules. It cannot be put in a strait-jacket formula. It depends upon the facts
and circumstances of each case.      To sustain the allegation of violation of
principles of natural justice, one must establish that prejudice has been
caused to him for non-observance of principles of natural justice.



RSA No.216/2003                                                Page 9 of 16
 20.   In the instant case as well no prejudice had been shown by

the appellant. The documents had admittedly been supplied to him

although not along with charge sheet but by the Enquiry Officer

before the enquiry commenced and before the witnesses were

examined. This contention of the learned counsel for the appellant

is also without any merit.


21.   The last argument raised by the learned counsel for the

appellant is that the orders of the Disciplinary Authority and of the

Appellate Body are non-speaking orders. It would be relevant to

reproduce the said orders.         Order of the Disciplinary Authority

read as follows:


                              "PUNJAB NATIONAL BANK

                                    ZONAL OFFICE

                                 E.K.ROAD : MEERUT

             REF:ZO:MRT:DAC:SST:                Date 26.12.1986

                                 ORDER

Reg:-Shri S.S.Tyagi, Manager, BO: Jalilpur

-Charge sheets dated 5.6.84 & 23.6.1984

Shri S.S.Tyagi, Manager, BO; Jalilpur was served with charge sheet dated 5.6.1984 for the lapses committed by him at BO: Muzaffarnagar City and charge sheet dt.23.6.84 for the lapses committed by him during his incumbency at BO:Afzalgarh. The undersigned being the Disciplinary Authority instituted enquiries vide orders dated 30.1.1986 to find out the truth into the imputations contained in both the charge sheets.

The Enquiry Officer has submitted his report on both the charge sheets and the reports alongwith records of the enquiry have been placed before me. I have gone through the report of the Enquiry Officer and the records of the cases and I find the following Articles of charges have been established:-

Charge Sheet dated 5.6.1984

-He allowed undue/unauthorized accommodation to certain parties.

-He did not act prudently.

-He did not follow the prescribed procedures of the Bank. Charge Sheet dated 23.6.1984

-He allowed undue/unauthorized accommodation to various parties.

-He concealed true state of affairs from the Authorities.

-He did not conduct pre-sanction appraisal in many accounts.

-He neglected post-sanction safeguards prescribed by the Bank.

-He failed to ensure end/use of bank's finance in various accounts.

I accept the finding of the enquiry as above. From these findings, the facts available on the enquiry report and records of the Bank, I conclude that Shri Tyagi failed to discharge his duties with honesty, integrity, devotion and diligence and failed to protect the interest of the bank as required under regulation 3(1) of the PNB Officer Employees (Conduct) Regulations-1977.

Keeping an overall view of the gravity of the articles of charges established against him as above, I decide to impose a penalty of "compulsory retirement" with immediate effect.

Further, he will not be entitled for salary other than subsistence allowance already paid/payable to him for the suspended period.

I order accordingly.

DEPUTY GENERAL MANAGER DISCIPLINARY AUTHORITY"

Order of the Appellate Body reads as follows:

"PUNJAB NATIONAL BANK HO:NEW DELHI ............

August 8, 1987 ORDER

Shri S.S.Tyagi, Ex.Manager, BO:Jalilpur (since compulsory retired from Bank's service)-Charge Sheets dated 5/6/84 & 23/6/84 .

****** The appeal submitted by Shri Tyagi against the punishment of compulsory retirement imposed upon him by the Zonal Manager, Meerut as Disciplinary Authority vide orders dated 26.12.86, has been placed before me along with records of the disciplinary case comprising charge sheets dated 5.6.84 and 23.6.84 served upon

him, his reply thereto, records of the enquiry proceedings including report of the Enquiry Officer and the orders passed by the Disciplinary Authority.

On perusal of records, I find that the Disciplinary Authority while agreeing with the findings of the Enquiry Officer has held Shri Tyagi responsible for the following lapses:-

-CHARGE SHEET DT.5.6.84

-He allowed unauthorized/undue accommodation to certain parties.

-He did not act prudently.

-He did not follow the prescribed procedures of the Bank.

-CHARGE SHEET DT.23.6.84

-He allowed undue/unauthorized accommodation to various parties.

-He concealed true state of affairs from the Authorities.

-He did not conduct pre-sanction appraisal in many accounts.

-He neglected post-sanction safeguards prescribed by the Bank.

-He failed to ensure endues of bank's finance in various accounts.

I have gone through the appeal submitted by Shri Tyagi and find that he has mainly raised the following points:-

- That the Enquiry Officer has not at all considered the evidence produced by him during the Enquiry proceedings and in a mechanical manner has accepted in toto whatever was presented by the Presenting Officer.

- That the allegation against him do not mention any dishonest intention or lack of integrity, devotion or diligence. Even the Enquiry Officer has also not indicated anywhere the he (Shri Tyagi) suffered from any of such vices. Even then, the Disciplinary Authority has imposed upon him the severe penalty.

- That he might have accommodated certain parties beyond his powers or authority, under extreme exigencies prevailing at the relevant time to retain the customers in the interest of the Bank. He has explained the circumstances fully and feels that this does not call for such extreme major penalty.

- That on account of his ceaseless efforts and public relations, during his posting at Muzaffarnagar city, the deposits rose from 3 crores to 5.7 crores and during his

incumbency the Bank did not suffer a loss of even a single rupee.

- That there was more than 900 loan accounts in the branch and adequate staff was not provided with to handle these accounts. Additional staff was provided only after his transfer from the said office. In the absence of adequate staff, he was over burdened and due to heavy rush and over work, he might have inadvertently committed some trifling errors.

- That the extreme major penalty of compulsory retirement imposed upon him is a severe blow to his entire family.

Shri Tyagi has also raised objections to the findings of the Enquiry Officer in respect of each of the charges held to the established against him.

On going through the records of the case and appeal preferred by Shri Tyagi, I find that he has made no fresh grounds on merits. Keeping in view the gravity of the lapses/charges proved against Shri Tyagi, I do not find any merit in the appeal preferred by Shri Tyagi and reject the same. I agree with the conclusion arrived at by the Disciplinary Authority and the punishment imposed upon Shri Tyagi is hereby confirmed.

I order accordingly and Shri Tyagi be informed.

GENERAL MANAGER APPELLATE AUTHORITY"

22. A perusal of these orders negatives this contention of the

learned counsel for the appellant. It can in no manner be said that

the punishing authority had not applied its mind to the case before

it before ordering the dismissal of the appellant. The punishing

authority had in fact placed reliance upon the report of the Enquiry

Officer and agreed with it and also accepted the reasons given by

him in the finding. It is a well settled principle of law that when

the punishing authority agrees with the finding of the Enquiry

Officer and accepts the reasons given by him in support of such

finding it is not necessary for punishing authority to again discuss

the evidence and come to the same finding as that of the Enquiry

Officer and give the same reasons for the said findings. This has

been reiterated by the Apex court time and again.

23. The Supreme Court in 2005 SCC (L&S) 1006 National

Fertilizers Ltd. Vs. P.K.Khanna reiterating the principles of 1995

SCC (L&S) 1376 State Bank of Bikaner & Jaipur Vs. Prabhu Dayal

Grover had held where the Disciplinary Authority agreed with the

finding of the Enquiry Officer it is not necessary for it to pass a

detail reasoned order. The same principle is also applicable to the

Appellate Body. This contention is also without any merit.

24. This is a second appeal. The appeal had been admitted and

the substantial question of law has been aforenoted. Scope of

judicial review is limited. Court should be slow to interfere with

the administrator's decision unless it was illogical or suffers from

procedural impropriety or was so shocking in the sense that it was

in defiance of logic or moral standard.

25. It should be slow to substitute its own decision to that of the

administrators unless it suffers from the aforenoted vices. The

Supreme Court in AIR 2005 SC 584 Damoh Panna Sagar Rural

Regional Bank Vs. Munna Lal Jain while dealing with the

misconduct of a manager of a nationalized bank had noted as

follows:

"A Bank officer is required to exercise higher stands of honesty and integrity. He deals with money of the depositors and the customers. Every officer/employer of the Bank is required to take all possible steps to protect the interests of the Bank discharge his duties with utmost integrity, honesty, devotion and diligence and to do nothing which is unbecoming of a Bank offcer. Good conduct and discipline are inseparable from the functioning of every officer/employee of the Bank.

26. A bank officer needs to maintain high standard of honesty

and integrity; this goes without saying. Acting beyond once

authority by itself is breach of discipline and amounts to a

misconduct. Charges leveled against the delinquent were not

casual; they were serious.

27. The last contention urged before this Court that the bank had

not suffered any actual monetary loss is also an argument only to

be noted and rejected. The Supreme Court in Nikunja Bihari's

case (supra) had noted as follows:

"In the case of a bank - for that matter, in the case of any other organization - 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 organization/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 organization, more particularly, a bank can function properly and effectively if its officers and employees do not observe the prescribed norms and discipline. Such indiscipline cannot be condoned on the specious ground that it was not actuated by ulterior motives or by extraneous considerations. The very act of acting beyond authority - that too a course of conduct spread over a sufficiently long period and involving innumerable instances - is by itself a misconduct. Such acts, if permitted, may bring in profit in some cases but they may also lead to huge losses. Such adventures are not given to the employees of banks which deal with public funds. If what we hear about the reasons for the collapse of Barings Bank is true, it is attributable to the acts of one of its employees, Nick Leeson, a minor officer stationed at Singapore, who was allowed by his superiors to act for beyond his authority. As mentioned hereinbefore, the very discipline of an organization 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 though as a matter of fact, in this case there are findings

that several advances and overdrawals allowed by the respondent beyond his authority have become sticky and irrecoverable.

28. The substantial question of law is answered against the

appellant and in favour of the department. There is no merit in the

appeal. It is dismissed.

(INDERMEET KAUR) JUDGE

JANUARY 31, 2011 nandan