Delhi High Court
Jange Ram Gandwal vs Chairman & Managing Director, ... on 8 September, 2011
Author: S. Muralidhar
IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: August 18, 2011
Decision on: September 8, 2011
W.P. (C) 5260 of 1999
JANGE RAM GANDWAL ..... Petitioner
Through: Mr. Nagendra Rai, Senior Advocate
with Mr. Binay Kumar and
Mr. Smarhar Singh, Advocates.
versus
CHAIRMAN & MANAGING DIRECTOR
SYNDICATE BANK & ANR ..... Respondents
Through: Mr. Jagat Arora with
Mr. Rajat Arora, Advocates.
CORAM: JUSTICE S. MURALIDHAR
1. Whether Reporters of local papers may be
allowed to see the judgment? No
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported in Digest? Yes
JUDGMENT
8.09.2011
1. The Petitioner who was working as an Assistant Manager in the Syndicate Bank
(„Bank‟), the Respondent herein, challenges an Order dated 4th January 1999,
passed by the Disciplinary Authority („DA‟) of the Respondent Bank, dismissing
him from service.
Factual background
2. The Petitioner was appointed as a clerk in the Bank on 24th October 1978. He
was promoted to the cadre of Junior Manager to Scale-I with effect from 3rd June
1985. On 30th January 1997 while he was working as an Assistant Manager in the
Old Rajinder Nagar Branch of the Bank in Delhi, he was served with a charge
sheet in which there were two articles of charge. The first article of charge was that
while functioning as Assistant Manager at the Nangloi Branch during the period
3rd December 1985 to 15th July 1992, the Petitioner unauthorisedly and
fraudulently transferred a sum of Rs.500/- from the Savings Bank account No.
25500 of Mr. Vinod Rai, a customer of the branch, to Petitioner‟s own Savings
Bank account No. STF 75 on 11th July 1989 and thereafter the Petitioner fabricated
documents to cover up the fraudulent act. The Petitioner was charged with having
"availed undue pecuniary benefits in a surreptitious manner in detriment to the
interests of the Bank."
3. The second article of charge was that while working in the DTC, Dichaon Kala
Extension Counter attached to the Nangloi Branch between 18th July 1989 and 23rd
October 1990, the Petitioner recommended/caused to arrange loans LD 519/90 on
1st July 1990 for Rs. 35,000/-; LD 735/90 on 28th September 1990 for Rs.35,000/-;
LD 917/90 on 13th December 1990 for Rs.25,000/- and additional LD of
Rs.15,000/- under LD 519/90 on 2nd April 1991 against the security VCC 82/90,
83/90 and SSD 3/90 respectively standing in the name of the minor depositor
Master Sanju. The charge was that the Petitioner‟s wife Mrs. Sunita Gondwal had
been appointed, by an order dated 25th April 1990 of the learned District Judge,
Delhi in Guardianship Case No. 128/88 as Guardian of Master Sanju till 17th
March 1997. The court order dated 25th April 1990, inter alia, imposed the
condition that Mrs. Sunita Gondwal was allowed to receive the amount due to the
father of Master Sanju towards gratuity, provident fund, leave salary arrears and
family pension and that the amount so received, except the pension amount, shall
be deposited in a fixed deposit account in the name of the minor in a nationalised
Bank which may be withdrawn by the minor after attaining majority. The
properties of the minor were not to be encumbered. The guardian Mrs. Sunita
Gondwal was, however, allowed to withdraw the amount of interest accruing on
the sum so deposited for utilization towards maintenance, up-bringing and
education of the minor. It was alleged that apart from not placing on the Bank‟s
record a copy of the court order, the Petitioner also arranged the above LDs in the
name of Mrs. Sunita Gondwal against the deposits standing in the name of the
minor in contravention of the order of the Court. Thus, he had allowed his wife to
derive undue pecuniary benefits and exposed the Bank to the risk of financial loss
and making the Bank liable for violation of the court order.
4. By a letter dated 10th June 1988 addressed to the Inquiry Officer, the Petitioner
prayed that Mr. Vinod Rai, Mr. Sanju Jarawate minor on whose behalf the deposit
accounts were opened by Mrs. Sunit Gondwal and the Petitioner himself should be
permitted to appear as witnesses. On 30th October, 1998, the Inquiring Authority
(„IA‟) submitted a report holding the charges proved. A copy of the report was
supplied to the Petitioner by the DA by a letter dated 9th November, 1998 for his
response. The Petitioner submitted his comments on 27th November, 1998. On 4th
January, 1999, DA passed the impugned order imposing the punishment of
dismissal on the Petitioner. The Petitioner‟s appeal against the said order was
dismissed by the Appellate Authority („AA‟) on 10th March, 1999. The Petitioner
then submitted a memorial to the Chairman and Managing Director of the Bank
and later filed this writ petition on 17th August, 1999. At the very first hearing on
31st August, 1999, this Court issued Rule in the matter.
Submissions of counsel
5. Mr. Nagender Rai, learned Senior Advocate appearing for the Petitioner
submitted that the entire inquiry proceedings were vitiated on account of staleness
of the charges. The charge sheet was served on the Petitioner on 31st January 1997
whereas the first article of charge pertains to an alleged crediting of the Petitioner‟s
savings account with Rs.500/- when the Petitioner was working in the Nangloi
Branch on 11th July 1989. The second article of charge pertained to alleged
irregularities in connection with the advancement of loans arranged in the name of
his wife between July, 1990 and April, 1991. As regards the first article of charge,
it was submitted that Mr. Vinod Rai had issued a letter of authority for transferring
the sum of Rs. 500/- from Savings account No. 25500. This was also admitted by
Mr. Vinnod Rai in his letter dated 3rd September 1991 addressed to the Chief
Manager, Nangloi Branch. Mr. Vinod Rai also admitted that he had received back
from the Petitioner a sum of Rs.500/-. There was in fact no complaint made by Mr.
Vinod Rai; what was produced was only a photocopy of the alleged complaint and
the signatures of Vinod Rai thereon did not tally with his signature in the Bank
records. Mr. Vinod Rai was not produced for cross examination. The discrepancies
in the signatures were admitted by the management witness. As regards the date of
issuance of the cheque, the cheque book register issued was not produced, and
therefore, 15th July 1984 could not be taken as the date of issuance of the cheque
book.
6. As regards the second article of charge, Mr. Nagendra Rai referred to the order
of the learned District Judge in terms of which Mrs. Sunita Gondwal was vested
with the powers to perform acts including making and raising loans against
movable properties standing in the name of the minor. The allegation that the Bank
had been exposed to risk of violation of court orders was imaginary and no
pecuniary benefit had been derived by either the Petitioner or his wife out of these
transactions. There was no violation of the court order. He submitted that although
the court would not be inclined to interfere in the disciplinary proceedings, this
was a case where the findings of the IA were based on no evidence. The Petitioner
had undergone tremendous mental agony on account of the impugned order of
dismissal.
7. In reply, Mr. Jagat Arora, learned counsel appearing for the Respondent Bank
submitted that a complaint had indeed been received from Mr. Vinod Rai and was
exhibited in the inquiry as MEX-12. Mr. A.K. Sitaram, the Vigilance Officer
(„VO‟), had also confirmed this. The purported letter of authorisation issued by the
complainant surfaced much later and, therefore, would not absolve the Petitioner
of the lapses committed by him. Relying on the decision in State Bank of India v.
Tarun Kumar Banerjee (2000) SCC L&S 1049, Mr. Arora submitted that the
complainant Mr. Rai need not be called as a witness in the inquiry proceedings.
Moreover, the Petitioner could have summoned him as his witness. As regards the
second article of charge, he submitted that the availing of loans for pledging
security of account of minor Master Sanju for whom the Petitioner‟s wife is a
guardian, was in contravention of the order dated 25th April 1990 passed by the
learned District Judge. This was a serious breach of trust and even if no loss had
been caused to the Bank it had exposed the Bank to risk. Mr. Arora submitted that
this conduct was serious enough to invite dismissal. He relied upon the decisions
in Disciplinary Authority cum Regional Manager v. Nikunja Bihari Patnaik
(1996) 9 SCC 69 and State Bank of India v. Bela Bagchi 2005 III LLJ 721. As
regards the delay in the issuance of the charge sheet, Mr. Arora submitted that the
Petitioner had not taken this plea at any time during the inquiry proceedings or
even in the writ petition and therefore, could not be permitted to raise such a plea
at the stage of arguments. He submitted that this delay had also not caused any
prejudice to the Petitioner. He relied on the decisions in State of Andhra Pradesh
v. N. Radhakrishan 1998 SCC (L&S) 1044; NB Chauhan v. DDA [order dated
26th April, 2004 in WP (C) No. 6061 of 2000], Dr. R.K.S. Chauhan v. State of
U.P. 1996 SCC (L&S) 1044 and Shipping Corporation of India v. Machado
Brothers AIR 2004 SC 2093. Lastly he submitted that finding on facts recorded by
DA could not be disturbed by a court exercising writ jurisdiction under Article 226
of the Constitution. Reliance is placed on the decisions in Chairman and MD,
United Commercial Bank v. P.C. Kakkar AIR 2003 SC 1571 and Damoh Panna
Sagar Rural Regional Bank v. Munna Lal Jain AIR 2005 SC 584.
Delay in commencing disciplinary proceedings
8. The first article of charge relates to an event that allegedly took place on 11th
July 1989 and the second to events that occurred between July 1990 and April
1991. Any delay in commencing disciplinary proceedings does prejudice a charged
officer. The objection by the Bank that the point concerning the delay in instituting
disciplinary proceedings was not raised by the Petitioner earlier is not entirely
correct. In the order of the AA, a reference is made to the submissions made by the
Petitioner in his appeal dated 16th January, 1999 that "Disciplinary Authority did
not take into account the fact that nobody who is regularly operating his account
will wait for long period to lodge a complaint about any unauthorized withdrawal."
In the memorial submitted to the Chairman and MD the Petitioner, inter alia,
pointed out that there was a delay of seven years in framing the articles of charges
and that "an adverse inference can be drawn that the intention motive of framing
articles of charges after lapse of 7 years was stemmed ulterior and malafide motive
to humiliate and harass the undersigned delinquent official."
9. However, the trigger for the first charge appears to be a complaint from Mr.
Vinod Rai on which an investigation by the Vigilance Wing commenced. A
questionnaire was issued to the Petitioner on both sets of transactions which the
Petitioner answered. He in fact produced documents by way of explanation. Only
thereafter was the chargesheet issued. This process took some time. Since the
charges touch upon financial irregularity, honesty and personal integrity of the
charged official of a bank, the plea of delay may not by itself be sufficient to hold
the disciplinary proceedings to be vitiated.
The first article of charge
10. Turning to the first article of charge, the complaint letter of Mr. Vinod Rai
(MEX-12) was admittedly undated. On the basis of the said letter, the Petitioner
was posed queries by the VO of the Bank to which the Petitioner replied on 14th
October, 1996. In response to the query whether a sum of Rs.500/- was transferred
from the account of Mr. Vinod Rai to his own account on 11th July 1989, the
Petitioner answered in the affirmative. In response to the question as to why he did
not file the letter of authorisation along with the debit slip, he stated that he had
"forgotten to place it on record". The VO Mr. K. Sitaram who was examined as a
management witness stated that he met Mr. Vinod Rai who informed him that the
Petitioner had refunded Rs.500 to him. Consequently Mr. Vinod Rai on 16th
October 1996 withdrew his complaint. This letter was marked as MEX-13. The
Petitioner‟s explanation for withdrawing the amount on a debit slip was that the
cheque issued by Mr. Rai for the said sum had been misplaced. The said cheque
and the purported authorisation letter of Mr.Rai were produced by the Petitioner
only at the time of replying to the questionnaire of the VO. The IA concluded that
on the date when the transfer of Rs.500 took place from the account of Mr. Vinod
Rai to the account of the Petitioner, there was no letter of authorisation from Mr.
Vinod Rai. The letter of authorisation along with cheque No. 987536 dated 9th July
1989 for Rs. 500/- (which the Petitioner stated he had misplaced) were furnished
by the Petitioner to the VO only along with the authorisation letter dated 14th
October, 1996. Mr. Rai withdrew his complaint dated 16th October 1996, i.e., two
days thereafter. Moreover, the cheque book to which the cheque belonged was
itself issued at least six days later than the date on the cheque. The IA therefore,
deduced that the authority letter and the cheque were obtained subsequently by the
Petitioner.
11. Mr. Nagendra Rai, learned Senior counsel for the Petitioner has placed
considerable reliance on the answers given by Mr. Sitaram MW-1 in the
affirmative to the question that the signature of Mr. Vinod Rai on the complaint
did not tally with his signature on the Bank‟s record whereas his signature in the
letter of authorisation (MEX-14) was verified to be correct. He also pointed out
that Mr. Vinod Rai did not appear as a witness and therefore, the circumstances
under which he made a complaint in the first instance and withdrew it later
remained unclear. There was only the hearsay evidence of the VO about his
conversation with Mr. Vinod Rai. The attempts to have Mr. Vinod Rai appear as a
witness were not fruitful.
12. The doubt concerning the date of the complaint (MEX-12) is of no real
significance since admittedly on 16th October 1996 Mr. Vinod Rai withdrew the
said complaint. Obviously therefore he had made a complaint which he
subsequently withdrew. The fact that the Petitioner returned to Mr. Vinod Rai
Rs.500 goes to substantiate that there was a transfer of the amount from the
account of Mr. Vinod Rai to that of the Petitioner. Also, since it was the Petitioner
who produced the authorisation letter (MEX-14) and the cheque dated 9th July
1989 when he replied to the questionnaire of the VO on 14th October 1996 the non-
examination of Mr. Vinod Rai was also not material. The Petitioner is unable to
explain how Mr. Vinod Rai could have possibly issued a cheque on 9th July 1989
from a cheque book which was issued to him only on 15th July 1989. Also, why
did the Petitioner hold on to the authorisation letter (MEX-14), also undated, for so
many years and thought it fit to produce it only on 14th October 1996 when
questioned by the VO? Consequently, this Court is unable to find any error in the
conclusion arrived at by the IA that there was no letter of authorisation in the
Bank‟s record when the transfer of Rs. 500/- took place. The precise finding of the
IA on the first charge reads as under:
"On the basis of oral and documentary evidences, I
am inclined to conclude that the debit of Rs.500/- to
SB a/c 25500 and credit to SB/STF a/c 75 and
subsequent withdrawal are done/caused by the
CSOE unauthorisedly and the CSOE has derived
the pecuniary benefit out of the same transaction."
13. However, this was only a part of the first charge. The remaining part that the
Petitioner "created/fabricated documents to cover up his fraudulent act" and that he
availed pecuniary benefits "in a surreptitious manner" were not held by the IA to
be proved. This would have a bearing on the assessment of the gravity of the
misconduct and the commensurate penalty.
The second article of charge
14. Turning to the second article of charge, there is no explanation for the delay in
proceeding against the Petitioner for transactions that took place between July,
1990 and April, 1991. A perusal of the order of learned District Judge shows that
what is prohibited was that the guardian would not "mortgage, or charge or
transfer by sale, gift, exchange or otherwise, any part of the immovable property of
the ward or lease any part of the property for a term exceeding five years ...,
without the express sanction of this court previously obtained ...". There was no
prohibition on raising loans on the fixed deposits. Therefore, it could not be said
that the Petitioner‟s wife had contravened the order of the District Court. Further,
the evidence before the EA showed that the amount borrowed as loan against the
fixed deposits in the name of the minor were utilized for the benefit of the minor as
mandated by the order of the learned District Judge. Further, the loan amounts
were repaid by Mrs. Sunita Gondwal and closed in 1994 itself. The order of the
District Court was on the records of the Bank when the loan amounts were
advanced. The EA also failed to notice that there was no pecuniary loss
whatsoever to the Bank. Therefore, there is no merit in the contention that the
Bank had been exposed to risk on account of the said loans. The finding of the EA
on the second charge overlooked all the above factors. The said finding on the
second article of charge is based on no evidence and is unsustainable in law.
Question of punishment
15. The resultant position is that of the two charges, only a part of first charge can
be held to have been proved against the Petitioner. The quantum of punishment
will therefore have to be necessarily re-examined by the DA. Consequently, the
impugned order of the DA dated 4th January 1999 and the order dated 10th March
1999 of the AA are set aside. The entire matter will now be placed again before the
DA who will, in light of this judgment, determine what appropriate penalty should
be awarded to the Petitioner. A decision will be taken by the DA within a period of
two months from today and communicated to the Petitioner within two weeks
thereafter. The consequential orders depending on the penalty awarded will also be
issued by the DA within the same period. If aggrieved by such decision, it will be
open to the Petitioner to seek appropriate remedies as are available to him in
accordance with law.
16. The writ petition is disposed of in the above terms with no order as to costs.
S. MURALIDHAR, J.
SEPTEMBER 8, 2011
raj
