Punjab National Bank vs R.S. Sharma & Anr.
2012 Latest Caselaw 4119 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

                                          Date of decision: 13th July, 2012

+                       LPA No.951/2011

%     PUNJAB NATIONAL BANK                    .... Appellant
                  Through: Ms. Raavi Birbal & Mr. R.S. Mathur,
                           Advs.

                                 Versus
      R.S. SHARMA & ANR.                                  ..... Respondents
                    Through:          Mr. Randhir Jain & Ms. Radhika
                                     Jain, Advs. for R-1.
                                     Ms. Sangeeta Rai, Adv. for R-2.
CORAM :-
HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
                               JUDGMENT

RAJIV SAHAI ENDLAW, J.

1. This intra-court appeal impugns the judgment dated 12.09.2011 of the

learned Single Judge in W.P.(C) No.643/1995 preferred by the respondent

No.1. The respondent No.1 was employed with the appellant Bank. He had

filed the writ petition impugning the order dated 03.06.1994 of the

Disciplinary Authority of the appellant Bank imposing penalty of reduction

of grade from SMG Scale-IV to MMG Scale-III on the respondent and the

order dated 17.06.1995 of the Chairman-cum-Managing Director of the

appellant Bank as the Appellate Authority, removing the respondent from

service. The learned Single Judge vide the judgment impugned in this

appeal, though not finding merit in the challenge to the order dated

03.06.1994 of the Disciplinary Authority imposing the penalty of reduction

of grade on the respondent, has set aside the order of the Appellate

Authority removing the respondent from service, for the reason of the

charge on the basis whereof the penalty was enhanced to that of removal

from service having not been put to the respondent and the finding of the

Appellate Authority thereon being based on no evidence. The respondent

having attained the age of superannuation, the learned Single Judge directed

the appellant Bank to release the retiral and other benefits along with arrears

to the respondent, treating the respondent to have continued in service till

superannuation on the grade of MMG Scale - III.

2. Notice of this appeal was issued and since a short issue was involved,

the appeal, with the consent of the counsels set down for final hearing at the

after notice miscellaneous stage only. The operation of the judgment of the

learned Single Judge was also stayed. The respondent has preferred cross

objections qua the findings of the learned Single Judge upholding the order

of the Disciplinary Authority and which cross objections were also directed

to be heard along with the appeal. The counsels have been heard.

3. The challenge by the respondent in the cross objections to the order of

the learned Single Judge is on the ground of the inquiry purportedly held

against him and on the basis whereof the Disciplinary Authority imposed

the punishment of reduction of rank, being defective. It is argued that

neither any admission/denial of documents was done nor was any evidence

led by the appellant Bank or any of the charges proved and thus the finding

that, the charges have been proved against the respondent, could not have

been arrived at. It is argued that the departmental inquiry was thus vitiated.

Per contra, the counsel for the appellant, from the record of the departmental

proceedings has purported to show that the charge on the basis whereof the

appellate authority has enhanced the punishment was framed / existed and

also stood proved.

4. The learned Single Judge, insofar as the challenge to the order of the

Disciplinary Authority was concerned, has found / held:

(i) that the respondent had acceded to the procedure adopted by

the Inquiry Officer;

(ii) that the respondent, during the inquiry proceedings, did not

doubt the veracity of the 859 documents produced by the

appellant Bank;

(iii) that the Inquiry Officer had recorded detailed questioning of

the respondent No.1;

(iv) that the matter turned on the interpretation of the documents;

(v) that the Court is not to act as a Court of appeal and re-examine

the evidence analyzed by the Inquiry officer unless the findings

are perverse or based on no evidence;

(vi) that the Inquiry Officer in the present case had acted

objectively in drawing his conclusions and in holding some of

the charges to have been not proved and some of the charges to

be only partly proved;

(vii) that there is no illegality in the Disciplinary Authority

accepting the inquiry report.

5. Though the respondent as aforesaid has filed cross objections but

neither has the counsel for the respondent really pressed the cross objections

nor are we able to decipher any error in the judgment of the learned Single

Judge insofar as dismissing the challenge by the respondent to the order of

the Disciplinary Authority. Rather, the arguments have veered around to the

justifiability of the Appellate Authority in enhancing the punishment from

that of reduction in rank imposed by the Disciplinary Authority to that of

removal from service. We have even otherwise, after going through the

record, satisfied ourselves that the procedure adopted by the Inquiry Officer

cannot be said to be vitiated and the inquiry proceedings were held in a fair

manner in compliance of the principles of natural justice.

6. We therefore dismiss the cross objections preferred by the

respondent.

7. Insofar as the enhancement of the punishment by the Appellate

Authority is concerned:

(i) of the four charges against the respondent, charge No.3 was as

under:

"He unduly sanctioned loans to various parties by neglecting post sanction control measures and put sizeable funds of the Bank difficult of recovery."

(ii) in the statement of Articles of charges accompanying the

charge sheet, it was further elaborated that the conduct of the

accounts which the respondent was charged with having

sanctioned in undue haste and ignoring the pre-sanction credit

appraisal measures and by exceeding the loaning powers vested

in him, was not satisfactory and the banks dues were at stake

and the outstandings were doubtful / difficult of recovery;

(iii) the Inquiry Officer in his report submitted under 36 headings

framed heading No.34 as :

"34. Limits were sanctioned to various parties engaged in the manufacture of Copper Wire drawings despite restrictions placed on financing of this activity vide Zonal Office letter dated 26.07.1990, thereby leading to heavy bank's exposure in this segment."

and found the charge to have been proved beyond doubt.

Under charge No.3 also the finding was of the same having

been proved;

(iv) The Disciplinary Authority in its order dated 03.06.1994 while

concurring with the findings of the Inquiry Officer confirmed

that the respondent sanctioned loans to a large number of

parties in undue haste by ignoring to observe pre-sanction

credit appraisal norms thereby showing utter lack of prudence

to discharge his duties and further found the respondent having

sanctioned the loans to various parties by exceeding his vested

loaning powers and neglecting its control measure thereby

putting sizeable funds of the Bank to jeopardy.

It thus cannot be said that the charge, of the bank‟s funds of `4.23

crores approximately proving difficult of recovery, was never put to the

respondent and we are unable to agree with the said finding of the learned

Single Judge.

8. However, that is not the end of the matter. The learned Single Judge

has further held that the said finding is not based on any evidence. The

learned Single Judge in this regard has further referred to Regulation 3(1)

read with Regulation 24 of the Punjab National bank Officer Employees

(Discipline & Appeal) Regulations of 1997 requiring it to be shown that the

action of the delinquent officials was with an intent to cause loss to the

management. The learned Single Judge has further held that there was no

specific charge on this aspect and the observations of the Disciplinary

Authority that the respondent No.1 showed "utter lack of prudence to

discharge his duties" was not a conclusion drawn by the Inquiry Officer;

rather the finding of the Inquiry Officer was that the petitioner‟s conduct

was not judicious. The learned Single Judge thus concluded that the

Appellate Authority could not have made the same the basis for

enhancement of the penalty.

9. We have minutely combed the proceedings of the inquiry which is in

the question answer form between Inquiry Officer, Presenting Officer and

the respondent. Neither have we been able to find any reference pertaining

to the actions of the respondent No.1 having put sizeable funds of the Bank

difficult of recovery nor has the counsel for the Bank been able to point out

any.

9. However, what we find is that the said charge is merely consequential

to the first two charges which are as under:

"ARTICLE -I He sanctioned loans to various parties in undue haste by ignoring the pre-sanction credit appraisal measures. ARTICLE - II He sanctioned loans to various parties by exceeding his vested loaning powers."

and which the learned Single Judge also has held to have been validly

proved. Once, it is held that the respondent is guilty of sanctioning loans to

various parties in undue haste by ignoring the pre-sanction credit appraisal

measure and by exceeding the loaning powers vested in him, the putting of

banks‟ monies which are public monies in jeopardy is consequential. The

counsel for the appellant in this regard has invited our attention to

Disciplinary Authority-cum-Regional Manger Vs. Nikunja Bihari Patnaik

(1996) 9 SCC 69 reiterated in Chairman and Managing Director Vs. P.C.

Kakkar AIR 2003 SC 1571 laying down that once an officer is held guilty

of acting without authority, it is no defence to say that there was no loss

caused therefrom. It was held that acting beyond one‟s authority is by itself

a breach of discipline and a misconduct of a serious nature and not casual

nature.

10. We are therefore of the opinion that it cannot be said that the order of

the Appellate Authority enhancing penalty from that of reduction in rank to

that of removal from service was without any reason or basis. All that the

Appellate Authority has done in the present case is to have disagreed with

the order of the Disciplinary Authority of imposing the penalty / punishment

only of reduction in rank for the charge proved, of the appellant having

sanctioned loans without following the requisite procedure and in excess of

his authority. This, coupled with the fact that along with the charge sheet

itself the respondent was notified of the monies of the banks which owing to

his actions had become doubtful and / or difficult of recovery and that the

respondent has not been able to make a statement that the monies have been

recovered or are secured, was sufficient for the Appellate Authority to

enhance the punishment.

11. We are unable to agree with the learned Single Judge that the

enhancement of penalty by the Appellate Authority was on any ground

additional to that considered by the Disciplinary Authority.

12. It is not in dispute that it was within the power of the Appellate

Authority to enhance the punishment. The Appellate Authority having

enhanced the punishment, which it was entitled to do so, it was not for this

Court to interfere, particularly when the principles of proportionality applied

by the Appellate Authority are not found to be perverse. Supreme Court, in

B.C. Chaturvedi Vs . UOI MANU/SC/0118/1996 held that the

Disciplinary Authority, and on appeal the Appellate Authority, being fact

finding authorities have exclusive power to consider the evidence with a

view to maintain discipline; they are invested with the discretion to impose

appropriate punishment keeping in view the magnitude or gravity of the

misconduct. The High Court while exercising power of judicial review,

cannot normally substitute its own conclusion on penalty and impose some

other penalty; only if the punishment imposed shocks the conscience of the

High Court, would it be appropriate to mould the relief, either by directing

reconsideration of penalty imposed or to shorten the litigation, it may itself

in exceptional and rare cases, impose appropriate punishment giving cogent

reasons in support thereof. The decision of the Appellate Authority, in the

facts of the present case, does not shock our conscience. The learned Single

Judge also has not found any exception or rare features for this Court to

impose punishment different from that imposed by Appellate Authority.

13. The counsel for the respondent has invited our attention to another

office letter dated 26.07.1990 of the appellant Bank vide which the Chief

Manager of different branches of the Bank were advised against financing

the units engaged in Copper Wire drawing and related activity; on that basis

he has argued that the sanctions by the respondent of the various funding

limits to Copper Wire drawing units were of a date prior thereto as also

obvious from the imputation of charges. We are however not impressed

with the said argument. The violations of procedure with which the

respondent No.1 has been charged with are numerous and one such letter

cannot be used to interfere with the findings of the Appellate Authority.

Moreover, the letter dated 26.07.1990 is not a general letter to all the Branch

Managers but is specifically addressed to the respondent pointing out the

heavy concentration of financing to such units and advising thereagainst.

14. It cannot be forgotten that the Chief Manager of a bank is entrusted

with public monies and though required under the social goal to encourage

entrepreneurship, is required to observe prudence and sanction assistance

only to those deserving and likely to repay the public monies lent to them at

cheaper rates and to not jeopardize their fate. Such unpaid debts of public

sector banks are eating into our economy and the officers of the Bank who

are entrusted with disbursement thereof have an onerous task. An error of

judgment on their part not only makes a Bank suffer loss but is always to the

deprivation of a more deserving assistance seeker. Once the officer of the

Bank is found guilty of neglect of the safeguards prescribed in this regard, it

becomes irrelevant whether such officer acted with an intent to cause loss to

the bank or not since neglect in such cases is res ipsa loquitur for intent to

cause loss. Supreme Court in Ganesh Santa Ram Sirur Vs. State Bank of

India (2005) 1 SCC 13 held that acting beyond one‟s authority is by itself a

breach of discipline, trust and misconduct. The earlier dicta in Regional

Manager, UPSTRC Vs. Hoti Lal MANU/SC/0102/2003 laying down that if

a charged employee holds a position of trust and deals with public money or

acts in a fidicuary capacity, trust / honesty and integrity and trustworthiness

of highest degree are must and unexceptionable and it would not be proper

to deal with the matter leniently, was cited with approval. In this regard, it

is also worth noticing that the period for which the respondent No.1 was the

Chief Manager of the concerned Gandhi Nagar Branch was only from

15.11.1989 to 11.12.1990. The respondent, in this short span of seven

months enhanced limits of parties whose past working did not justify so,

sanctioned credits to family / group concerns without treating them as asset /

allied concerns, all without ensuring effective post sanction credit control

measures

15. We therefore allow this appeal and set aside the order of the learned

Single Judge insofar as setting aside the order of the Appellate Authority.

Resultantly, W.P.(C) No.643/1995 preferred by the respondent No.1 is

dismissed. No order as to costs.

RAJIV SAHAI ENDLAW, J

ACTING CHIEF JUSTICE

JULY 13, 2012 „gsr‟