S.P. Mehra vs Syndicate Bank And Ors.
2015 Latest Caselaw 3318 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                  W.P.(C) No.3942/1999 and W.P.(C) 3061/2000

%                                        Reserved on: 20th April, 2015
                                         Pronounced on: 24th April, 2015

W.P.(C) No.3942/1999

S.P. MEHRA                                                 ..... Petitioner
                          Through:       Mr. Rishab Raj Jain, Pallvi Deepika,
                                         Advocates


                          Versus

SYNDICATE BANK AND ORS.                                     ..... Respondents

                 Through:                Mr. Jagat Arora, Advocate


W.P.(C) 3061/2000

S.P. MEHRA                                                 ..... Petitioner
                          Through:       Mr. Rishab Raj Jain, Pallvi Deepika,
                                         Advocates

                          Versus

SYNDICATE BANK AND ORS.                                     ..... Respondents
                 Through:                Mr. Jagat Arora, Advocate

CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?


 VALMIKI J. MEHTA, J (ORAL)

1. By this writ petition filed under Articles 226 and 227 of the

Constitution of India, petitioner, who was an employee of the respondent no.

1/Bank impugns the order passed by the departmental authority/Disciplinary

Authority dated 19.7.1999 imposing the punishment of dismissal from

service.

2. Against the petitioner a charge-sheet dated 30.3.1998 was issued in

which the allegation against the petitioner essentially was that he had stood

as a guarantor for five accounts belonging to his relatives and acquaintances

without taking prior permission from the respondent no.1/Bank or without

informing the respondent no.1/Bank. Against the petitioner by the charge-

sheet there was also an allegation that he was engaging in trade or business

outside the scope of his employment and which was hence stated to be a

service misconduct.

3. The charge-sheet dated 30.3.1998 reads as under :

" CHARGESHEET

It is alleged against you as under:-

That you are the guarantor for the following loan accounts: 1- DL sanctioned to M/s Kay Cloth House which is now transferred to Loans in Court a/c no:3/88 which is showing a

huge balance to be recovered from you and the principal borrower at our K.G.Marg Branch.

2. DL-35/76 granted to Sh.O.P.Mehra at our K.G.Marg Branch.

3. OSL-6/87 granted to M/s S.B.Enterprises at Nirman Vihar Branch.

4. Other loan granted to your brother at our A.A.Road Branch.

5. Gift India Advertisers which is now transferred to Loans in court a/c no:3/91 in which your wife is a partner.

It is observed that neither you have taken prior permission from the competent authority to stand as a guarantor to the above loan accounts nor taken the required initiative to ensure that the loans are closed/regularised in view of your position as a guarantor specially employed in the bank. Now all the above loans have become sticky and the bank is compelled to file suits to recover the dues. As such you have misused your official position to get the above loans sanctioned to the people either related or closely connected to you.

It is further observed that you have availed a D.L.22/92 from our Barakhamba Road Branch on 22.11.92 and while availing that facility you have not disclosed your indirect liabilities referred to above and thus concealed the information from the bank. It is further alleged that you have also got liabilities with UCO Bank, Chandni Chowk Branch and also with Thrift and Credit Society of the bank employees union.

The above go to show that you have misused your official position to get the loans to the people related/closely known to you and not ensured the repayment. You have also concealed the indirect liabilities while availing the D.L. You have also not obtained permission from the competent authority to stand as a guarantor to the above loan accounts. The above acts on your part are highly objectionable and constitute the misconduct of doing acts prejudicial to the interest of the bank vide clause 19.5(J) of the Bipartite Settlement. Further, the above

transactions also indicate that you are engaging/engaged in trade or business outside the scope of your employment which also constitute misconduct under clause 19.5(a) of the Bipartite Settlement. Hence you are hereby required to submit your explanation and also to take immediate steps to settle dues under the above loan accounts within 15 days of receipt of this letter failing which we shall be constrained to proceed further against you.

Yours faithfully Sd/-

ASST. GENERAL MANAGER"

4. Petitioner replied to the charge-sheet vide his letter dated 30.6.1998

denying the charges.

5. Thereafter, the Enquiry Officer held proceedings against the petitioner

and held the petitioner guilty in terms of Enquiry Report dated 3.2.1999 and

the conclusion of the Enquiry Officer in this regard reads as under :

"Conclusion

On going through the enquiry proceedings, it is accepted by CSE that his family members have enjoyed various loan facilities from the bank due to his position/contacts with the various authorities of the bank and that all such accounts are not yet closed and he has also not disclosed his indirect liabilities, while availing other loan facilities for self and while standing as guarantor for loans at various branches and also did not fill up the loan applications properly, thus concealed the facts. Further though the loans were sanctioned in the absence of specific permission from the competent authority to stand as a surety/in violation of HO guidelines, it is due to his misuse of his position as an employee/union activist in the bank."

6. Before I give my observations and conclusions I would like to observe

that really the departmental proceedings were completely unnecessary in the

present case, and this is because it is not as if against the petitioner there is

an allegation that he has misappropriated any moneys or he has wrongly got

sanctioned the loans in the five accounts in which he stood as the guarantor

or that the petitioner has derived any benefit whatsoever from the mere

technical default of not informing the respondent no.1/Bank of his standing

as the guarantor. Most importantly, it is not understood as to how the

respondent no. 1/Bank claimed that petitioner did not inform the respondent

no. 1/Bank of his standing as the guarantor inasmuch as the record of this

case shows that the petitioner in the various applications for loans is duly

shown as the officer of the respondent no.1/Bank, and therefore, respondent

no. 1/Bank cannot say that it was not having knowledge that petitioner was

an employee of the respondent no.1/Bank when loans were sanctioned in the

five accounts in which the petitioner stood as the guarantor. Also it will be

relevant to note that petitioner in the enquiry proceedings has been able to

establish that the requirement of the respondent no.1/Bank being informed

came into existence by means of a circular of the year 1979 but the loans in

question were of the year 1976. Finally and most importantly it has to be noted

that the loan accounts are not running into lakhs and crores of rupees and the

loan amounts were essentially for amounts of Rs. 3,500/- to Rs. 25,000/- and

that too which were not availed of by the petitioner but in these accounts he

only stood as a guarantor. With respect to the account of M/s. Gift India

Advertisers, the fifth account, petitioner was not even a guarantor and the

wife of the petitioner was a partner in that account but admittedly that loan

account stands closed and it has been so recorded by the Enquiry Officer

himself at internal page 4 of his report. The net position therefore is that out

of the five accounts in which there is an allegation of petitioner standing as a

guarantor without informing the respondent no.1/Bank, three accounts

already stand closed and with respect to two accounts, the only fault as

alleged against the petitioner is that he stood as a guarantor, and which is of

course not an illegal act in itself, and the only illegality alleged is that the

petitioner did not inform the respondent no.1/Bank about the same.

7. In my opinion, the entire proceedings against the petitioner are

unfortunate and without any basis inasmuch not only there is no illegality

alleged in the petitioner standing as a guarantor for his family members

being his parents and brother, the only allegation against the petitioner of his

not informing the respondent no.1/Bank is not a very serious allegation

because in all the accounts where the petitioner stood as a guarantor, the

loan papers duly showed the petitioner to be an employee of the respondent

no.1/Bank. This Court therefore fails to understand as to how once in the

loan papers petitioner is shown as the employee of the respondent no.

1/Bank, and the loans are being granted by the respondent no. 1/Bank itself

the present can be a case of standing as a guarantor without prior permission.

Surely, no case was thus made that petitioner did not inform the respondent

no.1/Bank of his standing as a guarantor. More importantly, the Enquiry

Officer in the subject Enquiry Report dated 3.2.1999, at internal page 6 of

the report, para 2, clearly holds that the requirement of the respondent

no.1/Bank being informed came into existence by a circular of 1979 whereas

the loans in question were of the year 1976 and which observations of the

Enquiry Officer read as under :

"The CSE brought on record that concept of seeking permission from competent authority came in 1979, whereas the referred loans belong to 1976. Further, the same was not questioned by the sanctioning authority before sanctioning/releasing the facility."

8. A reading of the aforesaid facts and the record of this case leads to the

following salient conclusions:

(i) There is no charge against the petitioner of any misappropriation of

monies or any concealment of facts.

(ii) The charge against the petitioner is at the very best only a technical

charge of his allegedly not informing the respondent no.1/Bank of his

standing as a guarantor in the five accounts.

(iii) Even this charge against the petitioner is totally frivolous because

loans were given by the respondent no. 1/Bank itself in which the petitioner

was shown as an employee i.e in the loan papers petitioner is duly shown as

the employee of the respondent no. 1/Bank.

(iv) The requirement of informing the respondent no.1/Bank as noted by

the Enquiry Officer came into existence by means of a circular of the year

1979 whereas the loans in question are of the year 1976.

(v) Out of the five loan accounts, three accounts already stand cleared,

and with respect to the other two accounts which were of the parents and

family members of the petitioner, surely, petitioner as a family member

could not have refused to stand as a guarantor, and which action in itself is

also not illegal as per even the case of the respondent no. 1/Bank.

(vi) The Enquiry Officer in his conclusion given at the end of the Enquiry

Report dated 3.2.1999, (reproduced above) has not arrived at a finding that

the petitioner was carrying on any business as was alleged in the charge-

sheet against the petitioner.

(vii) Against the petitioner there is no charge that he has illegally got the

loans sanctioned because sanctioning of the loans has been done by the

competent authorities of the respondent no.1/Bank as per due process and it

is not even the case of the respondent no.1/Bank that there are any

irregularities with respect to sanctioning of the loans in which the petitioner

stood as a guarantor. This aspect is buttressed by the facts that admittedly

respondent no. 1/Bank has not even alleged any wrong doing against the

petitioner or any of its other officers with respect to sanctioning of the loans

in the five loan accounts.

9. In view of the above, action of the respondent no. 1/Bank in imposing

the punishment of dismissal from service of the respondent no.1/Bank is a

complete illegality to say the least and accordingly the entire departmental

proceedings including the Enquiry Report dated 3.2.1999 and the order

passed by the Disciplinary Authority dated 19.7.1999 are quashed.

10. Learned counsel for the respondent no.1/Bank sought to argue that

this Court should not interfere in the punishment imposed by the respondent

no.1/Bank inasmuch as this Court interferes only if punishment is

shockingly disproportionate. In support of his argument, reliance is placed

by the counsel for the respondent no. 1/Bank upon the judgment of the

Supreme Court in the case of Life Insurance Corporation of India &

Others. Vs. S. Vasanthi, 2014 IX AD (S.C.) 37.

This argument urged on behalf of the respondent no. 1/Bank is liable

to be rejected for two reasons. Firstly, petitioner is not guilty at all and once

the petitioner is not guilty at all there is no question of imposing any

punishment whatsoever upon the petitioner, whether minor or major of

dismissal from service. Even assuming that petitioner has to be held guilty,

the judgment in the case of S. Vasanthi (supra) as relied upon by the

respondent no.1/Bank, will have no application to the facts of the present

case inasmuch as in the said case the Hon'ble Supreme Court held that

courts will not interfere with the punishment imposed by the departmental

authority unless punishment is shockingly disproportionate inasmuch as in

the facts of the said case High Court interfered with the penalty orders in

spite of the fact that the charge-sheeted officer was found guilty of the

allegations of tampering with the premium position and other records

pertaining to 17 insurance policies which resulted in settlement of surrender

value payments though the policies had not acquired surrender value.

Clearly therefore the judgment relied in the case of S. Vasanthi (supra) does

not help the respondent no. 1/Bank because in the present case there are no

grave charges against the petitioner of tampering with the record resulting in

financial loss to the employer by payment of monies to third party.

11. Learned counsel for the respondent no. 1/Bank also argued that the

writ petition is not maintainable in this Court inasmuch as petitioner should

have approached the competent authority under the Industrial Disputes Act,

1947 but considering the facts that this writ petition is very old of the year

1999, I refuse to relegate the petitioner to the Industrial Tribunal, and this is

even assuming that argument of the respondent no. 1/Bank is correct with

respect to the existence of an alternative efficacious remedy.

12. In view of the above, the writ petition is allowed. The Enquiry Report

dated 3.2.1999 and the order of the Disciplinary Authority dated 19.7.1999

are quashed. Petitioner will be held as was not dismissed from the service

pursuant to the impugned charge-sheet and the impugned departmental

proceedings. This writ petition in view of the facts stated above is allowed

with costs of Rs. 25,000.

W.P.(C) 3061/2000

13. By this writ petition, petitioner has prayed for release of his terminal

benefits and which were withheld by the respondent no. 1/Bank only on

account of the order of the Disciplinary Authority dated 19.7.1999 and since

the departmental proceedings against the petitioner have been quashed by

allowing the W.P. (C) No. 3942/1999, this writ petition will also stand

allowed and it is directed that respondent no. 1/Bank will release all

retirement dues of the petitioner within a period of two months from today

along with interest @ 6% per annum simple payable one month after the

date of the retirement of the petitioner and till the petitioner is paid the

requisite amount. In case, petitioner is not paid the amounts due within a

period of two months from today, thereafter the petitioner will be entitled to

interest @ 9% per annum simple.

14. This writ petition is accordingly allowed leaving the parties to bear

their own costs.

APRIL 24 , 2015                                   VALMIKI J. MEHTA, J
godara