Pran Kumar Kaul vs Indian Overseas Bank & Ors.
2015 Latest Caselaw 4863 Del

$~10
*    IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                    Date of Decision : July 10, 2015
+                              LPA 426/2015
     PRAN KUMAR KAUL                                  ..... Appellant
             Represented by:         Mr.D.S.Chauhan, Advocate with
                                     Ms.Ruchi Singh, Advocate

                                     versus

     INDIAN OVERSEAS BANK & ORS                ..... Respondents
              Represented by: Mr.Karan Khanna, Advocate for R-1

CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
HON'BLE MS. JUSTICE MUKTA GUPTA
PRADEEP NANDRAJOG, J. (Oral)

CM No.11861/2015 Allowed subject to just exceptions.

LPA No.426/2015

1. The charge against the appellant reads as under:-

"Articles of Charge :

You had contravened Regulations 3(1) and 3(3) of Indian Overseas Bank Officer Employees (Conduct) Regulations 1976, a breach of which would amount to misconduct in terms of Regulation 24 thereof. The said Regulations are extracted below:

3(1) Every officer employee shall, at all times take all possible steps to ensure and protect the interests of the bank and discharge his duties with utmost integrity, honesty, devotion and diligence and do nothing which is unbecoming of a bank officer.

3(3) No officer employee shall, in the performance of his official duties or in the exercise of powers conferred on him, act otherwise than in his best judgment except when he is acting under the direction of his official superior.

Any breach of any of the provisions of these Regulations shall be deemed to constitute a misconduct punishable under the Indian Overseas Bank (Discipline and Appeal) Regulations, 1976."

2. The statement of imputation in support of the charges reads as under:-

"I) You had dishonestly and fraudulently withdrawn a total sum of `13,500/- from the Current Accounts of M/s H.L.Graphics and M/sCellulinks Productions P.Ltd. as per details given below and misappropriated the same:

      Title of Account                Date                Amount

      M/s H.L.Graphics            25/06/93                 2,000
      M/s H.L.Graphics            08/11/93                 1,500
      M/s Cellulinks Prod.P.Ltd. 05/07/93                10,000

II) You had dishonestly and fraudulently transferred a total sum of `39,200/- from the Current Account of M/s H.L.Graphics and credited the same to your Savings Bank Account No.15796, as per details given below and misappropriated the same.

                  Date                            Amount
                                                     `
                  25/08/93                        25,000
                  07/09/93                        10,000
                  29/10/93                         4,200

III) You had on 10/09/93 dishonestly and fraudulently debited a total sum of `30,000/- from the Current Account of M/s Cellulinks Prod. P.Ltd. and credited Bankers Cheques Account favouring Radhika Anand with `21,000/- and your Saving

Bank A/C No.15796 with balance of `9,000/- and thereby misappropriated ` 30,000/-.

IV) You had dishonestly and fraudulently transferred a total sum of `39,200/- from the Current Account of M/s Cellulinks Prod. P.Ltd. and credited the account of M/s H.L.Graphics, as per details given below:

      Dr.                          Cr.            Date        Amount
      M/s Cellulinks Prod.    M/s H.L.Graphisc 22/10/93         35,000
      P.Ltd.

      M/s Cellulinks Prod. M/s H.L.Graphisc       04/11/93       4,200
      P.Ltd.

You had committed these fraudulently withdrawals to offset the fraud committed by you in the account of M/s H.L.Graphics, as detailed in para-II above.

V) You had dishonestly and fraudulently transferred a sum of `50,000/- from the Current Accounts of M/s KRIBHCO and M/s H.L.Graphics as per details given below and to conceal the same, you had destroyed page-1 of the transaction log of computer relating to 07/09/93

Dr. Cr. Date Amount M/s KRIBHCO M/s H.L.Graphics 07/09/93 25,000

M/s H.L.Graphics M/s KRIBHCO 25/09/93 25,000

You had effected this fraudulent transaction on 25/09/93 with a view to offset the fraudulent debit of `25,000/- on 07/09/93 in the Account of M/s KRIBHCO.

VI) You had remitted cash totalling `57,500/- into the Current Account of M/s Cellulinks Prod. P.Ltd. as per details given below, by way of internal credit vouchers prepared by you with a view to partly compensate the fraudulent withdrawals totalling `79,200/- effect you in the said Account

on 05/07/93, 10/09/93, 22/10/93 and 04/11/93 as mentioned in paras-I, III & IV of this charge-sheet.

            Date                             Amount
                                               `
            03/12/93                         20,000
            06/12/93                         14,000
            07/12/93                         3,500
            07/01/94                         10,000
            28/02/94                         10,000

It is thus charged that you failed to ensure and protect the interest of the Bank and discharge your duties with utmost honesty, integrity, devotion and diligence. You had acted otherwise than in your best judgment. You had also acted in a manner which is unbecoming of an Officer of the Bank."

3. The report of the Inquiry Officer has returned a finding that the charges stood proved.

4. The Competent Authority has levied the punishment of removal from service which has been upheld by the Appellate Authority.

5. Challenge before the learned Single Judge has failed. Writ petition filed by the appellant has been dismissed.

6. First contention advanced concerning Regulation 6(17) of the Discipline and Appeal Regulations of the respondent bank has been rejected by the learned Single Judge on the reasoning that in sum and substance the Regulation was complied with inasmuch as after evidence was recorded the Inquiry Officer required the Presenting Officer to address with reference to the evidence led concerning the charges with opportunity to the appellant to respond. The learned Single Judge has given an additional reason of no prejudice being caused evinced by the fact that said plea was not urged in

the appeal filed before the Appellate Authority.

7. The Regulation in question enjoins upon the Inquiry Officer to generally question the Charged Officer on circumstances appearing against him in the evidence if the Charged Officer does not examine himself.

8. It is apparent that the Regulation in question is intended to give an opportunity to the charged employee to give his version on the evidence led at the inquiry.

9. It is trite that it is the substance of a matter which is important and not its form. Whilst it may be true that in the instant case the Inquiry Officer has not formally put the circumstances against the appellant in a question form to elicit an answer, but compliance with the Regulation is made when one looks at the presentation by the Presenting Officer before the Inquiry Officer of the evidence before the Inquiry Officer and the appellant's written response thereto.

10. Besides, as we discuss other contentions advanced, it would emerge that the factual aspect of the statement of imputation was never denied by the appellant, and his defence was that since he had private dealings with M/s.H.L.Graphics and M/s.Cellulinks Productions Pvt. Ltd. he withdrew the cash from the accounts of the two firms as alleged and credited it in his personal saving account, the account of one Radhika Anand or retained the same with the consent of the two parties. We would be highlighting that with reference to the charge how this conduct expose the bank to a risk, but for the purposes of first contention urged it would suffice to note that once the doing of an act is admitted pursuant to a charge but a justification thereof is given the onus would be on the Charged Officer to make good the defence.

11. The first contention fails.

12. Second contention urged was that two authorization letters by the two firms ought to have been taken note of by the Inquiry Officer. The learned Single Judge has held that the said two authorization letters had to be proved, and since the same were not proved, the Inquiry Officer was justified in ignoring the same.

13. The view taken by the learned Single Judge is technically correct, but in our opinion there are better reasons to hold that even if the said two letters were taken into account, it would make no difference. Our reasons. A perusal of the charge against the appellant would reveal that its gravamen was that the appellant made cash withdrawals or transferred money to his, Radhika Anand and another account without following the procedures of the law. Assuming that the two letters on which the appellant relies were indeed subsequently written by the two firms whose accounts were debited, the charge would still remain proved because the charge was of every employee being obliged to ensure and protect the interest of the bank while discharging his duties and not to perform any duty without exercising best judgment.

14. Now, a cash withdrawal from an account is permissible under the signatures of the account operator and either by a cheque or a cash withdrawal slip of the bank being used. As per the appellant he withdrew the cash on the oral instructions and later on obtained a letter of authorization to do so. What if the two parties did not give the letter of authorization? Surely, the bank would have been liable because its employee in the discharge of his duties acted illegally. No withdrawal from any account in cash can be permitted by a Bank Manager on a letter written

by a party. Besides, in the instant case when the cash withdrawals were made there were no contemporaneous authorization. As regards the accounts of the two firms being debited and account of somebody else being credited in the said sum, no RTGS transfer instructions were issued nor were cheques issued. Evidence shows that the appellant working as an Assistant Manager, on his own made the debits and credits and later on obtained a writing by the account holder to do so. What if the account holder had not issued the letter in question?

15. We re-emphasize that the charge was that of acting in a manner where the interest of the bank was put at risk.

16. The third contention advanced concerning who should have exercised the power of review has been dealt with by the learned Single Judge in paragraph 14 onwards of the impugned decision; and we concur. The reasoning of the learned Single Judge be read as our reasoning.

17. The last contention concerned proportionality of the punishment.

18. A service under a bank requires utmost probity, diligence and honesty of the highest level. Especially when the post held is that of an Assistant Manager. Conceding to the point that the parties whose accounts were debited did not make an issue of the same, and for which the reason is that the appellant was having personal dealings with the said two firms. But the manner in which the appellant acted, as highlighted above, did put the bank to a risk. Such kind of conduct would obviously result in a loss of confidence by a bank on the employee and would justify a penalty of a kind to be levied where the employee is out of service.

19. We were inclined to issue notice to the respondent to show cause in the appeal as to why the penalty of removal from service be not converted to

one of compulsory retirement with pensionary benefits, but on noting as told by learned counsel for the appellant that the appellant has not rendered pensionable service, we cannot even convert the penalty to one of compulsory retirement with full pension.

20. The appeal is accordingly dismissed in limine but without any order as to costs.

(PRADEEP NANDRAJOG) JUDGE

(MUKTA GUPTA) JUDGE

JULY 10, 2015 mamta