Akash Arya vs Punjab National Bank & Ors
2019 Latest Caselaw 1444 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                         Reserved on:        19.02.2019
                                         Pronounced on:      12.03.2019

+      W.P.(C) 2908/2016
       AKASH ARYA                                            ..... Petitioner
                           Through       Mr.Shanker Raju, Adv. with
                                         Mr.Nilansh Gaur, Adv.

                           versus

       PUNJAB NATIONAL BANK & ORS             ..... Respondents
                    Through Mr.Rajat Arora, Adv. with Mr.Murad
                            Khan, Adv.

       CORAM:
       HON'BLE MR. JUSTICE SURESH KUMAR KAIT

                                    JUDGMENT

1. Vide the present petition, the petitioner seeks directions as under:

a) Quash and set aside impugned penalty order dated 30.05.2013

(Annexure P-1) impugned appellate order dated 29.08.2014

(Annexure P-2) and the impugned order in review dated

09.06.2015 (Annexure P-3) and also the inquiry report dated

09.10.2012 at Annexure P-4 and direct the respondents to reinstate

the petitioner in service with all consequential benefits;

b) Declare Regulation 4(i) of PNB Officers (D&A) Regulations, 1977

(Annexure P-5) as ultra vires on being discriminatory to the extent

of denial of superannuation benefits to the officer employee as

compared to workman employee or in the alternative;

c) Extend the benefit of Clause 6 (b) of Bipartite Settlement dated

10.04.2002 to the petitioner and he be declared entitled to

superannuation benefits and gratuity etc. with arrears from the date

of removal.

2. The petitioner has joined Punjab National Bank as Management

Trainee on 26.02.1990. When the petitioner was posted as Manager of the

respondent bank at Gautam Budh Nagar on 11.09.2009, a performance

certificate was issued to the petitioner on 20.05.2010 indicating that the

petitioner achieved the goal of budget with impressive growth of the bank.

During the course of working as Manager, the petitioner was sanctioning

loans in the different heads which were being duly repaid by the customers

as per loan agreement and methodology of the bank. However, the petitioner

was served a chargesheet alleging that the petitioner did not conduct proper

pre-sanction approval and sanctioned various loans without recommendation

of the second officer and also failed to observe proper post-sanction follow

up in various borrower accounts. It was also alleged that the petitioner failed

to follow Bank's system and procedure. Though the petitioner was put under

suspension, however, the same was revoked vide order dated 08.10.2011.

The petitioner filed a reply to the chargesheet while denying the allegations

and stated that due to his efforts various new accounts were opened resulting

into deposit of ₹60 crores. The petitioner has also highlighted that accounts

were opened for getting land compensation. The petitioner also mentioned

procurement of ₹70 lakh as LIC premium. As per the record in 2010, Kasana

Branch of the Bank earned a profit of nearly ₹2 crores and this was followed

in the next year. Each and every loan was sanctioned with the tacit oral

consent as well as written orders except few files which were unintentionally

left unrecommended of the second man working at the time including Sh. V.

K. Jain and also recommended by Sh. H. K. Bhatt and Ms. Gargi Gupta on

oral as well as tacit concerned and Sh. V. K. Jain, left certain files

unrecommended. It is further stated that all the loans were safe and the loan

amount regularly reimbursed by the customers, thus ruled out any loss to the

bank.

3. However, the respondent was not satisfied with the reply of the

petitioner and thereafter, an Inquiry Officer was appointed. During the

course of inquiry, only one witness i.e. Sh. M. L. Sharma, Internal Senior

Auditor was listed as a witness to prove document number 146. Although,

the files were 152 in number and none of it was testified by their maker

regarding genuineness of the documents. These documents could not have

been used against the petitioner as per Regulation 6 (13) of the Rules.

During the course of inquiry, the Presiding Officer submitted documentary

evidence marked as ME-1 to ME-159. The petitioner was also asked to

submit the defence documents for which he preferred a list showing the

relevant documents and the reference to the charge and also the attendance

register. But the Inquiry Officer had insisted without any context the

submission of relevancy of the documents and ultimately despite showing

the account number described in the chargesheet, the petitioner in the

absence of further details of the documents like the documents submitted for

loan, the Inquiry Officer denied these documents to the petitioner.

4. During the course of inquiry, Sh. M. L. Sharma was called for

examination. Since the report of Sh. M. L. Sharma was not ready to prove

the documents, accordingly, his evidence was not recorded. The Inquiry

Officer has examined a new witness Sh. V. K. Jain, who has also not

sanctioned all the loans etc., processed by the petitioner yet, the documents

were not proved by its maker during the course of inquiry. After the

examination of Sh. V. K. Jain which was objected to by the petitioner, the

EO directed the presenting officer to submit a written brief. Since the

petitioner was denied defence documents which were in possession of the

bank, there was no occasion for him to have submitted a list of defence

witnesses. Ultimately without affording the petitioner a reasonable

opportunity to have defence documents and then examined defence

witnesses, the presenting officer was persuaded to submit the written brief.

5. Learned counsel appearing on behalf of petitioner submits that as per

the charges, two kinds of accounts i.e. referred and quoted were mentioned

by the petitioner in his defence brief. The Inquiry Officer without taking

version of the petitioner in his defence and without recording elaborate

reasons as to how the Articles of Charge have been established in so far as

Articles of Charge 1 is concerned selectively proved the Charges. But,

regarding charge 2, since the files could not be located but later on found did

not prove this charge and accordingly, the inquiry report has held that the

charge partially proved vide Annexure P-4.

6. Learned counsel submits that the petitioner was asked to submit

representation on the charge and the same was submitted by the petitioner

while taking exception to vagueness of the charge against the Rules. The

petitioner has also taken the ground that the witnesses who were to prove the

documents had not been examined and the inquiry was not conducted in a

fair manner. It was also contended that the conclusion of the inquiry officer

was based on non-proved exhibits and that all the loans were made in the

line of Headquarter Guidelines and were duly reported to the competent

authority. But the disciplinary authority mechanically agreed with the

findings of the inquiry officer and without recording reasons.

7. It is further submitted that the management exhibits were verified but

no witness to prove the documents was examined. The disciplinary authority

travelled beyond the scope of the inquiry and imposed major penalty of

removal from service upon the petitioner by treating the suspension period

as not spent on duty. The disciplinary authority wrongly considered the fact

that a financial loss of around ₹2 Crores has resulted to the Bank, whereas,

to this regard no specific charge made against the petitioner. The loans were

sanctioned to the right persons and are being repaid to the bank in absence

of any proof of alleged loss i.e., for non-payment in notice or DRT

proceedings being filed. The loan period for repayment is ten years as per

the guidelines and this is yet to expire. This disciplinary authority has not

applied for Bipartite Settlement dated 10.04.2002 despite, the petitioner

being an employee is entitled for the superannuation benefits. Being

aggrieved the petitioner preferred an appeal on 23.07.2013 and the same was

dismissed by the appellate authority vide Annexure P-2. The petitioner filed

review of the said order and the same was rejected vide order dated

09.06.2015 by maintaining the penalty but without going into its

proportionality. Although the points raised by the petitioner in his review

have been reproduced but no finding has been recorded on it.

8. Learned counsel further submitted that the petitioner has been

punished mainly on the alleged loan of ₹2 crores to the bank, however, no

such charge was framed against the petitioner in the inquiry. No material or

evidence has been produced or adduced to prove the aforesaid charge. The

petitioner has been deprived of a reasonable opportunity to effectively

defend this part of charge in violation of the principles of natural justice.

9. It is further smutted that there were two charges against the petitioner,

one is partly proved and second is not proved. Therefore, the disciplinary

authority and the appellate authority had to impose the penalty on seeing the

misdemnour committed by the petitioner which has not been taken care in

the present case. To strengthen his arguments, counsel for the petitioner has

relied upon the case of S. R. Tiwari vs Union of India and Anr.: (2013) 6

SCC 602 whereby held that it is mandatory for the authority to see the

proportionality.

10. Learned counsel further submitted that the document filed before the

Presenting Officer have not been proved by any of the witnesses. The same

is against the observation of this court made in W.P.(C) No. 8726/2015 titled

as Union of India vs. Shameem Akhtar whereby held that charges levelled

against delinquent official is to be proved in the inquiry before any penalty

is imposed. In the absence of any witness and in the absence of any

opportunity to cross-examine a witness would be against the canon of

natural justice and the same cannot be treated as a mere formality. Thus, the

present petition deserves to be allowed.

11. On the other hand, learned counsel for the respondent bank submitted

that charge-I against the petitioner was on 43 accounts, however, proved on

4 accounts and not proved on remaining accounts. It is further submitted

that during preliminary hearing, the petitioner did not accept the charges

levelled against him, accordingly, further proceedings were conducted by

the Inquiry Officer. The petitioner preferred to take assistance of Sh. D. S.

Solanki, Sr. Manager to defend his case in the inquiry on 20.06.2012 and

requested that his consent letter would be submitted on record before the

next date of inquiry or presented on the next date of inquiry. Accordingly,

on 07.07.2012 petitioner neither brought his DR nor presented his consent

letter and assured that on the next date of inquiry his defence representative

would be present in the proceedings. Subsequently, on 21.07.2012, the

petitioner requested to change his defence in place of Sh. D. S. Solanki.

Accordingly, permission was given by the Inquiry Officer to engage Sh. A.

K. Singh, Sr. Manager as his DR. Consent letter was obtained and placed on

record. Presenting Officer submitted documentary evidences marked as ME-

1 to ME-159 in support of charges levelled against the petitioner during the

course of inquiry. All these documents were made available to the petitioner

and verification from original was allowed to the petitioner and he

confirmed on 09.08.2012 for having done the verification from the originals

at branch. The petitioner was advised to submit a list of documents which

were required to defend his case. He did not send any list in the given time

and sought further time telephonically. The inquiry officer had received one

generalised list without any relevancy to the charge on 28.08.2012 which

was declined by him vide his letter dated 28.08.2012 on the ground there

was no specific mention of any particular of the accounts and specific

documents required in those accounts. Thus, advised vide his letter dated

28.08.2012 to bring specific list of documents relevant to the alleged charges

for his defence on 05.09.2012 and submit the same during the course of

inquiry proceeding. But the petitioner failed to submit any specific list for

defence documents and stated that he had not prepared any list other than

already submitted which is as per the chargesheet. The presenting officer

called two witnesses: 1) Sh. M. L. Sharma (Sr. Auditor) and 2) Sh. V. K.

Jain (officer). However, the witness of Sh. M. L. Sharma was disallowed by

the Inquiry Officer acceding to the objections raised by the defence. Proper

opportunity was given to the defence to cross examine the other witness.

Thus, the inquiry was conducted in fair, impartial and transparent manner as

per bank's norms as well as observing principles of natural justice. After

completion of inquiry, both the parties were given opportunity to give their

written brief so that they may again present any leftover point/logic to

support their case. Accordingly, PO had submitted his written brief to the

inquiry officer on 14.09.2012 and the petitioner's written brief was received

on 04.10.2012. The Inquiry officer submitted his report dated 09.10.2012

holding the imputation of charge I-4, 19, 28, 30, 31, 35, 40 and charge-II as

not proved and other charges as proved.

12. Learned counsel for the respondent further submitted that since the

matter has been considered by the respective departmental authorities,

namely the inquiry officer, disciplinary authority, appellate authority and

reviewing authority of the bank. The departmental authorities are the best

judge in respect of the departmental matters and the courts/tribunals should

not exercise its power under Article 226 of the Constitution of India. To

strengthen his arguments, counsel for the respondent has relied upon the

case of Apparel Export Promotion Council vs. A. K. Chopra : AIR 1999

SC 625 whereby the Supreme Court has observed as under:

"The High Court appears to have overlooked the settled position that in departmental proceedings, the Disciplinary Authority is the sole judge of facts and in case an appeal is presented to the Appellate Authority, the Appellate Authority has also the power / and jurisdiction to re-appreciate the evidence and come to its own conclusion, on facts, being the sole fact finding authorities. Once findings of fact, based on appreciation of evidence are recorded, the High Court, in writ jurisdiction may not normally interfere with those factual findings unless it finds that the recorded findings were based either on no evidence or that findings were wholly perverse and / or legally untenable. The adequacy or inadequacy of the evidence is not permitted to be canvasses before the High Court. Since the High Court does not sit as an Appellate Authority, over factual findings recorded during departmental proceedings, while exercising the power of judicial review, the High Court cannot normally speaking substitute its own conclusion, with regard to the guilt of the delinquent, for

that of the departmental authorities. Even in so far as imposition of penalty or punishment or penalty is concerned, unless punishment or penalty imposed by the Disciplinary or the Departmental Appeal it shocks the conscience of the High Court, it should not normally substitute its own opinion or and impose some other punishment or penalty."

13. I have heard learned counsel for the parties.

14. In case of Debotosh Pal Choudhary vs. Pubjab National Bank &

Ors: AIR 2002 SC 3276, it is observed by the Hon'ble Supreme Court that

fulfilment of some of the requirements of Regulation 6(5) of the Regulations

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 inquiry.

15. The documents which were official documents pertaining to loan

transactions were proved and it was not necessary that the maker of the

document had to be examined to prove the document. Once the documents

are part of the records and pertains to loan transactions, the same can be

proved by witness of the bank to prove the authenticity and veracity of the

documents. It is not necessary that for each documents it is only the maker

to prove about the veracity of the documents. The departmental agencies are

not governed by strictly as per the Evidence Act.

16. The petitioner being an officer cadre employee is governed under

provision of the PNB Officers' Employee (Discipline and Appeal)

Regulations, 1977. The petitioner had also vide order dated 05.04.2016

given up his claim with regard to the vires of the regulations. Bipartite

settlement would not apply in the case of the petitioner. The Pension

Regulations are statutory in nature and pension is paid to the officers as well

as workmen employees in terms of Pension Regulations 1995. The inquiry

conducted against the workmen is in terms of Bipartite Settlement, whereas,

in respect of an officer employee it is in terms of the Officers Employees

(Discipline & Appeal) Regulations. The charges levelled against the

petitioner were grave and serious in nature and it was in pursuant to the

charge sheet, a departmental inquiry was constituted and punishment of

removal from service was awarded to him.

17. It is pertinent to mention that during the inquiry proceedings the

petitioner was advised to submit a list of documents required to defend his

case. The petitioner did not send any list in the given time and sought further

time telephonically. The Inquiry Officer received one generalised list on

28.08.2012 without any relevancy to the charge which was declined by him

vide letter dated 28.08.2012 stating there was no specific mention of any

particulars of the documents. Moreover, he was advised vide letter dated

28.08.2012 to bring specific list of documents relevant to the alleged charges

for his defence on 05.09.2012 and submit the same during the course of

inquiry proceedings. But the petitioner failed to submit any specific list for

defence documents and stated that he had not prepared any list other than

already submitted. Accordingly, the Inquiry Officer observed that as per the

list available on record, it specify the details of the account and name of the

documents, however, the list submitted by the petitioner neither specify the

details of accounts and the specific document of the said account.

18. Moreover, the inquiry officer has duly considered the objection raised

by the defence during the inquiry proceedings held on 05.09.2012 and

closed the evidence of Sh. M. L. Sharma while recording that MW-1 is not a

relevant witness in the absence of investigation report. Thus, claim of the

petitioner has failed as the inquiry officer had duly considered his objection

during the inquiry proceedings and gave his findings on the basis of oral as

well as documentary evidences led before him.

19. It is pertinent to mention that there is no Regulation 10 (b) in the PNB

Officers' Employee (Discipline and Appeal) Regulations, 1977. The

procedure for imposition of penalty has been prescribed under Regulation

6(b) of the said Regulations. As discussed above all the relevant documents

had been supplied to the petitioner and no prejudice has been caused to him.

Moreover, there is no violation of Regulation 6(16) as alleged. Ample

opportunity was provided to the petitioner to submit the documents, he

intends to produce in his defence but he did not produce list of specific

documents for which he himself is responsible. Neither the petitioner

produced the defence exhibits nor defence evidence despite opportunity was

given by the inquiry officer. The charge-I against the petitioner is that he

sanctioned Term Loan/KCC to the borrower, without conducting proper pre-

sanction appraisal. In various cases there is no loan application, but blank

and incomplete application. He also sanctioned Term Loan Tractor/KCC to

the borrowers without conducting proper pre-sanction appraisal. In many

cases there is no photo of borrower. He also did not conduct proper pre

sanction appraisal while sanctioning credit facilities. Recklessly, in accounts

there is no photo ID/not verified from original. He sanctioned Term Loan

Tractor and KCC to borrowers without obtaining Khatuani and not verified

from original as per bank's guidelines due to which it is established during

the inquiry that the petitioner has caused ₹2 crores loss to the bank.

20. In view of the above facts and circumstances, I find no merit in the

present petition and the same is, accordingly dismissed with no order as to

cost.

(SURESH KUMAR KAIT) JUDGE MARCH 12, 2019 @mit/ab