Jharkhand High Court
Raj Narayan Dubey Son Of Late Babu ... vs Central Bank Of India Through Its ... on 4 August, 2023
IN THE HIGH COURT OF JHARKHAND AT RANCHI
L.P.A. No. 69 of 2022
----
Raj Narayan Dubey son of late Babu Nand Dubey, resident of Sri
Ram Colony, Loha Singh Marg, Lane No.2, Itki Road, PO Hehal,
PS Pandra, District Ranchi 834005.
... Appellant
Versus
1. Central Bank of India through its Chairman-cum-Managing
Director, having Office at Nariman Point, PO PS Nariman
Point, District Mumbai (Maharashtra).
2. The General Manager / Reviewing Authority, Central Bank of
India, having Office at Central Bank of India, Zonal Office,
Mourya Complex, Bailey Road, Patna, PO GPO, PS Kotwali,
Town and District Patna 800015.
3. The Senior Regional Manager / Appellate Authority, Central
Bank of India, Regional Office, having Office at Krishna
Arcade, 2nd Floor, Booty More, PO PS Bariatu, Town and
District Ranchi 834008.
4. The Assistant General Manager / Disciplinary Authority,
Central Bank of India, having Office at Krishna Arcade, 2nd
Floor, Booty More, PO PS Bariyatu, Town and District Ranchi
834008.
5. The Chief Manager / Enquiry Authority, Central Bank of India,
having Office at Krishna Arcade, 2nd Floor, Booty More, PO PS
Bariyatu, Town and District Ranchi 834008.
... Respondents
----
CORAM : SRI SANJAYA KUMAR MISHRA, C.J.
SRI ANANDA SEN, J.
----
For the Petitioner : Mr. Sumeet Gadodia, Advocate
For the Respondents : Mrs. Darshna Poddar Mishra, Advocate
----
13/ 04.08.2023 Upon hearing the learned counsel for the parties, this Court
passed the following, (Per Ananda Sen, J.)
ORDER
1. This Letters Patent Appeal at the instance of the writ petitioner-
appellant has been preferred challenging the order dated 30.11.2021 passed
by the learned Single Judge in W.P.(S) No.1060 of 2016, whereby the writ
petition filed by the petitioner has been dismissed.
Learned Single Judge has dismissed the writ petition holding that
the benefit of Leave Encashment is not available to the employee, who is
compulsorily retired or removed from service by way of punishment. It has
further been held that in terms of the Circular, the writ petitioner was rightly
granted 2/3rd pension. Further gratuity of the petitioner was withheld. Learned
Single Judge also dismissed the prayer of the petitioner by which he
challenged his compulsory retirement by way of punishment.
2. When the matter was taken up today, learned counsel appearing
for the writ petitioner-appellant submitted that he is not pressing the issue of
reinstatement after setting aside the punishment order of compulsory
retirement. He submits that he is only confining his prayer to payment of full
Gratuity and balance 1/3rd of his pension.
3. Learned counsel for the writ petitioner-appellant submitted that no
doubt, the writ petitioner-appellant was compulsorily retired by way of
punishment, but that, itself, is not a ground to withhold or forfeit his gratuity. As
per the Rules of the Central Bank of India, the Gratuity shall not be forfeited in
case of proved misconduct except where such misconduct causes financial
loss to the Bank and in that case the forfeiture of the gratuity shall be to the
extent of the financial loss only. As per him, though the allegation, which was
levelled against the petitioner was of misconduct, but there was no allegation
of any loss caused to the bank, nor there was quantification of the financial
loss in the departmental chargesheet, which was supplied to the petitioner.
Only in the final order dated 21.11.2014, passed by the Disciplinary Authority,
the authority arrived at a finding that due to the misconduct, omission and
commission of the writ petitioner, there is a loss and huge potential loss
caused to the bank. He submits that there has to be real monetary loss to the
bank, which should be quantified, to forfeit the gratuity. Further, the said loss
should be reflected in the chargesheet to which the delinquent can rebut and
contest during the proceeding. Without there being any charge that the
delinquent has caused monetary loss, and the extent of the said loss being
quantified during the Disciplinary Proceeding only, it was not within the
jurisdiction of the Bank to invoke the provision, which empowers the bank to
forfeit the gratuity. Further, he submits that even 1/3rd of his pension could not
have been deducted as Regulation 33 of the Pension Regulations of the Bank
provides that when less pension is awarded than the full pension admissible,
the Board of Directors should be consulted, but in this case, admittedly, the
Board of Directors were not consulted before reducing the pension. It is the
Competent Authority who has taken the decision to impose the punishment,
which is not in accordance with the Regulation 33 of the Pension Regulations
of the Bank. Relying on these legal provisions, petitioner prays that the
impugned order passed by the learned Single Judge, without considering the
aforesaid provision of law is bad, thus, the petitioner is entitled for full pension
and gratuity. Learned counsel for the writ petitioner-appellant further submits
that the respondents committed grave illegality by not passing any order
forfeiting the pension of the petitioner though show cause notice was issued to
that effect. He contended that without affording any opportunity of hearing, the
pension could not have been reduced to 2/3rd of the full payable pension.
4. Learned counsel appearing on behalf of the Bank submits that
admittedly, the petitioner was found guilty of the misconduct of grave illegality
and irregularity committed, while performing his duty as a responsible officer of
the Bank. Charge against the petitioner is grave and serious. Writ petitioner-
appellant was found guilty of the charge, thus, by way of punishment, he was
compulsorily retired. Since the writ petitioner-appellant is not challenging his
punishment, he is estopped from raising all these pleas. Once the writ
petitioner-appellant has been removed for the act of misconduct, which is
grave, there is loss of confidence upon him. Since there was a monetary loss
to the Bank, the quantum of which is more than the Gratuity payable to the
petitioner, the authority decided to forfeit the gratuity. So far as pension is
concerned, she submits that the petitioner is not entitled for full pension in
terms of Regulation 33 of the Bank by way of penalty. The Board of Directors
of the Bank had delegated the power to the competent authority to pass an
appropriate order in relation to Regulation 33 of the Pension Regulations, thus,
it is not necessary to consult the Board of Directors, when the competent
authority itself passes the order. Thus, the counsel for the Bank submits that
this Letters Patent Appeal needs to be dismissed as the learned Single Judge
has correctly held that the writ petitioner-appellant is guilty of the charge
levelled against him and he has been punished with the punishment of
compulsory retirement.
5. At the very outset, as noted above, the appellant has given up his
prayer whereby he has challenged the order by which he has been imposed
the punishment of compulsory retirement. Since the writ petitioner-appellant
has given up the challenge to the punishment order, we are not entering into
the realm to decide the validity, propriety, legality or otherwise of the
punishment order. Thus, now the issues, which need consideration by this
Court in this Letters Patent Appeal are:-
(i) Whether the Gratuity of the writ petitioner-appellant can be
forfeited in terms of the Central Bank of India Employees'
Gratuity Fund Rules?
(ii) Whether the petitioner is entitled for the balance 1/3rd
pension, which has been deducted by way of punishment?
6. The writ petitioner-appellant was an employee of the Central Bank
of India. He was appointed on 18.08.1978 on the post of Agricultural Assistant.
He was promoted to different posts and finally he was promoted as Senior
Manager on 31.03.2003. While he was posted as Senior Manager at Ranchi
Branch, a memo along with Article of Charge was issued to him in
contemplation of a Departmental Proceeding. The charge against the writ
petitioner-appellant was that he sanctioned loan to several farmers without
observing lending norms like CIBIL Report was not obtained, entire processing
was not done by him and in some cases processing was done singly by him.
Further, a supplementary chargesheet was issued to the petitioner alleging
that he had sanctioned the loan account against security of equitable
mortgage of immovable property on the basis of fake title deeds, thus, he did
not verify the original title deeds. It is necessary to quote the charges against
the petitioner. Charges as per memo of charge dated 07.05.2014 read as
under:-
Sri R.N. Dubey Senior Manager has committed the following
lapses while he was posted as Sr. Manager of Piskamorh
Branch
Charge No.1:
Following loan accounts have been sanctioned by Sri Dubey
without observing lending norms like:
1. CIBIL report not obtained
2. Entire processing was done singly by him
3. Unit is Non-existent
4. A/C was not properly monitored thereby exposing the
Bank to potential financial loss as the accounts turned
Non Performing Asset.
S.N Name Sanc.Limit Bal O/S
Rs. In lacs Rs. In lacs
1. M/S Lucky Mobile Repairing Centre 10.00 10.05
2. M/S Sunny Xerox Centre 9.00 8.72
3. M/S Nikita Butique 5.00 5.05
4. M/S Sai Furniture 8.00 7.72
5. M/S R.B. Furniture 9.00 8.60
6. M/S Santosh Furniture 7.00 7.08
7. M/S Tuntun Tent & Cateror 10.00 9.98
8. M/S Quality Metals 15.00 15.10
Charge No.2:
Following loan accounts have been sanctioned by Sri Dubey
without observing lending norms like:
1. CIBIL report not obtained
2. Entire processing was done singly by him
3. A/C was not properly monitored thereby exposing the
Bank to potential financial loss as the accounts turned
Non Performing Asset.
S.N Name Sanc.Limit Bal O/S
Rs. In lacs Rs. In lacs
1. M/S Manish Men's Parlour 5.00 4.60
2. Scissor Talk Parlour 7.50 7.16
3. Dolly Engineering 8.00 8.06
Charge No.3:
Sri R.N. Dubey has sanctioned following loan account
without observing lending norms like:
1. Estimated sales figure were not justified
2. Loan was disbursed in cash by allowing Rs.25.00 lac in
current account of borrower
3. CIBIL report not obtained
4. Entire processing was done singly by him
S.N Name Sanc.Limit Bal O/S
Rs. In lacs Rs. In lacs
1. M/S Sushila Narayan Enterprises
OD 15.00 16.23
TL 45.00 35.91
Charge No.4:
Following loan accounts have been sanctioned by Sri Dubey
without observing lending norms like:
1. Margin money stipulation in sanction was not properly
observed
2. Financial Report, Pre sanction inspection report,
Residence verification report, appraisal note were
prepared by the former Sr. Manager Sri P.K. Sah but
these documents were not verified by the sanctioning
authority
S.N Name Sanc.Limit Bal O/S
Rs. In lacs Rs. In lacs
1. Surya Lok Travels - TL 46.00 44.09
Charges as per memo of charge (Supplementary) dated
05.06.2014 read as under:-
Sri R.N. Dubey Senior Manager has committed the following
lapses while he was posted as Branch Manager of Sonari
Branch
Charge No.1:
He has sanctioned following loan account against security
of Equitable Mortgage of immovable properties created on
Fake Title Deeds. Thus he has not verified the Original Title
Deeds with that of certified copy of title Deeds and thereby
exposing the Bank to potential financial loss.
S.N Name Sanc.Limit Bal O/S
Rs. In lacs Rs. In lacs
1. Paramjit Singh Virdi TL-9.50 9.83
7. A Departmental Proceeding was initiated against the writ
petitioner-appellant, in which he rebutted the charge levelled against him. On
11.11.2014, Enquiry Report was submitted, finding the charges levelled
against the writ petitioner-appellant to be proved. On 21.11.2014, the
Disciplinary Authority found the appellant guilty of the charges and proposed
punishment of compulsory retirement. In the said order, the Disciplinary
Authority arrived at a finding that the total loss to the bank is Rs.1.95 crore,
thus, the potential loss is huge. On 21.11.2014, administrative order was
issued by Senior Regional Manager, wherein the punishment of compulsory
retirement was inflicted. On 07.04.2015, the Appellate Authority dismissed the
Departmental Appeal of the appellant and on 10.11.2015, review was also
dismissed. A notice was issued to the writ petitioner-appellant, directing him to
show cause as to why his entire gratuity of Rs.10 lakh be not forfeited in
accordance with Section 4(6)(a) of the Payment of Gratuity Act read with
Central Bank of India Employees Gratuity Fund Rules 1975. It has been
reflected in the letter that loss to the bank was Rs.1.95 crore, thus, the gratuity
amount should be forfeited. The respondents, thereafter, did not pay the
gratuity to the writ petitioner-appellant. Further the respondents only
sanctioned 2/3rd of the pension to the writ petitioner-appellant, forfeiting 1/3rd,
by exercising power conferred under Regulation 33 of the Pension
Regulations, 1995.
8. After hearing the parties and going through the records, we find
that the payment of gratuity of the writ petitioner-appellant is governed by
Central Bank of India Employees Gratuity Fund Rules. The said Rules came
into effect from 1st June, 1975. Rule 12 of the said Rules provides for forfeiture
of the gratuity. It is necessary to quote Rule 12 for better appreciation, which
reads as under: -
12. In case of termination of service of the member on
account of proven misconduct, gratuity payable shall not be
forfeited, except where such misconduct causes financial
losses to the Bank and in that case the forfeiture of the
gratuity shall be to the extent of the financial loss only.
9. Rule 12(a) of the said Rules is not important as the departmental
proceeding against the writ petitioner-appellant is already concluded and there
is no investigation or inquiry pending against him. From the provisions of Rule
12 above, it is clear that gratuity of the writ petitioner-appellant can be forfeited
where the petitioner is found guilty of misconduct which has caused financial
loss to the Bank and in case of forfeiture of gratuity, the same shall be to the
extent of the financial loss only. This provision suggests that there should be a
proved misconduct of the writ petitioner-appellant causing financial loss to the
Bank, then only the gratuity can be forfeited, to the extent of the said loss.
Thus, the Bank, in order to invoke Rule 12 of the Rules, at the very outset
should assert that the misconduct of the employee had led to a financial loss
to the Bank and such loss should be quantified. There has to be an enquiry as
to whether there is a financial loss to the Bank and to what extent the Bank
has suffered the financial loss. This exercise should be conducted by the Bank
while conducting the departmental enquiry itself, so that the delinquent gets an
opportunity to rebut the same. To arrive at a conclusion as to whether there
was any financial loss caused to the Bank or not, first there should be such an
allegation against the delinquent officer. The allegation should be levelled in
the form of a charge in the chargesheet itself, indicating that due to the
misconduct, the bank has suffered a monetary loss and the extent of such loss
should also be mentioned in the chargesheet.
10. In the case of Union Bank of India & Others versus C.G. Ajay
Babu & Another reported in (2018) 9 SCC 529, the Hon'ble supreme Court,
at paragraph 14 thereof, while dealing with a similar provision prevailing in
Union Bank of India Gratuity Rules, has held as under: -
14. That there is a bipartite settlement in the appellant Bank
is not in dispute. That the settlement provides for forfeiture
only if there is a loss caused on account of misconduct
leading to dismissal, is also not in dispute. There is no case
for the Bank that the misconduct of the respondent
employee has caused any financial loss to the Bank, and
therefore, forfeiture, taking recourse to sub-section (6) of
Section 4 of the Act, cannot be resorted to. Thus, we are in
respectful agreement with the view taken by the High Court
that the respondent employee is entitled to the protection of
the bipartite settlement.
11. In the instant case, when we go through the chargesheet, we find
that the charge is only of irregularity in sanctioning loan. There is no charge
that there was loss caused to the Bank because of the action of this petitioner.
In the chargesheet, it has only been mentioned that the petitioner has failed to
discharge his duties and failed to protect the interest of the Bank with utmost
integrity, honesty, devotion and diligence. There is no quantification of any
financial loss allegedly sustained by the Bank in the chargesheet nor there is
any whisper to the effect that the Bank has suffered any financial loss. The
enquiry report is also before us. While we go through the Enquiry Report, we
find that the Enquiry Officer, after dealing with the charge, has only mentioned
that the charges are proved. Enquiry Report also does not deal with the issue
of any financial loss caused to the bank or not, far less the quantum. Thus,
from these documents, it is clear that neither the chargesheet nor the enquiry
report refers to any loss nor quantifies the financial loss. It is only in the final
order of punishment, the Disciplinary Authority in the last paragraph made a
passing observation, that the total loss to the Bank is 1.95 crore. Taking into
consideration the huge potential loss, it was proposed to punish the writ
petitioner-appellant with the punishment of compulsory retirement. It is
necessary to quote the said paragraph of the final order dated 21.11.2014
passed by the Disciplinary Authority, which reads as under: -
Total loss to the Bank is Rs.1.95 crores for the acts of
omission and commission committed by the CSOE. Taking
into consideration such huge potential loss and the findings
of the IA, propose consolidated punishment to CSOE as
"Compulsory Retirement" under Regulation 4(h) of Central
Bank of India Officers Employees' (Discipline and Appeal)
Regulations 1976.
12. The Disciplinary authority had assessed the loss as Rs.1.95 crore
and huge potential loss and how it has been arrived at is not mentioned
anywhere. Without any imputation and without any finding of fact about the
loss and assessment to that effect, this finding has been arrived at by the
Disciplinary Authority. Only on the aforesaid basis, gratuity of the petitioner
has been forfeited.
13. As held earlier, there has to be an enquiry followed by a finding of
fact based on cogent and reliable evidence that the bank has suffered a loss
and then only the gratuity could have been forfeited. This is because the
petitioner should be made aware that because of the misconduct, the bank
has suffered a loss and the loss is quantified to a particular amount. Unless
this is done, the petitioner cannot fairly contest the same, which will amount to
depriving him an opportunity to defend himself. This will amount to a violation
of natural justice. This entire aspect is missing in this case as the petitioner
was never imputed with the allegation that his action has caused loss to the
Bank. The respondents have thus, committed grave illegality and have acted
beyond the scope of the concerned Rules of the Bank in forfeiting the gratuity
of the petitioner.
14. So far as withholding of pension is concerned, same is covered by
the Central Bank of India Employees Pension Regulation, 1995. Relevant
provision is Clause 33 of the said Regulations, which deals with withholding of
pension in case of compulsory retirement. It is necessary to quote Clause 33
of the Central Bank of India Employees Pension Regulation, 1995, which
reads as under: -
33. Compulsory Retirement Pension-
1. An employee compulsorily retired from service as a
penalty on or after 1st day of November, 1993 in terms of
Central Bank of India Officer Employees' (Discipline and
Appeal) Regulations, 1976 or awards / settlements may be
granted by the authority higher than the authority competent
to impose such penalty, pension at a rate not less than two-
thirds and not more than full pension admissible to him on
the date of his compulsory retirement if otherwise he was
entitled to such pension on superannuation on that date.
2. Whenever in the case of a bank employee the Competent
Authority passes an order (whether original, appellate or in
exercise of power of review) warding a pension less than
the full compensation pension admissible under these
regulations, the Board of Directors shall be consulted before
such order is passed.
3. A pension granted or awarded under sub-regulation (1) or,
as the case may be, under sub-regulation (2), shall not be
less than the amount of rupees three hundred and seventy
five per mensem.
15. From the aforesaid provision, it is clear that the Bank has the
authority to deduct pension by way of penalty at a rate not less than 2/3rd and
not more than full pension admissible to the employee. Sub Clause (2) of
Clause 33 provides that whenever a Competent Authority passes an order
awarding pension less than the full pension, the Board of Directors shall be
consulted before such order is passed. In this case, the Competent Authority
has passed the order deducting 1/3rd pension, but the said order was passed
without affording any opportunity to the petitioner. Further, it is an admitted
case of the respondents that the Board of Directors was not consulted. The
respondents have taken a plea that the Board of Directors has delegated the
power to the Competent Authority to pass an appropriate order, thus, there
was no necessity of consultation with the Board of Directors. We are not in
agreement with the aforesaid argument. When the Regulations of the Bank
provides that the Board of Directors has to be consulted before passing an
order reducing the amount of pension, the said provision has to be followed
strictly. It is the Competent Authority, who has to pass an order, but, in
consultation with the Board of Directors. This mandate of the Regulations of
the Bank needs to be followed strictly.
16. The Hon'ble Supreme Court in the case of State of M.P. versus
Centre for Environment Protection Research & Development, reported in
(2020) 9 SCC 781 at paragraph 54 thereof has held that when a statute
requires a thing to be done in a particular manner, it is to be done only in that
manner. Paragraph 54 of the said judgment reads as under: -
54. It is well settled that when a statute or statutory rules
prescribed a penalty for any act or omission, no other
penalty not contemplated in the statute or statutory rules
can be imposed. It is well settled that when statute requires
a thing to be done in a particular manner, it is to be done
only in that manner.
17. Thus, in this case, the Board of Directors had to be consulted
before passing the order to reduce the pension of the petitioner. Further the
argument of the respondents that the Board of Directors had delegated the
power to the Competent Authority cannot be accepted as any such delegation
would amount to violation of the provisions and would also amount to giving a
go bye to the provisions of Clause 33(2) of the Regulations of the Bank as the
Competent Authority, empowered to pass the order of reduction, and the
authority, empowered to be consulted with, cannot be one and same. If both
the authorities are one and same, the same will make the provisions of law
nugatory, which cannot be the intention of the legislation. Thus, we hold that
the Board of Directors has to be consulted by the Competent Authority before
passing any order of reducing the pension of a delinquent officer. In this case,
since the Board of Directors, has admittedly, not been consulted, the action of
the respondents deducting 1/3rd of the pension is also bad and needs to be set
aside.
18. Considering what has been held above, we hold that the petitioner
is entitled to full gratuity and his full pension needs to be restored. We hereby
direct the respondents to pay the full gratuity; restore the full pension of the
petitioner and pay the arrears of pension to the petitioner from the date of
compulsory retirement. The order dated 30.11.2021 passed by the learned
Single Judge in W.P.(S) No.1060 of 2016 is modified to the aforesaid extent,
without interfering with the order of punishment, whereby petitioner has been
compulsorily retired.
19. This Letters Patent Appeal is, accordingly, disposed of.
20. There shall be no orders as to costs. Urgent certified copies of this
order shall be issued as per the Rules.
(Sanjaya Kumar Mishra, C.J.)
(Ananda Sen, J.)
Kumar/Cp-02
