(PER: HON'BLE MR. JUSTICE C M JOSHI)
1. This appeal is filed by the appellant impugning an order of
2. The factual matrix that is relevant for the purpose of this
(a) The appellant [Petitioner] was working as the Chief Manager
of the Branch of respondent No.1 at Deccan Gymkhana Branch,
Pune, during 10.07.2014 to 04.03.2016 and he retired on attaining
the age of superannuation with effect from 30.04.2016.
(b) While he was working in the said Branch, he issued a Letter
of Credit [LoC] for `300.00 crores to a Private Company beyond his
powers without entry in the Bank's Books. The said LoC was
issued manually when the relevant regulations/norms prescribe the
LoC has to be issued digitally in SFMS Portal of the Bank.
(c) Responding to the Bills/invoices submitted to the Bank of
India, Karve Road Branch, Pune, by a sister concern of the Private
Company in whose favour the LoC was issued, the bills were
discounted on the basis of the LoC.
(d) Later, the said LoC was found to be not entered in the Books
of the issuing Branch and claim made by Bank of India, was
rejected.
(e) On the basis of the complaint filed by the Officer of the Bank
of India, a case was registered by CBI/ACB, and after investigation,
they filed the chargesheet to the Special Court, Pune, in Special
(CBI/ACB) case No.09/2018 on 12.01.2018, against the appellant
and several others. After trial, the appellant was convicted and
sentenced for the offence under Section 120B of IPC- criminal
conspiracy; under Section 13(1) r/w 13(2) of the Prevention of
Corruption Act. An appeal against the said judgment of conviction
is pending before the Bombay High Court, where the sentence is
suspended as an interim measure.
(f) On the administrative side, the respondents-Bank issued a
show cause notice dated 12.09.2016, obviously, after the appellant
retired from service on 30.04.2016, alleging that the lapses of
issuing purported manual LoC of `300.00 crores in favour of M/s.
Varron Auto Company Private Limited, in LC 1/2016, was not
entered anywhere in the books of the Bank; was issued manually,
which is against the guidelines of the Bank; no commission to the
extent of `1.99 crores was collected; marginal security was not
obtained; loan papers were not obtained; financial papers were not
obtained; sanction was not conveyed to the party and not reported
to the Circle Office; issuance of LoC was beyond the powers of the
appellant and the Branch; acceptance of the Bills drawn under LoC
purported to be given by the Bank of India, Karve Road, Pune,
under the signature of the appellant and not keeping the copy of
the same in the branch record; and acknowledged the receipt of
bills purported to have been given to the Bank of India, Karve road
and exposing the Bank to huge risk and financial loss.
(g) Pursuant to the said show cause notice, the appellant issued
a reply on 19.09.2016, which was not accepted and an enquiry was
instituted after issuing Article of Charges and statement of
imputations. The appellant participated in the enquiry and the
Enquiry Officer gave his Report on 24.04.2017 stating that the
charges leveled stand proved.
(h) The second show cause notice was issued and on
considering reply by the appellant, the Disciplinary Authority,
ordered for withdrawal of pension to the full extent permanently as
envisaged under Regulations 43 and 45 of the Canara Bank
(Employees') Pension Regulations, 1995 [Pension Regulations,
1995].
(i) The appeal to the Executive Director of the respondent-Bank
was rejected on 06.06.2018 confirming the order of the Disciplinary
Authority.
3. The appellant, approached this Court in W.P.No.15294/2020
contending that the Disciplinary Authority had no jurisdiction to
initiate any disciplinary proceedings after the date of
superannuation. The learned Single Judge found that there is no
infirmity in the proceedings conducted against the appellant and as
such, dismissed the writ petition.
4. The learned counsel appearing for the appellant submits that
Regulations 43 and 45 of the Pension Regulations, 1995, could not
have been invoked to impose the punishment of withdrawal of
pension since the appellant was not found guilty as on the date of
Disciplinary Authority's order. He submits that the judgment of the
Criminal Court was only delivered on 05.10.2021 and therefore,
Disciplinary Authority could have invoked Regulation No.48,
concerning the pension. Regulation 48, can only be invoked, if
there is any pecuniary loss caused due to criminal breach of trust
or forgery. The withdrawal of the pension could only be done with
prior consultation with the Board of Directors and not otherwise.
When the Disciplinary Authority has opined that there is no
financial loss caused to the Bank, and there was no such
consultation with the Board, the impugned order is liable to be set
aside.
5. In support of his contention, he places reliance on the
following decisions:
(1) State Bank of India and others V Navin Kumar Sinha1;
(2) Murugan O K V. The Divisional Manager, Canara Bank
and others2
6. Per contra, the learned counsel appearing for respondents
submits that the Disciplinary Authority opined that the
2024 SCC OnLine SC 3369
[Writ Petition No.35266/2024 (S-R) decided on 04.03.2025].
appellant/petitioner attempted fraud in issuing LoC manually,
despite there being the Guidelines to issue the same digitally on
SFMS portal. Such LoC, nowhere finds a place in the Books of
Deccan Gymkhana Branch, Pune, and therefore, an independent
enquiry without relying upon the judgment of the Criminal Court
was permissible and in pursuance to the report of the enquiry
officer, the Disciplinary Authority has imposed the punishment. It
was unnecessary for the respondents to wait for the finding by the
Criminal Court and therefore, the contentions of the appellant are
unsustainable. He contends that the Dispute Resolution
Committee, constituted for deciding the claim of Bank of India, as
against respondent No.1- Canara Bank, has recommended a sum
of `225.00 crores to be paid to Bank of India, and the balance
should be borne by the Bank of India itself. Therefore, respondent
No.1 has suffered the financial loss.
7. In this regard, he places reliance on the following decisions:
(1) Union of India and others V Subedar Ram Narain etc.3,
(2) AFR Satya Narayan Dora, V. State Bank of India and
another rendered by Orissa High Court, Cuttack4
(3) P. Mathivanan Inbaraj V. Canara Bank and another;
rendered by Madurai Bench of Madras High Court5 ;
AIR 1998 SC 3225;
[W.P.(C) No.24026/2017; decided on 08.12.2021];
2023 SCC OnLine Mad 594
(4) J.B. Chaudry V Indian Overseas Bank and others;
rendered by High Court of Delhi6
8. The appellant, basically challenges the jurisdiction of the
Disciplinary Authority to initiate the enquiry after the
superannuation of the appellant on 30.04.2016. It is his contention
that Regulations 43 and 45 of the Pension Regulations, 1995,
speak of conviction by the Court and therefore, the withdrawal of
the pension is unsustainable. The provisions of Regulations 43,44,
45 and 48 are reproduced below for better understanding:
"43. Withholding or withdrawal of pension:-
The Competent Authority may, by order in writing, withhold or
withdraw a pension or a part thereof, whether permanently or for
a specified period, if the pensioner is convicted of a serious crime
or criminal breach of trust or forgery or acting fraudulently or is
found guilty of grave misconduct.
Provided that where a part of pension is withheld or withdrawn
the amount of such pension shall not be reduced below the
minimum pension per mensem payable under these
Regulations."
44. Conviction by Court:-
Where a pensioner is convicted of a serious crime by a Court of
Law, action shall be taken in the light of the judgment of the court
relating to such conviction.
45. Pensioner guilty of grave misconduct:-
In a case not falling under Regulation 44 if the Competent
Authority considers that the pensioner is prima facie guilty of
grave misconduct, it shall, before passing an order, follow the
procedure specified in Canara Bank Office Employees' (Discipline
2013 SCC OnLine Del 3230
and Appeal) Regulation, 1976 or in Settlement as the case may
be.
xxxxxxx
48. Recovery of Pecuniary loss caused to the Bank:-
(1) The Competent Authority may withhold or withdraw a pension
or a part thereof, whether permanently or for a specified period
and order recovery from pension of the whole or part of any
pecuniary loss caused to the Bank if in any departmental or
judicial proceedings the pensioner is found guilty of grave
misconduct or negligence or criminal breach of trust or forgery or
acts done fraudulently during the period of his service:
Provided that the Board shall be consulted before any final orders
are passed:
Provided further that departmental proceedings, if instituted while
the employee was in service, shall, after the retirement of the
employee, be deemed to be proceedings under these regulations
and shall be continued and concluded by the authority by which
they were commenced in the same manner as if the employee
had continued in service.
(2) No departmental proceedings, if not instituted while the
employee was in service, shall be instituted in respect of an event
which took place more than four years before such institution:
Provided that the disciplinary proceedings so instituted shall be in
accordance with the procedure applicable to disciplinary
proceedings in relation to the employee during the period of his
service.
(3) Where the Competent Authority orders recovery of pecuniary
loss from the pension, the recovery shall not ordinarily be made
at a rate exceeding one third of the pension admissible on the
date of retirement of the employee:
Provided that where a part of pension is withheld or withdrawn,
the amount of pension drawn by a pensioner shall not be less
than the minimum pension payable under these regulations."
9. The Apex Court in the case of State Bank of India V. Navin
Kumar Sinha, referred supra, has held as below:
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"31. As has been held by this Court on more than one
occasion, a subsisting disciplinary proceeding i.e. one initiated
before superannuation of the delinquent officer may be
continued post superannuation by creating a legal fiction of
continuance of service of the delinquent officer for the purpose
of conclusion of the disciplinary proceeding (in this case as per
Rule 19(3) of the Service Rules). But no disciplinary proceeding
can be initiated after the delinquent employee or officer retires
from service on attaining the age of superannuation or after the
extended period of service."
10. It is pertinent to note that the said finding was in the
backdrop of Order 19(1) of the State Bank of India Officer's Service
Rules, 1992, where there was no provision which is in pari materia
with Regulation 48 of the Pension Regulations, 1995. In that
context, the Apex Court held that "no disciplinary proceeding can
be initiated after the delinquent employee of officer retires from
service". Thus the said decision can be distinguished.
11. In the case of Murugan O.K. V. The Divisional Manager,
Canara Bank and others referred supra, this Court has held in
para 10 as below:
"No doubt, as contended by learned counsel for the
respondent-Bank Sri.Muthanna, the Bank has every right to
recover the pecuniary loss caused to the Bank by its
employees in accordance with the relevant Regulations.
Regulation 43 of 1995 Regulations empowers the competent
authority to withhold or withdraw the entire pension, if the
pensioner is convicted of a serious crime or criminal breach of
trust or forgery or acting fraudulently or is found guilty of grave
misconduct, which means power to withhold or withdraw
pension would be available to the respondent Bank only on
happening of certain events and finding a Bank employee
guilty of grave misconduct in an enquiry. Regulation 46 of
1995 Regulations permits recovery of amount determined in
an enquiry from the gratuity or pension. Regulation 48 of 1995
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Regulations empowers the Bank to recover pecuniary loss
caused to the Bank by its employees and order recovery from
the pension, if in any departmental or judicial proceedings, the
pensioner is found guilty of grave misconduct or negligence.
Regulation 49 of 1995 Regulations empowers the Bank to
recover bank dues such as housing loans, advances, license
fees, other recoveries and recoveries due to staff co-operative
credit society from the commutation value of the pension or
the pension or the family pension. But none of the regulations
would permit the respondent-Bank to recover the entire
pension amount without conducting enquiry. If recovery of
entire pension is permitted towards recovery of loan balance, it
would defeat the very object of payment of pension."
12. It is pertinent to note that the powers of the bank to withhold
or withdraw the entire pension are only in the circumstance if the
employee is found guilty in a criminal case or so found in the
disciplinary inquiry. In the event, there is loan dues, then recovery
can be done only to the extent of 50% and not more under
regulation 48. The appellant in the above case was found to owe
the bank certain amount concerning a loan raised by him during his
service. He had contended that an enquiry cannot be instituted for
recovery of such dues. Therefore, the facts are totally different and
cannot be applied to the case on hand.
13. In the case of J.B. Chaudhry Vs. Indian Overseas Bank
and others, referred supra, the learned Single Judge of the Delhi
High Court observed as below:
"9. What the counsel for the petitioner argues by reference to
Regulation 44 is an argument which has to be seen in the
context of earlier Regulations 42 and 43. Regulation 44 only
gives one of the reasons on the basis of which pension can be
- 12 -
stopped i.e conviction on account of a serious crime by Court of
law and that Regulation does not say that for other reasons
pension cannot be stopped. In fact, Regulation 42 makes it clear
that future good conduct shall be an implied condition of every
grant of pension and its continuance under these regulations.
Regulation 43 read with Regulation 45 shows that if a retired
employee is found guilty of misconduct there is an entitlement to
withhold or withdraw the pension. Regulation 45 lays down the
procedural requirement that the necessary procedure provided in
the Indian Overseas Bank Officer Employees' (Discipline and
Appeal) Regulations, 1976 will have to be followed. Therefore, in
my opinion, there is no basis that Pension Regulations of the
respondent No.1 prevent conducting of departmental
proceedings after superannuation/retirement of an employee. In
fact, the Regulations provide otherwise i.e they specifically
provide that in case of grave misconduct departmental
proceedings can be initiated for withholding or withdrawing of the
pension even after the retirement/superannuation, and also that
good conduct is necessary for continuing of the pension.
10. The final argument which is urged on behalf of the petitioner
is that the chargesheet has not been issued by the appropriate
authority. In support of this argument, counsel for the petitioner
has also placed reliance upon the definition of "Competent
Authority" as found in Regulation 2 (e) of the Indian Overseas
Bank Officer Employees' (Conduct) Regulations, 1976 of the
respondent No.1. Surely, a company functions through its Board,
however, such Board does and in fact has delegated powers
with respect to various aspects to various authorities of the bank.
A general argument that it is only the Chairman which is the
competent authority therefore cannot in any manner assist the
petitioner. In any case, I would leave this aspect to be urged and
decided in the departmental proceedings which have been
initiated against the petitioner. The issue as to whether or not the
Chairman is the competent authority will also be an issue which
the petitioner can raise in the departmental proceedings and
which will be decided in the departmental proceedings inasmuch
as before me there is no sufficient material filed by the petitioner
to decide this issue one way or the other."
14. The perusal of Regulation 43 shows that it speaks of:
a) Withholding or withdrawing of pension or part of it;
b) Whether permanently or for a specified period;
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c) If the pensioner is convicted of a serious crime or criminal
breach of trust or forgery or acting fraudulently or is found
guilty of grave misconduct.
When the impugned order was passed, there was no such
conviction. The proviso to Regulation 43 directs minimum pension
to be paid if part of the pension is withheld or withdrawn.
15. Regulation 45 deals with the situation when the pensioner is
guilty of grave misconduct. If the pensioner is not convicted by a
Court, but the Competent Authority finds the pensioner guilty, such
finding has to be in accordance with the procedure laid down in
Canara Bank Officer Employees (Discipline and Appeal)
Regulations, 1976. Thus, there is no need to resort to look into
Regulation 48. It is not the case of the respondents that the
withholding or withdrawing the pension is not for recovery of the
pecuniary loss.
16. The learned Single Judge has relied on the decision in the
case of P. Mathivanan Inbaraj Vs. Canara Bank and others,
referred supra, rendered by Madras High Court, which lays down
that the Regulations 43 and 45 stand in isolation to Regulation 48
and as such, there is no need to consult the Board of Directors
while passing the order of withholding or withdrawal of the pension.
In para 53 and 54 of the said judgment, it is observed as below:
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"53. As already stated above, Regulation 48 relates to recovery
of pecuniary loss caused to the Bank, wherein clause (2)
mandates that no departmental proceedings, if not instituted while
the employee was in service, shall be instituted in respect of an
event which took place more than four years before such
institution. Though clause (2) of Regulation 48 starts with the
words "No departmental proceedings", however, what is to be
seen is the heading under which the said provision stands. It falls
under the heading "Recovery of Pecuniary loss caused to the
Bank". In effect, it means that only if the competent authority
intends to recover the pecuniary loss caused to the bank by the
act of the pensioner while in service, the competent authority could
resort to Regulation 48 and in such a situation clause (2) of
Regulation 48 would get attracted. Therefore, if a departmental
proceedings is to be initiated for the purpose of recovering the
pecuniary loss caused to the bank from the pension of the
erstwhile employee, then in such a scenario, it should be instituted
within a period of four years from the date on which the event took
place and any period beyond four years from the date on which
the event took place, no departmental proceeding could be
initiated. Further, if such a departmental proceeding is initiated,
before any order is passed either for withholding or withdrawing
the pension and also an for order of recovery from pension, the
Board shall be consulted by the competent authority before
passing any order.
54. However, if the intention of the competent authority is not to
recover, from pension, the pecuniary loss caused to the bank,
there is no necessity for the competent authority to resort to
Regulation 48 and the competent could very well resort to
Regulation 45 and in such circumstances, departmental
proceedings could be initiated by following the procedure
prescribed under the DA Regulations and subject to the outcome
of the enquiry, the competent authority can pass orders under
Regulation 43 without resorting for any consultation with the
Board. In the aforesaid scenario, by no means could Regulation 43
and 48 be read in conjunction and both the Regulations stand in
isolation and are to be invoked in the scenarios, which the
competent authority decides, subject to what the competent
authority intends to do on the outcome of the proceedings, if any,
initiated against the pensioner."
17. We agree with the above view. The appellant was found to
have committed grave misconduct. Such finding was in
accordance with the procedure laid under Canara Bank Officer
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Employees (Discipline and Appeal) Regulations, 1976.
Therefore, we find no reason to hold that the views of the
learned Single Judge can be faulted on any aspect. The appeal
is unmerited and as such, the same is dismissed.
18. Pending applications are also disposed of.
Sd/-
(VIBHU BAKHRU)
CHIEF JUSTICE
Sd/-
(C M JOSHI)
JUDGE
tsn*
