Kerala High Court
P.Sankaran Namboodiri vs Kerala State Financial Enterprises Ltd on 11 April, 2025
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WP(C) No. 19103 of 2014
1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE P.M.MANOJ
FRIDAY, THE 11TH DAY OF APRIL 2025 / 21ST CHAITHRA, 1947
WP(C) NO. 19103 OF 2014
PETITIONER:
P.SANKARAN NAMBOOTHIRI
AGED 60 YEARS
S/O.S.PARAMESWARAN NAMBOODIRI, THALAVANNATTU ILLAM,
NAGAMPADAM, KOTTAYAM-1.
BY ADV P.SANKARAN NAMBOODIRI(Party-In-Person)
RESPONDENTS:
1 KERALA STATE FINANCIAL ENTERPRISES LTD
REPRESENTED BY ITS MANAGING DIRECTOR, CORPORATE OFFICE,
BHADRATHA, MUSEUM ROAD, THRISSUR-680 020.
2 STATE OF KERALA
REPRESENTED BY THE PRINCIPAL SECRETARY, GOVERNMENT
SECRETARIAT, THIRUVANANTHAPURAM-695 001.
R1 BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR, SC
SRI.P.BENNY THOMAS
SRI.K.JOHN MATHAI
SRI.JOSON MANAVALAN
SRI.KURYAN THOMAS
SMT. POOJA MENON
R2 BY SRI. BINOY DAVIS, GOVT. PLEADER.
SMT. A. ARUNA, AMICUS CURIAE
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
11.04.2025, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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WP(C) No. 19103 of 2014
2
C.R.
P.M. MANOJ, J
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WP(C) No. 19103 of 2014
----------------------
Dated this the 11th day of April, 2025
JUDGMENT
The writ petition is preferred primarily challenging Ext.P2 and
related Ext.P1 memo of charges, Ext.P3 enquiry report and Ext.P5
order passed in the appeal.
2. The petitioner was an employee of the Kerala State Financial
Enterprises ( for short 'KSFE') - the 1st respondent. He entered into
the service of the 1st respondent on 28.08.1978. At the time of
termination, he had completed 29 years of service.
3. While initiating disciplinary proceedings, he was working as
the Senior Manager. The issue involved in this case is with respect to
his tenure in the Loan Unit at Kottayam. During those periods, he had
sanctioned 300 loans, which amounts to Rs.3 Crores. Out of which,
the dispute was raised with respect to 24 loans, which were defaulted,
and on examination and verification of the documents, certain
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irregularities were found, and the petitioner was charge- sheeted after
two years.
4. Going by the charge memo, which is produced as Ext.P1, it is
stated that the petitioner, in blatant violations of the procedures in
vogue, had sanctioned loans amounting to Rs.34,40,000/- to a group
of persons related to Sri.M.R.Sasikumar, one of the Chitty Canvassing
Agents, during a time span of six months, accepting insufficient and
unacceptable properties as securities disregarding the interest of the
Company. On the basis of this allegation, he was charge-sheeted for
the following activities:
• wrongful gain by collusive act.
• overvaluation of mortgaged properties for a high amount, which
amounts to cheating the Company.
• devolution and transfer of properties mortgaged with
preplanned intention to siphon out the Company money.
• malafide intention in acceptance of entire property for the loan
transactions specified in the memo of charges which are devoid
of independent accessibility and separate demarcation.
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• identified each property with malafide intention which is
otherwise impossible to identify,
• A preplanned action plan in collusion with the Assistant Manager
and Assistant concerned along with loanees and mortgagers.
• He has deliberately given high valuation to favour the loanees
at the cost of Company's interest.
• Due to high inflated valuation given and no separate access to
each property, it was impossible to dispose any one of the
property to realize the respective dues.
• he has an intention to defeat the claim of the Company at the
stage of realisation of the dues
• In order to make wrongful gain to himself and loss to the
Company he did not follow the general guidelines issued by the
Company for acceptance of security property whereby siphoned
off Company's money.
• The Company has sustained heavy loss due to the activities of
the petitioner. Thereby he failed to protect the interest of the
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Company. By his unholy alliance with loanees and mortgagees
he has forsaken the interest of the Company.
• With certain ulterior motive he did not entrust the task of
valuation to Kattappana Branch Manager in violation of the
directions of the Head Office.
• The unholy nexus with the loanees is evident from chart
submitted by Internal Audit Team.
5. In addition to that, he has committed certain other serious
lapses, which are:
(i) The FSV of the properties are not even recorded in the
scrutiny notes.
(ii) Even the valuation reports are missing in a No. of files.
(iii) Separate revenue records for each property, such as
Location Sketch, Location Certificate, Possession
certificate, upto date Encumbrance Certificate etc., were
not obtained.
(iv) Almost all valuation reports are devoid of many vital
information such as extent of property, Sy.No.,
boundaries and means of access to the property etc.
(v) The repayment capacity of Loanees has not been
ascertained properly.
(vi) Almost all the loan Agreements are totally blank.
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(vii) Equitable mortgage has not been created in a
number of cases."
6. On the basis of the aforementioned charges, disciplinary
actions were initiated. All the charges levelled against him have been
categorically denied by him by Ext.P15.
7. Since the petitioner is appearing as a party in person and
finding out the difficulties in answering the legal aspect, Adv.Aruna A.,
was appointed as Amicus Curiae. The primary argument of the
learned Amicus Curiae on the allegations in Ext.P1 charge memo was
that it is vague and non-specific. Secondly, the charges are not
proved. Thirdly, Ext.P2 the order of dismissal and Ext.P5 order in
appeal are cryptic. Fourthly, there is violation of principles of natural
justice and; finally, the punishment imposed is disproportionate.
8. Whereas the petitioner's contention was that, no counter
affidavit is filed even after repeated directions, thereby there is no
specific denial of the contentions raised in the writ petition. He was
denied festival allowance and DCRG, minimum pension supplement
was withheld, the agent-principal relationship was misinterpreted/and
there was inconsistent and arbitrary denial of benefits along with
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violation of principles of nature justice in the disciplinary proceedings
etc.
9. Moreover, he has gone to the extent that the enquiry officer
appointed by the Bank was one among the Advocates who is in the
panel of lawyers entrusted with legal scrutiny of documents submitted
before the KSFE especially attached to Kottayam Branch where the
petitioner was holding the charge as senior Manager. She is having
some resentment against the petitioner regarding the allotment of
files in accordance with her likes.
10. According to the learned Amicus Curiae,
1. A single offence should not be split into multiple charges,
the policy of framing one charge for one set of allegations
should as far as possible be adopted
2. Distinct offences should not be merged into one charge
3. Charge should be brief pointed and couched in clear terms
without any vagueness. The date of occurrence of the
incident and times wherever applicable should always find a
place in charge
4. Charges should be logically framed or in other words, they
should follow logically from the nature of the allegations
made.
5. a full and clear statement of allegations on which each
charge is based together with any other circumstances
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which is proposed to take into consideration in passing the
orders in the matter should be appended.
11. However, the aforementioned principles about the memo of
charges are not followed while issuing Ext.P1 memo of charges. It is
contended by the learned Amicus Curiae that though Ext.P1 memo of
charges comprised of 20 pages, there is no separation as memo of
charges and statement of imputation. Mainly, there are five parts of
the allegations numbered as 1 to 5.
• The first charge is with respect to sanctioning of loans amounting
to Rs.34,40,000/-. However, no specific details are provided
against that charge.
• Second charge is with respect to wrongful gain at the cost of the
Company, obtained by the petitioner by sanctioning loans
without adequate security with the help of subordinates, namely,
V.Sudhakaran and K.P. Sreeraman. Even this charge was vague
as there was no specific details given regarding the collusion and
the quantum of wrongful gain obtained by the petitioner.
• The third charge is regarding the valuation of seven properties
which is divided in sub paragraphs under headings A to D. Those
sub paragraphs along with subdivisions would show that the
over valuation and sanctioning of loans are termed as collusive,
preplanned action, malafide and cheating etc. Those allegations
appear to be a mere violation of the norms of Company.
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However, it is not specifically explained as to how these
allegations are collusive or preplanned or that amounts to
malafide or cheating.
• Whereas the fourth charge is general and vague in nature, which
speaks about the lapses while accepting the property security.
But it says, "in almost all cases" but do not specify which are the
cases in which such lapses were occurred from the part of the
petitioner.
➢ The first sub charge under fourth charge speaks
about the File Scrutiny Verification of the
properties which were not recorded in the scrutiny
notes. But that is not specified which property and
which corresponding loans are affected.
➢ The second sub charge speaks about the missing
of valuation report. Even in that case, the identity
of such files where the valuation reports are
missing is not mentioned.
➢ The third sub charge provides that, certain
revenue records of such properties were not
obtained. But the details of such properties and
the loans pertains to such transaction are not
mentioned.
➢ The fourth sub charge provides that, a phrase
used as almost all valuation reports are devoid of
many vital information regarding the extent,
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survey numbers, boundaries and means of access
to properties. Even then it is not specified which
are the properties and the loan pertaining to the
same.
➢ Sub charge five speaks about the inappropriate
ascertainment of the repayment capacity of the
loanees. Even that is vague with respect to the
name and details of such loanees and the loans.
➢ And the sixth sub charge is that almost all the loan
agreements are totally blank. Even in that, it is
not specified with respect to the details of such
loans.
➢ Finally sub charge seven, which speaks about an
equitable mortgage not created in number of
cases. Again in that charge the details of such
loans are not specified.
Thereby the fourth charge remains vague and ambiguous
making it impossible to ascertain and answer precisely the
allegations provided. Thereby he was denied an opportunity for
a meaningful defence which is in violation of principles of natural
justice.
• The fifth charge is regarding a big conspiracy initiated by the
petitioner and "others concerned, the names of whom are
mentioned elsewhere herein."
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Even there it is stated that almost all loans are under default
even from the 1st instalment. However, the charge failed to specify
how the alleged conspiracy was carried out, offering only casual and
vague assertions without providing any details of the acts, rules or
intentions of those persons involved in the conspiracy. While the
charge memo contains numerous names it does not specify who are
the individual implicated in connection with each allegation. The
common terms used is "almost all loans are under default", but do not
specify which loans are in default. Thereby rendering the charges
ambiguous and lacking clear terms, it is against the principle that the
charge should be brief, pointed and couched in clear terms, without
any vagueness.
12. In support of this contention the Amicus Curiae has brought
the attention of this Court to Anant R Kulkarni v. Y.P. Education
Society and Others [2013 (6) SCC 515]. Wherein it is held in
paragraphs 15, 16 and 17 as follows :
"15. In Surath Chandra Chakrabarty v. State of W.B. [(1970) 3
SCC 548 : AIR 1971 SC 752] this Court held, that it is not
permissible to hold an enquiry on vague charges, as the same do
not give a clear picture to the delinquent to make out an effective
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defence as he will be unaware of the exact nature of the allegations
against him, and what kind of defence he should put up for rebuttal
thereof. The Court observed as under : (SCC p. 553, para 5)
"5. ... The grounds on which it is proposed to take action have
to be reduced to the form of a definite charge or charges which
have to be communicated to the person charged together with a
statement of the allegations on which each charge is based and
any other circumstance which it is proposed to be taken into
consideration in passing orders has also to be stated. This rule
embodies a principle which is one of the specific contents of a
reasonable or adequate opportunity for defending oneself. If a
person is not told clearly and definitely what the allegations are
on which the charges preferred against him are founded, he
cannot possibly, by projecting his own imagination, discover all the
facts and circumstances that may be in the contemplation of the
authorities to be established against him."
16. Where the charge-sheet is accompanied by the statement of
facts and the allegations are not specific in the charge-sheet, but are
crystal clear from the statement of facts, in such a situation, as both
constitute the same document, it cannot be held that as the charges
were not specific, definite and clear, the enquiry stood vitiated. Thus,
nowhere should a delinquent be served a charge-sheet, without
providing to him, a clear, specific and definite description of the
charge against him. When statement of allegations are not served
with the charge-sheet, the enquiry stands vitiated, as having been
conducted in violation of the principles of natural justice. The
evidence adduced should not be perfunctory; even if the delinquent
does not take the defence of, or make a protest that the charges are
vague, that does not save the enquiry from being vitiated, for the
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reason that there must be fair play in action, particularly in respect
of an order involving adverse or penal consequences. What is
required to be examined is whether the delinquent knew the nature
of accusation. The charges should be specific, definite and giving
details of the incident which formed the basis of charges and
no enquiry can be sustained on vague charges. (Vide State of
A.P. v. S. Sree Rama Rao [AIR 1963 SC 1723] , Sawai Singh v. State
of Rajasthan [(1986) 3 SCC 454 : 1986 SCC (L&S) 662 : AIR 1986
SC 995] , U.P. SRTC v. Ram Chandra Yadav [(2000) 9 SCC 327 :
2001 SCC (L&S) 79 : AIR 2000 SC 3596] , Union of India v. Gyan
Chand Chattar [(2009) 12 SCC 78 : (2010) 1 SCC (L&S) 129]
and Anil Gilurker v. Bilaspur Raipur Kshetriya Gramin Bank [(2011)
14 SCC 379.
17. The purpose of holding an enquiry against any person is not
only with a view to establish the charges levelled against him or to
impose a penalty, but is also conducted with the object of such an
enquiry recording the truth of the matter, and in that sense, the
outcome of an enquiry may either result in establishing or
vindicating his stand, and hence result in his exoneration.
Therefore, fair action on the part of the authority concerned is a
paramount necessity." (pages 5 & 6)
13. It is to be noted that Ext.P1 is not accompanied by a
statement of allegation which is essential for providing clarity on the
charges. Further, the reply given by the petitioner as per Ext.P15
clearly establishes that the petitioner was unable to adequately
respond to the legal issue raised in the charge memo as the loan
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documents were not provided to him. This will further indicate that
due to the vague and generalised charge memo, the petitioner had no
other option but to submit a broad and generalised reply. As he lacked
access to the necessary documents required for a meaningful defence,
that amounted to violation of the principles of natural justice.
14. In the second phase of the argument, the learned Amicus
Curiae contended that none of the charges raised in the memo of
charges were proved, other than merely stating in the enquiry report
that it was proved. The enquiry report does not contain charge-wise
discussion of the allegations. Nor does it provide a charge-wise
conclusion based on any analysis of evidence. The findings are
presented in a generalised and conclusive manner without properly
examining the specific allegations under each charge; not discussing
with the evidence as well. Similarly, the enquiry report fails to provide
a detailed discussion of the charges or the reasons for arriving at the
conclusion. Instead of conducting a charge-wise evaluation, Ext.P3
enquiry report merely states that the petitioner had exercised his
discretionary power in a malafide and irresponsible manner and failed
to safeguard the interest of the company. At the same time, the
enquiry officer failed to evaluate the evidence which is considered for
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arriving at such a conclusion. Therefore, such a conclusion is
arrived at without any evidence.
15. As stated earlier, vague charges were framed, especially the
details of the loans in question. Thereby that cannot be stated to have
proved without specific allegations. Any conclusion drawn against the
petitioner, in the absence of any specific allegation and pointing the
evidence on which such allegations are considered, are arbitrary and
illegal. In the absence of any clear reasoning, the charges were found
without evidentiary support. Thus, the entire disciplinary process is
floated and unjust, warranting interference of this court.
16. It is further contended by the learned Amicus curiae that the
second charge and the findings of the enquiry officer regarding the
collusion with subordinates and wrongful gain by the petitioner is not
sustainable. Evidence was neither produced nor availed by the
enquiry officer to enter into a conclusion against the petitioner in that
regard. In the absence of credible evidence or a reasoned conclusion,
the findings in the enquiry report on the second charge are not legally
sustainable or factually justified.
17. Similarly, the third charge accuses the petitioner of
malafidedly attempting to cheat the company and siphoning money
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from its accounts colluding with the Assistant Manager, as evident
from Ext.P1. But in Ext.P3 enquiry report, these aspects have not
been substantiated with any proof. In fact, no evidence was adduced
to support these allegations. The statement by the enquiry officer is
vague and appears to be biased since it does not specify what is the
alleged hidden purpose, nor does it explain the context in which such
valuation was done by the delinquent with the aid of supporting and
corroborative materials. This can be read along with the allegation of
the petitioner that the enquiry officer, who is an advocate in the panel
of the bank for legal scrutiny is having some resentment with the
petitioner with respect to allotment of files.
18. The fourth charge is vague in nature. It states certain
violations of the norms of the company with respect to certain loans.
However, the enquiry report does not provide the details of the
document which is produced as evidence by the management in order
to prove those charges. The list of the materials produced as evidence
is not provided along with the enquiry report.
19. The fifth charge was also dealt in a light manner. There is
no evidence to prove conspiracy or collusion though violation of the
norms while granting norms is discussed. In the absence of any
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evidence stated in the enquiry report, the findings of the enquiry
officer cannot be accepted.
20. Moreover, it is the case of the petitioner that
Sri.V.Sudhakaran, Assistant Manager and Sri.K.P. Sreeraman,
Assistant, who are the incumbents stated to have colluded or
conspired with the petitioner, have been completely exonerated from
the charges. According to the petitioner, he is only a supervising
authority. Originally, the entire verification, after obtaining the legal
scrutiny report, was to be done by the Assistant first verified by the
Assistant Manager and only in the last session it will come up before
the petitioner. Though such contention is raised by the petitioner, that
aspect is not controverted either during the argument or through a
counter affidavit. Therefore, the allegation of collusion and conspiracy
cannot stand since another person who would have an element of
conspiracy, and collusion is completely exonerated from the charges.
21. It is further contended that it is a settled principle that the
jurisdiction under Article 226 can be exercised to interfere with the
disciplinary proceedings in cases where the findings of the fact is
based on no evidence or the conclusion on its very face is so wholly
arbitrary and capricious that no reasonable person could ever have
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arrived at such conclusion. This position has been upheld by the Apex
Court in Union of India and others v. P.Gunasekaran [(2015) 2
SCC 610]. Further, the Hon'ble Apex Court has held that "the findings,
recorded in a domestic enquiry, can be characterized as perverse if it
is shown that such a finding is not supported by any evidence on
record or is not based on the evidence adduced by the parties or no
reasonable persons could have come to those findings on the basis of
that evidence." This principle was laid down by this Court in State of
Andhra Pradesh and Others v. S. Sree Rama Rao [1994 2 LLJ
150 = AIR 1963 SC 1723 = 1964 (3) SCR 25] in which the question
was whether the High Court under Article 226 could interfere with the
finding recorded at Departmental enquiry. This decision was followed
in Central Bank of India v. Prakash Chand Jain [(1969) 2 LLJ 377
(SC) = AIR 1969 SC 983] and Bharat Iron Works v. Bhagubhai
Balubhai Patel and others [1976 SCC (L&S) 92 = AIR 1976 SC 98
= (1976) 1 SCC 518]. In Rajinder Kumar Kindra v. Delhi
Administration through Secretary (Labour) and others [AIR
1984 SC 1805 = (1984) 4 SCC 635]. It was laid down that where the
findings of misconduct are based on no legal evidence and the
conclusion is one to which no reasonable man could come, the findings
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can be rejected as perverse. It was also laid down where a quasi-
judicial tribunal records findings based on no legal evidence and the
findings are his mere ipse dixit or based on conjectures and surmises,
the enquiry suffers from the additional infirmity and non-application
of mind and stands vitiated. [Kuldeep Singh v. The Commissioner
of Police [ (1999) 2 SCC 10].
22. It is further contended by the Amicus Curiae that without
any evidence and without any discussion on the charges alleged
separately, arrived at a conclusion on the charges that the charges
levelled against the delinquent are successfully proved. Further, it is
contended that the enquiry report does not contain any findings of
fact with respect to the charges alleged in the charge memo
evaluating the evidence. The nature of allegations and the discussion
in the enquiry report is vague and is a one-sided one, whereby no
reasonable person could have justifiably arrived at a conclusion
warranting the dismissal of the petitioner from service. Therefore,
the disciplinary proceedings suffer from serious legal infirmities
warranting interference of this Court.
23. The learned Amicus Curiae also contends that Exts.P2, P3,
and P5 are cryptic. They do not offer reasonable findings specifically
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on the charges alleged in Ext.P1. On that basis, those orders are liable
to be interfered with.
24. The learned Amicus Curiae further argued that there is
violation of principles of natural justice, since the petitioner has a case
that he was denied with an opportunity of hearing before issuance of
Ext.P5. That part is not at all denied by the respondents by way of a
counter affidavit. Moreover, the petitioner was not given an
opportunity to examine the witness as per the witness list produced
by him. That was refused by the management. In this regard, it was
held by the Apex Court in Union of India and Others v. Prakash
Kumar Tandon [AIR 2009 SC 1375] which reads as :
"17. The principles of natural justice demand that an application
for summoning a witness by a delinquent officer should be
considered by the enquiry officer. It was obligatory on the part of
the enquiry officer to pass an order in the said application. He
could not refuse to consider the same. It is not for the Railway
Administration to contend that it is for them to consider as to
whether any witness should be examined by it or not. It was for
the enquiry officer to take a decision thereupon. A disciplinary
proceeding must be fairly conducted. An enquiry officer is a quasi
judicial authority. He, therefore, must perform his functions fairly
and reasonably which is even otherwise the requirement of the
principles of natural justice.
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18. In M.V. Bijlani v. Union of India & Ors. [(2006) 5 SCC 88],
this Court has held :
"Although the charges in a departmental proceeding are not
required to be proved like a criminal trial i.e. beyond all
reasonable doubt, we cannot lose sight of the fact that the
enquiry officer performs a quasi-judicial function, who upon
analyzing the documents must arrive at a conclusion that there
had been a preponderance of probability to prove the charges
on the basis of materials on record. While doing so, he cannot
take into consideration any irrelevant fact. He cannot refuse to
consider the relevant facts. He cannot shift the burden of proof.
He cannot reject the relevant testimony of the witnesses only on
the basis of surmises and conjectures. He cannot enquire into
the allegations with which the delinquent officer had not been
charged with."
19. If the disciplinary proceedings have not been fairly
conducted, an inference can be drawn that the delinquent officer
was prejudiced thereby.
20. In S.L. Kapoor v. Jagmohan & Ors. (1980) 4 SCC 379, this
Court has held that non-compliance of the principles of natural
justice itself causes prejudice. We are not oblivious of the fact
that the said principle has since been watered down but in a
situation of this nature, we are of the opinion that the concurrent
findings of the Tribunal, as also the High Court cannot be said to
be unreasonable or suffering from any legal infirmity warranting
interference."
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25. Moreover, in Ext.P3 enquiry report it is stated by the enquiry
officer that "on 14.09.2009 both sides prayed time for producing the
argument notes and the management submitted their argument notes
on 15.10.2009 and the delinquent sought some more adjournment
for producing his argument notes. But so far he has not produced the
same and hence the enquiry was closed and the matter was taken
for orders."
26. Going by the proceedings detailed by the enquiry officer
prior to this, it appears that the enquiry officer has given several
adjournments on various occasions to the management. However,
that privilege was denied to the petitioner. That also would show that
the enquiry officer was biased, being an advocate in the panel of the
Bank for scrutiny of the documents. From this, it can be presumed
that the principles of natural justice has been completely violated.
Thereby, serious prejudice has been caused to the petitioner and
procedural irregularity occurred warranting interference of this Court
as it was held in Gunasekharan's case supra.
27. On the basis of the aforementioned arguments, the learned
amicus curiae is trying to conclude that the punishment imposed on
the petitioner as per Ext.P5 is disproportionate, especially when the
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charges are not proved and no evidence was adduced to prove such
charges. The enquiry report itself does not provide any list of
documents and the list of witnesses on which the enquiry officer relied
on to enter into the conclusion that charges are proved. Moreover, it
is further stated that as per Ext.P17, all the loan accounts mentioned
in the charge memo have been closed and the company has fully
received its money. Thereby, there was no financial loss sustained to
the company as alleged in the charge memo. It is also stated that at
the time of initiation of a disciplinary proceeding, the petitioner had
29 years of unblemished service which the respondents have not
disputed. It is also pertinent to note that the alleged conspirators, as
per the charge memo, have completely been exonerated. Therefore,
it appears that the petitioner had been punished for no reason.
28. Under the aforementioned circumstances, the punishment
of dismissal from service, which will deny him the pensionary benefits
of 29 years of service rendered by him, is itself excessive, unjust,
void and disproportionate to the charges. Such a harsh penalty can
be characterised as showing the court's consciousness.
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29. Per contra, the contention of the petitioner as well as the
learned amicus curiae was that, though no counter affidavit has been
filed even after sufficient opportunities, the counsel for the
respondents argued on the basis of reported decisions in Apparel
Export Promotion Council v. A.K. Chopra [(1999) 1 SCC 759]
Management of State Bank of India v. Smita Sharad Deshmukh
and another [(2017) 4 SCC 75] and The State of Rajasthan and
others v. Bhupendra Singh [JT 2024 (8) SC 351] that the scope of
judicial review for interfering with disciplinary proceedings is quite
limited. In that regard, the learned counsel for the respondents
brought the attention of this Court to para 16 & 17 of the Apparel
Promotion Council supra which are as follows :
"16. The High Court appears to have overlooked the settled
position that in departmental proceedings, the disciplinary au-
thority is the sole judge of facts and in case an appeal is pre-
sented to the appellate authority, the appellate authority has also
the power/and jurisdiction to reappreciate the evidence and
come to its own conclusion, on facts, being the sole fact-finding
authorities. Once findings of fact, based on appreciation of evi-
dence 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
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the findings were wholly perverse and/or legally untenable. The
adequacy or inadequacy of the evidence is not permitted to be
canvassed before the High Court. Since the High Court does not
sit as an appellate authority over the factual findings recorded
during departmental proceedings, while exercising the power of
judicial review, the High Court cannot, normally speaking, sub-
stitute its own conclusion, with regard to the guilt of the delin-
quent, for that of the departmental authorities. Even insofar as
imposition of penalty or punishment is concerned, unless the
punishment or penalty imposed by the disciplinary or the depart-
mental appellate authority, is either impermissible or such that it
shocks the conscience of the High Court, it should not normally
substitute its own opinion and impose some other punishment or
penalty. Both the learned Single Judge and the Division Bench of
the High Court, it appears, ignored the well-settled principle that
even though judicial review of administrative action must remain
flexible and its dimension not closed, yet the court, in exercise of
the power of judicial review, is not concerned with the correct-
ness of the findings of fact on the basis of which the orders are
made so long as those findings are reasonably supported by ev-
idence and have been arrived at through proceedings which can-
not be faulted with for procedural illegalities or irregularities
which vitiate the process by which the decision was arrived at.
Judicial review, it must be remembered, is directed not against
the decision, but is confined to the examination of the decision-
making process. Lord Hailsham in Chief Constable of the North
Wales Police v. Evans [(1982) 3 All ER 141 HL] observed:
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"The purpose of judicial review is to ensure that the individual re-
ceives fair treatment, and not to ensure that the authority, after
according fair treatment, reaches, on a matter which it is author-
ized or enjoined by law to decide for itself, a conclusion which is
correct in the eyes of the court."
17. Judicial review, not being an appeal from a decision, but a
review of the manner in which the decision was arrived at, the
court, while exercising the power of judicial review, must remain
conscious of the fact that if the decision has been arrived at by
the administrative authority after following the principles
established by law and the rules of natural justice and the
individual has received a fair treatment to meet the case against
him, the court cannot substitute its judgment for that of the
administrative authority on a matter which fell squarely within
the sphere of jurisdiction of that authority."
Whereby it is contended that the High Court normally should not
interfere unless such findings are based on no evidence or were wholly
perverse and/or legally untenable and the High Court cannot function
as an appellate authority.
30. Similarly, paragraph 6 of Management of State Bank
supra reads:
"6. In Bank of India v. Degala Suryanarayana [Bank of India v. Degala
Suryanarayana, (1999) 5 SCC 762 : 1999 SCC (L&S) 1036] , after referring
to H.C. Goel case [Union of India v. H.C. Goel, (1964) 4 SCR 718 : AIR 1964
SC 364] , this Court held at para 11 : (Degala case [Bank of India v. Degala
Suryanarayana, (1999) 5 SCC 762 : 1999 SCC (L&S) 1036] , SCC pp. 768-
69)
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"11. Strict rules of evidence are not applicable to depart-
mental enquiry proceedings. The only requirement of law
is that the allegation against the delinquent officer must
be established by such evidence acting upon which a rea-
sonable person acting reasonably and with objectivity
may arrive at a finding upholding the gravamen of the
charge against the delinquent officer. Mere conjecture or
surmises cannot sustain the finding of guilt even in de-
partmental enquiry proceedings. The court exercising the
jurisdiction of judicial review would not interfere with the
findings of fact arrived at in the departmental enquiry
proceedings excepting in a case of mala fides or perver-
sity i.e. where there is no evidence to support a finding or
where a finding is such that no man acting reasonably and
with objectivity could have arrived at that finding. The
court cannot embark upon reappreciating the evidence or
weighing the same like an appellate authority. So long as
there is some evidence to support the conclusion arrived
at by the departmental authority, the same has to be sus-
tained." "
31. The High Court will not re-appreciate the evidence, and its
jurisdiction is limited only to examine whether there is evidence in
support of the conclusion. It is further pointed out that in State of
Rajasthan supra as per paragraphs 20 to 24 & 27 it is contended by
the counsel for the respondents that the scope of judicial review under
Article 226 does not extend to reassessing evidence on the ground
that another view was possible on the material on record and the
interference is needed only when the findings are perverse based on
no evidence and if there is a violation of natural justice.
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32. It is further argued that going by Ext.P1 memo of charges
itself, it can be seen that each and all charges are explicitly stated,
and details of charge have been provided against each charge. The
charge memo itself thereby contained 20 pages, and Ext.P2 order of
punishment itself speaks about the procedure adopted while
conducting the disciplinary proceedings, the cost for such initiation of
disciplinary proceedings, conclusions of the enquiry officer, and finally,
the punishment and mode of recovery of loss from the petitioner.
Therefore, it cannot be heard to have stated that it is not a non-
speaking one.
33. Going by Ext.P3, it can be seen that the enquiry officer has
followed the procedure contemplated for conducting disciplinary
proceedings. The petitioner was given sufficient opportunity, and the
enquiry officer verified the documents and details of the examination
of witnesses, which were discussed and concluded that the charges
levelled against the petitioner were proved. Even the appeal filed as
per Ext.P4 has also considered in the 433rd Board Meeting held on
27.06.2012 as item No.18, and as per Resolution No.5787 the Board
resolved to reject the appeal by upholding the decision of the MD to
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dismiss the petitioner from service with forfeiture of DCRG on the
proven charges.
34. The contention with respect to recovery of loss as per
Ext.P17 is also denied by the counsel for the respondent. In fact, it
is not due to the effort of the petitioner, but the strenuous effort taken
by the 1st respondent, the amount, as stated in Ext.P17, could be
recovered. That cannot give any credit to the petitioner since by
traversing beyond his jurisdiction, he has assigned the loan, and that
became a default, and it was in a stage where the loans were not
recoverable due to the insufficiency of security assets. Therefore, that
cannot be taken for giving any leniency to the petitioner. The 29 years
of service and unblemished service, as claimed by the petitioner,
cannot be considered in the light of the findings in enquiry wherein
the charges alleged against the petitioner have been fully proved.
35. I have heard Sri.P. Sankaran Namboothiri, Party in person
along with learned Amicus Curiae Smt.A Aruna and Sri.P.
Gopalakrishnan Nambiar for the 1st respondent.
36. As rightly contended by the counsel for the respondent, the
jurisdiction to interfere with the disciplinary proceedings is quite
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limited. Since the judicial review is not an appeal from a decision but
a review of the manner in which the decision was arrived at, the court
while exercising the power of judicial review must remain conscious
of whether the decision has been arrived at by administrative
authority after following the principles established by law, the rules of
natural justice and the individual has received a fair treatment to meet
the case against him. However, this Court can interfere only when
findings are perverse, based on no evidence and on violation of
principles of natural justice. And the punishment imposed must shock
the conscious of the Court.
37. On the aforementioned parameters settled by the Apex
Court, through the various decisions aforementioned, I have
considered the issue involved in this case.
38. In order to examine the violations of principles of natural
justice this Court has to look into the memo of charges, Ext.P1. While
looking at Ext.P1 this court could have borne in mind the general
principles with respect to the content of memo of charges. The general
Principles states : Charge should be brief, pointed, and couched in
clear terms without any vagueness. The date of occurrence of the
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incident and times, wherever applicable, should always find a place in
charge. Charge should be logically framed or in other words, they
should follow logically from the nature of allegations made.
39. Going by Ext.P1 charge memo though it contains 20 pages,
it does not have a separation of statement of allegation and memo of
charges, which is essential for providing clarity on the charges. Going
by Ext.P15 reply given by the petitioner itself, it appears that due to
the nature of the charge memo the petitioner was not in a position to
provide adequate reply to each and every charges. Thereby a
generalised reply was given to the vague and generalised charges.
40. There are allegations of wrongful gain, collusion with
subordinates, siphoning off company money, mala fide intention in
accepting the property which does not access as security towards the
loan, malafide intention in accepting these properties which is
impossible to identify with inflated valuation and the act of the
petitioner is a result of pre-planned action in collusion with Assistant
Manager and Assistant concerned along with loanees and mortgagees.
It is also alleged that the petitioner's acts are intentional to defeat the
claim of the company at the stage of realisation of dues. It is alleged
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that the company has sustained heavy losses, and the petitioner has
an alliance with the loanees/mortgagees which are forsaken with the
interest of the company. It is also alleged that the petitioner has
acted with ulterior motives while not entrusting the task of valuation
to the Kattappana Branch manager, and the excess loanees charge
submitted by the internal audit team is also mentioned in para 4 of
the charges.
41. On the basis of the aforementioned evaluation of allegations
it is pertinent to note that separate charges are not framed against
the petitioner on the basis of these allegations. The disciplinary
proceedings have been initiated. Though certain details of loans were
provided, it does not specify against which loan the alleged charges
are framed. It is quite ambiguous about the nature of the charge
since it does not provide details of the loan against each charge or
allegation, which cannot be categorically distinguished. Similarly, the
other charges raised in paragraph 4 are also general in nature. It is
also bywords "on many occasions" "in almost all". The charges are
supplemental which show that the memo of charge is not brief,
pointed and in clear terms. It was vague, there was no distinct
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offence mentioned in the memo of charges. The charges are not in a
state of distinguishing allegations. Originally, the charge should be
logically framed, and which would flaw the nature of allegations made.
In this case there is no separate charge as well as allegation.
42. In the case of Ext.P3 enquiry report, the enquiry officer does
not discuss the charges on the basis of each allegation, and there is
no separate conclusion with respect to proving each charge. The
findings are generalised and conclusory manner. There are no explicit
details of evidence which is considered for concluding the charges.
Certain findings of the enquiry officer, especially with respect to
exercising of discretionary power by the delinquent, were vague and
lacked supporting evidence, or there were no specific findings to
sustain such serious allegations. Therefore, such a conclusion entered
by the enquiry officer appears to be arbitrary and illegal and based on
no evidence. There are charges of collusion with subordinates and
wrongful gain to the petitioner. However, there is no discussion with
respect to the evidence against such an allegation/charge. However,
it is concluded by the enquiry officer that such a charge is proved. In
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the absence of any pointed evidence or material evidence, it cannot
be accepted as proven.
43. Similarly, certain details of the loans are provided, saying
that some procedural irregularities have occurred due to violation of
the company norms. It is not discernible whether it is a charge or
allegation that the petitioner is malafidedly attempting to cheat the
company and siphon its fund in collusion with the assistant manager
and the assistant concerned. In fact, no evidence is provided by the
enquiry officer for treating this allegation, the charge as proved.
Nowhere is it proved with evidence the petitioner had a wrongful gain,
and that the petitioner had colluded with the Assistant Manager and
the Assistant concerned. In fact, in the latter part, these two persons,
the Assistant Manager and the Assistant concerned, were completely
exonerated from the charges.
44. Going by the words of the petitioner, as per the procedure,
all the applications are primarily submitted to the Assistant concerned
and the Assistant, along with the supporting documents by the loanee
or mortgagee to obtain the loan, be forwarded to the Assistant
Manager. On the basis of the scrutiny conducted by the Assistant
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Manager, the files will be forwarded to the petitioner, the Senior
Manager, who on scrutinising the records on the basis of the
recommendations of the Assistant Manager, will sanction the loans.
However, this part is absent in the enquiry and this part is not
controverted by the 1st respondent through a counter affidavit.
Therefore, those allegations with respect to the loans cannot be
accepted, which cannot be proved in the absence of any cogent
evidence.
45. Similarly, the fourth charge is also in a similar fashion,
wherein the enquiry officer has not explained the evidence which was
considered to prove such charges. As stated above, since the AM and
the Assistant concerned are exonerated, the charges of collusion and
conspiracy cannot be sustained. These issues have been considered
by the Apex Court in Gunasekharan supra and Kuldeep Singh
supra.
46. Ext.P2 is the order of punishment, and Ext.P5 is the order of
appeal. Ext.P5 order in appeal does not contain any details which are
cryptic in nature. It only says that the appeal has been considered by
the Board on its 433rd meeting held on 27.06.2012 as item No.18 and
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the decision has been taken as per Resolution No.5787 to reject the
appeal. However, no formal orders are passed and communicated to
the petitioner. Since the enquiry report appears to be not sustainable,
no specific discussion is made with respect to Ext.P2 order of
punishment. Moreover, going by Ext.P17, it appears that the entire
loan amount has been recovered by the 1st respondent, therefore,
the alleged loss that occurred to the company cannot be sustained.
However, it is stated by the counsel for the respondent that the
amounts could be recovered by the respondent through the strenuous
efforts taken by them. Such arguments cannot be accepted at first
blush since if those documents are stated to be inflated or created in
collusion and have been done with an intention to defeat the claim of
the company at the stage of realisation of the dues, these amounts
could not have been recovered by the 1st respondent.
47. On the basis of the aforementioned findings, it appears that
there is a violation of principles of natural justice, and there is a
serious procedural irregularity warranting interference of this Court.
The said position is upheld by the Apex Court in P. Gunasekharan
supra.
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48. Since charges are vague and the findings are entered on the
basis of no evidence, and there is no loss occurred to the 1 st
respondent in the light of Ext.P17, it appears that the punishment is
disproportionate. Moreover, considering the service of the petitioner,
which is stated to be unblemished till this incident, the recovery of the
gratuity of the petitioner towards alleged dues, which has not all
occurred as evident from Ext.P17, is shocking the conscience of this
Court. This court has valued that though there is allegations of
collusion and conspiracy, the other persons stated to have been a part
of that were completely exonerated. Then the punishment imposed
on the basis of collusion and conspiracy also cannot be sustained.
49. Under such circumstances, I deem it appropriate to set aside
Ext.P1, P2 and P5, and the petitioner will be reinstated with all back
wages. However, it is clarified that since the petitioner has crossed the
age of retirement, the calculation of back wages and other benefits
shall be done on a notional basis, including the entitled promotions.
The 1st respondent will have to release the gratuity that is forfeited
towards the loss in the absence of loss as evident in Ext.P17 with
statutory interest from the date of forfeiture.
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50. The entire exercise shall be completed within a period of
three months from the date of receipt of a certified copy of this
judgment. In case of failure to release the gratuity amount, that will
carry penal interest at the rate of 18% on completion of three months.
51. Such orders are passed considering the pecuniary and
jobless situation of the petitioner since then and the sufferings of the
petitioner and his family.
Before parting, it would be a failure on my part if I did not
mention the assistance rendered by the Amicus Curiae before this
Court in deciding this matter. I appreciate the efforts taken by the
learned Amicus Curiae Smt.A Aruna even during her peculiar
circumstances.
Sd/-
P.M.MANOJ
JUDGE
ttb
2025:KER:32542
APPENDIX OF WP(C) 19103/2014
PETITIONER'S EXHIBITS :
Exhibit P1 TRUE COPY OF THE CHARGESHEET DATED 09.08.2007
ISSUED BY THE 1ST RESPONDENT.
Exhibit P2 TRUE COPY OF THE DISMISSAL ORDER ISSUED BY THE
1ST RESPONDENT.
Exhibit P3 TRUE COPY OF THE REPORT OF THE ENQUIRY
COMMISSIONER DATED 14.11.2009.
Exhibit P4
TRUE COPY OF THE APPEAL MEMORANDUM DATED
23.03.2011 FILED BY THE PETITIONER BEFORE THE
BOARD OF DIRECTORS OF THE COMPANY.
Exhibit P5 TRUE COPY OF THE ORDER DATED 30.07.2012 OF THE
BOARD OF DIRECTORS OF THE COMPANY.
Exhibit P6 TRUE COPY OF THE APPLICATION FOR INFORMATION
SUBMITTED BY THE PETITIONER UNDER THE RIGHT TO
INFORMATION ACT DATED 22.1.2020
Exhibit P7 TRUE COPY OF THE REPLY DATED 5.2.2020 ISSUED
BY THE PUBLIC INFORMATION OFFICER OF THE 1ST
RESPONDENT
Exhibit P8 TRUE COPY OF THE REPRESENTATION FILED BY THE
PETITIONER BEFORE THE 1ST RESPONDENT DATED
12.7.2021
Exhibit P9 TRUE COPY OF THE LETTER DATED 12.8.2021 ISSUED
BY THE 1ST RESPONDENT REFUSING THE GRATUITY TO
THE PETITIONER
Exhibit P10 TRUE COPY OF THE LETTER DATED 24.9.2021 FILED
BY THE PETITIONER BEFORE THE 1ST RESPONDENT
Exhibit P11 TRUE COPY OF THE RELEVANT PORTION OF THE BANK
STATEMENT SHOWING THE DISBURSEMENT OF GRATUITY
AMOUNT TO THE PETITIONER
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Exhibit P12 TRUE COPY OF THE REPRESENTATION FILED BY THE
PETITIONER BEFORE THE 1ST RESPONDENT DATED
2.9.2022 FOR FESTIVE ALLOWANCE
Exhibit P13 TRUE COPY OF THE REPRESENTATION SUBMITTED BY
THE PETITIONER BEFORE THE 1ST RESPONDENT DATED
2.9.2022 FOR THE MINIMUM PENSION
Exhibit P14 TRUE COPY OF THE REPRESENTATION SUBMITTED BY
THE PETITIONER TO THE 1ST RESPONDENT DATED
29.9.2023
Exhibit P15 TRUE COPY OF THE REPLY STATEMENT FILED BEFORE
THE 1ST RESPONDENT DATED 21.11.2007 BY THE
PETITIONER
Exhibit P16 TRUE COPY OF THE APPLICATION DATED 7.3.2014
FILED BY THE PETITIONER BEFORE THE 1ST
RESPONDENT
Exhibit P17 TRUE COPY OF THE ANSWER TO THE EXHIBIT P16
APPLICATION BY THE 1ST RESPONDENT TO THE
PETITIONER DATED 13.3.2024
Exhibit 18 TRUE COPY OF THE FINDINGS ISSUED BY THE
GOVERNMENT MEDICAL COLLEGE, KOTTAYAM DATED
17.5.2024
Exhibit P19 TRUE COPY OF THE FINDINGS OF DR. LAL KRISHNA
DATED 23.5.2024 ISSUED BY THE GOVERNMENT
MEDICAL COLLEGE
Exhibit P20 TRUE COPY OF THE DISCHARGE CARD ISSUED BY THE
MEDICAL COLLEGE HOSPITAL, KOTTAYAM DATED
25.5.2024
Exhibit P21 TRUE COPY OF THE RESULTS ISSUED BY THE DDRC
AGILUS DIAGNOSTIC CENTRE DATED 30.5.2024 FOR
FURTHER TREATMENT
Exhibit P22 THE TRUE COPY OF THE ORDER DATED 15.06.2007
ISSUED BY THE 1ST RESPONDENT
2025:KER:32542
RESPONDENTS' ANNEXURES :
Annexure (A) True copy of the relevant extracts of the
Minutes of the 433rd meeting of the Board of
Directors of the 1st Respondent Company held
on 27.06.2012 and Resolution No. 5787 vide
which the Appeal of the Petitioner was
resolved to be rejected
Annexure (B) True copy of the relevant extracts of the
Standing Orders of the Company governing
disciplinary proceedings and Appeals therefrom
PETITIONER'S EXHIBITS :
Exhibit P23 TRUE COPY OF THE QUERIES SUBMITTED ON THE
RIGHT TO INFORMATION ACT
Exhibit P24 TRUE COPY OF THE REPLIES RECEIVED TO THE
QUERIES FROM R1
//TRUE COPY//
Sd/-
P.S. TO JUDGE
