Gajraj Singh Verma (Dead) Through ... vs Madhya Pradesh Grameen Bank
2023 Latest Caselaw 9347 MP

                                                          1
                           IN    THE       HIGH COURT OF MADHYA PRADESH
                                                AT JABALPUR
                                                       BEFORE
                                       HON'BLE SHRI JUSTICE MANINDER S. BHATTI
                                               ON THE 22 nd OF JUNE, 2023
                                             WRIT PETITION No. 1507 of 2003

                          BETWEEN:-
                          1.    GAJRAJ SINGH VERMA (DEAD) THROUGH LRS.
                                SMT. MEENA VERMA W/O LATE SHRI GAJRAJ
                                SINGH VERMA, AGED ABOUT 39 YEARS, R/O SHIV
                                COLONY I.T.I. ROAD HOSHANGABAD (MADHYA
                                PRADESH)

                          2.    VARUN VERMA S/O SHRI GAJRAJ SINGH VERMA,
                                AGED ABOUT 21 YEARS, RESIDENCE OF SHIV
                                COLONY I T I ROAD HOSHANGABAD (MADHYA
                                PRADESH)

                          3.    HIMANSHU VERMA S/O LATE SHRI GAJRAJ
                                SINGH VERMA, AGED ABOUT 19 YEARS, RESIDNT
                                OF SHIV COLONY I TI ROAD HOSHANGABAD
                                (MADHYA PRADESH)

                                                                                    .....PETITIONER
                          (BY SHRI SANJAY K. AGRAWAL - ADVOCATE)

                          AND
                          1.    MADHYA PRADESH GRAMEEN BANK THROUGH
                                ITS CHAIRMAN HEAD OFFICE AT C21 BUSINESS
                                PARK C21 SQUARE OPPOSITE HOTEL RADISSON
                                BLU MR-10 INDORE DISTRICT INDORE (MADHYA
                                PRADESH)

                          2.    BOARD     OF   DIRECTOR MADHYA PRADESH
                                GRAMEEN BANK HEAD OFFICE AT C21 BUSINESS
                                PARK, C21 SQUARE, OPPOSITE HOTEL RADISSON
                                BLU MR -10 INDORE (MADHYA PRADESH)

                                                                                 .....RESPONDENTS
                          (BY SHRI ASHISH SHROTI - ADVOCATE)

                                Th is petition coming on for hearing this day, th e court passed the
                          following:
Signature Not Verified
Signed by: PRADYUMNA
BARVE
Signing time: 6/28/2023
5:32:09 PM
                                                                         2
                                                                        ORDER

The petitioner has filed this petition while praying for the following reliefs:-

"a) Certiorari quashing the order, dated 8/4/2002 passed by the respondent no.1;

b) Certiorari quashing the order, dated 19.7.2002 passed by the respondent no.2 with a direction to exonerate the petitioner from all the charges levelled against him;

c) Certiorari quashing the recording of personal hearing, dated 4.4.2002, Annexure P-9;

d) Mandamus, directing the respondents to produce the order

dated passed by the respondent no.2 in appeal;

e) Any other order or orders that this Hon'ble Court deems fit

and proper in the circumstances of the case may also be kindly passed."

2. The facts, as detailed in the petition, are that the original petitioner (who has died on 4.8.2006 and now represented through his legal heirs), was an employee of Kshetriya Gramin Bank, Hoshangabad, who was appointed as officer on 11.3.1983. The petitioner was placed under suspension by the respondents vide memo dated 23.2.2001, which is contained in (Annexure P-1). The petitioner was then issued a show cause notice vide memo dated 29.5.2001, contained in (Annexure P-2), calling upon to explain certain irregularities alleged to have been committed by the petitioner during his tenure as Branch Manager of Nimsadiya Branch. The said show cause notice was replied by the petitioner. The respondents having not satisfied with the reply submitted by the petitioner, issued a charge-sheet to the petitioner, which contained as many as nine charges. The said charge-sheet was ensued in holding of a departmental enquiry. The petitioner participated in the Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 6/28/2023 5:32:09 PM

departmental enquiry and made no effort to prolong the same unnecessarily. Yet enquiry was conducted in complete contravention of principles of natural justice. Thereafter, an enquiry report was supplied to the petitioner. The petitioner submitted his explanation as regards the finding of the Enquiry Officer. The disciplinary authority vide order dated 6.2.2002, contained in (Annexure P-4), concurring with the finding of the Enquiry Officer proposed punishment of dismissal from service on the petitioner while dealing with the few charges and for the remaining charges, other penalties were proposed by the disciplinary authority. The petitioner was called upon to submit his written statement on or before 25.2.2002 and was further directed to enter appearance for personal hearing. As the petitioner was indisposed and was hospitalized as well, thus was not in a position to appear personally before the respondents and accordingly, the petitioner brought the said fact to the notice of the respondents. Thereafter, again the matter was posted by the disciplinary authority for couple of dates and then on 4.4.2002, the matter was posted for personal hearing. On 4.4.2002, the petitioner appeared before the authority, only with a request for adjournment. The petitioner was not in a position to represent himself on account of ill health. Yet, the respondents persuaded the petitioner to appear on 4.4.2002 for personal hearing. It was wrongly mentioned in the recording of personal hearing that the present petitioner had admitted his guilt.

The petitioner, at no point of time, admitted the charges. There were only minor lapses pertaining to the procedure regarding the transaction but same, by no stretch of imagination, could have attracted the proposed major penalty of dismissal. Ultimately, the respondents passed a final order of dismissal on 8.4.2002 contained in (Annexure P-12).

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3. The petitioner assailed the order dated 8.4.2002 by filing an appeal. Before the appellate authority, the petitioner submitted elaborated submissions and it was categorically submitted by the petitioner that there has been gross violation of principles of natural justice. Procedure pertaining to disciplinary enquiry was conducted by the enquiry officer, but the petitioner herein was not extended proper opportunity of hearing and the appellate authority after considering the petitioner's submission passed final order dated 19.7.2002, contained in (Annexure P-16) by which the order of penalty imposed by the disciplinary authority was modified while converting the same to bringing down the petitioner to minimum of pay scale in the officer category. By the same order, the period of suspension has been treated as 'leave without pay' and the petitioner has been debarred from consideration for his promotion for 3 years.

4. Counsel contends that the orders passed by the disciplinary authority as well as the appellate authority deserve to be quashed. It is contended by the counsel that the appellate authority itself considered the fact that the overt act did not constitute misconduct, thus, major penalty could not have been imposed. Therefore, the appellate authority ought to have set aside the order passed by the disciplinary authority in toto and ought to have ordered reinstatement of the petitioner with all consequential benefits. It is contended by the counsel that the order to bring down the petitioner to minimum of pay scale in the officer category has serious civil consequences. The said order could not have been passed without ensuring adherence to the settled principles of service jurisprudence pertaining to holding disciplinary proceedings. The counsel, therefore, submits that in the present case the order impugned deserves to be set aside and the petition deserves to be allowed on following grounds:-

Signature Not Verified i. No opportunity to lead evidence was afforded to the petitioner. Signed by: PRADYUMNA BARVE Signing time: 6/28/2023 5:32:09 PM

ii. The documents were not supplied to the petitioner during the course of enquiry despite repeated request.

iii. The original documents were not produced during the course of enquiry and the documents produced by the Management during the course of enquiry, were not exhibited.

iv. There was no admission by the petitioner regarding charge Nos. 1 & 2 and the admission was wrongly recorded by the disciplinary authority.

v. Written statement dated 25.2.2002 was not considered by the disciplinary authority.

vi. Opportunity of hearing ought to have been granted by the disciplinary authority.

5. To buttress the aforesaid submissions, the counsel has placed reliance in Kashinath Dikshita v. Union of India and others - 1986 (3) SCC 229; State of U.P. v. Shatrughan Lal and another - 1998(6) SCC 651; State of Uttar Pradesh and others v. Saroj Kumar Sinha - 2010 (2) SCC 772 and Union of India and others v. P. Balasubrahmanayam - 2021 (5) SCC 662.

6. Per contra, Shri Ashish Shroti, learned counsel for the respondents submits that in the present case, the conduct of the petitioner, being an employee of the Bank, is required to be taken note of. The counsel while taking this Court to charge Nos. 1 and 2 submits that the petitioner used 22 vouchers and out of 22 vouchers, on 14 vouchers, the account numbers of other account holders were mentioned and all 22 vouchers were in the name of present petitioner and accordingly, by the said vouchers, an amount of Rs.1,53,500/- was defalcated by the present petitioner. It is also contended by the counsel that it is not a case where only on the basis of admission of the petitioner, the order Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 6/28/2023 5:32:09 PM

impugned has been passed. On the contrary, not only the admission but also taking into consideration the evidence as well, the order impugned has been passed, which is evident from perusal of order dated 6.2.2002 contained in (Annexure P-4) wherein the conclusion of the Enquiry Officer is recorded that charge No. 1 is not only found proved on the basis of admission of guilt by the petitioner but also the evidence. The counsel further contended that in the present case repeated opportunities were afforded to the petitioner to appear for personal hearing and the petitioner was called upon for the purpose of personal hearing on 25.2.2002, 18.3.2002 and 4.4.2002 and it is submitted that on account of the petitioner's request, the matter was adjourned on various occasions, therefore, the allegations regarding principles of natural justice having no substance deserves to be discarded.

7. The counsel, while taking this Court to communication dated 4.4.2002 (Annexure P-9), which contains the details of the personal hearing submits that the same contains unequivocal admission of the petitioner and proceedings are

signed by the petitioner also. In the entire proceeding, it is nowhere mentioned by the petitioner that he was not physically fit nor any request was made to seek further adjournment. The petitioner only as an afterthought submitted a representation dated 15.4.2002 contained in (Annexure P-10) after passing of the order of dismissal by the disciplinary authority dated 8.4.2002 (Annexure P-

12). The counsel, thus submits that the petitioner was well aware that he personally appeared before the authorities on 4.4.2002 and later having found the order of dismissal dated 8.4.2002 submitted a representation for personal hearing dated 15.4.2002. It is contended by the counsel that the representation has been drafted in such a manner as if the petitioner was not aware of passing of the order of dismissal. The counsel submits that the representation dated Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 6/28/2023 5:32:09 PM

15.4.2002 contained in (Annexure P-10) is merely an afterthought and even in this representation, the petitioner nowhere submitted that he did not admit the charges in the proceedings dated 4.4.2002. On the contrary, the petitioner submitted in the representation that he was not medically fit and on account of ill health, he could not represent himself effectively. It is contended by the counsel that the petitioner was required to specifically submit as to whether he had admitted the charges on 4.4.2002 or not? Counsel further submits that the said fact is also evident from Para 5.8 of the writ petition.

8. The counsel further submits that so far as the allegation of the petitioner regarding procedural irregularities in disciplinary proceedings is concerned, in Para 7 of the memorandum of appeal, which has been brought on record as (Annexure P-13), the petitioner admitted that he was supplied the documents. In Para-8 thereof, the petitioner further submitted that the original documents were produced during conduct of enquiry. It is contended by the counsel that the petitioner's stand that he was not supplied the documents pertaining to preliminary investigation report, is also misconceived, inasmuch as, in the present case, the proceedings were started during the course of routine audit and not on the basis of any preliminary enquiry or investigation. The counsel, thus, while relying on the decision of the Apex Court in South Bengal State Transport Corporation v. Sapan Kumar Mitra and others - 2006 (2) SCC 584 submits that the photocopies of the documents can be used as evidence during the conduct of departmental enquiry. The counsel has also relied upon the judgment of the Apex Court in Manoj H. Mishra v. Union of India and others - 2013(6) SCC 313 while submitting inter alia that the admission of allegations is an important factor and is required to be considered

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while imposing the penalty.

9. While placing reliance on the decisions of the Apex Court in Ganesh Santa Ram Sirur v. State Bank of India and another - 2005 (1) SCC 13, State Bank of India and others v. S.N. Goyal - 2008 (8) SCC 92 and Boloram Bordoloi v. Lakhimi Gaolia Bank and others - 2021(3) SCC 806, it is submitted by the counsel that in the present case the petitioner being a Bank employee embezzled the amount (even if temporarily) of the public at large. It is further submitted that a Bank employee is treated to be the custodian of the funds of public at large and, therefore, any misconduct at the behest of the Bank employee, requires serious action and such Bank employee is not entitled for any leniency. The counsel lastly concluded while submitting that the scope of interference with the departmental enquiry is limited and in absence of any infirmity or illegality in the proceedings of departmental enquiry, the interference is not warranted. Reliance is placed on Union of India and others v. P. Gunasekaran - 2015(2) SCC 610.

10. No other point is pressed by the parties.

11. Heard rival submissions and perused the record.

12. The charge sheet, which was issued to the petitioner contains as many as 9 charges. Charge Nos. 1 & 2, which according to the respondents, have been admitted, were made basis to pass the order impugned. Charge Nos. 1 & 2 pertain to the conduct of the petitioner whereby the petitioner in the capacity of Branch Manager of the Bank prepared 22 transfer vouchers of different dates and all the vouchers were payable to the petitioner only. Out of 22 vouchers, 14 vouchers were in respect of different account holders, details of which have been given in Annexure 1 to the charge sheet. A perusal of Annexure 1 to the charge sheet reflects that the petitioner herein, in all vouchers Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 6/28/2023 5:32:09 PM

mentioned his own name as payee and on the basis of vouchers, the amount was withdrawn from the accounts of different account holders namely Lakshmi Bai, Krishna Kumar, Munni Bai, Savita Vyas and Budhiya Bai. Therefore, the allegation against the petitioner was that he defalcated the said amount and later on deposited the said amount with the accounts of all the persons. The said allegation was subjected to enquiry. The enquiry proceedings produced before this Court reflect that the proceedings were initiated on the basis of routine audit and thereafter, a memo was issued to the petitioner. The petitioner in response to the said memo, which was issued to the petitioner even before issuance of charge sheet, had admitted that there were some procedural lapses. Thereafter, the enquiry proceedings reflect that the petitioner admitted that while working as Branch Manager, he withdrew the amount. Even during the conduct of enquiry also there is admission by the petitioner that the amount was withdrawn and later on was deposited again. When the enquiry as regards charge Nos. 1 & 2 was completed the petitioner was asked as to whether, he was willing to submit any document or facts and the petitioner in respect of both charge Nos. 1 & 2 expressed that he was not willing to submit any other facts before the Enquiry Officer. The memorandum of appeal, which has been brought on record by the petitioner as (Annexure P-13) reveals that the petitioner in Paragraph 7 has admitted that he was supplied with the photocopies of the documents. It is further evident from Paragraph 8 that the original documents were produced by the Bank during course of enquiry. It is also important to note that in Para 7 of the memo of appeal though the petitioner submitted that he was not supplied the documents pertaining to charge No.7, however, the charge No. 7 has not been found proved in the present case by the Enquiry Officer. Therefore, in view of

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the enquiry proceedings as well as admission of the petitioner in Paras 7 & 8 of the memo of appeal, this Court does not find any irregularity in the enquiry proceedings. The enquiry proceedings were conducted while affording due opportunity to the petitioner to defend himself. There was no preliminary investigation and the proceedings were initiated on the basis of routine audit. The said fact is further evident from Page No. 10 of the enquiry proceedings, therefore, the petitioner cannot dispute the enquiry proceedings on the ground that there was violation of principles of natural justice and the petitioner was not afforded proper opportunity to defend himself.

13. Moreover, in the cases of disciplinary proceedings, the establishment o f misconduct is based on the principles of preponderance of probabilities, therefore, strict rule of evidence has no application in the departmental proceedings and it is trite that in the departmental proceedings the strict proof of evidence, which is required in criminal cases, is not required as observed by the Apex Court in Inspector General of Police v. S. Samuthiram - (2013) 1 SCC 598. The Apex Court in Para 26 has observed as under:-

"26. As we have already indicated, in the absence of any provision in the service rules for reinstatement, if an employee is honourably acquitted by a criminal court, no right is conferred on the employee to claim any benefit including reinstatement. Reason is that the standard of proof required for holding a person guilty by a criminal court and the enquiry conducted by way of disciplinary proceeding is entirely different. In a criminal case, the onus of establishing the guilt of the accused is on the prosecution and if it fails to establish the guilt beyond reasonable doubt, the accused is assumed to be innocent. It is settled law that the strict burden of proof required to establish guilt in a criminal court is not required in a disciplinary proceedings and preponderance of Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 6/28/2023 5:32:09 PM

probabilities is sufficient. There may be cases where a person is acquitted for technical reasons or the prosecution giving up other witnesses since few of the other witnesses turned hostile, etc. In the case on hand the prosecution did not take steps to examine many of the crucial witnesses on the ground that the complainant and his wife turned hostile. The court, therefore, acquitted the accused giving the benefit of doubt. We are not prepared to say that in the instant case, the respondent was honourably acquitted by the criminal court and even if it is so, he is not entitled to claim reinstatement since the Tamil Nadu Service Rules do not provide so."

14. The petitioner is undisputedly was working against the post of Branch Manager with the Bank. The Bank and its employees are custodian of the funds of public at large and, therefore, any attempt to embezzle or defalcate the said amount, is a serious misconduct. The Apex Court in Boloram Bordoloi (supra) in Paras 12 & 13 has observed as under:-

"12. Even the last submission of the learned counsel for the appellant that the punishment imposed is disproportionate to the gravity of charges, also cannot be accepted. The charges framed against the appellant in the departmental enquiry are serious and grave. If we look at the response, in his letter dated 16-8-2005, to the show-cause notice issued by the disciplinary authority, it is clear that he has virtually admitted the charges, however, tried to explain that such lapses occurred due to work pressure. Further he went to the extent of saying - he is ready to bear the loss suffered by the Bank on account of his lapses.

13. The Manager of a bank plays a vital role in managing the affairs of the bank. A bank officer/employee deals with the public money. The nature of his work demands vigilance with the in-built requirement to act carefully. If an officer/employee of the bank is Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 6/28/2023 5:32:09 PM

allowed to act beyond his authority, the discipline of the bank will disappear. When the procedural guidelines are issued for grant of loans, officers/employees are required to follow the same meticulously and any deviation will lead to erosion of public trust on the banks. If the Manager of a bank indulges in such misconduct, which is evident from the charge

memo dated 18-6-2004 and the findings of the enquiry officer, it indicates that such charges are grave and serious. In spite of proved misconduct on such serious charges, disciplinary authority itself was liberal in imposing the punishment of compulsory retirement. In that view of the matter, it cannot be said that the punishment imposed in the disciplinary proceedings on the appellant, is disproportionate to the gravity of charges. As such, this submission of the learned counsel for the appellant also cannot be accepted."

15. The Apex Court in Ganesh Santa Ram Sirur v. State Bank of India and another (supra) in Para 34 observed as under:-

"34. The Bank Manager/Officer and employees and any Bank nationalised/or non-nationalised are expected to act and discharge their functions in accordance with the rules and regulations of the Bank. Acting beyond one's authority is by itself a breach of discipline and Trust and a misconduct. In the instant case Charge No. 5 framed against the appellant is very serious and grave in nature. We have already extracted the relevant rule which prohibits the Bank Manager to sanction a loan to his wife or his relative or to any partner. While sanctioning the loan the appellant do not appear to have kept this aspect in mind and acted illegally and sanctioned the loan. He realized the mistake later and tried to salvage the same by not encashing the draft issued in the maiden name of his wife though the draft was issued but not encashed. The decision to sanction a loan is not an honest decisions. The Rule 34(3)(1) is a rule of integrity and therefore as rightly pointed out by Mr. Salve, the respondent Bank cannot afford to have the appellant as Bank Manager. The punishment of removal awarded by the Appellate Authority is just and proper in the facts and circumstances of the case. Before concluding, we may usefully rely on the judgment Regional Manager, U.P. SRTC. Etawah & Ors. vs. Hoti Lal & Anr. reported in 2003(3) SCC 605. Wherein this Court has held as under:-

"If the charged employee holds a position of trust where honesty and integrity are inbuilt requirements of functioning, Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 6/28/2023 5:32:09 PM

it would not be proper to deal with the matter leniently. Misconduct in such cases has to be dealt with iron hands. Where the person deals with public money or is engaged in financial transactions or acts in a fiduciary capacity, the highest degree of integrity and trustworthiness is a must and unexceptionable. Judged in that background, conclusions of the Division Bench of the High Court do not appear to be proper. We set aside the same and restore order of the learned Single Judge upholding the order of dismissal."

16. The Apex Court in State Bank of India and others v. S.N. Goyal (supra) held that the embezzlement does not wash away even after deposit of amount defalcated and accordingly held in Para 41 as under:-

"41. At the relevant point of time the respondent was functioning as a Branch Manager. A bank survives on the trust of its clientele and constituents. The position of the Manager of a bank is a matter of great trust. The employees of the bank in particular the Manager are expected to act with absolute integrity and honesty in handling the funds of the customers/borrowers of the bank. Any misappropriation, even temporary, of the funds of the bank or its customers/borrowers constitutes a serious misconduct, inviting severe punishment. When a borrower makes any payment towards a loan, the Manager of the bank receiving such amount is required to credit it immediately to the borrower's account. If the matter is to be viewed lightly or leniently it will encourage other bank employees to indulge in such activities thereby undermining the entire banking system. The request for reducing the punishment is misconceived and rejected."

17. So far as interference with the enquiry proceedings are concerned, the scope of interference with the disciplinary proceedings is limited as observed by the Apex Court in State of Karnataka and Anr. Vs. N. Gangaraj - (2020) 3 SCC 423 and Union of India and Ors. Vs. P. Gunasekaran - (2015) 2 SCC 610. The Apex Court in Union of India and Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 6/28/2023 5:32:09 PM

others vP. Gunasekaran (supra) has observed in Para 13 as under:-

"13. Under Articles 226/227 of the Constitution of India, the High Court shall not:

(i) reappreciate the evidence;

(ii) interfere with the conclusions in the enquiry, in case the same has been conducted in accordance with law;

(iii) go into the adequacy of the evidence;

(iv) go into the reliability of the evidence;

(v) interfere, if there be some legal evidence on which findings can be based.

(vi) correct the error of fact however grave it may appear to be;

(vii) go into the proportionality of punishment unless it shocks its conscience."

18. The enunciation of law by the Apex Court reflects that the interference with the departmental proceedings is limited. Therefore, the Court should refrain from interfering with the process unless there is gross violation of principles of natural justice or violation of the procedure prescribed for holding enquiry or where the allegations, if are taken into consideration in their entirety, do not constitute any misconduct. None of such eventuality is available in the present case. Therefore, the respondents in the present case upon considering the appeal of the petitioner have modified the penalty and in terms of the modified order, the petitioner was brought to the minimum of pay and was further debarred from consideration of his name for promotion for a period of 3 years. The authorities having considered the allegations have rightly imposed the penalty vide order dated 19.7.2002 contained in (Annexure P-16), therefore, the decision which has been arrived at by the respondents while taking into consideration the admission as well as the evidence, in the considered view of Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 6/28/2023 5:32:09 PM

this Court does not require any interference.

19. The decision as relied upon by the counsel for the petitioner in the case of Kashinath (supra) and State of U.P. v. Shatrughan Lal and another (supra), State of Uttar Pradesh and others v. Saroj Kumar Sinha (supra) are distinguishable, inasmuch as in the present case, there is no violation of principles of natural justice. The petitioner herein was not only supplied with all the documents but also was given ample opportunity to defend himself.

20. Simultaneously, the reliance on the decision of the Apex Court in Union of India and others v. P. Balasubrahmanayam (supra) is also of no assistance to the petitioner particularly in view of the fact that the appellate authority has already modified the order of penalty.

21. In view of the aforesaid, this Court does not find any merit in the petition. The same stands dismissed.

(MANINDER S. BHATTI) JUDGE PB

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