Telangana High Court

S. Hari Krishna Rao vs The Assistant General Manager And ... on 27 February, 2024

Author: B. Vijaysen Reddy

Bench: B. Vijaysen Reddy

     HONOURABLE SRI JUSTICE B. VIJAYSEN REDDY

               WRIT PETITION No.24077 OF 2017

ORDER :

This writ petition is filed by the petitioner - Mr. S. Hari

Krishna Rao questioning the impugned order No.ZOH/VIG/AAO/

SHKR/2015-16/484 dated 20.01.2016 passed by respondent No.2 -

the Deputy General Manager cum Appellate Authority, Zonal Office,

Allahabad Bank, Himayathnagar, Hyderabad and the order

No.ZOH/DA Order/14/703 dated 24.11.2014 passed by respondent

No.1 - the Assistant General Manager and Disciplinary Authority,

Allahabad Bank, Zonal Office, Himayathnagar, Hyderabad, as biased,

illegal, irrational, erroneous, contrary to law, principles of natural

justice and in violation of Articles 14, 16 and 21 of the Constitution

of India; and for a consequential direction to the respondents to

reinstate the petitioner into service forthwith with all consequential

monetary benefits including seniority, pay and allowances and other

attendant benefits while treating his suspension period as on duty.

2.1. It is submitted that the petitioner was appointed as

Probationary Officer in Allahabad Bank in 2006. Since the date of

appointment, he has rendered his services with utmost satisfaction to

his superior authorities without any complaint or blemish whatsoever.

However, the petitioner was suspended from service on 18.09.2013

alleging certain acts. On 16.11.2013, a show cause notice was issued

to the petitioner with the following charges directing him to give

explanation within seven (7) days.

"1.

             S.No.      Name of    Account No.      Limit          Date of
                        Account                   Sanctioned      Sanction
              (i)      Nagadevi    50136998295   Rs.4.50 lacs   20.12.2012
                       DWACRA

(i). That you did not obtain any loan application from the borrower of Nagadevi DWACRA and processed any loan documents/appraisal for sanction of the loan in the branch.

(ii). That on 20.12.2012, you disbursed the loan amount of Rs.4.50 lacs by transfer to SB account of Nagadevi Group i.e A/c No.21251742133. On the same day ,you debited the entire amount from the said SB Account of Nagadevi SHG group to your SB Account No.20732183163.

(iii). You retained the said amount in your SB account concerned till 26.12.2012 and again transferred And amount of Rs.450,518/- from your said SB Account No.20732183163 to the credit of the said Loan account of Nagadevi DWACRA Group LN No.50136998295 with interest towards liquidation of the loan. The Transfer Voucher for this entry of Rs.450,518 was passed by you.

2.

            S.No.     Name of     Account No.      Limit          Date of
                      Account                    Sanctioned      Sanction
             (a)     T Andamma    50144796527         51,000    19.02.2013
                       (KCC)
             (b)     K Venkanna   50144804574          51,000   19.02.2013


           (KCC)
   (c)   S Narayana    50144812020      51,000   19.02.2013
           (KCC)

(i). That you did not obtain the loan applications from the borrowers of the above three KCC A/cs and did not process any loan documents/appraisals for sanction of loan in the branch.

(ii). That you effected the disbursement of the amount of the loan in respect of the above KCC A/cs to the credit of your own SB Account No.20732183163.No Physical vouchers were available for all these transfer entries.

The Vouchers for the above disbursements were posted by your ID No.30656 and passed by ID No.24588 belonging to Sri Madhukar, Manager, Warrangal Branch as Panthini Branch was working on zero server with the main server at Warrangal Branch.

(iii). That you withdrew Rs.1,00,000/- and Rs.20,000/- from your above S.B A/c No.2O7321831163 from Himayatnagar Branch,Hyderabad on 22-02-2013 and 23-02-2013 respectively and receive cash yourself under your signature on the reverse of the respective withdrawal forms.

(iv). Although, you were present at Hyderabad on 22-02-2013 and 23-03-2013 as evidenced from the the the above withdrawal slips issued by you at Himayatnagar Branch,Hyderabad,it is observed that you signed that attendance register of Panthini Branch for both the above two days without attending the Branch,as the distance

between Himayatnagar Branch (Hyderabad) and Panthini Branch is approximately 155 kms.

(v). That on 25-02-2013,you transferred an amount of Rs.45,000/- from your said S.B A/c No.20732183163 towards the credit of an amount of Rs.5000/- each to the respective KCC Loan A/cs mentioned above and Rs.30,000/- for the credit of your Car Loan account No.50128371333. You did not prepare the physical voucher for this entry.

(vi). That on 27-02-2013,you closed all the three above KCC loan accounts with interest,each being Rs.46,076/- for each KCC loan A/c,by transferring the amount to the debit of your Staff O.D.A/c No.50019694495. Even for this transaction, physical voucher was not prepared by you.

 S.No.     Name of      Account No.      Limit         Date of
            Account                   Sanctioned      Sanction

1. Sri Lakshmi 50151683106 Rs.3.00 lacs 15.04.2013 SHG, Konkapaka

(i). That on 15-04-2013,you sanctioned a loan of Rs.3.00 lakhs to Sri Lakshmi SHG, Konkapaka and reported in MDA for the month of April 2013.

(ii). On the same date,you disbursed the loan amount of Rs.3.00 lakhs by transferring the amount to the SB Account No.21251734777of the above SHG. Again on the same day, the entire amount was transferred from SB

A/c 21251734777 of the said SHG to your own SB A/c No.20732183163.

(iii). Than on 17-04-2013,you transferred an amount of Rs.100,000/- from your above mentioned S.B A/c to the SB A/c No.50003951950 of Sri J Sekhar, PTS posted at ZO Hyderabad.

(iv). That on the same day, Sri J.Sekhar further transferred an amount of Rs.90,000 to his another SB A/c No.5002589212.

(v). That the remaining amount of Rs.2 lacs was withdrawn by you from your above mentioned S.B A/c through withdrawals and ATM withdrawals on various dates between 17.04.2013 and 15.05.2013.

(vi). That on 15.05.2013, you deposited an amount of Rs.1,00,000/- in cash to the credit of the above mentioned SHG loan A/c without mentioning your name on the deposit voucher after making two cash withdrawals each for Rs.50,000/- from your SB A/c No.20732183163/- on the same day. That thereafter, on 17-06-2013 an amount of Rs.2,04,387/- in cash ,was deposited towards liquidation of the said loan A/c purportedly by on Ms P.Komala,through a deposit voucher ,which is prepared by you in your own hand writing. Incidentally, you withdrew total amount of Rs.2,00,000/- in cash @Rs.50,000/- from your SB A/c No.20732183163 ,thereby suggesting that the said deposit was made at your behest.

4. Irregularities in your Car Loan A/c No.50128371333

(i). That you were sanctioned a Car Loan of Rs.650,000/- under ALB DReam Car Scheme vide ZO letter ZOH/Adv/581 dated 26.10.2012 for purchase of Sunny Nissan car. The repayment period was 84 months with NIL moratorium.EMI was fixed as Rs.11,100 p.m. with the repayment of the loan to commence from the next month of disbursement. Although loan was disbursed on 30.10.2012 against your Car Loan A/c No.50128371333 and the schedule of repayment in the CBS system was defined for repayment of the installment from the month of December,2012, you unauthorizedly altered the repayment schedule to commence from December, 2012,with an intention to conceal its status as NPA due to your non-payment of monthly installments of the said loan as per schedule.

5. Irregularities in Revenue Suspense

(i). That you availed Advance against salary without proper/any sanction from Zonal office on the following occasions;


Date of      Posted   Passed   Amount    Adjusted    Posted   Passed
Entry        By ID    by ID                 on       by ID    by ID
02.01.2013   32527    30656    30,000   14.05.2013   32527    30656
15.05.2013   19338    30656    30,000   30.05.2013   32527    30656
01.06.2013   30656    32527    30,000   12.06.2013   32527    30656

The above entries were debited to Revenue Suspense Account (81400007452) and credited to his SB/OD account on all these occasions. It is also observed that the Entry of 15.05.2013 for posting Advance in favour of you

against your salary was with the ID (19938) of Sri P.Babu Rao, Head Cashier, who was on leave on medical grounds upto June 2013 ,which indicates that the ID/Password of Sri Babu Rao was stolen by you and used for your unauthorized actions."

2.2. The petitioner submitted his explanation to the show cause

notice on 28.11.2013. In respect of allegation No.1, the petitioner

submitted that as the borrower paid the entire loan amount along with

interest in respect of Account No.50136998295 of Nagadevi, Self

Help Group (S.H.G.), her account has been closed and fresh loan has

been sanctioned to the Group with reduced limit and thereby no loss

caused to the Bank and there is no complaint from any borrower.

2.3. In respect of allegation No.2, the petitioner submitted that

as the borrowers paid the entire loan amount along with interest in

respect of Account Nos.50144696527, 50144804574 and

50144812020 under Kisan Credit Card Scheme, the said accounts

were closed and thereby no loss caused to the Bank.

2.4. In respect of allegation No.3, the petitioner submitted that

as the borrower paid the entire loan amount along with interest in

respect of Account No.50151683106 of Sri Lakshmi, Self Help

Group (S.H.G.), the said account has been closed and thereby no loss

caused to the Bank.

2.5. In respect of allegation No.4 that the petitioner

unauthorisedly altered repayment schedule of his Car Loan Account

No.50128371333, it is submitted that the said allegation was not

proved in the enquiry.

2.6. In respect of allegation No.5 that the petitioner availed

advance against salary without any permission from the higher

authorities by using other employee's password, the petitioner

submitted that he was not well versed with the administrative rules

and practices and as soon as he got knowledge of the same, he repaid

all the advance amounts against salary, and he has not utilised any

other employee's password.

2.7. Thus, allegation Nos.1 to 3 that the petitioner utilised the

loan amounts for his personal purposes is false and baseless and the

same was endorsed by the Disciplinary Authority in his observations

on his appeal. Accordingly, the petitioner submitted a representation

dated 24.02.2014 to respondent No.1 requesting to drop the charges

against him, as he has not committed any irregularities, and for his

reinstatement into service.

2.8. It is submitted that on 24.02.2014, a charge sheet was

issued with five (5) charges to the petitioner with same allegations as

mentioned in the show cause notice dated 16.01.2023. Thereafter, a

Presenting Officer was appointed. On request of the petitioner by the

letter dated 02.06.2014, the Bank permitted him to engage his

defence officer.

2.9. The petitioner submitted that on his appeal to respondent

No.2, respondent No.1 by way of his comments/observations dated

20.01.2017 mentioned that no charge has been established against the

petitioner, as such, his appeal should be considered positively by

reinstating him into service. Respondent No.1 also mentioned that

the enquiry officer has played the role of fact finding machinery

which is against the principles of quasi judiciary functions.

2.10. The petitioner submitted that total five employees

including him were issued show cause notice with similar charges

and all other employees were let off at the stage of show cause notice

itself giving benefit of doubt as per the majority decision, except him.

2.11. The petitioner submitted that the Bank has not submitted

any documents in support of any of the charges levelled against him.

Charge No.4 was not proved. Thus, the enquiry officer has given

findings without any documentary evidence. Respondent No.1 by the

impugned proceedings dated 24.11.2014 removed the petitioner from

service treating the suspension period as not on duty which is not a

disqualification for future employment, as such, he is entitled to

reinstatement into service. However, the appeal dated 16.12.2014

preferred by the petitioner was rejected by respondent No.2 holding

that the petitioner has not brought any fresh facts or evidence on

record which is perverse, biased and malice.

2.12. The petitioner submitted that for his letter dated

07.04.2017 under the RTI Act, the Bank supplied information by the

letter dated 12.04.2017 wherein it is noticed by the petitioner that

respondent No.1 has recommended reduction of 'basic pay to initial

stage' i.e., reduction of two increments, however, the Assistant

General Manager (Disciplinary Cell), Head Office, Kolkata, modified

the punishment as removal from service for obvious and extraneous

reasons. The Bank while removing the petitioner from service that

too while modifying the simple punishment into severe punishment

did not assign any valid reasons for imposing such severe punishment

of removal from service which is illegal, arbitrary and also in

violation of principles of natural justice and Articles 14, 16 and 21 of

the Constitution of India. Hence, this writ petition.

3.1. Respondent Nos.1 to 3 filed common counter affidavit

denying the allegations made against them. It is submitted that the

petitioner was a Middle Level Manager with seven (7) years of

experience, as such, he was posted as Branch manager at Panthini

Branch (Near Warangal) and he enjoyed discretionary powers to

sanction and disbursement of loans.

3.2. The petitioner being a Branch Manager, conferred with lot

of discretionary powers, indulged in serious financial irregularities by

misusing the powers. The petitioner was found reckless in

sanctioning and disbursing the loans and also by violating the Bank's

guidelines. The petitioner unauthorisedly transferred loan amounts

from the borrower's account to his own account. Hence, the

petitioner was suspended from service on 18.09.2013 for his serious

acts of misconduct involving financial improprieties and as his

presence in the Bank would cause more harm to the public interest.

3.3. By the letter dated 16.11.2013, explanation was called for

from the petitioner and as his explanation was not satisfactory, charge

sheet was issued to the petitioner for his misconduct; a departmental

enquiry was held wherein the inquiring authority found the charges

'proved' and after giving opportunity of submitting representation to

the petitioner, punishment of 'removal from service' was imposed by

the Proceedings No.ZOH/DA Order/14/703 dated 24.11.2014

and the same was confirmed in the appeal by the order in

Proc. No.ZOH/VIG/AAO/SHKR/2015-16/484 dated 20.01.2016.

4.1. The learned counsel for the petitioner relied on the

judgments of the Hon'ble Supreme Court in Nagarj Shivrao Karjagi

v. Syndicate Bank Head Office, Manipal1 and State of Uttar

Pradesh and others v. Saroj Kumar Sinha 2 and also the judgment

of the erstwhile High Court of Andhra Pradesh in V. Sai Baba

v. Bank of Baroda 3.

4.2. Learned counsel submitted that Regulation 19 of

Allahabad Bank Officer Employees' (Discipline and Appeal)

Regulations 1976, (for short 'Regulations') whereby the bank is

entitled to consult the Central Vigilance Commission, has been

wrongly construed by the respondents' authorities. The Disciplinary

Authority at the most could have taken suggestions of the Central

Vigilance Commission before a decision was taken. However, in the

AIR 1991 Supreme Court 1507

2010 SCC 772

1994 (6) SLR 240

instant case, the Disciplinary Authority having reached to a

conclusion that no pecuniary loss is caused to the respondent bank

and proposed to impose penalty of 'removal from service which shall

not be disqualification for future employment under Regulation 4(i)

(major penalty) of the Regulations', sought advice from the Vigilance

Cell i.e., the Assistant General Manager, Disciplinary Cell, Head

Office, Allahabad Bank. Acting upon such request of the

Disciplinary Authority, the Assistant General Manager, Disciplinary

Cell by the proceedings vide Ref. No.HO/PA/DC/14-1444 dated

07.11.2014 opined that the penalty of 'removal from service which

shall not be a disqualification for future employment under

Regulation 4(i) (major penalty) of the Regulations; further the

suspension period will be treated as 'Non-duty' and no pay and

allowance will be paid to him other than subsistence allowance

already paid', may be considered. The learned counsel submitted that

thus, it is a clear case where the Disciplinary Authority was totally

influenced by the opinion of the Assistant General Manager,

Disciplinary Cell.

4.3. In V. Sai Baba's case (Supra 3), the erstwhile High Court

of Andhra Pradesh held as under:

"12. In Nagaraj Siva Rao Kharjagi v. Syndicate Bank 1991(2) SLR 784, it was held that die (sic. the) proceedings before the disciplinary authority are quasi judicial in nature and being quasi judicial the power is unrestricted. In that case, under Regulations of the Syndicate Bank, the recommendation of the CVC could be obtained by the Bank in disciplinary matters. The Finance Ministry issued instructions making it obligatory on the part of the Bank to refer disciplinary matters to the CVC. The Supreme Court struck down such instructions as made without jurisdiction. The learned counsel for the Bank contended that the instructions of the Ministry of Finance alone were struck down but not the regulations of the Bank which permitted such reference to the CVC and therefore Regulation 19 which required the Bank to consult the CVC whenever necessary in respect of all disciplinary proceedings having a vigilance angle is valid. As observed by the Supreme Court, the proceedings before the disciplinary authority are quasi judicial in nature. Even though the advice which may be tendered by the CVO is only advisory in nature and is not binding on the Bank, still the fact remains that the CO is admittedly an officer superior to the disciplinary authority. The disciplinary authority is Deputy General Manger of Bank whereas the CVO is the General Manager Bank. From the facts it is seen that the 2nd respondent opined that a lesser punishment should be imposed while seeking the advice of the CVO and the CVO gave his opinion that the maximum penalty of dismissal from service should be imposed. It was followed by the 2nd respondent, the

officer, who is inferior in rank to the CVO. Under the said circumstances, it is difficult to hold that the 2nd respondent was not influenced by the advice tendered by the CVO.

13. In the said circumstances, it has to be held that the order of the 2nd respondent was fettered by the advice tendered by the CVO. Hence, when once the disciplinary enquiry commences, it assumes quasi judicial character and should be proceeded with, uninfluenced by any other authority and the disciplinary authority should be left free to come to its own conclusions without being advised by any other authority. The consultation required under Regulation 19 is referable to the stage prior to the commencement of the proceedings but not after the commencement of the disciplinary proceedings which are quasi judicial in nature.

15. For the aforesaid reasons, it has to be held that the order of the 2nd respondent dismissing the petitioner from service is vitiated for not following the principles of natural justice by not giving notice to the petitioner, when the 2nd respondent differed with the findings of the enquiry officer and also on the ground that the order of the 2nd respondent is influenced by the recommendation of the CVO. Once the order of the 2nd respondent is vitiated on the ground of violation of principles of natural justice, the appellate order which is based on the original order also has to be quashed, and accordingly both the orders are quashed."

4.4. In Nagaraj Shivrao Karjagi's case (Supra 1) while

dealing with Section 19 of the Banking Companies (Acquisition and

Transfer of Undertakings) Act (5 of 1970) read with Regulations 17

and 20 of the Syndicate Bank Officer Employees' (Discipline and

Appeal) Regulations 1976, the Hon'ble Supreme Court held as under:

"18. Secondly, the Ministry of Finance, Government of India has no jurisdiction to issue the impugned directive to Banking institutions. The Government may regulate the Banking institutions within the power located under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. So far as we could see, Section 8 is the only provision which empowers to the Government to issue directions. Section 8 reads:

"Every corresponding new bank shall, in the discharge of its functions, be guided by such directions in regard to matters of policy involving public interest as the Central Government may, after consultation with the Governor of the Reserve Bank, give."

19. The corresponding new bank referred to in S. 8 has been defined under S. 2(f) of the Act to mean a banking company specified in column 1 of the First Schedule of the Act and includes the Syndicate Bank. Section 8 empowers the Government to issue directions in regard to matters of policy but there cannot be any uniform policy with regard to different disciplinary matters and much less there could be any policy in awarding punishment to the

delinquent officers in different cases. The punishment to be imposed whether minor or major depends upon the nature of every case and the gravity of the misconduct proved. The authorities have to exercise their judicial discretion having regard to the facts and circumstances of each case. They cannot act under the dictation of the Central Vigilance Commission or of the Central Government. No third party like the Central Vigilance Commission or the Central Government could dictate the disciplinary authority or the appellate authority as to how they should exercise their power and what punishment they should impose on the delinquent officer. (See: De Smith's Judicial Review of Administrative Action, Fourth Edition, p. 309). The impugned directive of the Ministry of Finance is, therefore, wholly without jurisdirtion and plainly contrary to the statutoryRegulations governing disciplinary matters."

5. In view of the above authoritative pronouncements, it is clear

that the Disciplinary Authority having quasi judicial powers ought to

have applied its mind independently. In the instant case, the

Disciplinary Authority having proposed to impose the penalty as

stated above sought advice of the Assistant General Manager,

Vigilance Cell, who gave the following advice:

" "Removal from service which shall not be a disqualification for future employment" under Regulation 4(i) (major penalty) of ABOE ( D&A ) Regulations, 1976. Further the suspension period will be treated as "Non-

duty" and no pay and allowance will be paid to him other than the subsistence allowance already paid."

6. In the opinion of this Court, the decision of the Disciplinary

Authority was influenced by the advice of the Assistant General

Manager, Vigilance Cell. The Disciplinary Authority, having

expressed its mind, sought to know from the Assistant General

Manager, Vigilance Cell whether the punishment it seeks to impose

was appropriate. Such procedure adopted by the Disciplinary

Authority is contrary to the law laid down by the Hon'ble Supreme

Court in Nagaraj Shivrao Karjagi's case (Supra 1) and

the erstwhile High Court of Andhra Pradesh in V. Sai Baba's case

(Supra 3). The term "consultation" as per Regulation '19' of the

Regulations would mean 'suggestion' but not 'advice' as was done in

the instant case. Further, such consultation ought to be before

commencement of the proceedings and not after conclusion of the

proceedings as held in the afore-referred pronouncements.

This Court does not have any hesitation to hold that the impugned

proceedings dated 24.11.2014 whereby the petitioner is removed

from service are vitiated. Hence, the order dated 24.11.2014 of the

Disciplinary Authority and the order dated 20.01.2016 of the

Appellate Authority are liable to be set aside.

7. It is contended by the learned counsel for the petitioner that

no pecuniary loss occasioned to the respondent Bank. The learned

counsel referred to the comments/observations of the Disciplinary

Authority submitted to the Appellate Authority in terms of Clause

17(ii) of the Regulations which reads as under:

"On reverifying the entire case based on factual position and also on perusing the appeal preferred by the CO, I, while considering the pleas of the CO mainly on sympathetic & humanitarian considerations and also considering the fact that the CO completed a paltry period of 8 years of service in Bank, including the period of suspension and still has a left over service of more than 20 years, thus resulting in insufficient & inadequate position of the terminal benefits payable to the CO,the Appeal preferred by the CO may be positively examined, also keeping in view the fact that the Bank has not suffered any loss financially and also image wise, since there is no complaint from any borrower has been brought to the records of the Enquiry."

The learned counsel requested this Court to direct the Disciplinary

Authority to take into account that no pecuniary loss has been caused

to the respondent Bank. However, this Court is not inclined to go

into the merits of such submission, as the orders of the Disciplinary

Authority and the Appellate Authority are being set aside herein.

It is left open to the Disciplinary Authority to consider the same in

accordance with law.

8. Resultantly, the writ petition is allowed. The order dated

24.11.2014 of the Disciplinary Authority and the order dated

20.01.2016 of the Appellate Authority are hereby set aside.

The matter is remanded back to respondent No.1 who shall pass

orders in the disciplinary proceedings independently in accordance