Sunday, 1 September 2019

Whether employee acting beyond one's authority is guilty of misconduct liable for disciplinary enquiry?

Loss of confidence is the primary factor and not the amount of money misappropriated. Acting beyond one's authority is by itself a breach of discipline and is a misconduct. In the case of a bank, every officer/employee is supposed to act within the limits of his authority. If each officer/employee is allowed to act beyond his authority, the discipline of the organisation/bank will disappear. The functioning of the Bank would become chaotic and unmanageable. No organisation, more particularly, a bank can function properly and effectively if its officers and employees do not observe the prescribed norms and discipline. Such indiscipline cannot be condoned on the specious ground that it was not actuated by ulterior motives or by extraneous considerations.

In the High Court of Meghalaya at Shillong
(Before Ajay Kumar Mittal, C.J. and H.S. Thangkhiew, J.)

Shri Gautam Dhar  v.  State Bank of India and Others

Writ Appeal No. 59 of 2017
In
WP(C) No. 191 of 2014
Decided on June 11, 2019
Citation: 2019 SCC OnLine Megh 105 : 2019 Lab IC 2650

The Judgment of the Court was delivered by
Ajay Kumar Mittal, C.J.:— Through the instant writ appeal, the appellant seeks quashing of the judgment and order dated 7.11.2017, Annexure-5 passed by the learned Single Judge dismissing the writ petition filed by him against the order dated 17.10.2013, passed by the appellate authority of the respondent-Bank imposing major penalty of compulsory retirement against him.
2. A few facts relevant for the decision of the controversy involved as narrated in the writ appeal may be noticed. The appellant was appointed in the respondent-State Bank of India on 14.12.1984. He was subsequently promoted as Senior Assistant, Senior Special Assistant in the year 2008 and Assistant Manager in the year 2010. He was later on transferred to Zunheboto Branch, Nagaland w.e.f 1.5.2011 and was assigned multi task responsibilities to act as ATM-in-charge, Passing Officer as well as Cash Officer. On 23.2.2012, the Single Window Operator presented three cheques vide Account Nos. 31639151625, 31729456535 and 31890329563 belonging to three account holders for withdrawal of the total amount of Rs. 1,29,17,000/- to a third party i.e. Hotokhru Aye from the account of Deputy Inspector of School, Kanpur, Uttar Pradesh vide SBI account No. 10321911051 maintained at Swaroopnagar Branch, Kanpur. The appellant claimed that being the first Passing Officer, diligently cleared the above high value cheques in the system after verifying and ascertaining the correctness of account numbers, signatures and series of cheques and subsequently instructed the Single Window Operator to place before the Second Passing Officer. Thereafter, the appellant as the first Passing Officer and the second Passing Officer Shri Chandan Kumar had taken out the above amount and the Single Window Operator handed over the above amount to the drawee. The respondent State Bank of India appointed Investigating Officer who conducted the preliminary enquiry on 6.3.2012 at Zunheboto Branch on the allegation that the fake transaction had taken place on 23.2.2012 at Zunheboto Branch, Nagaland and Rs. 1,29,17,000/- had been paid to a third party from the account of Deputy Inspector of School, Kanpur, Uttar Pradesh by using the three fake cheques. He submitted the preliminary report on 17.3.2012. The appellant denied the allegation of his involvement or negligence. Thereafter, the Assistant General Manager, SBI Dimapur issued show cause notice dated 30.3.2012 to the appellant alleging commission of serious irregularity in regularising/authorising the payment of the above three cheques thereby violating the procedure of the bank as a result of which the Bank suffered huge monetary loss. The appellant was placed under suspension by the disciplinary authority vide order dated 17.4.2012 pending inquiry. According to the appellant, vide letter dated 25.4.2012, he requested the respondent Bank to supply him the photo copy of the documents relied upon by the disciplinary authority but the same were denied to him. He was not allowed to inspect the record. On 16.6.2012, the appellant informed the Assistant general Manager, Dimapur about his inability to give reply to the show cause notice for not allowing him to inspect the documents. The appellant submitted his reply vide letter dated 12.9.2012 denying all the allegations against him. The appellant asserts that the Single Window Operator vide letter dated 20.9.2012 also categorically stated his non involvement in the transaction. Vide letter dated 22.9.2012, the disciplinary authority informed the appointment of Inquiry Officer to the appellant and also allowed him to engage defence representative of his choice to represent him. The appellant engaged his defence representative. According to the appellant, during the course of inquiry on 19.11.2012, the Branch Manager as prosecution witness No. 1 clearly admitted that he was not aware of giving training/sensitisation or demonstration to the appellant and other staff in the Zunheboto Branch by the State Bank of India for application of fugitive ink test/ultra violet lamp test operation to detect fraud transaction. He further admitted that it was the duty of the Single Window operator to ensure passing of the cheque by two Passing Officers before making the payment across the counter. He further admitted that there was no doubt on the legitimacy of the account holders and that there was possibility of the three parties signatures obtained after the cheques were passed by the appellant. The Inquiry Officer vide report dated 31.12.2012 recorded that all the charges were proved against the appellant. According to the appellant, none of the adverse original documents relied upon by the respondent Bank were produced as per the rules; none of the signatories of the cheques had been called for and examined and none of the account holders of the three cheques were called. On the basis of the enquiry report, the respondent disciplinary authority vide letter dated 15.2.2013 directed the appellant to give his written statement of defence within seven days. The appellant submitted his reply in defence dated 5.3.2013 rebutting the findings of the Inquiry Officer by stating that he diligently verified and ascertained the cheques which were found to be proper and genuine to naked eyes; the question of referring to home branch did not arise as the said practice had already discontinued. No bank instruction was brought to his notice. He was not imparted the core banking system. It was the duty of the Single Window Operator to enter the high value transaction in register. In nut shell, he denied all the allegations levelled against him. The respondent appointing authority vide impugned order dated 4.4.2013 accepted the report of the Inquiry Officer and awarded major punishment of compulsory retirement from service to the appellant in terms of Rule 67(h) of State Bank of India Officer Service Rules (in short, “the Rules”). Vide letter dated 15.5.2013, the respondent authorities informed the appellant that he can prefer departmental appeal before the appellate authority within 45 days. Accordingly, the appellant filed appeal before the Chief General Manager, SBI, Local Head office, Gauhati. Vide order dated 17.10.2013, the respondent appellate authority upheld the decision of the appointing authority and rejected his appeal. The appellant sought documents through RTI vide letter dated 4.11.2013. Certain documents were provided to the appellant vide letter dated 27.11.2013. The appellant came to know for the first time about the advice sought from the Chief Vigilance Officer (CVO) by the respondent Bank and the recommendation dated 9.8.2012 made by CVO upon which the Bank conducted the enquiry against him to inflict severe punishment upon him. The writ petition filed by the appellant before the learned Single Judge having been dismissed vide order dated 07.11.2017, he has filed the instant writ appeal.
3. In the counter affidavit filed by the respondent State Bank of India in the writ petition before the learned Single Judge, it was inter alia stated that the appellant knowing fully that the cheques did not enter into the high value transaction register, he had given his authorisation on the said cheques for making payment immediately. The transaction took place due to authorisation by the appellant only and no other officer had put his signatures for authorisation. The action taken against the appellant was supported in the said affidavit. The appellant had filed the rejoinder affidavit reiterating the averments made in the writ petition and denying the contents made in the counter affidavit.
4. Learned counsel for the appellant submitted that since the CVO report becomes part of the decision making process, it was mandatory to have supplied to the appellant. Further, there was no specific denial in paras 38 and 39 of the reply that CVO report was not relied upon by the departmental Inquiry Officer. Secondly, there was no evidence against the appellant regarding the allegation of misconduct for clearing the three cheques. Thirdly, it was submitted that there was discrimination between the two similarly situated persons as Shri Chandan Kumar was equally responsible for the alleged withdrawal of money on 23.02.2012 who was awarded minor penalty of administrative warning. Reliance was mainly placed on judgments in Nagaraj Shivarao Karjagi v. Syndicate Bank, Head Office, Manipal(1991) 3 SCC 219State Bank of India v. D.C. Aggarwal(1993) 1 SCC 13Oriental Bank of Commerce v. S.S. Sheokand(2014) 5 SCC 172Union of India v. R.P. Singh(2014) 7 SCC 340 and State Bank of India v. Bidyut Kumar Mitra(2011) 2 SCC 316.
5. On the other hand, learned counsel for the respondent bank submitted that the appellant allowed withdrawal of cash through withdrawal form from the newly opened account to third party without any authority letter. Further, the signatures of the account holders were not matching. Chandan Kumar had no role to play in the fraudulent transaction as it was not approved by him. The punishment is also not disproportionate to the act done by the appellant. No principle of natural justice was violated. Reliance was placed on judgments in Disciplinary Authority cum Regional Manager v. Nikunja Bihari Patnaik(1996) 9 SCC 69State Bank of India v. Bela Bagchi(2005) 7 SCC 435 : AIR 2005 SC 3272/3275Commissioner of Police, Delhi v. Narender Singh(2006) 4 SCC 265 : AIR 2006 SC 1800State Bank of India v. Ramesh Dinkar Punde(2006) 7 SCC 212Union of Indiav. Bishamber Das Dogra(2009) 13 SCC 102 : AIR 2010 SC 3769.
6. We have heard learned counsel for the parties.
7. In the present case, a perusal of the record shows that the following allegations were levelled against the appellant:—
Allegation No. 1
It is alleged that you authorized payment of the following non home high value multicity cheques without ensuring their genuineness, even though the undernoted cheque forms did not bear significant security features such as ‘Bank's logo in invisible ink’, ‘Valid for Rs…..& under’ etc. Thus you discharged your duties in a very casual, reckless and negligent manner without bothering to protect the interest of the Bank.
Cheque No.
Date of Cheque
Amount of cheques (Rs.)
A/C No.
Drawee Branch
385822
17.02.2012
50,60,000
10321911051
(00217) Swaroop Nagar (Kanpur)
147972
13.02.2012
50,41,000
10321911051
(00217) Swaroop Nagar (Kanpur)
147968
06.02.2012
28,16,000
10321911051
(00217) Swaroop Nagar (Kanpur)
Allegation No. 2
Though the significant security features of the cheques as stated in Allegation No. 1 were missing, it is alleged that you neither took up the matter with the home branch to ascertain the genuineness of the cheques nor you refer the matter to the branch manager/other officials of the branch. Thus it is alleged that you were callous, insensible, adamant and negligent in discharge of your duties due to which Bank has suffered a huge financial loss to the tune of Rs. 1,24,66,000/-.
Allegation No. 3
It is alleged that you did not ensure use of Fugitive Ink test/ultra Violet Lamp test to verify the authenticity of the cheques stated in Allegations No. 1 before their passing. Thus, you have acted in gross violation of Bank's repeated instructions as contained in e-circular No. NBG/S&P-SP/21/2009-10 dated 19.12.2009 and reiterated in e-circular No. NBG/BOD-FMC/57/2011-12 dated 16.11.2011.
Allegation No. 4
It is alleged that you credited the amounts of the above mentioned cheques stated in allegation No. 1 into three newly opened savings bank accounts the conduct of which were not established as satisfactory. There were no transactions since opening of these accounts. You allegedly authorised the payments without verifying the legitimacy of the payees to receive such an amount, that too from a seemingly unrelated account at Kanpur. The details of the amounts where proceeds of the alleged forged cheques were credited are as under:—
Sl. No.
Cheque No.
Amount of the cheque (Rs)
Account No. Where the amount of the cheques were credited
Name of the account holder
Date of opening of the account
01.
385822
50,60,000/-
31639151625
Ms. Avikali
21.2.2011
02.
147972
50,41,000/-
31729456535
Mrs. Zhetoli
30.4.2011
03.
147968
28,16,000/-
31890329563
Mrs. H. Toheli Sumi
17.8.2011
Allegation No. 5
You have made under noted high value cash payments from the newly opened non cheque facility saving bank accounts to a third party named Hotokhu Aye through withdrawal slip without any authorization from the account holders. The account holders' signatures were also not verified while authorising the payment. Further, the signature of the drawer of account No. 31890329563 allegedly differ with her recorded signature. Thus, it is alleged that you have acted in a careless and negligent manner flouting Bank's laid down system and procedures. The details of the payments are as under:—
Sl. No.
Date of withdrqwal slip
Amount (Rs.)
Account No.
Name of the account holder
01.
23.02.2012
50,50,000/-
31639151625
Ms. Avikali Achumi
02.
23.02.2012
50,20,000/-
31729456535
Mrs. Zhetoli
03.
23.02.2012
28,16,000/-
31890329563
Mrs. H. Toheli sumi
Allegation No. 6
Bank's extant instruction is that high value cash payment of Rs. 10.00 lacs and above is to be authorised by two authorised officials of the Bank. However, it is alleged that you had single handedly authorised the payment of the cheques as stated in allegation No. 5 without referring to the second official for authorization in gross violation of the Bank's extant instruction.
Allegation No. 7
It is alleged that you did not ensure entering the transactions stated in Allegation No. 4 in the ash transaction Monitoring Register, though such register has to be maintained at the branch.
Allegation No. 8
In this regard, quoting a case of attempted fraud of similar nature an alert advice for exercising strict vigil for non home transaction was sent to all branches of the Region vide our letter No. AGM/DAC/248 dated 15.9.2011. However, it is alleged that you have ignored the controller's aforesaid instruction by making payment of fraudulent non home cheques as stated in allegation No. 1.
Allegation No. 9
It is also alleged that you had violated Bank's extant instructions by allowing the under noted cash payments though withdrawal slips in cheques facility accounts without taking permission of the Branch Manager/authorised officials.
Sl. No.
Account No. & Name of account holder
Date of transaction
Amount
Nature of account
01.
30722818808 of Kiyexu Chishi
14.01.2012
Rs. 1,40,000/-
Cheque facility
02.
11736617368 of N Awomi
27.01.2012
Rs. 7,00,000/-
Cheque facility
03.
30869019432 of Alotoli Awomi
14.02.2012
Rs. 2,00,000/-
Cheque facility
Allegation No. 10
You have passed/authorised the payment of STDR Account No. 11736695449 of Puloto K V Sema on 17.2.2012 without any application/STDR receipt. The transaction was done through a double entry voucher without the signature of the account holder, which is a serious violation of Bank's instructions.”
8. Departmental enquiry was conducted against the appellant. After considering the entire evidence on record, it was established that the appellant Shri Gautam Dhar while working as Assistant Manager at Zunheboto Branch during period from 26.3.2011 to 23.2.2012, committed serious irregularities in payment of three high value non home fake cheques amounting to Rs. 1,29,17,000/- purportedly issued by Deputy Inspector of School, Kanpur bearing account No. 10321911051 maintained at Swaroopnagar, Kanpur Branch. The proceeds of the cheques were credited to three newly opened saving bank accounts and subsequently cash payments were made to third party without ensuring the genuineness of the payee and without observing Bank's extant laid down systems and procedures. All the significant features such as ‘Bank's logo in invisible ink’, valid for Rs….etc. were missing in the cheques and the appellant did not ensure use of fugitive ink test/ultra violet test to verify the genuineness of the cheques. Further, the appellant single handedly authorised the payments of such high value cheques without referring to second Passing Officer although cash payment of Rs. 10 lacs and above was to be authorised by the two officers as per Bank's extant instructions. The Inquiry officer concluded that all the charges against the appellant except allegation No. 2 were proved. However, the disciplinary authority held all the charges to be proved. The appointing authority after going through the entire record held the appellant negligent in discharging his duties and imposed punishment of compulsory retirement as per the relevant rules. Even the appellate authority i.e. Chief General Manager vide order dated 17.10.2013 did not interfere with the findings recorded by the authorities below and rejected the appeal filed by the appellant.
9. Learned Single Judge has examined the matter in detail after considering the entire evidence, relevant rules and regulations and the case law on the point. It has been categorically recorded by the learned Single Judge that there is not an iota of evidence or discussion about the CVO report either in the order of the appointing authority or that of the appellate authority. We have also perused the record and find that the report of the CVO was not the basis for arriving at a finding against the appellant. The respondents considered the documents and evidence adduced during the enquiry proceedings. The appellant failed to show that any prejudice was caused to him by non supply of the CVO report when the same was neither a part of the enquiry proceedings or basis thereof. Thus, since the CVO report was neither relied upon nor mentioned while awarding punishment to the appellant, the contention on behalf of the appellant that as the CVO report became part of the decision making process, it was mandatory to have supplied to the appellant, cannot be accepted. Further, merely because the CVO had given advice or recommendations but the same were not furnished to the appellant to give him an opportunity to deal with the same, would not make the decision impugned in the instant case bad unless it is shown and established that the decision is influenced by such advice or recommendation. There is nothing on record from where it can be safely said that at or before making the impugned decision, any of the authorities concerned infact looked into or considered such advice or recommendation of the CVO. In that view of the matter, it cannot be said that there has been denial of natural justice in the present case for not supplying the copy of the report of CVO to the appellant.
10. With regard to the second contention that no evidence against the appellant with regard to the allegation of misconduct for clearing the three cheques, it may be noticed that it has been proved on record by the authorities below as also categorically recorded by the learned Single Judge that the appellant knowing fully well that the cheques did not enter into the high value transaction register, whereas he gave his authorisation on the cheques for making the payment. He neither took up the matter with the Home Branch to ascertain the genuineness of the cheques nor referred the matter to the Branch Manager or other officials of the branch. Further, he did not ensure use of fugitive ink test/ultra violet lamp test to verify the authenticity of the cheques before their passing. The appellant made the high value cash payments from the newly opened non cheque facility saving bank accounts to a third party through withdrawal slip without any authorisation from the account holders. As per Bank's extant instruction, high value cash payment of Rs. 10 lacs and above was to be authorised by two authorised officials of the Bank but the appellant had single handedly authorised the payment of the cheques without referring to the second official for authorisation in gross violation of the instructions. He even did not ensure entering the transaction in the Cash transaction Monitoring Register though such register had to be maintained at the Branch. Even the signatures on the cheques were not found to be matching. Further, the fact that the petitioner instructed the Single Window Operator to present the cheques was corroborated with the charges and clearly proved misconduct. Thus, there was ample evidence to prove misconduct of the appellant.
11. The relevant findings recorded by the learned Single Judge read thus:—
“29. I do not find any merit in the contention of counsel for the petitioner in as much as there is not an iota of evidence or discussions about the CVO report either in the order of the appointing authority or that of the appellate authority. The judgments relied upon by learned counsel for the petitioner are of no help to the petitioner as the facts in those judgments dealt with a situation where the recommendation of the CVO was considered and played some role in inflicting punishment on the delinquent. This is not the case here.
30. The report of the CVO, according to the respondents, was not the basis for arriving at a finding against the petitioner. The respondents considered the documents and evidence adduced during the enquiry proceedings. The petitioner has failed to show that any prejudice is caused to him by non supply of the CVO report, when the same was neither a part of the enquiry proceedings or basis thereof. In the case of State Bank of India v. Bidyut Kumar Mitra(2011) 2 SCC 316, it was clearly held that since the disciplinary authority has not relied upon CVO recommendation and the respondent had failed to plead or prove any prejudice having been caused, the disciplinary proceedings cannot be said to be vitiated in any way.
31. It is settled law that in departmental proceedings, the disciplinary authority is the sole judge of facts and in case an appeal is presented to the appellate authority, the appellate authority has also the power/and jurisdiction to re-appreciate the evidence and come to its own conclusion on facts, being the sole fact finding authorities.
32. The findings, recorded in a domestic enquiry can be characterised 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 person could have come to those findings on the basis of that evidence. This principle was laid down by the Hon'ble Supreme Court in the case of ‘State of Andhra Pradesh v. S. Sree Rama Rao’ (1964) 3 SCR 25 wherein the question was whether the High Court, under Article 226 can interfere with the orders passed by the disciplinary authority. The Hon'ble Supreme Court observed that the High Court had no jurisdiction to interfere with the orders. It was also held that in a departmental enquiry the rule followed in a criminal trial that in offences not established unless proved by evidence beyond reasonable doubt to the satisfaction of the court must be applied and that if such a rule was not applied the High Court could set aside the order of the departmental authority in exercise of its power under article 226 of the Constitution. It was further held that the High Court does not sit as a court of appeal over the decision of the authority holding a departmental enquiry: it has only to see whether the enquiry has been held by a competent authority and according to the procedure prescribed and whether the rules of natural justice have been observed. Where there is some evidence which the authority has accepted and which evidence may reasonably support the conclusion that the officer is guilty, it is not the function of the High Court exercising its jurisdiction under Article 226 to review the evidence and to arrive at an independent finding on the evidence. If the enquiry has been properly held, the question of adequacy or reliability of the evidence cannot be canvassed before the High Court. This decision was followed in the case of ‘Central Bank of India Limited, New Delhi v. Shri Prakash Chand Jain(1969) 1 SCR 735 and ‘Messrs Bharat Iron Works v. Bhagubhai Balubhai Patel(1976) 1 SCC 518.
33. In another case ‘Rajinder Kumar Kindra v. Delhi Administration through Secretary (Labour)’, (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 can be rejected as perverse. It was also laid down that 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 of non application of mind and stands vitiated. However, in the case at hand, the petitioner has not been able to show that the findings are based on no legal evidence or that the same are perverse.
34. I find that after considering the charges alongwith reply and after giving adequate opportunity to the petitioner, a detailed reasoned report was submitted by the Enquiry officer against which the petitioner submitted his reply to the disciplinary authority which was also dealt with and considered by the disciplinary authority and ultimately the appellate authority passed its order. The disciplinary proceedings ended with the appellate order and after perusal of the records of this case, it does not create any doubt in the mind of the court that the petitioner was not provided with reasonable opportunities to ventilate his grievances or that there was any procedural irregularities found at the time of conducting the disciplinary proceedings by the Enquiry Officer, Disciplinary authority and the appellate authority.
35. Therefore, after perusing the records and evidence, I have no hesitation to hold that the charges of misconduct levelled against the petitioner were established without any iota of doubt. Furthermore, knowing fully well that the cheques did not enter into the high value transaction register, the petitioner gave his authorisation on the cheques for making the payment; the fact that the petitioner instructed the Single Window Operator to present the cheques was corroborated with the charges and clearly proved misconduct. Considering the gravity of misconduct committed by the petitioner, being a responsible officer of the Bank, I am of the view that the punishment imposed by the appellate authority cannot be described as disproportionate.
36. I am of the view that there is very limited scope for judicial review of the order of punishment imposed by the appellate authority; considering the records of the entire disciplinary proceedings and the decisions cited above support my view. It is a well settled principle of law that unless the proceedings are patently perverse and shockingly illegal, the court should not interfere with the decision taken by the disciplinary authority which has been affirmed subsequently by the appellate authority.
37. The appointing authority and the appellate authority considered all the points raised by the petitioner after perusing the records placed before them. I do not find any ground to interfere with the findings of the authorities.”
12. As regards the plea of discrimination between the appellant and Shri Chandan Kumar, Accountant it has been recorded by the learned Single Judge that the transaction took place due to authorisation by the appellant only and no other officer had put his signature for authorisation. The appellant ought to have followed the procedure prescribed for making payment of high value transaction. The appellant knowingly fully well that the cheques did not enter into the high value transaction register had given his authorisation on the cheques. Thus, the whole responsibility was of the appellant and therefore, the question of discrimination does not arise. Moreover, no such argument was raised before the learned Single Judge.
13. Learned counsel for the appellant has not been able to point out any error, illegality or perversity in the findings recorded by the authorities below or the learned Single Judge, warranting interference by this Court in writ appeal.
14. We now proceed to examine the legal position on the issue. In Bela Bagchi's case (supra), while observing about the discipline to be maintained in a Bank and the duties of its employees, it was recorded by the Supreme Court that every employee of the Bank is required to take all possible steps to protect the interests of the Bank and its customers. He must discharge his duties with utmost integrity, honesty, devotion and diligence and to do nothing which is unbecoming of a Bank employee. It was further record that at the same time, acting beyond one's authority is by itself a breach of discipline and is a misconduct. The relevant para from the judgment reads thus:—
“15. A Bank officer is required to exercise higher standards of honesty and integrity. He deals with money of the depositors and the customers. Every officer/employee of the Bank is required to take all possible steps to protect the interests of the Bank and to discharge his duties with utmost integrity, honesty, devotion and diligence and to do nothing which is unbecoming of a Bank officer. Good conduct and discipline are inseparable from the functioning of every officer/employee of the Bank. As was observed by this Court in Disciplinary Authority-cum-Regional Manager v. Nikunja Bihari Patnaik(1996) 9 SCC 69, it is no defence available to say that there was no loss or profit resulted in case, when the officer/employee acted without authority. The very discipline of an organization more particularly a bank is dependent upon of its officers and officers acting and operating within their allotted sphere. Acting beyond one's authority is by itself a breach of discipline and is a misconduct. The charge against the employee were not casual in nature and were serious. That being so, the plea about absence of loss is also sans substance.”
15. In Narender Singh's case (supra), it was held by the Apex Court that there is distinction between the standard of proof required in recording a finding of conviction in a criminal case and in a departmental proceeding. In departmental proceedings, preponderance of probability would serve the purpose. The relevant observations read thus:—
“12. It is not in dispute that the standard of proof required in recording a finding of conviction in a criminal case and in a departmental proceeding are distinct and different. Whereas in a criminal case, it is essential to prove a charge beyond all reasonable doubt, in a departmental proceeding preponderance of probability would serve the purpose. [See Kamaladevi Agarwal v. State of W.B.(2002) 1 SCC 555].”
16. In Nikunja Bihari Patnaik's case (supra), acting beyond one's authority was held to be a misconduct within the meaning of Regulation 24 of Central Bank of India Officers Employees (Discipline & Appeal) Regulations, 1976. It was further recorded by the Apex Curt that proof of any loss is not necessary. In the said case, a Scale I officer of the Bank for a sufficiently long period and in a number of instances allowed overdrafts or passed cheques involving substantial amounts beyond his authority. Such acts were not held to be merely errors of judgment. The relevant observations recorded by the Apex Court read thus:—
“7. …….. Regulation 3 requires every officer/employee of the Bank to take all possible steps to protect the interests of the Bank and to discharge his duties with utmost integrity, honesty, devotion and diligence and to do nothing which is unbecoming of a Bank officer. It requires the officer/employee to maintain good conduct and discipline and to act to the best of his judgment in performance of his official duties or in exercise of the powers conferred upon him, Breach of Regulation 3 is “misconduct” within the meaning of Regulation 24. The findings of the Enquiry Officer which have been accepted by the disciplinary authority, and which have not been disturbed by the High Court, clearly show that in number of instances the respondent allowed overdrafts or passed cheques involving substantial amounts beyond his authority. True, it is that in some cases, no loss has resulted from such acts. It is also true that in some other instances such acts have yielded profit to the Bank but it is equally true that in some other instances, the funds of the Bank have been placed in jeopardy; the advances have become sticky and irrecoverable. It is not a single act; it is a course of action spreading over a sufficiently long period and involving a large number of transactions. In the case of a Bank - for that matter, in the case of any other organization - every officer/employee is supposed to act within the limits of his authority. If each officer/employee is allowed to act beyond his authority, the discipline of the organisation/bank will disappear; the functioning of the Bank would become chaotic and unmanageable. Each officer of the Bank cannot be allowed to carve out his own little empire wherein he dispenses favours and largesse. No organization, more particularly, a Bank can function properly and effectively if its officers and employees do not observe the prescribed norms and discipline. Such indiscipline cannot be condoned on the specious ground that it was not actuated by ulterior motives or by extraneous considerations. The very act of acting beyond authority - that too a course of conduct spread over a sufficiently long period and involving innumerable instances - is by itself a misconduct. Such acts, if permitted, may bring in profit in some cases but they may also lead to huge losses. Such adventures are not given to the employees of Banks which deal with public funds. If what we hear about the reasons for the collapse of Barings Bank is true, it is attributable to the acts of one of its employees, Nick Leeson, a minor officer stationed at Singapore, who was allowed by his superiors to act far beyond his authority. As mentioned hereinbefore, the very discipline of an organization and more particularly, a Bank is dependent upon each of its employees and officers acting and operating within their allotted sphere. Acting beyond one's authority is by itself a breach of discipline and a breach of Regulation 3. It constitutes misconduct within the meaning of Regulation 24. No further proof of loss is really necessary though as a matter of fact, in this case there are findings that several advances and over-drawals allowed by the respondent beyond his authority have become sticky and irrecoverable. Just because, similar acts have fetched some profit - huge profit, as the High Court characterizes it - they are no less blameworthy. It is wrong to characterize them as errors of judgment. It is not suggested that the respondent being a Class-I officer was not aware of the limits of his authority or of his powers. Indeed, Charge No. 9, which has been held established in full is to the effect that inspite of instructions by the Regional Office to stop such practice, the respondent continued to indulge in such acts. The Enquiry Officer has recorded a clear finding that the respondent did flout the said instructions and has thereby committed an act of disobedience of lawful orders. Similarly, Charge No. 8, which has also been established in full is to the effect that inspite of reminders, the respondent did not submit “Control Returns” to the Regional Office. We fail to understand how could all this be characterized as errors of judgment and not as misconduct as defined by the regulations. We are of the opinion that the High Court has committed a clear error in holding that the aforesaid conduct of the respondent does not amount to misconduct or that it does not constitute violation of Regulations 3 and 24.”
17. In Bishamber Das Dogra's case (supra), while referring to the judgment in Director General, RPF v. Ch. Sai Babu(2003) 4 SCC 331, it was recorded by the Supreme Court that normally the punishment imposed by a disciplinary authority should not be disturbed except in appropriate cases and that too after reaching a conclusion that the punishment is grossly or shockingly disproportionate after examining all the factors including the nature of charges proved against, nature of duties assigned having due regard to their sensitiveness, exactness expected of and discipline required to be maintained and the department/establishment in which the delinquent person works. The relevant para from the judgment reads thus:—
“20. Similarly in Director General, RPF v. Ch. Sai Babu(2003) 4 SCC 331, this Court held as under:
“Normally, the punishment imposed by a disciplinary authority should not be disturbed by the High Court or a tribunal except in appropriate cases that too only after reaching a conclusion that the punishment imposed is grossly or shockingly disproportionate, after examining all the relevant factors including the nature of charges proved against, the past conduct, penalty imposed earlier, the nature of duties assigned having due regard to their sensitiveness, exactness expected of and discipline required to be maintained, and the department/establishment in which the delinquent person concerned works.”
(Emphasis added)”
18. In Ramesh Dinkar Punde's case (supra), re-appreciation of evidence by the High Court was held to be impermissible. Therein, the Bank officer was found to be connected with the issue of STDRs in the name of certain individuals against clearing cheques received from various trusts/boards. He was found to have got overdraft limits sanctioned for the said individuals. Hence the order of dismissal passed against him was upheld. The plea of leniency on the ground of long years of service rendered by him was also rejected. The relevant observations are as under:—
“9. It is impermissible for the High Court to re-appreciate the evidence which had been considered by the inquiry officer, a disciplinary authority and the appellate authority. The finding of the High Court, on facts, runs to the teeth of the evidence on record.”
19. In Ch. Sai Babu's case (supra), it was held by the Supreme Court that court cannot modify punishment merely by saying that it is shockingly disproportionate. It has to record reasons to say as to how punishment imposed was disproportionate to the gravity of charges held proved against the delinquent. The pertinent paras from the judgment read as follows:—
“6. As is evident from the order of the learned Single Judge there has been no consideration of the facts and circumstances of the case including as to the nature of charged held proved against the respondent to say that penalty of removal from service imposed on the respondent was extreme. Merely because it was felt that the punishment imposed was extreme was not enough to disturb or modify the punishment imposed on a delinquent officer. The learned Single Judge has not recorded reasons to say as to how the punishment imposed on the respondent was shockingly or grossly disproportionate to the gravity of the charges held proved against the respondent. It is not that in every case of imposing a punishment of removal or dismissal from service a high court can modify such punishment merely saying that it is shockingly disproportionate. Normally, the punishment imposed by disciplinary authority should not be disturbed by high court or tribunal except in appropriate cases that too only after reaching a conclusion that the punishment imposed is grossly of shockingly disproportionate, after examining all the relevant factors including nature of charges proved against, the past conduct, penalty imposed earlier, the nature of duties assigned having due regard to their sensitiveness, exactness expected of and discipline required to be maintained, and the department/establishment in which the concerned delinquent person works.
7. In the present case we do not find that there has been a consideration of all the relevant facts and the learned Single Judge has not recorded reasons in order to modify the punishment imposed. The Division Bench of the High Court also did not examine the matter in proper perspective but simply concurred with the order passed by the learned Single Judge. Normally in cases where it is found that the punishment imposed is shockingly disproportionate, high courts or tribunals may remit the cases to the disciplinary authority for reconsideration on the quantum of punishment. In this case the disciplinary proceedings were initiated in the year 1989 and to shorten the litigation we think it appropriate to set aside the impugned order and remit the writ appeal No. 952 of 1998 to the Division Bench of the High Court to reconsider the case only on the quantum of punishment imposed on the respondent having regard to all relevant factors including the facts that the respondent was a member of Railway Protection Force and in the light of the observations made above. Since the proceedings are pending for quite some time, we request the High Court to dispose of the writ appeal expeditiously. The impugned order is set aside and the appeal is ordered in the above terms. No costs.”
20. Adverting to the judgments relied upon by the learned counsel for the appellant, it may be noticed that in S.S. Sheokand's case (supra), the Bank Manager had purchased third party cheques and drafts of huge amounts beyond his authority of lending, which was done without completing the pre-sanction formalities. The Chief Vigilance Commissioner advised imposition of major penalty of reduction of two stages in pay scale which was acted upon by the disciplinary authority. It was held by the Supreme Court that though it was quite possible that the Bank management had arrived at its decision to impose major penalty at a later stage on its own and not because of the recommendation of CVC but it could not be ignored that CVC report was sought by the management and thereafter punishment was imposed. Thus, it could not be said that this additional material was not part of decision making process. Here in the present case, the CVO report was never relied upon or referred by the respondent authorities before awarding punishment to the appellant. Thus, the position in the present case being different, the appellant cannot derive any advantage from the said decision. The said case was based on the recommendation of the CVC.
21. In D.C. Aggarwal's case (supra), the issue was whether the disciplinary authority while imposition punishment, major or minor could act on material which was neither supplied nor shown to the delinquent. Therein, disciplinary proceedings against the Bank officer on charges relating to misappropriation of bank fund were initiated. Inquiry officer's report exonerating the delinquent was directed by the Bank to be submitted through Central Vigilance Commission. The CVC disagreeing with the report, recorded its findings and recommended imposition of major penalty of removal. Copy of the recommendation of CVC was denied to the delinquent on the ground of it being a privileged document. It was held that the order of punishment passed by the disciplinary authority was vitiated for violation of principles of natural justice in denying the delinquent copy of recommendation of CVC which was prepared behind his back without his participation and decision was taken against him relying on that recommendation. It was further recorded that imposition of punishment on an employee on material which is not only not supplied but not disclosed to him cannot be countenanced. Procedural fairness is as much essence of right and liberty as the substantive law itself. There is no quarrel with the proposition of law. However, in the present case, recommendation/report/advice of CVC was never relied upon while imposing punishment and therefore the question of supply of copy of recommendation of CVC does not arise. Thus, the position in the present case being different, this decision does not come to the rescue of the appellant.
22. In Nagaraj Shivarao Karjagii's case (supra), a departmental enquiry was conducted against the petitioner by the Commissioner for Vigilance Inquiry from the Central Vigilance Commission. It was alleged that when he was functioning as Manager, he discounted under his discretionary jurisdiction a cheque for Rs. 50,000/- in order to accommodate an officer of the Bank or others known to him. Secondly, he retained the discounted instrument with him for a certain period without taking/causing to be taken any action to realise the amount due under the unpaid cheque. It was also alleged that the petitioner made available undue financial accommodation to the officer or others to the detriment of the interests of the Bank. He was charged with lack of integrity, honesty, devotion to duty, diligence and conduct unbecoming of the status of a Bank officer in contravention of the relevant rules. The inquiry officer found that the charges were established. The Bank referred the matter to the Central Vigilance Commission for advice and it was recommended that the petitioner may be compulsorily retired from service by way of punishment which was upheld by the disciplinary authority. The appeal by the petitioner before the High Court was also dismissed. Thus, the punishment awarded was specifically based on the advice of the CVC. Here in the present case, the report of the CVC being not relied upon or referred to, the appellant cannot derive any advantage from the said decision.
23. In R.P. Singh's case (supra), the respondent while serving as an Assistant in the Central Public Works Department was proceeded against in the departmental proceedings. The disciplinary authority sought advice from the UPSC by proposing to impose penalty of reduction of pay by two stages in the time scale of pay of the charged officer for a period of two years without cumulative effect. On receiving advice from the UPSC, the disciplinary authority accepted the same, imposed the punishment and communicated the same to the respondent alongwith the advice of UPSC. The said order of punishment was assailed by the respondent principally on the ground that the advice of the UPSC was not furnished to him before imposing punishment and thus was in violation of principles of natural justice. The Tribunal negatived the said order and upheld the order of punishment. The writ petition filed by the respondent before the High Court was allowed with a direction to the appellant Union of India to allow the respondent to make his representation in respect of the UPSC advice and thereafter to take decision afresh. The Supreme Court while dismissing the appeal filed by the appellant Union of India held that the advice of UPSC if sought or accepted, the same, regard being had to the principles of natural justice was to be communicated before imposition of punishment. Again therein, the main basis was the advice of the UPSC for imposition of penalty on the respondent. In the present case, the situation being different, this decision is of no significance to the appellant.
24. In Bidyut Kumar Mitra's case (supra), it was held by the Supreme Court that since the disciplinary authority had not relied on any recommendations of CVC and the respondent Bank Manager had failed to plead or prove any prejudice having been caused, the disciplinary proceedings could not be said to be vitiated. The authorities concerned would be within their right to totally ignore any advice or recommendations of CVC, if they so chose. It was further held that it was not even the case of the respondent Bank Manager that under any rule, usage, customs or practice, the authorities concerned were bound to take into account such advice or recommendations of CVC. The relevant observations read thus:—
“30. The aforesaid observations make it abundantly clear that the recommendations of CVC were not taken into consideration by the authorities concerned. There was also no other material on record to show that before taking the impugned decisions, any of the authorities concerned took into consideration any advice or recommendations of CVC. It was also not even the case of the respondent that under any rule, usage, customs or practice, the authorities concerned were bound to take into account such advice or recommendations of CVC. The authorities concerned would be within their right to totally ignore any advice or recommendations of CVC, if they so chose.”
25. This judgment though cited by the learned counsel for the appellant, rather supports the respondents.
26. In Manohar Lal v. Ugrasen(2010) 11 SCC 557, it was held by the Supreme Court that no higher authority in the hierarchy or an appellate or revisional authority can exercise the power of the original statutory authority nor can the superior authority mortgage its wisdom and direct the original statutory authority to act in a particular manner. If the appellate or revisional authority takes upon itself the task of the original statutory authority and passes an order, it remains unenforceable for the reason that it cannot be termed to be an order passed under the Act. This decision has no relevance with the controversy involved in the present case.
27. In Coimbatore District Central Cooperative Bank v. Coimbatore District Central Cooperative Bank employees Association(2007) 4 SCC 669, while discussing doctrine of proportionality, it was held that normally when disciplinary proceedings have been initiated and findings of fact have been recorded in such inquiry, they cannot be interfered with unless such findings are based on no evidence or are perverse or are such that no reasonable man could have reached. It was further held that equals must be treated equally and unequal treatment to equals would be violative of Article 14 of the Constitution. But it is equally well established that unequals cannot be treated equally. Equal treatment to unequals would also be violative of equal protection clause enshrined by Article 14 of the Constitution of India. There is no quarrel with this proposition of law. In the present case, the situation being different, the appellant cannot derive any advantage from the said decision.
28. In nut shell, all the decisions cited by the learned counsel for the appellant were where the punishment was awarded on the basis of the advice/recommendation/report of the CVC but in the present case, since the report or recommendation of the CVC was neither relied upon nor referred to by the authorities while awarding punishment, the said decisions being distinguishable are of no help to the appellant.
29. In banking business, absolute devotion, diligence, integrity and honesty needs to be preserved by every bank employee and in particular a bank officer so that the confidence of the public/depositors is not impaired. A bank officer holds a position of trust where honesty and integrity are inbuilt requirements of functioning. He deals with the money of the depositors and the customers. Every officer/employee of the Bank is required to take all possible steps to protect the interests of the bank and to discharge his duties with utmost integrity, honesty, devotion and diligence and to do nothing which is unbecoming of a bank officer. 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. Good conduct and discipline are inseparable from the functioning of every officer/employee of the Bank. It is no defence available to say that there was no loss or profit resulted in case when the officer/employee acted without authority.
30. In other words, the very discipline of an organisation more particularly a bank is dependent upon each of its officers acting and operating within their allotted sphere. Sympathy or generosity as a factor is impermissible. Loss of confidence is the primary factor and not the amount of money misappropriated. Acting beyond one's authority is by itself a breach of discipline and is a misconduct. In the case of a bank, every officer/employee is supposed to act within the limits of his authority. If each officer/employee is allowed to act beyond his authority, the discipline of the organisation/bank will disappear. The functioning of the Bank would become chaotic and unmanageable. No organisation, more particularly, a bank can function properly and effectively if its officers and employees do not observe the prescribed norms and discipline. Such indiscipline cannot be condoned on the specious ground that it was not actuated by ulterior motives or by extraneous considerations.
31. Further, it is well settled that a disciplinary proceeding is not a criminal trial. The standard of proof required is that of preponderance of probability and not proof beyond reasonable doubt. Still further, the court has to record reasons to say as to how the punishment imposed on the delinquent is shockingly or grossly disproportionate to the gravity of the charges held proved against him. Normally the punishment imposed by the disciplinary authority should not be disturbed by the High Court except in appropriate cases and that too only after examining all the factors including the nature of duties assigned having due regard to their sensitiveness, exactness expected of and discipline required to be maintained and the department/establishment in which the delinquent person concerned works.
32. Having crystallised the factual as well as the legal position as narrated above and after perusing the findings recorded by the authorities below and the judgment rendered by the learned Single Judge, we do not find any ground to adopt a different view. Consequently, finding no merit in the appeal, the same is hereby dismissed.
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