IN THE HIGH COURT OF JUDICATURE AT PATNA LPA No.976 of 2009 1. THE STATE BANK OF INDIA, through the Chief General Manager, Local Head Office, Patna. 2. The Chief General Manager (Appeal and Review Department), SBI, Local Head Office, Post Box No.103, Patna-1. 3. The Deputy General Manager, State Bank of India, Zonal Office, Patna. 4. The Chief Manager (Internal Inquiry), State Bank of India, 3rd Floor, Local Head Office, Patna. … (Respondent)- Appellants Versus JAGARNATH PRASAD, aged about 55 years son of late Radha Mohan Lal, r/o Gola Road, West Bailey Road, P.S. Danapur, District-Patna. … Petitiioner- Respondent ----------- For the appellants: Mr. Kaushalendra Kumar Sinha, Adv. For the respondent: Mr. Awadhesh Kumar Mishra, Adv. ----------- P R E S E N T THE HON’BLE JUSTICE SMT. T. MEENA KUMARI THE HON’BLE MR. JUSTICE MIHIR KUMAR JHA O R D E R (2.12.2010) By Court, This appeal which has already been admitted for final hearing on 3.2.2010 is placed before us in view of application filed by the sole respondent-writ petitioner who has made a prayer in I.A. No. 8738 of 2010 for early disposal of the appeal on the ground that the sole respondent-writ petitioner is going to superannuate in near future and therefore the order passed by the learned Single Judge should be allowed to be acted upon in the interest of justice as also in the interest of his dependent family members. 2. Considering the aforementioned prayer and in fact a very limited scope of the appeal, we have heard counsel for both the parties on merits with a view to finally dispose of this appeal. 3. Mr. Kaushalendra Kumar Sinha, learned counsel 2 appearing on behalf of the appellants-State Bank of India (hereinafter referred to as „the Bank‟) and its officials, has submitted that once in a departmental proceeding out of six charges five of them was found to be proved against the respondent- writ petitioner leading to an order of punishment of his compulsory retirement, the direction contained in the impugned order of the learned Single Judge for consideration of awarding of punishment even in absence of a finding as with regard to any perversity and procedural infirmity in the departmental proceeding was clearly unsustainable, inasmuch as there would be no scope for remitting the matter back for consideration of proportionate punishment. In this context Mr. Sinha has referred to the findings recorded by the Enquiry Officer in respect of the various charges which according to him indicate that the charge of negligence on the part of the writ petitioner in performing his duty in capacity of Branch Manger of the Bank was fully established. He has also submitted that normally in a situation like this when the charges in a departmental proceeding is proved, the order of punishment in exercise of power under Article 226 of the Constitution is not to be interfered, inasmuch, power of judicial review of this Court would not be that of an appellate authority. 4. Mr. Awadhesh Kumar Mishra, learned counsel appearing on behalf of the respondent-writ petitioner, on the other hand, has submitted that if there was a charge against the 3 petitioner of lacking devotion to the duty and integrity and the Enquiry Officer has recorded a finding that the delinquent writ petitioner did not lack the required devotion, the presumption would be that there was nothing against him to prove negligence in performance of his duty much less of lack of integrity specially when there were materials to show that the writ petitioner had made his sincere effort and by virtue of that Bank loan also had been recovered. He has thus supported the order passed by the learned Single Judge giving a direction to the Bank to reconsider the quantum of punishment. 5. In the opinion of this Court, once charge of negligence in performance of official duty by a Bank Officer holding the post in the rank of Branch Manager is proved, there would be little scope for him to take a plea that there was no material showing lack of devotion in performance of his duty. 6. In order to appreciate the aforementioned rival contentions of both the parties it would be felt necessary to take stock of the charges and the findings recorded by the Enquiry Officer. The Enquiry Officer in the departmental proceeding while considering the charges of irregularities allegedly committed by the respondent- writ petitioner during the period of his posting as a Branch Manager of Chainpur Branch of the Bank had recorded the following findings: “STATEMENT OF ALLEGATIONS While posted as Branch Manager at Chainpur Branch, the following lapses/ irregularities were alleged to 4 have been committed by him, which facilitated a fraud of Rs. 5.20 lacs in Savings Bank Account no. 5568 of Shri Dilip Kumar Upadhyay opened on 8.4.2002. ALLEGATION NO. 1(a) He released payment of substantial amount from the newly opened SB Account no. 5568 against spurious credits and unauthenticated balances. On 20.5.2002, there was a credit balance of only Rs. 26,084/- in the account. On 21.5.2002, there are two debits of Rs. 11,800/- and Rs. 13,000/- and the balance has been casted as Rs. 14,284/- and Rs. 1284/- respectively. In the same line space provided for debit and credit entries, a fake credit for Rs. 1,50,000/- has been inserted and the original balance of Rs. 14,2,84/- altered to Rs. 1,64,284/- and the next of balance of Rs. 1,284/- altered to Rs. 1,51,284/- Both the balances are unauthenticated. The figures in lacs are written in the column meant for thousands. FINDINGS OF THE INQUIRING AUTHORITY My overall view relating to the said allegation is based on the following:- a) The cheque amounting to Rs. 13,000/- was passed by Shri S.K.Jain Kala vide PW4 and the other cheque amounting to Rs. 11,800/- was passed by the CSO. The balances there against were rightly casted, which appear to have been subsequently altered. The day book of previous day i.e. 20.5.2002 was also not checked. b) Both the balances are found unauthenticated. There is every possibility to presume that the fake credit entry of Rs. 150000/- was made in the said account after passing of the above two cheques on 21.5.2002 and just before the next withdrawals allowed as detailed in allegation no. i(b) on the 5 24.6.2002. At this stage it can be well be presumed that it has not come to the notice of the CSO. But it is clear from the FEx.2 that the balances against these withdrawals are unauthenticated. Both the cheques have not been released through ledger. Day book of the date had also not been checked. No roaster is on record. c) Who had made this fictitious deposit entry of Rs. 1,50,000/- in the ledger in thousand columns? It is not clear. It has also not been proved. The original balance of Rs. 1,284/- has accordingly been altered as Rs. 1,51,284/-. This seems to have been made to accommodate further withdrawals thereagainst. I am of the view that upto this stage the CSO is not primarily responsible. No. doubt the overall responsibility of the Branch affairs rest with the CSO, being the Branch Manager of a unit, but the prevailing circumstances operating at the branch during the period need full consideration, therefore, I partly prove the allegation. ALLEGATION NO. 1(b) On 24.6.2002, there I a withdrawal for Rs. 15,030/-. On 25.6.2002, there are two withdrawals for Rs. 35,000/- and Rs.50,000/-. The latter has been initiated by him in the ledger. On 28.6.2002, there are two withdrawals for Rs. 35,000/- and Rs. 50,000/-. The latter has been initiated by him in the ledger. On 28.6.2002, there is again a withdrawal for Rs. 40,000/- initiated by him in the ledger thereby reducing the balance to Rs. 1254/-. On 28.6.2002 itself there was a fictitious credit entry for Rs. 1,70,000/- increasing the balance to Rs. 1,71,254/-. The balance is unauthenticated. Against this credit, he passed cheques for Rs. 45,000/- and Rs. 25,050/- for payment on 6 5.7.2002 and intialled against the entries in the ledger. On 8.7.2002, he again passed two withdrawals of Rs. 50,000/- each and initialled them in ledger, thereby reducing the balance to Rs. 1,204/-. FINDINGS OF THE INQUIRING AUTHORITY After going through the above facts/ evidences putforth by the Presenting Officer and defence counsel, I draw my conclusion relating to the allegation on the following basis: a) The CSO had blindly passed/ released all the alleged cheques (except amount to Rs. 35,000/- which was passed by Shri Ram Lal, PW4 vide EPR-29) through the ledger. While passing cheque of heavy amount Rs. 50,000/- on 25.6.2002 (in small place) he could not even notice, several alterations (fake credit entry) in the ledger sheet/ unauthenticated balance of the account, when the cheque in question was released by him through ledger. b) The CSO squarely failed to observe normal precaution to save the interest of the Bank. He should have called the ledger keeper to ascertain the factual position of the account. No question appears to have been raised by the CSO in regard to fake credit of Rs. 1,50,000/- made in the ledger sheet at second point of time which was atleast opened to him. All the balances were left unauthenticated in the ledgersheet. c) The appeal made by the CSO on the last day of enquiry at the branch on 18.2.2005 as detailed in the EPR page 43, signals that the CSO was well aware in regard to the position obtaining at the branch, thereafter he failed to exercise extra precaution to plug the loop hole to protect the 7 Bank‟s interest. He failed to alert himself. d) The S/B balancing was in arrear. Checking of day books are not on record from April, 2002 to July, 2002 vide PW4 (EPR 29) as well as DEx.4, Audit Report. e) The ledger keepers who were officiating as JMGS, I are also responsible for posting of cheques by ignoring the fictitious deposit entry of Rs. 1,50,000/- in the said account. He should have brought the facts to the notice of the passing officer. f) The depositor of the account was freely accommodated this way to avail of the temporary benefit. The depositor had certainly took the help of branch people/ outsider, if any, who engineered the said fake credit entry in the ledger (may not be bank staff vide type of entry made). It is work of an outsider. But no direct finger can be raised against anyone in the absence of proof/ evidence. g) It is very difficult to believe that the fake credit of Rs. 1,70,000/- and prior to that of Rs. 1,50,000/- appearing in the account did not strike to the attention of the CSO. He failed to observe mischievous role already played in the ledger sheet, while releasing several above cheques through the ledger. Here the CSO had reasons to concentrate himself promptly to plug the situation, which he lost and allowed further chance to the depositor to engineer same action to avail of the time being benefit (vide allegation no. 1(c). h) The defence stand that the CSO was on leave/ training from 21.5.2002 to 17.6.2002, then how had he passed a cheque of Rs. 11800/- on 21.5.2002? 8 In view of the foregoing facts, the CSO is squarely responsible for the overall lapses and thus the allegation stands proved. ALLEGATION NO. 1(c) On 18.7.2002, there is actual credit of Rs. 96,000/- in the ledger which has been altered to Rs. 2,96,000/- by inserting the digit 2 in the credit column as well as in balance column. On the same day there is a withdrawal of Rs. 96,000/- which has been passed by him and initialled by him in the ledger. On the next day a fresh cheque book was issued in the account and by using a fresh cheque book bearing no. 571001, a further amount of Rs. 50,000/- was withdrawn on 19.7.2002 which was passed for payment by him and the balance in the ledger was initalled by you too. Despite being the only officer at the branch, the Branch manager as well as the Passing Officer of the debits mentioned above and having opportunity to observe the numerous alterations in the ledger sheet and also did not take the normal precaution of verifying the source of such huge credits for a new account specially as the balances were unauthenticated and previous balance had been observed by him to be extremely low. FINDINGS. The written statement of the PW4 vide PEx.23/11 as well as letter dated 11.3.2002 (in file) conclusively establish overall lacking in many areas of the Branch functioning. Despite all this the CSO could not alert/ amend himself to protect the Bank‟s interest. It is needless to mention that the losses to the Bank amounting to Rs. 5,20,000/- have fully been recovered alongwith interest from the depositor of the account (vide Branch letter to SDO-Also indicate that there was fear of psychosis in the mind of employees). 9 The depositor was also witness to the case, who did not turn up during the enquiry. His written statement indicates that he was in need of money to cover up the season of his running business. From the above, as already stated he was purely accommodated to avail of the time being opportunity to meet his requirement. Certainly he had taken the help of someone to engineer all fake credit entries in his account on the basis of which withdrawals to the like amount as needed were made in phased manner. The CSO being the only officer at the branch as well as passing officer of several cheques as discussed above having an opportunity to observe the ledger on so many times. Beside this he took lightly the information passed on to him by the employees jointly, which he missed. He was aware about the roaming of outsiders in the branch (vide explanation called from Shri Ram Lal Ram dated 28.5.2003 DEx.7/11. Further he failed to observe the large number of alteration in the balance of account and also did not take the normal precaution of verifying the source of such huge credits for a new account specially as the balances were unauthenticated and previous balance had been observed by him to be extremely low. The CSO could not alert himself, despite several opportunity/ indicators were available to him to check the loop holes and allowed the functioning of the branch in a very casual routine manner by ignoring/ overlooking all the bank‟s system and procedure. In view of the situation obtaining, I find him prima facie responsible (as discussed under allegation no. 1(b) for the overall lapses and thus the allegation stands proved. ALLEGATION NO.2 10 He failed to take adequate precautions to prevent free access to the ledger by unauthorized person(s) other than the bank employees. FINDINGS OF THE INQUIRING AUTHORITY Here I noticed that the Branch Manager totally ignored the danger signal passed on to him by the staff jointly in writing on 11.3.2002 (the photocopy of which was countersigned by the PW4 during the enquiry), he could not alert himself and failed to take adequate precaution to prevent free access to the ledger by unauthorized person(s) other than the Bank employee. It is not established that the fake credit entries were made by the Branch staff . The situation occurring at the branch had been discussed in detail under allegation no.1(a)(b)(c). The CSO failed to abide by the vicarious responsibilities entrusted to him as a team leader and allowed all untowards happening during his tenure at the branch. Therefore, the allegation stands proved. ALLEGATION NO. 3 He failed to maintain the Bank‟s established system and procedures at the branch. The irregularities observed were as follows:- a) Day Book writing/ checking was not a practice at the branch. Even roster for checking of day books/ ledgers were not maintained. b) Saving Bank Account was not balance after 31.3.2002. c) Balancing of Clean Cash, General Ledger posting was in arrears. d) Job rotation was not effected at the required periodicity with duty being changed only on 20.7.2002 after 23.8.2001. e) Branch Manager‟s Monthly Certificate was not 11 submitted for the months from May 2002 to January 2003 to Zonal Office, Patna despite their letter as below:- i) AGM/V/1275 dated 26.10.2002 ii) AGM/V/99 dated 26.11.2002 iii) AGM/V/111 dated 2.1.2003 iv) No. 130 dated 13.2.2003 v) AGM/V/137 dated 22.2.2003 FINDINGS OF THE INQUIRING AUTHORITY I agree with the views expressed by the defence counsel on page 9-10 of his brief in this regard. When the checking of books were not carried out, why not explanation were called at the material time to record the deficiency on their part? This has not been done by the CSO. Further it is observed from the available recores vide DEx. 7,8,9,10 that the CSO started taking initiatives after the fraud came to light. But when the CSO vide his statement dated 13.8.2002 (PEx.25) have categorically accepted the lapses on his part, which is a documentary evidence as well as established facts, thus the allegations leveled against the CSO are conclusively proved. ALLEGATION NO.4 He was paid Rs. 4,400/- in cash by Shri Gorakh Nath Chaurasia, holder of CC no. 70 for sanctioning a limit of Rs. 40,000/- for trade of “PAAN” as alleged by Shri Chaurasia. FINDINGS OF THE INQUIRING AUTHORITY The PW1 while deposing during the enquiry on 18.2.2005 at Chainpur branch, disclosed and ratified the statement (PEx.17) given by him in the past (vide EPR page 41). The PW1 was not cross-examined by the defence counsel, while an opportunity was allowed to him during the enquiry. It is, therefore, assessed that 12 the defence counsel had in principle accepted the written statement of PW1, which was duly ratified/ testified during the enquiry on 18.2.2005. The defence stand that he did not cross-examine PW1 as he was not at all a witness in the case as produced and acceptance of such statement which was not witnessed was also ab initio defective and the paper has got no evidentiary value. The witness was named earlier, produced but was not cross-examined to surface the truth. Here the defence failed in his attempt to null the allegation. In view of the above, the said allegation leveled against the charged officer is in principle proved. ALLEGATION NO.5 An amount of Rs, 10,000/- is alleged to have been paid to him by Shri Mohan Prasad Gupta, holder of CC Account no.66 through Shri Vidya Sagar Chaurasia for enhancement of limit from Rs. 1.00 lac to Rs. 2.00 lacs. The money was later on returned to Shri Gupta as the limit was not enhanced. FINDINGS OF THE INQUIRING AUTHORITY There is point to be noted that Shri Gupta did not turn up during the enquiry as PW5, it is very difficult to prove the allegation in the absence of his confession/ testification of the said statement, which the Presenting Officer failed to produce during the enquiry. The money was refunded through Shriu Vidya Sagar Chourasia, through a cheque. Neither was Shri Vidya Sagar presented nor the cheque was presented during the enquiry to establish the allegation. In view of the above and in the absence of documentary evidences, which could not be produced by the Presenting Officer during the enquiry, the allegation is therefore, not proved. 13 ARTICLES OF CHARGE. While posted as Branch Manager from 05.12.2001 to 20.12.2003 at Chainpur Branch, he failed to discharge his duties with utmost integrity, honesty, devotion and diligence and acted in a manner unbecoming of a Bank officer and highly prejudicial to Bank‟s interests in violation of Rule 50 (4) of SBI Officer‟s Service Rules. FINDINGS OF THE INQUIRING AUTHORITY. The undernoted facts/findings on the basis of available materials did not allow me to ignore them before arriving at the conclusion:- (i)From DEx.4 (Audit Report) the staff posted at the branch at the material time carried out misdeeds as explained on page 16-17 SDRM. They are being dealt separately. (ii)The outside inspecting team had observed that there was some improvement because of transfer of the erring staff and availability of sufficient number of officers. (which was not available earlier). (iii)The CSO was the only officer surrounded by such erring staff could not manage the affairs of the branch. No doubt the CSO is primarily responsible for all the lapses as discussed in the report. (iv)Certainly in such a situation anyone cannot work with the required devotion. (v)Pending works were cleared by the other staff called for the same/ managed by the controller. The controlling office was fully aware of the position of the branch obtaining thereat at the material time. (vi)The recoveries have finally been made, devotion. (v)Pending works were cleared by the 14 other staff called for the same/managed by the controller. The controlling office was fully aware of the position of the branch obtaining thereat at the material time. (vi)The recoveries have finally been made, due to hectic attempt made by the CSO from the depositer. (vii)An amended statement of P.W.1 received at this office on 26.05.2005 (placed in file), the contents of which are self explicit (relating to allegation no.4 which has been proved). (viii)Some of the defence counsel‟s view contained in his brief on page 1,2,3 cannot be totally ignored. Out of five allegations leveled against the CSO. 4 have been proved with 1 (a), which is partly proved. Accordingly the charges are proved (except the honesty integrity which is based on several factors as stated above and discussed) under Rule 50 (4) of State Bank of India Officers‟ Service Rules.” (Underlining by me.) 7. The aforesaid underlined findings by itself would go to show that not only the most of charges were proved against the respondent- writ petitioner but he had also failed to perform his duty in an efficient manner in the interest of the bank and it was largely on account of his lack of supervision in capacity of the Branch Manager as also negligence that the Bank was put to financial loss as also had suffered in its image in the eyes of its customers. 8. It, thus, cannot be held that one line observation of the Enquiry Officer as with regard to the last charge that since 15 recovery could ultimately be made no order of punishment ought to have been passed against the writ petitioner, especially when the charge of lack of honest and integrity was not found to be proved against him. As noted above, out of six charges four of them had been fully proved and one of them had been partly proved and he was exonerated only in respect of one of the six charges. As a matter of fact the learned Single Judge also while examining the correctness of the impugned order of punishment of compulsory retirement against the petitioner in the impugned order has held as follows: “In my view there is little scope of interference in the present matter. Judicial Review is available particularly on two grounds- procedural infirmity or perversity of the order. None is available in present case. This Court cannot sit in appeal over the finding of fact. The charges having been proved, it was within the discretion of the authority to impose punishment.” 9. Normally having recorded such a finding there could have been little scope for remitting the matter back for reconsideration on the quantum of punishment and in fact the only reason which has weighed upon the learned Single Judge is as follows: “ Mr. Dixit, learned counsel for the petitioner submits that considering the charges the punishment, as meted out, is disproportionately hard. It is submitted that there is a clear finding of the disciplinary authority that there is no doubt with regard to integrity or honestly of the petitioner. 16 In my view, considering that the petitioner was at the fag of his career the disciplinary authority may reconsider the punishment, which could be harsed. I therefore direct the disciplinary authority to reconsider the