IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 16.08.2011 CORAM: THE HONOURABLE MR.JUSTICE V.DHANAPALAN WRIT PETITION No.12759 of 2009 B.Muthiah ... Petitioner vs. 1. The Chairman and Managing Director, (Reviewing Authority) Indian Bank, Head Office, 66, Rajaji Salai, Chennai 600 001. 2. The Executive Director (Appellate Authority), Indian Bank, 66, Rajaji Salai, Chennai 600 001. 3. The General Manager (Disciplinary Authority) 66, Rajaji Salai, Chennai 600 001. 4. The Commissioner for Departmental Inquiries (Inquiring Authority), Satarkata Bhavan A-Block, GPO Complex INA, New Delhi – 110 023. ... Respondents Writ Petition under Article 226 of the Constitution of India. For Petitioner : Mr.S.Sethuraman For Respondents : Mrs.Rita Chandrasekaran, for R1 to R3 for M/s.Aiyar & Dolia No appearance for R4 O R D E R This Writ Petition has been filed under Article 226 of the Constitution of India, praying for issuance of a writ of certiorarified mandamus calling for the records pertaining to Disciplinary proceedings in Charge Sheet No.2908/98/VG dated https://hcservices.ecourts.gov.in/hcservices/ 18.05.1998 and enquiry report of the 4th respondent dated 28.05.1999 in Ref.No.2699/99/VG, order dated 17.04.2000 in Ref.No.2069/2000/VG passed by the 3rd respondent (the Disciplinary Authority), order dated 20.11.2006 in Ref.No.3035 APP/VG/2006 passed by the 2nd respondent (the appellate authority), order dated 21.05.2007 in Ref.No.671 REV/VG/2007 and 19.06.2008 in Ref.No.REV/NKBM/GEN/964/2008 passed by the 1st respondent (the reviewing authority) and quash the same as illegal, arbitrary and biased and also to direct the respondents to reinstate the petitioner in the service with all benefits. 2. Facts of the case as put forth by the petitioner in the affidavit would run thus: 2a. The petitioner was working as Chief Manager in Thousand Lights Branch of Indian Bank between 27.07.1995 and 31.03.1996. After taking over charge of the said Branch, he submitted a Renewal proposal dated 25.11.1995 based on the request of the parties and at the instance of the Zonal Office of the Bank, recommending the following limits : (a) Demand loan of Rs.12 crores (b) Bill discount (CSBP/DABP for 90 days) limit of Rs.5 crores (c) Open cash credit of Rs.5 crores (d) OD/Book debts for 90 days of Rs.8 crores (e) Letter of Credit/DA Inland 90-180 days of Rs.15 crores 2b. Apart from seeking note ratification of the action of the Branch in extending certain adhoc facilities on the advice of the Zonal Manager, the irregularities prevailing in the account were specifically highlighted in the said proposal. The renewal proposal was recommended by the Zonal Office to the Head Office of the Bank and a note was placed to the Board recommending the renewal proposal and ratification of the action of the Zonal Manager and CMD in advising the Branch to release overdrafts and opening of letter of credit. But, the renewal proposal was not approved and the action of the Zonal Manager and the former CMD of the Bank were not ratified. Resultantly, the action of the Branch in opening the letters of credit and release of overdraft limits were treated as unauthorised and in violation of extant guidelines/Circular by the Bank from time to time. 2c. On 02.04.1996, the petitioner was suspended from the services of the Bank and an explanation was called for on 25.04.1996 by the Chief Vigilance Officer with regard to the alleged irregularities in the loan account of M/s.Gemini Picture Circuit Private Limited, that he has failed to monitor the account properly and allowed the party to enjoy Inland LC limits, adhoc sanction limit, TOD and clean OD, with irregularities and absence of securities cover by way of proper Equitable Mortgage and had exposed the Bank to a huge financial risk. The petitioner submitted a reply https://hcservices.ecourts.gov.in/hcservices/ dated 04.07.1996 in detail denying the allegations, pointing out the fact that excess limit was allowed on the instruction/knowledge of CMD and Zonal Manager and it was not permitted by the petitioner. As far as the mortgage is concerned, the same was available as security when the limit was in the Harbour Branch and continued in the Thousand Lights Branch. Not being satisfied with the said reply of the petitioner, the Disciplinary Authority issued a charge sheet on 18.05.1998. 2d. For each and every charge framed against him, the petitioner submitted a suitable explanation dated 06.07.1998 specifically pointing out that he has always kept the Zonal Office and Head Office informed about the account and the alleged excess were not really excess and they were all allowed with prior permission of the Zonal Manager or against security by way of Fixed Deposit. However, not satisfied with his explanation, the Disciplinary Authority ordered Departmental Enquiry appointing Mr.Suman Nayar as Inquiring Authority and Mr.Suman Nayar conducted the hearing on 14.10.1998, 27.11.1998 and 11.01.1999 and concluded the enquiry and submitted his report on 30.04.1999. Thereafter, the petitioner submitted a detailed reply to the Disciplinary Authority about the infirmity in the enquiry report. Without considering any of the contentions put forth by the petitioner about the infirmity in the enquiry report, the Disciplinary Authority accepted the Enquiry Report and found the petitioner guilty of all the charges except charge No.5 and by an order dated 17.04.2000, imposed the punishment of dismissal from service with immediate effect in terms of Regulation (J) of the Indian Bank Employees (Discipline and Appeal) Regulation, 1976. 2e. Aggrieved by the said order of dismissal from service, the petitioner preferred an appeal to the Appellate Authority on 19.06.2000 and after a lapse of 6 ½ years, the Appellate Authority, by an order dated 18.12.2006 dismissed his appeal with an observation that the petitioner has to be imposed punishment of compulsory retirement. When the petitioner sent a letter of clarification on 11.12.2006 as to whether the punishment was modified from dismissal to compulsory retirement in terms of recommendation, by a letter dated 20.12.2006, it was clarified by the Department that by mistake, 'compulsory retirement' has been mentioned for the word 'dismissal'. 2f. Challenging the order passed by the Appellate Authority, the petitioner preferred a Review Petition to the Chairman and Managing Director of the Bank , the 1st respondent herein on 06.05.2007 and the 1st respondent, who is the Reviewing Authority, by an order dated 19.05.2007 dismissed the Review Petition without any consideration. In the meantime, the borrower had paid the entire amount of Rs.157 crore under OTS Scheme loan and all the loan accounts were closed. As the gravamen of charges was that the petitioner has exposed the Bank to risk of recovery of Rs.2713.54 https://hcservices.ecourts.gov.in/hcservices/ lakhs and committed the misconduct under regulation of 3(1) of Indian Bank Officers Employees' Regulation, 1975, the petitioner made a representation dated 11.05.2008 about the recovery of the amount and setting aside of the punishment of dismissal from service. But, the Bank refused to consider the case of the petitioner. Hence, the petitioner is before this court by way of the present writ petition. 3. Respondents 1 to 3 have filed counter affidavit, wherein, they have vehemently denied that the enquiry was not conducted as per the Indian Bank Office Discipline and Appeal Regulations. The Inquiring Authority appointed by the Central Vigilance Commission was experienced in the conduct of the departmental enquiry and was well aware of the provisions under which the enquiry was to be conducted. The copies of 22 documents were served on the petitioner before the conduct of enquiry. During the enquiry, the said documents were taken on record by the Inquiring Authority and marked as Exhibits M1 to M22. The petitioner was given due opportunity by the Inquiring Authority and by following the principles of natural justice, he permitted the petitioner to verify the documents with the petitioner's defence assistant at the Branch. Since the said documents are certified copies of the Bank/Branch, no personal identification is needed in the domestic enquiry. Despite the same, the Inquiring Authority in his proceedings dated 14.10.1998 has stated that if there is any doubt by the petitioner about the authenticity of the documents submitted by the Presenting Officer (PO) and if any such doubt is found, it has to be sent within 3 days of the inspection failing which it shall be assumed that the documents are accepted as genuine. The petitioner has not sent any such intimation to the Inquiring Authority and he cannot question the veracity of the documents at this stage as it is just an after thought. Therefore, the contentions of the petitioner that the Inquiring Authority did not conduct the Inquiry as per the Regulations are not true. 3a. In fact, the petitioner has not made any objection to the 3rd respondent that the Inquiring Authority did not conduct the enquiry properly and that the petitioner was given opportunity to adduce evidence in his favour. Thus, according to the respondents, the procedure of conducting departmental enquiry as envisaged in the regulations were strictly followed by the Inquiring Authority. In the absence of any objection by the petitioner at the time of admission of the documentary evidence or any time later during the enquiry, there was no need for the Inquiring Authority to get them proved in the enquiry by production of witnesses and the objection made by the petitioner is just an afterthought. 3b. According to the respondents, it is not mandatory in terms of Indian Bank Office Employe's (Discipline and Appeal) Regulations that a charge sheet should be preceded with the issue of show cause notice. Where a show cause notice had been issued, it is not https://hcservices.ecourts.gov.in/hcservices/ mandatory that the charge sheet should be the same as per the show cause notice. Opportunity was given to the petitioner to reply to the charges framed against him and only then, further proceedings were initiated. There is not an iota of truth on the contention of the petitioner that punitive action was taken against him based on suspicion. The charges were proved either beyond reasonable doubt or by preponderance of probability and there is no question of reasonableness in the entire process, as the enquiry was conducted in a proper manner by following the principles of natural justice. Hence, the respondents pray for dismissal of the writ petition. 4. To the counter affidavit filed by the respondents, the petitioner has filed a rejoinder, stating that the counter is silent with regard to his contention that no witness was examined by the Management and the documents were merely marked. According to the petitioner, the marking of the documents will not amount to proving the contents of the documents and the contents of the documents can be proved only by the maker of the documents or by a person who is conversant with the contents of the documents. In the absence of which, the documents cannot be considered as proved. Therefore, relying on such documents without giving an opportunity to the petitioner to cross-examine the maker is in violation of the principles of natural justice. The petitioner has further stated that the Inquiring Authority has merely relied on the submission of the Presenting Officer and has not relied on the documents filed by the Bank proving the charge. 4a. The petitioner has also pointed out that the show cause notice dated 25.04.1996 was signed by the General Manager/Chief Vigilance Officer, Mr.S.C.Vohra. Regulation 19 of Indian Bank Officers Employees (Discipline and Appeal) Regulations, 1976 provides for consultation with the Central Vigilance Commission by the Bank. The Chief Vigilance Officer is the Officer of the Central Vigilance Commission stationed in the Bank. The Vigilance Officer of the Bank, as a representative of the Commission and the Bank took up the case for getting first stage advice and second stage advise at the time of awarding the punishment. Hence, it is settled law that the Chief Vigilance Officer's role has to be confined to the above role and he should not cause any issuance of show cause or charge sheet as he should not frame an opinion about the case. 4b. With regard to the averment of the respondents that M/s.Gemini Pictures Circuits Pvt. Ltd. and other group accounts were the cause of action for initiating vigilance action against many Officers of the Bank, the petitioner would state that out of the one- time settlement of compromise only, the entire liability of Gemini Pictures Circuits Pvt. Ltd. Gemini Arts and other group accounts were adjusted on 28.03.2007 and the Bank has filed a full satisfaction memo to DRT Chennai on 28.03.2007. Such being the factual position, there was discrimination in awarding punishment. https://hcservices.ecourts.gov.in/hcservices/ 5. Mr.S.Sethuraman, learned counsel for the petitioner would strenuously contend that the impugned orders are legally infirmed on the following grounds (i) the enquiry conducted is in violation of the principles of natural justice (ii) there is denial of cross- examination (iii) the Disciplinary Authority has substituted the finding without affording an opportunity to the petitioner (iv) charges which were not dealt with by the Inquiring Authority were dealt with independently by the Disciplinary Authority (v) there is no monetary loss caused to the Bank and (vi) punishment awarded is disproportionate. In support of his contentions, the learned counsel has relied on the following Supreme Court decisions : (i) AIR 1994 SCC 1341 (Triveni Rubber and Plastics vs. Collector of Central Excise, Cochin) : "3. ... The quantum of tread-rubber produced in the appellant's factory during the said two years is a question of fact. Unless it is found that some relevant evidence has not been considered or that certain inadmissible material has been taken into consideration the concurrent findings of fact cannot be disturbed by us in this appeal under Art. 136 of the Constitution. This is not also a case where it can be said that the findings of the authorities are based on no evidence or that they are so perverse that no reasonable person would have arrived at those findings." (ii) JT 1996 (4) 457 (The Disciplinary Authority-Cum- Regional Manager and others vs. Nikunja Bihari Patnaik) : "... Each officer of the Bank cannot be allowed to carve out his own little empire wherein he dispenses favours and largesse. 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. 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. ... 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 https://hcservices.ecourts.gov.in/hcservices/ all this be characterised as errors of judgment and not as misconduct as defined by the regulations. ..." (iii) (1998) 7 SCC 84 (Punjab National Bank and others vs. Kunj Behari Misra) : "17. ... If the enquiry officer had given an adverse finding, as per Karunakar case, the first stage required an opportunity to be given to the employee to represent to the disciplinary authority, even when an earlier opportunity had been granted to them by the enquiry officer. It will not stand to reason that when the finding in favour of the delinquent officers is proposed to be overturned by the disciplinary authority then no opportunity should be granted. The first stage of the enquiry is not completed till the disciplinary authority has recorded its findings. The principles of natural justice would demand that the authority which proposes to decide against the delinquent officer must give him a hearing. When the enquiring officer holds the charges to be proved, then the report has to be given to the delinquent officer who can make a representation before the disciplinary authority takes further action which may be prejudicial to the delinquent officer. When, like in the present case, the enquiry report is in favour of the delinquent officer but the disciplinary authority proposes to differ with such conclusions, then that authority which is deciding against the delinquent officer must give him an opportunity of being heard for otherwise he would be condemned unheard. In departmental proceedings, what is of ultimate importance is the finding of the disciplinary authority. 18. Under Regulation 6, the enquiry proceedings can be conducted either by an enquiry officer or by the disciplinary authority itself. When the enquiry is conducted by the enquiry officer, his report is not final or conclusive and the disciplinary proceedings stand concluded with the decision of the disciplinary authority. It is the disciplinary authority which can impose the penalty and not the enquiry officer. Where the disciplinary authority itself holds an enquiry, an opportunity of hearing has to be granted by him. When the disciplinary authority differs with the view of the enquiry officer and proposes to come to a different conclusion, there is no reason as to why an opportunity of hearing should not be granted. It will be most unfair and iniquitous that where the charged officers succeed before the enquiry officer, they are deprived of representing to the disciplinary authority before that authority differs with the enquiry officer's report and, while recording a finding of guilt, imposes punishment on https://hcservices.ecourts.gov.in/hcservices/ the officer. In our opinion, in any such situation, the charged officer must have an opportunity to represent before the disciplinary authority before final findings on the charges are recorded and punishment imposed. ..." (iv) AIR 1999 SC 3734 (Yoginath D.Bagde vs. State of Maharashtra and another) : "33. In view of the above, a delinquent employee has the right of hearing not only during the enquiry proceedings conducted by the Enquiry Officer into the charges levelled against him but also at the stage at which those findings are considered by the Disciplinary Authority and the latter, namely, the Disciplinary Authority forms a tentative opinion that it does not agree with the findings recorded by the Enquiry Officer. If the findings recorded by the Enquiry Officer are in favour of the delinquent and it has been held that the charges are not proved, it is all the more necessary to give an opportunity of hearing to the delinquent employee before reversing those findings. The formation of opinion should be tentative and not final. It is at this stage that the delinquent employee should be given opportunity of hearing after he is informed of the reasons on the basis of which the Disciplinary Authority has proposed to disagree with the findings of the Enquiry Officer. This is in consonance with the requirement of Article 311(2) of the Constitution as it provides that a person shall not be dismissed or removed or reduced in rank except after an enquiry in which he has been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges. So long as a final decision is not taken in the matter, the enquiry shall be deemed to be pending. Mere submission of findings to the Disciplinary Authority does not bring about the closure of the enquiry proceedings. The enquiry proceedings would come to an end only when the findings have been considered by the Disciplinary Authority and the charges are either held to be not proved or found to be proved and in that event punishment is inflicted upon the delinquent. That being so, the "right to be heard" would be available to the delinquent up to the final stage. This right being a constitutional right of the employee cannot be taken away in any legislative enactment or Service Rule including Rules made under Article 309 of the Constitution. " 36. Along with the show-cause notice, a copy of the findings recorded by the enquiry officer as also the reasons recorded by the Disciplinary Committee for disagreeing with those findings were communicated to the appellant but it was immaterial as he was required to show https://hcservices.ecourts.gov.in/hcservices/ cause only against the punishment proposed by the Disciplinary Committee which had already taken a final decision that the charges against the appellant were proved. It was not indicated to him that the Disciplinary Committee had come only to a “tentative” decision and that he could show cause against that too. It was for this reason that the reply submitted by the appellant failed to find favour with the Disciplinary Committee." (v) AIR 2001 SC 2398 (S.B.I. and others vs. Arvind K.Shukla) : "2. Mr Sundravardan, the learned Senior Counsel appearing for State Bank of India contended before us that in the case in hand, in fact, there has been no disagreement with the findings of the enquiring officer by the disciplinary authority, and on the other hand, the disciplinary authority on the accepted findings of the enquiring officer has recorded his conclusion differently on the basis of the relevant provisions of the Rules, and therefore the question of giving an opportunity to the delinquent at that stage does not arise. To appreciate this contention, we have been taken through the findings of the enquiring officer and Charges 1(a) and 1(d) as well as the reasonings and ultimate conclusion of the disciplinary authority on those two charges. On examining the same, we are not persuaded to accept the submission of the learned counsel and in our view, the disciplinary authority has disagreed with the conclusion and findings arrived at by the enquiring officer. The next question therefore is, as has been formulated earlier, whether the disciplinary authority was required to record its tentative reasons for disagreement and give to the delinquent officer an opportunity to represent before it recorded its ultimate findings. This question is concluded by a three-Judge Bench decision of this Court in the case of Punjab National Bank v. Kunj Behari Misra1." (vi) (2004) 8 SCC 653 (J.A.Naiksatam vs. Prothonotary & Senior Master, High Court of Bombay and others) : "As per Rule 8 of the Bombay Rules, if the disciplinary authority is not agreeing with the reasons given by the enquiry officer it would be open to the disciplinary authority to hold further enquiry in accordance with the provisions of Rule 7 and Rule 8(2) shows that if the disciplinary authority disagrees with the findings of the enquiry officer on any of the articles of charge he shall record his reasons for such disagreement. Sub-rule (4)(i)(a) of Rule 8 of the Bombay Rules further shows that the copy of the report of the enquiry officer and his finding on each https://hcservices.ecourts.gov.in/hcservices/ article of charge together with brief reasons shall be given to the delinquent employee. The rule further says that the disciplinary authority shall give its reasons for disagreeing with the decision of the enquiry officer. The counsel for the appellants contended that even if the rule does not specifically say that the delinquent employee should be given personal hearing when it disagrees with the enquiry officer, the same shall be read into the provision and the delinquent employee shall be given an opportunity of personal hearing before a final decision is taken in the matter. ..." (vii) (2007) 1 SCC 437 (Mathura Prasad vs. Union of India and others) : "18. Even if the enquiry officer had, in his first report, proceeded on surmises and conjectures as was observed by the High Court, the disciplinary authority could disagree with the said finding but it was, therefor, required to record its reasons. No reason was recorded. Sub- rules (2) and (3) of Rule 10 aim at achieving the same purpose. If sufficient materials are not available on record, a direction for holding a further enquiry may be issued in terms of sub-rule (2) of Rule 10 so as to enable the department to lead further