* THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN + WRIT PETITION NO. 28757 of 1997 % 05.06.2007 # B. Vasanthi Rao and others. ….. Petitioner Vs. 1. $ Syndicate Bank, Head Office, Manipal rep, by its Managing Director and another. ….Respondents. ! Counsel for the Petitioner: Sri S. Ashok Anand Kumar ^ Counsel for the Respondent bank: A. Krishnam Raju, Standing Counsel < Gist: >Head Note ? Citations: [1] 1995 Supp (3) SCC 456 2 2003(5) SCC 83 3 2000(5) SCC 231 4 AIR 1967 SC 1124 5 AIR 1982 SC 937 6 1994(1) SCC 292 7 1996(2) SCC 205 8 2006(5) SCC 153 9 1964 (5) SCR 64 10 (2006)5 SCC 173 11 (1964) 4 SCR 718 12 (1965) 1 WLR 1320 at 1326 13 (1977) AC 1014 14 (1972) 2 QB 455 at 493 15 (1978) 1 All ER 411 16 AIR 1963 SC 114 17 2001(2) SCC 386 THE HON'BLE MR JUSTICE RAMESH RANGANATHAN WRIT PETITION No. 28757 of 1997 O R D E R: The order of the Chairman & Managing Director of the Syndicate Bank dated 20-02-1996, and the order of the General Manager dated 23-03-1992, are under challenged in this writ petition and a Writ of Certiorari is sought to quash both these orders. During the pendency of this writ petition the petitioner died. Thereafter, by order in WPMP.No.22228 of 1999 dt. 09-11-1999, his wife and both his sons were brought on record as his legal representatives. Facts, in brief, are that, while working as the Divisional Manager of the respondent-bank at Patna, the petitioner was issued charge memo dated 24-11-1990 for certain irregularities alleged to have been committed by him during the period, between 11-07-1983 and 03-06-1989, while functioning as the Divisional Manager at the Divisional Office, Hyderabad (Rural Division). The relevant portion of the charge memo reads thus:- “Following irregularities are observed in the matter of recommending/sanctioning of the said loans: a) That in their letter No.3636 dt.2.6.1987, HO, CPFMO had agreed to consider the proposal only if the loanees are persons whose salaries are routed through the Bank and employed in companies who are dealing with the Bank. However, while informing M/s BMR Estates and Builders, the sponsors of the scheme vide your letter No.2924 dt.20.6.1987 that Bank is agreeable to their proposal dated 30.4.87, the terms stipulated by Head Office as stated above were not incorporated in the said letter. b) Head Office had also in their letter 3636 dated 2.6.1987 directed to recommend viable proposals to them for their clearance. However, this stipulation was not adhered to by the branch as a result of which loans were continued to be sanctioned/arranged/released at branch level itself without seeking clearance of Head Office and this fact was also within your knowledge. c) Specific sanction letter or clear cut guidelines such as per party limit, validity of the limit, margin to be maintained, interest rate, eligibility criteria were not conveyed to the branch. d) Zonal Office vide their letter No.6467 dt.28.12.87 had permitted Divisional Office (Rural) to approved the branch action in having arranged the loans, subject to having followed all the norms. However, though the norms as stipulated were not followed/adhered to while releasing the loans by this branch you ratified/approved the branch action in arranging the said loans vide your letter No.10947 dt.2.3.88. It is now observed that a number of complaints have been received from certain employees of the Government departments to the effect that loans have been arranged for a higher amount than the one agreed to and by between them earlier. In addition to this the complaints also relate to the following matter: a) that the sponsors have not registered the house plots in their names in all the cases. b) That title deeds have not been conveyed to them c) That in a few cases, the plots which have been registered in their names, are not the ones promised to them earlier by the sponsors. d) That the actual cost/value of the plots are around Rs.3000/- to rs.5000/- only, whereas the loans are arranged for Rs.8000/- to 12000/- That as a result of these complaints, repayments are not forthcoming towards a large number of loan accounts since the letters of undertaking given by the loanees to their respective employers, authorizing deduction of monthly instalments along with interest from their salaries towards credit of their respective loan accounts, have been countermanded/withdrawn by the said complaints.” An enquiry was conducted and the enquiry officer found the petitioner guilty of all the charges, except to the limited extent that complaints had been received from certain employees of government departments to the effect that loans had been arranged for a higher amount than the one agreed to between them earlier. The enquiry officer held that, while the complaints had alleged a conspiracy between the bank and the builders, no such conspiracy had either been alleged in the charge sheet nor was any evidence adduced to prove the same. The enquiry officer also held that the petitioner’s contention that the complaint contained baseless allegations, and were basically aimed at the builders, had not been challenged by the prosecution and that the complaints had apparently originated because of misunderstanding between the borrowers and the builders which was beyond the control of the bank. The enquiry officer further held that no substantial evidence had been adduced by the prosecution to show that the petitioner was responsible for the irregularities alleged in the said complaints or that there were lapses or negligence on his part in the discharge of his official duties. On receipt of the enquiry report, the second respondent, by order dated 23-03-1992, concurred with the findings of the Inquiring authority, held the petitioner guilty of misconduct under Regulation 3(1) read with Regulation 24 of the Syndicate Bank Officer Employees’ (Conduct) Regulations, 1976 (for short ‘the Regulations’). The 2nd respondent held that the charges, established in the enquiry, were serious in nature attracting deterrent punishment, and since the petitioner had paved the way for the irregular state of affairs in the transactions, and had exposed the bank to huge financial risk, ends of justice would be met if the penalty of ‘removal’ from the services of the bank was imposed on the petitioner. Accordingly, for breach of Regulation 3(1) of the Regulations, the petitioner was removed from the services of the bank with immediate effect. Aggrieved thereby, the petitioner preferred an appeal to the first respondent. The first respondent, by order dated 20-02-1996, held that the petitioner had failed to adhere to the stipulated norms/guidelines while sanctioning loans, that the original advance was about Rs.1.19 crores and the individual loans ranged between Rs.8,000/- to Rs.12,000/- which were required to be cleared within 36 months from the date of availment, that interest was charged at 16.5%, that the loan proposal scheme of M/s. B.M.R Estates and Builders was sponsored by and through the Alwal Branch, that the proposal was forwarded to the Deputy General Manager, Zonal Office, Hyderabad, by the petitioner with his favourable recommendations on the proposal which, in turn, was forwarded to the Head Office by the Zonal Office with their recommendation that the proposal was deposit oriented and the individual loans would be considered only to the extent of 50% of the deposit received in advance, that the Head Office had informed the Zonal Office to consider the proposals only if the loanees were persons whose salaries were routed through the bank and were employed in companies which had dealings with the bank restricting the outflow of funds to 50% of the deposit mobilized and this was subject to the proposal otherwise being in order. The first respondent held that the petitioner had, subsequently, taken up the matter with the Zonal Office stating that the companies, whose employees were financed by the scheme, could not be persuaded to open an account for obvious reasons, that they had already advised the branch to restrict the outflow of funds only to 50% of the deposits and that the proposals were required to be scrutinized properly. The first respondent held that the petitioner, being the head of the Divisional Office, had failed to send specific sanction letters/clear cut guidelines such as per party limit, validity of the limit, margin to be maintained, rate of interest, eligibility criteria etc. and that, while arranging loans, there was no specific clearance from the Head Office though the branch action was subsequently approved inspite of the fact that the norms stipulated were not complied with. The first respondent noted that, as far as recovery aspect was concerned, the bank had filed suits against the loanees for recovery, that recovery through legal recourse was always a time consuming task and, if the petitioner had carefully evaluated the scheme and complied with the stipulated norms, the matter would not have landed in the Court of law. The first respondent held that the contention of the petitioner, that his case was given an isolated/discriminatory treatment by the bank, was not supported by substantial evidence, the averment was vague and irrelevant and, since huge funds of the bank were involved in the transactions, the petitioner should have been cautious enough to monitor the scheme, that he had functioned in a casual and perfunctory manner and that the bank was likely to incur heavy pecuniary loss. Taking into consideration various aspects of the case the first respondent held that he was taking a lenient view and that the punishment of removal from the services of the bank was being reduced to that of “Compulsory retirement”. The thrust of the submissions of Sri S. Ashok Anand Kumar, learned counsel for the petitioner, is that since the action of the petitioner was approved, initially by the Managing Director of the Bank on 07-08-1987 and, thereafter, by the Zonal Office, in its proceedings dated 22-02-1988, any technical violation or non- compliance with the earlier instructions issued by the Head Office, in its proceedings dated 02-06-1987, must be held to have been waived, and, consequent upon approval being accorded, both by the Managing Director and the Zonal Office, the petitioner can no longer be held responsible for any such technical violations. Learned counsel would submit that, since the subsequent approval of the Managing Director and the Zonal Office amounted to ratification of the earlier acts, any technical violation or accountability lapses on the part of the petitioner must be held to have been condoned and, as a result, no further action could have been taken, thereafter, against the petitioner. Learned counsel would contend that the petitioner was singled out for punishment while his subordinates, including the Branch Manager, (who had sanctioned the loans and had released the amounts), and his superiors at the Zonal Office, who had approved his action, were not even proceeded against departmentally and that the petitioner was made a scapegoat as certain baseless complaints were received by the bank. Learned counsel would submit that the petitioner was imposed the punishment of removal from service by the second respondent, just a month prior to his retirement on superannuation, which had resulted in the petitioner being denied pension under the Pension Regulations governing employees of the respondent-bank. Learned counsel would place reliance on the policy guidelines of staff accountability issued by the respondent- bank on 09-12-2002 to contend that, even where sanction of loans was approved subsequently, earlier accountability lapses was specifically required not to be pursued thereafter. While fairly conceding that the said circular dated 09.12.2002 was subsequent to the impugned order of punishment of removal from service passed by the second respondent, and that there was no plea in this regard in the writ petition filed before this Court, learned counsel would submit that, nonetheless, since these guidelines were framed, on a detailed examination of various aspects, by expert committees of the bank, from time to time, it was merely a reiteration of the consistent earlier practise of the bank not to take disciplinary action for accountability lapses when sanction was subsequently accorded. Learned counsel would contend that the writ petition filed by the legal representatives of the deceased employee was maintainable and, while the consequence of the writ petition being allowed was that the legal heirs of the deceased employee were not entitled to claim reinstatement, they would, nonetheless, be entitled for the monetary relief which would ensue as a consequence of the impugned orders of punishment being quashed. Learned counsel would contend that the enquiry officer had made no reference, in his report, to the endorsement of the Zonal Office dated 26-12-1987, on Ex.S-24 letter dated 22.12.1987 addressed to the Deputy General Manager at the Zonal Office, wherein the petitioner, while informing that this was agreed to by the Chairman during his visit to Hyderabad, had sought permission to approve the action of the branch in release of the loans, or to Ex.S.27(2) wherein the Zonal Office had informed the Head Office that they had approved the branch’s action in releasing the loans, both in view of the fact that the Managing Director had permitted release of the loans during his visit on 07-08-1987 and as the Divisional Office had confirmed that the branch had stopped arranging loans under this category, as all the complaints had been promptly attended to by deputing their officers and as the repayment position of the accounts had improved. Learned counsel would place reliance on U.P. Avas Evam Vikas Parishad Vs. Friends Cooperative Housing Society Ltd.[1], Vijayadevi Naval Kishore Bhartia Vs. Land Acquisition Officer[2], Jaya Gokul Educational Trust v. Commissioner & Secretary to Government Higher Education Department[3], Girijanandini Devi Vs. Bijendra Narain Choudhary[4], State of U.P. Vs. Mohd. Sharif[5], Shri Rameshwar Manjhi Vs. Management of Sangramgarh Colliery[6], Puran Singh Vs. State of Punjab[7] and D.C. Aggarwal Vs. State Bank of India[8]. Sri A. Krishnam Raju, learned standing counsel for the respondent-bank, on the other hand, would contend that the approval accorded, both by the Managing Director and the Zonal Office, was only from the resources angle i.e. as against the earlier sanction accorded for grant of loans to the extent of 50% of the deposits mobilized, approval had been given for sanction of loans upto 60% of the deposits mobilized. Learned standing counsel would submit that, since approval was accorded only from the resources angle, the petitioner was required to comply with the other stipulations in the Head Office letter dated 02-06-1987 and since, admittedly, he did not adhere to the stipulations, had instructed the Branch Office to sanction the loans, and release the amounts, he was rightly held guilty of the charges levelled against him and was imposed the punishment. Learned standing counsel would submit that the petitioner cannot be said to have been singled out for adverse treatment since he alone was responsible for the irregularities and his attempts, to now shift the blame on others, was clearly an after thought. Learned standing counsel would reiterate that, since the procedural violations and the petitioner’s failure to adhere to the conditions stipulated in the Head Office letter dated 02-06-1987 had not been subsequently approved either by the Managing Director or by the Zonal Office, the irregularities committed by him cannot be said to have been condoned and the respondents were justified in initiating departmental action against him and, on his being found guilty in the departmental enquiry, in initially imposing on him the punishment of removal from service which was later reduced to “compulsory retirement”. Learned standing counsel would submit that even assuming, without admitting, that the approval was for release of the loans in its entirety, and not merely from the resources angle, this aspect did not relate to charge No.1 and that, in any event, charge No.1 must be held to have been established. Learned standing counsel would submit that even if one of the several charges levelled against the delinquent employee is held to have been established, for which the punishment of compulsory retirement can lawfully be imposed, this Court would not interfere in proceedings under Article 226 of the Constitution of India. Learned standing counsel would contend that, since the orders under challenge are the orders of punishment imposed on the petitioner, it is the petitioner alone who can be said to be aggrieved thereby, and not his legal representatives, and consequently a writ petition filed by him cannot be continued after his death by his legal representatives. Learned standing counsel would contend that this Court, under Article 226 of the Constitution of India, would not sit in appeal over findings of fact recorded by domestic tribunals nor would it re-appreciate the evidence on record or substitute its views for that of the enquiry officer or the disciplinary authority, to interfere with the punishment imposed for proved acts of misconduct. Learned standing counsel would contend that, since the enquiry officer, on an elaborate and detailed analysis of the evidence on record, had come to the conclusion that the petitioner had committed the alleged irregularities, the respondents were justified in holding him guilty of the charges and in imposing punishment for such proved acts of misconduct. On the question of maintainability of the writ petition being continued by the legal representatives of the delinquent employee, who died during the pendency of the writ petition, the maxim “ actio personalis moritur cum persona ”, a personal action dies with the person, has limited application. It operates in a limited class of actions ex delicto such as actions for damages for defamation, assault or other personal injuries not causing the death of the party, and in other actions where after the death of the party the relief granted could not be enjoyed or granting it would be nugatory. (Girijanandini Devi4). In Mohd. Sharif5, the Supreme Court observed:- “………..We are satisfied that the dismissal order has been rightly held to be illegal, void and inoperative. Since the plaintiff has died during the pendency of the proceedings the only relief that would be available to the legal heirs of the deceased is the payment of arrears of salary and other emoluments payable to the deceased……….” Again in Shri Rameshwar Manjhi (deceased) through his son Shri Lakhiram Manjhi6, the Supreme Court held:- “……….Even otherwise there may be a claim for back wages or for monetary relief in any other form. The death of the workman during pendency of the proceedings cannot deprive the heirs or the legal representatives of their right to continue the proceedings and claim the benefits as successors to the deceased workman…….” In the present case also, while the death of the delinquent would result in an end to the claim for reinstatement into service, his legal representatives would, however, be entitled to have the impugned order of punishment quashed and to claim the monetary benefits due to the deceased delinquent from the date of imposition of punishment till the date of his death. The objection to the maintainability of the writ petition must, therefore, be rejected. To examine the contentions urged, regarding approval accorded by the Managing Director and the Zonal Office, it is necessary, in brief, to refer to the relevant correspondence in this regard, for it is only on examination thereof can it be determined whether approval was accorded in its entirety or whether approval was accorded only from the resources angle and whether the petitioner’s failure to adhere to the stipulations contained in the Head Office letter dated 02-06-1987 was condoned or not. The Head Office of the Syndicate Bank, in its letter dated 02-06-1987, informed the Deputy General Manager, Zonal Office, Hyderabad, as under: “We may consider the proposal only if the loanees are persons whose salaries are routed through us and employed in companies who are dealing with us. Taking into consideration the SLR/CRR, incremental reserve ratio etc., the amount which will be left for lending will be 55.5% of the deposits. We shall be able to lend only to the extent of 50% of the deposits. This is, however, subject to the proposals, otherwise being in order. You may recommend viable proposal restricting the outflow of funds to 50% of deposits, and seek our clearance.” The stipulations in the Head Office letter dated 02-06-1987 were:- 1. the loanees should be persons whose salaries were routed through the Bank; 2. the loanees should be employed in companies who had dealings with the bank; 3. loans should be recommended only to the extent of 50% of the deposits mobilized; 4. extending of loans was to be subject to the proposals otherwise being in order; and 5. viable proposals could be recommended restricting the outflow of funds to 50% of deposits, and clearance from the Head Office was to be sought. While the petitioner would contend that he had received an official communication from the Zonal Office, informing him of the aforesaid conditions stipulated by the Head Office, only on 13-06- 1987, prior to which he had addressed a letter to M/s.BMR Estates and Builders on 10-06-1987, it is not in dispute that the petitioner did not adhere to all the conditions stipulated therein. The petitioner was informed, vide letter dated 11-08-1987, (Ex.S.12), that the Head Office, in its earlier letter No.3636 dated 02-06-1987, had instructed the Zonal Office to seek clearance only in the case of proposals sanctioned to:- 1. Persons whose salaries were routed through the Bank and persons employed in companies who were having dealings with the bank; 2. Curtailing outflow of funds to 50% of deposits; and 3. Proposals being otherwise in order. The Zonal Office enquired from the petitioner whether these conditions were fulfilled, in all cases of loans released to enable the Zonal Office to seek Head Office clearance from “resources angle”. The petitioner was advised to give these details without fail, henceforth, so that the Zonal office could seek clearance from the Head Office straight away. In reply thereto, the petitioner, in his letter dated 14-08-1987 (Ex.S-13), informed the Zonal Office that the borrowers had submitted irrevocable letters of undertaking to the effect that the monthly instalments and interest on the loans would be collected from the salary and remitted to the branch, that the companies, whose employees were being financed under the scheme, could not be persuaded to open an account for obvious reasons, that this condition may not be insisted upon, that the branch had already been advised to restrict lending to 50% of the deposits, that the Chairman during his recent visit to Hyderabad had permitted one of their city branches to lend upto 60% of the deposits and, therefore, the matter should be taken up with the Head Office and their permission sought to lend upto 60% of the deposits since these amounts were FCNR deposits. The petitioner further informed that the proposals were scrutinized properly before sanction and, unless they were found complete in all respects, the loans were not to be disbursed. In his letter dated 20-08-1987 (Ex.S-14), the petitioner informed the Zonal Office that the Divisional Office had already recommended enhancement of loans from the earlier 50% of the deposits received to 60% of the FCNR deposits, which may be permitted, and that the decision in this regard be conveyed to the Divisional Office. The said letter in Ex.S-14 contains an endorsement of the Zonal Office dated 26-08- 1987 that “this has been discussed with the Chairman during his visit to our office on 7th/8th and it was agreed that we can lend upto 60%”. Vide letter 27-08-1987 (Ex.S-15), the petitioner was informed that the Chairman of the Bank, during his visit to the Zonal Office on 07.08.1987, had agreed that the bank could lend upto 60% and, therefore, the Divisional Office could permit the branch to lend upto 60% and that this facility was to be used for sanctioning loans to employees of government/semi- government/ reputed companies recommended by M/s.BMR Estates & Builders only and that the branch should follow the terms and conditions laid down in the letter of the Head Office dated 02-06-1987. It is clear, from Ex.S-15 letter dated 27-08-1987, that the