THE HON'BLE SRI JUSTICE GHULAM MOHAMMED and THE HON'BLE SRI JUSTICE SANJAY KUMAR W.A.No.1927 of 2005 JUDGMENT (Per Sri Justice Ghulam Mohammed) The appellants-State Bank of India filed this appeal aggrieved by the order dated 02.08.2005, passed in W.P.No.5269 of 2001, whereby the learned Single Judge of this Court while setting aside the punishment of dismissal from service, directed the appellants to reinstate the respondent into service and modified the said punishment to that of withholding of five increments with cumulative effect for the lapses committed by the respondent and that the respondent is not entitled to monetary benefits from the date of dismissal till the date of reinstatement by virtue of the said order, but the said period has to be counted for continuity of service for terminal benefits only. 2. The brief facts are that the respondent while working as Assistant Manager in the appellants-Bank at Guntakal Branch, Anantapur District, was served with a charge sheet dated 17.10.1995 on account of certain irregularities said to have been committed by him when he was working as Field Officer at Atmakur, ADB Branch during June 1990 to August 1992. He submitted his statement of defence on 12.11.1995. On completion of domestic enquiry, the second appellant vide orders dated 09.03.1998, removed him from service. The appeal preferred by him before the appellate authority was also dismissed by order dated 18.09.1998. Challenging both the said orders, the respondent filed W.P.No.5269 of 2001. Through order dated 02.08.2005, the learned single Judge of this Court allowed the same with the directions specified supra. Aggrieved by the same, the appellants-Bank filed the present writ appeal. 3. Learned Standing Counsel for the appellants-Bank vehemently contended that based on the recommendations of the respondent, who is a Field Officer at that point of time, the Branch Manager of the Bank had sanctioned the loans and in that process, he committed misconduct recommending the ineligible borrowers and also higher amounts than the eligibility and he breached the trust and confidence fastened on him. He further contended that even though the fourth and fifth charges were not proved, as the first charge was partly proved, second and third charges were also proved, the disciplinary authority has rightly imposed the punishment of removal from service and that the learned Single Judge ought not to have interfered with the punishment imposed on the respondent, who had committed serious misconduct. He relied upon the decision of the Supreme Court in SURESH PATHRELLA v. ORIENTAL BANK OF COMMERCE[1] wherein it was held as under: “It will be noticed that the appellant was charged for the alleged violation of Regulation 3(1) of the Regulations, 1982. Regulation 3(1) reads: 3.(1) Every Officer employee shall, at all times take all possible steps to ensure and protect the interests of the bank and discharge his duties with utmost integrity, honesty, devotion and diligence and do nothing which is unbecoming of a bank officer”. The regulation ensures that every officer at all times takes all possible steps to protect the interests of the Bank and discharge his duties with utmost integrity, honesty, devotion and diligence and do nothing which will be unbecoming of a bank officer. Such regulations are made to instil the public confidence in the bank so that the interests of customers/depositors are well safeguarded. In such a situation the fact that no amount was lost to the bank would be no ground to take a lenient view for the proved misconduct of a bank officer. In Disciplinary Authority-cum-Regional Manager v. Nikunja Bihari Patnaik-(1996) 9 SCC 69 this Court held that a bank officer acting beyond his authority constituted misconduct and no further proof of loss is necessary. In Regional Manager, U.P.S.R.T.C. v. Hoti Lal-(2003) 3 SCC 605 this Court held in para 10 at SCC p.614 as under: If the charged employee holds a position of trust where honesty and integrity are inbuilt requirements of functioning, it would not be proper to deal with the matter leniently. Misconduct in such cases has to be dealt with iron hands. 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. Judged in that background, conclusions of the Division Bench of the High Court do not appear to be proper. We set aside the same and restore order of the learned Single Judge upholding the order of dismissal’. In Chairman and MD, United Commercial Bank v. P.C.Kakkar-(2003) 4 SCC 364, this Court said in para 14 at SCC p.376-77 as under: 14. A bank officer is required to exercise higher standards of honesty and integrity. 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. 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, 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 each 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 charges against the employee were not casual in nature and were serious. These aspects do not appear to have been kept in view by the High Court’. Learned counsel further relied upon the decision of the Supreme Court in STATE BANK OF INDIA v. RAMESH DINKAR PUNDE[2] wherein it was held as under: “Confronted with the facts and the position of law, learned counsel for the respondent submitted that leniency may be shown to the respondent having regard to long years of service rendered by the respondent to the Bank. We are unable to countenance such submission. As already said, the respondent being a bank officer holds a position of trust where honesty and integrity are inbuilt requirements of functioning and it would not be proper to deal with the matter leniently. The respondent was a Manager of the Bank and it needs to be emphasized that in the banking business absolute devotion, diligence, integrity and honesty needs to be preserved by every bank employee and in particular the bank officer so that the confidence of the public/depositors is not impaired. It is for this reason that when a bank officer commits misconduct, as in the present case, for his personal ends and against the interest of the bank and the depositors, he must be dealt with iron hands and he does not deserve to be dealt with leniently. Learned counsel also relied upon the judgment of the Supreme Court in DAMOH PANNA SAGAR RURAL REGIONAL BANK v. MUNNA LAL JAIN[3] wherein it was held as under: “The common thread running through in all these decisions is that the court should not interfere with the administrator’s decision unless it was illogical or suffers from procedural impropriety or was shocking to the conscience of the court, in the sense that it was in defiance of logic or moral standards. In view of what has been stated in Wednesbury case, the Court would not go into the correctness of the choice made by the administrator open to him and the court should not substitute its decision to that of the administrator. The scope of judicial review is limited to the deficiency in decision-making process and not the decision. To put differently unless the punishment imposed by the disciplinary authority or the appellate authority shocks the conscience of the court/tribunal, there is no scope for interference. Further to shorten litigations it may, in exceptional and rare cases, impose appropriate punishment by recording cogent reasons in support thereof. In the normal course if the punishment imposed is shockingly disproportionate it would be appropriate to direct the disciplinary authority or the appellate authority to reconsider the penalty imposed. In the case at hand, the High Court did not record any reason as to how and why it found the punishment shockingly disproportionate. Even there is no discussion on this aspect. 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, there is no defence available to say that there was no loss or profit resulting in case, when the officer/employee acted without authority. The very discipline of an organization more particularly a bank is dependent upon each 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 charges against the employee were not casual in nature and were serious. These aspects do not appear to have been kept in view by the High Court. It needs no emphasis that when a court feels that the punishment is shockingly disproportionate, it must record reasons for coming to such a conclusion. Mere expression that the punishment is shockingly disproportionate would not meet the requirement of law. Even in respect of administrative orders, Lord Denning M.R. in Breen v. Amalgamated Engineering Union –(1971) 1 All ER 1148 observed: “The giving of reasons is one of the fundamentals of good administration”. In Alexander Machinery (Dudley) Ltd., v. Crabtree-1974 ICR 120 (NIRC) it was observed: “Failure to give reasons amounts to denial of justice. Reasons are live links between the mind of the decision-taker to the controversy in question and the decision or conclusion arrived at”. Reasons substitute subjectivity by objectivity. The emphasis on recording reasons is that if the decision reveals the “inscrutable face of the sphinx”, it can, by its silence, render it virtually impossible for the courts to perform their appellate function or exercise the power of judicial review in adjudging the validity of the decision. Right to reason is an indispensable part of a sound judicial system. Another rationale is that the affected party can know why the decision has gone against him. One of the salutary requirements of natural justice is spelling out reasons for the order made, in other words, a speaking-out. The “inscrutable face of the sphinx” is ordinarily incongruous with a judicial or quasi-judicial performance”. 4. On the other hand, learned counsel for the respondent submitted that the respondent being a Field Officer rendered unblemished service for the last 15 years before issuance of the charge sheet and that his duty is only to recommend the cases, but ultimate sanctioning power is vested with the other Officers of the Bank. He further contended that the learned single Judge has rightly held that there is only the negligence on the part of the respondent in discharging his duties properly and that the punishment of removal from service is disproportionate to the proven misconduct. He relied upon the decision of the Supreme Court in TATA ENGINEERING AND LOCOMOTIVE COMPANY LIMITED v. JITENDRA PRASAD SINGH[4] wherein it was held as under: “What influenced the Court in deciding the matter is that; “Since as many as three workmen on almost identical charges were found guilty of misconduct in connection with the same incident, though in separate proceedings, and one was punished with only one month’s suspension, and the other was ultimately reinstated in view of the findings recorded by the Labour Court and affirmed by the High Court and the Supreme Court, it would be denial of justice to the appellant if he alone is singled out for punishment by way of dismissal from service” As the judgment is rested upon this position, whatever other views may have been expressed in the course of the judgment may be of no significance. In that view of the matter, we think there is no need to interfere with the order made by the High Court, that too in a proceeding arising under Article 136 of the Constitution. Hence, we decline to interfere with the order made by the High Court. The appeals are dismissed accordingly’. He also relied upon the judgment of this Court in B. VASANTHI RAO v. SYNDICATE BANK, HEAD OFFICE, MANIPAL REP. BY ITS MANAGING DIRECTIOR[5] wherein it was held as under: “Since the impugned orders are liable to be quashed on the ground of non-application of mind by the respondents on the question whether the petitioner has been discriminated against, in being proceeded against departmentally and in being singled out for imposition of the major punishment of ‘compulsory retirement’ and, as the enquiry officer has failed to take into consideration the admissible material evidence on record, it is wholly unnecessary for this court to examine the contention of Sri S. Ashok Anand Kumar, relying on the Circular dated 09.12.2002 issued by the respondent bank subsequent to imposition of punishment on the petitioner that no disciplinary action could be taken against the petitioner, for the accountability lapses, if any, as such lapses were subsequently condoned on sanction being accorded by the zonal office for the loans released earlier. The writ petition is allowed and the impugned order of the 2nd respondent dated 23.03.1992 and the 1st respondent dated 20.02.1996 are, accordingly, quashed. However, in the circumstances, without costs. 5. The point for consideration is whether the learned single Judge is justified in modifying the punishment, by the impugned order. 6. We have perused the evidence and the report of the Enquiry Officer. The charged officer i.e., respondent was the Filed Officer of the Bank at the relevant point of time. For the irregularities committed by him, the charge sheet dated 17.10.1995, was served on him with the following charges: (i) You had with a malafide intention got encashed banker’s cheques issued at the branch in the names of borrowers in respect of Debt Relief under ARDRS 1990 without their knowledge and without getting the cheques being revalidated. (ii) You had not checked and scrutinized the claims thoroughly while submitting claims under ARDRS 1990, you had attested Form No.II in respect of 25 borrowal accounts who were close relatives of the staff members and who were not entitled to get the benefit of the staff members and who were not entitled to get the benefit under ARDRS 1990, with a view to passing on the pecuniary benefit to them. You were also responsible for providing debt relief under ARDRS 1990 to some of the borrowers in excess of the eligible amount of debt relief. (iii) You had recommended sanction of fresh loans to the beneficiaries while the loans sanctioned to them earlier were outstanding and overdue, without disclosing the existence of earlier loans and their overdue position. (iv) You had allowed Sri Pidugu Sriramulu to avail the crop loan which was sanctioned in the name of Shri Pidugu Venkataiah. (v) You had recommended sanction of crop loans to the members of the same family individually although they constitute a joint family without ascertaining the fact that the borrowers have land holdings in their individual names. You had also not conducted pre-sanction in respect of those loans. After conducting a detailed enquiry, the disciplinary authority held charge No.1 as partly proved, charge Nos.2 and 3 as proved and charge Nos.4 and 5 as not proved and finally, passed an order removing the respondent from service. The appellate authority also confirmed the same. 7. The respondent being a Field Officer of the Bank has the knowledge of the customers’ over dues and before recommending for fresh loans, he has to verify the records and in such process, he fraudulently encashed the cheques, which were in his custody, thereby, financial loss was caused to the Bank. Based on his recommendations only, the Officers of the Bank sanctioned the loans. As such, the finding of the learned single Judge that there was no financial loss to the Bank and no misappropriation on the part of the respondent cannot be sustained since it was held by the Apex Court in the decisions cited supra, as relied on by the learned Standing Counsel for the Bank, that the Bank Officer is required to exercise higher standards of honesty and integrity and every officer/employee of the bank is required to take all possible steps to protect the interest of the bank and to discharge his duty with utmost integrity, honesty, devotion and diligence. Further, in MUNNA LAL JAIN’s case, cited 3 supra, the Apex Court held that if the punishment imposed is shockingly disproportionate, it would be appropriate to direct the disciplinary authority or the appellate authority to reconsider the penalty imposed. In the case on hand, the first charge framed against the respondent was held partly proved and the other two charges were held proved. Therefore, we are of the considered view that the punishment of removal of the respondent from service is proportionate to the proven misconduct. 8. In view of the above, the Writ Appeal is allowed, setting aside the impugned order. However, the appellants-Bank is directed to pay the terminal benefits to the respondent and that the amounts, which were paid to the respondent by virtue of the impugned order, shall not be recovered from him. No order as to costs. _____________________ GHULAM MOHAMMED, J __________________ SANJAY KUMAR, J Date:11.08.2011 sj [1] (2006) 10 SCC 572 [2] (2006) 7 SCC 212 [3] (2005) 10 SCC 84 [4] CDJ 2000 SC 1091 [5] CDJ 2007 APHC 846