IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 19.12.2007 CORAM THE HONOURABLE MR.JUSTICE V.DHANAPALAN W.P.No.54 of 2001 G. Karunanidhi Petitioner vs. 1 The Indian Bank represented by its Chairperson & Managing Director 31, Rajaji Salai Chennai – 600 001 2 The Executive Director Indian Bank 31, Rajaji Salai Chennai – 600 001 3 The General Manager (Inspection) Indian Bank 31, Rajaji Salai Chennai – 600 001 Respondents Writ Petition filed under Article 226 of the Constitution of India praying for issuance of a writ of certiorarified mandamus calling for the records on the file of the third respondent bearing no.6779:99:VG dated 21.12.1999 read with the order dated 29.02.2000 passed by the second respondent read with the order dated 29.07.2000 passed by the first respondent, quash the same and consequently direct the respondents to reinstate the petitioner in service with effect from 21.12.2000 with back- wages, continuity of service and all other attendant benefits. For petitioner Mr. R. Muthukumarasamy, Senior Counsel for Mr. K.A. Ravindran For respondents Mr. G. Venkataraman for M/s. Aiyar & Dolia https://hcservices.ecourts.gov.in/hcservices/ O R D E R The petitioner has filed this writ petition, calling in question, the legality of the order of: (i) the third respondent, the Disciplinary Authority in and by which he has been imposed the major penalty of compulsory retirement, (ii) the second respondent, the Appellate Authority confirming the order of the third respondent, the Disciplinary Authority and (iii) the first respondent, the Reviewing Authority rejecting the Review Application. 2. The petitioner's case, in brief, as could be seen from his affidavit, is as under: a. The petitioner joined the services of the respondent bank in the year 1974 and was working as Branch Manager of the Kotturpuram Branch from 08.07.1993 to 31.03.1996. While was working as Branch Manager of the Kotturpuram Branch of Indian Bank in 1994, he was informed over telephone by the then Chairman and Managing Director (CMD) that one C.R. Viswanathan would get in touch with him regarding an International Women's Football Tournament in the name of the then Chief Minister J. Jayalalitha and accordingly, an account was opened in the name of "Dr. J. Jayalalitha Gold Cup International Women's Football Tournament – 1994" (“Football Tournament” for short) by the said C.R. Viswanathan, Organising Secretary of the Tournament. Based on the instruction from the CMD to allow Temporary Over Drafts (TODs) to the extent of Rs.150 lakhs towards the Football Tournament Account as a temporary arrangement and that the same would be adjusted by Government grants and other collections and also based on his assurance that he would personally monitor such collections, TODs were allowed by the petitioner and the matter was also reported to the Regional Manager, Zonal Manager and the CMD and confirmation obtained. Though TODs were originally meant for a period of four months, as Government grants and collections did not materialise as expected and TODs remained unsettled, the petitioner wanted to meet the Chief Minister/Chief Secretary/any other Government officials for the purpose of recovery. But, the CMD had intervened stating that the matter was being dealt with at the top level and assured the petitioner that he would liaise with the Government officials for recovery of money and also advised the petitioner not to embarrass C.R. Viswanathan. https://hcservices.ecourts.gov.in/hcservices/ b. While so, the petitioner received a show-cause notice dated 15.04.1996 from the Chief Manager, Vigilance stating that during his tenure as Branch Manager of the Kotturpuram Branch from 08.07.1993 to 31.03.1996, he had committed serious irregularities in respect of appraisal, disbursal and follow up of credit limits sanctioned to the Football Tournament because of which the bank was facing difficulties in recovering the liability of Rs.194 lakhs as on 14.12.1996. The petitioner gave his reply stating that: i he had obtained confirmation for the facilities allowed; ii the letter dated 09.11.1994 from the Zonal Manager to the CMD contains the notings of the CMD himself; iii he had taken all efforts in this regard and documents were available to prove his case; iv the account was referred to him by his superiors, viz., the Assistant General Manager, Regional Office, Madras (South), the Zonal Manager and the then CMD and v C.R. Viswanathan, claiming that he was to be designated as the Organising Secretary and the Organising Committee under formation included high dignitaries like the Chief Secretary, Finance Secretary, Education Secretary, Director General of Police and several others, informed him that there are no separate constitution and by-laws as the Football Tournament being a one-time event; c. The respondent bank, not being convinced with the petitioner's explanation, issued a charge sheet dated 18.03.1997 which consisted of the following charges: i that he had allowed huge TODs without verifying basic information of the borrower Association; ii that he had allowed several overdrafts for which he had no powers and that he had not obtained confirmation for the same and thus misused his official position; iii that though he permitted huge overdrafts, he had not cared to take documents and thus rendered the bank without recourse to proceed for recovery; and https://hcservices.ecourts.gov.in/hcservices/ iv that he had not taken follow up action in getting the documents or in recovery of TODs granted. d. To the charge-sheet referred to above, the petitioner submitted his explanation dated 25.04.1997 reiterating his earlier stand that all his actions were based on the instructions of his superiors and that every TOD which he allowed was with the confirmation of his superiors. Ten documents were also enclosed with the petitioner's explanation to show that his actions were not based on mere telephonic instructions and that his explanation was genuine. e. Despite receipt of the petitioner's explanation dated 25.04.1997 together with enclosures, the bank, by its letter dated 17.05.1997, ordered a departmental enquiry on the petitioner in which he participated and marked 31 documents and was represented by a Defence Assistant, though no witness was examined on his behalf. For its part, the bank marked 40 documents and examined one Shyam Sundara Babu, Senior Manager. f. In the enquiry, the petitioner was denied the opportunity to scrutinize the files and documents at the Regional Office / Zonal Office/ Head Office stating that his request for scrutiny of files was irrelevant on the ground that all the records relating to the transaction were available at the Branch Office. g. In the domestic enquiry, the Management Witness stated in his cross examination that: i he had seen from DEX 4 that Chief Secretary of the State had written to the CMD that the tournament in question was approved by the Government and was sanctioned by the Football Association/Federation including FIFA and that the Chief Secretary had sought the help of the CMD to sponsor the expenses roughly estimated as Rs.30 lakhs; ii from DEX 5 and 7, it is clear that the opening of the account in question was brought to the notice of the Government of Tamil Nadu; i from DEX 13, it was clear that the Zonal Manager had written a letter on 09.11.1994 to the CMD informing him about the TOD that was allowed on 11.10.1994 and was confirmed by the Assistant General Manager, Chennai (S) when the balance was Rs.1,40,40,761.02 and that CMD's confirmation for Assistant General Manager's action was requested; https://hcservices.ecourts.gov.in/hcservices/ iv it was seen from the various documents that all the disbursements were reported to the Regional Office and confirmation was obtained; and v it was seen from DEX 9 that the Government of Tamil Nadu had made a budgetary provision for the expenditure of this Tournament and therefore, in his opinion, there was nothing to question the bona fides of the account. h. The defence, while cross-examining the Management Witness, also referred to Clause 15.4 of MEX 40, the Manual of Instructions relating to opening of accounts for Associations, Committees, Clubs and Societies which while dealing with accounts in which no regular rules are drawn up and which are held only temporarily states that an account may be opened for reliable persons of standing and status after the Manager satisfies himself about the bona fides of the party. In this connection, DEX 25 was put to the Management Witness in which the credentials of C.R. Viswanathan was mentioned. i. In his written brief to the Enquiry Officer, the petitioner referred to the various circumstances which led to his actions and requested that the entire case may be looked at taking into consideration the fact that he did whatever his superiors asked him to do in good faith. The bank never contended that the veracity of the document was in dispute nor was its case that the petitioner's actions were for his personal gain. Further, the Presenting Officer has stated that the second charge was not proved since the TODs had the confirmation of the Assistant General Manager / Zonal Manager / CMD. j. Despite such glaring evidence against the bank, the Enquiry Officer submitted his report finding the petitioner guilty of charges 1, 3 and 4 and holding the second charge as partly proved and partly not proved. k. The petitioner sent his representation to the findings of the Enquiry Officer on 31.07.1999 stating that: i the Enquiry Officer failed to see the very unusual nature of the entire transaction; ii the findings of the Enquiry Officer are perverse and biased inasmuch as the various documents marked both by the Management and the defence were not considered in a fair manner; and https://hcservices.ecourts.gov.in/hcservices/ iii the Enquiry Officer failed to consider the innumerable documents marked by both sides which would bring out his innocence clearly. l. Yet, the Disciplinary Authority, the third respondent, by his order dated 21.12.1999, concurred with the Enquiry Officer and imposed the punishment of compulsory retirement, questioning for the first time, the veracity of the correspondence between the Chief Secretary and the CMD. m. The appeal filed by the petitioner before the second respondent on 19.01.2000 stood rejected on 29.02.2000 pursuant to which, the petitioner preferred a Review before the first respondent on 17.04.2000 and it was also rejected on 29.07.2000. 3. Thus, being aggrieved by the three orders referred to above passed by each of the respondents, the present writ petition seeking to quash the same and to direct the respondents to reinstate the petitioner in service with effect from 21.12.2000 with back-wages, continuity of service and all other attendant benefits. 4. The respondents have filed their counter contending that: a. the petitioner did not possess clean record throughout his career and explanation was called for from him on four occasions for the irregularities committed in granting loans, non-execution of lease deed in favour of the bank and procedural lapses committed in the opening of account in the case of Jeppiar Farms and his reply was accepted in respect of two cases for which explanations were called and he was warned to be careful in future in respect of the remaining two cases and two more charge sheets were issued to him and kept in reserve in view of his compulsory retirement; b. the petitioner while working as Manager in the Kotturpuram Branch of Indian Bank from 08.07.1993 to 31.03.1996 committed serious irregularities in respect of TODs granted to the Football Tournament since the reply given by the petitioner was not found satisfactory, the Disciplinary Authority issued charge sheet to the petitioner on 18.03.1997 levelling four charges; c. As per Regulation No.24 of the Indian Bank Officer Employees (Conduct) Regulations, 1976, a breach of any of the conduct regulations constitutes a misconduct that is punishable under Regulation 4 of the Indian Bank Officer Employees (Discipline & Appeal) Regulations, 1976 as amended; https://hcservices.ecourts.gov.in/hcservices/ d. though the borrower is an association organised by Tamil Nadu Football Association, there is no record available regarding its constitution or the full particulars of the borrower and despite the same, the petitioner had allowed huge temporary overdrafts even without verifying the basic and essential information namely the constitution, members of the association, its by-laws, etc; e. even though the petitioner had permitted huge temporary overdrafts, he had not even cared to take any documents and thus, rendered the bank without recourse to proceed for recovery of its liability of Rs.194.09 lakhs as on 14.02.1996; f. as the statement of defence submitted by the petitioner was not satisfactory, the preliminary sitting of the enquiry was held on 20.06.1997 and the regular enquiry was conducted on 23.02.1999; the petitioner was given ample opportunity along with his Defence Assistant to inspect the documents relied on by the Bank Management and both the petitioner and his Defence Assistant confirmed that they had completed the inspection of listed documents and had no objection for these documents being marked; g. it is not open to the petitioner to make reference to documents imagined by him as if they are in existence in some other office and on that allegation plead that such imaginary documents were not made available to him without specifying what those documents are; h. it is in no manner established by the petitioner that C.R. Viswanathan was the organising Secretary of the Association and he has not established or shown proof as to the official constitution of the association, the constitution of the Organising Committee and the appointment of C.R. Viswanathan as its Organising Secretary; i. the petitioner's request for perusal of the files of Regional Office/Zonal Office/Head Office was in the nature of a roving inspection and he did not specify any particular document or correspondence and in the absence of any specific letters/correspondence, the Inquiring Authority rejected his request for making such roving perusal; j. DEXs 4,5 and 7 have no evidentiary value since Bank is not a party to the same and in DEX 9 which is an extract of the Assembly proceedings, there was only a passing reference to the Tournament and there was no intent from the Education Minister for any budgetary provision for the tournament; https://hcservices.ecourts.gov.in/hcservices/ k. when the petitioner allowed TODs and sought confirmation of the superiors, he had not brought to their knowledge that he had not obtained cover documents which would safeguard the interest of the bank and he had deliberately overlooked and ignored the legal implications while granting TODs; l. the petitioner's reckless omissions and commissions had led the bank to lose its case before the Debts Recovery Tribunal and also the Debts Recovery Appellate Tribunal, Mumbai resulting in a loss of Rs.262.64 lakhs to the bank; m. each of the charges levelled against him is independent and just because, the second charge was partially proved, the petitioner is estopped from contending that he is absolved from other charges; n. the Inquiring Authority's findings that the petitioner should not have allowed the account to be overdrawn is perfectly justified as the account allowed to be opened by the petitioner is in respect of an Association which was never registered and thus not a legal entity; o. the repeated allegations of the petitioner that all his actions were at the instance of the CMD is not tenable since he had miserably failed in his duty to follow the due procedure contemplated under the Manual of Instructions connected with the opening of an account; p. his allegation that cheques were passed on various dates and therefore, he was not aware of as to how many cheques would go on any given date is nothing but mis-statement of facts and as a Branch Manager, it is not open to him to enable any customer having a current account to go on drawing amounts to any extent without any instructions; q. his allegation that the bank did not take action against others is not correct as departmental action has been taken against the superiors alleged by him resulting in imposition of appropriate punishments on them; r. the petitioner has been found guilty of the articles of charges and the misconduct committed by him falls under Regulation 3(1) of Indian Bank Officers' Employees (Conduct Regulations) read with Regulation 24 of the said Regulations; and https://hcservices.ecourts.gov.in/hcservices/ s. the Disciplinary Authority has considered all the materials relating to the charge sheet issued to the petitioner and imposed the punishment on the petitioner by a well-considered order and the appellate authority also has given cogent reasons for rejecting the petitioner's appeal and so also the Reviewing Authority. 5. Mr. R. Muthukumarasamy, learned Senior Counsel appearing for the petitioner, at the threshold, has contended that only based on the assurance from the CMD of the bank that he would ensure recovery of TODs from the Government which could make the repayment from its grants and other sources of income and upon his instructions and that of the Regional Manager / Zonal Manager, the petitioner had allowed TODs to be drawn in the Football Tournament a/c and as such, he cannot be singled out for the loss sustained by the bank, setting free all his superiors who had instructed him to do so and who had also confirmed such TODs granted. 6. On the point of procedural lapse in the process of conduct of enquiry, the learned Senior Counsel has vehemently contended that despite various explanations given by the petitioner to the bank, the petitioner was not allowed by the Enquiry Officer to scrutinise the vital records available at the Regional Office/Zonal Office/Head Office and his request was not acceded to by the bank by saying that those documents were not relevant and a perusal of those documents would have certainly enabled the petitioner to prove his innocence and brought to light, the culpability of his superiors and this action of the respondents in not allowing the petitioner to scrutinise the relevant documents amounts to violation of principles of natural justice. With regard to the first charge that the petitioner had opened the Football Tournament account in question even without any knowledge of the basic information such as constitution, members and by-laws of the Association, he has argued that the petitioner was under the obligation of carrying out the instructions of his superiors including the CMD of the bank and in this regard, he has pointed Regulation 3(3) of the Indian Bank Officer Employees' (Conduct) Regulations, 1976 which reads as under: "No office employee shall, in the performance of his official duties or in the exercise of powers conferred on him, act otherwise than in his best judgment except when he is acting under the direction of his official superior." In this context, it is his further contention that as per Clause 15.4 of Manual for Deposit of Accounts, accounts of funds which have no regular rules drawn up and which are held only temporarily may be allowed to be opened in the names of reliable persons of standing and status suffixed by words "Sports Fund", etc. and before opening of such accounts, the Manager must thoroughly satisfy himself with the bona fides of the respective parties and so also the circumstances under which the account is opened https://hcservices.ecourts.gov.in/hcservices/ and in the instant case, since high ranking personalities such as the then Chief Minister of Tamil Nadu, the Chief Secretary to Government, the CMD of the Bank were involved and the CMD also recommended grant of TODs to the Football Tournament and it was also announced in the Assembly session that budgetary provision was to be made for the conduct of the tournament, the petitioner cannot be found fault with for not having known the basic information and especially, when his superiors had confirmed the grant of TODs granted at various intervals. 7. With regard to the third charge that the petitioner had not obtained cover documents, it is the contention of the learned Senior Counsel that even in the case of regular sanction limits, during routine follow-up process, the higher authorities would ask the Branch to confirm the documentation process and when no such issue was raised in this matter involving several lakhs of rupees, it naturally goes to show that the petitioner's superiors including the CMD of the Bank were aware that no documents were given as security by the account-holder and above all, since the CMD of the bank himself was actively involved in this transaction, there was no reason for the petitioner to doubt the bona fides of the account-holder. While attacking the allegation in the third charge that the bank was without recourse for recovery since cover documents were not obtained by the petitioner, the learned Senior Counsel has contended that while the Debts Recovery Tribunal had admitted the cheques drawn by the Tournament Committee through which the payments were made and which had not become time-barred, the respondents are estopped from alleging so and above all, had the Government grants and sufficient collection from the sponsors come in time, the issue of cover documents would not at all have arisen and the Enquiry Officer ought to have taken into consideration all these relevant factors before framing such a charge against the petitioner. 8. While attacking the fourth charge, the learned Senior Counsel has brought to the notice of this Court that the letters dated 15.02.1996 and 17.04.1996 from C.R. Viswanathan to the then Chief Minister and the then Chief Secretary respectively and the letters dated 14.08.1995, 09.09.1995 and 17.10.1995 from the Regional Office to the petitioner would throw light on the efforts taken by the petitioner in the process of recovery of TODs and the Enquiry Officer has not at all taken cognizance of these correspondences. 9. In support of his contentions, the learned Senior Counsel for the petitioner has relied on: a. a judgment of the Supreme Court in the case of Reliance Airport Developers (P) Ltd. v. Airports Authority of India reported in (2006) 10 SCC 1: https://hcservices.ecourts.gov.in/hcservices/ "57. The present trend of judicial opinion is to restrict the doctrine of immunity from judicial review to those class of cases which relate to deployment of troops entering into international treaties, etc. The distinctive features of some of these recent cases signify the willingness of the courts to assert their power to scrutinise the factual basis upon which discretionary powers have been exercised. One can conveniently classify under three heads the grounds on which administrative action is subject to control by judicial review. The first ground is “illegality”, the second “irrationality” and the third “procedural impropriety”. These principles were highlighted by Lord Diplock in Council of Civil Service Unions v. Minister for the Civil Service (commonly known as CCSU case). If the power has been exercised on a non-consideration or non-application of mind to relevant factors, the exercise of power will be regarded as manifestly erroneous. If a power (whether legislative or administrative) is exercised on the basis of facts which do not exist and which are patently erroneous, such exercise of power will stand vitiated. (See CIT v. Mahindra and Mahindra Ltd. ) The effect of several decisions on the question of jurisdiction have been summed up by Grahame Aldous and John Alder in their book Applications for Judicial Review, Law and Practice thus: “There is a general presumption against ousting the jurisdiction of the courts, so that statutory provisions which purport to exclude judicial review are construed restrictively. There are, however, certain areas of governmental activity, national security being the paradigm, which the courts regard themselves as incompetent to investigate, beyond an initial decision as to whether the Government’s claim is bona fide. In this kind of non-justiciable area judicial review is not entirely excluded, but very limited. It has also been said that powers conferred by the Royal Prerogative are inherently unreviewable but since the speeches of the House of Lords in Council of Civil Service Unions v. Minister for the Civil Service 26 this is doubtful. Lords Diplock, Scaman and Roskili appeared to agree that there is no general distinction between powers, based upon whether their source is statutory or prerogative but that judicial review can be limited by the subject-matter of a particular power, in that case national security. Many prerogative powers are in fact concerned with sensitive, non-justiciable areas, for example, foreign affairs,