IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Writ Petition No.3409 of 1986 Date of decision:23.03.2010 B.R.Khosla ....Petitioner versus Union Bank of India and another ...Respondents CORAM: HON’BLE MR. JUSTICE K. KANNAN ---- Present: Mr.Girish Agnihotri, Senior Advocate with Mr. Arvind Seth, and Ms. Binayajeet Sheoran, Advocates, for the petitioner. Mr. B.B.Bagga, Advocate, for the respondents. ---- 1. Whether reporters of local papers may be allowed to see the judgment ? Yes 2. To be referred to the reporters or not ? No 3. Whether the judgment should be reported in the digest ? Yes ---- K.Kannan, J. 1. The Branch Manager of a Bank, who was dismissed from service for alleged proven acts of misconduct, is the petitioner, challenging the decision. 2. The article of charges referred to 6 instances of misconduct, which are reproduced:- “1. That on 28.1.1983 Shri B.R.Khosla had unauthorisedly transferred a sum of money aggregating to approximately Rs.2,00,000/- from three Saving Bank Accounts Nos.1421, 1422 and 1423 at Bhapra Branch to the account of a borrowing party viz. M/s Benewalt & Civil Writ Petition No.3409 of 1986 - 2 - Kornik for adjustment of overdrafts unauthorisedly granted by him to the party. 2. That in January 1983 he accepted Rs.3,000/- from one Shri Tek Ram a borrowal party of Bhapra Branch, which was intended for the credit of the party’s loan account with the Branch. Shri Khosla, however, gave the party cheque for Rs.3,000/- and told him to pay the instalment next month. However, when the party deposited the cheque as late as in February 1983, the cheque returned unpaid for want of funds in Shri Khosla’s Savings Bank Accounts. 3. That during his tenure as Branch Manager, Bhapra Branch, he purchased three cheques for Rs.3,000/-, Rs.4,000/- and Rs.1,000/- on 4.11.1982, 11.11.1982 and 17.11.1982 in the Savings Bank Account of one Shri P.S.Kalra who is reported to be the Sales Manager of the aforesaid party viz. M/s. Benewalt Kornik. These cheques were returned by Kanpur Branch on 26th November, 1982 with the remarks ‘Refer to Drawer’. The aforesaid amount of Rs.8,000/- stands unadjusted as there is no balance in the Account of Shri P.S.Kalra which was opened on 9th July, 1982. 4. That when checking the leave record of staff members at Simla Branch, Shri Khosla without having regard to the leave rules confirmed/accorded sanction of sick leave to one Shri I.S.Rana for the period from 10.1.1980 to 15.2.1980 in spite of the fact that Shri Rana had remained away from his duties not on account of his own sickness but on account of his wife’s illness. 5. That one Shri Dali Ram, Peon, Simla Branch had been sanctioned 13 days privilege leave from 28.1.1980 to 9.2.1980 and later on requested for sanction of leave upto 1.3.1980 on medical grounds. Shri Khosla without having regard to the leave rules sanctioned him sick leave for the Civil Writ Petition No.3409 of 1986 - 3 - entire period from 28.1.1980 to 1.3.1980 even without obtaining medical/fitness certificate from Shri Ram. 6. That Shri Khosla unauthorisedly removed from the Branch the party files and security documents pertaining to the following borrowal accounts: Party Files (a) to (o) (Names of parties omitted here) Security Documents: (a) to (p) (Names of parties omitted here)” 3. Among the charges, the 1st charge was an alleged act of the petitioner debiting the amounts to the tune of Rs.2 lakhs standing in the name of three Account holders and crediting them to a borrowing party namely, M/s Benewalt & Kornik for adjustment of overdrafts. The evidence revealed that the three Account holders had given complaints of the amounts having been debited without their authority to which the contention in defence was that the account holders were closely associated with the borrowing party M/s Benewalt & Kornik and the transfer of amounts had been done only under express authority. As regards the 2nd charge that he had borrowed an amount of Rs.3,000/- from a customer and issued a cheque which was dishonoured, the seriousness of misconduct attributed by the Bank was that the borrowing had been done during the time when the petitioner had been kept under suspension on criminal complaints having been filed at the instance of the three account holders referred to above and it lowered the esteem of the Bank that the Branch Manager had concealed the fact of a suspension and issued cheque which was dishonoured subsequently. The contention in defence was that the amount of Rs.3,000/- had been borrowed from a professional moneylender and he had ultimately paid back the loan. As Civil Writ Petition No.3409 of 1986 - 4 - regards the 3rd charge, the petitioner had purchased three cheques of the value of Rs.3,000/-, 4,000/- and 1,000/- against the banking norms and allowed for instant credit to be availed to persons, whose cheques had subsequently dishonoured. This was again stated to be grossly against the norms in discounting bills of parties whose accounts had been obtained only a few days earlier and without knowing the creditworthiness of the party. The defence was that they had been done under oral instructions from the Regional Manager and that in any event the amounts had been subsequently adjusted and there was no financial loss. Charge No.4 was relatively minor that he had granted sick leave to one staff without actually verifying the fact that sickness was not for the staff himself but for his wife and in yet another case, he had sanctioned leave on medical grounds for a long period even without obtaining any medical certificate from the staff. This challenge had been totally denied by the petitioner. The last charge was that the petitioner had unauthorizedly removed the party files and security documents pertaining to the borrowal accounts of M/s Benewalt & Kornik and several others and this was known only at the time when the subsequent incumbent took charge, who found to his dismay that all the documents were not available. The petitioner had admitted to the return of the documents only on the assumption of the charge by the subsequent incumbent but he had its own explanation to say that there was justification for retention of some documents. 4. The enquiry yielded to a finding of guilt and stating that the charges were serious, the disciplinary authority took a decision to Civil Writ Petition No.3409 of 1986 - 5 - dismiss him from service. An appeal to the competent authority was also rejected and it is the concurrent finding of guilt and punishment of dismissal that are in challenge before this Court. 5. The learned senior counsel appearing on behalf of the petitioner, Shri Girish Agnihotri would contend that (i) the report of the Investigating Officer had not been provided to him to show cause against the finding of guilt and the report itself was furnished only along with the order of dismissal by the disciplinary authority. The petitioner had been substantially prejudiced by the inability of the petitioner to show cause how the findings had been wrongly recorded; (ii) several of the documents which the petitioner had sought particularly in relation to the banking practice of allowing for overdrafts of certain customers on oral instructions from the Regional Manager were not allowed to be produced in enquiry in spite of his demand. While the Enquiry Officer had referred the matter as falling within the jurisdiction of the Regional Manager to accord the permission to access the records, the superior officer had rejected the plea on the ground that only the Enquiry Officer should decide whether documents could be given to the petitioner or not. The enquiry without furnishing the relevant documents which had an important bearing on the case vitiated the entire process and culminating in a wrong decision; (iii) the relevant Officer Employees' (Discipline and Appeal) Regulations, 1976 provided for a procedure of a preliminary investigation and a notice to show cause against any action before even a charge-sheet was issued. No such preliminary notice had been given to the petitioner and there was a breach of the mandate of the regulations; Civil Writ Petition No.3409 of 1986 - 6 - (iv) the petitioner had a blemishless record as an officer for more than 15 years and the punishment of dismissal which had the effect of denying to the petitioner all the service benefits, was grossly disproportionate to the charges and could not have been, therefore, inflicted, even if they were held to be true. 6. The extent of enquiry before this Court as regards departmental proceedings could hardly be dilated to traversing all the factual inferences except when the enquiry so grossly violated the principles of natural justice that the course of justice was derailed and the ultimate decision was wholly suspect that would not admit even the standards of proof beyond the preponderance of probabilities. 7. As regards the 1st charge relating to the wrongful debit granted to three accounts and transferring them to the account of a borrowing party to allow for a overdraft of Rs.2 lakhs, the contention of the learned counsel for the petitioner was that the Bank itself had filed a suit for declaration that the amount from Saving Bank Account Nos.1421, 1422 and 1423 of Mohan Malhotra, Snehlata Malhotra and Ramesh Malhotra respectively had been rightly transferred and appropriated to the account of M/s Benewalt & Kornik and the accounts themselves had been opened only for the grant of facility to the 1st defendant and kept under the plaintiff's Bank lien. In that suit, the petitioner had also been arrayed as the 9th defendant and the suit had been decreed. Having regard to the Bank's stand itself that the private accounts had been opened only for the grant of facility to M/s Benewalt & Kornik, it was stopped from contending that there had been any Civil Writ Petition No.3409 of 1986 - 7 - impropriety or misconduct of the petitioner in allowing for the transfer of such funds from the three accounts and provide for a overdraft facility to the borrowing party. The contention though seems attractive, the learned counsel appearing for the Bank would point out that the suit itself had been instituted only subsequent to the conclusion of the enquiry and the decision of the disciplinary authority for removal from service. The proof of charges ought to be therefore seen independently of the contentions raised in the suit. The gravity of the charge was urged by the learned counsel for the Bank to be very severe by pointing out to the detailed consideration by the Enquiry Officer that the three account holders had themselves given complaints to the police of lack of authority for transferring the amounts from their accounts to the borrowing party's accounts and it was only subsequently when a civil suit came to be filed by the Bank, the petitioner was able to gain over the three private account holders to make them say that their accounts had been opened only for the purpose of accommodation for the borrowing parties. The Enquiry Officer had dealt with the issue from the stand point of how the petitioner himself had conceded in his cross- examination that there were no written instructions from anyone of the account holders for transferring the amounts to the borrowing party. It was also elicited through evidence that none of them was in any way related to the partners of the firm of the borrowing party. Even an entry marked in red ink against the accounts that the amounts were kept under lien to the Bank had no corresponding instructions from any higher official to place them under such lien nor was there any authority granted Civil Writ Petition No.3409 of 1986 - 8 - to the petitioner by any of the account holders. Referring to the fact that the borrowing party had given such a letter, the Enquiry Officer found that the borrowing party cannot give any such instructions for marking the private parties’ accounts to be kept as lien for the Bank. The learned counsel appearing on behalf of the Bank also points out that the Branch Manager did not have at that time authority to allow for an overdraft of 2 lakhs of rupees without written instructions from the higher officials. 8. Responding to the contention of the petitioner's counsel that the petitioner's attempt to secure the documents when such overdraft facilities had been extended to some other account holders and that was the prevalent practice, the learned counsel for the respondent would point out that there had been instances when a decision for grant of overdraft facility to a customer would have been taken by the higher officials which in all cases would inevitably have documentary proof for such decision but only the fact of transmission of the decision to extend such facility to a Branch Manager would have been oral to ensure that the disbursal of the loan was not unduly delayed. There had never been any practice of oral instructions from a higher official without proceeding in writing specifically approving of such overdraft facilities. This argument literally answers the twin contentions of the petitioner (i) the civil suit had ended in favour of the Bank showing that the private accounts had been opened only for extending overdraft facilities to the borrowing party; and (ii) there had been gross prejudice to the petitioner for not availing to the petitioner the documents that he had called for. The first portion of the objection enumerated above is seen to be not Civil Writ Petition No.3409 of 1986 - 9 - truly relevant since the institution of the suit was subsequent to the finding of guilt by the Enquiry Officer. The Bank had every legitimate right to secure that the amount that had been advanced to the borrowing party was sufficiently secured and whatever plea was possible to mitigate the loss and offset its liability to the private parties could not be taken advantage of by the petitioner. As a matter of fact, at the time of the trial of the suit when the petitioner had already been found the guilty, the private account holders, who had initially given complaints had rallied to support the cause of the petitioner himself and there was hardly any worthwhile a contest in the civil suit. The Bank marched coach and four to secure the decree. The decision, being a post-facto event after the finding of guilt, cannot mitigate the gravity of the charge against the petitioner. The second limb of the contention regarding non-supply of documents will also have no meaning since there could be no past practice against express authority which was required for the sanctioning limits of the petitioner. Even if the limits of the loan had been acceded, the act of making unilateral debits of private account holders to extend a credit to a borrowing party that resulted in criminal complaints was serious enough a charge and the Enquiry Officer was, therefore, justified in finding that the petitioner's misconduct had been proved beyond any form of doubt. 9. The private borrowing by the petitioner during the time when he was under suspension and the issuance of a cheque that bounced was itself not a fact in doubt. The petitioner's contention was that he had borrowed the money from a professional moneylender and he failed to Civil Writ Petition No.3409 of 1986 - 10 - prove the same. Again the Enquiry Officer was justified in saying that a borrowal from the customer and non-repayment of such loan was a gross breach of discipline. I have no reason to differ with such a finding. 10. The 3rd charge relating to purchase of three cheques whose accounts had been opened only less than 6 months prior to the accommodation granted to them was highly suspect and it was against all the Banking norms. The defence with reference to this was also not one of denial of the fact of discounting the cheques and the loss that immediately occasioned by all the cheques bouncing but the defence was that these accounts had been made subsequently regular and no loss had been caused. While the act of granting leave without adequate verification may not itself be a very serious misconduct, the last charge that the petitioner had taken away all the relevant documents relating to the account which was the subject matter of charge, among others, was indeed very serious. The excuses given by the petitioner that this should have been taken note of even at the preliminary stage before the charge- sheet had been levied, is no answer to the fundamental misconduct of removing the documents without any authority. On the other hand, the onus must be on the petitioner to state why the documents had been retained by the petitioner without any authority from higher officials or without entering the details of such retention in the official records. 11. This brings us to the most crucial issue whether the proceedings before the enquiry had been so flawed that the ultimate decision of proof of the charges and the punishment meted to him could not be sustained. The learned senior counsel points out to Regulation 6 Civil Writ Petition No.3409 of 1986 - 11 - (3) of the Union Bank of India Officer Employees' (Discipline and Appeal) Regulations, 1976, which reads as follows:- “(3) Where it is proposed to hold an inquiry, the Disciplinary Authority shall frame definite and distinct charges on the basis of the allegations against the officer employee and the articles of charge, together with a statement of the allegations, on which they are based, shall be communicated in writing to the officer employee, who shall be required to submit within such time as may be specified by the Disciplinary Authority (not exceeding 15 days), or within such extended time as may be granted by the said Authority, a written statement of his defence.” This Regulation contemplates a notice prior to the appointment of an Enquiry Officer. The essence of this regulation is that a delinquent shall be given an opportunity to respond to the articles of charges and for an appointment of an Enquiry Officer by a disciplinary authority subsequent to receipt of the written statement. In this case, the Enquiry Officer has been appointed simultaneously with service of the charge-sheet. It is essentially one of procedure that does not go to the root of the problem. So long as an incumbent has an opportunity to explain the charge-sheet, it is immaterial whether the Enquiry Officer was appointed subsequent to the receipt of the reply or simultaneously with the issuance of the charge- sheet. This defect, in my view, is not fundamental to vitiate the entire proceedings. This aspect has been touched upon by the Division Bench of Andhra Pradesh in The Depot Manager, Andhra Pradesh State Road Transport Corporation, Medak Versus Mohd. Ismail and another- 1997-I-LLJ 1192 that held that a preliminary enquiry is of a very informal character and the methods are likely to vary in accordance with Civil Writ Petition No.3409 of 1986 - 12 - the requirements of each case. The delinquent employees shall have no vested right in any form or procedure of holding preliminary enquiry. The object being the satisfaction of the officer concerned, the procedure of enquiry is wholly at the discretion of the officer holding the enquiry. I am in full agreement with the statement of law made by the Andhra Pradesh High Court. 12. The substantial argument of the learned senior counsel appearing for the petitioner is also with reference to the procedure adopted by the Enquiry Officer and the mode of acceptance of the Enquiry Officer's report by the disciplinary authority even without serving a copy of the Enquiry Officer's report. The effect of non-supply of the Enquiry Officer's report has been authoritatively laid down by the decision of the Hon'ble Supreme Court in Managing Director, ECIL, Hyderabad and others Versus B.Kaarunakar and others-(1993) 4 Supreme Court Cases 727. The learned senior counsel also refers to several other decisions to the effect of non-supply of Enquiry Officer's report but I stay confined to the decision of the Hon'ble Supreme Court for its highest merit of consideration as a decision of a Constitution Bench. While affirming its earlier decision by a three Member Bench in Union of India Versus Mohd. Ramzan Khan -(1991) 1 SCC 588, it held that the supply of Enquiry Officer's report is fundamental and it will have an important bearing on the compliance of natural justice principle. It also carved out an exception as to when it will not still be material if a person cannot show prejudice by the absence of Enquiry Officer's report. In this case, the finding of the 1st charge which was substantial that the Civil Writ Petition No.3409 of 1986 - 13 - petitioner had transferred the amounts standing against three private accounts to the account of a borrowing party to allow for a withdrawal was in a way an admitted fact. The defence further was that the accounts had been marked as lien for the Bank to advance the loan to the borrowing party. If the petitioner had tendered some documents which were not being considered and the Enquiry Officer's findings had been rendered without consideration of documents which were produced, the non-supply of the Enquiry Officer's report would have had a bearing. The petitioner had examined himself and he had to admit in the cross- examination that he had no documents or written authority from anyone of the account holders authorizing him to transfer the amounts to the borrowing parties. The petitioner also had to admit that he had no authority from the Regional Manager to give an overdraft facility up to 2 lakhs of rupees. On the other hand, the petitioner was pleading for a banking practice for such oral instructions. The supply of the Enquiry Officer's report itself would not have made a difference for what was found by the Enquiry Officer was based on appreciation of evidence, which could not be displaced even in any of the grounds of challenge made to the Appellate Authority. The same could be stated also of charges 2 and 3 where the finding that the borrowal from a customer and issuance of a cheque that was dishonoured was found to be a true event. The explanation by the petitioner was that the person from whom he had borrowed was a professional moneylender and there had been no proof for the same. The purchase of cheques from customers who had opened their accounts only a few months earlier and whose creditworthiness had Civil Writ Petition No.3409 of 1986 - 14 - not been tested was again only justified by the fact that the accounts had been subsequently adjusted. The event itself was not in challenge. The 6th charge which was again substantial relating to the retention of banking documents had not been denied but it was only contended that if the documents had not been there, it could have been asked for even earlier when the preliminary enquiry had been conducted. This was again, as I have pointed out already, a lame excuse because the retention of the documents were themselves revealed only at the time when the subsequent incumbent took charge and it was immaterial that the authorities had not noticed the absence of the documents at the preliminary stage. 13. In this case each one of the serious misconducts attributed to the petitioner had been clearly established. The supply of the Enquiry Officer's report itself would not have made a difference for even while preferring an appeal, nothing is clearly brought out as to how a prejudice had been caused by non-supply of the report. The adherence to principles of natural justice cannot mean that justice itself has to be buried fathoms deep and truth could be allowed to be eclipsed by technical defences. Matters of procedure are at best, hand maids to justice; they