CIVIL WRIT JURISDICTION CASE No.1636 OF 1993 ******* In the matter of an application under Articles 226 and 227 of the Constitution of India. ******* RAJ KUMAR SINGH, son of Sri Rajkeshwar Singh, resident of Gandhi Nagar, West Boring Canal Road, Police Station-Shri Krishnapuri, Patna, District- Patna. ….. Petitioner. Versus 1. THE BIHAR STATE CO-OPERATIVE LAND DEVELOPMENT BANK LTD., Buddha Marg, Patna, through its Managing Director/Administrator. 2. The Administrator, Bihar State Co-operative Land Development Bank, Buddha Marg, Patna-1. 3. Mr. Tarun Kumar Prasad, Sanchalan Padadhikari-cum-Deputy Managing Director, Bihar State Co-operative Land Development Bank, Buddha Marg, Patna-1. ….. Respondents. ******* For the Petitioner: Dr. Anil Kumar Upadhyay & Mr. Rakesh Kumar Samrendra, Advocates. For the Respondents: Mr. Y.V. Giri, Sr. Advocate with Mr. Rajesh Prasad Choudhary, Advocate. ******* P R E S E N T THE HON'BLE MR. JUSTICE SUDHIR KUMAR KATRIAR THE HON'BLE MR. JUSTICE BIRENDRA PRASAD VERMA ******* S.K. Katriar, J. This writ petition is directed against the order dated 29.1.1993 (Annexure-1), passed by the learned Administrator of the respondent Bihar State Co-operative Land Development Bank (hereinafter referred to as the „Bank‟), whereby the petitioner has been removed from the services of the Bank with effect from the date of issue of the order. 2. It appears from the order dated 12.7.2010, passed in the present writ petition, that it was adjourned to enable the 2 Bank to re-examine the whole matter. Learned counsel for the Bank today submits that it has on reconsideration, come to the conclusion that an appropriate order has been passed against the petitioner and, therefore, they would like to contest the writ petition. 3. A brief statement of facts essential for the disposal of this writ petition may be indicated. The Bank is a public sector undertaking of the State of Bihar and is engaged in banking business for the benefit of the rural population of this State, inter alia, with particular emphasis on agriculture. The petitioner had initially joined the services of the Bank on 16.11.1979, as Chief Accounts Officer, and was posted in the head office in Patna. On 7.8.1981, the post of Chief Accounts Officer was redesignated as Deputy Managing Director (Finance and Accounts). Subsequently, on 1.4.1982, this post was redesignated as Director (Finance). In view of deterioration in the working of the Bank, its Board of Directors was superseded and the State Government had deputed an Administrator to control the affairs of the Bank who had joined on 29.7.1988. 3.1) The petitioner was served with charge-sheet dated 11.9.1988 (Annexure-5), incorporating therein 13 charges against the petitioner which was served on him on 12.9.1988. He participated in the enquiry proceedings and the learned enquiry 3 officer submitted his report which was accepted by the learned disciplinary authority who removed him from service. The petitioner challenged the same by preferring C.W.J.C. No.2551 of 1989, which was allowed by this Court by order dated 29.1.1990, the order of dismissal from service was set aside, and the Bank was directed to hold fresh enquiry from the stage as it stood on 26.10.1988. 3.2) The Bank thereafter served an additional charge on the petitioner on 30.3.1991. He participated in the enquiry proceedings, and adduced evidence in support of his case. On a consideration of the materials on record, the learned enquiry officer submitted his report dated 27.5.1992 (Annexure-10), whereby he found some of the charges not to have been proved, some of the other charges have been held to have been partly proved, and the remaining charges have been held to have been proved. This was followed by second show-cause notice to the petitioner to which he had shown cause. On a consideration of the materials on record, the learned disciplinary authority agreed with the findings of the learned enquiry officer. It has been held that charge nos.2, 7, 8 and 9 have not been proved. It has been further held that charge nos.3 to 5 have been partly proved, and the remaining charges, namely, charge nos.1, 6 and 10 to 13 have been proved. He, therefore, passed the impugned order of removal from service. 4 4. While assailing the validity of the impugned action, learned counsel for the petitioner submits that the proven charges do not show corruption, embezzlement, falsification of accounts and the like, but only financial mis-management which has never been treated in the eye of law to be misconduct. He submits that it is at best a case of negligence and carelessness which is clearly distinct from misconduct. There is also no allegation of causing loss to the Bank. He next submits that charge nos.10 to 13 are based on a factually incorrect premise. The charges are to the effect that the branches of the Bank mentioned therein were restricted branches, whereas the correct position is that those were unrestricted branches. He next submits that the learned enquiry officer has not acted independently and impartially. He also submits that it is evident on a plain reading of the charge-sheet, the enquiry report, and the impugned order that there were other functionaries of the Board who were equally responsible for the irregularities who have not been proceeded against, and the petitioner has been made the scape-goat. He lastly submits that the impugned order is perverse, the findings are based on no evidence, and the petitioner should be exonerated. 5. Learned counsel for the Bank has submitted that corruption is not the only ground for dismissal from service. The 5 petitioner‟s acts of omission and commission had brought the Bank into complete mess, which had led to heavy losses. He submits in the same vein that the mess created by him had led to supersession of the Board of Directors, and the administration of the Bank had been taken over by the State Government. He relies on the following reported judgments: (i) Tara Chand Vyas Vs. Chairman & Disciplinary Authority and others, (1997)4, S.C.C. 565. (ii) Bank of India and another Vs. Degala Surya Narayana, (1999)5 S.C.C. 762 (paragraph-11). 5.1) He also submits that, if a person has been erroneously let off, the same cannot be a ground to exonerate the person against whom charges have been proved. He next submits that the charges have been proved on the basis of documentary evidence. He lastly submits that appropriate punishment has been inflicted on the petitioner. On the own showing of the petitioner disclosed in his supplementary affidavit, the petitioner has been able to rehabilitate himself and is gainfully employed. 6. We have perused the materials on record and considered the submissions of learned counsel for the parties. There is no need to recapitulate the state of affairs prior to the order of this Court in C.W.J.C. 2551 of 1989. The articles of charges 6 incorporating 13 charges (plus the additional charge subsequently added), and the cause shown by the petitioner etc. had not been disapproved by this Court and are, therefore, relevant in the present proceedings. As stated hereinabove, the learned disciplinary authority in his detailed discussion in the impugned order of punishment, has agreed with the findings of the learned enquiry officer, and is summarized hereinbelow: Serial No. of Charge as per the charge- sheet. Charges Findings of the learned disciplinary authority. Conclusion 2. vkids n~okjk lgh foRrh; fLFkfr ugha j[ks tkus ds dkj.k iz'kkld n~okjk ,l0Mh0vks0 (vkSfMV) ,oa ys[kk inkf/kdkjh dks ;g funs'k fn;k x;k fd os cSad dh foRrh; fLFkfr ds lEcU/k esa foLr`r izfrosnu vkids ek/;e ls nsa vkSj ;g funs'k vkidks Hkh iz'kkld us fn;kA ,l0Mh0vks0 (vkSfMV) ,oa ys[kk inkf/kdkjh n~okjk izfrosnu rS;kj fd;k x;k ysfdu mlij vkius gLRkk{kj djus ls bUdkj fd;kA vr% blls Li’V gksrk gS fd iz”kkld ds fof”k’V vkns”k dk mya?ku vkius fd;kA The conducting officer, on the basis of written statements of Shri N.K. Poddar and Shri Mahendar Pandey, both Accounts Officers, has held that their evidence disproves this charge. I agree with the conducting officer that this charge is disproved. Charge not proved. 7. eSustesaV dkSLV (Management cost) lk/ku dh rqyuk esa cgqr vf/kd c<+ x;k gS vkSj ftldh vksj lEcaf/kr inkf/kdkfj;ksa dk /;ku ,oa lq/kkjkRed lq>ko vkius ugh j[kk rFkk deZpkfj;ksa dk vR;f/kd The Conducting officer has reported that the accused officer was not in a position to control the increasing management Charge not proved. 7 ykbZCyhVh vkius iSnk dj fn;kA cost and that the accused officer had also invited attention of the Managing Director of this problem vide his note dated 13.4.1987. I agree with the conducting officer that this charge is not proved. 8. iwoZ ds izca/ku (vkids dk;Zdky esa) dks xqejkg dj lgh fLFkfr dks ugh crykus ds pyrs dbZ yk[k #i;s dk Qtwy[kpkZ ;Fkk jaxhu Vh0oh0 lsV, Hkkstuk, ckgjh yksxksa ds Lokxr, fons”k ;k=k vkfn ij O;; gq, tks u rks lgh Fkk vkSj u bldk dksbZ vkSfpR; FkkA The conducting officer has also absolved the accused officer of this charge on the ground that no material evidence is available directly involving the accused officer in the aforesaid types of expenditure. I agree with this part of the findings of the conducting officer. As regards misleading the management about correct financial position, my observations are contained in the earlier paragraphs. Charge not proved. 9. bUVjhe ,dkseksMs”ku (Interim Accommodation) dSl dzsMhV ,dkmUV dks vkius +_.k forj.k dk Jksr ekudj ml #i;s dk bLrseky fd;kA ;g vkids n~okjk lefiZr 2&8&88 ds izfrosnu es “Sources and application of Funds during the cooperative year The conducting officer, banking on the evidence of Shri N.K. Poddar, the then Accounts Officer has come to the conclusion that traditionally interim accommodation used to be considered as resources in Charge not proved. 8 1987-88 ls Hkh Li’V gksrk gSA foRrh; funs”kd gksus ds ukrs vkidks ;g tkuuk pkfg;s Fkk fd bUVjhe ,dkseksMs”ku dks lk/ku Jksr esa ugh yk;k tkuk pkfg;sA vr% ;g vkids dk;Z dh vKrk dks Li’V djrk gSA brus ojh’B inkf/kdkjh gksus ds ukrs bruh tkudkjh vkidks jguh pkfg;s FkhA Li’Vr% blls Hkh vkius izoa/ku dks xqejkg fd;kA the bank and hence nothing unusual was done by the accused officer and as such the conducting officer has absolved the accused officer of this charge. But technically, interim accommodation is never to be considered as resources since it was purely in the nature of stop gap arrangement pending refinance from NABARD by floating of debentures. The problem is linked with cash credit management discussed in the earlier paragraphs. Hence there is no need to consider this as a separate charge. 3. tks izfrosnu rS;kj fd;k x;k mlls Li’V gksrk gS fd ekax dks de fn[kyk;k x;k tks fd ,d xEHkhj foRrh; vfu;ferrk gSA iz”kkld n~okjk Li’V #i ls ekax dk ,lVhesV (estimate) nsus gsrq vkidks dgk x;k Fkk ysfdu vkius fnukad 2&8&88 ds izfrosnu esa dksbZ Li’V mRrj ugh fn;kA cfYd mi izca/k funs”kd (;kstuk ) n~okjk iwoZ esa tks vkdM+s fn;s x;s Fks mlh dks vkius ns fn;kA Li’V gS fd funs”kd (foRr ) gksus ds ukrs vkidks ekax dh lgh tkudkjh gksuh pkfg;s Fkh D;ksafd fcuk mlds dksbZ ;kstuk cukuk lEHko ugh In course of years, an approximate estimate could at least have been prepared on the basis of branchwise, category-wise lending, since the yearwise branchwise and category-wise figures of lending were available in the accounts section, and since the schedule recovery of each category of loan is almost fixed. Apparently no attempt has been made in the finance section to work out Partly proved. 9 nh[krkA Li’Vr% ekax nokus dh lkftl esa vkidh ftEesokjh gSA even an approximate estimate of demand in the branches in course of 9 years under the leadership of the accused officer, in which case such wide variations in estimate of demands could have been avoided and the bank could have been saved from such scandal. As Director (Finance), the accused officer was not expected to abdicate this responsibility in favour of the planning or recovery section. Hence I agree with the conducting officer that this charge is partly proved against the accused officer. 4 izkIr izfrosnu ,oa vads{k.k izfrosnu 1984&85 ls Li’V gksrk gS fd cSad iwoZ ds o’kksZa esa (vkids dk;Zdky esa) uqdlku djrk jgk gS, tks 1986&87 ds var rd djhc 26 djksM+ #i;s dk uqdlku vkdfyr gSA bl ckr dks vkids n~okjk Nqik;k x;k ftlds pyrs cSad dh foRrh; fLFkfr dh lgh tkudkjh ugh gks ik;h vkSj vusd [kpZ fd;s x;s tks drbZ ugh djuk pkfg;s Fkk ftlls cSad dks xEHkhj gkuh gqbZA In short, although I do not find the accused officer guilty about being in collusion or actively initiating any avoidable expenditure, I find him guilty to the extent that the profit and loss accounts were not being prepared properly as a result of which a rosy financial picture was presented before the management. Accordingly this charge has been partly proved. Partly proved. 10 5. iwoZ ds dbZ o’kksZa (vkids dk;Zdky esa) cSad n~okjk dSihVy fjlhV (Capital receipt) ls jsHksU;w ,DlisUMhpj (Revenue Expenditure) dks ehV (meet) fd;k tk jgk gS ftlds ckjs esa foRr funs”kd ds ukrs vkidks tkudkjh gksuh pkfg;s Fkh fd ;g iw.kZr% xyr uhfr gS vkSj csSad ds fy;s vR;Ur gh vfgrdkjh gSA ysfdu bl vksj vkius dksbZ /;ku ugh fn;k vkSj u bl pht dh vksj lEcaf/kr inkf/kdkjh dk gh /;ku vkd`’V fd;k rkfd le; jgrs iwoZ ds o’kksZa esa iz”kklu bl ij lq/kkjkRed dk;Z djrhA But a careful examination of the notes indicates that the accused officer at least during the years 1986 and 1987 invited the attention of the management towards this important problem, although he has not clearly suggested bifurcation of revenue and capital accounts. However, clear cut categorization of revenue and capital accounts was also a technical necessity which was not followed in the finance and account sections of this bank, and the accused officer has to take responsibility for having not introduced such bifurcation. This charge is, therefore, partly proved. Partly proved. 1. iz”kkld ds ;ksxnku ds ckn iz”kkld n~okjk vkidks cSad dh foRrh; fLFkfr ds lEcU/k esa lgh fLFkfr iz”kkld ds le{k j[kus dks dgk x;kA ysfdu fnukad 2&8&88 dks vkids n~okjk lefiZr izfrosnu esa tku&cw>kdj vkius cSad dh lgh foRrh; fLFkfr dks Nqik;kA In short, the accused officer, although the chief of finance for a prolonged period of nine years, had either not realized the importance of such basic information nor had introduced any system to keep the finance section abreast of even an Charge proved. 11 approximate information about recovery of loans. . In view of the fact that recovery of loans is one of the two basic functions of this Bank, the aforesaid lapses on the part of the accused officer is unpardonable and directly indicates his carelessness and negligence. Although it appears from the submissions of the accused officer and also from the records that the statements were prepared perhaps in a hurry and the errors contained therein were perhaps not intentional, but the very fact that the finance section under the leadership of the accused officer was not prepared to give even an approximate figure about such basic financial information indicates the incompetence of the accused officer. In any case, such informations had a highly misleading effect. I, therefore, do not find any reason to disagree from the findings of the conducting officer that this charge is proved against the accused 12 officer. 6 dS”k dzsfMV dk xyr (injudicious) bLrseky ls cSad dks djksM+ks #i;s dh ykbZCyhVh (liability ) vkius [kMk+ dj fn;kA The cash Credit management had to ensure that such interim finance was not borrowed from other banks before it was necessary, was not used for any other purpose refinance obtained promptly from NABARD and was promptly refunded to the lending bank so as to avoid heavy liabilities of overdraft interest. The figures quoted by the conducting officer leads to the conclusion that these vital points of cash credit management were not properly supervised, leading to heavy liabilities to pay interest. There appears to be no doubt that the supervision of the accused officer being the Chief of Finance was inadequate in this respect. Hence I hold the accused officer guilty of this charge. Charge proved. 10. Ys[kk “kk[kk ls miyC/k vkdM+ksa ls ;g Li’V gksrk gS fd “kk[kk dgyxkao o’kZ 1986&87 esa izfrcaf/kr “kk[kk Fkk ,oa “kk[kk dks 40%98 y[k #i;s y{k fu/kkZfjr FkkA ijUrq vkids n~okjk bldk /;ku j[ks fcuk 61%05 Charge nos.10, 11, 12 and 13 relate to irregularities in sending excess funds to certain branches for advancing of loans beyond the limit of eligibility and Charge proved. 13 yk[k #i;s dh fuf/k Hksth x;h rFkk “kk[kk n~okjk 64%74 yk[k #i;s _.k forfjr fd;k x;kA izfrcaf/kr “kk[kk dks y{k ls Hkh vf/kd fuf/k nsuk vkids n~okjk vfu;fer gqvk gSA nwljh ckr vkids n~okjk foeqDr fuf/k ls Hkh vf/kd _.k forj.k djus ij dksbZ dkjZokbZ ugha djus ls vkidk ?kksaj ykijogh ,oa lkftl ifjyf{kr gksrk gSA beyond their targets, that too without following the usual procedure. Charge no.10 is with respect to disbursement of loan to the extent of 64.74 lacs in a situation when the target of loan disbursement was limited to 40.98 lacs in the Kahalgaon branch of the Bank. In other words, it was a restricted branch. 11. “kk[kk vjsjkt o’kZ 1984 ,oa 1986&87 esa izfrcaf/kr FkkA mldk _.k forj.k dk y{k dze”k% 6%70 yk[k #0 ,oa 38%27 yk[k #i;s ek= fu/kkZfjr FkkA blds fo#) vkids n~okjk dze”k% 28 yk[k #0 ,oa 100%50 yk[k #i;s dh fuf/k Hksth x;h rFkk “k[kk n~okjk dze”k% 38%36 yk[k #i;s ,oa 108%93 yk[k #i;s dk _.k forj.k fd;k x;kA vkids n~okjk “kk[kk ds y{k ls bruh vf/kd fuf/k foeqDr djuk ?kksj foRrh; vfu;ferrk gS ,oa “kk[kk n~okjk vkids n~okjk foeqDr jkf”k ls vf/kd jkf”k dk _.k forj.k djus ij mlij dksbZ dkjZokbZ ugh djus ls vkidk ?kksj ykijokgh ,oa lkftl ifjyf{kr gksrk gS The 11th charge was to the effect that Areraj branch was being a restricted branch the loan amount for the period 1984 and 1986-87 were limited to Rs.6.70 lacs and Rs.38.27 lacs respectively whereas it had disbursed Rs.28 lacs and Rs.100.50 lacs respectively. Charge proved. 14 12. o’kZ 1986&87 esa eqtQ~Qjiqj, dVjk rFkk eksrhgkjh esa ,yhthCyhVh (eligibility) ls vf/kd #i;s vikds n~okjk foeqDr fd;k x;k vkSj “kk[kk n~okjk vkids n~okjk foeqDr jkf”k ls vf/kd jkf”k forfjr dh x;h (eksrhgkjh dks NksM+dj) tks fuEufyf[kr rkfydk ls Li’V gksrk gS%& 12th charge was to the effect that during the year 1986-87 the petitioner had released funds in excess of eligibility to Muzaffarpur, Katra and Motihari branches of the Bank and loan was disbursed far in excess of the eligibility. Charge proved. dzekad “kk[kk dk uke dsVsxjh category ,yhthCyhVh Eligibility foeqDr jkf”k _.k forj.k dh jkf”k (#i;s yk[k esa ) 1. eqtQ~Qjiqj 2 74:98 121:00 152:18 2. dVjk 2 63:88 96:40 113:88 3. eksrhgkjh 2 32:79 170:00 162:49 mDr rF;ksa ls Li’V gS fd vkius ?kksj foRrh; vfu;ferrk cjrhA “kk[kk ij dkjZokbZ ugha djus ls vkidk ?kksj ykijokgh ,oa lkftl ifjyf{kr gksrk gSA 13. a1986&87 esa 15&5&87 dks gh vkius ikap ckj eqtQ~Qijiqj “kk[kk dks jkf”k foeqDr fd;k tks dze”k% 5%00 yk[k #0, 10%00 yk[k #0, 10%00 yk[k #0, 10%00 yk[k #i;s ,oa iqu% 10%00 yk[k #i;s gSA blh rjg eksrhgkjh “kk[kk esa 1986&87 esa 15&5&87 dks rhu psd 10 (nl) & 10 (nl) yk[k #i;s dk fuxZr fd;kA mlh o’kZ dVjk “kk[kk esa 15&5&87 dks ,d ckj 10%00 yk[k #i;s fQj 5%00 yk[k #i;s dk psd fuxZr gqvkA blh rjg ds vU; mnkgj.k Hkh gSa tks layXu rkfydk (vuqyXud&8 ) ls Li’V gks tk;sxk fd vkids n~okjk ,d ds ckn ,d The petitioner is guilty of serious financial irregularities. Charge proved. 15 psd fuxZr gksrs x;s tc fd fu;ekuqlkj tks fuf/k vkids n~okjk foeqDr dh x;h mldh lgh mi;ksfxrk izek.k i+= izkIr gks tkus ij gh vkids n~okjk nksckjk fuf/k foeqDr djuk pkfg;s FkkA vr% ,slk djds vki ?kksj foRrh; vfu;ferrk ds nks’kh gSaA 14. Suppl. Charge. Supplementary charge. This charge relates to causing loss to the Bank to the extent of Rs.4,95,715.84 incurred by the Bank by way of paying interest on over- drafts taken by the Branches in pursuance of the orders issued from the Bank Headquarter in active connivance of the accused officer. Not discussed in the enquiry report. 7. It is evident on a perusal of the enquiry report and the order of the learned disciplinary authority that, out of the 13 charges, four charges have not been proved, three charges have been partly proved, and eight charges have been fully proved. We will consider the combined effect of the three sets of findings at the appropriate stage. 8. We are at present completely omitting from our consideration the findings with respect to the four charges which 16 are in favour of the petitioner, and indeed the learned counsel for the respondents has made no grievance with respect to the same. It is in relation to the remaining charges that we have to consider the petitioner‟s submission whether or not a case of misconduct is made out. It appears to us on a perusal of the discussion in the enquiry report and the order of the learned disciplinary authority that it was not a case of mere financial irregularities. Learned counsel for the respondents is right in his submission that the petitioner‟s working had brought about a near-collapse of the banking functions of the Bank. It appears that he was in full command of the situation and was, therefore, engaging himself in all kinds of acts of omission and commission which led to the situation that the Bank incurred heavy losses and its administration had been taken over by the State Government. In other words, the losses incurred by the Bank and attributable to the petitioner has had to be made good by the tax-payers‟ money. The petitioner had joined the services of the Bank on 16.11.1979 as Chief Accounts Officer, and had been given the position of Director (Finance) in the Bank on 1.4.1982. He was thus fully conversant with the affairs of the Bank. On the date of service of the charge-sheet, he had already put in nine years of service and was, as head of the Finance Department, in full command of the situation. He was releasing excess amounts to the restricted branches at his own will, and was 17 taking no care at all for recovery of loans. These are essential functions of banking business which the petitioner had put to complete disarray by his acts of omission and commission. It is evident that the Director (Finance) in a banking company is perhaps the most important functionary, and his primary duty undoubtedly is financial management of the Bank. He seems to be treating the Bank as his personal fiefdom. 9. Learned counsel for the respondents has rightly relied on the judgment of the Supreme Court in Tara Chand Vyas Vs. Chairman & Disciplinary Authority and others (supra), wherein the importance and the perspective of banking company has been emphasized. Paragraphs 1 to 3 of the judgment are reproduced hereinbelow: “1. The petitioner was imputed with the charges that while working as a Branch Manager of the respondent Gramin Bank, Khareri Branch, between 17.3.1982 to 8.8.1983, he derelicted in the performance of the duties in making payment of loans without ensuring supply of implements to the loanees and deposit of adequate security from the dealers as a consequence of which the respondent Bank was put to loss. The enquiry officer found that all the fourteen charges were proved. On the basis thereof, the disciplinary authority found that the charges were established and imposed the proposed punishment. Impugned order came to be passed, on appeal, by the Board. The writ petition filed by the petitioner was dismissed. The Special Appeal No.1009 was also dismissed on 4.10.1996 by the Division Bench of the Rajasthan High Court, Jaipur Bench. Thus, this special leave petition. 18 2. Economic empowerment is a fundamental right of the weaker sections of the people, in particular the Scheduled Castes and Scheduled Tribes, ensured under Article 46 as a part of social and economic justice envisaged in the Preamble of the Constitution; the State