IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 16.09.2008 CORAM THE HONOURABLE MR.JUSTICE P. JYOTHIMANI W.P. No. 5384 of 2008 & M.P. No. 1 of 2008 Ammaiappan ..Petitioner Vs. 1. The General Manager, Disciplinary Action Section Circle Office, Canara Bank, 524, Anna Salai, Teynampet, Chennai – 600 018. 2. The General Manager, Canara Bank, Industrial Relations Section, Personal Wing, Head Office, Bangalore – 560 002. 3. Thiru S. Ramji ..Respondents Prayer: Petition under Article 226 of the Constitution of India praying for a Writ of Certiorarified Mandamus calling for the records relating to the proceedings in Ref. IRS.DP.CNC CS 4/07 dated 9.4.2007 of the 2nd respondent and to quash the same and consequently direct the respondents to defer/keep in abeyance the disciplinary proceedings in Ref. IRS.DP.CNC Cs 4/07 dated 9.4.2007 of the 2nd respondent till the conclusion of the criminal proceedings in FIR no. RC MA1 2007 A 0009 dt 21.2.2007 on the file of the Inspector of Police, SPE:CBI:ACB: Chennai. (Prayer amended as per order of Court dated 4.3.208 in M.P. NO. 2/2008 ) For Petitioner :: Mr.V.C. Suresh for M/s. Sivanandh & Associates For Respondents :: Mr.N. Chandrasekaran ( for CBI) takes notice Mr.C. Seethapathy for R1 to R3 https://hcservices.ecourts.gov.in/hcservices/ O R D E R Heard the learned counsel on either side. By consent, the writ petition itself is taken up for final disposal. 2. This writ petition is filed challenging the charge memo issued against the petitioner dated 9.4.2007 by the respondent Bank. The crux of the charge in the departmental proceedings initiated against the petitioner is that the petitioner, in collusion with some middle men, opened a Savings Bank Account of prospective borrowers without actually knowing them and without ensuring their presence. In view of the same, the allegations and the charge framed against the petitioner are to the following effect: ...."You recommended Canbudget loans to them to the extent of Rs.89.56 lakhs during the period from January 2006 to March 2006 violating the laid down norms for identification of the borrowers, execution of documents, disbursement of the loans and follow-up of the loans. All the accounts have become sticky and the whereabouts of the borrowers/company were not known. An investigation conducted in the matter revealed that the documents furnished by the employees of the company as proof of address, income PAN card, Passport were found to be fake/fabricated. Only a few persons purported to be the borrowers said to have visited the branch to open the account and to receive the loan proceeds. The investigation also revealed that the loan proceeds were received by you. The follow up letters sent to the residential addresses of the borrowers were returned with the reason " No such person/No such address/No such street/left etc."...... By your above acts, you have failed to discharge your duties with honesty, integrity, devotion and diligence and thereby contravened Regulation 3(1) read with Regulation 24 of Canara Bank Officer Employees' (Conduct) Regulations, 1976, which is punishable under the provisions of Canara Bank Officer Employees' (Discipline & Appeal) Regulations, 1976. " 3. It is seen that though enquiry proceedings were initiated in respect of fabrication of documents and also granting of loans in contravention of the rules of the Bank thereby causing financial loss to the Bank, the Central Bureau of Investigation https://hcservices.ecourts.gov.in/hcservices/ The Central Bureau of Investigation has also registered a case in R.C. No. 9/A/2007 on 21.1.2007 against the petitioner and 12 others under Sections 120B, 420, 468, 471 I.P.C. and Section 13(2) r/w 13 (1)(e) of Prevention of Corruption Act, 1988. It is not in dispute that the matter is under investigation by the Central Bureau of Investigation and the investigation is not yet completed. Eventhough this writ petition is filed challenging the charge memo, the main ground of attack is that when same set of facts are involved in criminal proceedings as well as in departmental proceedings and when criminal investigation is pending, the petitioner cannot be expected to reveal his defence in the departmental proceedings as it might affect his substantial defence in the criminal proceedings. Therefore, the learned counsel for the petitioner would submit that eventhough the petitioner is prepared to face departmental proceedings, by virtue of pendency of investigation by the Central Bureau of Investigation, the departmental proceedings should be deferred till criminal investigation is over. 4. In order to find out the present stage of investigation by the Central Bureau of Investigation, this Court directed the learned counsel for the Central Bureau of Investigation to take notice. Accordingly, Mr.N. Chandrasekaran, learned counsel appearing for the Central Bureau of Investigation, on instructions from the department, would submit that investigation against the petitioner, on the above said charges, is pending and that the department would complete the investigation within a period of 3 months. However, for the purpose of granting sanction for prosecuting the petitioner, according to the learned counsel, the Bank may take some time and that the period which the Bank may take, shall not be burdened on the Department. 5. On the other hand, learned counsel for the respondent Bank, on instructions, would fairly submit that immediately after investigation by Central Bureau of Investigation is completed, within 15 days from the date of receipt of report from the said agency, the Bank would pass orders in respect of grant of sanction for prosecuting the petitioner so as to enable the criminal prosecution to be proceeded further. 6. The submissions made by the learned counsel for Central Bureau of Investigation and learned counsel for the Bank are recorded. 7. On a careful reading of the First Information Report in criminal case against the petitioner as well as the contents of the charge-memo framed against the petitioner in the departmental proceedings as per the rules governing the respondent Bank, the https://hcservices.ecourts.gov.in/hcservices/ question that has to be decided is whether the petitioner is guilty of violating the code of conduct prescribed, which are binding on him. Nevertheless, such violation of code of conduct basically depends upon the allegation made against the petitioner i.e, he committed gross irregularities in granting loans and thereby siphoned off funds of the Bank in an improper manner. Therefore, there is no difficulty to come to the conclusion that whether it is criminal investigation or departmental proceedings, the basic issue that has to be decided is whether the conduct of the petitioner in granting loans has resulted in financial loss to the Bank. 8. This is certainly a case where same set of facts are involved in both criminal as well as departmental proceedings. The Supreme Court in the decision reported in 1999 3 SCC 679 (Capt. M. Paul Anthony V. Bharat Gold Mines Ltd.) where a similar question was involved, held that, eventhough on the facts and circumstances of the case, the departmental proceedings need not be stopped during the pendency of criminal case, the same can be done in cases where cogent reasons are given. The Supreme Court laid down the following criteria in respect of the above issue: "22. The conclusions which are deducible from various decisions of this Court referred to above are: (i) Departmental proceedings and proceedings in a criminal case can proceed simultaneously as there is no bar in their being conducted simultaneously, though separately. (ii) If the departmental proceedings and the criminal case are based on identical and similar set of facts and the charge in the criminal case against the delinquent employee is of a grave nature which involves complicated questions of law and fact, it would be desirable to stay the departmental proceedings till the conclusion of the criminal case. (iii) Whether the nature of a charge in a criminal case is grave and whether complicated questions of fact and law are involved in that case, will depend upon the nature of offence, the nature of the case launched against the employee on the basis of evidence and material collected against him during investigation or as reflected in the charge-sheet. (iv) The factors mentioned at (ii) and (iii) above cannot be considered in isolation to stay the departmental proceedings but due regard has https://hcservices.ecourts.gov.in/hcservices/ to be given to the fact that the departmental proceedings cannot be unduly delayed. (v) If the criminal case does not proceed or its disposal is being unduly delayed, the departmental proceedings, even if they were stayed on account of the pendency of the criminal case, can be resumed and proceeded with so as to conclude them at an early date, so that if the employee is found not guilty his honour may be vindicated and in case he is found guilty, the administration may get rid of him at the earliest. 9. Apart from the fact that it is settled law that departmental proceedings and criminal proceedings are different in nature and there is no bar for the departmental proceedings to continue when criminal case is pending, the Supreme Court has held that if departmental proceedings and criminal proceedings are based on identical and similar set of facts and the charge against the delinquent in the criminal case is grave in nature, which involves complicated questions of law, it is desirable that the departmental proceedings is postponed till the conclusion of the criminal case. The reason for the said decision is obviously that the delinquent, if compelled to reveal his defence in the departmental proceedings, especially when criminal investigation is pending on the same issue, it would definitely affect his case in the criminal proceedings, which is grave in nature and thereby, virtually affect his right to defend provided under Article 21 of the Constitution of India. In fact, the above cited judgment of the Supreme Court has been followed with approval in the latest judgment reported in 2008 1 SCC 650 (Indian Overseas Bank V. P. Ganesan), wherein in paragraph 18, it has been observed as hereunder: "Legal position operating in the field is no longer res integra. A departmental proceedings peding a criminal proceedings does not warrant an automatic stay. The superior courts before exercising its discretionary jurisdiction in this regard must take into consideration the fact as to whether the charges as also the evidence in both the proceedings are common and as to whether any complicated question of law is involved in the matter." 10. Applying the dictum laid down by the Apex Court to the case on hand, I am of the considered view that it is desirable https://hcservices.ecourts.gov.in/hcservices/ that departmental proceedings initiated against the petitioner are deferred till the investigation in the criminal case is completed by the Central Bureau of Investigation. More so, due to the reason that the Central Bureau of Investigation itself has come forward with a definite stand that the investigation is in progress and that the same would be completed within a period of 3 months. 11. In the light of the above, the writ petition is disposed of directing the Central Bureau of Investigation to complete the investigation in the case registered against the petitioner in R.C. No. 9/A/07 dated 21.2.2007 within a period of 3 months from the date of receipt of a copy of this order and send a report immediately to the respondent Bank. On receipt of the said report, as submitted by the learned counsel for the Bank, the respondent Bank shall complete its process of granting sanction to prosecute the petitioner within 15 days thereafter. On such sanction being granted, it is for the Central Bureau of Investigation to proceed with the laying of charge-sheet against the petitioner in accordance with law and thereafter, it is open to the respondent Bank to proceed with the departmental proceedings based on the impugned charge-memo and pass appropriate orders on merits and in accordance with law, after giving due opportunity to the petitioner. No costs. Connected M.P. is closed. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar nv To 1. The General Manager, Disciplinary Action Section Circle Office, Canara Bank, 524, Anna Salai, Teynampet, Chennai – 600 018. 2. The General Manager, Canara Bank, Industrial Relations Section, Personal Wing, Head Office, Bangalore – 560 002. https://hcservices.ecourts.gov.in/hcservices/ Copy to Mr.N. Chandrasekaran, Counsel for Central Bureau of Investigation, High Court, Madras.104. 1 cc to Mr.Sivanadh, and Associates, SR. 52681 1 cc to Mr.P.R. Raman, SR. 52607 W.P. No. 5384 of 2008 MRD (CO) kk 7/10 https://hcservices.ecourts.gov.in/hcservices/