Case: Nagaraj Shivarao Kharjagi Vs. Syndicate Bank

The events leading to these cases may briefly be stated. In 1982, the petitioner was a Manager of the Syndicate Bank (`the Bank) at East Patel Nagar Branch at New Delhi. He discounted a cheque of the sum of Rs. 50, 000 drawn on Punjab National Bank, Madras, after obtaining, by phone prior approval of the Regional Divisional Manager of the Bank. The cheque was sent for realisation to the Punjab National Bank at Madras, but it was returned unpaid. The petitioner did not take prompt action to recover the amount from the person in whose favour he discounted the cheque. He kept the cheque with him even without reporting to the higher authorities. In 1983, the Assistant General Manager of the Bank called upon him to explain why the amount due under the discounted cheque has not been recovered. The petitioner in his reply explained the circumstances under which the cheque was discounted. He has stated that the credit was given to the account of one Dr. N. Ramakrishnan who was a Senoir Scientist in Indian `Agricultural Research Institute, New Delhi but the amount was withdrawn by another person called A. Chandrashekhar who is an officer of the Bank. He has further stated that A. Chandrashekhar has promised to pay the amount and therefore, he has retained the instrument with him hoping that A. Chandrashekhar would keep up his promise. On 6 July 1984 a sum of Rs.52, 167.15 was deposited with the Bank. A sum of Rs.36, 000 towards principal sum and Rs.16, 167.15 towards interest. A suit was filed to recover a sum of Rs.14, 000 out of the principal amount. And later on, this principal amount was also recovered and credited to the Bank.However, in 1985 there was a departmental inquiry against the petitioner. The Commissioner for Vigilance Inquiry from the Central Vigilance Commission conducted the inquiry. The first charge against the petitioner was that when he was functioning as Manager, he discounted under his discretionary jurisdiction a cheque for Rs.50, 00 0 drawn in the name of Dr. N. Ramakrishnan in order to accommodate A. Chandrashekhar an officer of the Bank or others known to him. The second charge framed against him, related to the retention of the discounted instrument with him from December, 1982 till January 1984 without taking/causing to be taken any action to realise the amount due under the unpaid cheque. It was also alleged that the petitioner made available undue financial accommodation to A. Chandrashekhar or others to the detriment of the interests of the Bank. He was charged with lack of the integrity, honesty devotion to duty, diligence and conduct unbecoming of the status of Bank Officer in contravention of Regulation No. 3(1) of the Syndicate Bank Officer Employees (Conduct) Regulations, 1976.The inquiry was held as per the procedure prescribed by Syndicate Bank Officer Employees (Discipline &Appeal) Regulations, 1976, (`the Regulations). On 16 October 1986, the Inquiry Officer submitted his report holding that the charges were proved against the petitioner. He has held that the petitioner has failed to take any effective steps for recovery of the amount paid under the discounted instrument. He has kept the instrument with himself for unduly long period without even surrendering the same to the custody of the Bank. It was Only after the Additional General Manager reminded him by letter dated 15 December 1 983, the petitioner assured him that he would return the cheque which he finally did on 18 January 1984. The Inquiry Officer has finally concluded that the transaction connected with the unpaid instrument was of an accommodative nature with a v iew to assist A. Chandrashekhar by using another person as benami and it was in clear violation of the rules of the Bank.It is said and indeed not disputed that the Bank referred the matter to the Central Vigilance Commission for advice and the Commission has recommended that the petitioner may be compulsorily retired from service by way of punishment.The disciplinary authority after considering the inquiry report and affording an opportunity to the petitioner passed an order dated 7 October 1987 imposing on the petitioner the penalty of compulsory retirement. The petitioner appealed to the General Manager challenging the punishment. On 27 August 1988 the General Manager dismissed the appeal concurring with the findings recorded and the punishment imposed by the disciplinary authority. The petitioner thereupon moved the Bombay High Court for relief under Article 226 of the Constitution. The High Court has also dismissed the writ petition. He has now appealed to this Court.

Reasoning: The corresponding new bank referred to in Section 8 has been defined under Section 2(f) of the Act to mean a banking company specified in column 1 of the First Schedule of the Act and includes the Syndicate Bank. Section 8 empowers the Government to issue direction in regard to matters of po licy but there cannot be any uniform policy with regard to different disciplinary matters and much less there could be any policy in awarding punishment to the delinquent officers in different cases. The punishment to be imposed whether minor or major depends upon the nature of every case and the gravity of the misconduct proved. the authorities have to exercise their judicial discretion having regard to the facts and circumstances of each case. They cannot act under the dictation of the Central Vigilance Commission or of the Central Government. No third party like the Central Vigilance Commission or the Central Government could dictate the disciplinary authority or the appellate authority as to how they should exercise their power and what punishment they should impose on the delinquent officer. (See: De Smiths Judicial Review of Administrative Action, Fourth Edition, p. 309). The impugned directive o f the Ministry of Finance, is therefore, wholly without jurisdiction, and plainly contrary to the statutory Regulations governing disciplinarypetitioner being aw are of the directions of the Ministry of Finance and the circulars issued by the Bank has in his memo of appeal before the appellate authority inter alia complained that the system and procedure adopted by the Bank in dealing with vigilance cases, is totally against the principles of natural justice. The Bank has no control over such cases. The Disciplinary Authority and Appellate Authority are required to carry into effect the punishment advised by the Central Vigilance commission without change.