Avinash Sadashiv Bhosale (D) Thr. Lrs vs U.O.I. & Ors

3. Before adverting to the facts leading to the filing of the present appeal, we must notice that the petitioner Mr. Avinash Sadashiv Bhosale died during the pendency of this appeal. His legal heirs have been brought on record, in his place. However, for the sake of convenience, he shall be referred to as Mr. Bhosale or as the appellant whichever is appropriate.

4. It appears that Mr. Bhosale joined the services of respondent No.2 Bank as a Probationary Officer on 31st July, 1975. He was confirmed as an Officer in Junior Management Grade Scale–I on 31st July, 1977. In course of time, he was promoted to Middle Management Scale-II (August, 1984). Thereafter, he was further promoted as Officer in Middle Management Scale–III in August, 1994. In course of time, he was posted as the Branch Manager at Washi Turbhe branch on 31st January, 1998 and was officiating in the Senior Management Scale-IV.

5. Whilst he was working at Washi Turbhe branch, it was discovered that the branch had indulged in fraudulent transactions to the tune of Rs. 12 crores. On 8th July, 1998, the appellant was relieved from the branch of the aforesaid bank, presumably due to his alleged involvement in the said transactions. On 16th July, 1998, he apparently reported the fraud to the Crime Branch, CBD, Belapur, Navi Mumbai. The A.G.M. in charge of the Region IV, State Bank of India, Zonal Office, Mumbai was also informed. In the complaint made to the police, he had requested that the culprits who are involved in the fraud be identified. He had also asked the police to initiate suitable action against the culprits in accordance with law.

7. The appellant was suspended from service on 23rd July, 1998 alongwith one Mr. Yadneshwar Choudhary. However, the latter was soon reinstated in service as he was not made a co-accused in the criminal proceedings initiated against Mr. Bhosale and three other co-accused.

9. Simultaneously to the criminal proceedings, the respondent bank had initiated departmental proceedings against Mr. Bhosale. He was served a charge sheet dated 14th January, 2000 containing articles of charge and statement of imputation of misconduct in terms of Rule 68(2)(iii) of the State Bank of India Officers Service Rules, 1992 (hereinafter referred to as the “1992 Rules”). In the aforesaid charge sheet certain specific and serious allegations have been made against Mr. Bhosale. The statement of imputation alleges that after his transfer at Washi Turbhe Branch on 31st January, 1998 from Rabala Trans Thane Creek Branch, he permitted M/s Kalgindar Construction Company Pvt. Ltd. to open a current account at Washi Turbhe Branch without completing the required formalities. Further, the account was allegedly opened with a view to accommodate the said construction company at a later date by executing the fictitious Demand Draft (D.D.) purchase transactions. The statement of imputation thereafter tabulates the departure from established norms which are to be observed by the Bank for DD purchase. It is alleged that Mr. Bhosale indiscriminately and without any justification authorised D.D. purchase of 11 cheques aggregating to Rs.5,51,51,070/- drawn in favour of M/s Kalgindar Construction Company Pvt. Ltd. and presented by it for credit of proceeds thereof to its Current Account. All the cheques so discounted except one for Rs.5 lacs were beyond the discretionary powers vested in Mr. Bhosale. While allowing D.D. purchases, no D.D. purchase limit was fixed for the said construction company, nor was the genuineness of the transactions or credentials of the parties ascertained by Mr. Bhosale. All the D.D. purchase transactions in question were also not reported to the Controllers. The high value cheques were allowed to be handed over to the representative of the said construction Company, instead of dispatching them to the Bank’s branch located at the centre by Regd. A.D. Post. This deliberate action of Mr. Bhosale facilitated the said construction company to perpetrate a fraud on the Bank as the said cheques did not reach the drawee Banks.

10. Charge No.2 narrates a similar incident where Mr. Bhosale allowed M/s. Kumar Constructions Company, a proprietory firm, to open a current account on 15th June, 1998 without making enquiries of antecedents of the proprietor and completing the other required formalities with a malafide intention to accommodate the aforesaid company at a later date by allowing fictitious D.D. purchase of cheques. Thereafter, the actual details of the D.D. purchase are tabulated.

11. The third Charge in the list of allegation relates to M/s. Kalani Builders and Developers Pvt. Ltd., dealing in construction business. The aforesaid company submitted a proposal prepared by a Chartered Accountant for being extended credit facilities. Based on the aforesaid proposal, Mr. Bhosale sanctioned cash credit limit of Rs.20 lacs (fund based) and Rs.20 lacs (non-fund based). All this was done by him without making independent enquiries, carrying out pre-sanction survey, arranging visits by the field officer or by himself, properly scrutinizing and appraising the proposal, compiling an opinion report on the borrowers and the guarantors and obtaining recommendations of the field officer. Mr. Bhosale, within a period of one month from the date of sanction of cash credit limit on 1st June, 1998 permitted D.D. purchase of a high value cheque for Rs.31,00,980/-, which was beyond his discretionary powers. He had not ascertained the genuineness of the large value D.D. purchase transaction nor made enquiries about the credentials of the drawer of the cheque. He also allowed cash withdrawals of Rs.30 lacs. Further, he directed the Dispatch Clerk to hand over the said purchased cheque to the representative of the said company for dispatching it to the drawee Bank instead of dispatching it by Regd. A.D. Post. Charge No. 3(iii) alleges that on 9th May, 1998, Mr. Bhosale issued a Letter of Credit for Rs.19,87,000/- on behalf of M/s. Kalani Builders Pvt. Ltd., without proper scrutiny/assessment of the required particulars. Even the counter guarantee was not obtained, nor was it ensured that obligations of the said company would be met on due date. Due to his reckless financing and allowing D.D. purchase to M/s. Kalani Builders and Developers Pvt. Ltd., the Bank suffered a huge financial loss to the extent of Rs.70 lacs. He wanted to conceal the facts of his irregular financing and, therefore, he did not obtain prior sanction of the Controllers or reported for post facto confirmation of the Controllers.

15. Thereafter, the enquiry proceedings were initiated against Mr. Bhosale. Mr. P.P. Thomas, Officer, Senior Management Grade Scale-V was appointed as the Inquiry Officer on 30th June, 2000. The preliminary hearings of the inquiry were scheduled to be held on 7th September, 2001 and 25th September, 2001, none of which were attended by Mr. Bhosale, despite being reminded in advance by the Inquiry Officer. Consequently, the preliminary hearing proceedings were held ex-parte. The regular hearing of the inquiry was scheduled for 17th January, 2002. Again, Mr. Bhosale expressed his inability to attend the same on account of sickness. The hearing of the inquiry was, therefore, postponed to 18th March, 2002, whereupon the regular hearing was conducted by the Inquiry Officer, in the presence of the presenting officer Mr. D.R. Bapat and Mr. Bhosale. The entire evidence, including the statement of Mr. Suresh Mahadeva Mahale was recorded in the presence of Mr. Bhosale. Mr. Mahale was working as a dispatcher at Washi Turbhe Branch during the period when the irregularities were committed thereat. Further, both Mr. Bhosale and the presenting officer were directed to submit their respective written briefs. Consequently, the presenting officer submitted a brief on 8th April, 2002, whereas Mr. Bhosale submitted his brief on 6th June, 2002.

17. Against the aforesaid order of dismissal, Mr. Bhosale preferred a statutory appeal on 19th August, 2003 under the 1992 Rules. Upon consideration of the submissions made by Mr. Bhosale in the appeal by Order dated 27th February, 2004, the Appellate Authority (Chief General Manager) dismissed the same. The relevant observations made by the Appellate Authority are as under:-

Having so considered the various points brought out in the appeal, I am of the view that the appellant has not been able to put forth any convincing point of merit. The appellant has committed serious and grave irregularities. There is therefore no scope for modification of the penalty imposed on him. I therefore reject the appeal and order accordingly.”

45. In view of the aforesaid legal principles enunciated and reiterated by this Court, we cannot accept that because the appellant had been prosecuted, the departmental proceedings could not have been continued simultaneously. As pointed out by Mr. Dwivedi, the charges against the appellant in the criminal trial related to the commission of criminal offences under Sections 120(B), 420, 467, 468, 471 and 201 of Indian Penal Code. The proof of criminal charges was depended upon prosecution producing proof beyond reasonable doubt relating to the culpability of the appellant alongwith other persons. In the departmental proceedings, the basic charge was that appellant whilst posted as a Branch Manager of Washi Turbhe Branch, failed to discharge his duties with utmost integrity, honesty, devotion and diligence to ensure and protect the interest of the Bank and acted in a manner unbecoming of a Bank Officer. The aforesaid charge clearly related to the manner in which the appellant performed the duties as the Manager of the Branch of the Bank. It had nothing to do with any criminal liability attaching to such conduct. It must be emphasised that Bank officials act as trustees of funds deposited by the public with the Bank. They have an obligation to earn the trust and confidence of not only the account holders but also the general public. The standard of integrity required of the Bank officials, particularly the cashiers, accountants, auditors and the Management at all levels, is like the Caesar’s wife, they must be above suspicion. Mr.Bhosale failed to maintain such high standards of integrity. He therefore, acted in violation of Rule 50(4) of the 1992 Rules. We, therefore, do not find any merit in the aforesaid submissions of Mr. Jain.

50. In view of the aforesaid, we find no merit in this appeal and the same is hereby dismissed.

September 25, 2012.