UMESH KUMAR PAHWA versus THE BOARD OF DIRECTORS UTTARAKHAND GRAMIN BANK & ORS.
[2022] 16 S.C.R. 420, Supreme Court of India, 2022
Outcome: Case Partly allowed (Granted)
Segment: Ratio
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SUPREME COURT REPORTS
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UMESH KUMAR PAHWA
v.
THE BOARD OF DIRECTORS UTTARAKHAND GRAMIN
BANK & ORS.
(Civil Appeal No. 796-799 of 2022)
FEBRUARY 11, 2022
[M. R. SHAH AND B. V. NAGARATHNA, JJ.]
Constitution of India: Art.226 – Appellant who was serving
as the Branch officer at the Respondent Bank was accused of taking
bribe from the borrower of the bank – Case of borrower-complainant
that he had applied for loan which was sanctioned but the loan
amount was later reduced by the appellant – Bank issued a show
cause notice to the Appellant – Appellant denied the allegations
and in turn levied allegations of malice and bias against the
Chairman of the Bank – The disciplinary proceedings were
commenced which found the Appellant guilty and he was removed
from service – Appellant filed an appeal before the Appellate
Authority which was dismissed –Aggrieved appellant filed writ
petition before the High Court – During the pendency of this writ
petition, the Appellant filed another writ petition seeking a writ of
mandamus commanding the Bank to grant promotion from the date
when those junior to him were promoted – High Court while hearing
both writs together, dismissed the first writ petition thereby
confirming the order of removal from service without further entering
into the merits of the writ petition which was for promotion – Hence
the instant appeal – Held: The charges proved in the departmental
proceedings showed that there was no financial loss
caused to the
Bank and on the contrary a decision was taken by the appellant to
reduce the loan amount in the case of the complainant, which can
be said to be the decision in the bank’s interest – Moreover, the fact
that the appellant had worked for 28 years and during those 28
years, there were no allegations against him, the punishment of
removal for the charges proved and the misconduct established, is
too harsh and disproportionate – However, considering the fact
that it can be said to be a case of loss of confidence in the employee
by the Bank, it is deemed just and proper to substitute the punishment
from that of removal of service to that of compulsory retirement – As
[2022] 16 S.C.R. 420
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regards the second writ petition, the High Court had dismissed the
said writ petition for promotion primarily on the ground that once
he was removed from service, there was no question of considering
his case for promotion – However, the appellant claimed the
promotion from the date when his juniors came to be promoted –
The material available on record showed that in the earlier round
of litigation, the High Court had directed the Bank to consider his
case for promotion considering his ACR for the Financial Years
1999-2000 to 2003-2004 – The said exercise was required to be
done by the Bank – Therefore, the second writ petition is remanded
to the High Court to decide the same afresh in accordance with law
and on its own merits.
Partly allowing the appeals, the Court
HELD: 1. The High Court has observed that the appellant
demanded a bribe from complainant solely on the basis of his
cross-examination. However, he had a reason to speak against
the appellant as his loan amount was reduced from 
 to
Rs.75,000/- by the appellant. It is the case on behalf of the
appellant that considering the material and his capacity, a decision
was taken to reduce the loan amount from Rs.1,50,000/- to
Rs.75,000/- which was taken in the interest of the bank. There
are allegations of bias against the Chairman right from the very
beginning. Even at one point of time the Chairman was charge-
sheeted for the offences under Sections 323, 354, 504, 506 IPC
on the complaint filed by
the wife of the appellant and on the
basis of complaint filed by a woman delegate. It is true that
subsequent thereto the criminal proceedings were quashed by
the High Court. There were specific allegations of bias against
the Chairman and the Bank right from the initiation of the
departmental proceedings made by the appellant. [Para 3.1][425-
D-G]
2. The charges proved in the departmental proceedings
showed that there is no financial loss caused to the Bank and on
the contrary a decision was taken by the appellant to reduce the
loan amount from Rs.1,50,000/- to Rs.75,000/- in the case of the
complainant, which can be said to be the decision in the bank’s
interest. Moreover, the fact that the appellant had worked for 28
years and during those 28 years there are no allegations against
UMESH KUMAR PAHWA v. THE BOARD OF DIRECTORS
UTTARAKHAND GRAMIN BANK
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him, in the facts and circumstances of the case, the punishment
of removal for the charges proved and the misconduct established,
is too harsh and disproportionate. However, considering the fact
that it can be said to be a case of loss of confidence in the
employee by the Bank, it is deemed just and proper to substitute
the punishment from that of removal of service to that of
compulsory retirement. [Para 3.2][425-G-H; 426-A-B]
3. So far as the submission on behalf of the appellant that
the appellant has not conducted any misconduct and the finding
recorded by the inquiry officer on the charges proved are perverse
is concerned, the High Court is justified in holding that in the
limited jurisdiction available to the High Court in exercise of
powers under Article 226 of the Constitution of India, the High
Court is not required to reappreciate the evidence and/or
interfere with the findings recorded by the inquiry officer accepted
by the disciplinary authority. However, the order of removal of
service can be said to be disproportionate to the charges and
misconduct held to be proved. [Para 4][426-C-D]
4. The High Court has dismissed the said writ petition for
promotion primarily on the ground that once he is removed from
service there is no question of considering his case for promotion.
However, it is required to be noted that the appellant claimed
the promotion from Scale II to Scale III from the date when his
juniors
came to be promoted w.e.f. 30.03.2005. From the material
available on record, it appears that in the earlier round of litigation
being Writ Petition (S/B) No.65 of 2012, the High Court had
directed the Bank to consider his case for promotion considering
his ACR for the Financial Years 1999-2000 to 2003-2004. The
said exercise was required to be done by the Bank. Therefore,
so far as the Writ Petition (S/B) No.267 of 2013 is concerned, the
same is required to be remanded to the High Court to decide the
same afresh in accordance with law and on its own merits. [Para
5][426-E-G]
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 796-
799 of 2022.
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From the Judgment and Order dated 17.07.2018 of the High Court
of Uttarakhand at Nainital in Writ Petition No. 04(S/B) of 2013 and Writ
Petition No. 267(S/B) of 2013 and Impugned final Order dated 08.01.2020
in Review Application MCC No. 1039 and 1026 of 2018.
Ms.Priya Hingo Rani, Sr.Adv., Azim H. Laskar, Ganesan Subbian,
Jyoti kumar Singh, Chandra Bhushan Prasad, Advs. for the Appellant.
D.S. Patni, Sr. Adv., Suhaas Ratna Joshi, Mahendra Singh Rawat,
Ms. Mallika Joshi, Dharmendra Barthwal, Adv. for the Respondents.
The Judgment of the Court was delivered by
M. R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned common
judgment and order dated 17.07.2018 passed by the High Court of
Uttarakhand at Nainital in Writ Petition (S/B) No.4 of 2013 and Writ
Petition (S/B) No.267 of 2013 as well as the order passed in the review
applications dismissing the same vide common order dated 08.01.2020,
the employee - the original writ petitioner has preferred the present
appeals.
2. That the appellant herein was serving as a Branch Officer at
Pratap Pur Branch of the Respondent – Bank. He has put in 28 years’
of service. While he was serving at Pratap Pur Branch during the period
27.06.2008 to 21.11.2008, a complaint was made against the appellant
by one borrower of the Bank namely Karamjeet Singh on 17.09.2008
alleging that the appellant had sanctioned the limit of loan of
Rs.1,50,000/- which was later on reduced to Rs.75,000/-. Four other
persons also
made the complaint against the appellant. On receiving the
complaint against the appellant - the Chairman of the Bank transferred
him to another branch of the Bank, during pendency of the inquiry
pertaining to aforesaid complaints. A show cause notice was issued to
the appellant seeking his explanation. The appellant replied to the said
show cause notice stating therein that the allegations in the complaint
are baseless, frivolous and fabricated. He also made allegations of malice
and bias against the Chairman of the Bank. The disciplinary proceedings
were initiated against the appellant. A charge-sheet was issued to him
and following charges were framed:
“1. He did not discharge his duties with integrity and honesty and
took such actions and committed such omissions which showed
lack of probity and integrity on his part.
UMESH KUMAR PAHWA v. THE BOARD OF DIRECTORS,
UTTARAKHAND GRAMIN BANK
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2. He committed serious violations of duty and breach of trust
reposed in him by the Bank and misused his official position.
3. In the performance of his official duties and in exercise of
powers conferred on him, he unauthorizedly exceeded his authority
/powers and did not report the same for/or obtained approval/
confirmation from higher authorities for such excessive actions.
4. He flouted instructions of the higher authorities.
5. He adopted such steps and took such actions as were derogatory,
prejudicial and detrimental to the interest of the bank.
6. He misrepresented and suppressed material facts from higher
authorities.
7. He knowingly and willfully violated Bank’s rules and established
procedures for his personal gains.
8. Due to his acts, bank is likely to suffer financial losses.
9. He committed such acts which tarnished the image of the Bank.
10. He did acts unbecoming of an officer of the Bank”
2.1 That the Bank decided to initiate an inquiry for a major
punishment. The appellant participated in the departmental inquiry. The
complainant, Karamjeet Singh was also examined during the inquiry.
The inquiry officer held the charges No.1, 2, 3, 4, 5, 7, 8, 9 and 10 as
proved. On receipt of the inquiry report the appellant submitted his reply
and contended that the findings of the Inquiry Officer are perverse to
the material placed on record and against the principle of natural justice.
He also made allegations
of bias against the Chairman of the Bank.
Thereafter after considering the inquiry report and giving opportunity to
the appellant, the disciplinary authority/Chairman of the Bank passed an
order of removal of the appellant from service. The appellant preferred
an appeal before the Appellate Authority and the Appellant Authority
dismissed the appeal vide order dated 20.12.2011. Feeling aggrieved
against the order of removal from service, the appellant preferred the
present writ petition before the High Court being Writ Petition (S/B)
No.4 of 2013.
2.2 During the pendency of Writ Petition (S/B) No.4 of 2013 the
appellant also preferred another Writ Petition No.267 of 2013 seeking a
writ of mandamus commanding the Bank to grant promotion from Scale
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II to Scale III from the date when those junior to him were promoted
w.e.f. 30.03.2005. Both the writ petitions were heard together. By the
impugned judgment and order the High Court has dismissed Writ Petition
(S/B) No.4 of 2013 confirming the order of removal from service of the
appellant. As the order of removal had been confirmed, the High Court
without further entering into the merits of the case also dismissed Writ
Petition (S/B) No.267 of 2013 which was for seeking promotion from
Scale II to Scale III officer from the date when those juniors to the
appellant were promoted i.e. w.e.f. 30.03.2005.
Feeling aggrieved and dissatisfied with the impugned common
judgment and order passed in Writ Petition (S/B) No.267 of 2013 as well
as W.P. (S/B.) No.4 of 2013, the employee delinquent has preferred the
present appeals.
3. We have heard the learned counsel for the respective parties
at length.
3.1 Having considered the impugned judgment and order passed
by the High Court and even the findings recorded by the Inquiry officer
it appears that the High Court has observed that the appellant demanded
a bribe from Karamjeet Singh solely on the basis of his cross-examination.
However, it is required to be noted that he had a reason to speak against
the appellant as his loan amount was reduced from Rs.1,50,000/- to
Rs.75,000/- by the appellant. It is the case on behalf of the appellant that
considering the material and his capacity a decision was taken to reduce
the
loan amount from Rs.1,50,000/- to Rs.75,000/- which was taken in
the interest of the bank. There are allegations of bias against the Chairman
right from the very beginning. Even at one point of time the Chairman
was charge-sheeted for the offences under Sections 323, 354, 504, 506
IPC on the complaint filed by the wife of the appellant and on the basis
of complaint filed by a woman delegate. It is true that subsequent thereto
the criminal proceedings were quashed by the High Court. Be that it
may, there were specific allegations of bias against the Chairman and
the Bank right from the initiation of the departmental proceedings made
by the appellant.
3.2 Even looking to the charges proved in the departmental
proceedings we find that as such, there is no financial loss caused to the
Bank and on the contrary a decision was taken by the appellant to reduce
the loan amount from Rs.1,50,000/- to Rs.75,000/- in the case of
Karamjeet Singh -the complainant, which can be said to be the decision
UMESH KUMAR PAHWA v. THE BOARD OF DIRECTORS,
UTTARAKHAND GRAMIN BANK [M. R. SHAH, J.]
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in the bank’s interest. Moreover, the fact that the appellant had worked
for 28 years and during those 28 years there are no allegations against
him, in the facts and circumstances of the case, we are of the opinion
that the punishment of removal for the charges proved and the misconduct
established, is too harsh and disproportionate. However, considering the
fact that it can be said to be a case of loss of confidence in the employee
by the Bank, we deem it just and proper to substitute the punishment
from that of removal of service to that of compulsory retirement.
4. So far as the submission on behalf of the appellant that the
appellant has not conducted any misconduct and the finding recorded by
the inquiry officer on the charges proved are perverse is concerned, the
High Court is justified in holding that in the limited jurisdiction available
to the High Court in exercise of powers under Article 226 of the
Constitution of India, the High Court is not required to reappreciate the
evidence and/or interfere with the findings recorded by the inquiry officer
accepted by the disciplinary authority. However, as observed hereinabove
the order of removal of service can be said to be disproportionate to the
charges and misconduct held to be proved.
5. Now in so far as the dismissal of Writ Petition (S/B) No.267 of
2013 is concerned, at the outset it is required to be noted that the High
Court has not dealt with and
considered the same on merits independently.
The High Court has dismissed the said writ petition for promotion primarily
on the ground that once he is removed from service there is no question
of considering his case for promotion. However, it is required to be noted
that the appellant claimed the promotion from Scale II to Scale III from
the date when his juniors came to be promoted w.e.f. 30.03.2005. From
the material available on record, it appears that in the earlier round of
litigation being Writ Petition (S/B) No.65 of 2012, the High Court had
directed the Bank to consider his case for promotion considering his
ACR for the Financial Years 1999-2000 to 2003-2004. The said exercise
was required to be done by the Bank. Therefore, so far as the Writ
Petition (S/B) No.267 of 2013 is concerned, the same is required to be
remanded to the High Court to decide the same afresh in accordance
with law and on its own merits.
6. In view of the above and for the reasons stated above the
impugned Judgment and Order passed by the High Court passed in Writ
Petition (S/B) No.4 of 2013 is hereby modified to the extent substituting
the punishment from that of removal of service to that of compulsory
retirement.
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 The appellant shall be entitled to all the benefits which may be
available to him by converting the punishment from that of removal of
service to that of compulsory retirement. So far as the impugned judgment
and order of the High Court in Writ Petition (S/B) No.267 of 2013 is
concerned, in view of the above and for the reason stated above and as
the High Court has not decided the said writ petition on merits, we set
aside the impugned judgment and order as well as the order dated
08.01.2020 dismissing the said Writ Petition (S/B) No.267 of 2013 and
remand the matter to the High Court to decide the same afresh in
accordance with law and on its own merits.
Present appeals are accordingly allowed to the aforesaid extent.
However, in the facts and circumstances of the case, there shall be no
order as to costs.
Devika Gujral and Amarendra Kumar
Appeals partly allowed.
(Assisted by : Iram Jan, LCRA)
UMESH KUMAR PAHWA v. THE BOARD OF DIRECTORS,
UTTARAKHAND GRAMIN BANK [M. R. SHAH, J.]