Case: State Bank Of India  Vs. Bidyut Kumar Mitra

3. The respondent was appointed as a Clerk in the Imperial Bank of India, which is a predecessor of the appellant Bank. Way back in November, 1944, he had joined in the capacity of a Clerk. Subsequently, by the year 1978-79, he was working as Branch Manager at the Biplabi Rash Behari Bose Road Branch, Calcutta of the appellant Bank. In the capacity of a Branch Manager, he granted numerous mid-term loans to a number of transport operators without making appropriate scrutiny of the applications as required under the rules. He had also granted the loans in excess of his discretionary power thereby exposed the Bank to the risk of serious financial loss.4. A charge sheet dated 14th December, 1981 was served upon him alleging that he, during his incumbency as the Branch Manager of the Biplabi Rash Behari Bose Road Branch, Calcutta from 29th February, 1978 to 21 st August, 1979 had granted medium term loans to large number of transport operators without making thorough scrutiny of the relative proposals. He had sanctioned the loans even before completion of the necessary formalities. The loans were granted without making any discreet enquiries to the credit worthiness of the borrowers/guarantors. He had thus violated the laid down norms and instructions of the Bank in this regard and thereby exposed the Bank to grave risk of financial loss. The gist of the allegations was as follows:-"(i) (a) granting loans, in as many as 29 cases (as per Annexure `B) out of 57 such cases, far in excess of the discretionary powers vested in you in terms of H.O. `SIB Circular No.57 of 1979;(b) Sanctioning the loans in question without compiling the necessary opinion reports on the borrowers/guarantors properly; and (c) allowing most of these borrowers to stand AS guarantors for the advances granted to others and vice-versa (as per Annexure`C); (ii) It has further been alleged against you that-(a) You had failed to submit the necessary control returns in respect of the Medium Terms Loans in question to the Controlling Authority at the appropriate time despite reminders:(b) You had made full payment to a body building firm viz. M/s. C.A. Engineers and Body Buildings, Calcutta as per their quotation long before the delivery of the chassis by the suppliers, in respect of a loan of Rs.1,92,000/- granted to Shri Ashoke Kumar Sengupta (MTL No.21) on the 21st April, 1979;(c) You had allowed clean overdrafts to some of these borrowers (as per Annexure `D), presumably to meet their margin requirements, without obtaining any letters of request and without stipulating any repayment programme therefore and even without reporting the matter to your Controlling Authority."5. It was alleged that he had acted in an extremely negligent manner and thereby contravened the provisions of Rules 32(3) and 32(4) of the State Bank of India (Supervising Staff) Service Rules (hereinafter referred to as `Service Rules). It was further stated that the above charges, if proved, would amount to lapses involving lack of devotion to duty and would be construed as prejudicial to the interests of the Bank. Consequently, he was asked to show cause within fifteen days as to why disciplinary action should not be taken against him. A copy of the list of documents and list of witnesses relied upon by the Bank were supplied to the respondent.6. On 11th March, 1982, Shri A.R. Banerjee, Commissioner of Departmental Enquiries, Central Vigilance Commission (hereinafter referred to as `CVC) was appointed as the Enquiry Officer. The Enquiry Officer instructed the Bank to show all the documents including the additional documents relied upon by it to the defence by 20th March, 1982. The defence assistant of the respondent was also instructed to submit the list of the defence documents required, if any, by 31st March, 1982 along with the respective relevancy to the charge sheet and likely whereabouts of the documents. He was also instructed to submit the list of additional witnesses, which were required to be summoned along with their latest addresses. By letter dated 31st March, 1982, the respondent informed the Enquiry Officer that he shall submit the list of defence witnesses and documents within "a couple of days". Thereafter, the defence representative of the respondent by letter dated 3rd April, 1982 addressed to the Enquiry Officer, submitted a list of witnesses and documents of the defence. According to the respondent, all the witnesses referred to in the list of witnesses were officers of the Bank. Similarly, the documents referred to, were also in the possession of the management of the Bank. Therefore, the respondent claimed that he was unable to produce either the witnesses or the documents in support of his defence, unless they were summoned by the Enquiry Officer.7. It appears that the two witnesses referred to in the said application of the respondent were summoned. However, the documents relied upon by the respondent were not requisitioned. It was the case of the respondent that in fact his prayer in respect of the aforesaid documents was never disposed of and no reason was assigned by the Enquiry Officer for not requisitioning such documents. It appears that the aforesaid issue was also not dealt with by the Enquiry Officer in the Enquiry Report dated 22nd September, 1982. On this short ground, the respondent had claimed that he was denied reasonable opportunity of hearing at the enquiry and the same has caused serious prejudice to his defence.8. On 16th September, 1982, the respondent submitted the defence arguments in the form of a written brief. In the aforesaid brief, the respondent did not raise the issue of non-supply of any documents. On 16th June, 1983, the Disciplinary Authority forwarded his comments and a note on the enquiry proceeding to the Appointing Authority. In this note, the Disciplinary Authority agreed with the findings of the Enquiry Officer. It was mentioned that it has been proved at the enquiry that the respondent granted medium term loans to a large number of transport operators, not in a proper manner, thus exposed the Bank to a risk of substantial financial loss. It was further mentioned that while granting advances, the respondent should have ascertained his discretionary powers and followed the Bank instructions. The Disciplinary Authority recommended the imposition of penalty of dismissal on the respondent.9. By order dated 4th July, 1983, the Appointing Authority, upon examination of the records pertaining to the enquiry, agreed with the findings of the Disciplinary Authority and imposed the punishment of dismissal on the respondent in terms of Rule 49(h) read with Rule 50(3)(iii) of the Service Rules effective from the date of the receipt of the aforesaid order.10. Aggrieved by the aforesaid order of dismissal, the respondent filed a departmental appeal on 31st August, 1983. In the aforesaid appeal, the respondent for the first time alleged violation of principle of natural justice due to non-supply of documents as requested through his letter dated 3rd April, 1982. However, there was no averment with regard to the non-supply of CVC recommendations. Furthermore, the respondent had not given any particulars as to what prejudice had been caused to him during the course of the enquiry proceeding. Such an objection was also not raised by the respondent while the enquiry was being conducted.11. By order dated 6th June, 1984, the Appellate Authority upheld the order of the Appointing Authority imposing the punishment of dismissal. With regard to the non-supply of some documents, the Appellate Authority held that respondent had failed to submit the list of documents and witnesses within the stipulated time. Furthermore, he did not raise any objection during the course of the enquiry.12. Being aggrieved by the aforesaid order of 1st December, 1984, the respondent filed a review application. He made a grievance that neither the Enquiry Officer nor the Disciplinary Authority or the Appellate Authority while passing the orders considered the material contentions raised by the respondent in his written statement of defence as well as in his petition of appeal. According to him, all the authorities proceeded with a predetermined mind and the orders have been passed mechanically. For the first time, he made a grievance that neither the documents mentioned in the application dated 3rd April, 1982 were requisitioned nor the witnesses mentioned in the list of witnesses were summoned. He then proceeded to set out the relevance of the documents which according to him would have enabled him to prove at the enquiry that priority sector advance was given utmost importance in the Banks policy. It was, therefore, incumbent upon him as Branch Manager to make all efforts to increase advances in the priority sector which includes transport loans. The opinion reports submitted by the respondent with regard to the loans were never incomplete. They were not produced at the enquiry. He also highlighted that production of documents listed at Sr. No. 12 would have shown that the respondent was absorbed with the work relating to IDBI Refinance, which resulted in a little delay in submitting the controlled return. He stated that the documents mentioned at Sr. No. 14 would have shown that the overdrafts of borrowers were sanctioned on the basis of request letters. According to him, the document at Sr. No. 17 would have enabled him to prove that in priority sector group guarantee or counter guarantee was permissible in case of loans to transport borrowers. He, therefore, submitted that non- summoning of such documents resulted in denial of reasonable opportunity and was in gross violation of principle of natural justice.13. By a detailed order dated 12th/16th November, 1987, the Review Committee declined to interfere with the order of the Appointing Authority which had been upheld by the Appellate Authority.14. Aggrieved by the action of the Bank in passing the aforesaid order, the respondent challenged the same in a Writ Petition Civil Order No. 7390 (W) of 1988 in the High Court at Calcutta. It would appear that for the first time, the respondent raised the ground of non- supply of the vigilance report. He also submitted that the refusal of the Bank to requisition the documents mentioned in the list of witnesses and to summon the witnesses named in the list of witnesses resulted in denial of reasonable opportunity of hearing at the enquiry and the same caused serious prejudice to his defence. He stated that out of the seventeen documents referred to in the application dated 3rd April, 1982, the documents at Sr. No. 1, 2, 6, 12, 14 and 17 were most vital documents. He reiterated the pleas which were raised in the Review Petition.15. The appellant Bank filed a detailed counter affidavit in opposition to the writ petition denying all allegations and claims of the respondent. In reply to paras 10, 11 and 12 of the petition, it was stated that respondent was asked to submit his list of documents and witnesses by 31st March, 1982, but he failed to do so. He submitted the list after nearly two months and as such no action could be taken there upon. It is reiterated that the respondent did not make any grievance about the non- production of documents at the enquiry. He also did not raise any objection with regard to non-calling of any witness at the enquiry. It was stated that the allegations with regard to denial of natural justice are baseless and the respondent had in fact admitted that he committed the irregularity but he blamed the Head Office for not warning the respondent well in advance. His justification about the group guarantee was nullified by his own defence witness, a Development Manager, who deposed that the group guarantee is meant for poor sections of the community under Differential Interest Rate (DIR) loans and not for transport operators. It was also pointed out that group guarantees are taken only for loans of about Rs.6,500/- or so and not for large amounts of Rs. 1 Lac and above. The appellant Bank also submitted that there were no violations of principle of natural justice. The appellant Bank also submitted that Presenting Officer made repeated requests to the respondent to submit the list of documents and witnesses but the respondent ignored the requests. It was only about two months later when the enquiry was virtually completed when the respondent submitted a request letter dated 3rd April, 1982.16. By judgment and order dated 18th April, 2001, the learned Single Judge dismissed the writ petition. Aggrieved by the judgment of the learned Single Judge, the respondent challenged the same in appeal before the Division Bench. The Division Bench vide judgment and order dated 6th February, 2009 set aside the judgment of the learned Single Judge dated 18th April, 2001 and allowed the writ petition. Consequently, the Enquiry Report, order of punishment and the subsequent orders of the Appellate Authority as also the resolution passed by the Review Committee were quashed and set aside. The Bank has challenged the aforesaid judgment of the Division Bench in the present appeal.

Court's reasoning:
25. In our opinion, the Division Bench has erroneously relied on the judgment in D.C. Aggarwals case (supra). As rightly observed by the learned Single Judge, in that case this Court considered a situation where the Disciplinary Authority passed an elaborate order regarding findings against the Charge Sheet Officer agreeing on each charge on which CVC had found against him. In these circumstances, this Court observed that:-"The order is vitiated not because of mechanical exercise of powers or for non-supply of the inquiry report but for relying and acting on material which was not only irrelevant but could not have been looked into. Purpose of supplying document is to contest its veracity or give explanation. Effect of non-supply of the report of Inquiry Officer before imposition of punishment need not be gone into nor it is necessary to consider validity of sub-rule (5). But non-supply of CVC recommendation which was prepared behind the back of respondent without his participation, and one does not know on what material which was not only sent to the disciplinary authority but was examined and relied on, was certainly violative of procedural safeguard and contrary to fair and just inquiry."These observations would not be applicable in the facts of the present case as the Disciplinary Authority did not take into consideration any recommendations of the CVC. The judgment was, therefore, rightly distinguished by the learned Single Judge.26. We may now consider the other judgments relied upon by Mr. Bandopadhyay. In the case of Kisan Degree College (supra), this Court noticed that the respondent was dismissed from service on the basis of an Enquiry Report. In that case, the respondent had at the earliest sought for inspection of the documents. He was, however, told to inspect the same at the time of final arguments in the enquiry. It was, therefore, held that the enquiry proceeding had been conducted in breach of rule of natural justice. The aforesaid judgment would have no relevance in the facts of this case. In the case of S.K. Sharma (supra), this Court held that violation of any and every procedural provision can not be said to automatically vitiate the enquiry held or order passed. Except in cases falling under - "no notice", "no opportunity" and "no hearing" categories, the complaint of violation of procedural provision should be examined from the point of view of prejudice, viz., whether such violation has prejudiced the delinquent officer/employee in defending himself properly and effectively. In the present case, we have noticed above that the respondent did not even care to submit the list of documents within the stipulated time. Further, he did not even care to specify the relevance of the documents sought to be requisitioned. In our opinion, the appellant Bank has not transgressed any of the principles laid down in the aforesaid judgment whilst conducting and concluding the departmental proceedings against the respondent. Therefore, the aforesaid observations in S.K. Sharmas case are of no avail to the respondent. In the case of Nagarjuna Construction Company Limited (supra), this Court observed as follows:-"The basic principles of natural justice seem to have been disregarded by the State government while revising the order. It acted on materials which were not supplied to the appellants. Accordingly, the High Court for the first time made reference to the report/inspection notes which were not even referred to by the State Government while exercising revisional power."These observations are of no relevance in the facts and circumstances of the present case. The respondent herein is merely trying to make capital of his own lapse in not submitting the list of documents in time and also not stating the relevance of the documents required to be produced. By now, the legal position is well settled and defined. It was incumbent on the respondent to plead and prove the prejudice caused by the non-supply of the documents. The respondent has failed to place on record any facts or material to prove what prejudice has been caused to him.We may also notice here that there is not much substance in the submission of Mr. Bandopadhyay that mere breach of Rule 50(11) would give rise to a presumption of prejudice having been caused to the respondent. The aforesaid rule is as under:-"(x) (a) the inquiring authority shall where the employee does not admit all or any of the articles of charge furnish to such employee a list of documents by which, and a list of witnesses by whom, the articles of charge are proposed to be proved.(b) The Inquiring Authority shall also record an order that the employee may for the purpose of preparing his defence:I. inspect and take notes of the documents listed within five days of the order or within such further time not exceeding five days as the Inquiring Authority may allow:II. submit a list of documents and witnesses that he wants for inquiry:III. be supplied with copies of statements of witnesses, if any, recorded earlier and the Inquiring Authority shall furnish such copies not later than three days before the commencement of the examination of the witnesses by the Inquiring Authority. IV. give a notice within ten days of the order or within such further time not exceeding ten days as the Inquiry Authority may allow for the discovery or production of the documents referred to at (II) above. Note: The relevancy of the documents and the examination of the witnesses referred to at (II) above shall be given by the employee concerned.(xi) the Inquiry Authority shall, on receipt of the notice for the discovery of production of the documents, forward the same or copies thereof to the authority in whose custody or possession the documents are kept with a requisition for the production of the documents on such date as may be specified."A perusal of the note under Clause 4 of the aforesaid rule would make it obvious that the respondent was not only to submit a list of documents and witnesses but was also required to state the relevancy of the documents and the examination of the witnesses. The respondent himself having not complied with the procedural requirements can hardly complain that a breach of the procedural requirements under Clause xi would ipso facto result in rendering the enquiry null and void. In any event, since the Disciplinary Authority has not relied on any recommendations of the CVC and the respondent has failed to plead or prove any prejudice having been caused, the disciplinary proceedings can not be said to be vitiated.