Case: Avinash Sadashiv Bhosale (D) Thr. Lrs Vs. U.O.I.

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.6. It is claimed by Mr. Bhosale that instead of taking action on the complaint submitted by him, the A.G.M. on 22nd July, 1998 wrote to the police indicating that the appellant had no locus standi to file the complaint. It was stated that Mr. Bhosalenot an authorised person to lodge a complaint on behalf of the Bank, since he himself is involved in the alleged offence in the aboveAs noticed earlier, the appellant was relieved from the Branch on 8th July, 1998. He had protested that he had an excellent and unblemished service record in the Bank for the past 23 years. He maintained that he was entirely innocent and did not commit any breach of the service regulations of the bank. He pointed out that he proceeded on leave on account of sickness on 26th March 1998 and also that he was mostly either on leave or on some outdoor assignment duties during the period immediately preceding the detection of the said fraudulent transactions. Further, it has been claimed that certain officials in the Bank in connivance with each other committed fraud by purchasing cheques without his knowledge.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.8. It appears that after completion of investigation by the police, the appellant was prosecuted for having committed the offences punishable under Sections 120(B), 420, 467, 468, 471 and 201 of Indian Penal Code alongwith three others who were the account holders. By judgment dated 4th December, 2001, Mr. Bhosale and the other co-accused were acquitted of all the charges.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. 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 thebranch 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.12. Charge No.4 alleges that Mr. Bhosale indiscriminately sanctioned loan aggregating to Rs.56.43 lacs to 19 borrowers underBuy Scheme for purchase of vehicles during 30th April, 1998 to 1st June,In these transactions, quantum of loans was to be related to the income of the borrowers. However, this basic factor was totally neglected.13. Charge No. 5 points to the expenditure of Rs. 4.35 lacs incurred by Mr. Bhosale during the period from March, 1998 to June, 1998 for carrying out repairs toProperty and providing furniture at the Branch. This was done without inviting any competitive quotations and without seeking approval from the Controlling Authority.14. Charge No.6 relates to 86 bills of stationery items amounting to Rs.1.16 lacs. Here again, the expenditure was incurred without seeking sanction from the Controlling Authority. On the basis of the aforesaid allegations, it was held that Mr. Bhosale failed to discharge his duty with utmost integrity, honesty, devotion and diligence to ensure and protect the interest of the Bank and acted in a manner in violation of Rule 50(4) of the 1992 Rules.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, 2002.16. Finally, the Inquiry Officer submitted his report on 19th August, 2002, whereby it was held that all the charges have been proved against Mr. Bhosale. A copy of the Inquiryreport was made available to Mr. Bhosale for his submissions. It appears from the record that Mr. Bhosale had submitted a detailed defence to the findings of the Inquiry Officer. Ultimately, the Disciplinary Authority in its Order dated 19th July 2003 rejected all the pleas raised in defence by the appellant. Upon careful examination of the entire material on record, the disciplinary authority passed the following effectiveC.O. has also contended that the I.A. has not taken into consideration the acquittal of the C.O. in the criminal case as a sufficient and judicial proof of there being no misconduct on his part. He has further stated that the I.A. has not considered the fact finding reports compiled by the Bank officials S/S. Vasant Karve and Mukand Joshi, which have not implicated the C.O. for the lapses mentioned in the charge sheet served on him.The Court has acquitted the C.O. of offences punishable under Indian Penal Code, whereas the departmental action is for his misconduct in terms of Rules 66 of the SBIOSR.The above submissions have no relevance to the allegations inasmuch as the allegations levelled against the C.O. have been inquired by the I.A. in the departmental enquiry as per the procedures adopted / in-vogue in departmental enquiry. Reasonable opportunity was given to the C.O. to put up his defence before the I.A. After evaluating the evidence brought before the inquiry, the I.A. has held the allegations as proved.On a careful examination and consideration, the submissions of the C.O. are found to be not convincing and hence not acceptable. I, therefore, considering the case in its entirety in my capacity as the Disciplinary and Appointing Authority, hold all the allegations and the charge as a whole ason sufficient and acceptable evidence. The proven allegations are very serious in nature which have exposed the Bank to substantial financial loss. The proven misconduct evidently speaks of lack of honesty and integrity on the part of the Charged Officer. Considering all the facts and circumstances of the case, I am of the view that retaining the officer in theService is fraught with grave risks. I, therefore, consider that imposition of penalty ofunder rule 67(j) of the State Bank of India Officers Service Rules on Shri A. S. Bhosale, Officer, MMGS III (under suspension), would meet the ends of justice, treating the period of suspension undergone by the official, as such. I order accordingly.The C.O. may, if he so desires, prefer an appeal against this order to the Appellate Authority within 45 days from the date of receipt thereof in terms of Rule 69(1) and (2) ibid.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 ashave examined the entire records of the case and on the basis thereof observe as under, seriatim:i) The contentions of the appellant are without basis. The entire inquiry process has been correctly followed and fair opportunity has been provided to the appellant to defend himself.ii) The Inquiry Authority in his report has unequivocally stated that the preliminary hearing, which was to be held on 17th August, 2001 was postponed to the 7th September, 2001, due to the chargedabsence. Later the hearing scheduled for 7th September, 2001 was also postponed to 25th September, 2001, for the same reasons. Thesubmission that the Inquiring Authority was biased therefore has no basis.iii) Thecontention seems to be an after thought since in the Regular hearing on the 18th March, 2002, the appellant did not raise objections on this count. Moreover, during the hearing, the appellant confirmed having received these documents (presentingexhibits).iv) It is apparent from the inquiry proceedings that the defence was provided a fair opportunity to defend itself. Theattempt to cry foul at this juncture is therefore not valid.v) This argument of the appellant does not have any basis. The charge sheet had clearly outlined these details.vi) The process followed in a departmental inquiry is distinctly different from that followed in a proceedings before the court. Thecontention is therefore not acceptable.vii) The appellant cannot disclaim responsibility on this count. As the head of the Branch, he should have ensured that theinstruction relating to dispatch of instruments (DD Purchased) should have been meticulously followed. Moreover, PW-1 (the dispatch clerk) has confirmed in the proceedings held on 18th March, 2002 that the covers containing the instruments were delivered at the behest of the appellant.viii) The Inquiringconclusion that the initials on the Demand Liability Register were those of the appellant is supported by reasoned logic. The Inquiring Authority has lucidly portrayed as to how he reached such a conclusion.ix) a) Allegation 1 (i) & (ii) :The appellant cannot disown the fact that cheques were purchased for large amounts. He further cannot disassociate himself by stating that other officers permitted the withdrawals in the account. Moreover, the officials who permitted these withdrawals had done so, on the basis of the credit balance available in the account(s).b) Allegation 1(iii) :In addition to stating that the cheques were delivered to the beneficiary at the instructions of Shri Balkawade, the witness had affirmed that these were also delivered at the behest of the appellant. His contention that the prosecution did not introduce key witness is irrelevant.c) Allegation 1(iv) :The submission of the appellant has no basis.d) Allegation 2(i) and (ii) :It has been proved in the inquiry that DD Purchases were authorised by the appellant. His attempt to pass the responsibility to officials who passed the withdrawals in the account is not appreciated. Further, it is a fact that tee account was not properly introduced.e) Allegation2(iii), (iv) and (v) :The appellant is merely trying to raise vague issues. As already stated earlier, the Inquiry Authority has very aptly concluded that the initials in the Demand Liability Register were that of the appellant.f) Allegation 3 :By merely stating that the documents were in the custody of the Field Officer, the appellant cannot disclaim responsibility. It was also open to the appellant to produce the field Officer as a defence witness.g) Allegation 4:The allegation have been proved based on the documentary evidence produced by the Presenting Officer in the course of the inquiry proceeding. The appellant has during the regular hearing held on 18th March, 2002 confirmed having verified the documents. His contention that no document was produced in the inquiry is therefore incorrect.h) Allegation 5 :The allegation has been proved based on documentary evidence. Splitting of Bills has been proved from the fact that 111 bills were paid in respect of 7 items of expenditure.i) Allegation 6 :The allegation was proved based on documentary evidence. From the evidence brought out in the inquiry it is apparent that the appellant split bills pertaining to stationery items, in order to ensure that the amount of the split bills falls within his discretionary powers.x) Although there has been some delay in the issuance of the charge sheet, theclaim that it had amounted to denial of opportunity to establish his innocence is not maintainable.xi) The Honourable Court had acquitted the appellant on the subject matter of criminal conspiracy. The appellant cannot draw a parallel between the findings of the departmental proceedings and theverdict.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.Mr. Bhosale challenged the orders passed by the Disciplinary Authority as well as the Appellate Authority by filing Writ Petition No. 8606 of 2004 in the High Court of Judicature at Bombay by Order dated 30th March, 2005. The writ petition was dismissed by a Division Bench of the Bombay High Court in limine. The aforesaid Order of the High Court is challenged by Mr. Bhosale in this appeal.

Court's reasoning:
47. The findings recorded by the Enquiry Officer cannot be said to be based on no evidence. In such circumstances, the appellant cannot take any advantage of the findings of innocence recorded by the criminal court. The ‘cleangiven by the learned Magistrate was influenced by the failure of the prosecution to lead the necessary evidence. No advantage of the same can be taken by the appellant in the departmental proceedings.48. We also do not find any merit in the submissions made by Mr. Jain that the order by the Disciplinary Authority is vitiated by non- application of mind. The extracts reproduced above would clearly indicate that the Disciplinary Authority was alive to all the submissions made by the appellant. The Disciplinary Authority had taken into consideration all the relevant material and only then concluded that the charges have been duly proved against the appellant. Furthermore, it is a matter of record that the appellant was duly supplied a copy of the Inquiry Report and he had submitted detailed objections to the same. These objections were placed before the Disciplinary Authority together with the Inquiry Report. Therefore, the appellant can not possibly claim that there has been a breach of rule of natural justice.49. Similarly, the Appellate Authority has also given cogent reasons in support of its conclusion. This is also apparent from the extract of the order of the Appellate Authority reproduced above.