THE GENERAL MANAGER (P) PUNJAB & SIND BANK & ORS. v.

DAYA SINGH (Civil Appeal No. 4120 of 2007)

JULY 28, 2010 [R.V. Raveendran and H.L. Gokhale, JJ.]

2010(9) SCR 71

The Judgment of the Court was delivered by

GOKHALE J. 1. This appeal seeks to challenge the judgment and order  dated  25.01.2007 rendered  by a  Division  Bench  of  Allahabad High Court  

allowing  Civil  Writ  Petition  No.  2846/2004  filed  by  the  respondent.  The  

respondent at the relevant time in 1997-99 was working as a Manager of a  

Branch  of  Punjab  &  Sind  Bank  in  Kanpur  and  he  was  directed  to  be  

dismissed for misconduct after a departmental inquiry vide order dated 6th  

June, 2003. The respondent had challenged this order and two subsequent  

orders in his writ petition to the High Court and these orders have been set  

aside by the impugned judgment and order. Being aggrieved by the same,  

this appeal has been filed by the General Manager (P) on behalf of Bank.  

Apart  from  setting  aside  order  of  dismissal,  High  Court  directed  the  

reinstatement of the respondent. The respondent moved a contempt petition  

for non-implementation thereof. This Court vide its order dated 7th May, 2007  

has stayed the contempt proceedings. Subsequently, leave was granted on  

appellant’s Special leave petition on 6th September, 2007. Mr. Rajiv Nanda,  

learned  Counsel  has  appeared  for  the  appellant.  The  respondent  has  

appeared in person.

Short facts leading to this appeal

2. As stated above, the respondent was working as a Manager of the  

appellant’s Branch (earlier an extension counter) at Guru Nanak Girls Degree  

College, Sunder Nagar, Kanpur. In a vigilance inspection, it was found on 8th

of  March,  1999  that  some  20  loans  to  the  tune  of  Rs.16.48  lacs  were  

disbursed  to  some  persons  against  FDRs  though  the  FDRs  were  in  the  

names of altogether different persons. It was also seen that the withdrawals  

which were allowed, were far in excess over the amounts in the FDRs. All  

those entries were in the hand-writing of the respondent.

3.  On  9th  of  March,  1999,  when  the  Zonal  Manager,  Lucknow,  telephonically  made  further  inquiries  with  the  respondent,  immediately  

thereafter,  the  respondent  left  the  Branch  by  leaving  behind  a  letter  of  

voluntary retirement dated 9th March, 1999 without handing over the charge  

of  the articles and documents of  the Branch to  anybody else.  He did not  

report for duty any time thereafter, although a telegram was sent to him on  

11th  March,  1999  that  he  should  join  immediately.  He  was,  therefore,  

suspended on 12th March, 1999. An FIR was lodged on 13th March, 1999  

and the respondent was arrested along with the Cashier Mr. K.P.Singh.

4.The appellant Bank issued a charge-sheet to the respondent containing  

the following charges :

(i) He  sanctioned  demand  loan  against  twenty  non-existent  

FDR’s amounting Rs.16.48 Lac to the fictitious persons. Thus  

he has misappropriated Rs.16.48 lac by way of  sanctioning  

demand loans against non-existent FDRs without any security.

(ii) He has left the Branch on 9th March, 1999 without handing  

over the charge of articles and documents of Branch.

(iii) He has left his station of posting without authorization, and he  

is absconding from the services since 09.03.1999.

(iv) He stands a  guarantor  to  the  loan sanctioned to  M/s  Mark  

Tubes,  at  Branch office Gurgaon.  The loan was sanctioned  

against  his  surety  for  which  he  has  not  obtained  prior  

permission from the competent authority. The account turned

into  NPA  account  and  he  has  not  made  sincere  efforts  to  

ensure the recovery of this loan amount, and

(v) He  has  taken  guarantee  of  his  wife  named  Mrs.  Satvinder  

Kaur who has taken a loan from Bank of India, Tilak Nagar,  

New Delhi-110018 in the name of M/s Paper Products. He has  

never  sought  a  permission  from  competent  authority  for  

standing as guarantor.

The inquiry could not start  earlier  since the respondent was in judicial  

custody till December, 2001. Thereafter, a full-fledged inquiry was conducted.

5.  During  the  inquiry,  relevant  documents  were  produced  through  the  

concerned  officers.  The  material  produced  before  the  inquiry  officer  with  

respect to charge No.1 was that some 20 fictitious loans were sanctioned  

against non-existent FDRs. A chart to that effect has been produced before  

us as well as photo copies of the documents which were placed before the  

inquiry officer. Thus in this compilation at page 21 , there is a photo copy of a  

page of loan register which shows at serial number 54, an advance of a loan  

of Rs.75000/- to one Rajinder Kaur against FDR Nos. 115/86 and 116/86. In  

this very compilation at page No.54, there is photocopy of a page of the FDR  

ledger wherein the FDR Nos. 115 and 116 are recorded. The FDR No.115 is  

worth of Rs.10000/- and No. 116 is worth of Rs. 2500/- only. FDR No. 115 in  

the name of one Nand Kumar whereas FDR No.116 is in the name of one  

Hardeep Satija. Thus as can be seen, whereas the amounts in the two FDRs  

were only Rs.12500/- together, the loan advanced was Rs.75000/- and that  

too to a third party one Rajinder Kaur in whose name either of the FDRs do  

not  stand.  The  above  referred  two extracts  of  the  ledger  are  brought  on  

record during the inquiry as Management Exhibits, MEX B-1 and MEX F-1.

6. These amounts are stated to have been handed over to the respondent  by the Cashier of the Bank one K.P. Singh on 18 occasions and by one Mr.  

Dixit on two occasions. Mr. K.P. Singh has deposed during the departmental

inquiry. He has proved the above referred two extracts. He has stated that the  

respondent used to ask him to get such cash as against FDRs and he used to  

make the cash available to him. Thus in all 20 ledger entries were brought on  

record and exhibited showing the withdrawals permitted to some persons and  

the ledger entries showing the names of altogether different persons in whose  

names the FDRs stood and also that the FDR amounts were for less than the  

amount  allowed  to  be  withdrawn.  The  inquiry  officer  has  dealt  with  this  

material on record in the following words in his report :

“Presenting officer relied on MEX A 1-20 MEX BI to 10; MEX C 1 to 20,  

MEX F 1 to 20 and MEX G-1 to 20. These are the documents showing all  

the entries by CSO in his own handwriting. The presenting officer also  

brought  in  MW1  to  prove  payments  made  to  CSO  by  MW1  through  

Exhibits marked MEX C 1 to C4; MEX C-6 to C-7; MEX C-11 to C-20.  

Through exhibits MEX B1 to B10 presented that there were no records  

through which FDRs kept as security could be proved. P.O. in his plea  

brought in MEX E-1 to MEX E-3 to show that FDRs against which the  

loan were raised too did not belong to borrower and one was paid to the  

beneficiary  on  11.07.96.  P.O.  argued  advance  was  made  were  non-

existent.”

7. Although, the respondent participated in the inquiry and filed his reply  therein as well as a detailed counter in this Court,  there is no explanation  

whatsoever as to how these 20 persons were given the loans when the FDRs  

were not in their names and also why the loan amount is far exceeding the  

amount that was deposited. The only submission of the respondent was that  

when earlier inspections were carried out, no such allegation was made. He  

submitted that he had increased the business at the extension counter at the  

College and that is how it had become a Branch, yet his work was not being  

appreciated. However, no particulars were given to pin point any mala fides.  

Besides,  all  these  entries  were  in  his  hand-writing  and  there  was  no  

explanation  in  that  behalf.  As  far  as  the  deposition  of  Mr.  K.P.  Singh  is

concerned, it was sought to be contended that bank officers had stood surety  

for  his  bail  and,  therefore,  his  evidence  should  not  be  accepted.  That  

obviously could not be, in view of the documentary evidence, which was in his  

own hand-writing and which showed that the loan advances were far more  

than the amounts in the FDRs and they were given to persons other than  

those in whose names, the FDRs were issued.

8. The inquiry officer, therefore, concluded in his report as follows :

‘Assessment of evidence of presenting officer’s and CSO weighs heavily   

on P.O. side. He has produced the documents as available in the branch  

and proved that advances made were having incomplete details on each  

documents. The C.S.O. has based himself on premises and has nothing  

to present in his defence.

On going through both written and oral evidence before me, I posed  

queries before CSO, whether he can produce any evidence of FDRs from  

Bank records. The answer was negative and evasive. Further query was   

raised whether the borrowers could be produced to prove his contention.   

The reply again was negative. Hence evaluating the document before me  

and other relevant evidence, I am of the opinion that charge number 1   

based on allegations 1 to 20 stands proved’.

9. Similarly, with respect to the charges Nos. 2 and 3 of his going away  

from  the  branch  on  9th  March,  1999  without  handing  over  charge  and  

absconding thereafter,  the only submission forthcoming was that when the  

Zonal Manager talked to him, he felt reprimanded and, therefore, he sent his  

letter of V.R.S. There was however no explanation as to how he could walk  

away without  handing over  the change and why he did not  turn  up even  

though he was given a telegram to join on the duty.

10. As far as the charge number 4 and 5 are concerned, it was alleged  against him that he has stood guarantor firstly for a company in one case and  

then for his wife which was done without the permission from the competent

authority. The only defence of the respondent was that there was no harm to  

the bank in this, and if necessary the amount be adjusted from his retirement  

benefit or otherwise after reinstatement by regular installments. This was no  

explanation  and this  was against  the service  rules  and hence the  inquiry  

officer held that the charges were proved.

11. After considering the inquiry report, the Zonal Manager who was the  

disciplinary  authority  came  to  the  conclusion  that  the  respondent  has  

committed  misconduct  under  Clause  3(1)  and  15(v)  read  with  Regulation  

No.24 of the Punjab & Sind Bank Officers Employees (Conduct) Regulations  

1981. He concurred with the findings of the inquiry officer. Therefore, by the  

order dated 6th June, 2003, he imposed the penalty of dismissal from service  

alongwith  recovery  of  pecuniary  loss  under  ‘Punjab  and  Sind  Bank  

officer/employees (Discipline and appeal)  Regulation 1997. That order has  

been subsequently confirmed in the internal appeal and in review.

12. As stated above, all these three orders were challenged in the above  

writ  petition  in  the  High  Court,  and  have  come  to  be  set  aside.  It  was  

contended on behalf of the respondent that the report submitted against him  

by the inquiry officer was too sketchy and it did not contain any reasons in  

support  of  the  findings  arrived  at  by  the  inquiry  officer.  The  High  Court  

accepted that submission. It held that the inquiry officer merely stated in his  

report  that  certain  documents  in  support  of  each  of  the  charges  were  

presented and also that the submissions of the petitioner in reply were not  

tenable and therefore, the charges stood proved. The High Court held that  

the  documents  produced  were  neither  detailed  nor  their  nature  was  

explained. It  further held that there was no discussion and much less any  

analysis of the evidence presented. The Court held that no specific finding  

has been recorded on the basis of the evidence to establish the guilt of the  

respondent.  The absence of good reason was held to be in breach of the  

principles of natural justice. Therefore, the order was set aside.

13.  The High Court  directed the appellant  to  reinstate  the respondent  

though  for  the  limited  purpose  of  holding  the  inquiry  afresh.  That  was  

following the law laid  down in  Managing Director  ECIL Hyderabad Vs.  B.  

Karunakar AIR 1994 SC 1074. It directed the appellant to hold a fresh inquiry  

and  then  to  pass  appropriate  orders.  It  is  this  order  which  has  been  

challenged before us.

Rival Contentions

14. Mr. Nanda, learned counsel appearing for the appellant has taken us  

through the material which was there before the inquiry officer and which was  

also placed before the High Court and also before this Court. He has referred  

to  the  report  of  the  inquiry  officer  and  as  to  how  the  charges  were  

established. The relevant paragraphs therefrom are already quoted above.  

Mr. Nanda, therefore, raised a question - Can this report in any way be said  

to  be  sketchy? He submitted  that  the  inquiry  officer  may not  have  given  

separate finding based on each and every document, but he has referred to  

all the documents produced in the inquiry and considered them. He pointed  

out that the report clearly shows that a complete co-relation was established  

between the ledger entries in the loan register and the entries in the FDR  

register by producing the relevant pages of both these registers.  All  those  

entries  were  noted  to  be  in  the  hand-writing  of  the  respondent.  It  clearly  

showed that in 20 cases, loans were disbursed to persons in whose name  

there  were  no  FDRs and  the  amounts  released  were  far  in  excess.  The  

respondent had not disputed those entries. The inquiry officer has, therefore,  

given the necessary finding and the High Court has clearly erred in holding  

that no specific finding had been recorded on the basis of the evidence to  

establish the guilt of the respondent. Mr. Nanda has also stated that once the  

charges were established, the High Court had no jurisdiction to interfere in  

the decision of the Bank authority and he relied upon the judgments of this  

Court in Suresh Pathrella Vs. Oriental Bank of Commerce, AIR 2007 SC 199,

State Bank of India Vs. Bela Bagchi  (2005) 7 SCC 435 and  Damoh Panna  

Sagar Rural Regional Bank Vs. Munna Lal Jain (2005) 10 SCC 84.

15. The respondent who appeared in person reiterated his submissions  which  were made during  the  inquiry.  He submitted  that  he had improved  

business at the extension counter to make it  a branch, that he was being  

made a victim and that the documents did not establish the misconduct. On a  

query from the Court he could not dispute that the relevant entries were in his  

hand-writing. With a view to satisfy ourselves, we asked him as to what was  

his explanation with respect to those entries. He had no particular answer to  

offer.  His  only  submission  was  that  no  borrower  had  been  examined  in  

support of the allegations against him.

Resultant Conclusions

16. In view of what is stated above, it  is very clear that the Bank had  taken  the  necessary  steps  to  establish  the  misconduct  before  the  inquiry  

officer.  The  relevant  documents  including  ledger  entries  were  produced  

through the concerned witnesses.  The respondent  fully  participated in  the  

inquiry. He had no explanation to offer during the course of the inquiry or any  

time thereafter. When all the relevant entries were in the handwriting of the  

respondent, the Bank did not think it necessary to call the borrowers. In fact,  

as  the  inquiry  officer  states,  the  respondent  should  have  produced  the  

borrowers  if  he  wanted  to  contend  anything  against  the  documentary  

evidence  produced  by  the  Bank.  In  the  circumstances,  the  conclusions  

arrived at by the inquiry officer as stated above could not have been held as  

without any evidence in support. The High Court has clearly erred in holding  

that  the  documents  produced  were  neither  detailed  nor  their  nature  was  

explained.

17. We are rather amazed at the manner in which the High Court has  

dealt with the material on record. The Inquiry Officer is an officer of a Bank.  

He was considering the material which has placed before him and thereafter,

he has come to the conclusion that the misconduct is established. He was  

concerned with a serious charge of unexplained withdrawals of huge amounts  

by a Branch Manager in the name of fictitious persons. Once the necessary  

material was placed on record and when the charge-sheeted officer had no  

explanation to offer, the Inquiry Officer could not have taken any other view.  

The order  of  a bank officer  may not  be written in  the manner  in  which a  

judicial officer would write. Yet what one has to see is whether the order is  

sufficiently clear and contains the reasons in justification for the conclusion  

arrived at. The High Court has ignored this aspect. Absence of reasons in a  

disciplinary order  would amount  to  denial  of  natural  justice to  the charge-

sheeted  employee.  But  the  present  case  was  certainly  not  one  of  that  

category. Once the charges were found to have been established, the High  

Court  had no reason to  interfere  in  the  decision.  Even though there  was  

sufficient  documentary evidence on record,  the High Court  has chosen to  

hold that the findings of the Inquiry Officer were perverse. A perverse finding  

is  one which is  based on no evidence or  one that  no reasonable person  

would arrive at. This has been held by this Court long back in Triveni Rubber  

& Plastics vs. CCE AIR 1994 SC 1341. Unless it is found that some relevant  

evidence has not been considered or that certain inadmissible material has  

been taken into consideration the finding cannot be said to be perverse. The  

legal  position  in  this  behalf  has  been  recently  reiterated  in  Arulvelu  and  

Another vs. State Represented by the Public Prosecutor and Another (2009)  

10 SCC 206. The decision of the High Court cannot therefore be sustained.  

18. As held in T.N. C.S. Corporation Ltd. vs. K. Meerabai (2006) 2 SCC  

255  the  scope  of  judicial  review  for  the  High  Court  in  departmental  

disciplinary matter is limited. The observation of this Court in Bank of India  

vs. Degala Sriramulu (1999) 5 SCC 768 are quite instructive:

“Strict  rules  of  evidence  are  not  applicable  to  departmental  enquiry  

proceedings. The only requirement of law is that the allegation against   

the delinquent officer must be established by such evidence acting upon  

which a reasonable person acting reasonably and with objectivity may  

arrive  at  a  finding  upholding  the  gravamen of  the  charge  against  the   

delinquent officer. Mere conjecture or surmises cannot sustain the finding  

of guilt even in departmental enquiry proceedings. The court exercising   

the jurisdiction of judicial review would not interfere with the findings of   

fact arrived at  in the departmental  enquiry proceedings excepting in a   

case of mala fides or perversity i.e where there is no evidence to support   

a finding or where a finding is such that no man acting reasonably and  

with  objectivity  could  have  arrived  at  that  finding.  The  court  cannot   

embark upon reappreciating the evidence or weighing the same like an  

appellate authority.  So long as there is some evidence to support  the  

conclusion arrived at by the departmental authority, the same has to be  

sustained. In Union of India v. H.C. Goel (AIR 1964 SC 364, (1964) 4  

SCR 718). the Constitution Bench has held:

a. “The High Court can and must enquire whether there is any  

evidence at all in support of the impugned conclusion. In other  

words,  if  the  whole  of  the  evidence  led  in  the  enquiry  is  

accepted as true, does the conclusion follow that the charge in  

question is proved against the respondent? This approach will  

avoid weighing  the evidence.  It  will  take the evidence as it  

stands and only examine whether on that evidence legally the  

impugned conclusion follows or not.”

19. In a number of cases including  State Bank of India vs. Bela Bagchi  

(supra) this Court has held that a bank employee has to exercise a higher  

degree of  honesty and integrity.  He is concerned with  the deposits  of  the  

customers of the Bank and he cannot permit the deposits to be tinkered with  

in any manner. In Damoh Panna Sagar Rural Regional Bank’s case (supra)  

the  Manager  of  a  Bank  who  had  indulged  in  unauthorized  withdrawals,  

subsequently returned the amount with interest. Yet this Court has held that  

this conduct of unauthorized withdrawals amounted to a serious misconduct.

Same is  the case in  the present  matter.  There  was a  clear  documentary  

evidence on record in the handwriting of the respondent which established his  

role  in  the  withdrawal  of  huge  amounts  for  fictitious  persons.  The  ledger  

entries  clearly  showed  that  whereas  the  FDRs  were  in  one  name,  the  

withdrawals were shown in the name of altogether different persons and they  

were  far  in  excess  over  the  amounts  of  FDRs.  The  respondent  had  no  

explanation  and,  therefore,  it  had  to  be  held  that  the  respondent  had  

misappropriated the amount. Inspite of a well reasoned order by the Inquiry  

Officer, the High Court has interfered therein by calling the same as sketchy.  

The High Court has completely overlooked the role of the bank manager as  

expected by this Court in the aforesaid judgments.

20. In these facts and circumstances, we allow this appeal and set aside the impugned  

judgment and order passed by the Division Bench of the Allahabad High Court. The  

petition filed by the respondent in the High Court will stand dismissed. Consequently,  

contempt proceedings initiated by him will also stand dismissed.