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CASE NO.: Appeal (civil)  2055 of 2003

PETITIONER: State Bank of India & Ors.                               

RESPONDENT: Ramesh Dinkar Punde                                      

DATE OF JUDGMENT: 11/08/2006

BENCH: H.K. SEMA & A.K. MATHUR

JUDGMENT: J U D G M E N T

H.K.SEMA,J         The challenge in this appeal is to the order dated 2nd  August, 2002 of the High Court of Judicature at Bombay  whereby  the imposition of penalty of removal inflicted upon  the respondent, who is a bank officer, preceded by an inquiry,  is set aside with a direction to the appellant to reinstate the  respondent with all consequential benefits including that of  back wages, to be paid within a period of three months.           Briefly stated, the facts are as follows:         The respondent was working as an officer under the  appellant bank and at the relevant time he was posted as  Manager, Personnel Banking Division, Palghar Branch.   Sometime in June, 1986 the respondent introduced one Shri  Kishor Bidaye and Shri D.B. Angane to the Branch Manager  Jogeshwari (W) Branch.  The respondent brought said Shri  Bidaye to the Branch Manager and got a current account  opened in the name of Shri Bidaye.  He had also introduced  the said current account by giving his old Andheri address at  Bombay as the address of Bidaye.  A cheque was issued in  favour of the State Bank of India, which was to be invested in  the name of the Trust/Board.  However, the respondent  insisted that the funds were meant for Bidaye and Angane and  thereby, induced the Branch Manager to accept the Trust  funds as Term Deposits and issue TDRs in the names of  Bidaye and Angane.  The respondent also ensured sanctioning  of overdraft facility against the STDRs. so issued.  It is also  alleged that the respondent exerted pressure to grant overdraft  on the same day of remittance of funds and emphatically  stated that it would be his responsibility if anything went  wrong.  A complaint was made by a Trust regarding Term  Deposit Receipts being issued in the name of Bidaye and  granting overdraft facilities to him on the basis of such TDR.           The appellant’s bank, thereafter, initiated a Departmental  Inquiry.  The following charges were framed against the  respondent: "ARTICLE OF CHARGE TOGETHER WITH THE  GROUNDS ON WHICH IT IS BASED \026 SHRI R.D.  PUNDE (UNDER SUSPENSION) FRAUD AT  JOGESHWARI (W) BR. CHARGE

CHARGE-1 You, when posted at Palghar Branch as Manager  P.B.D. negotiated with a fraudulent intention to  extend credit facilities against deposits to be  received from Trusts to Sarvashri Kishore Bidaye  and D.B. Angane at Jogeshwari (W) Branch and

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induced the Branch Manager, Jogeshwari (W)  branch to accept Trust Funds in Terms Deposits  and also caused issue of TDRs in the individual  names with the funds received for investment in  their own names (Trusts).  You ensured that STDR  were issued in individual names and that overdrafts  were sanctioned there against although you were  well aware that it was in violation of Bank’s  prescribed norms, procedures, instructions on the  subject.  You assisted the said persons despite  knowing their fraudulent motives.  You thus acted  dishonestly and in a manner unbecoming of a Bank  Official violating Rule No. 32(4) of the State Bank of  India (Supervising Staff) Service Rules.

GROUNDS ON WHICH BASED (i)     You negotiated with the Branch Manager,  Jogeshwari (w) Branch on behalf of Sarvashri  Kishor Bidaye and D.B. Angane about the  credit facilities to be extended to them against  deposits to be received and vouched for  bonafides and creditworthiness of the said  individuals and assured to recover at short  notice loans granted there against.   Accordingly you introduced Shri Kishor   Bidaye and caused his current Account to be  opened in the books of Jogeshwari (w) Branch  knowing fully well that Shri Bidaye is a  defaulter borrower of our Pimpri Branch.  You  also gave your residential address as the legal  address of Shri Bidaye.   

You visited Jogeshwari (w) Branch on various  dates accompanied by others including the  said persons and caused issue of STDRs in the  name of Shri Bidaye/Shri Angane against  clearing cheques received from the under  noted Boards.  You also prevailed upon the  Branch Manager/Manager P.B.D. to sanction  overdraft limit threagainst to the said persons.

       Cheque  Amt.            Date pf STDR            Amt. Of OD         Recd.           Of Cheq.        TDR             No.             TDR             Limi t         From                                                            Favouring       Sanc t                                                                                                 Ione d         ----------------------------------------------------------------------------------         The Railway      Rs.2 lacs      26.06.86        236386  Rs. 2 lacs    Rs.1.50         Goods                                                Shri.          Lacs         Clearing and                                         Bidaye         Forwarding         Establishment         ----------------------------------------------------------------------------------         Nathdwere       Rs.2 lacs        8.07.86        236199  Rs.2 lacs           Rs. 1.50         Temple Board                                         Shri           Lacs                                                                      Bidaye         ----------------------------------------------------------------------------------         Security        Rs.5 lacs       12.07.86        586504  Rs.5 lacs           Rs. 3.75         Guards Board                                         Shri           Lacs         For Greater                                                  Angane         Bombay and         Thane Distt.         ----------------------------------------------------------------------------------

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       Hyderabad       Rs.5 lacs       21.07.86        586542  Rs. 5 lacs   Rs. 3.75         (Sind)                                                       Shri           Lacs         National                                                     Bidaye         Collegiate         Board.         ----------------------------------------------------------------------------------   

        (ii)    You were well aware of the intentions and  motives of Shri Bidaye and Shri Angane to  defraud the Bank.  You failed to use the  material information to protect the Bank’s  interest."  

On the basis of the aforesaid charges, the Commissioner  for Departmental Inquiries in the Central Vigilance  Commission, Govt. of India was appointed as the Inquiry  Officer.  The Inquiry Officer, after making a detailed inquiry,  submitted its report dated 31.1.90 holding that the charges  against the respondent stand proved.  Thereafter, by an order  dated 8.12.90 the Disciplinary Authority dismissed the  respondent from the services of the Bank.  Aggrieved thereby,  the respondent filed an appeal before the Appellate Authority,  which was rejected by the order dated 29.10.91.  Aggrieved  thereby, the respondent preferred Writ Petition No. 2105/92  before the High Court of Judicature at Bombay praying inter- alia to quash and set aside the order of dismissal dated  8.12.90 passed by the Disciplinary Authority and also the  order dated 29.10.91 passed by the Appellate Authority  rejecting his appeal and to reinstate the respondent with full  back wages, continuity of service and all the consequential  benefits.  During the pendency of the Writ Petition before the  High Court, it appears that pursuant to the observations made  by the High Court, the petitioner bank reduced the  punishment of dismissal to removal.   The High Court, on re-appreciation of evidence, reversed  the finding of the Inquiry Officer and set aside the orders of  the Disciplinary Authority and Appellate Authority.   Before we proceed further, we may observe at this stage  that it is unfortunate that the High Court has acted as an  appellate authority despite the consistent view taken by this  Court that the High Court and the Tribunal while exercising  the judicial review do not act as an appellate authority.  Its  jurisdiction is circumscribed and confined to correct errors of  law or procedural error, if any, resulting in manifest  miscarriage of justice or violation of principles of natural  justice. Judicial review is not akin to adjudication on merit by  re-appreciating the evidence as an Appellate Authority.  (See  Govt. of A.P. and Ors. (appellant) v. Mohd. Nasrullah Khan  (respondent) (2006) 2 SCC 373 at page SCC 379).   Reverting to the facts of the case, it appears that the  respondent was charged with misconduct of having conducted  himself in violation of the Rule 32(4) of the Service Rules.  Rule  32(4) reads: "32(4) Every employee shall, at all times, take all  possible steps to ensure and protect the interest of  the Bank and discharge his duties with utmost  integrity, honesty, devotion and diligence and do  nothing which is unbecoming of a bank official."

       After noticing the said provision and re-appreciating the  evidence, the High Court was of the opinion that unless there  is evidence to show that the petitioner had knowledge of the  intention on the part of the persons introduced in the Bank,  the petitioner cannot be said to have committed any

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misconduct as alleged by the Bank.  The High Court has also  considered the official evidence recorded by the Inquiry Officer  in course of the inquiry and observed that the statements  recorded by the Inquiry Officer had no where stated that the  petitioner had knowledge of the intention of Bidaye and  Angane to enjoy the overdraft facility by misusing TDRs  belonging to someone else.  The High Court also observed that  there is no evidence to show that on all the occasions when  the TDRs were issued the petitioner was present in the  Jogeshwari Branch.  Ultimately, the High Court has concluded  its finding in paragraph 9 of the impugned Judgment as  under:  "9. Ample evidence could have been led to prove the  complicity of the petitioner with Bidaye and Angane.   Even in the FIR lodged with the police, there is not  even a suggestion that the petitioner was in anyway  involved in the commission of fraud by Bidaye and  Angane.  In these circumstances, we are firmly of  the opinion that this is a case of no evidence of  misconduct as alleged by the bank, which is not  proved at all and therefore order of punishment is  unsustainable.  In the result the petition succeeds  and it is allowed."                   It is impermissible for the High Court to re-appreciate  the evidence which had been considered by the Inquiry Officer  \026 a Disciplinary Authority and the Appellate Authority.  The  finding of the High Court, on facts, runs to the teeth of the  evidence on record.           The clinching evidence found by the Inquiry Officer  against the charged officer is in the form of Hand Writing  Expert, marked as Ex. S-54 (2), which proved that the hand  writing is that of the charged officer.  It is also proved that the  charged officer had filled in the account opening form of Sh.  Bidaye, which has not been denied by the charged officer.  The  charged officer, in his examination-in-chief has admitted that  he introduced Sh. Bidaye.  The charged officer also admitted  that Sh. Nazar requested him to fill in the application form  and pay-in-slip which he did as a part of customer service.   The charged officer was the Manager of the Bank.  There was  no occasion for him to fill in the application form or the pay- in-slip on behalf of Bidaye as a customer service unless he has  personal interest in it.  The respondent admitted that the  distance between Palghar Branch (where he was posted) and  the Jogeshwari Branch (where the account was opened) is  about 60 Kms.  and Palghar Branch is not connected by local  train as it usually takes about 2 = hours from Andheri Station  to Palghar Branch.    It is common knowledge that unless he  had personal interest, he  would not have covered such a  distance to favour his so called friend Bidaye.  The charged  officer also admitted his presence on 12.6.86 and 26.6.86.           The account opening form of Sh. Bidaye is in the hand- writing of the charged officer.  The address of Sh. Bidaye is  shown as c/o the respondent.  The account has been  introduced by the respondent.  In the Inquiry Report it is  established that the charged officer did exert pressure on the  Branch officials for issuance of TDRs against the funds  received from the trusts and granting overdrafts against TDRs.           From the facts collected and the report submitted by the  Inquiry Officer, which has been accepted by the Disciplinary  Authority and the Appellate Authority, active connivance of the  respondent is eloquent enough to connect the respondent with  the issue of TDRs and overdrafts in favour of Bidaye.           We are, therefore, clearly of the view that the High Court  was erred both in law and on facts in interfering with the

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findings of the Inquiry Officer, the Disciplinary Authority and  the Appellate Authority by acting as a court of appeal and re- appreciating the evidence.           We may now notice a few decisions of this Court in  similar circumstances.           In the case of Union of India (appellant) v. Sardar  Bahadur (respondent) (1972) 2 SCR 218 it is held as under:  A disciplinary preceeding is not a criminal trial. The  standard proof required is that of preponderance of  probability and not proof beyond reasonable doubt.  If the inference that lender was a person likely to  have official dealings with the respondent was one  which reasonable person would draw from the  proved facts of the case, the High Court cannot sit  as a court of appeal over a decision based on it.  The  Letters Patent Bench had the same power of dealing  with all questions, either of fact or of law arising in  the appeal, as the Single Judge of the High Court.    If the enquiry has been properly held the question of  adequacy or reliability of the evidence cannot be  canvassed before the High Court.  A finding cannot  be characterized as perverse or unsupported by any  relevant materials, if it was a reasonable inference  from proved facts."   

In Union of India (appellant) v. Parma Nanda  (respondent) (1989) 2 SCC 177 it is held at page SCC 189 as  under: "27. We must unequivocally state that the  jurisdiction of the Tribunal to interfere with the  disciplinary matters or punishment cannot be  equated with an appellate jurisdiction. The Tribunal  cannot interfere with the findings of the Inquiry  Officer or competent authority where they are not  arbitrary or utterly perverse. It is appropriate to  remember that the power to impose penalty on a  delinquent officer is conferred on the competent  authority either by an Act of legislature or rules  made under the proviso to Article 309 of the  Constitution. If there has been an enquiry  consistent with the rules and in accordance with  principles of natural justice what punishment  would meet the ends of justice is a matter  exclusively within the jurisdiction of the competent  authority. If the penalty can lawfully be imposed  and is imposed on the proved misconduct, the  Tribunal has no power to substitute its own  discretion for that of the authority. The adequacy of  penalty unless it is malafide is certainly not a  matter for the Tribunal to concern itself with. The  Tribunal also cannot interfere with the penalty if the  conclusion of the Inquiry Officer or the competent  authority is based on evidence even if some of it is  found to be irrelevant or extraneous to the matter." In Union Bank of India (Appellant) v. Vishwa Mohan   (respondent) (1998) 4 SCC 310, this Court held at page SCC  315  Para 12 as under:  "12. After hearing the rival contentions, we are of  the firm view that all the four charge sheets which  were inquired into relate to serious misconduct. The  respondent was unable to demonstrate before us  how prejudice was caused to him due to non-supply  of the enquiry authority’s report/findings in the  present case. It needs to be emphasised that in the  banking business absolute devotion, diligence,

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integrity and honesty needs to be preserved by every  bank employee and in particular the bank officer. If  this is not observed, the confidence of the  public/depositors would be impaired. It is for this  reason, we are of the opinion that the High Court  had committed an error while setting aside the  order of dismissal of the respondent on the ground  of prejudice on account of non-furnishing of the  inquiry report/findings to him."

       In Chairman and Managing Director, United  Commercial Bank and Ors. (Appellant) v. P.C. Kakkar \026  (respondent) (2003) 4 SCC 364, this Court held at page SCC  376 para 14 as under: "14.  A Bank officer is required to exercise higher  standards of honesty and integrity. He deals with  money of the depositors and the customers. Every  officer/employee of the Bank is required to take all  possible steps to protect the interests of the Bank  and to discharge his duties with utmost integrity,  honesty, devotion and diligence and to do nothing  which is unbecoming of a Bank officer. Good  conduct and discipline are inseparable from the  functioning of every officer/employee of the Bank.  As was observed by this Court In Disciplinary  Authority-cum-Regional Manager v. Nikunja Bihari  Patnaik (1996) 9 SCC 69,  it is no defence available  to say that there was no loss or profit resulted in  case, when the officer/employee acted without  authority. The very discipline of an organization  more particularly a Bank is dependent upon each of  its officers and officers acting and operating within  their allotted sphere. Acting beyond one’s authority  is by itself a breach of discipline and is a  misconduct. The charges against the employee were  not casual in nature and were serious. These  aspects do not appear to have been kept in view by  the High Court."

       In Regional Manager, U.P. SRTC, Etawah & Ors.  (appellants) v. Hoti Lal and Anr. (respondents) (2003) 3  SCC 605, it was pointed out as under:  "If the charged employee holds a position of trust  where honesty and integrity are inbuilt  requirements of functioning, it would not be proper  to deal with the matter leniently.  Misconduct in  such cases has to be dealt with iron hands.  Where  the person deals with public money or is engaged in  financial transactions or acts in a fiduciary  capacity, highest degree of integrity and  trustworthiness is a  must and unexceptionable."

       In Cholan Roadways Ltd. (appellant) v. G.  Thirugnanasambandam (respondent)  (2005) 3 SCC 241  this Court at page SCC 247 held: "It is now a well-settled principle of law that the  principles of the Evidence Act have no application in  a domestic inquiry."

       Confronted with the facts and the position of law, learned  counsel for  the respondent submitted that leniency may be  shown to the respondent having regard to long years of service  rendered by the respondent to the Bank.  We are unable to  countenance with such submission.  As already said, the  respondent being a bank officer holds a position of trust where

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honesty and integrity are inbuilt requirements of functioning  and it would not be proper to deal with the matter leniently.   The respondent was a Manager of the Bank and it needs to be  emphasised that in the banking business absolute devotion,  diligence, integrity and honesty needs to be preserved by every  bank employee and in particular the bank officer so that the  confidence of the public/depositors is not impaired.  It is for  this reason that when a bank officer commits misconduct, as  in the present case, for his personal ends and against the  interest of the bank and the depositors, he must be dealt with  iron hands and he does not deserve to be dealt with leniently.          In the case of T.N.C.S. Corpn. Ltd. and Ors. (appellants)  v. K. Meerabai (respondent) (2006) 2 SCC 255 such plea had  been rejected by this Court.  It was pointed out at page SCC  267 para 29 as under:  "29.  Mr. Francis also submitted that a sum of Rs.  34,436.85 being 5% of the total loss of Rs.  6,88,735/- is sought to be recovered from the  respondent and that the present departmental  proceedings is the only known allegation against the  respondent and there was no such allegation earlier  and, therefore, a lenient view should be taken by  this Court and relief prayed for by both the parties  can be suitably moulded by this Court. We are  unable to agree with the above submission which,  in our opinion, has no force. The scope of judicial  review is very limited. Sympathy or generosity as a  factor is impermissible. In our view, loss of  confidence is the primary factor and not the amount  of money mis-appropriated. In the instant case,  respondent employee is found guilty of mis- appropriating the Corporation funds. There is  nothing wrong in the Corporation losing confidence  or faith in such an employee and awarding  punishment of dismissal. In such cases, there is no  place for generosity or mis-placed sympathy on the  part of the judicial forums and interfering therefor  with the quantum of punishment awarded by the  disciplinary and Appellate Authority."                  In the view that we have taken, this appeal deserves to be  allowed.  The impugned judgment and order of the High Court  dated 2.8.2002 is, hereby, set aside.  The orders of the  Disciplinary Authority and that of the Appellate Authority are  restored.  The Writ Petition filed by the respondent stands  dismissed.           The appeal is allowed.  In the facts and circumstances of  this case, the parties are asked to bear their own costs.