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CASE NO.: Appeal (civil)  1766 of 2005

PETITIONER: Syndicate Bank & Ors.

RESPONDENT: Venkatesh Gururao Kurati

DATE OF JUDGMENT: 31/01/2006

BENCH: H.K. SEMA & Dr.A.R. LAKSHMANAN

JUDGMENT: J U D G M E N T

H.K.SEMA,J

                                This appeal, preferred by Syndicate Bank is directed  against the Judgment and Order dated 16th April, 2004 passed  by the Division Bench in Writ Appeal No.7997 of 1999  affirming the order dated 14th June, 1999 of the learned Single  Judge passed in Writ Petition No. 12594 of 1991 allowing the  Writ Petition filed by the respondent herein.                   Briefly stated the facts are as follows:-                 The respondent was working as Manager of the  appellant’s bank at Horti Branch (Karnataka) between  30.12.1976 and 22.7.1981.  It is alleged that during the said  period the respondent in collusion with certain staff members  got necessary documents signed and arranged loans in the  name of poor illiterate villagers under the Integrated Rural  Development Program and misappropriated the proceeds of  such loans.    The allegations are:- "a) On 20.06.1979 he obtained loan  application and other documents from one Sri.  S.M. Desai with Sr. N.C. Yelasangi as the  proposed surety/co-obligant without informing  them the purpose for which the same was  obtained.  A loan of Rs.6000/- for working  capital needs of Sri. S.M. Desai’s Boosari  business was sanctioned and arranged by the  respondent though the said Sri. S.M. Desai  was not doing such business.  Thereafter, the  loan proceeds was withdrawn and received by  the respondent by using a withdrawal slip  issued in the name of the said Sri. S.M. Desai  15 days prior to the arranging the loan.

b) Between January 1981 and March 1981,  the respondent in connivance with Sri.  K.B.Bhaskaraiah, the then Farm  Representative of bank’s Horti branch, Sri.  H.K. Hegdeyal, the Pigmy collection Agent Sri  Mareppa P. Talakeri, the then Attender of the  bank’s Horti branch and Sri. Parasappa  Siddappa Talakeri, father of the said Sri,  Mareppa P. Talakeri sanctioned and arranged  12 Sheep Loans of Rs. 4000/- each  aggregating to Rs. 48,000/- under the DRI  Scheme and received the amount of the said  loans either directly or through the accounts of

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the said Sr. Parasappa Siddappa Talakeri.   This was done as detailed below:-

i)      Sri.  Parasappa Siddappa Talakeri  obtained loan application for sheep loans  in the names of either his family  members who were not eligible for such  loans or other poor uneducated people of  the village.  ii)     Necessary Farm Representative’s Reports  were obtained from Sri. K.B.  Bhaskaraiah, the Farm Representative.  iii)    Though the amount of loans were to be  released to the suppliers directly the  same were credited to the Savings Bank  Accounts of the borrowers.  To show that  the transactions were genuine, Stamped  Receipts for purchase of sheep were  obtained and put on record.      

c)      Out of the 12 sheep loans arranged as aforesaid: i)      Sri, Eswarappa Bhimappa Harijan who  had received only Rs.300/- from the  amount of loan of Rs.4000/- arranged in  his name as above said, sought the  intervention of Sri. S.S. Shivar, the village  Panchayat President and thereupon, the  respondent paid the said Sri. Eswarappa  Bhimappa Harijan a sum of Rs.3,500/-. ii)     Sri. S.R.Harijan another such villager in  whose name such loan was arranged who  did not receive the loan proceeds, took up  the matter directly with the respondent  and thereupon the respondent paid him a  sum of Rs.3000/- iii)    Smt. Girijava Omnna Harijan, Smt.  K.R.Harijan and Sri. S.D. Harijan denied  having received the loan amount.  

   d)  On 22.07.1981, the date of relief of the  respondent from the bank’s Horti branch, he  sanctioned a loan of Rs.10,000/- to Sri.  Parasappa Siddappa Talakeri.  On 24.07.1981  Sri. Mareppa P. Talakeri, credited a sum of  Rs.120/- each to 72 loan accounts including  the said 12 Sheep loan accounts from the  proceeds of the loan of Rs.10,000/- sanctioned  by the respondent to the said Sri. Parasappa  Siddappa Talakeri."

        On the basis of the aforesaid allegations, the following  charges were framed against the respondent on 5th August,  1985 with the statement of imputations of misconduct:

CHARGE SHEET UNDER REGULATION NO.6 OF  SYNDICATE BANK OFFICER EMPLOYEES’  (DISCIPLINE & APPEAL) REGULATIONS 1976.

WHEREAS it is proposed to hold an enquiry against  you in accordance with the procedure laid down in  Regulation No.6 of Syndicate Bank Officer  Employees’ (Discipline & Appeal) Regulations, 1976.

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                               AND

WHEREAS the Articles of Charges and Statement of  Imputations of misconduct in respect of which the  enquiry is proposed to he held are mentioned here  below:

NOW THEREFORE, you are hereby directed to  submit within 15 days from the date of receipt of  this Charge Sheet, your written statement of  defence, if any, showing cause as to why  departmental proceedings should not be initiated  against you and appropriate action should not be  taken against you.     

                               ARTICLES OF CHARGES

                               ARTICLE No.1:

That during the period between 30.12.1976 and  22.7.1981, you were functioning as manager of our  Horti Branch and that while functioning in your  position as such, on 20.6.1979, you obtained loan  applications and other documents in the name of  Shri Shankarappa Malakappa Desai with Sri N.C.  Yelasangi as the proposed co-obligant / surety  without informing them the purpose for which, they  were obtained:

                               AND

Then sanctioned and arranged in their names, a  secured Loan of Rs.6,000/- for the ostensible  purpose of working capital requirements of Boosari  business, knowingly or having reaons to believe that  the said Sri Shankarappa Malakappa Desai was not  doing such business;

                               AND  

Got the loan proceeds withdrawn and received the  same through a withdrawal slip issued in the name  of the said Sri Desai, 15 days prior to the arranging  of the loan.

By your above acts, you failed to discharge your  duties with utmost integrity, honesty, devotion and  diligence and exhibited conduct unbecoming of a  Bank Officer and thereby violated Regulation  No.3(1) of the Syndicate Bank Officer Employees’  (Conduct) Regulations, 1976.

                               ARTICLE No.II       

That during the period between January 1981 and  March 1981, you, in connivance with Sri  K.B.Bhaskaraiah, the then Farm representative of  our Horti Branch, Sri H.K. Hegdeyal, the pigmy  collection Agent of the branch, Sri Mareppa  P.Talakeri, the then Attendar of the Branch and Sri  Parasappa Siddappa Talakeri, father of the said Sri  Mareppa P.Talakeri, obtained application forms for  sheep loans through the said Sri Mareppa P.  Talakeri, in the names of either his family members  of other poor uneducated people of the village;

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                               AND  

Secured Farm Representative Reports from Sri.  K.B.Bhaskaraiah, the Farm representative;

                               AND

Sanctioned 12 loans for a total sum of Rs.48,000/-  under the IRDP Scheme;

                               AND

Got the loan proceeds withdrawn from the accounts  of the borrowers concerned and received the  amount either directly or through the accounts of  the said Sri Parasappa Siddappa Talakeri, Sri H.K.  Hegdeyal and others known to you;

                               AND

In the process, committed various irregularities as  more fully described in the statement of  imputations of misconduct mentioned herein below:

By your above acts, you failed to discharge your  duties with utmost integrity, honesty, devotion and  diligence and exhibited conduct unbecoming of a  Bank Officer and thereby violated Regulation  No.3(1) of the Syndicate Bank Officer Employees’  (Conduct) Regulations, 1976.            

               The Enquiry Officer was appointed.  He conducted  the enquiry after giving an opportunity to the respondent,  submitted its report on 3.7.1989 finding the respondent guilty  of the charges proved.  The Disciplinary Authority accepted the  report of the Enquiry Officer and by the impugned order dated  29.7.1989 removed the respondent from the service of the  bank with immediate effect.  However, the same shall not be  the disqualification for future employment.   Thereafter, the  respondent filed an appeal before the Appellate Authority.  The  Appellate Authority gave the respondent personal hearing on  25.04.1991.  In the appeal, the respondent submitted that he  did not want to make any oral submission but submitted a  written representation dated 25.4.1991 along with additional  appeal filed on 2.9.1989.  After considering the appeal filed by  the respondent, the Appellate Authority dismissed the appeal  by an order dated 29.4.1991 confirming the punishment of  removal imposed by the Disciplinary Authority.  Aggrieved  thereby, the respondent filed a Writ Petition No. 12594 of 1991  challenging the removal of the respondent from the bank  service.   The learned Single Judge amongst others held that it  is not a fit case for interference in so far as the finding on the  charges framed against the petitioner (respondent herein).   However, the learned single Judge was of the opinion that  punishment imposed on the respondent was disproportionate  to the gravity of the charge proved.  The learned single Judge  was also of the opinion that the respondent was placed under  suspension from 19.7.1989 and he was removed from service  on 29.7.1989 i.e. two days before the date on which the  petitioner (respondent herein) would have attained the  superannuation age in the normal course.  The petitioner  (respondent herein) served the appellant’s bank for more than

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33 years and except this disciplinary proceeding there was no  other allegation of misconduct against the petitioner  (respondent herein) while working in the bank.  The petitioner  (respondent herein) was removed from the bank service just  two days before he completed the age of 58 years and during  his old age, he must necessarily have something to maintain  himself and his family members.   On these compassionate  grounds, the learned single Judge converted the order of  removal from service into compulsorily retirement.           In our view, this is no ground for converting the  order of removal from service into compulsorily retirement.  On  the question of punishment being disproportionate to the  charges framed and proved, we are of the view that the  charges framed and proved are grievous in nature, which  would normally attract removal from service, if such charges  were proved.  We are also of the view that sentiments and  compassion have no role to play in such a situation when the  gravity of misconduct such as this has been found well proved  against the respondent.                        Against the order of the learned Single Judge,  curiously enough, the respondent preferred Writ Appeal No.  7997 of 1999 and the appellants herein filed cross objections.   Both the appeal and the cross-objections were disposed by a  common order by the Division Bench after re-appreciating the  evidence allowing the writ appeal by setting aside the order  dated 14.6.1999 passed by the learned Single Judge in Writ  Petition No. 12594 of 1991 and quashed the order of dismissal  dated 29.7.1989.  Hence the present appeal by special leave.                  In the writ appeal, the learned Division bench  framed the following issues:- (i)     Whether charges framed against the  appellant-delinquent officer are  vague? (ii)    Whether non-supply of the  documents sought by the appellant  vitiated the enquiry and the action  of the management of the  respondent Bank in removing the  appellant from service as a  disciplinary measure? (iii)   Whether placing reliance on  statements previously recorded by  CBI by the Enquiry Officer has  vitiated the enquiry? (iv)    Whether the findings of fact  recorded by the Enquiry Officer are  perverse for want of legal evidence?  

               The Division Bench decided issue Nos. 1, 3 and 4  against the respondent herein.  The Division Bench, however,  decided issue No.2 against the appellant herein, that non- supply of documents sought by the appellant vitiated the  inquiry resulting the removal of the respondent from the bank  service.                     The sole question, therefore, to be determined is,  whether non-supply of documents, which did not form part of  chargesheet and were not relied upon by the prosecution  prejudice the delinquent officer resulting in vitiating the  enquiry proceedings.                    During the proceeding the management has  produced oral evidence of 24 witnesses and documentary  evidence by producing 218 documents, the fact which is not  denied by the delinquent officer.                  It was the specific case of the appellants that the  documents sought by the delinquent officer which were

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relevant for the purpose of enquiry and which were part of the  charges were supplied to the delinquent officer, but the  documents which were not supplied to the delinquent officer  were those on which the prosecution either did not rely or  which did not form part of the charges.                   Before we examine the issue No.2 we may at this  stage quote the finding of the learned Division Bench in  paragraph 16 of the judgment: "The reasons stated by the management of the Bank  not to supply copies of certain documents sought by  the appellant, in our considered opinion, are totally  irrational and untenable.  The documents in respect  of which privilege of confidentiality was claimed by  the Bank’s Management, by no stretch of  imagination, could be regarded as privileged  documents or confidential in nature.  Therefore, we  do not think that the Bank’s Management was  justified and acted legally in refusing to furnish the  copies of the documents sought by the appellant.  It  is our considered opinion that all the documents  sought by the appellant-delinquent are either those  documents on the basis of which the disciplinary  authority has framed the charges and the  documents on which the disciplinary authority has  placed reliance to prove those charges or the  documents though, they are not the basis for  framing the charges nor those of which the  disciplinary authority places reliance to prove the  charges against the appellant delinquent, but, they  would have aided the appellant-delinquent, to  effectively cross-examine the witnesses of the  disciplinary authority."     

                                                       (emphasis supplied)

     The High Court’s finding, in our view, is perverse.   The High Court having come to the conclusion that the  documents sought by the respondent are not the basis for  framing the charges nor those on which the Disciplinary  Authority placed any reliance to prove the charges against the  delinquent officer held that non-supply of those documents  sought by the delinquent officer prejudiced his case and  resulted in vitiating the proceedings.                    From the record, it appears that the delinquent  officer sought for supply of certain documents.  The twelve  documents, which formed part of the charges and were relied  upon by the Inquiry Officer, were supplied to him by a letter  dated 11th August, 1987.  Two documents were produced  during the enquiry for cross-examination of the witnesses.   This fact was admitted by the counsel for the respondent at  the time of hearing.   Rest of the documents were not supplied  to the delinquent officer stating that they had no relevancy to  the enquiry, meaning thereby that neither they form part of  the charges nor were relied upon by the prosecution during  the course of enquiry.                   Apart, from this the delinquent officer did not deny  that the prosecution relied upon 218 documents and also 24  witnesses and the delinquent officer had an opportunity to  cross examine them and also examine the documents on basis  of which the witnesses were cross-examined in the course of  enquiry.  The Enquiry Officer as stated earlier submitted a  detailed report in which the delinquent officer did not deny at  all, either by oral or written arguments, that he did not receive  the cash from the cashier which was meant for the loanee.    Learned counsel for the respondent vehemently urged that

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although the documents may not form part of the charges or  be relied upon by the prosecution in the course of enquiry,  denial of the same would prejudice the delinquent’s case  because denial of contemporary documents deprive the right of  the delinquent to set up an effective defence.  We are unable to  countenance such submissions at all, that the documents  which do not form part of the charges or are relied upon by the  prosecution during the course of enquiry, non-supply of which  would cause any prejudice to the delinquent officer.                 In the case of Krishna Chandra Tandon   Vs.  The  Union of India, (1974) 4 SCC 374, it is held in paragraph 16  as under:- "Mr.Hardy next contended that the appellant  had really no reasonable opportunity to defend  himself and in this connection he invited our  attention to some of the points connected with  the enquiry with which we have now to deal.  It  was first contended that inspection of relevant  records and copies of documents were not  granted to him.  The High Court has dealt with  the matter and found that there was no  substance in the complaint.  All that Mr.  Hardy was able to point out to us was that the  reports received by the Commission of Income- tax from his departmental subordinates before  the charge-sheet was served on the appellant  had not been made available to the appellant.   It appears that on complaints being received  about his work the Commission of Income-tax  had asked the Inspecting Assistant  Commissioner Shri R.N. Srivastava to make a  report.  He made a report.  It is obvious that  the appellant was not entitled to a copy of the  report made by Mr. Srivastava or any other  officer unless the enquiry officer relied on  these reports.  It is very necessary for an  authority which orders an enquiry to be  satisfied that there are prima facie grounds for  holding a disciplinary enquiry and, therefore,  before he makes up his mind he will either  himself investigate or direct his subordinates  to investigate in the matter and it is only after  he receives the result of these investigations  that he can decide as to whether disciplinary  action is called for or not.  Therefore, these  documents of the nature of inter-departmental  communications between officers preliminary  to the holding of enquiry have really no  importance unless the Enquiry Officer wants  to rely on them for his conclusions.  In that  case it would only be right that copes of the  same should be given to the delinquent.  It is  not the case here that either the Enquiry  Officer or the Commissioner of Income-tax  relied on the report of Shri R.N.Srivastava or  any other officer for his finding against the  appellant.  Therefore, there is no substance in  this submission."                   

               In the case of Chandrama Tewari   vs.  Union of  India, 1987 (Supp.) SCC 518 at scc p.521 it was held by this  Court: "However, it is not necessary that each and  every document must be supplied to the

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delinquent government servant facing the  charges, instead only material and relevant  documents are necessary to be supplied to  him.  If a document even though mentioned in  the memo of charges is not relevant to the  charges or if it is not referred to or relied up by  the enquiry officer or the punishing authority  in holding the charges proved against the  government servant, no exception can be taken  to the validity of the proceedings or the order.   If the document is not used against the party  charged the ground of violation of principles of  natural justice cannot successfully be raised.   The violation of principles of natural justice  arises only when a document, copy of which  may not have been supplied to the party  charged when demanded is used in recoding  finding of guilt against him.  On a careful  consideration of the authorities cited on behalf  of the appellant we find that the obligation to  supply copies of a document is confined only  to material and relevant documents and the  enquiry would be vitiated only if the non- supply of material and relevant documents  when demanded may have caused prejudice to  the delinquent officer."                 

                                In our view, non-supply of documents on which the  Enquiry Officer does not rely during the course of enquiry does  not create any prejudice to the delinquent.   It is only those  documents, which are relied upon by the Enquiry Officer to  arrive at his conclusion, the non-supply of which would cause  prejudice being violative of principles of natural justice.  Even  then, the non-supply of those documents prejudice the case of  delinquent officer must be established by the delinquent  officer.  It is well settled law that the doctrine of principles of  natural justice are not embodied rules.  It cannot be put in a  straitjacket formula.  It depends upon the facts and  circumstances of each case.  To sustain the allegation of  violation of principles of natural justice, one must establish  that prejudice has been caused to him for non-observance of  principles of natural justice.                       Learned counsel for the respondent has cited the  following rulings of this Court:                 Committee of Management, Kisan Degree  College     vs.  Shambhu Saran Pandey, (1995) 1 SCC 404,  wherein it has been held by this Court that denial of  an  opportunity to inspect documents at the time of final hearing  is erroneous procedure and in violation of principles of natural  justice.  This is not the fact of the case at hand.              

               State of U.P.   vs.  Shatrughan Lal, (1998) 6 SCC  651 wherein this Court held that where the charge-sheet is  issued and the documents which are proposed to be utilized  against that person are indicated in the charge-sheet but  copies thereof are not supplied to him in spite of his request  and at the same time he is called upon to submit his reply  cannot constitute an effective opportunity to defend  The  aforesaid decision is of no help to the facts of the respondent’s  case.                    Lastly, it is contended by the counsel for the  respondent, that the respondent has put in 33 years of service  and he was dismissed from service just two days prior to the  age of superannuation, therefore, this Court may consider the

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entitlement of pension and gratuity in spite of removal from  service.  In this connection, learned counsel has cited the  decision of this Court in Ganesh Santa Ram Sirur   vs.  State  Bank of India  (2005) 1 SCC 13 where  Dr.Justice  A.R.  Lakshmanan speaking for the Bench although upholding the  dismissal of the appeal held that in the peculiar facts and  circumstances the appellant will be entitled to full pension and  gratuity irrespective of his total period of service.  In that case  the officer had sanctioned loan to his wife.  However, having  realised the mistake later he tried to salvage the same by not  encashing the draft issued in the name of his wife and the  draft was not encashed.  In those peculiar facts and  circumstances since no loss was caused to the bank this  Court took that view.  The decision in Ganesh Santa Ram  Sirur (supra) is distinguishable from the facts of this case.                  In the view we have taken the order dated  14.6.1999 passed by the learned Single Judge and the order  dated 16.4.2004 passed by the Division Bench are hereby  quashed and set aside.  The order of the Disciplinary Authority  dated 29.7.1989 removing the respondent from service is  restored.  The appeal is allowed with no order as to costs.