Hon'ble Mrs. Vijay Lakshmi,J.
Heard Sri S.N.Tiwari, learned counsel for the petitioner and Sri S.K.Kakkar, learned counsel appearing on behalf of the respondents.
By means of the present writ petition, the petitioner has challenged the orders dated 26.11.2007, annexure-5 to the writ petition, order dated 20.11.2008, annexure-9 to the writ petition, order dated 07.01.2009, annexure-10 to the writ petition and further order dated 25.04.2009 passed by the reviewing authority. By the order dated 26.11.2007, the petitioner has been awarded major penalty of compulsory retirement in terms of Regulation 4(h) of Punjab National Bank Officers and Employees' (Discipline and Appeal) Regulation, 1977 (hereinafter referred to as "Regulation, 1977"). The order of punishment has been confirmed in appeal and by the reviewing authority.
The enquiry proceeding has been initiated in respect of the various charges when the petitioner was posted as Branch Manager, Gonda. The first charge sheet was submitted on 05.02.2007 and the second charge sheet was submitted on 14.08.2007. In the first charge sheet two charges have been levelled, , which are as follows:
"Charge No.1.- He indulged in violation of bank/Government guidelines and did not conduct proper pre-sanction appraisal while sanctioning loans to various borrowers and failed to conduct proper post sanction follow up/control in the same, as a result banks' funds and interest have been put to jeopardy and outstanding in the loan accounts if proving difficult of recovery.
Charge No.2:- He did not ensure lodgment and safe upkeep of cheques submitted by customers for collection and made/passed various unauthorised transactions to conceal the same, as a result banks' interest has been put to jeopardy and it may suffer a financial loss.
In the second charge sheet three charges have been levelled, which are as follows:
Charge No.3:- He misused his official position and sanctioned/disbursed credit facilities to large number of borrowers ignoring the fact that the Senior Regional Manager suspended his loaning powers.
Charge No.4:- He sanctioned/disbursed credit facilities in favour of various borrowers without proper pre-sanction appraisal and failed to exercise effective post sanction follow-up/control in the same, as a result security in various loan accounts has been found to be depleted/missing and outstanding is proving difficult of recovery.
Charge No.5:- He put banks' interest to jeopardy by not ensuring compliance of laid down guidelines in day to day working of the branch viz adjustment of ODD entries, incurred expenses beyond his vested powers, timely balancing of important heads and non conduction of morning checking in as much as to conceal the facts he did not seek confirmation of excess expenditure made and submitted false MMC."
In the aforesaid charge sheets on the basis of charges, it was alleged that the petitioner failed to discharge his duties with utmost integrity, devotion and diligence, which constitute misconduct in terms of Regular 3(1) read with Regulation 24 of Regulation, 1977. The petitioner filed the reply to the aforesaid charge sheets.
In the reply, in sum and substance, the petitioner has submitted that on the verbal instructions of Senior Regional Manager, Faizabad the loans have been sanctioned. He admitted that there was procedural lapses on his part and due to shortage of staff, the postings have not been done within the stipulated time. The enquiry officer submitted the enquiry report on 25.10.2007 to the disciplinary authority and found all the charges proved. In respect of all the charges, the following findings have been recorded :
FINDINGS ON ARTICLE I On the basis of evidences brought on the records of Enquiry and the arguments put forth by PO and CO as detailed by me herein before it is established that CO indulged in violation of bank/government guidelines and did not conduct proper pre-sanction appraisal by sanctioning loans to various borrowers and failed to conduct proper post sanction follow up/control in the same. Thus the Article I is proved.
FINDINGS ON ARTICLE II On the basis of evidences brought on the record of enquiry and the arguments put forth by PO & CO as detailed by me hereinbefore it is established that the CO did not ensure lodgement and safe upkeep of cheques submitted by customers for collection and made/passed various unauthorized transactions to conceal the same, as a result bank's interest has been put to jeopardy and it may suffer a financial loss. Thus the Article II is proved.
FINDINGS ON ARTICLE III On the basis of evidences brought on records of enquiry and the arguments put forth by PO & Co as detailed by me hereinbefore it is established that the CO misused his official position and sanctioned/disbursed credit facilities to large number of borrowers ignoring the fact that the Sr. Regional Manager suspended his loaning powers. Thus Article III is proved.
FINDINGS ON ARTICLE IV On the basis of evidences brought on the records of enquiry and the arguments put forth by PO & CO as detailed by me hereinbefore it is established that the CO sanctioned/disbursed credit facilities in favour of various borrowers without proper pre sanction appraisal and failed to exercise effective post sanction follow up/control in the same, as a result security in various loan a/cs has been found to be depleted/missing and outstanding is proving difficult of recovery. Thus the Article IV is proved.
FINDINGS ON ARTICLE V On the basis of evidences brought on the records of enquiry and the arguments put forth by PO & CO as detailed by me hereinbefore it is established that the CO put bank's interest to jeopardy by not ensuing compliance of laid down guidelines in day to day working of the branch viz. Adjustment of ODD entries, incurred expenses beyond his vested powers, timely balanacing of important heads and non conduction of morning checking in as much as to conceal the facts he did not seek confirmation of excess expenditure made and submitted false MMCs. Therefore Article V is proved.
On the receipt of the enquiry report, the disciplinary authority has issued the show cause notice along with the copy of the enquiry report to the petitioner. The petitioner filed the reply. The disciplinary authority after consideration of the reply of the petitioner awarded the major penalty of compulsory retirement. The findings of the disciplinary authority are as follows:
"I have gone through the charge sheet dated 05.02.2007 and Supplementary charge sheet dated 14.08.2007 served upon Shri A.K.Baranwal, Enquiry Officer's report dated 25.10.2007, his submissions dated 07.11.2007 thereon and entire records of the case, I observe that the Charged Officer misused his official position and sanctioned/disbursed credit facilities to large number of borrowers ignoring the fact that the Sr. Regional Manager suspended his loaning powers, indulged in violation of bank/government's guidelines, failed to ensure/conduct proper pre-sanction appraisal and in some cases did not obtain recommendations thereon as also failed to conduct proper post sanction follow up/control of the loan accounts. Further, he did not ensure lodgement and safe upkeep of cheques submitted by customers for collection and made/passed various unauthorised transactions to conceal the same and also put bank's interest to jeopardy by not ensuring compliance of laid down guidelines in day to day working of the branch viz. Adjustment of ODD entries, incurred expenses beyond his vested powers, not ensured timely balancing of important heads and non conduction of morning checking in as much as to conceal the facts he did not seek confirmation of excess expenditure made and submitted false MMC.
His contention that he did not indulge in violation of Bank/Govt. Guidelines and did conduct proper pre-sanction appraisal while sanctioning the loan to various borrowers and at no stage failed to conduct proper post-sanction follow-up/control in as much as did every thing in respect of nine points mentioned in the charge sheet is not tenable as it is evident from Enquiry Record (E:3/1/18, E:3/13/10, E:3/14/12, E:3/15/22, E:3/19/49, E:3/21/16, DE: 3/25/2) that while working at BO: Siktaha the charged officer has not obtained any recommendation before sanctioning the loan and he failed to verify the securities (DE:3/1/3 to DE:3/1/5, DE:3/5/1 to DE:3/5/4) he also failed to verify the enduse (DE:3/13/1, DE:3/14/1 to DE:3/14/4, DE:3/14/8) and the same was confirmed by MW-1 in his deposition (QA 6, 7, 8 PP 27, 28 register 1).
It is also proved during the Enquiry proceedings that the CO disbursed the loan to respective borrowers by crediting directly their accounts (DE:3/9/4, DE:3/11/11, E:3/27/4 to E:3/27/6) which is confirmed by MW-1 (Qa 14, 17 & 19 PP 29 register 1), not only this he also failed to obtain bills for purchase of Primary securities and not created the securities (E:3/27/9, E:3/27/4, E:3/26/30 & E:3/26/31) MW-1 has categorically confirmed during his examination in chief (Qa 20, 21 PP 29, 30 register 1).
His contention that after receiving the cheques the same was handed over to ODBC Incharge is not tenable as the charged officer while working at E/C Shohratgarh U/B Parsa has not ensured lodgement and safe upkeep of the cheques submitted by the customers for collection and made unauthorised transactions (E:3/41 to E:3/56) and further to conceal the same the charged officer has unauthorisedly debited suspense account and credited the CA No.4 and SF 1499 through agency and on 14.09.06, the charged officer debited ODD head of E/C with the said amoutn and adjusted main suspense account and after regular follow-up from Regional Officer the ODD of E/C for the said amount was adjusted by debiting, the respective SF and CA without having any debit authority from the respective account holders. The MW-3 in his deposition at PP32 to 33 (2nd Register) QA 2 to 7 has deposed that the CO has not sent the cheques amounting to Rs.41780.99 and Rs.8156.00 drawn on IDBI Varanasi and SBI Balrampur respectively for collection in SF a/c no.1499 and CA no.4 and mere shifting of responsibilities to others he will not be absolved from the charge.
His contention that this charge is product of confused instructions of the Regional Office, Faizabad to sanctioned loan, to sanctioned loan as instructions given in credit camp. Not to sanctioned loan by him from the receipt till the instructions till the verbal instructions of the SRM Faizabad in credit camp held on 12.1.04 & 13.1.04 is not maintainable as it is established on the basis of Enquiry record that the Charged Officer while working at BO: Mahali has misused his official position and sanctioned/disbursed credit facilities to large number of borrowers ignoring the fact that Sr. Regional Manager has restricted him to exercise his loaning powers except sanctioning of loans against bank deposits/govt. Deposit staff loan (E.17) it was also desired that the application/cases under Govt. Sponsored schemes, KCC, or under SHG were to be referred to RO for their approval, but the Charged Officer in utter violation of instructions of Sr. Regional Manager sanctioned/disbursed various credit facilities during the period 04.1.2004 to 12.11.2005 (ME.1/1 to ME.1/14, EM.3/2, ME4/4, ME.13 & ME14). The MW-5 has categorically confirmed the same in his deposition (QA 4 PP16, 17 register 2). He further deposed that charged officer inspite of restrictions of loaning powers sanctioned loans in 53 borrowal accounts (QA PP17 register 2).
His contention that this charge is the product of failure of the computer, levy of periodical intt. And wrong extraction of balancing and in this way the a/c vide S.No.2 to 5 are within DP and within discretionary power as well as levy of intt. In S.N.4 there was wrong extraction of Balance also, which was corrected and the outstanding were brought down 194726 and all other a/c including S.No.4 but except S.No.1 were brought under limit soon stands no good as the charged officer allowed overdrawings (ME.3/4, ME.16/1 to 16/37, ME.16/4 to 16/50) beyond his vested powers and has not moved the same to competent authority for confirmation of his action. MW.5 has also confirm the same (QA 7, 8 PP 17 register 2) and also allowed clean overdrafts in the accounts (E.653/6, E.53/1 and E.53/8). The MW-5 has also confirmed in his deposition at PP 22 (2nd Register) QA 27 and the charged officer has brought nothing to the record in support of his contention during the enquiry proceedings.
It is evident from the records that Charged Officer sanctioned/disbursed the credit facilities in favour of various borrowers without proper pre-sanction appraisal and against bank guidelines as he has not obtained recommendation of officers or got it recommended by clerk though the officers were posted in the branch (E.37/1 to E.37/12, E.39/1 to E.39/10, ME.17/1 to ME.17/29). The MW-5 has deposed the same (QA 12, PP 18 register 2), as such his contention that the branch was either not having the IInd man or he was on leave or engaged in other work the recommendation was not possible is not tenable. It is also proved during the enquiry proceedings on the basis of records brought that charged officer also failed to exercise affective post sanction follow-up/control in the same as evident from records (ME.3/9, ME.5/1 to ME.5/9, ME.6/1 to ME.6/3) that charged officer failed to ensure creation of equitable mortgage and ME.3/14 & ME.9 reveals that he had not obtained the audited balance sheets from the borrowers, while sanctioning limits of Rs.10.00 lacs & above. The MW-5 has confirmed the same (QA 16, 17 PP 20, 21 register 2). The MW-5 has further deposed that (QA 3 PP 15 register 2) that charged officer failed to verify the end use and to create securities in loan accounts (ME.3/15, ME.3/16, ME.2/1, ME.2/3, DE.7, ME.15/1 to 15/18). He further allowed limitation to expire in 50 borrowal accounts (ME.3/18 & ME.3/19) and also not ensured periodical checking of tractor/vehicle accounts (ME.3/17). The MW-5 has confirmed the same during examination in Chief (QA 23 PP 21 register 2).
His contention that he did not submit wrong information as the relative MMC was submitted after tallying the Balances upto date and even today also all the Balances has got tallied as mentioned in the MMC and the allotment of morning checking of these heads was assigned to various officers and he ensured compliances from all is not maintainable as the Charged officer concealed the facts from the higher authorities in respect of balancing of different heads of the branch by submitting wrong confirmations through MMCs (E.51/1 to E.51/5) whereas MW-5 in his deposition has categorically confirmed that balances were untallied (QA 24 PP 21, 22 register 2). It is also established that the charged officer did not ensure morning checking of SF, CA, OD and long books in branch as well as at extension counter (ME.3/3).
Further, the charged officer did not ensure adjustment of ODD entries and a large number of ODD were outstanding as evident from E.3/20, E.52/1 to E.52/2 and the deposition of MW-5 (QA 28 PP 23 IInd register). Further, it is also evident from ME.4/3 and DE.15/1 to DE.15/13 that the charged officer has incurred expenditure beyond his vested powers and he did not move to competent authority for confirmation of his action MW-5 in his deposition at PP 22 (2nd register) QA 25 has confirmed the same.
In view of the above, I do not find the submissions of the charged officer as tenable. I agree with the findings of the Enquiry Officer and hold Sri A.K.Baranwal guilty of the proven charges, which clearly cast a doubt on his motives and reflect adversely upon his integrity. Therefore, considering the facts of the case as also his past tract record dispassionately, I decide to impose upon Shri A.K.Baranwal a major penalty of "Compulsory Retirement" in terms of Regulation-4(h) of Punjab National Bank Officer Employees' (Discipline & Appeal) Regulations, 1977.
I order accordingly."
Against the order of disciplinary authority, the petitioner filed appeal under Clause 17(1) of the Regulation, 1977. the appellate authority vide order dated 11.02.2008 dismissed the appeal. The petitioner filed review application, which has been rejected by the reviewing authority vide order dated 25.04.2009.
Learned counsel for the petitioner submitted that the petitioner has sanctioned the loans, which are mainly agricultural loans on the verbal instructions of Senior Regional Manager, Faizabad on completion of various formalities. Therefore, the sanction loans were not contrary to his authority. He further submitted that various alleged irregularities have been explained in the reply. The charges are not of such nature, which leads to the major penalty. It is the case of minor punishment.
Sri S.K.Kakkar, learned counsel for the respondents submitted that vide letter dated 13.09.2003, the Senior Regional Manager, Faizabad has suspended the powers of the petitioner to sanction the loan except the loan against the deposit. However, in uttter disregard to such instructions of the Senior Regional Manager, Faizabad, the petitioner sanctioned the credit facility during the period 04.11.2004 to 12.11.2005 to a large number of borrowers, fifty three in numbers. The details of such loans are at page 38 of the writ petition. The petitioner has allowed the over drawings in CC accounts much beyond to his vested power and did not seek confirmation of his action from competent authority, the details of such five accounts are mentioned at page 39 of the writ petition. The petitioner allowed availment of clean over drafts in Saving Fund Accounts (in 25 accounts) and did not ensure adjustment of overdraft amount within a reasonable time as they were outstanding as on date of Inspection report, i.e. 03.02.2006, the details of which are at page 40 of the writ petition. He did not ensure proper scrutiny of financial data and assessment of PBF while sanctioning the loan to borrowers, the details of which are at page 40 of the writ petition. He disbursed the KCC accounts without recommendation/sanction in utter violation of bank's guidelines. He sanctioned credit facilities to the KCC borrowers (15 cases) without recommendation/sanction in utter violation of bank's guidelines, the details of which are at page 41 of the writ petition. He did not ensure creation of equitable mortgage of IP through title deed deposited by the borrowers as collateral security as a result the bank's interest is at stake, the details of such are at page 42 and 43 of the writ petition. He did not ensure obtaining title deeds & creation of equitable mortgage of IP taken as collateral securities in loan accounts, the details of which are at page 44 of the writ petition. He failed to ensure creation of mortgage of agriculture land with Sub-Registrar/Revenue Authorities in agriculture loan accounts and thus put bank's interest in jeopardy, the details of which are at page 45 of the writ petition. He did not obtain Joint Registration Certificate in respect of vehicle/tractor loan accounts, the details of which are at page 45 of the writ petition. He, in violation of bank guidelines did not ensure timely renewal of CC limits (23 accounts) on due dates. The details of which are at page 46 of the writ petition. He did not ensure to take audited balance sheet from the borrowers while sanctioning limits of Rs.10 lakhs and above. He did not ensure verification of end-use of the Bank's fund and also not obtained bills/receipts. The details of which are at page 47 of the writ petition. He did not ensure creation of securities in the loan accounts, as a result securities are not available/depleted, the details of which are at page 48 of the writ petition. He did not ensure periodical checking of tractor/vehicle loan accounts (23 accounts) and also PNB 551 not held in record. Limitation expired in various loan accounts (50 accounts) but he did not ensure renewal of the same. He failed to ensure proper post sanction follow up in the various loan accounts (44 accounts) above Rs.1 lakh as a result, they are running irregular. He did not ensure compliance of Bank's laid down guidelines in adjustment of ODD entries and thus put bank's interest in jeopardy. He incurred expenditure under various heads beyond his vested powers in utter violation of bank's guidelines and did not seek confirmation of his action from competent authority. He concealed the facts from higher authorities with regard to balancing of different heads of the branch by submitting wrong confirmation through MMC even though the balances were not tallied. He did not ensure morning checking of SF, CA, CD, OD and long books in branch as well as EC Utoria as per bank guidelines. The details of which are mentioned in supplementary charge sheet. He submitted that the charges were of very serious in nature and being the Branch Manager he was supposed to follow the instruction of Senior Regional Manager though he did not had a right to sanction the loan except the loan against the deposit but he sanctioned the other type of loans exceeding his powers. Such act of the petitioner was in the nature of misconduct and, therefore, the petitioner has rightly awarded the punishment of compulsory retirement. In reply the petitioner has not disputed that his power to sanction the loan has been suspended by letter dated 13.09.2003 issued by Senior Regional Manager.
We have considered the rival submission and perused the record.
The petitioner was Branch Manager assigned with certain duties and obligations. A bank officer is required to exercise higher standards of honesty and integrity. He deals with the 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. It is not in dispute that vide letter dated 13.09.2003 issued by Senior Regional Manager, Faizabad, he has suspended the power of the petitioner to sanction the loan except the loan against the deposit. Despite the aforesaid order of Senior Regional Manager, the petitioner has sanctioned the loans. The plea of the petitioner that he has sanctioned loans on the verbal instructions of Senior Regional Manager, Faizabad, which the petitioner is not able to substantiate, can not be accepted. To substantiate such plea, the petitioner ought to have made request to the enquiry officer to cross examine Senior Regional Manager, Faizabad but the same has not been done. Therefore, the plea of the petitioner that on the verbal instructions of Senior Regional Manager, Faizabad loans have been sanctioned, can not be accepted. In reply, the petitioner has admitted the irregularities. Irregularities are referred in the impugned order and pointed out by the learned counsel for the respondents.
In the case of Regional Manager, U.P.S.R.T.C. Vs. Hoti Lal, reported in (2003) 3 SCC, 605, the Apex Court has observed that 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, the highest degree of integrity and trustworthiness is a must and unexceptionable.
In the case of Director General, RPF and others Vs. Ch. Sai Babu, reported in (2003) 4 SCC, 331, the Apex Court held as follows:
"Normally, the punishment imposed by a disciplinary authority should not be disturbed by the High Court or a tribunal except in appropriate cases that too only after reaching a conclusion that the punishment imposed is grossly or shockingly disproportionate, after examining all the relevant factors including the nature of charges proved against, the past conduct, penalty imposed earlier, the nature of duties assigned having due regard to their sensitiveness, exactness expected of an discipline required to be maintained, and the department/establishment in which the delinquent person concerned works."
In the case of Chairman and Managing Director, United Commercial Bank and others Vs. P.C.Kakkar, reported in (2003) 4 SCC, 364 the Apex Court, while dealing with the punishment awarded to the bank officer observed as follows "A bank officer is required to exercise higher standards of honesty and integrity. He deals with the 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, reported in (1996) 9 SCC, 69 : 1996 SCC (L&S) 1194, 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."
In the case of Commandant, 22nd Battalion, Central Reserve Police Force, Srinagar, c/o 56/APO and others Vs. Surinder Kumar, reported in (2011) 10 SCC, 244, the Apex Court held as follows:
"Moreover, it appears from the impugned order that the High Court has in exercise of power of judicial review interfered with the punishment of dismissal on the ground that it was disproportionate. In Union of India Vs. R.K.Sharma, reported in (2001) 9 SCC, 592, this Court has taken the view that the punishment should not be merely disproportionate but should be strikingly disproportionate to warrant interference by the High Court under Article 226 of the Constitution and it was only in an extreme case, where on the face of it there is perversity or irrationality that there can be judicial review under Article 226 or 227 or under Article 32 of the Constitution. Since this is not one of those cases where the punishment of dismissal was strikingly disproportionate or where on the face of it there was perversity or irrationality, the Division Bench of the High Court ought not to have interfered with the order of dismissal from service."
In the case of State Bank of Mysore and others Vs. M.C.Krishanappa, reported in (2011) 7 SCC, 325, the Apex Court has held that "it is well settled that punishment is primarily a function of management and the Courts rarely interfere with the quantum of punishment.
In view of the above, we are of the view that the findings recorded by the disciplinary authority and upheld by the appellate authority and reviewing authority are findings of fact, based on material on record. They are neither arbitrary nor perverse. It is settled principle of law that the scope of judicial review in the disciplinary proceedings, under Article 226 of the Constitution of India is very limited. The order can be reviewed only in a situation where the findings are based on no material and are perverse and arbitrary. We do not find that any such case has been made out by the petitioner, which requires interference by this Court.
Learned counsel for the petitioner submitted that post retiral benefits may be directed to be paid.
There is nothing on record to show that the post retiral benefits have been denied to the petitioner. Therefore, it does not need any adjudication and direction from the Court.
The writ petition is devoid of merit and is, accordingly dismissed.
Dt.19.02.2014.
R./