IN THE HIGH COURT OF KARNATAKA AT BENGALURU ON THE 29TH DAY OF NOVEMBER 2019 BEFORE THE HON'BLE MR. JUSTICE RAVI MALIMATH AND THE HON'BLE MR. JUSTICE ASHOK S. KINAGI WRIT APPEAL No.5800 OF 2012 (S-DIS) BETWEEN:
SYNDICATE BANK A BODY CONSTITUTED UNDER THE BANKING COMPANIES(ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT 1970, REPRESENTED BY ITS GENERAL MANAGER(P) INDUSTRIAL RELATIONS DIVISION HEAD OFFICE, MANIPAL-576 104. UDUPI DISTRICT NOW REPRESENTED BY ITS SENIOR MANAGER(IR) SRI SHIVARAM SEETARAM SHASTRI ….APPELLANT (BY SRI. SYED KASHIF ALI, ADVOCATE FOR M/S SUNDARASWAMY & RAMDAS, ADVOCATE) AND:
SRI DEVENDRA K JOSHI AGED ABOUT 58 YEARS SON OF LATE SRI KUMUCHANDRA JOSHI EARLIER WORKING AS MIDDLE MANAGEMENT GRADE SCALE III AT SYNDICATE BANK CENTRAL ACCOUNTS OFFICE AHMEDABAD, SINCE ILLEGALLY DISMISSED FROM SERVICE AND RESIDING AT NO.12/140 RAMESHWAR APARTMENT SOLA ROAD, NARANPURA AHMEDABAD-380 063 GUJARAT STATE.
……RESPONDENT (BY SRI. M NAGA PRASANNA, SR. COUNSEL FOR M/S. P.S. RAJA GOPAL ASSOCIATES) THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER PASSED IN THE WRIT PETITION No. 15124 OF 2008 (S-DIS) DATED 26.6.2012.
THIS WRIT APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 05.11.2019, COMING ON FOR PRONOUNCEMENT THIS DAY, ASHOK S. KINAGI J, DELIVERED THE FOLLOWING:
JUDGMENT Aggrieved by the order dated 26.6.2012 passed by the learned Single Judge in W.P.No.15124 of 2008, the respondent-Bank has preferred this appeal.
2. Parties are referred to as they are arrayed in the writ petition.
3. Brief facts of the case are as follows :
The petitioner joined the service of the respondent-bank and was promoted from time to time on merit basis by way of selection. After his promotion to Middle Management Grade Scale-III, petitioner was posted to work as a Senior Branch Manager of Housing Finance branch at Ahmedabad. He joined the said branch as a Senior Manager on 7.8.2002 and was relieved from there on 30.4.2004. Noticing certain flaws committed by the borrowers on the respondent-Bank, the petitioner initiated criminal action against the fraudulent elements by lodging complaints before the police. The respondent-Bank has also filed civil suits for recovery of amounts due to the bank wherever warranted.
4. After transfer of the petitioner, certain motivated, frivolous and false complaints were set up against the petitioner. The vigilance department of the bank ordered for investigation. The Investigation Officer after investigating the matter submitted a report. On the basis of the report, respondent-bank issued a letter dated 6.10.2005 calling upon the petitioner to give explanation for the charges leveled against him. Petitioner submitted his reply on 5.12.2005 to the letter issued by the respondent-bank on 6.10.2005.
5. The respondent-bank issued a charge sheet on 4.5.2006. Petitioner denied the charges leveled against him. The inquiry officer was appointed to conduct inquiry into the matter vide letter dated 29.5.2006. The petitioner vide letter dated 5.9.2006 sought certain documents from the respondent-bank as per Annexure-F. The presenting officer provided certain documents which were available in the bank. The inquiry authority held a preliminary inquiry and that the inquiry was concluded on 28.2.2007. The inquiry authority has opined that issue Nos.1 and 2 are not proved and issue No.3 is proved. The disciplinary authority issued notice to the petitioner to show cause his explanation to the inquiry report. The disciplinary authority disagreeing with the findings on issue Nos.1 and 2 and after considering the reply of the petitioner, passed an order of dismissal of the petitioner from service on 2.8.2007.
6. Petitioner aggrieved by the order of dismissal preferred appeal before the Appellate Authority. The Appellate Authority rejected the appeal and confirmed the order of dismissal.
7. Petitioner aggrieved by the order of dismissal and the order of Appellate Authority preferred W.P.15124 of 2008. The learned Single Judge allowed the writ petition and quashed the order dated 2.8.2007 passed by the Disciplinary Authority and the order dated 3.4.2008 passed by the respondent-Bank and modified the order of dismissal into compulsory retirement and directed the bank to extend the consequential monetary benefit to the petitioner.
8. The respondent-bank aggrieved by the order dated 26.6.12 passed by the learned Single Judge in W.P.No.15124 of 2008 has filed this appeal.
9. Heard arguments of learned counsel for the parties and perused the records.
10. The respondent-Bank after verifying the records has alleged that the petitioner has committed an offence of accepting illegal gratification from the borrowers. Not followed KYC norms and failed to exercise due diligence in verifying the authenticity of the documents submitted by the borrowers by cross checking each documents. In case of salaried borrowers/guarantors, authenticity of the salary certificates/undertaking letters were not certified with the employers and also failed to make independent enquiries to verify the net worth declared by the borrowers/guarantors in ADV-80A by making reference to the documents like ITAO, agreement, RTO registration certificate, chartered accountant certificate, title deeds etc. Petitioner failed to verify source of margin paid by the borrowers and also failed to follow guidelines/circular No.66/02/BC while accepting valuation reports. Two identical flats in the same building in respect of HL 787 and 788 are valued differently at Rs.8.00 lakh and 7.00 lakh. Branch has advanced Rs.6.00 lakh for one flat and Rs.5.25 lakh for another. However for the second flat advanced 0.75 lakh as furniture loan. Allotment letter had fixed Rs.8.54 for both flats. Signature of the valuer differs in both the reports.
11. Petitioner denied all the charges leveled against him and the enquiry was conducted. The inquiry officer has initiated proceedings and framed three issues for consideration which are as follows :
(I) Whether CSOE while working as Senior Branch Manager at Ahmedabad Housing Finance Branch during the period between 7.8.2002 and 30.4.2004 sanctioned housing loans to 15 parties aggregating to Rs. 65,00 lakhs?
(II) Whether the Housing Loans sanctioned by the CSOE were without making pre-sanction appraisals, without exercising due diligence, without adhering KYC norms and thereby unduly accommodated the parties?
(III) Whether the CSOE had demanded and accepted illegal gratification and instigated the prospective customers to manipulate/fabricate required documents?
12. In the inquiry proceedings, the respondent-bank in support of the charges leveled against the petitioner, examined witnesses and got marked the documents. The inquiry officer after considering the evidence on record was of the opinion that issue Nos.1 and 2 are not proved and issue No.3 is proved. Totally out of 9 borrowers, only two were examined i.e. Madhusudan Kalidas MW9 deposed that he did not visit the house of CSOE i.e. the petitioner and he did not remember when he gave the loan application. Ex.M12 was confronted to MW9. He admits the date as mentioned as 1.7.2003 and Ex.M13 was also confronted to him. He admits the date of process and sanction note is on 9.8.2003. He alleges that he has retained the photo copies of the currency notes alleged to have been given to the petitioner and the same has been submitted to the Bank. He admits that he does not have any documentary or personal evidence while handing over Rs.10,000/- to the petitioner. If at all if the petitioner has demanded illegal gratification from MW9, MW9 could have brought it to the notice of the higher authority of the bank but he has not done so.
13. Further, retaining of photostat copies of the currencies alleged to have been given to the petitioner by MW9 creates a doubt in the mind of the court that the respondent-bank has set up this witness against the petitioner.
14. MW10 is one of the borrower who has deposed that he was compelled to pay Rs.24,000/-
to the petitioner and he has reiterated the same as deposed by MW9. The inquiry authority has observed in the report that “it has also come on record that one Mr.Anil was assisting the customers right from the filing of application and arranging of other documents required for availing house loan. Circumstantial evidence do indicate that the said person was a middle man in getting the loan sanctioned to various borrowers and the same was well within the knowledge of CSOE” and further observed as under :
“However, apart from the deposition of the borrower and staff members/witnesses that he used to demand/accept illegal gratification, no other corroborative evidence, evidencing payment to/acceptance of illegal gratification by CSOE has been brought on record to indicate that he demanded/accepted/illegal gratification from the borrower. I therefore, hold that the evidence adduced during the inquiry is not adequate to prove charges fully.”
Further held that the charges of
bank has failed to establish regarding demand/acceptance of illegal gratification by the petitioner. That, as far as process and sanctioning of loan is concerned, the said process of procedure has to be followed in the respondent- bank and it is not a one man decision and that it has to pass through several officers.
15. The respondent-bank in the inquiry proceedings had produced documents and led evidence. But the said documents and evidence, do not establish or indicate that the petitioner had adopted dilatory tactics in the processing/sanctioning or releasing the accepted loan application. The comparative chart with ‘M’ series exhibits, submitted as Annexures of 15 HLs, indicate that most of the loans were sanctioned on the date of its processing itself and released on the same day or immediately on the date of execution of the loan documents after completion of all the formalities like submission of collateral security, informing of commencement of repairing works, bringing all the guarantors and joint borrowers on the day of release to the branch, obtaining title clearance report and valuation report from the panel advocate and valuer. The petitioner has followed KYC norms in all the cases. The respondent-bank has not produced single incident of non fulfilling the norms in all the cases. Further, the respondent-Bank has not cited a single incident of non-fulfilling the KYC norms by the borrowers/guarantors. The respondent-bank has also failed to examine other borrowers, who have alleged to have given complaints. Due to non examination of other borrowers, adverse inference has to be drawn against the respondent-bank for withholding material witnesses. The Disciplinary Authority disagreeing with the findings of the inquiry officer, merely relying on the statements of MWs 9 and 10 who are the set up witnesses of the respondent-bank, has passed an order of dismissal.
16. The Disciplinary Authority has not assigned proper reasons to disagree with the findings of the inquiry authority. The order of dismissal is arbitrary and illegal. From the perusal of records, it is a clear cut case of victimization. The respondent-bank has victimized the petitioner on false complaint alleged to have been given by the borrowers.
17. The alleged action of the petitioner has not caused any financial loss to the bank. At the most it can be said to be irregular but not illegal. The learned Single Judge considering the length of service and unblemished past record of the petitioner and the part of charge is not proved, held that the penalty of dismissal is on the higher side and converted into compulsory retirement. The learned Single Judge was justified in modifying the order of dismissal into one of compulsory retirement. The respondent-Bank has not made out any grounds to interfere with the impugned order. We also do not find any grounds to interfere with the impugned order. Hence, we decline to interfere with the impugned order.
In view of the aforesaid facts, we proceed to pass the following :
ORDER Writ appeal is dismissed.
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JUDGE Sd/-
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