1

IN THE GAUHATI HIGH COURT

(THE HIGH COURT OF ASSAM, NAGALAND, MIZORAM

AND ARUNACHAL PRADESH)

WP(C) NO.413/2008

1. Sri Kailash Ch Sarma,

S/o Late Rajani Kanta Sarma,

Resident of Krishnanagar,

Chandmari,

Guwahati-3

District- Kamrup, Assam

………………………… Petitioner

- Versus-

1. Punjab National Bank,

Represented by their Chairman,

Bhikaji Complex,

Head Office- New Delhi.

2. The Zonal Manager,

Punjab National Bank,

Disciplinary Action Cell

North East Zonal Office,

Bhangagarh,

Guwahati-5.

3. The General Manager,

Appellate Authority,

Punjab National Bank,

2

Human Resource Development Division,

Bhikaji Complex,

Head Office- New Delhi.

…………………… Respondents

BEFORE

HON’BLE MR. JUSTICE B.K. SHARMA

For the petitioner : Mr. D.K. Das, Sr. Adv

Ms. J. Buragohain, Adv

For the respondents : Ms. S. Sarmah, learned Standing Counsel

Punjab National Bank

Date of hearing : 30.10.2014

Date of Judgment : .11.2014

JUDGMENT AND ORDER (CAV)

1. By means of this writ petition filed on 01.02.2008, the

petitioner has challenged the Annexure-X order dated 27.12.2006,

by which, pursuant to a departmental proceeding, the disciplinary

authority imposed on him penalty of compulsory retirement in terms

of Regulation 4 (h) of Punjab National Bank Officer Employees,

(D&A) Regulations, 1977. The petitioner has also challenged the

Annexure-XII communication dated 16.07.2007, by which the

departmental appeal preferred by him against the penalty of

compulsory retirement was rejected. It will be pertinent to mention

here that during the pendency of the writ petition, the petitioner

was communicated about the outcome of the review petition that he

had submitted seeking review of the major penalty of compulsory

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retirement. By the said communication dated 05.05.2008, the

petitioner was informed of the order of the reviewing authority

dated 21.04.2008, by which the penalty of compulsory retirement

imposed by the disciplinary authority and confirmed by the

appellate authority was substituted by imposing the major penalty

of “reduction of his salary to five stages lowering the time scale of

pay till the date of his retirement in place of the major penalty of

compulsory retirement”. It will also be pertinent to mention here

that after imposition of the penalty of compulsory retirement and

before filing of the writ petition, the petitioner attained the age of

superannuation on 31.01.2008. Thus, by the impugned order of

compulsory retirement substituted to that of reduction of salary to

five stages lower in the time scale of pay had the effect in the

service career of the petitioner for the period from 27.12.2006 to

31.01.2008.

2. In the writ petition, there is no formal challenge to the

aforesaid order of the reviewing authority dated 21.04.2008

communicated vide letter dated 05.05.2008, but the said fact has

been brought on record by the petitioner in the affidavit in reply

filed on 27.03.2014. Coming to the facts of this case, the petitioner

while was serving as Deputy Manager at Fancy Bazar Branch,

Guwahati, was placed under suspension by Annexure-I order dated

03.07.2004 with immediate effect. The order was passed on the

ground of alleged involvement of the petitioner in the fraud relating

to several savings bank accounts while was serving in Zoo Road

Branch during his incumbency from 13.07.1998 to 01.07.2002.

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3. The order of suspension was followed by the Annexure-II

charge sheet dated 26.03.2005 issued under Regulation 6 of the

Punjab National Bank Employee’s (Discipline & Appeal)

Regulations, 1 977. Altogether four charges were framed against

the petitioner as enumerated in the statement of imputation of

misconduct in support of the articles of the charges. For a ready

reference, the statement of imputation of misconduct as was

enclosed along with the charge sheet is reproduced below:-

“STATEMENT OF IMPUTATION OF MISCONDUCT IN SUPPORT

OF ARTICLES OF CHARGES AGAINST SHRI KAILASH CHANDRA

SARMA, DY. MANAGER (U/S) BO:FANCY BAZAR, GUWAHATI PREV.

BRANCH MANAGER AT EC- NIRD UNDER BO:ZOO ROAD, GUWAHATI

Shri K. C Sarma, Dy Manager (U/S) BO:Fancy Bazar, Guwahati

while working as Branch Manager at EC- NIRD under BO:Zoo Road,

Guwahati from 1 3. 07. 1 998 to 30. 06. 2002 is alleged to have committed

the following lapses/irregularities in connivance with Shri Kabin Chandra

Kalita, Head Cashier, EC- NIRD under BO: Zoo Road, Guwahati.

CHARGE 1 .

Shri Sarma failed to ensure compliance of laid down guidelines and

systems and procedures of the Bank. He failed to conduct checking of

Ledger entries properly and morning checking of Ledgers. Shri Sarma in

connivance with Shri Kalita, Head Cashier (U/s) has flouted Bank’s

guidelines leading to several acts of perpetration of fraud at the

branch.

A. Shri Sarma being the incumbent In- charge of the branch did not

ensure that the Deposit slips for cash received from the customers for

Rs. 1 0, 000/- above were signed by both the receiving cashier and

himself in terms of Insp. & Control Divn. Circular No. 1 5/2001 dt.

25. 07. 2001 . This negligence on the part of Shri Sarma facilitated Shri

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KC Kalita, Head Cashier to receive cash from the customers without

accounting for the same in the Books of the Bank. To name a few of

such A/Cs as under:

Sl No SF A/C Name Dt. Of Credit Amount (Rs)

1 26 A. Begum 27. 03. 2002 24, 000. 00

2 1 24 Shyam Konwar 03. 02. 2000 1 0, 000. 00

3 1 24 Do 1 2. 1 2. 2001 20, 000. 00

4 1 24 Do 1 5. 1 2. 2001 35, 000. 00

5 1 24 Do 1 6. 03. 2002 1 0, 000. 00

B. Shri KC Kalita unauthorisedly made payment in several a/cs witout

making entry in the Ledger sheets. Shri Sarma being the incumbent In-

charge passed these debit instruments under his signature without

ensuring their posting in the Leger Sheets. These instruments were

recorded in the Cash Book and in the Long Book but the same remained

undetected as Shri Sarma did not conduct morning checking of Ledgers

as per I&C Divn. Cir. No. 9/98 dt. 03. 1 2. 1 998 and 8/99 dt. 1 3. 03. 1 999.

Thus, Shri Kalita and Shri Sarma jointly perpetrated the fraud by non-

posting of the debit instruments in the concerned Ledger Sheets. A few

of such cases are mentioned below: -

Sl No SF A/C NO NAME DT OF DEBIT AMOUNT

1 207 Subash Jain 26. 02. 2000 1 6, 750. 00

2 295 Atul Patwari 31 . 1 2. 1 999 1 2, 000. 00

3 1 9 BN Sarma 1 8. 03. 2000 6, 000. 00

C. Shri Kalita has inflated the Ledger balance in the following a/cs through

extension mistake. Shri Sarma failed to detect the extension mistakes

while passing the said instruments and thereby allowed the fraud to

take place.

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Sl No SF A/C NO NAME DATE AMOUNT

1 1 5 Phatik Nath 31 . 08. 2001 8, 000. 00

2 1 67 Kaliram

Terang

20. 05. 2002 9, 000. 00

3 228 Basanti Boro 30. 03. 2002 2, 000. 00

D. Shri KC kalita fraudulently inflated the Ledger balances in several a/cs

while posting the interest in the Ledger sheets and removed the

preceding Ledger Sheets and did not keep the said Ledger Sheets in old

record. The inflated balances in the Ledgers was detected while

reconstructing the Statement of A/cs. Shri Sarma as incumbent In-

charge of the branch along with Shri Kalita inflated the balances while

carrying forward the same in the new Ledger Sheets and has destroyed

Bank’s record willfully to avoid detection of fraud. To name a few:

Sl

No

SF

A/C

NO

NAME DATE AMOUNT

LEDGER SHEET

MISSING

FROM

1 269 Mantu Giri 04. 04. 2001 239, 300/- Opening of A/c

to 22. 09. 01

2 31 7 SS AIRTSC 05. 07. 2002 1 09, 243/- 27. 06. 2001 to

05. 07. 02

E. Shri Sarma passed the inflated interest amount posted by Shri Kalita in

5 A/Cs as detailed under, thereby draining Bank’s revenue to the tune

of Rs. 27, 684. 00.

Sl

No

SF

A/C

NO

NAME DATE AMOUNT

INTT AMT

INFLATED TO

1 1 55 Rubu Barman 27. 03. 2002 8000. 00 Rs. 20, 260/- from

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Rs. 1 2, 260/-

2 228 Basanti Boro 27. 03. 2002 3268. 00 Rs. 51 84/- from

Rs. 1 91 /-

3 269 Mantu Giri 22. 03. 2001 3200. 00 Rs. 5200/- from

Rs. 2000/-

4 343 Chandana

Barman

22. 03. 2001 1 600. 00 Rs. 1 627/- from

Rs. 27/-

5 343 Chandana

Barman

27. 03. 2002 1 1 61 6. 00 Rs. 1 1 , 81 6/- from

Rs. 200/-

F. In the following A/cs Shri Sarma has passed inflated amount posted by

Shri Kalita in the Ledger Sheets thereby indulging in fraudulent

activities

Sl

No

SF

A/C

No

Name Date Amount (Rs)

Amount inflated

to

1 1 88 Naba Deka 22. 02. 2001 300. 00 Rs. 4770/- from

Rs. 4470/-

2 261 Pankaj Deka 1 0. 06. 2002 30, 000. 00 Rs. 70, 000/-

from

Rs. 40, 000/-

G. Shri Sarma authenticated a carry forwarded balance of Rs. 204821 . 00 in

place of Rs. 45, 899. 00 in SF A/c No. 228 of Basanti Boro on 29. 05. 2001

thereby fraudulently authenticating inflated balance by Rs. 1 58, 922. 00.

H. Shri Kalita has manipulated Books of A/cs of the branch through

fictitious debit entries in the Ledger without any supporting voucher.

Shri Sarma failed to detect such manipulation as he did not ensure

proper and time balancing of Books. To name a few

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Sl No A/C No NAME DATE OF

DEBIT

AMOUNT

1 26 A. Begum 04. 04. 2002 - Rs. 21 , 000/-

2 1 24 Shyam Konwar 28. 09. 2001 - Rs. 1 0, 000/-

I. Shri Kalita deflated the Ledger balance through extension mistakes in

the following a/cs to show the balances as tallied. Shri Sarma failed to

detect the same through balancing and facilitated perpetration of fraud:

Sl No A/C NO NAME DATE AMOUNT

1 1 1 4 Nitai Haloi 21 . 09. 2001 - Rs. 2000. 00

2 229 Kabin Ch

Kalita (Staff)

24. 02. 2001 - Rs. 300. 00

3 31 5 Lachit Boro 22. 09. 2000 - Rs. 1 000. 00

J. Shri Sarma passed debit instruments with lesser amount than the

voucher amount in following a/cs and thereby has fraudulently inflated

the Ledger balance

Sl No SF

A/C

NO

NAME DATE VOUCHER AMT. AS

1 22 TM Devi 1 8. 02. 2002 Rs. 661 8/- instead of

Rs. 6648/- .

2 60 SK Dutta 1 4. 1 0. 1 999 Rs. 1 500/- instead of

Rs. 2000/-

K. Shri Sarma has passed a debit transfer voucher of Rs. 850/- as a

credit transfer voucher in the a/c No. 24 of Shri K Sarma on

31 . 05. 2001 . Shri Sarma thereby has fraudulently inflated the balance

in the a/c by Rs. 1 700/- .

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L. Shri KC Kalita deflated the Ledger balance in the SF a/c no. 362 of Shri

LBB Singh on 1 6. 08. 2002 by Rs. 1 4, 000/- by not crediting the a/c in

order to tally the balance. Shri Sarma as supervisory official did not

rectify it and allowed the fraud to remain undetected.

M. The manipulation in SF Balance Book started in the month of October,

1 999 when in SF A/cv No. 60 of Shri SK Dutta a Cheque of Rs. 2000/-

dt 1 4. 1 0. 1 999 was posted as Rs. 1 500/- in Ledger, duly passed by Shri

KC Sarma thereby making the Ledger excess by Rs. 500/- . The same

was tallied by manipulation in casting of balance in SF a/c no. 1 56 and

1 76. Subsequently, in the month of Nov. 99, Shri Kalita made fictitious

entries in SF A/c Nos. 31 5 and 30 without making any entries in Cash

Book and Long Book. The balancing in Nov. 99 was tallied by over

writing/manipulation of balances of other a/cs. The chain of fictitious

entries and manipulation in Ledger balances started in the month of

Oct. ’99 and continued thereafter with the active involvement of both

Shri Kalita and Shri Sarma till its detection. Thus, Shri Sarma in

collusion with Shri Kalita defrauded the Bank.

CHARGE- 2

As per Book of Instruments (Routine) Chapter XII, Schedule H & N, old

record pertaining to SF Ledgers should be preserved for eight years.

Shri Sarma did not ensure safe custody of Ledger Shets both Current

as well as old Ledger Sheets and payment instruments as per laid down

guidelines and procedures of the Bank. For example Bank’s records in

the SF A/c No. 1 24 of Shyam Konwar from 21 . 09. 2000 to 1 9. 04. 2001

and in the SF A/c No. 1 79 of Nirma Singh from 31 . 03. 2000 to

02. 04. 2001 has not been preserved.

CHARGE - 3

Shri Sarma sanctioned a Demand Loan No. 65 fvg. Shri Sailendra Nath

Bhattacharjee against FD on 04. 04. 2001 for Rs. 200, 000/- without the

knowledge of the depositor. The said loan was adjusted on 07. 05. 2001

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by deposit of cash. The depositor in his letter dt. 24. 06. 2004 has

refused that he has availed any such DL against the said FDR. Only

duplicate copy of the cash payment voucher dt 04. 04. 2001 signed as SN

Bhattacharjee is held in the record. The said signature of Shri

Bhattacharjee differs from the specimen signature held on record.

Neither the said DL document is enclosed with the cash deposit voucher

dt 07. 05. 2001 nor the same is available in the branch record. FDR

found renewed on 26. 1 2. 2001 which do not have any lien marking or

discharge of the depositor. There was no lien marking in the FD Ledger

on the dt. of advance.

The above facts establish that Shri Sarma in connivance with Shri Kalita

has fraudulently raised a DL for Rs. 200, 000/- .

CHARGE- 4

Shri Sarma passed debit instruments in the SF A/c No. 1 55 of Ruba

Barman on 31 . 1 2. 1 999 for Rs. 1 50, 000/- without getting the same

posted in the concerned Ledger Sheet though the same was entered in

the Cash Book and Long Book. The said instrument is not available in

branch record. Thus, Shri Sarma in connivance with Shri Kalita has

defrauded the Bank. ”

4. Along with the charge sheet, the petitioner was also

provided with the list of documents relating to the charges. In

response of the charges leveled against the petitioner, he

submitted his written statement of defence vide Annexure-III

dated 19.05.2005. In the said written statement, the petitioner

denied the charges and attributed the misconduct to one of his

colleagues, namely, Sri K.C Kalita, Head Cashier, who was also placed

under suspension and taken up for departmental proceeding.

However, some of the defence pleas as indicated in the written

statement are quoted below:-

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“1 . SB A/C 207 Subash Jain

The concerned cheque for Rs. 16, 750/- was verified.

The signature appearing on the cheque appears to be that

of the undersigned. I do not understand how it escaped

my attention. It must be the intention of the cashier for

not posting the amount in the ledger, the reason must be

definitely known to him, which was however not detected

by me. It is of course true that I could not conduct

morning checking on regular basis as I was running from

one place to another for mobilization of deposit. But Sir,

it is not at all t rue that I had any role to connive with

the Head Cashier for preparation of fraud.

SB A/C 1 9 BN Sarma

The debit instrument of Rs. 6000/- dated 1 8. 03. 2000

was passed erroneously without entering in the Ledger

folio. However the amount got recovered subsequently,

when the mater came to light. It is true that the morning

checking was not done by the undersigned regularly, as

prescribed. But Sir, it is not a fact that I have jointly

with the Head Cashier, perpetrated any fraud.

SB A/C 228 Basanti Boro

Here again I regret sincerely for not being able to

detect the extension mistake in the account. The change

was in the handwriting of the cashier concerned and

authenticated by himself.

Charge- 3

With the consent of the depositor D/L of

Rs. 2, 00, 000/- was allowed to a third party on

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04. 04. 2001 against the security of F/D of the depositor.

The said loan was adjusted on 07. 05. 2001 with up to date

interest accrued thereon. However no lien was marked on

F/D. Whatever the statement was given on 24. 06. 2004

(not known to me) as reported in the charge sheet Sri

Bhattacharya was forced by some officers to give in

writing, he naturally feared at that time as stated by him

now while contacted by the undersigned. Hence, I may

kindly be absolved of this charge. ”

5. Being not satisfied with the aforesaid written statement

of defence, the disciplinary authority decided to hold an enquiry

against the petitioner in respect of the charges leveled against him

and accordingly appointed Enquiry Officer and Presenting Officer.

The petitioner was also apprised of his right to take the assistance

of any Officer/Employee of the Bank.

6. In due course, the Enquiry Officer conducted the enquiry

and on conclusion of the same, submitted the enquiry report dated

21.08.2006, copy of which was furnished to the petitioner advising

him to submit his representation against the same. Accordingly, the

petitioner submitted his written representation vide Annexure-IX

dated 06.09.2006. Thereafter, the disciplinary authority in

consideration of the entire materials on record including the

evidence adduced by the petitioner and the representation

submitted against the enquiry report, decided to impose the major

penalty of compulsory retirement and the same was communicated

to the petitioner vide the impugned Annexure-X letter dated

27.12.2006. Thereafter, the departmental appeal preferred by the

petitioner was also rejected by the Annexure-XII order dated

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27.06.2007. However, after filing of the writ petition, the major

penalty of compulsory retirement has been substituted to that of

the major penalty of reduction of his salary to five stages lowering

the time scale of pay till he retired from service on attaining the

age of superannuation on 31.01.2008.

7. I have heard Mr. D.K. Das, learned Senior Counsel, assisted

by Ms. J. Buragohain, learned counsels for the petitioner and so

also Ms. S. Sarmah, learned counsel representing the respondent

bank. I have also perused the entire materials on record.

8. As to what are the charges leveled against the petitioner

has been noted above. Although generally denied the charges, but

as noted above he also admitted his failure to conduct morning

checking on regular basis. He also expressed his regret for not

being able to detect the extension mistake in the account. As

regards the Charge No.3, it was the plea of the petitioner that with

the consent of the depositor, he sanctioned the demand loan

against the No FDR and the same was allowed to a 3rd party. He

however, admitted that no lien was marked on the FD. The Enquiry

Officer in his report held the petitioner guilty of the Charge No.1

and Charge No.3. Charge No.1 is divided to several parts ranging

from Charge No.1 A to M. The Enquiry Officer found the petitioner

guilty of Charge No.1 B (partly); 1C; 1H; 1I and 1K. He also found the

petitioner guilty of Charge No.3. Relevant portion of the enquiry

report are quoted below:-

“ASSESMENT OF EVIDENCE AND FINDINGS CHARGE 1 B

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However, the CO in his defence referred DE 2 i. e. the

withdrawal slip dt. 31 . 1 2. 1 999 for Rs. 1 2, 000/- which was filled

up by Shri K. C Kalita, Cashier in charge and accordingly the

payment was made by Shri Kalita but it is not established in the

enquiry proceedings who passed the cheque for payment.

Regarding the amount of Rs. 6000/- in the SF A/c No. 1 9 of BN

Sharma, was recovered subsequently (ME 27/3)

CO in his written brief admitted that he did not conduct morning

checking regularly as he some time used to remain busy for

mobilizing deposits. For mobilizing deposits, the then RM

appreciated Sri Sarma vide letter dated 06. 1 2. 2001 for acquiring

substantial amount of Govt. Deposits.

In view of the facts stated above, I am of the opinion that

Charge 1 B is Partly proved i. e. proved to the extent that Sri

Sarma did not conduct morning checking of ledgers regularly,

reasons are as under: -

1 . Debit instruments, cash book and long book of relevant dates

were not produced in the enquiry proceeding.

2. Ledger sheet of demand loan not produced.

3. PO failed to establish who passed the instruments.

ASSESMENT OF EVIDENCE AND FINDINGS CHARGE 1C

The PO in his written brief simply referred ME No. 1 , 8, 1 0 and

statement of defence dated 1 9. 05. 2005 without placing any

arguments.

ME- 1 to 1 (2), ME- 8 to 8(5) and ME- 1 0 to 1 0(2) are the ledger

sheet of SF A/C No. 15- Phatik Nath, SF- 167 of Ksaliram Terang

and SF A/C No. 228 of Basanti Boro respectively, which clearly

established that there were extension mistake in the ledger as

per charge sheet.

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Though PO did not produce any valid evidence to prove that Shri

Sharma passed the instruments as mentioned in the Charge Sheet

but since Shri Sharma is the only one officer in the Extension

Counter it is natural that all those instruments were passed by

the CO. Moreover, the CO in his reply to the charge sheet

admitted that he failed to detect the extension mistakes in the

accounts.

In view of the facts state above I am of the opinion that

Charge 1 C is PROVED.

ASSESMENT OF EVIDENCE AND FINDINGS CHARGE 1H

SF A/C 88. The mistake was not an intentional one and the

difference of Rs. 300/- as recovered from the depositor.

SF A/C 261 . The posting of Rs. 70, 000/- was authenticated by

the undersigned based on original vouchers. After the vouchers

were posted, and authenticated, probably Sri Kabin Kalita

destroyed the same. He prepared a fresh voucher in his own

handwriting for Rs. 40, 000/- and placed the same on record. He

thus misappropriated the difference amount of Rs. 30, 000/- . The

position is evident from the document marked ME- 30 which does

not bear my signature as authorized official.

Thus the fraudulent activity was on the part of Sri Kabin

Chandra Kalita, then Head Cashier and not on me as alleged, I

request you to quash aside the charge.

ME- 7 is the ledger sheet of SF A/c No. 1 24 Shyam Konwar

which shows that on 28. 09. 2001 a cheque No. 340483 of

Rs. 1 0, 000/- was passed for payment whereas it has got no

reflection in the cash book (ME- 47) and long book (ME- 48). Thus

the entry is a fictious one. In the enquiry proceedings it is not

established, who passed/released the cheque from the ledger.

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ME- 4 is the ledger sheet of SF A/c No. 26 Arifa Begum showing

that on 04. 04. 2002 an amount of Rs. 21 , 000/- was debited

leaving a balance of Rs. 73. 85 in the a/c, but in the cash book

ME- 5 the entry of Rs. 21 , 000/- is not found. Thus it is evident

that there were manipulations in the ledger through fictious debit

entry.

The pleas taken by CO in his written brief as well as in his reply

to the charge sheet is not acceptable to me because had the

balancing of ledgers have been cast and tallied as per rules of the

Bank the manipulation in the ledger should have come into light.

Thus Shri Sarma failed to detect the fictious debit entry made

by Shri Kalita. Hence, I am of the opinion that CHARGE 1 H IS

PROVED.

ASSESMENT OF EVIDENCE AND FINDINGS CHARGE 1 - I

The PO in his written brief referred ME- 6, 1 1 , 1 6 and reply

to the charge sheet dated 1 9. 05. 2005. He did not place any

arguments.

ME- 6, 1 1 & 1 6 are the ledger sheets of SF A/C No. 1 1 4, 229

and 31 5 respectively, depicting that Sri Kalita deflated the ledger

balance through extension mistakes in the accounts mentioned in

the charge sheet which CO did not deny in his written brief

rather he took the plea that he could not detect the mistakes as

the balancing was cast and tallied by his only staff, Sri Kalita and

put before him for signature and accordingly he acted in good

faith.

The pleas taken by the CO in his written brief and reply to the

charge sheet is not tenable because he put his signatures on the

balance without verifying the same. If he acted as per guidelines

of the bank the fraudulent act of Sri Kalita could have been

identified at the time of tallying balances in the month end.

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Hence, I am of the opinion that Charge- 1 (I) is PROVED.

ASSESMENT OF EVIDENCE AND FINDINGS CHARGE 1 K

The PO in his written brief only referred ME- 3 and reply to the

charge sheet dated 19. 05. 2005. He did not place any arguments

in support of the charge.

ME- 3 to 3(1 ) is the ledger sheet of SF A/c No. 24 of K Saran

which reveals that on 31 . 05. 2001 an amount of Rs. 850/- has

been posted in the credit column of the ledger by giving a

narration “To demand loan”. As per narration the amount should

have been posted in the debit column of the ledger instead of

credit column and balance should have been decreased instead of

increasing.

In the enquiry proceedings it is not established who passed the

voucher of Rs. 850/- but CO in his reply to the charge sheet

stated, “The SB A/c No. 24 relates to Sri K Saran and not

Sarma. The difference has since been got recovered and

corrected. The mistake is not intentional.

From the statement of CO it can be concluded that he passed

the cheque. Hence, I am of the opinion that the CHARGE IS

PROVED.

ASSESMENT OF EVIDENCE AND FINDINGS CHARGE - 3

The CO in his reply to the Charge sheet dt. 1 9. 05. 2005 stated

that the loan was given to a third party but there is no evidence

produced in the enquiry proceedings in this regard. The demand

loan voucher ME 1 8, the Cash pay- in- slip dt. 07. 05. 2001 ME- 22

and ledger folio of demand loan ME- 25 clearly show that the loan

was made to have been given to Shri S. N. Bhattacharjee. So

involvement of 3rd party in the demand loan is not there. The

demand loan account was opened and filled up by Shri KC Sarma in

his own handwriting in the ledger and that also shows that the

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loan was made in the name of Shri SN Bhattacharjee and no

other person. The handwriting in the ledger was identified to be

of Shri Sarma by MW- 1 .

The pleas taken by CO are not acceptable to me in view of the

facts stated above. Hence, I am of the opinion that THE

CHARGE 3 IS PROVED. ”

9. After the aforesaid findings recorded by the Enquiry

Officer in his enquiry report, the petitioner was furnished with the

copy of the same asking him to submit his representation and he

accordingly submitted. One of the defence he had advanced in his

representation was that all the original accounts were adjusted in

normal course of deposit of cash. Being not satisfied with the

defence plea advanced in the representation, the disciplinary

authority imposed the major penalty of compulsory retirement and

the same was confirmed by the appellate authority. As noted above,

the said penalty of compulsory retirement, however, has been

substituted by another major penalty of reduction in the time scale

of pay by five stages.

10. Mr. Das, learned counsel for the petitioner in reference to

the charges leveled and the evidence adduced by the petitioner

during enquiry, submitted that the material witness relating to

Charge No.3 having not been examined in the enquiry proceeding,

the said charge cannot be said to have been established. He also

submitted that once the Charge No.3 is held not established, the

petitioner will get due benefit in respect of other allegations of the

Charge No.1, in view of the findings recorded by the reviewing

authority. He placed reliance on the decision of the Apex Court

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reported in (1 999) 2 SCC 1 0 [Kuldeep Singh –vs- Commissioners

of Police and others].

11. Countering the above argument, Ms. S. Sarma, learned

counsel representing the respondent bank submitted that once the

confidence reposed on a bank employee is lost, he/she cannot be

retained in service. She submitted that there being overwhelming

evidence towards establishing the charges also proved in the

enquiry, there cannot be any re-appreciation of the said evidence

sitting on appeal over the same and also the findings recorded by

the enquiry authority, disciplinary authority; appellate authority and

the reviewing authority. She submitted that although the Charge

No.2 and 4 could not be established in the enquiry, but any one of

the charges which stood established in the enquiry was enough to

impose major penalty. According to her, the petitioner should

consider himself lucky to go away with the penalty of compulsory

retirement later on substituted to reduction in the time scale of

pay. According to her, having regard to the gravity of the charges,

it was a fit case for imposition of penalty of dismissal and/or

removal from service. In support of her argument, she placed

reliance on two decisions of the Apex Court reported in (1 996) 9

SCC 69 [Disciplinary Authority –cum- Regional Manager and

others –vs- Nikunja Bihari Patnaik] and (2005) 7 SCC 435 [State

Bank of India and another –vs- Bela Bagchi and others].

12. Throughout the writ petition, there is no allegation of any

procedural irregularity in conducting the enquiry. What has been

emphasized is that the petitioner being busy with other works, at

times, he could not make the required checking of entries.

20

According to the petitioner, it was the other incumbent, namely, K.C

Kalita, who was responsible for the transactions and the fraud

committed on the bank. This aspect of the matter finds mention in

the written statement, which the petitioner had submitted in

response to the charge sheet.

13. As to what are the findings of the Enquiry Officer has

been noted above. One of the defence advanced by the petitioner

was that agreeing to anything while submitting defence statement

cannot be a part of the enquiry proceedings (referred the case of

defence-Charge-1B). While assessing the evidence and recording

findings in respect of the said charge, the Enquiry Officer in

reference to the written brief of the Presenting Officer referred

to the statement of the petitioner accepting the charge vide his

statement of defence. As quoted above (enquiry report), the

petitioner in his written brief admitted that he did not conduct

morning checking regularly as he used to remain busy for mobilizing

deposits. Same is the defence in respect of the other allegations

relating to article of charge No.1 as noted above. As regards the

Charge No.1C, the defence of the petitioner has also been noted

above. According to him, the loan was given to a 3rd party against

the particular FDR and not to the depositor. However, he failed to

produce any evidence to establish that the loan was extended to a

3rd party.

14. As discussed in the enquiry report, the demand loan

voucher (ME-18); Cash-pay-in-slip dated 07.05.2001 and the Ledger

folio of the demand loan (ME-25) clearly depicted that the loan was

shown made to the FDR holder Sri Sailendra Nath Bhattacharjee

21

and not to any 3rd party. The demand loan account was opened and

filled up by the petitioner in his own handwriting and the account

was made in the name of said Sri Sailendra Nath Bhattacharjee and

no other person. There was no denial on the part of the petitioner

about his handwriting in the said documents, which were also

identified to be that of the petitioner by the management witness

one Sri K.C Talukdar, the then Senior Manager of Zoo Road Branch.

From the evidence on record, the Enquiry Officer found that non

making of lien on the face of FDR and on Ledger account clearly

showed that the FDR was not available and that was also not

available on Ledger account, which was nothing but an act of evasion

of detection subsequently.

15. As noted above, the petitioner in his written brief had

contended that his written statement of defence dated 19.05.2005

should not be given any cognizance because the same was submitted

in a hurry. Such a defence cannot be accepted. The loan account

was adjusted on 07.05.2001 (ME 22) by cash deposit. The voucher

was prepared by none other than the petitioner and the same was

also identified by MW-1 during the course of enquiry on

02.03.2006. It is in these circumstances, the above noted finding

was recorded by the Enquiry Officer towards holding that the

article of charge No.3 stood proved in the enquiry.

16. The decision on which the learned counsel for the

petitioner has placed reliance, namely, Kuldeep Singh (Supra) is

primarily to emphasis that judicial review under Article 226 of the

Constitution of India in respect of a departmental enquiry is not

totally barred. It was held in the said case that while it is true that

22

the High Court under Article 226 of the Constitution would not

interfere with the findings recorded at the departmental enquiry

and that the Court cannot sit on appeal over such findings assuming

the role of an appellate authority, but the power of judicial review

is available if the findings recorded are based on no evidence or

utterly perverse. There is no quarrel with the said proposition of

law. However, the learned counsel for the petitioner could not show

anything as to how the findings recorded by the Enquiry Officer,

the Disciplinary Authority, the Appellate Authority and the

Reviewing Authority are based on no evidence and/or are perverse.

17. Learned counsel representing the respondent bank has

referred to the decision in Nikunja Bihari Patnaik (Supra), so as to

emphasis that proof of loss resulting in any bank transaction is not

necessary and that what is required to be considered in respect of

a bank employee and for that matter any public servant is as to

whether he had acted beyond his authority so as to attract

misconduct. That was a case relating to an employee of the Central

Bank of India and the Apex Court was concerned with his

misconduct. He had allowed over drafts or passed cheques involving

substantial amounts beyond his authority. It was held that such

acts could not be treated merely as errors of judgment.

18. In Bela Bagchi (Supra), on which the learned Counsel for

the respondent bank has placed reliance, the Apex Court has

emphasized that a bank employee has to exercise a higher degree

of honesty and integrity. Absence of any loss to the bank is no

defence. In paragraph 15 of the judgment, it was observed thus:-

23

“1 5. 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, it is no defence available to say

that there was no loss or profit which resulted in the

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 wit5hin 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. That being so,

the plea about absence of loss is also sans substance. ”

19. Learned counsel for the petitioner submitted that in

absence of any evidence adduced by the FDR holder i.e. the

depositor, the charge No.3 could not have been said to be

established. The fact of the matter is that the entire documents

relating to the charge exhibited and proved in the enquiry and as

discussed above clearly pointed out the guilt on the part of the

petitioner. He also failed to identify any person in respect of his

stand that the loan was extended to a 3rd party. Even in case of non

examination of the author of a document, it was held by the Apex

24

Court in Director General ICMR –vs- Dr. Anil Kumar Ghosh,

reported in (1 998) 7 SCC 97 that the author of the documents

which were produced during enquiry and were proved need not be

examined. That was a case of initiation of disciplinary enquiry

against the respondent for wrongly claiming house rent allowance.

When the documents produced during enquiry clearly established

the charge, it was held that non-examination of the author of the

documents was inconsequential.

20. In the instant case, apart from the fact that the

petitioner himself could not identify as to who was the 3rd party to

whom the loan was allegedly extended, all the documents pertaining

to the Charge No.3 clearly established the illegality committed by

the petitioner. It was on the basis of the complaint lodged by the

depositor the illegality was detected. It was immaterial that the

amount in question was liquidated by cash deposit subsequently by

the petitioner. As has been held by the Apex Court in State of

Tamilnadu –vs- K. Guruswamy, reported in (1 996) 7 SCC 1 1 4,

that in case of charge relating to corruption, the penalty of

dismissal and nothing less is the appropriate punishment. In

Additional District Magistrate –vs- Pravakar Choturvedi,

reported in (1 996) 2 SCC 1 2, the Apex Court held that the penalty

of dismissal for temporary misappropriation of an amount of

Rs.21,000/- was not disproportionate to the gravity of the offence.

21. The expression “sufficient evidence” postulates existence

of some evidence which links the charged officer with the

misconduct alleged against him. As noted above, it is not the case of

the petitioner that there was any procedural irregularity in

25

conducting the enquiry and that it is a case of no evidence and/or

the findings recorded by the authorities are perverse. All the

authorities, namely, Enquiring, Disciplinary, Appellate and Reviewing,

after appreciating the evidence on record having held the

petitioner guilty of Charge No.1 (Partly proved) and Charge No.3,

this Court exercising its power of judicial review under Article 226

of the Constitution of India, cannot sit on appeal over the said

findings and/or re-appreciate the evidence like an appellate

authority, so as to return another finding other than the findings

recorded by the said authorities.

22. It has been held in State Bank of India –vs- S. N. Goyal,

reported in (2008) 8 SCC 92 that temporary misappropriation of

customer’s money by a bank Manager is a serious misconduct

warranting removal from service. Emphasizing on relationship

between banker and customer, it was observed that the same is of

trust. It was further observed that the employees of bank in

particularly Managers are expected to act with absolute integrity

and honesty in handling customers/borrowers money and that even

a temporary misappropriation of such money is a serious matter. As

regards the penalty imposed and the interference thereof, it was

held that it will not be justified to interfere with the penalty

imposed exercising writ jurisdiction when the enquiry was fair and

proper and the finding of guilt is valid. In paragraph 41 of the

judgment, the Apex Court observed thus:-

“41 . At the relevant point of time the respondent

was functioning as a Branch Manager. A bank survives on

the trust of its clientele and constituents. The position of

26

the Manager of a bank is a matter of great trust. The

employees of the bank in particular the Manager are

expected to act with absolute integrity and honesty in

handling the funds of the customers/borrowers of the

bank. Any misappropriation, even temporary, of the funds

of the bank or its customers/borrowers constitutes a

serious misconduct, inviting severe punishment. When a

borrower makes any payment towards a loan, the Manager

of the bank receiving such amount is required to credit it

immediately to the borrower’s account. If the matter is

to be viewed lightly or leniently it will encourage other

bank employees to indulge in such activities thereby

undermining the entire banking system. The request for

reducing the punishment is misconceived and rejected. ”

23. Learned counsel for the petitioner on being pointed out

that leaving aside the Charge No.3, even the other elements of

Charge No.1 have been established in the enquiry, then also the

penalty imposed on the petitioner with subsequent substitution by

the reviewing authority would be justified, it was submitted that

charges under Article No.1 was diluted in view of the findings

recorded by the reviewing authority. To appreciate the said

submission, let me discuss about the order passed by the reviewing

authority, which is also not under any formal challenge in the writ

petition, about which mention has been made above. The

substitution of penalty of the compulsory retirement to that of

reduction in the time scale of pay by five stages by the reviewing

authority is in reference to the primary responsibility of the Head

Cashier for the fraudulent activities. However, the petitioner has

never been absolved of the charges leveled against him. While

27

discussing about the charges leveled against the petitioner including

the Charge No.3, the reviewing authority has recorded the

following observation and finding:-

“I have examined the points raised by Shri Sarma

in his review petition along with records of the case and

observed that: -

The enquiry was conducted as per the provisions

of PNB Officer Employees (D&A) Regulations- 1 977 and

the petitioner was provided adequate opportunities for his

defence. The lapses stood established in the enquiry on

the basis of proper analysis of the evidence on record.

The petitioner failed to conduct proper morning

checking in the Extension Counter and to detect various

fraudulent entries/manipulations made by Sh. KC Kalita,

Head Cashier in the books of bank jeopardizing the bank’s

interest. His contention that he was not connected with

any misappropriation of money does not belief the Charges

of not observing the bank’s guidelines by him as Incumbent

of EC- NIRD due to which the fraud took place causing

loss to the extent of Rs. 45. 73 lac.

The plea taken by the petitioner in respect of

article of Charge III is not tenable as the said article

has been held as proved based on detailed assessment of

evidences in support thereof. It is a matter of record

that MW- 2 was not produced in the enquiry but no

prejudice was caused to defence due to non- appearance of

the Management Witness. During the preliminary

investigation conducted by Shri B C Talukdar, Manager,

letter dated 24. 06. 2004 was given by Mr. Bhattacharjee

stating that he had not raised any demand loan. The

28

records reveal that the petitioner in his statement of

defence stated that the demand loan was allowed to a

third party with the consent of the depositor but it was

confirmed in the enquiry that signature of the depositor

on demand loan voucher did not tally with signature on

account opening form of FDR.

Taking on overall view of the case including the

fact that the Head Cashier was primarily responsible for

fraudulent activities, I am of the opinion that ends of

justice would be met by imposing major penalty of

“Reduction of his salary to five stages lower in the time

scale of pay till the date of his retirement” in place of

the major penalty of “Compulsory Retirement” imposed by

the Disciplinary Authority and confirmed by the Appellate

Authority. There is no change as to the decision of the

Disciplinary Authority about treatment to the suspension

period. The petitioner has already attained the age of

superannuation on 31 . 01 . 2008, hence his terminal dues will

be settled after taking into consideration of the modified

penalty but no salary will be paid for the intervening

period from his compulsory retirement till his attaining the

age of superannuation.

I order accordingly and Shri Sarma be informed. ”

24. From the above reading of the findings recorded by the

reviewing authority, it cannot be said that the petitioner has been

absolved of the Article of Charge No.1. The reviewing authority

upon discussion of all the relevant aspects of the matter took a

lenient view of the matter and decided to impose a major penalty of

reduction in pay by five stages in lieu to compulsory retirement.

Such findings of fact and the exercise of discretion cannot be

29

interfered with exercising power of judicial review under Article

226 of the Constitution of India. It is once again emphasized in

reference to the decision of the Apex Court in BSNL –vs-

Bhurumal, reported in (201 4) 7 SCC 1 77 that findings of fact are

not to be interfered with by the High Court under Article 226 of

the Constitution of India. Interference permissible only in case the

evidence are totally perverse or based on no evidence. Insufficiency

of evidence cannot be a ground to interdict the findings as it is not

the function of this Court to re-appreciate the evidence.

25. For all the aforesaid reasons, I do not find any merit in

the writ petition and accordingly it is dismissed, without, however

any order as to costs.

JUDGE

Alam