P. C. Aravindakshan v. Union Bank of India & Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE SUNIL THOMAS MONDAY, THE 22[ND] DAY OF NOVEMBER 2021 / 1ST AGRAHAYANA, 1943** ## **WP(C) NO. 28695 OF 2018** ## **PETITIONER:** P.C.ARAVINDAKSHAN AGED 64 YEARS S/O LATE CHATHAN, AGED 64 YEARS, XVI/294, NEAR SNDP OFFICE,POOSARIPADY, KIZHAKKEPURAM, NORTH PARAVUR 683513 BY ADVS. GEORGE CHERIAN (SR.) K.S. SANTHI LATHA SUSAN CHERIAN ## **RESPONDENTS:** 1 THE UNION BANK OF INDIA UNION BHAVAN, VIDHAN BHAVAN MARG, NARIMAN POINT, MUMBAI 400021 REPRESENTED BY ITS CHAIRMAN AND MANAGING DIRECTOR 2 THE DEPUTY GENERAL MANAGER(ERD) UNION BANK OF INDIA, UNION BANK BHAVAN, VIDHAN BHAVAN MARG, NARIMAN POINT, MUMBAI-400 021. 3 THE DEPUTY GENERAL MANAGER(P), APPELLATE AUTHORITY, UNION BANK OF INDIA, CENTRAL OFFICE, NARIMAN POINT, BOMBAY-400 021. 4 CHIEF MANAGER AND DISCIPLINARY AUTHORITY, UNION BANK OF INDIA, REGIONAL OFFICE, ERNAKULAM-682 011. BY ADVS. SRI.A.S.P.KURUP, SC, UBI SRI.SADCHITH.P.KURUP THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.11.2021, THE COURT ON 22/11/2021 DELIVERED THE FOLLOWING: W.P.(C) No.28695/2018 2 ## **JUDGMENT** The writ petitioner entered the service of the first respondent bank as a clerk on 11/10/1976. He was promoted later and while working as the manager in the Nilambur branch of the bank, was suspended in 2008 alleging that he had committed financial irregularities. Pending disciplinary proceedings, he was suspended and charge memo was served on him. Ext.P1 is the charge memo along with the statement of allegations dated 11/8/2009 An internal enquiry was conducted . By the report, he was found guilty of the allegations levelled against him. The petitioner filed Ext.P2 objections to the enquiry report. On the basis of the enquiry report and the objections filed as Ext.P2, the appointing authority imposed penalty of dismissal from service, with immediate effect, by Ext.P3 order dated 13/8/2010. He preferred an appeal against the dismissal order, which was rejected by Ext.P5 order dated 5/8/2011. Claiming that he was not served with the copy of order and that he received it much later a belated review petition was filed as Ext.P6. It was dismissed by Ext.P7 order dated 20/7/2018 holding that review petition was highly belated. Aggrieved by the above, the petitioner has approached this court. The main relief sought in the writ petition was to set aside Ext.P3,P5 and P7 orders and to quash Ext.P13 order of forfeiting gratuity and directing the respondents to pay the terminal benefits like gratuity, CPF and PL encashment. W.P.(C) No.28695/2018 3 2. Heard the learned senior counsel appearing for the writ petitioner and the learned counsel for the respondent bank. 3. Assailing the conclusions arrived at in the enquiry, the learned senior counsel for the petitioner contended that the petitioner had acted fairly and in accordance with the Rules. There was no transgression of power or abuse of delegated authority in sanctioning various loans. The loans were given after informing the regional office. The loans were fully secured and the bank suffered no loss. It was contended that the relatives to whom loans were given were otherwise entitled for non commercial loans, such as gold loan/loan against deposit/housing loan etc. All the loans were repaid. The allegation that disbursement of the loan amount was not reported was also not correct. The learned counsel assailed the findings on the ground that he had reported all the transactions to the head office and the bank has not sustained any financial loss. The learned senior counsel also pointed out that there was no allegation of misappropriation or falsification of the accounts. 4. Before evaluating the entire facts, it is essential to look into the charges levelled against the petitioner. Ext.P1 discloses that, the following allegations were raised against the petitioner; 1). While working at Elanji Branch he had released/sanctioned loans to his wife, brother -in -law, sister- in -law and sister-in- law's husband. As per the instructions in circulars Nos.6401 dated 28/3/2002 and IC 7495 dated 26/9/2006, the officer of the bank was not empowered to sanction W.P.(C) No.28695/2018 4 loans to his relatives. He suppressed the fact regarding the debit of additional amounts from the loan accounts without reporting in BMDP/F1 statements and M- 27 statements. 2). He advised the Muvattupuzha Branch to release the title deeds of the equitable mortgage property to his close relatives, without ensuring closure of housing loan accounts of his sister -in -law and sister in - law's husband and crop loan account of his sister in law. 3). He had allowed excesses in agricultural, ST loans and housing loans without specific written request from the respective borrowers. There was no proper assessment of loan requirements, He had also not carried pre/post sanctioned inspection. 4). He had issued a false certificate of balancing of books of accounts vide Elanji branch letter dated 14/6/2007, jointly with the then accountant . In fact, all the books of accounts of the said branch were tallied on 2/8/2008 as of 31/7/2008. 5). Scale of finance was not at all observed in crop Loan Accounts. 6). Loan sanctions and disbursal were singly handled by him in case of all loans including group/relative accounts. 7). While working as a branch manager at Irimpanam branch, serious irregularities were reported in housing loans. 5. On the basis of the above charge sheet, domestic enquiry was conducted and the enquiry officer concluded as follows ; W.P.(C) No.28695/2018 5 - 1). The employee failed to take all possible steps to ensure and protect the interest of the bank. - 2). He failed to discharge his duties with the utmost devotion and diligence. - 3). He failed to discharge his duties with utmost honesty and integrity. - 4). Acting otherwise than in his best judgment in performance of his official duties. 6. The maximum penalty of dismissal from service was thereupon imposed on him. Supporting the action of the management the learned counsel for the respondent bank contended that a detailed enquiry was conducted and the petitioner was granted reasonable opportunity of being heard at all levels. He fully participated in the enquiry and ultimately on the basis of the materials on record, he was found guilty. There was sufficient materials to indicate that the petitioner has committed serious irregularities and hence the conclusions arrived at by the enquiry officer was not liable to be interfered by this court in exercise of its jurisdiction under Article 226 of the Constitution of India. It was further contended that the petitioner never raised any objection regarding the enquiry at any stage . 7. Though the learned senior counsel for the petitioner assailed the above conclusions, it seems that the petitioner has no grievance that the enquiry was partial. He has also no allegation that the enquiry officer was prejudiced. Material also indicate that the petitioner was given a W.P.(C) No.28695/2018 6 reasonable opportunity to raise his objection and participate in the enquiry. The conclusions arrived at are based on several records and oral evidences. Having considered this, I find no reason to interfere in the conclusions arrived by the enquiry officer, which seems to be sufficiently supported by the materials on record. 8. The learned senior counsel for the petitioner vehemently assailed the punishment imposed on the petitioner. It was pointed out by the learned senior counsel that the petitioner has completed 32 years of service. He never had an unblemished career . Though he had served in various branches, no allegations were ever raised against him. It was further contended that even in the present case there was no allegation of misappropriation or that the petitioner had caused any substantial loss to the bank or falsification of accounts or acts of forgery or cheating. No criminal case was also initiated against him. Even the allegations against him can only be considered as procedural irregularities in the course of his tenure or instances of indiscretion **.** It was contended that there was no illegality in issuing loans to relatives and that the loans were repaid. It was also contended that all the transactions were supported by sufficient security and the employer had no allegation that the petitioner had an intention to cheat the bank. All the transactions were done by him openly and records were available to support the transaction. It was contended that punishment imposed by the authority was shockingly disproportionate to the guilt proved. To substantiate the contentions, the learned senior W.P.(C) No.28695/2018 7 counsel relied on various decisions . 9. _**Bijendra Kumar Singh v, Union of India & Others (2013 (2) KHC 77)**_ was a case wherein a mobile phone lost in the Airport was found by a Sub Constable on duty. The passenger was unable to give the number of the missing mobile. However, the mobile was returned by the superior officer without registering the matter in lost & found register. Constable was dismissed from service for his mala fide intention. Holding that the dismissal from service was strikingly disproportionate to gravity of charges, the petitioner was ordered to be reinstated without back wages. It was held on facts fact , the ultimate punishment of dismissal was not warranted and it was fairly settled that proportionality principle will apply in the said circumstances. The learned Judge relied on the decision in **C** _**hairman cum Managing Director Coal India Ltd.and Another v.Mughal Kumar Chaudhari (2009 (15) SCC 620).**_ It was held by the Apex Court that award of punishment which was grossly in excess to the allegations cannot claim immunity and remains open for interference under the limited scope of judicial review. 10. To further buttress the contentions, the learned senior counsel for the petitioner relied on an identical situation wherein another employee was granted relief by the respondent bank. To support it, learned senior counsel relied on Ext.P16 order passed by the first respondent bank in relation to dismissal of services of one Anil Kumar, who was the manager of a branch at Hyderabad. Ext.P16 shows that very serious allegations W.P.(C) No.28695/2018 8 were raised against the said employee with respect of funds of the bank. It was alleged that he had recommend a loan proposal in favour of the society to the tune of 1.07 Crores. In fact, the promoter of the firm had created equitable mortgages in respect of two extensive landed properties. But it was revealed later that there was impersonation in the case of first property and bogus deed in case of the second property. The photo affixed on the documents and signatures which were appearing therein were different from that of the real owner. The value of the property was also highly inflated. The manager also did not assess the value of the property correctly. Apart from that, he had issued another such loan to a textile shop **.** The mortgage was created in favour of another person's property on the basis of the certified copies without obtaining permission/ratification from the regional office. Substantial amounts were released to several other institutions indiscriminately, without assessing their requirements and conducting due diligence. Still relief was granted to her. 11. Countering the above arguments, the learned counsel for the respondent bank vehemently relied on the decisions of the Supreme Court reported in _**Bank of India v Suryanarayana (1999 KHC 704)**_ , S _**tate Bank of India v. T.J.Paul (1999 KHC 322), Union of India and Others v. P.Gunasekaran ( 2014 KHC 4721)**_ and B _**oloram v. Lakhimi Gaolia Bank and Others(AIR 2021 SC 872**_ ) and _**State of Karnataka & another v. N.Gangaraj (202 KHC 6164) & C.I.S.F & others v. AbratAli (2016**_ W.P.(C) No.28695/2018 9 _**KHC 643).**_ The learned counsel also relied on the decision of this court reported in _**Deputy General Manager (Appellate Authority) & Others v. Ajai Kumar Srivastava (2021 KHC 6006).**_ In Bank of India v. Suryanarayana(supra) essentially the court was dealing with the question of interference with regard to the conclusions arrived at by the authority, in exercise of judicial review, by Constitutional Courts. It was held that the courts cannot embark upon a re appreciation of the evidence or weighing the same, like an appellate authority. The present decision has no application to the facts of the case since the question of conclusion arrived at on merits was not seriously agitated by the learned senior counsel for the writ petitioner. In State Bank of India v. T.K.Paul's' (Supra), it was held that the punishment of removal could not have been imposed by the appellate authority and therefore the punishment was modified and the matter was remanded to the appellate authority to consider which of the punishments other than dismissal could be imposed on the employee. In Union of India v. P.Gunasekaran (Supra), the Supreme Court held that regarding the punishment imposed, the court will not go into the proportionality of the punishment, unless it shocks its conscience. In that case, the employee, being a ministerial officer, impersonated himself as a central excise executive officer and unauthorisedly conducted passenger checks in the public transport bus. He was dismissed from service, which was under challenge. The Supreme Court in exercise of its power, held that the punishment imposed on the employee was not shockingly W.P.(C) No.28695/2018 10 disproportionate. In CISF & Others v. Abrar Ali(Supra) a member of a armed force Abraham was instructed not to leave the unit, but despite such orders, he deserted from the force for five days **.** In spite of the above, holding that disobedience of the orders of the superiors and such desertions were tantamounts to gross misconduct the penalty of dismissal was harsh and excessive. In state of Karnataka & Another (Supra), it was held by a Bench of the Supreme Court that power of judicial review confined on the constitutional courts was not that of an appellate authority. It can only interfere in the punishment imposed, only when it was found that the punishment was highly dis-appropriate to the guilt alleged. 12. Relying on Boloram Bordoloi's case(supra), the learned senior counsel for the petitioner contended that, that was a case wherein one of the allegation was that more than one loan was given to the members of the same family, the Supreme Court held that compulsory retirement imposed on the employee was not perverse. However, it is pertinent to note that in that case, apart from the allegation of sanctioning more than one loan to the member of the same family, there were serious allegation of misappropriation and disbursing of loans irregularly to units without any shops or business. Reiterating the decision of the supreme Court in Union of India v. P.Gunasekaran's case (Supra), the learned counsel for the petitioner specifically pointed out that, in that case it was held that the court should not go into the proportionality of punishment ,unless it shocks its conscience Almost similar view was followed in Deputy General Manager W.P.(C) No.28695/2018 11 v. Ajai kumar Srivastava's case (supra). 13. An evaluation of the above decisions clearly show that the consistent view taken by the Supreme Court was that, the court can interfere with the punishment only when it was highly disproportionate to the misconduct proved. 14. In the case at hand, it has to be appreciated that the petitioner had put in 32 years of long service. There is absolutely no record to show that he was involved in any other misconduct earlier. Though there was an allegation that while he was at Irumbanam, serious irregularities were found out, such an allegation was raised only when the present allegations were set up against the petitioner. Further, all the allegations of misconduct alleged during his tenure at Irumbanam shows that, at the most, they are all procedural irregularities. No much seriousness was involved in that case to warrant punishment of dismissal. Regarding the allegations raised against the petitioner while in service at Elanji, definitely the allegations cannot be lightly seen. He had released funds to his close relatives. It has also come on record that all the loans were closed. However, that will not absolve the petitioner. It is on record that the bank had no allegation that the petitioner had misappropriated any money. There is no allegation of dishonesty, criminal breach of trust, or cheating. It is also true that there were few other allegations, which at the most can be said to be a case of breach of procedures rather than a very serious misconduct. Having evaluated the entire facts, it is only to be held that the W.P.(C) No.28695/2018 12 punishment of dismissal imposed by the management especially in the background of Ext.P16, exceptionally disproportionate. Definitely, I feel that a major penalty is liable to be imposed, but something lesser than the punishment of dismissal. Having considered the entire facts, I am inclined to direct that the termination of service of the petitioner by way of dismissal from service will stand substituted by compulsory retirement with effect from the date of Ext.P3. 15. Serious contentions were raised regarding the amounts due to the petitioner. It was contended by the learned senior counsel that on an allegation that the bank was entitled to recover amount, a claim of around Rs.20 Lakhs were sought. However, when this was opposed by the petitioner, it was brought down to Rs.10 Lakhs. It was recovered from his gratuity also. It was contended that, amount can be recovered from gratuity only under clause 17 of the Employees Provident Fund Rules of the respondent bank. A copy of the Provident Fund Rules was placed at the time of hearing. Clause 17 says that though there shall be no forfeiture, in the case of Provident Fund Rules, except where the petitioner was dismissed for misconduct causing financial loss to the bank and in such case, forfeiture shall be limited only to the extent of financial loss caused. Having considered that, the dismissal will stand substituted by the compulsory retirement, the petitioner will be entitled to all the benefits flowing therefrom . The authority shall, within two months from the date of receipt of a copy of this judgment, compute the entire amounts due W.P.(C) No.28695/2018 13 without imposing any other deductions than those permissible under law and intimate the petitioner. Thereafter, it shall release the entire amount due within three months from the date of receipt of a copy of this judgment. In case the amount is not paid, or there is a dispute regarding the quantum payable, the right of the petitioner to seek appropriate relief in accordance with law is reserved. The writ petition is allowed in part as above. Sd/- **SUNIL THOMAS Judge** dpk W.P.(C) No.28695/2018 14 ## **APPENDIX OF WP(C) 28695/2018** PETITIONER EXHIBITS - EXHIBIT P1 TRUE COPY OF ARTICLES OF CHARGE DATED 11.08.2009. - EXHIBIT P2 TRUE COPY OF THE SUBMISSION DATED 15.06.2010 BY THE PETITIONER AGAINST THE FINDINGS OF INQUIRY OFFICER. - EXHIBIT P3 TRUE COPY OF THE ORDER DATED 13.08.2010 BY DISCIPLINARY AUTHORITY. - EXHIBIT P4 TRUE COPY OF THE APPEAL TO THE APPELLATE AUTHORITY DATED 20.1010 FILED BY THE PETITIONER. - EXHIBIT P5 TRUE COPY OF THE ORDER DATED 05.08.2011 BY APPELLATE AUTHORITY. - EXHIBIT P5 TRUE COPY OF COVERING LETTER DATED 09.08.2011. - EXHIBIT P5 TRUE COY OF EMAIL COMMUNICATION DATED 07.03.2018. - EXHIBIT P6 TRUE COPY OF THE REVIEW APPEAL DATED 15.03.2018 BY PETITIONER AGAINST THE ORDER DATED 05.08.2011. - EXHIBIT P7 TRUE COPY OF THE ORDER DATED 20.07.2018 BY THE SECOND RESPONDENT. - EXHIBIT P8 TRUE COPY OF THE LETTER DATED 16.01.2017. - EXHIBIT P9 TRUE COPY OF THE LETTER DATED 12.05.2017 ISSUED BY BANK TO PETITIONER. - EXHIBIT P10 TRUE COPY OF THE REPLY DATED 13.06.2017 SUBMITTED BY THE PETITIONER. - EXHIBIT P11 TRUE COPY OF THE NOTICE OF FORFEITURE DATED 25.10.2017 ISSUED BY RESPONDENT TO PETITIONER. 15 W.P.(C) No.28695/2018 EXHIBIT P12 TRUE COPY OF THE REPLY DATED 03.11.2017 SUBMITTED BY THE PETITIONER. EXHIBIT P13 TRUE COPY OF THE ORDER DATED 11.01.2018 ISSUED BY RESPONDENT BANK. EXHIBIT P16 TRUE COPY OF THE LETTER NO-CO:ERD 2010:2017 DATED 2.6.2017 RESPONDENT EXHIBITS EXHIBIT R1A TRUE COPY OF THE ORDER DATED 20/03/2020 PASSED BY THE ASSISTANT LABOUR COMMISSIONER (CENTRAL) ERNAKULAM IN APPLICATION NO.48(14)/2018/D2.