Umayanalloor Service Co-operative Bank v. V. Rajendran and others

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN MONDAY, THE 3[RD] DAY OF JULY 2023 / 12TH ASHADHA, 1945 WP(C) NO. 20431 OF 2018** ## **PETITIONER:** UMAYANALLOOR SERVICE CO OPERATIVE BANK UMAYANALLOOR P.O., KOLLAM DISTRICT, REPRESENTED BY ITS SECRETARY. BY ADV SRI.V.JAYAPRADEEP, SC ## **RESPONDENTS:** 1 V. RAJENDRAN REMYA NIVAS, THRIKKADAVOOR, PERINAD P.O., KOLLAM - 691 601. 2 THE KERALA CO-OPERATIVE TRIBUNAL THIRUVANANTHAPURAM - 695 001, REPRESENTED BY ITS SECRETARY. 3 THE CO-OPERATIVE JOINT REGISTRAR CIVIL STATION, KOLLAM - 695 013. BY ADVS. SRI.N.RAGHURAJ SMT.MABLE C.KURIAN – SR.GP THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03.07.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C).No. 20431 of 2018 : 2 : ## **DEVAN RAMACHANDRAN, J.** ## **========================= W.P.(C).No. 20431 of 2018 ========================== Dated this the 3[rd] day of July, 2023** ## **JUDGMENT** The petitioner, “Umayanalloor Service Co-operative Bank” ('Bank' for short), calls into question Ext.P5 order of the Statutory Arbitrator under the provisions of Section 69 of the Kerala Cooperative Societies Act, 1969 ('KCS Act' for short); as also Ext.P7 order of the Kerala Co-operative Tribunal, Thiruvananthapuram ('Tribunal' for short), affirming it on various grounds, but primarily that they have not taken into account the evidence on record, but have proceeded to find the 1[st] respondent not guilty, solely on conjectures and surmises. 2. Sri.Jayapradeep V – learned Standing Counsel for the petitioner – Bank, explained that, while the 1[st] respondent was working as the Secretary of his client, he committed falsification of accounts, including forgery and counterfeiting, thus misappropriating large amounts, in excess of Rs.5 lakhs; and that this was identified by the Statutory Concurrent Auditor. He added that said Auditor found theft of more than Rs.2 lakhs and the 1[st] respondent was then suspended from service, pending enquiry; but readmitted to service, when he conceded to misappropriation of Rs.3 lakhs. He further submitted that a Charge Memo was, thereafter, issued against the 1[st] W.P.(C).No. 20431 of 2018 : 3 : respondent and disciplinary action completed, to find him guilty, thus awarding the punishment of dismissal from service on 15.03.1999. He pointed out that, however, when the 1[st] respondent challenged the enquiry proceedings before the Statutory Arbitrator, Ext.P5 order was issued, confirming the findings of his client; but that, in an appeal filed by the said respondent before the learned Tribunal, all such were reversed, thus exonerating him fully. Sri.Jayapradeep V. submitted that the conclusions and holdings of the learned Tribunal are without any basis, particularly when it records that the original documents and materials marked in evidence had not been produced. He thus prayed that Ext.P7 be set aside. 3. Sri.N.Raghuraj – learned counsel for the 1[st] respondent, refuted the afore submissions of Sri.Jayapradeep V., saying that, as has been rightly found by the learned Tribunal, the originals of none of the vouchers relied upon by them were placed on record and that petitioner was trying to substantiate their findings in the disciplinary enquiry against his client on untenable and impermissible edifice. He explained that the allegation against his client, in short, was that, while he was working as the Secretary of the petitioner – Bank, he paid certain amounts as interest to the District Co-operative Bank against the loans taken by the former, but that when receipts were issued for the same, he would interpolate figures into it to make them a larger one, and then defalcate the balance by signing vouchers, W.P.(C).No. 20431 of 2018 : 4 : thus drawing cash from the Bank. He submitted that, therefore, to prove this trail, the petitioner Bank ought to have produced the accounts maintained by the District Co-operative Bank and to have then correlated it against the receipts issued by them – which is alleged to have been interpolated with figures by his client; as also the vouchers, on the strength of which he is alleged to have accepted the said figures from the Bank. He argued that when none of these documents were even produced on record, but photocopies sought to be marked as Ext.P11, the learned Tribunal was wholly without error in having rejected all such and in having found his client without any guilt. He concluded saying that, in fact, criminal cases were also filed against his client by the Bank on the very same set of allegations and that he has been exonerated honourably in every one of them – which is nearly 17 in number – finding that the accusations are without any basis. He, therefore, prayed that, in the light of the afore facts and, in particular, the findings of the Criminal Court – the judgments of which have been produced on record as Exts.R1(a) to R1(l), this writ petition be dismissed. 4. I have evaluated the afore rival submissions on the touchstone of various materials available on file. I also record that both sides were _ad idem_ that this Court can continue with the hearing of this case and to dispose it of, without calling for records from the learned Tribunal or the learned Arbitrator because, all of them have W.P.(C).No. 20431 of 2018 : 5 : been placed on record by the petitioner along with its paper book. 5. As rightly argued by Sri.N.Raghuraj, the imputation against the 1[st] respondent is specifically to the effect that, while he was functioning as the Secretary of the petitioner – Bank, he remitted amounts towards interest on loans availed by it from the District Cooperative Bank and obtained receipts from them, which was thereafter interpolated by him with figures, thus making it higher. The Charge Memo then proceeds to say that he caused vouchers to be prepared by himself – being the custodian of the Bank's cash – and then drew amounts against such forged receipts, thus causing theft to an extent of over Rs.5 lakhs. 6. Upfront, I must, however, record that it is the unreserved case of the petitioner – Bank that the Concurrent Auditor found only Rs.2 lakhs lost to them by way of falsification of accounts; and that the 1[st] respondent, while being readmitted to service after his suspension, had conceded to theft of Rs.3 lakhs. However, even before this Court, the singular argument of Sri.Jayapradeep V – learned Standing Counsel for the petitioner – Bank, is that there is misappropriation of Rs.5,98,000/-, which is also the figure mentioned in the Charge Memo issued by his client to the 1[st] respondent. Obviously, therefore, there is no consistency as to the amount that has been allegedly misappropriated; and the learned Tribunal has, therefore, correctly found that, in the absence of a proper and valid W.P.(C).No. 20431 of 2018 : 6 : quantification, an omnibus allegation against the 1[st] respondent would become untenable. Pertinently, even today, the Bank does not have any case as to the actual amount which they say has been allegedly misappropriated; but are now basing their contentions on certain surmises that they hold on to, to impute theft against the 1[st] respondent. 7. That apart, the easiest way the petitioner – Bank could have proved the charges against the 1[st] respondent was by producing documents from the District Co-operative Bank and the receipts available with them and to correlate the same to find whether the figures therein are different. They could also have then produced the vouchers, on the strength of which the 1[st] respondent is alleged to have drawn cash from the Bank, to verify whether same is also in dissonance with the figures recorded by the District Co-operative Bank, while accepting the interest amounts from him. None of these documents have been produced, except Ext.P11 – which is copies of vouchers and documents – without being supported by any of the other documents which could have substantiated the plea of the petitioner. This is exactly what the learned Tribunal has found, and, therefore, one fails to understand how the petitioner Bank, in the light of unequivocal admissions made by them to the effect that they have not produced the originals of the receipts – which were received by them from the District Co-operative Bank; or the vouchers, on the W.P.(C).No. 20431 of 2018 : 7 : strength of which the petitioner Bank had allegedly drawn money against them from the Bank, can still maintain that said respondent is guilty of misappropriation or falsification of accounts. 8. Obviously, therefore, contrary to the arguments of Sri.Jayapradeep V, it is the petitioner – Bank, which is seeking to base its inferences on surmises and conjectures, and not the learned Tribunal. 9. That being said, the factum of the 1[st] respondent having been acquitted honourably by the learned Magistrate, after examining the evidence led by the prosecution thoroughly is also of vital importance in this case. The judgments of the learned Magistrate have been produced by the 1[st] respondent as Exts.R1(a) to R1(l). This Court is further told by Sri.N.Raghuraj that some of these judgments were also produced before the learned Tribunal, but not before the learned Arbitrator, since they were delivered after his orders. Going by the same, I see that 17 cases were filed against the 1[st] respondent with respect to the same transaction and based on identical allegations, and the total amount alleged to be misappropriated by the 1[st] respondent appears to be Rs.5,98,000/-. Though this Court does not mean to say that the findings of the Criminal Court would be absolutely binding on the learned Tribunal or the learned Arbitrator in all events and cases, they certainly have a persuasive effect, going by the judgments of the Hon'ble Supreme Court in **G.M.Tank v.** W.P.(C).No. 20431 of 2018 : 8 : ## **State of Gujarat and Others [2006 (5) SCC 446], Bhaskar Reddy S. and Another v. Superintendent of Police and Another [2015 (2) SCC 365]** and **Paul Anthony v. Bharat Gold Mines Ltd. [ 1999** **(3) SCC 679]** . This is much more so in cases where evidence is totally lacking before the learned Arbitrator or the learned Tribunal, and where circumstantial evidence is sought to be relied upon by the petitioner in substantiation of their allegations. The findings of the Court of the learned Magistrate, therefore, certainly have some bearing; and I, therefore, cannot find any fault with the learned Tribunal in having adverted to them. Furthermore, the learned Tribunal has not found in favour of the 1[st] respondent solely on account of the findings of the learned Magistrate, but also for the reason indited above. In the afore circumstances, I have no doubt that the learned Tribunal has acted without error, and I, therefore, dismiss this writ petition without any further orders. ## **Sd/-** ## **DEVAN RAMACHANDRAN JUDGE** anm W.P.(C).No. 20431 of 2018 : 9 : ## **APPENDIX OF WP(C) 20431/2018** |PETITIONER EXHIBITS|| |---|---| |EXHIBIT P1.|COPY OF THE REPORT OF THE DOMESTIC| ||ENQUIRY OFFICER.| |EXHIBIT P2.|COP OF THE BANK VOUCHER NO.7218 DTD| ||31.12.97.| |EXHIBIT P3.|COPY OF THE ARBITRATION PETITION NO.38/99| ||DTD 19.7.99.| |EXHIBIT P4.|COPY OF THE ARGUMENT NOTE DTD 29.8.01 OF| ||PETITIONER.| |EXHIBIT P5.|COPY OF THE AWARD DATED 05.09.01 OF THE| ||ARBITRATOR.| |EXHIBIT P6.|COPY OF THE JUDGMENT OF THIS COURT IN| ||O.P.6324/03 DTD 3.12.13.| |EXHIBIT P7.|COPY OF ORDER DTD 31.01.18 APPEAL| ||NO.107/2001.| |EXHIBIT P8.|COPY OF VOUCHER SIGNED BY R1| ||DTD.10.11.98.| |EXHIBIT P9.|COPY OF VOUCHER SIGNED BY R1| ||DTD.08.12.98.| |EXHIBIT P10.|COPY OF VOUCHER SIGNED BY R1| ||DTD.30.12.98.| |EXHIBIT P11.|COPY OF VOUCHER SIGNED BY R1| ||DTD.02.03.99.| |RESPONDENT EXHIBITS|| |Exhibit R1(a)|TRUE PHOTOCOPY OF THE JUDGMENT DATED| ||20.10.2017 IN C.C.N.411 OF 2001| |Exhibit R1(b)|TRUE PHOTOCOPY OF THE JUDGMENT DATED| ||20.10.2017 IN C.C.N.547 OF 2001| |Exhibit R1(c)|TRUE PHOTOCOPY OF THE JUDGMENT DATED| ||31.10.2017 IN C.C.N.597 OF 2001| |Exhibit R1(d)|TRUE PHOTOCOPY OF THE JUDGMENT DATED| ||30.10.2017 IN C.C.N.598 OF 2001| |Exhibit R1(e)|TRUE PHOTOCOPY OF THE JUDGMENT DATED| ||31.10.2017 IN C.C.N.599 OF 2001| |Exhibit R1(f)|TRUE PHOTOCOPY OF THE JUDGMENT DATED| ||25.10.2017 IN C.C.N.605 OF 2001| |Exhibit R1(g)|TRUE PHOTOCOPY OF THE JUDGMENT DATED| ||26.10.2017 IN C.C.N.612 OF 2001| |Exhibit R1(h)|TRUE PHOTOCOPY OF THE JUDGMENT DATED| ||20.10.2017 IN C.C.N.613 OF 2001| |Exhibit R1(i)|TRUE PHOTOCOPY OF THE JUDGMENT DATED| ||20.10.2017 IN C.C.N.614 OF 2001| |Exhibit R1(j)|TRUE PHOTOCOPY OF THE JUDGMENT DATED| ||20.10.2017 IN C.C.N.615 OF 2001| ## W.P.(C).No. 20431 of 2018 : 10 : Exhibit R1(k) TRUE PHOTOCOPY OF THE JUDGMENT DATED 20.10.2017 IN C.C.N.616 OF 2001 Exhibit R1(l) TRUE PHOTOCOPY OF THE JUDGMENT DATED 20.10.2017 IN C.C.N.617 OF 2001