Full Judgment Text
2023INSC766
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 11196 OF 2011
State Bank of India …Appellant (s)
Versus
A.G.D. Reddy ...Respondent(s)
J U D G M E N T
K.V. Viswanathan, J.
1. The present appeal by the State Bank of India (for short
“the Bank”), calls in question the correctness of the judgment
of the Division Bench of the High Court of Karnataka at
Bangalore dated 20.10.2010 in Writ Appeal No. 8085 of
2003. By the said judgment, the Division Bench had
Signature Not Verified
Digitally signed by
Jayant Kumar Arora
Date: 2023.08.24
16:01:13 IST
Reason:
dismissed the Appeal of the Bank and confirmed the
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judgment and order of the learned Single Judge dated
12.11.2003. The learned Single Judge had allowed the Writ
Petition No. 29547 of 1997 filed by the respondent and
quashed the order passed by the Appointing Authority and
granted consequential benefits to the respondent. The
Appointing Authority had, by its order of 31.01.1995,
imposed a punishment of “ reduction in basic pay to the
lowest stage in Scale-I ” as envisaged under Rule 49 (e) of the
State Bank of India (Supervising Staff) Service Rules and
further, has treated the period spent by the delinquent officer
under suspension from 18.08.1990 till the date of his
reinstatement as suspension only.
2. Being aggrieved, the Bank has filed the present Appeal.
Shri Sanjay Kapur, learned counsel for the Bank, contends
that the courts below have transgressed the limits of Judicial
Review. According to the learned counsel, the courts below
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have erred in characterizing the orders of the Disciplinary
authorities as perverse.
3. On the contrary, the respondent represented by Shri
S.N. Bhat, learned Senior Counsel, vehemently defends the
orders impugned. Learned Senior Counsel contends that the
present was a case of “no evidence” and the enquiry officer
without any evidence on record and based only on his
personal purported knowledge has recorded the findings of
guilt. Learned Senior Counsel further contends that the
courts below have rightly set aside the order of the
Disciplinary Authorities and that the case did not call for any
interference.
Relevant Facts
4. The facts, insofar as they are necessary for the
adjudication of this Appeal, are set out hereinbelow:
a) Disciplinary proceedings were initiated against the
respondent for certain acts of misconduct allegedly
committed by him when he was working as Field Officer of
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the Mahadevapura Branch of the Bank. Broadly stated, the
charges in the Charge Sheet dated 13.02.1992 were:
i) That he recommended and obtained sanction from the
Branch Manager, credit limits to various units as detailed
therein and permitted excess drawings on an on-going basis;
that he did not report to the controlling office the excess
drawings permitted; that he did not conduct periodical
inspections as per the extant instructions; that loan sanctions
were given and credit limit extended to entities operating in
the premises of another entity;
ii) That credit limit was recommended and sanction
obtained for M/s Saraswathi Fabricators even though the unit
was located away from the area of operation; sanction of the
advance was not reported to the Controlling Office; and
formalities for creating equitable mortgage over immovable
property offered as collateral security were not completed;
iii) That the respondent recommended and obtained
sanction of advance to M/s ACE Photo Reprographers and
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M/s Sangeetha Refreshments both from Shivajinagar, even
though the units were non-existent and the particulars
furnished were fictitious as another firm M/s All Arts
Company was operating from the same premises; that the
sanction of these advances were not reported to the
controlling office and periodical inspection of the units were
not conducted.
iv) That the respondent had recommended and obtained
sanction on 20.05.1987 cash credit limit to M/s. Rajeswari
Enterprises and the respondent did not submit control return;
that periodical inspections were not carried out and
formalities for creation of equitable mortgage over
immovable property stipulated as pre-condition for sanction
of limit were not completed. Certain other charges set out,
which are not directly relevant for the adjudication of the
Appeal, have not been highlighted hereinabove.
v) It was alleged in the charge memo that by the acts
committed, the respondent failed to comply with the extant
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instructions with regard to sanction and follow-up of
advances and failed to take all possible steps to ensure and
protect the interest of the Bank and did not discharge his
duties with utmost diligence and integrity and thereby
violated the service rules.
b) As part of the charge, it was further alleged that he
purchased agricultural land in October 1987 ad-measuring
21.36 acres and got it registered in his name for a nominal
amount, using the influence of one Shri Ramamurthy of M/s
Bindu Enterprises who are enjoying credit facilities with the
branch and he failed to declare to the Bank the purchase of
immovable property as per the extant instructions. It was
alleged that by the above acts, he placed himself under
pecuniary obligations to the party.
c) The statement of imputations were also furnished.
Findings of the Enquiry Officer
5) The respondent filed his detailed reply denying the
allegations. An Enquiry Officer was appointed. Before the
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Enquiry Officer, the Bank examined seven witnesses and
marked twenty four documents. The delinquent employee
did not examine any witness but had produced thirty
documents. The Enquiry Officer, after completion of the
enquiry proceedings, analyzed all the oral and documentary
evidence and found the respondent guilty for some of the
charges levelled and absolved the respondent with regard to a
few other charges. The presenting Officer did not pursue the
following charges contained in the chargesheet.
“(a) Recommendation of the loan by charged
official in respect of M/s. Fotografiks.
(b) Charge vii (b) - The unit had borrowing from
Central Bank of India, Avenue Road, Bangalore.
(c) Charge II - The influence of Shri Ramamurthy
of M/s. Bindu Enterprises towards purchase and
registration of 21.36 acres of lands.”
The following charges were held not proved:
“I. Charge No. (ii) (a) pertaining to M/s. Farooq
Tanning Control forms in respect of these units
were submitted.
II. Non reporting of excess drawings permitted in
the case of M/s Fotografiks.
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III. M/s Ace Photo Reprographers
The charge that the unit is not functioning is not
proved.”
The remaining charges were held proved.
6) With these findings, the Enquiry Officer submitted his
report dated 23.08.1993 and the records of the enquiry to the
Disciplinary Authority. The Disciplinary Authority issued a
second show cause notice along with the copy of the Enquiry
report to which the respondent filed a detailed reply.
Thereafter, the Disciplinary Authority also issued a notice
dated 04.10.1993 setting out the points of disagreement with
regard to the Enquiry Officer’s findings to which again the
respondent furnished a reply.
Findings of the Disciplinary Authority and Imposition of
Penalty
7) The Disciplinary Authority, by his order of 28.12.1994,
elaborately considered the matter. He agreed with all the
findings of the enquiry officer and even on the aspects where
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the enquiry officer held that the charges were not proved, the
disciplinary proceeding differed with the enquiry officer on
some of those aspects and held the charges to be proved.
For example, in the case of a unit - ACE Foto
Reprographers not functioning in the premises, while the
enquiry officer held the charge not proved, the Disciplinary
Authority held the charge to be proved.
8) These aspects need not detain the Court any further. As
it will be clear from the discussion below, ultimately the
charges with regard to not conducting periodical inspections
of the units mentioned in the charge and the non-completion
of the formalities for creating equitable mortgage over
immovable property offered as collateral security, in the case
of M/s Saraswathi Fabricators are the primary aspects that
has engaged the attention of this Court. As will be clear from
the discussion in the later part of this judgment, it is those
two charges which have ultimately been found to be proved
that have been elaborated herein below.
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9. Pursuant to the above, the Appointing Authority passed
an order on 31.01.1995 imposing the penalty of “reduction in
basic pay to the lowest stage in Scale-I” as provided under
Rule No. 49(e) of the State Bank of India (Supervising Staff)
Service Rules and further to treat the period under suspension
from 18.08.1990 till the order of his reinstatement as
suspension only.
10. The Appellate Authority to whom the respondent
approached confirmed the orders.
11. Challenging the order of the Disciplinary Authorities
and the Appellate Authority, the petitioner moved a writ
petition, which has now resulted in the orders of the learned
Single Judge and that of the Division Bench.
12. The learned Single Judge classified the common heads
under Charge I as was also done by the Enquiry Officer as
being
i) Conduct of periodical inspection;
ii) Non-submission of control forms; and
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iii) Area of operation
13. We will deal with the first limb, after we consider the
second and third limbs, for the sake of convenience.
Charge regarding non-submission of control forms and
area of operation
14. On the aspect of non-submission of the control forms,
the learned Single Judge records that the burden was wrongly
shifted on the respondent when the Enquiry Officer held that
the delinquent had not proved the submission of the control
forms. The learned Single Judge held that when the
respondent denied the charge, the onus was on the
Disciplinary Authority to prove the charge alleged against the
delinquent employee by producing relevant material and the
material must be such that it amounts to proving the guilt of
the employee in respect of the charge against him with some
degree of definiteness.
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15. We have perused the Enquiry Report on this issue and
we are satisfied that the learned Single Judge is right on this
score. The following findings in the Enquiry Report fortify
that conclusion:-
“However, in respect of other units listed in the charge
sheet regarding non-submission of control form the
charges are proved. Although, it is likely that the Bank's
files may be missing due to shifting of the branch, no
attempt has been made by the defence to bring the control
forms from the controlling authority. It only clearly
indicates that the control forms have not been submitted.
This is a failure on the part of the charged official.”
16. Equally with regard to the third limb, namely,
transgression of the area of operation, the learned Single
Judge rightly found that in a number of instances loans had
been sanctioned outside the area of operation and, as such, it
could not be held that there was any transgression by the
delinquent respondent. This view is independently fortified
when we peruse the Enquiry Report.
17. In the preliminary paragraphs under the head “Area of
operation”, while dealing with the relative instructions of the
Bank, the following is set out:
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“ii) Where there are clusters of eligible units, whether
SSI or Small business, situated outside the respective
operational area, assistance could be rendered to them,
provided the place is accessible throughout the year and
is connected by the public transport. Even in such cases,
the location of units should not be far beyond the
operational area and the number of units should
reasonably large. (sic.) Recommendations in this regard
should be first got approved from the controlling
authority.
iii) Lending to SSI and small business units could also
be affected in adopted villages with the prior approval of
the controlling authority.
iv) Care, should however, be taken that the flexible
approach does not lead to scattered lending.
Approach should preferably be financing of clusters of
units/growth centres.”
Nowhere in the Enquiry Report or in the evidence had it been
brought out that any of these above conditions in the
excepted categories were breached.
Charge regarding conduct of periodical inspections
18. However, we find that the learned Single Judge and the
Division Bench, which confirmed the order of the learned
Single Judge, erred in recording the following finding with
regard to the first limb, namely, about the respondent not
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conducting the periodical inspections as required under the
extant instructions:-
“In so far as the first component of the charge is
concerned, i t can safely be said that none of the witnesses
examined by the Bank before the enquiry officer have
spoken about the truth or otherwise of the allegations
made in the charge memo. However, the enquiry officer
in his lengthy report based on his personal knowledge
about the instructions and guidelines issued by the Head
Office of the bank for conduct of inspection by Field
Officers of the bank, observes that it is the duty of the
Field Officer, to conduct periodical inspection and
maintain proper records of those inspections. To arrive at
the conclusion that the delinquent officer is guilty of this
charge, he merely states in his report that Sri Krishna
Murthy Urala - PW 4 has deposed that the charged
official has not conducted any periodical inspection.
This conclusion of the enquiry officer is based on the
mis-reading of the evidence of PW-4 by the enquiry
officer. In fact, PW 4 in his lengthy deposition before the
enquiry officer has stated that the periodical inspections
of units were carried out by the petitioner sometimes
independently and some time with the Branch Manager
and the relevant records were not available at the Branch.
It has also come in the evidence that the Branch was
shifted to new building some time in the year 1989 and
during shifting, books used for recording of the
inspection of units might have been misplaced and they
are bit traceable. So, in my opinion picking out one stray
sentence here and there in the deposition of P.W. 4 and
importing his personal knowledge about the so called
instructions and guidelines issued by the Bank, in my
view, the enquiry officer could not have come to the
conclusion that the Petitioner failed to conduct periodical
inspection and therefore that part of the charge in the
charge memo is proved against him.”
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19. To satisfy ourselves on this aspect, we examined the
enquiry report. The rationale for the inspection is set out in
the preliminary portion of the report. It is stated as follows:-
“Follow up and supervision for term loans:
Term lending particularly to small scale units, is
subject to various risks due to the long period of
loan and the fact that the small scale units being
financially vulnerably are likely to be affected by
even minor adverse changes in their fortunes, where
mortgage of immovable properties are obtained, we
are in a relatively better position although the
process of realization in the event of default may
prove to be cumbrous. Where, however, the security
comprises machinery in leased, rented premises, the
risks are much greater; movable machinery,
particularly, being liable to felonious removal.
Further, the tenancy in rented premises may sought
to be terminated by the owner although the law
generally protects the tenancy against unfair
ejectment.
Having regard to the foregoing consideration, it is
needles to add the proper selection of clients is one
matter to which considerable thought should be
given. The only means of forestalling and avoiding
possible loss would lie in the vigilant follow up of
loans after they have been granted.”
Thereafter, some guidelines have been set out. Dealing with
the charge, the Enquiry Officer records the following:-
“From the above instructions it may be observed that
it is the duty of Field Officer to conduct periodical
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inspection and maintain proper records of those
inspections.
The defence merely contested the charge on the plea
that inspection register has not been produced for
evidence. The I is not only supposed to maintain the
inspection register but also report the observations
made by his (sic.) during the inspection by means of
separate report. None of such reports have been
produced by the defence to prove that inspections
have been conducted by him.
In this connection it is pertinent to bring the following
instructions of the Bank in regard to report to be
submitted by the field Officer.
Accounts with borrowings of Rs.2 lacs and over
should be followed up by I on the basis of a
proforma marked follow up form for I (STF6).
The objective underlying the form is to relate
outstanding to the activity level on a continuing
basis i.e. every month, and to relate the activity level
to earlier projections (as indicated in the scheme or
estimates based on past performance). A systematic
follow-up through this form will reveal any tendency
towards irregularity in an account and the probable
reasons if any irregularity does occur. In either case,
the situation is brought to the attention of the
Manager SIB or BM, who even otherwise will be
expected to check these statements every month. The
abnormalities indication (sic.) in item 6 of the Notes
on Form SIF 6 are illustrative. There could be other
abnormalities which could be inferred on the basis of
this form. Sri Krishnamurthy Urala - PW4 deposed
on page 10,11 of the proceedings that the charged
official has not conducted any periodical inspection.
This deposition clearly proves the above charge.
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Accordingly, I conclude that the charges levelled
against him regarding conduct of periodical
inspection has been amply proved.”
(In the summary of findings ‘I’ is
recorded as indicating the Field Officer)
No doubt, the report records that no such report has been
produced by the defence to prove that the “inspections have
been conducted by him”. To satisfy ourselves, whether the
onus has been wrongly shifted on the employee, we perused
the evidence of PW-4 Krishnamurthy Urala to whose
deposition, copious references were made both by Mr. Sanjay
Kapur, learned Counsel and Mr. S.N. Bhat, learned Senior
Counsel.
20. In the charge memo, the respondent was specifically
charged that the respondent had recommended and obtained
sanction from the Branch Manager, credit limits to various
units as detailed therein and permitted excess drawings on an
on-going basis and the respondent did not report to the
controlling office the excess drawings and did not conduct
periodical inspections as per the extant instructions. A
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number of units were mentioned in the charge memo to
substantiate the allegation that periodical inspections, as per
the extant instructions, were not conducted on them. The
following have emerged in the deposition of PW-4 - Shri
Krishnamurthy Urala recorded on 17.02.1993:
“PO: Mr. Urala do you by chance know who was the
field officer handling this unit between June 86 to
1988.
PW4: Yes. It is Mr. AGD Reddy.
…. …..
PW4: What is the procedure for conducting inspections
to units as per laid down instructions.
PO: The laid down instruction is the unit has to be
inspected normally once in a month by FO along
with the stock statements to verify whether the
disbursal of the funds from the a/cs has been
properly utilized.
The field officer should carry branch inspection
book to the units and write the observations
thereon, and also he has to make the observations
in the inspection book kept at the unit.”
….. …….
PO: Were the inspections conducted for these units.
PW4: No.”
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Deposition of PW-4 recorded in the enquiry on 03.03.1993:
“DR: You said certain units have not been
inspected by your predecessors. Can
you tell us the basis for this allegation.
PW 4: No proper records were maintained.
DR: Did you trace/see the inspection cards
relating to the period of 1988, 87 &
back.
PW4: Yes.
DR: A submission to EO: We have been told
by the branch that the inspection
records related to 88,87 & back are not
available. Kindly direct the prosecution
to make available copies of the records
for the defence purpose.
EO: DR to specifically mention the
inspection registers in r/o which units
you require to enable EO to examine
your request.
DR: Inspection cards in r/o units mentioned
in the charge sheet.
EO: PO may examine the request of DR and
if possible records, if available may be
given.
Otherwise a report may be given to
EO.”
21. It transpires that there was a direction to produce the
inspection records relating to units mentioned in the
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chargesheet. The following is found in the transcript in the
enquiry proceeding (dated 04.05.1993):-
“PO: I was requested by DR in the previous sitting
to produce two documents viz. Inspection register
for the relevant period and list of machinery in r/o
M/s. Bindu Enterprises. I am submitting the
inspection register & also a list of machineries as
requested for perusal of EO & DR.
DR: We will respond after going through the said
documents.”
(emphasis supplied)
Onus of proof
22. Having considered the above, we are constrained to
conclude that the charge of the Bank, that the inspection was
not carried, stood established. Then it was for the respondent
to show, as undertaken by him, what his response to the
allegation was.
23. It is well settled that, in a disciplinary proceeding, the
question of burden of proof would depend upon the nature of
the charge and the nature of the explanation put forward by
the respondent. In a given case, the burden may be shifted to
the respondent depending upon the explanation. [See Orissa
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Mining Corporation and Another vs. Ananda Chandra
Prusty , (1996) 11 SCC 600, Para 6].
24. Here the specific charge was with regard to a series of
named units, periodical inspections were not carried out. To
support the charge, witnesses were examined and on the
request through his defence representative, the Enquiry
Officer has directed the presenting officer to produce the
inspection records. The Enquiry Officer specifically asked
the defence representative to mention the inspection registers
in respect of the units which are required. The defence
representative specifically makes a request for the inspection
records in respect of the units mentioned in the charge sheet.
The Enquiry Officer directs the presenting officer to examine
the request and records, if available, be given. Thereafter, it
has come on record that the Presenting Officer produced the
inspection register for the relevant period for perusal of the
Enquiry Officer and the defence representative. On this, the
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defence representative stated that they would respond, after
going through the documents. In the written submissions
filed, a grievance is raised that the records pertaining to
inspection were produced at the fag end of the enquiry. We
are not impressed with the submission since, it was after the
production of the inspection register that the defence
representative of the respondent had stated, that they will
respond after going through the said documents. No response
was forthcoming. Neither from the records nor at the hearing
has it been demonstrated as to how the charge of failure to
conduct the inspection was countered by the respondent. The
records sought being made available, the onus did shift to the
respondent to show that the charge was untenable.
25. In view of the above, clearly with regard to the first
limb of the first charge, namely, the failure to conduct
periodical inspection, it cannot be said that the finding of the
Enquiry Officer is on a mis-reading of the evidence or that
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the records of the inspection of units were part of the records
that could be possibly misplaced or that a finding was based
on some stray sentence and personal knowledge was
imported by the Enquiry Officer de hors the record.
Charge regarding formalities for creation of equitable
mortgage
26. There is one other aspect which has completely escaped
the attention of the learned Single Judge and consequently
the Division Bench. One of the charges dealt with by the
Enquiry Officer was about not securing the advance to M/s
Saraswathi Fabricators by creation of an equitable mortgage
even though the equitable mortgage of immovable property
was offered by the party. The following findings were
recorded by the Enquiry Officer:-
“On page 12 para 7.2 of PEX 9, the borrower has
offered equitable mortgage of building at No. 458,
Viveknagar, Bangalore, a site measuring 1500 sq. ft.
and built in area of 700 sq. ft. belonging to Sri K. V.
Srinivasan valued at Rs. 4.5 lacs. The CO by his
negligence has not stipulated this in his
recommendations to the BM. In the process the
advance could not be collaterally secured by
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non-creation of equitable mortgage. Hence the
charge that equitable mortgage has not been created
is proved.”
27. To satisfy ourselves, we examined the record of the
enquiry proceedings on this issue. In the deposition of PW-4,
recorded in the enquiry proceeding on 17.02.1993, the
following is found:-
“PO: Looking to PEX page 12 item 7.2 of PEX 9
please tell us the collateral security offered by
the unit.
PW4: …. security is a site measuring 1,500 sq. ft. & bldg.
area of 700 sq. ft. belonging to Sri KV Srinivasan
at Vivek Nagar, Bangalore valued at Rs.4.5 lacs.
PO: Was the formality completed at the time of
sanctioning of this loan.
PW4: No.”
Deposition of PW-4 recorded on 03.03.1993:-
“DR: Who puts the stipulations in sanctioning of a loan?
At the branch level?
PW4: Field Officer in consultation with the Br. Manager.
DR: Can the Br. manager as sanctioning authority
waive any stipulation?
PW4: Depends on the circumstances.
…. …..
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DR: Showing PEX9 from pg. l to 12 constitute the
application. Do you agree?
PW4: It is application cum interview form.
DR: From pg. 13 to 19 forms appraisal memorandum.
PW4: Yes.
DR: The application contains the offers of the
applicant and the appraisal contains the conditions of
sanction by the sanctioning authority. Do you agree?
PW4: The application cum interview form is containing
information regarding the prospective borrower.
Based on the information the FO in consultation
with BM has to fix the credit limits and
stipulations in the appraisal memorandum.
DR: On page 12 para 7. 2 though there is an offer, on
pg. 18 para 9.2 there is no stipulation to the effect
that the offer of the applicant should be taken as
collateral security. Do you see?
PW4: I do not know.
DR: On pg.12 para 7.2 there is a mention of equitable
mortgage of certain properties. Do you see?
PW4: Yes.
DR: On pg.18 para 9.2 under the stipulation the
stipulation column is vacant. Do you see?
PW4: Yes.
DR: The taking of equitable mortgage of certain
securities is not a condition stipulated by the sanctioning
authorities i.e. BM at branch level in r/o PEX9, pg. 18,
para 9.2 'stipulations'.
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PW4: Yes,
DR: Hence the question of completion of the formalities
of non-existent stipulation does not arise. Do you see?
PW4: I do not know.”
28. What is significant to note is PEX 9 pertains to the
application for working capital in respect of M/s Saraswathi
Fabricators together with the appraisal memorandum. It is
clear from the deposition that the applicant for the loan had
offered collateral security in the form of land and building
and that the formality of collateral security was not taken. It
is further borne out that it is the Field Officer in consultation
with the Branch Manager who has to fix the credit limit and
the stipulations. It appears from the records that no
stipulation was put with regard to equitable mortgage so
mentioned with regard to M/s Saraswathi Fabricators, even
though the party had offered equitable collateral security in
the form of immovable property.
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29. The explanation of the respondent is only that there was
no stipulation in the sanction order with regard to the taking
of collateral security. The charge is that, with regard to M/s
Saraswathi Fabricators, the formalities for creating equitable
mortgage over immovable property offered as collateral
security were not completed. The evidence of PW-4 is that
the stipulation for collateral security is so made by the Field
Officer in consultation with the Branch Manager.
30. In the light of the above, the finding of the Enquiry
Officer that the respondent, by his negligence, did not
stipulate this in his recommendation to the Branch Manager
and, as such, the advance could not be collaterally secured by
creation of equitable mortgage cannot be said to be perverse
or based on no evidence.
31. The answer given by the respondent in the writ petition
that personal guarantee was available; that the sanction did
not contain any condition regarding equitable mortgage of the
27
property; that documents of title were traced only in
September, 1988 after he left the Branch in June, 1988; that
as required by the successor of the respondent and the then
Branch Manager, the respondent had identified the
documents and suggested that they complete the work
connected with the creation of equitable mortgage, are not
matters on which the view of the Disciplinary Authority can
be substituted. In the written submissions filed, the
respondent claims that, after the papers were traced, the
mortgage was, in fact, effected. Even this would not make
any difference to the charges and the findings recorded,
which themselves were based on the evidence on record.
Scope of judicial review in disciplinary proceedings
32. From the above discussion, it is clear that it could not
be said that the Enquiry Report, the findings of the
28
Disciplinary Authority and the order of the Appointing
Authority are based on no evidence or are perverse. Even if
we eschew the report insofar as the aspect of non-submission
of control form, the transgression of the area of operation and
non-declaration of the immovable property and certain other
charges are concerned, the order of penalty can be sustained.
33. As has been demonstrated above, the aspects of failure
to conduct periodic inspection and the negligence in not
stipulating the taking of immovable property as collateral
security in the case of M/s Saraswathi Fabricators in spite of
the party offering it, constrain us to conclude that there was
material on record for the appellant to pass the order of
penalty.
34. Mr. S.N. Bhat, learned Senior Counsel, relying upon the
judgments of this Court in Nand Kishore Prasad vs. State of
Bihar and Others , (1978) 3 SCC 366 and Anil Kumar vs.
Presiding Officer and Others , (1985) 3 SCC 378 contends
that the Disciplinary Authority should arrive at its conclusion
29
on the basis of some evidence with some degree of
definiteness pointing to the guilt of the delinquent in respect
of the charge against him. He would contend that a suspicion
cannot be allowed to take the place of proof and scrupulous
care must be taken to see that the innocent are not punished
by recording findings merely based on ipse dixit of the
Enquiry Officer. We are unable to accept the contention that
the principles laid down in the above judgments are attracted
to the present case. The judgments cited are clearly
distinguishable, for the reasons that we have set out
hereinabove, while analyzing the facts of the present case.
35. Shri Sanjay Kapur, learned counsel for the Bank relies
on State Bank of India vs. Ram Lal Bhaskar and Another ,
(2011) 10 SCC 249. In that judgment the scope of judicial
review of departmental proceedings was set out and the
principle laid down in State of A.P. vs. S. Sree Rama Rao ,
AIR 1963 SC 1723, was reiterated, which reads as follows:-
30
“This Court has held in State of A.P. and Others v. S.
Sree Rama Rao (AIR 1963 SC 1723, para 7):
"7. … The High Court is not constituted in a
proceeding under Article 226 of the Constitution a
Court of appeal over the decision of the authorities
holding a departmental enquiry against a public
servant: it is concerned to determine whether the
enquiry is held by an authority competent in that
behalf, and according to the procedure prescribed in
that behalf, and whether the rules of natural justice are
not violated. Where there is some evidence, which the
authority entrusted with the duty to hold the enquiry
has accepted and which evidence may reasonably
support the conclusion that the delinquent officer is
guilty of the charge, it is not the function of the High
Court in a petition for a writ under Article 226 to
review the evidence and to arrive at an independent
finding on the evidence."
13. Thus, in a proceeding under Article 226 of the
Constitution, the High Court does not sit as an
appellate authority over the findings of the disciplinary
authority and so long as the findings of the disciplinary
authority are supported by some evidence the High
Court does not re-appreciate the evidence and come to
a different and independent finding on the evidence.
This position of law has been reiterated in several
decisions by this Court which we need not refer to, and
yet by the impugned judgment the High Court has re-
appreciated the evidence and arrived at the conclusion
that the findings recorded by the enquiry officer are not
substantiated by any material on record and the
allegations leveled against the respondent no.1 do not
constitute any misconduct and that the respondent no.1
was not guilty of any misconduct.”
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36. It is now well settled that the scope of judicial review
against a departmental enquiry proceeding is very limited. It
is not in the nature of an appeal and a review on merits of the
decision is not permissible. The scope of the enquiry is to
examine whether the decision-making process is legitimate
and to ensure that the findings are not bereft of any evidence.
If the records reveal that the findings are based on some
evidence, it is not the function of the court in a judicial
review to re-appreciate the same and arrive at an independent
finding on the evidence. This lakshman rekha has been
recognized and reiterated in a long line of judgments of this
Court.
37. In the present case, it could certainly not be said that the
report is based on no evidence or that it is perverse. The
learned Single Judge transgressed the limits of judicial
review in setting aside the enquiry proceedings and the
punishment imposed. The Division Bench, in a short order
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has, after extracting a part of the learned Single Judge’s
judgment, gone on to hold that having perused the records of
the enquiry they do not find that the charges have been dealt
with in any manner of specificity. Thereafter they conclude
that the learned Single Judge was justified in arriving at its
conclusion. We are not able to sustain the orders of the
learned Single Judge and the Division Bench.
Severability of charges
38. The question that remains is, in the light of the findings
above, does the order of penalty imposed call for any
interference?
39. The law is well-settled that if in a disciplinary
proceeding, the order of penalty can be imposed on the
charges proved and the punishment imposed is lawfully
sustainable on those charges, it is not for the Court to
consider whether those grounds alone would have weighed
with the authority in imposing the punishment. No doubt, on
the facts of the present case, on some aspects of the charge,
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the proof may have been found wanting. However, since the
law laid down by this Court is that unless punishment
imposed is only co-relatable to any of those charges found
not proved, the penalty cannot be set aside. In this case, the
punishment can be sustained even if the charges held not
proved are severed. [See State of Orissa vs. Bidyabhushan
Mohapatra [1963] Supp. 1 SCR 648 and Deputy General
Manager (Appellate Authority) and Others. vs. Ajai Kumar
Srivastava , (2021) 2 SCC 612].
40. Then the only question is does the penalty imposed
shock the conscience of the Court? In the oral arguments as
well as in the written submissions, the respondent contended
that there was no charge of financial misappropriation or of
causing any financial loss to the Bank. This submission was
countered by the appellant by placing reliance on the
judgment of this Court in Disciplinary Authority-cum-
Regional Manager and Others vs. Nikunja Bihari Patnaik ,
(1996) 9 SCC 69, particularly, the holding of the Court in
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para seven thereof to contend that the test is really not of loss
having been resulted or profit having been made. The test is
whether the delinquent employee, has observed the
prescribed norms of the Bank. The penalty imposed in this
case is “ reduction in basic pay to the lowest stage in Scale-I ”
as envisaged under Rule 49 (e) of the State Bank of India
(Supervising Staff) Service Rules and further, to treat the
period spent by the delinquent officer under suspension from
18.08.1990 till the date of his reinstatement as suspension
only. Since the charge of not conducting periodical
inspection and the failure to complete the formalities for
creating equitable mortgage with regard to M/s Saraswathi
Fabricators are supported by evidence, we do not think that
the penalty as imposed is disproportionate so as to shock the
conscience of the Court. We maintain the penalty as imposed
in the order of the Appointing Authority dated 31.01.1995
and as confirmed by the Appellate Authority.
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41. For the reasons stated above, we have no hesitation in
holding that both the learned Single Judge and the Division
Bench were in error in allowing the writ petition and
interfering with the findings of the Enquiry Officer, the
decision of the Disciplinary Authority, the order of the
Appointing Authority and the decision of the Appellate
Authority. We, therefore, set aside the order of the learned
Single Judge and that of the Division Bench and dismiss the
Writ Petition No. 29547 of 1997 filed by the respondent.
Accordingly, the Appeal is allowed, with no order as to costs.
…..…………………J.
(J.K. Maheshwari)
…..…………………J.
(K.V. Viswanathan)
New Delhi;
August 24, 2023.
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