Full Judgment Text
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CASE NO.:
Appeal (civil) 2961-2962 of 2008
PETITIONER:
The Managing Director State Bank of Hyderabad and Anr
RESPONDENT:
P. Kata Rao
DATE OF JUDGMENT: 24/04/2008
BENCH:
S.B. Sinha & D.K. Jain
JUDGMENT:
J U D G M E N T
REPORTABLE
CIVIL APPEAL NOS. 2961-2962 OF 2008
(Arising out of SLP (C) Nos. 14356-14357 of 2007)
S.B. Sinha, J.
1. Leave granted.
2. Appellant is aggrieved by and dissatisfied with a judgment and order
dated 4.6.2007 passed by a Division Bench of the Andhra Pradesh High
Court in Writ Appeal No. 627/628 of 2005 whereby and whereunder it
refused to interfere with the judgment and order passed by a learned Single
Judge of the said Court in WP No. 476 of 2001.
3. Respondent at all material times was an employee in the appellant
Bank. He was placed under suspension on or about 13.8.1998. A
departmental proceeding was initiated against him.
12 items of charges were drawn up; charge Nos. 11 and 15 whereof
read as under:
"Charge No. 11: He authorized cash and transfer
credits to the demand loan accounts against pledge
of gold ornaments of Smt. P. Lakshmi, his wife,
from out of proceeds of loan amounts released to
two DIR and one cash credit borrowers. Thus he
facilitated his wife to get undue pecuniary benefit by
permitting unauthorized adjustments which were
done with his prior knowledge.
Charge No. 15: He sanctioned and released
loans to his close relatives in contravention of H.O.
Cir. No. ADV/98 of 1976 dated the 2nd December,
1976."
4. He was also proceeded against in a criminal case. He was acquitted
of the criminal charges.
5. However, the departmental proceedings continued during pendency of
the criminal proceedings as prayer for stay thereof was not acceded to. The
Enquiry Officer found that all the charges apart from charge Nos. 1(a), 2(b),
3 were proved.
6. The Appointing Authority passed an order of dismissal. An appeal
preferred thereagainst by the respondent was dismissed.
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7. By an order dated 29.12.1995, the appellant was acquitted of the
charges framed against him in the criminal proceeding under Sections 120B,
420 and 468 of the Indian Penal Code. He was also acquitted of the charges
for alleged commission of offences under Section 5(1)(d) read with Section
5(2) of the Prevention of Corruption Act.
8. Respondent, however, was convicted under Section 477(A) of the
Indian Penal Code as also under Section 5(1)(d) and 5(2) of the Prevention
of Corruption Act. He preferred an appeal thereagainst before the High
Court.
A Writ Petition was also filed questioning the said order of dismissal.
9. By an order dated 12.3.1999, a learned Single Judge of the High Court
quashed the order of punishment and directed the disciplinary authority to
issue a show cause notice indicating the modified punishment and pass an
appropriate order.
10. A show cause notice was issued, pursuant to the said direction.
11. Again an order of dismissal was passed on 2.7.1999. An appeal
preferred thereagainst was dismissed. Another writ petition was filed by the
respondent aggrieved by and dissatisfied therewith.
12. The Criminal Appeal filed by the appellant came up for consideration
before a learned Single Judge of the High Court and by a judgment and
order dated 3.10.2001, it was held:
"... In such a case, it is difficult to believe that the
appellant had any intention to benefit himself or
other persons. It has to be noted that the above
reasoning of the trial court is most perverse and
without any material. In my considered view the
trial court had jumped to the conclusion without
any basis."
13. As regards, alleged commission of offence under Section 477A of the
Indian Penal Code, it was stated:
"From the above discussion, I am of the
considered opinion that the appellant could not
have made the alleged entries willfully and with
dishonest intention to defraud. It is certainly not
the case of the prosecution that the appellant had
independently committed the offence under
Section 477-A I.P.C. and on the contrary the
specific allegation of the prosecution was that
there was conspiracy initially and as such a
conspiracy has culminated into various offences
attributable to all the accused and in particular of
the offence under Section 477-A against the
appellant.
Therefore, in view of the above observation made
by the Apex Court and in view of peculiar facts
and circumstances, in the instant case, it is unsafe
to draw any adverse inference against the appellant
that he committed the offence under Section 477-A
I.P.C., inasmuch as the essential ingredients viz.,
’willfulness’ and ’intention’ to defraud could not
successfully be substantiated by the prosecution
against the appellant. Admittedly the case of the
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appellant as stated in his examination under
Section 313 Cr.P.C., that it was only a mistake
committed inadvertently and from the above facts
and circumstances and the evidence on record, the
only inference that can be drawn is that the
accused, no doubt, might have made some wrong
entries, but the same cannot be termed as acts of
willfulness and with fraudulent intention to falsify
the accounts. Hence the appellant is entitled for
an acquittal for the offence under Section 477-A
I.P.C."
The judgment of conviction and sentence under Sections 5(1)(d) and
5(2) of the Prevention of Corruption Act was also set aside by the High
Court opining that the prosecution had failed to prove the guilt of the
accused beyond all reasonable doubts, holding:
"... In other words when the appellant was
acquitted of all the charges including the charge
under Section 477-A, I.P.C. by this Court, it
cannot be said that he committed the offence under
the provisions of Prevention of Corruption Act."
14. The Writ Petition filed by the appellant against the order of dismissal
passed against him came up for consideration before a learned Single Judge
of the High Court. The High Court, while passing its judgment dated
7.02.2005, considered the totality of the circumstances.
As regards the correctness of the order of dismissal, it was opined:
"\005.The said orders can in no way be considered to
be a reason as such for a de novo consideration on
the aspect of punishment and it is also to be
noticed that reconsideration is only in respect of
punishment and that too based on the earlier
recommendations made in appeal. Therefore,
necessarily it follows that the order of dismissal as
was imposed earlier on 23.07.1994 could not
possibly be repeated or restated much less
reimposed. Necessarily it has to be any other
punishment other than the order of dismissal or
removal. Further, the specific direction is only to
take a follow up action in terms of the directions
given in the appeal on the earlier occasion. Thus,
on a conspectus reading of the said directions, the
only scope left for reconsideration is to once again
take into consideration the earlier directions given
in appeal and not otherwise, or to impose any other
punishment much less dismissal order. Having
regard to the aforesaid circumstances and also
even taking into account totality of the
circumstances vis-‘-vis the allegations as made
against him and also the clear acquittal of the
petitioner on criminal side though it may not be
binding, necessarily the respondents had to follow
the earlier orders of this Court, since the same are
not kept in view and the impugned orders are not
in terms of the said order. Hence, the matter
requires to be reconsidered afresh by the
authorities. In the circumstances, it has to be held
that the impugned orders of the respondents in
dismissing the petitioner from service are not only
contrary to the directions given by this Court on
12.03.1999 in W.P. No. 16833 of 1994, but also do
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not in any way commensurate to the gravity of the
allegations as made or found against him."
It was directed:
"In the circumstances, both the Writ Petitions are
allowed setting aside both the orders of
respondents dated 02.07.1999 and 02.02.2000 and
directing fresh consideration and disposal of the
matter in accordance with law after giving notice
and opportunity to the petitioner. The respondents
are also directed to pay subsistence allowance and
all such other allowances to which the petitioner is
entitled during the period of his suspension from
01.08.1994 to 02.07.1999. No costs."
15. An intra-court appeal was preferred thereagainst. The Division
Bench, in its impugned judgment dated 4.06.2007, opined:
"In the present case, we find that the enquiry
officer had exonerated the respondent of charges
1(a), 2(b), 3 and 5, which pertain to
misappropriation and deriving of pecuniary
benefits by him. A perusal of the judgment dated
03.10.2001 passed by the learned Single Judge in
Criminal Appeal No. 12 of 1996 makes it clear that
the respondent was honourably acquitted with an
unequivocal finding that there was neither any loss
to the bank nor any pecuniary benefit was taken by
the respondent. Thus, on the crucial issue whether
the respondent is guilty of financial misfeasance
and malfeasance, there is no conflict between the
findings of the enquiry officer and the Court,
which disposed of the criminal appeal. Since the
learned Single Judge, who decided Writ Petition
No. 16833 of 1994 and the appointing authority,
which reconsidered the matter in the light of the
direction given by this Court, did not have the
benefit of considering the judgment of acquittal
rendered in Criminal Appeal No. 12 of 1996, the
only appropriate course would be to direct the
appellants to again consider the respondent’s case
and pass appropriate order in accordance with law.
[Emphasis supplied]
It was directed:-
"In the result, Writ Appeal No. 627 of 2005 is
dismissed and Writ Appeal No. 628 of 2005 is
disposed of with the direction that the appointing
authority shall reconsider the case of the
respondent on the issue of quantum of punishment
to be imposed on him and pass appropriate order
within six weeks from the date of receipt of copy
of this judgment."
16. Mr. Soli J. Sorabjee, the learned senior counsel appearing on behalf of
the appellant would submit that the High Court committed a serious error in
passing the impugned judgment insofar as it failed to take into
consideration:-
(i) That the criminal court merely granted the benefit of doubt in
favour of the respondent; and
(ii) Even an order of acquittal may not be a bar for passing an order of
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dismissal from service particularly keeping in view the fact that a
bank employee is required to maintain strict integrity.
17. Mr. P. Kata Rao, the respondent appearing in person, however, would
urge that both the departmental proceedings and the criminal case were
based on the same set of facts. The charge of misconduct against him, it
was urged, was based on violation of some procedural guidelines only and,
thus, not grave in nature. It was pointed out that the learned Single Judge
examined the entire records and it had been found that the respondent is not
guilty of any malpractice and furthermore has not derived any pecuniary
benefit. Even the charges of misappropriation, it was urged, have not been
proved against him.
18. There cannot be any doubt whatsoever that the jurisdiction of superior
courts in interfering with a finding of fact arrived at by the Enquiry Officer
is limited. The High Court, it is trite, would also ordinarily not interfere
with the quantum of punishment. There cannot, furthermore, be any doubt
or dispute that only because the delinquent employee who was also facing a
criminal charge stands acquitted, the same, by itself, would not debar the
disciplinary authority in initiating a fresh departmental proceeding and/ or
where the departmental proceedings had already been initiated or to continue
therewith.
19. We are not unmindful of different principles laid down by this court
from time to time. The approach that the court’s jurisdiction is unlimited
although had not found favour with some Benches, the applicability of the
doctrine of proportionality, however, had not been deviated from.
20. The legal principle enunciated to the effect that on the same set of
facts the delinquent shall not be proceeded in a departmental proceedings
and in a criminal case simultaneously, has, however, been deviated from.
The dicta of this Court in Capt. M. Paul Anthony v. Bharat Gold Mines Ltd.
and Another [(1999) 3 SCC 679], however, remains unshaken although the
applicability thereof had been found to be dependant on the fact situation
obtaining in each case.
21. The case at hand is an exceptional one. Respondent was a responsible
officer. He was holding a position of trust and confidence. He was
proceeded with both on the charges of criminal misconduct as also civil
misconduct on the same set of facts, subject, of course, to the exception that
charges Nos. 11 and 15 stricto sensu were not the subject matter of criminal
proceedings, as integrity and diligence, however, were not in question.
Before us also it has not been contended that he had made any personal gain.
22. The High Court in its judgment categorically opined that he merely
had committed some inadvertent mistakes. He did not have any intention to
commit any misconduct. The purported misconduct on his part was neither
willful nor there existed any fraudulent intention on his part to falsify the
account. The High Court opined that the prosecution had failed to bring
home the guilt of the accused beyond all reasonable doubts for the offences
punishable under the provisions under the Indian Penal Code.
The judgment of the High Court states a definite view. It opined that
the finding of the learned Trial Judge holding him guilty under Section 477A
of the Indian Penal Code and the provisions of the Prevention of Corruption
Act was perverse. The circumstances in favour of the accused, the High
Court inferred, had wrongly been attributed against him by the Trial Judge.
23. A learned Single Judge of the High Court in his judgment dated
7.02.2005 only upon taking into consideration the observations made by the
High Court in the said criminal appeal but also the other circumstances,
brought on record, directed fresh consideration and disposal of the matter in
accordance with the law upon giving an opportunity of hearing to the
respondent. The Division Bench of the High Court, in the first round of
litigation, noticed that the entire record had been perused by the learned
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Single Judge. It was found that the original authority had imposed a
punishment of only stoppage of one increment with cumulative effect which
was modified by the appellate authority into one of withholding of increment
without cumulative effect and held that failure of the disciplinary and
appellate authorities to take into consideration modified punishment has
caused serious prejudice to the respondent.
24. It was furthermore noticed that in purported compliance of the
directions issued by the learned Single Judge, the penalty of dismissal from
service was re-imposed on the respondent.
25. The Division Bench, however, disagreed with the conclusion of
imposition of stoppage of one increment. Even then it observed that in the
facts and circumstances of this case the issue relating to dismissal of
respondent needs reconsideration. It was directed:
"While doing so, the concerned authority shall
keep in view the following factors:
(i) Both the disciplinary authority
and this Court in Criminal Appeal No. 12
of 1996 found the respondent not guilty
of charges of misappropriation, deriving
the personal benefit for himself and
causing loss to the bank.
(ii) The effect of the Judgment of
this Court in Criminal Appeal No. 12 of
1996 in the light of the decision of the
Supreme Court in M. Paul Anthony’s
case (supra) and G.M. Tank’s case
(supra).
(iii) Modified punishment of
withholding of increment without
cumulative effect imposed on the
respondent is a minor penalty unlike the
punishment of withholding of increment
with cumulative effect, which was held
to be a major penalty by the Supreme
Court in Kulwant Singh Gill’s case
(supra).
(iv) While considering the
proportionality of the punishment,
distinction lies between the procedural
irregularities constituting misconduct
from the acts of misappropriation of
finances, causing loss to the institution,
etc."
26. We do not see any reason keeping in view the peculiar facts and
circumstances of the case to disagree with the said findings, although we
would like to reiterate the principles of law to which we have referred to
hereinbefore.
27. We may, however, notice that Mr. Sorabjee has strongly relied upon a
decision of this Court in Commissioner of Police, New Delhi v. Narender
Singh [(2006) 4 SCC 265] to contend that therein initiation of a
departmental proceeding was upheld inter alia on the ground that although a
confession made by an accused in a criminal proceeding would not be
admissible having regard to Sections 25 and 27 of the Evidence Act, the
same would not be a bar to proceed against him departmentally.
In that case it was held:
"13. It is now well settled by reason of a catena of
decisions of this Court that if an employee has
been acquitted of a criminal charge, the same by
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itself would not be a ground not to initiate a
departmental proceeding against him or to drop the
same in the event an order of acquittal is passed."
This court therein considered the nature of the confessions made by
the delinquent officer and the implication thereof having regard to Sections
25 and 26 of the Evidence Act to hold that the Tribunal was not correct in
holding that the confessional statement was not admissible in the
departmental proceeding.
In G.M. Tank v. State of Gujarat and Others [(2006) 5 SCC 446],
noticing a large number of decisions operating in the field, it was observed:
"30. The judgments relied on by the learned
counsel appearing for the respondents are
distinguishable on facts and on law. In this case,
the departmental proceedings and the criminal case
are based on identical and similar set of facts and
the charge in a departmental case against the
appellant and the charge before the criminal court
are one and the same. It is true that the nature of
charge in the departmental proceedings and in the
criminal case is grave. The nature of the case
launched against the appellant on the basis of
evidence and material collected against him during
enquiry and investigation and as reflected in the
charge-sheet, factors mentioned are one and the
same. In other words, charges, evidence, witnesses
and circumstances are one and the same. In the
present case, criminal and departmental
proceedings have already noticed or granted on the
same set of facts, namely, raid conducted at the
appellant’s residence, recovery of articles
therefrom. The Investigating Officer Mr V.B.
Raval and other departmental witnesses were the
only witnesses examined by the enquiry officer
who by relying upon their statement came to the
conclusion that the charges were established
against the appellant. The same witnesses were
examined in the criminal case and the criminal
court on the examination came to the conclusion
that the prosecution has not proved the guilt
alleged against the appellant beyond any
reasonable doubt and acquitted the appellant by its
judicial pronouncement with the finding that the
charge has not been proved. It is also to be noticed
that the judicial pronouncement was made after a
regular trial and on hot contest. Under these
circumstances, it would be unjust and unfair and
rather oppressive to allow the findings recorded in
the departmental proceedings to stand.
31. In our opinion, such facts and evidence in the
departmental as well as criminal proceedings were
the same without there being any iota of
difference, the appellant should succeed. The
distinction which is usually proved between the
departmental and criminal proceedings on the basis
of the approach and burden of proof would not be
applicable in the instant case. Though the finding
recorded in the domestic enquiry was found to be
valid by the courts below, when there was an
honourable acquittal of the employee during the
pendency of the proceedings challenging the
dismissal, the same requires to be taken note of
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and the decision in Paul Anthony case1 will apply.
We, therefore, hold that the appeal filed by the
appellant deserves to be allowed."
Each case, therefore, must be determined on its own facts.
28. However, we may notice that this Court, in State Bank of India and
Others v. T.J. Paul [(1999) 4 SCC 759], noticed:
"7. The above orders were questioned in a writ
petition. The learned Single Judge while allowing
the writ petition held that the finding of the
enquiry officer on Item 23 was that no financial
loss was proved and if it was a case of not taking
adequate "security" from the loaners and in not
obtaining ratification as per Head Office
instructions, these charges were not sufficient \027 in
view of Rules 22(vi)(c) and (d) read with sub-rule
(vii) \027 for imposing a penalty of dismissal or
removal. Only a minor penalty could be imposed .
As per the enquiry officer’s report there was no
actual loss caused by reason of any act of the
employee wilfully done. There was no evidence of
financial loss adduced before the enquiry officer.
The finding that the respondent jeopardised the
Bank’s interest was based on no evidence. Penalty
must have been only for minor misconduct. The
SBI Rules were not applicable since the
misconduct alleged related to the period of service
in Bank of Cochin. The learned Judge observed
that "punishment of removal" could not have been
imposed as it was not one of the enumerated
punishments under Bank of Cochin Rules. The
writ petition was allowed, the impugned order was
quashed. It was, however, observed that the Bank
could impose punishment for minor misconduct as
per rules of Bank of Cochin."
T.J. Paul (supra) was a case involving violation of the instructions of
the Head Office as also gross negligence on the part of the delinquent
officer. While holding that the same would constitute major misconduct
referring to the case of Union of India v. G. Ganayutham [(1997) 7 SCC
463], it was opined:
"19\005In our view, this decision is not applicable to
the facts of the case. Here the Court is not
interfering with the punishment awarded by the
employer on the ground that in the opinion of the
Court the punishment awarded is disproportionate
to the gravity of the misconduct. Here, the
gradation of the punishments has been fixed by the
rules themselves, namely, the rules of Bank of
Cochin and the Court is merely insisting that the
authority is confined to the limits of its discretion
as restricted by the rules. Inasmuch as the rules of
Bank of Cochin have enumerated and listed out the
punishments for "major misconduct", we are of the
view that the punishment of "removal" could not
have been imposed by the appellate authority and
all that was permissible for the Bank was to
confine itself to one or the other punishment for
major misconduct enumerated in para 22(v) of the
rules, other than dismissal without notice. This
conclusion of ours also requires the setting aside of
the punishment of "removal" that was awarded by
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the appellate authority. Now the other punishments
enumerated under para 22(v) are "warning or
censure or adverse remark being entered, or fine,
or stoppage of increments/reduction of basic pay
or to condone the misconduct and merely
discharge from service". The setting aside of the
removal by the High Court and the relief of
consequential benefits is thus sustained. The
matter has, therefore, to go back to the appellate
authority for considering imposition of one or the
other punishment in para 22(v) other than
dismissal without notice."
29. As the respondent has merely been found to be guilty of commission
of procedural irregularity, we are of the opinion that it is not a fit case where
we should exercise our discretionary jurisdiction under Article 136 of the
Constitution of India, particularly in view of the fact that the respondent has
now reached his age of superannuation, and the appropriate authority of the
appellant would be entitled to impose any suitable penalty upon him.
35. The appeals are dismissed. No costs.