Full Judgment Text
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CASE NO.:
Appeal (civil) 2508 of 1998
PETITIONER:
Kailash Nath Gupta
RESPONDENT:
Enquiry Officer, (R.K. Rai), Allahabad Bank & Ors.
DATE OF JUDGMENT: 27/03/2003
BENCH:
Shivaraj V. Patil & Arijit Pasayat.
JUDGMENT:
J U D G M E N T
SHIVARAJ V. PATIL J.
The appellant was an officer in the Allahabad Bank
when disciplinary proceedings were initiated against
him on account of certain alleged irregularities.
Following charges were framed against him: -
"ARTICLE I
That the said Shri K.N. Gupta while
functioning as Manager during the period from
March, 1983 to April, 1986, allowed advances
to various borrowers without observing the
norms procedure laid down from time to time
by Head Office. Due to his negligence Bank’s
money is in jeopardy. Out of good number of
irregular advances, few cases are taken
hereafter.
Advances for pumpsets have been allowed
under Minor irrigation loan scheme -
(1) without observing the requirement of
possessing the minimum land holding by
the borrowers. Few cases having such
irregularities are as follows: -
Name of the Date Amount Land holding
Borrower Advance Advance
Sri Ram Ratan 29.3.85 Rs.4750/- 1.37 acres
Ram (Jt. A/c)
Sri Indra Deo 11.3.85 Rs.1200/- 1.64 acres
Singh Yadav
b) Under the aforesaid minor irrigation
scheme advances for pumpsets have been
allowed without obtaining the completion
report of boring from A.D.O. (M.I.).
Few such cases are as follows: -
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Name of the Date of Amount of
Borrower Advance Advance
Sri Narain & others 6.6.84 Rs.8536.00
25.5.84 Rs.2150.00
Rabindra Singh Yadav 13.8.84 Rs.7800.00
9.8.84 Rs.4200.00
c) Under minor irrigation scheme advances
for electric Tube Well/pump set have
been allowed without verification of
electricity. Few examples are as
follows: -
Name of the Date of Amount of
Borrower Advance Advance
Ram Kanwar and ors. 7.2.85 Rs.7500.00
Sri Santi 28.3.84 Rs.7000.00
ARTICLE II
That during the aforesaid period and
while functioning in the Yusufpur branch of
the Allahabad Bank as Manager the said Sri
K.N. Gupta allowed advances to small
borrowers under small loan scheme and did not
obtain the relative bills. As such the end-
use of the loan amount was not ascertained.
Few examples are as follows: -
Name of the Date of Amount of
Borrower Advance Advance
Sri Kanhiya Lal 12.4.85 Rs.6000.00
Verma
Smt. Jahan Ara begum 10.4.85 Rs.6000.00
ARTICLE III
That during the period from March, 1983
to April, 1986 while functioning as Manager
in the Yusufpur Branch of Allahabad Bank the
said Shri K.N. Gupta ignoring the preliminary
norms of Bank’s financing did not obtain No
Dues Certificate from other financing
institutions. Few examples are as follows: -
Name of the Date of Amount of
Borrower Advance Advance
Sri Ram Javit 22.6.84 Rs.9000.00
Sri Janamjaya Singh 14.3.86 Rs.4750.00
ARTICLE IV
That the said Sri K.N. Gupta while
functioning as Manager during the period from
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march, 1983 to April, 1986 allowed advance of
Rs.25,000/- under SEEUT scheme to Sri Shashi
Kumar Upadhyay on 30.3.1984 for purchase of
Tempo Taxi. Again the finance was allowed to
Sri J.P. Pandey on the same vehicle without
adjusting the outstanding in the loan amount
of Sri Shashi Kumar Upadhyay. He has thus
jeopardized Bank’s money.
ARTICLE V
That during the aforesaid period from
March, 1983 to April 1986 while functioning
in the Yusufpur Branch of the Bank as Manager
the said Shri K.N. Gupta allowed advances to
such borrowers just for extending them the
benefit of subsidy money, few such examples
are as follows: -
Name of the Date of Amount of
Borrower Advance Advance
Smt. Ugani Devi 1.3.86 Rs.4250.00
Sri Kapoor Chand 27.3.86 Rs.4750.00
Singh Yadav
By this aforesaid negligence and
irregular action Sri Gupta has violated the
rules 3(1) & 3(3) of Allahabad Bank Officer
Exmployees’ (Conduct) Regulations, 1976 which
amounts to misconduct under rule 24 of the
aforesaid regulations."
After holding enquiry, he was found guilty of some
of the charges and ultimately the disciplinary
authority ordered his removal from service. He also
failed in the appeal filed before the appellate
authority challenging the order of his removal from
service. Thereafter, he filed a writ petition in the
High Court challenging the order of his removal from
service contending that - (a) the order of dismissal
was passed by an authority junior to the appointing
authority, so it was violative of Article 311 of the
Constitution of India; (b) none of the charges leveled
against him amounted to any misconduct; (c) the
findings of the disciplinary authority as well as the
appellate authority were perverse and (d) that the
punishment of removal awarded was wholly
disproportionate to the charges leveled against him.
The High court, on consideration of the material placed
before it and having regard to the submissions made on
behalf of either side, held against the appellant on
all the points. However, as regards the point relating
to awarding of disproportionate punishment, following
the judgment of this Court in State Bank of India &
Ors. vs. Samerendra Kishore Endow & Anr. [(1994) 2 SCC
537], the High Court was of the view that imposition of
appropriate punishment was within the discretion and
judgment of the disciplinary authority; it was not open
to the High Court or the administrative tribunal to
interfere with the quantum of punishment exercising
power of judicial review. Hence, in this appeal the
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appellant has called in question the validity and
correctness of the impugned order.
On 8.11.1996, this Court ordered issue of notice
limited to the question of the nature of the punishment
to be imposed on the appellant and the respondents were
directed to produce the confidential reports of the
appellant. On 5.5.1997, leave was granted and the
appeal was allowed. On 2.3.1998, this Court allowed
the review petition filed by the respondents observing
that there was an error apparent on the face of the
impugned order which had not taken into account the
settled position of law as profounded by this Court in
State Bank of India & Ors. vs. Samerendra Kishore Endow
& Anr. (supra). After setting aside the order dated
5.5.1997, while allowing the review petition, this
Court directed that the special leave petition be
placed for consideration afresh before an appropriate
Bench in the normal course. Thereafter, on 27.4.1998,
leave was granted again. It is how the appeal came up
for hearing before us.
The learned counsel for the appellant, confining
his argument to the quantum of punishment, urged that
the appellant was initially appointed as Clerk in the
respondent-Bank on 3.2.1959 and because of his hard
work, devotion to duty and integrity, he was promoted
to the officer cadre on 24.10.1973; from time to time,
he rose in the hierarchy; his competency, merit and
ability are well-reflected in the records; he had put
in more than 30 years’ unblemished service; the
irregularities found against him do not reflect about
his misconduct or any dishonest intention or
misappropriation of any money. According to the
learned counsel, the appellant acted only on the basis
of the circulars issued by the Bank and at any rate,
the extreme penalty of his removal from service was
shockingly disproportionate to the charges held proved
against him. The learned counsel also submitted that
the decision in the case of State Bank of India & Ors.
vs. Samerendra Kishore Endow & Anr. (supra) does not
hold the field any more. There has been great change
in approach of this Court even with regard to the
proportionality of the punishment to the charges
proved. He cited few decisions in support of his
submissions. He also added that the appellant was
removed from service on 28.3.1988; he could have
superannuated on 31.8.1994; even assuming that on
account of irregularities said to have been committed
by the appellant, a small loan amount of Rs. 45,000/-
in all, which could not be recovered from borrowers and
could be deducted from his retirement benefits.
On the other hand, the learned counsel for the
respondents made submissions in support of the impugned
order. The learned counsel further urged that having
regard to the nature of charges which were held proved
against the appellant, the punishment imposed on him
was quite justified. Under the circumstances, the
impugned order may not be disturbed.
We have carefully examined the submissions made by
the learned counsel for the parties. The High Court
did not go into the question as to whether the order of
removal of the appellant from service was grossly
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disproportionate in view of the decision of this Court
in State Bank of India & Ors. vs. Samerendra Kishore
Endow & Anr. (supra).
This Court in Union of India & Anr. vs.
G.Ganayutham [(1997 7 SCC 463] considered the question
whether judicial review powers in administrative law
permit the High Courts or the administrative tribunals
to apply the principle of "proportionality". In the
said judgment, reference is made to leading cases in
England and also to the rulings of this Court touching
the question of "proportionality". In para 15,
reference is made to the case of Ranjit Thakur vs.
Union of India & Ors. [(1987) 4 SCC 611). In that
case, after finding the appellant guilty in court
martial, he was dismissed from service and a sentence
of imprisonment was also imposed as permitted by Army
Act. While quashing the said punishment on the ground
that it was "strikingly disproportionate", this
Court, in para 25 observed thus:-
"25.... The question of the choice and
quantum of punishment is within the
jurisdiction and discretion of the
court-martial. But the sentence has to
suit the offence and the offender. It
should not be vindictive or unduly
harsh. It should not be so
disproportionate to the offence as to
shock the conscience and amount in
itself to conclusive evidence of bias.
The doctrine of proportionality, as part
of the concert of judicial review, would
ensure that even on an aspect which is,
otherwise, within the exclusive province
of the court-martial, if the decision of
the court even as to sentence is an
outrageous defiance of logic, then the
sentence would not be immune from
correction. Irrationality and
perversity are recognized grounds of
judicial review."
In the said case, the "doctrine of
proportionality" was treated as part of judicial
review in administrative law.
A Bench of three learned Judges of this Court in
B.C.Chaturvedi vs. Union of India & Ors. [(1995) 6 SCC
749], while dealing with the power to interfere with
the punishment imposed by the disciplinary authority,
in para 17, stated thus:-
"The next question is whether the
Tribunal was justified in interfering
with the punishment imposed by the
disciplinary authority. A Constitution
Bench of this Court in State of Orissa
vs. Bidyabhushan Mohapatra (AIR 1963 SC
779) held that having regard to the
gravity of the established misconduct,
the punishing authority had the power
and jurisdiction to impose punishment.
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The penalty was not open to review by
the High Court under Article 226. If
the High Court reached a finding that
there was some evidence to reach the
conclusion, it became unassessable. The
order of the Governor who had
jurisdiction and unrestricted power to
determine the appropriate punishment was
final. The High court had no
jurisdiction to direct the Governor to
review the penalty. It was further held
that if the order was supported on any
finding as to substantial misconduct for
which punishment "can lawfully be
imposed", it was not for the Court to
consider whether that ground alone would
have weighed with the authority in
dismissing the public servant. The
Court had no jurisdiction, if the
findings prima facie made out a case of
misconduct, to direct the Governor to
reconsider the order of penalty. This
view was reiterated in Union of India
vs. Sardar Bahadur [(1972) 4 SCC 618}.
It is true that in Bhagat Ram vs. State
of H.P. [(1983) 2 SCC 442] a Bench of
two Judges of this Court, while holding
that the High Court did not function as
a court of appeal, concluded that when
the finding was utterly perverse, the
High court could always interfere with
the same. In that case, the finding was
that the appellant was to supervise
felling of the trees which were not
hammer marked. The Government had
recovered from the contractor the loss
caused to if by illicit felling of
trees. Under those circumstances, this
Court held that the finding of guilt was
perverse and unsupported by evidence.
The ratio, therefore, is not an
authority to conclude that in every case
the Court/Tribunal is empowered to
interfere with the punishment imposed by
the disciplinary authority. In
Rangaswami vs. State of T.N. [(1989)
supp. 1 SCC 686], a Bench of three
Judges of this Court, while considering
the power to interfere with the order of
punishment, held that this Court, while
exercising the jurisdiction under
Article 136 of the Constitution, is
empowered to alter or interfere with the
penalty; and the Tribunal had no power
to substitute its own discretion for
that of the authority. It would be seen
that this Court did not appear to have
intended to lay down that in no case,
the High Court/Tribunal has the power to
alter the penalty imposed by the
disciplinary or the appellate authority.
The controversy was again canvassed in
State Bank of India case where the Court
elaborately reviewed the case law on the
scope of judicial review and powers of
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the Tribunal in disciplinary matters and
nature of punishment. On the facts in
that case, since the appellate authority
had not adverted to the relevant facts,
it was remitted to the appellate
authority to impose appropriate
punishment."
It is also further stated in the same judgment
that "the High Court/Tribunal while exercising the
power of judicial review, cannot normally substitute
its own conclusion on penalty and impose some other
penalty. If the punishment imposed by the disciplinary
authority or the appellate authority shocks the
conscience of the High Court/Tribunal, it would
appropriately mould the relief, either directing the
disciplinary authority/appellate authority to
reconsider the penalty imposed or to shorten the
litigation, it may itself in exceptional and rare cases
impose appropriate punishment with cogent reasons in
support thereof."
In the background or what has been stated above,
one thing is clear that the power of interference with
the quantum of punishment is extremely limited. But
when relevant factors are not taken note of, which have
some bearing on the quantum of punishment, certainly
the Court can direct re-reconsideration or in an
appropriate case to shorten litigation, indicate the
punishment to be awarded. It is stated that there was
no occasion in the long past service indicating either
irregularity or misconduct of the appellant except the
charges which were the subject matter of his removal
from service. The stand of the appellant as indicated
above is that though small advances may have become
irrecoverable, there is nothing to indicate that the
appellant had misappropriated any money or had
committed any act of fraud. If any loss has been
caused to the bank (which he quantifies at about
Rs.46,000/-) that can be recovered from the appellant.
As the reading of the various articles of charges go to
show, at the most there is some procedural irregularity
which cannot be termed to be negligence to warrant the
extreme punishment of dismissal from service.
These aspects do not appear to have been
considered by the High Court in the proper perspective.
In the fitness of things, therefore, the High Court
should examine these aspects afresh. The consideration
shall be limited only to the quantum of punishment and
not to any other question. As the appellant would have
superannuated in the normal course in the year 1994,
and the matter is pending for a long time, the High
Court is requested to dispose of the matter within six
months from the date of receipt of this order. It is
made clear that no opinion has been expressed by us as
to what would be the appropriate punishment. In this
view, the impugned order is set aside. The writ
petition is remitted to the High Court for disposal in
the light of what is stated above.
The appeal stands disposed of in the above terms with
no order as to costs.
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