Full Judgment Text
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PETITIONER:
THE DISCIPLINARY AUTHORITY-CUMREGIONAL MANAGER AND ORS.
Vs.
RESPONDENT:
NIKUNJA BIHARI PATNAIK
DATE OF JUDGMENT: 15/04/1996
BENCH:
JEEVAN REDDY, B.P. (J)
BENCH:
JEEVAN REDDY, B.P. (J)
MUKHERJEE M.K. (J)
CITATION:
JT 1996 (4) 457 1996 SCALE (3)711
ACT:
HEADNOTE:
JUDGMENT:
J U D G M E N T
B.P. JEEVAN REDDY,J.
Leave granted.
The respondent was an officer in Scale-I in the service
of the Central Bank of India. While he was working as the
Branch Manager, Paradeep Branch, he was suspended pending
enquiry on November 21, 1988. On January 16, 1989, ten
charges were communicated to him. He denied all of them. An
Enquiry Officer was appointed who reported, after holding a
due enquiry, that Charges Nos.1, 6, 8 and 9 were established
fully while Charges Nos.2,3,5,7 and 10 were established
partially. Charge No.4 was held not established. On the
basis of the said report, the appropriate authority
dismissed the respondent from service. The appeal preferred
by the respondent was dismissed whereupon he approached the
Orissa High Court by way of a writ petition. The High Court
has allowed the writ petition holding that the charges held
established against the respondent represent errors of
judgment but not "misconduct". The High Court opined that
though the respondent was guilty of doing many acts beyond
his authority, it was not established that it was done with
any ulterior motive or for any extraneous consideration.
Since the Enquiry Officer has not found that the Bank has
actually incurred any loss on account of the said acts of
the respondent, the High Court held, the charge of
misconduct is not established. Accordingly, the writ
petition was allowed, the order of punishment imposed upon
the respondent was set aside and the respondent was directed
to be reinstated in service with all consequential benefits.
The charges framed against the respondent are the following:
"(1) The Petitioner took charge of
the Branch from 29.9.86. At the
time of taking over charges there
were number of overdrafts accounts.
Instead of taking care for
adjustment of such advances by
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constant follow up, he continued to
extend the facility unauthorisedly
and without any delegated powers
even exceeding the outstanding
balance as on 29.9.86 as a result
bank’s interest is likely to be
jeopardized.
(2) The petitioner allowed clean
overdrafts to several parties
without any delegated authority and
much beyond his discretionary
powers, violating Central Office
guidelines as a result he has
exposed the bank to severe
financial risk.
(3) The petitioner allowed drawings
in cash credit a/cs much beyond the
sanctioned limits and or enhanced
the existing limits in gross
violation of his discretionary
powers. As such, there is every
likelihood that the bank’s interest
may be at stake.
(4) The petitioner sanctioned
number of fresh cast. credit limits
to different parties much beyond
his lending powers in violation of
bank’s norms and guidelines without
proper documents and in some cases
without any documents.
(5) The petitioner sanctioned a
number of Term Loans directly
without observing the bank’s rules
and guidelines.
(6) The petitioner unauthorisedly
issued Bank Guarantee on behalf of
different parties without
intimation to R.O. The guarantees
were issued and signed by himself
as Br.Manager though on behalf of
the Bank. While acting so he had
not taken counter guarantee in
some cases.
(7) While allowing unauthorisedly
advances/TOD/other loans, the
petitioner had not taken proper
documents. Most of the documents
taken were blank, undated,
unstamped. Thus he had not
safeguarded the interest of the
Bank.
(8) The petitioner though made
number of unauthorized irregular
advances, allowed clean overdrafts,
he had not submitted any Control
Returns to the Regional Office
inspite of letters/reminders.
(9) The petitioner allowed clean
overdraft in number of accounts
even after Regional Office’s
specific instructions to stop such
practices and stop allowing further
overdrafts. As such willfully he
violated instructions of higher
authorities which was an act of
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insubordination.
(10) In number of borrowal
accounts, the petitioner had not
done proper follow up and had no
taken due care either for renewal
of documents or for obtaining
balance confirmation. As a result,
in number of borrowal a/cs the
documents were allowed to go time
barred, putting the interest of the
bank at jeopardy. Even in proper
time he had not submitted the STF
to Regional Office for taking
legal action against such
defaulters."
In support of Charge No.1 as many as fifteen instances
were cited. While it is not necessary to refer to all those
instances, it is sufficient to mention that in all these
cases it has been found that the respondent acted beyond
his authority in allowing the overdrafts or in passing the
cheques, as the case may be. In some cases, the Bank was
benefited by the acts of the respondent while in some other
cases, the concerned amounts became sticky or irrecoverable.
Charge No.2 relates to temporary overdrawals allowed by the
respondent beyond his authority to different parties. A
number of instances were cited and held established. The
Enquiry Officer held the charge proved. He also found that
in some cases the Bank stood to gain while in some other
cases the concerned advances had become sticky. Similarly,
in respect of Charge No.3, number of instances were cited.
It was held that in many cases the respondent allowed
drawings/enhanced limits in excess of the sanctioned limits
in violation of his discretionary powers. Charges Nos.5,6
and 7 speak of the respondent acting beyond his authority.
Charge No.8 says that inspite of reminders, the respondent
failed to send "Control Returns" to the Regional Office.
This charge was held fully established. Charge No.9 is to
the effect that the respondent allowed number of accounts
and clean overdrafts even after receiving the instructions
of the Regional Office to stop such practice. The Enquiry
Officer found that the respondent had indeed flouted the
orders of the Regional Manager and committed an act of
disobedience of lawful orders. The substance of Charge
No.10 is that for want of proper follow up action, a number
of borrower accounts have become time-barred and the
prospects of the recovery of bank’s dues have become bleak.
Fifteen instances were cited in support of this charge.
It may be remembered that Charges Nos.1,6,8, and 9 were
held to have been established in full while the remaining
charges [except charge No.4] were held to be established in
part. It is indeed a matter of surprise that inspite of the
aforesaid findings, the High Court came to the opinion that
it is not a case of misconduct. Regulation 24 of the Central
Bank of India Officer Employees’ (Displine and Appeal)
Regulations, 1976 defines the acts of misconduct in the
following words:
"24. Acts of misconduct: A breach
of any of the provisions of these
regulations shall be deemed to
constitute a misconduct punishable
under the Central Bank of India
Officer Employees’(Discipline and
Appeal) Regulations, 1976."
Regulation 3 of the said Regulations may also be
noticed:
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"3(1). Every officer employee
shall, at all times take all
possible steps to ensure and
protect the interest of the bank
and discharge his duties with
utmost integrity, honesty, devotion
and diligence and do nothing which
is uncoming of a bank officer.
(2) Every officer employee shall
maintain good conduct and
discipline and show courtesy and
attention to all persons in all
transactions and negotiations.
(3) No officer employee shall, in
the performance of his official
duties or in the exercise of powers
conferred on him, act otherwise
than in his best judgment except
when he is acting under the
direction of his official superior.
(4) Every officer employee shall
take all possible steps to ensure
the integrity and devotion to duty
of all persons for the time being
under his control and authority."
It may be mentioned that in the memorandum of charges,
the aforesaid two regulations are said to have been violated
by the respondent. Regulation 3 requires every
officer/employee of the Bank to take all possible steps to
protect the interests of the Bank and to discharge his
duties with utmost integrity, honesty, devotion and
diligence and to do nothing which is unbecoming of a Bank
officer. It requires the officer/employee to maintain good
conduct and discipline and to act to the best of his
judgment in performance of his official duties or in
exercise of the powers conferred upon him, Breach of
Regulation 3 is "misconduct" within the meaning of
Regulation 24. The findings of the Enquiry Officer which
have been accepted by the disciplinary authority, and which
have not been disturbed by the High Court, clearly show that
in number of instances the respondent allowed overdrafts or
passed cheques involving substantial amounts beyond his
authority. True, it is that in some cases, no loss has
resulted from such acts. It is also true that in some other
instances such acts have yielded profit to the Bank but it
is equally true that in some other instances, the funds of
the Bank have been placed in jeopardy; the advances have
become sticky and irrecoverable. It is not a single act; it
is a course of action spreading over a sufficiently long
period and involving a large number of transactions. In the
case of a Bank - for that matter, in the case of any other
organization - every officer/employee is supposed to act
within the limits of his authority. If each officer/
employee is allowed to act beyond his authority, the
discipline of the organisation/bank will disappear; the
functioning of the Bank would become chaotic and
unmanageable. Each officer of the Bank cannot be allowed to
carve out his own little empire wherein he dispenses favours
and largesse. No organization, more particularly, a Bank can
function properly and effectively if its officers and
employees do not observe the prescribed norms and
discipline. Such indiscipline cannot be condoned on the
specious ground that it was not actuated by ulterior motives
or by extraneous considerations. The very act of acting
beyond authority - that too a course of conduct spread over
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a sufficiently long period and involving innumerable
instances - is by itself a misconduct. Such acts, if
permitted, may bring in profit in some cases but they may
also lead to huge losses. Such adventures are not given to
the employees of Banks which deal with public funds. If
what we hear about the reasons for the collapse of Barings
Bank is true, it is attributable to the acts of one of its
employees, Nick Leeson, a minor officer stationed at
Singapore, who was allowed by his superiors to act far
beyond his authority. As mentioned hereinbefore, the very
discipline of an organization and more particularly, a Bank
is dependent upon each of its employees and officers acting
and operating within their allotted sphere. Acting beyond
one’s authority is by itself a breach of discipline and a
breach of Regulation 3. It constitutes misconduct within the
meaning of Regulation 24. No further proof of loss is really
necessary though as a matter of fact, in this case there
are findings that several advances and over-drawals allowed
by the respondent beyond his authority have become sticky
and irrecoverable. Just because, similar acts have fetched
some profit - huge profit, as the High Court characterizes
it - they are no less blameworthy. It is wrong to
characterize them as errors of judgment. It is not suggested
that the respondent being a Class-I officer was not aware of
the limits of his authority or of his powers. Indeed, Charge
No.9, which has been held established in full is to the
effect that inspite of instructions by the Regional Office
to stop such practice, the respondent continued to indulge
in such acts. The Enquiry Officer has recorded a clear
finding that the respondent did flout the said instructions
and has thereby committed an act of disobedience of lawful
orders. Similarly, Charge No.8, which has also been
established in full is to the effect that inspite of
reminders, the respondent did not submit "Control Returns"
to the Regional Office. We fail to understand how could all
this be characterized as errors of judgment and not as
misconduct as defined by the regulations. We are of the
opinion that the High Court has committed a clear error in
holding that the aforesaid conduct of the respondent does
not amount to misconduct or that it does not constitute
violation of Regulations 3 and 24.
We must mention that Sri V.A.Mohta, learned counsel For
the respondent, stated fairly before us that it is not
possible for him to sustain the reasoning and approach of
the High Court in this case. His only submission was that
having regard to the age of the respondent [37 years] and
the facts and circumstances of the case, this Court may
substitute the punishment awarded to the respondent by a
lesser punishment. The learned counsel suggested that any
punishment other than dismissal may be imposed by this
Court. We considered this request with the care it deserves,
but we regret that we are unable to accede to it. Learned
counsel for the Bank, Sri V.R.Reddy, Additional Solicitor
General, also stated, on instructions of the Bank, that it
is not possible for the Bank to accommodate the respondent
in its service in view of his conduct.
The appeal is accordingly allowed and the judgment of
the High Court is set aside. There shall be no order as to
costs.