Bank & Ors Vs. Swapan Kumar Pani & Anr  Insc 92 (24 February 2006)
Sinha & Dalveer Bhandari
APPEAL NO. 1642 OF 2004 S.B. Sinha, J.
are two cross appeals between the parties. Canara Bank is appellant in Civil
Appeal No. 1641 of 2004 and respondent in Civil Appeal No. 1642 of 2004. Shri Swapan
Kumar Pani (hereinafter referred to as "the first respondent") is
appellant in Civil Appeal No. 1642 of 2004 and first respondent in Civil Appeal
No. 1641 of 2004.
first respondent at all material time was working as Accountant, in Jajpur Road, Orissa Branch of Canara Bank, Calcutta (hereinafter referred to as 'the
Bank'). It is stated that in the said capacity he used to hold one set of keys
of the locker of the bank. Another set of keys used to be in the custody of the
Manager of the Bank. Admittedly on the ground that he had committed a
misconduct; a departmental proceeding was proposed to be held in terms of
Regulation 6 of the Canara Bank Officer Employees' (Discipline &Appeal)
Regulations, 1976 (Regulations) wherefor the following Articles of Charge were
served on the first respondent:
Utkal Iron & Steel Industries is a Constituent of our Jajpur road Branch.
They were sanctioned an M.L. Limit of Rs. 10.00 lakhs vide advances Section I,
C.O. Calcutta, letter CC: ADV- I:0069:84T dated 6.1.1984. the loan was
sanctioned on Collateral Security of Bearer Bonds of Rs. 2.00 lacs besides
other securities. The details of the bearer bonds are given in the statement of
bearer bonds were put in a loan paper cover and kept in double lock on
20.1.1984. On 23.1.1986, M/s S.K. Sahu & Brothers, the Statutory auditors,
requisitioned the bonds for verification. It was found, on verification, that
the bonds were missing and the cover contained a few blank sheets of B-2,
attendance marking register.
are reasons to believe that you had unathorisedly and with ulterior motive
removed the aforesaid bearer bonds from safe custody.
have, thereby, failed to protect the interests of the Bank and have exposed the
Bank to financial loss.
your above action, you have failed to perform your duties with utmost honesty,
integrity, devotion and diligence and thereby committed a misconduct within the
meaning of Regulation-3 (1) read with Regulation 24 of the Canara Bank Officer
Employees (Conduct) Regulations, 1976, which is punishable under the provisions
of Canara Bank Officer Employees' (Discipline Appeal) Regulations, 1976."
The gist of the charge contained in the said article of charge, thus, was that
the first respondent had unauthorisedly and with ulterior motive removed the
special bearer bonds worth Rs. 2 lacs from the bank's safe custody on 6.11.1985
on which date he was holding the second set of keys of the double lock having
obtained the keys from the Manager's drawers and while removing the said bonds
kept blank sheets of B-2 register therein.
said bearer bonds had been taken as collateral security from M/s Utkal Iron and
Steel Industries towards sanctioning of M.L. Limit of Rs. 10 lacs.
departmental proceedings he was found to be not guilty of the said charges
pursuant whereto he was exonerated by an order of the Disciplinary Authority
dated 29.3.1989. Again a charge-sheet containing almost identical charges was
issued on 31.3.1989. The allegations made against the first respondent in the
said charge sheet were that the said bearer bonds had been last seen by him in
July, 1985 and thereafter he failed to verify the existence thereof. Though he
was one of the holders of the keys the bank double lock and a certificate was
issued by him as regards the existence of the said bearer bonds without
actually verifying their availability he committed a misconduct. The charge
against him in short was that he had failed to protect the bank's interest and
exposed it to financial loss and that he had failed to discharge his official
duties with devotion and diligence. Another departmental proceeding was
initiated whereupon the Inquiry Officer submitted a report. It is, however,
accepted that the said matter was not further proceeded against.
Managing Director of the bank, who was the Reviewing Authority, allegedly came
to know that the matter regarding missing of the bearer bonds had been
investigated into by the CBI and from its report it was revealed that the same
were removed by the respondent on 6.11.1985 and out of the 20 bonds, 5 were
disposed of at Calcutta through a private person for a sum of Rs. 59,500/-. The
Reviewing Authority, on the aforementioned premise, in purported exercise of
his powers under Regulation 18 of the Regulations called upon the first
respondent to show cause within 15 days as to why action should not be taken
against him in the light of the fresh evidence; and as to why the Reviewing Authority
should not set aside the findings of the Inquiring Authority dated 17.6.1988
and consequently the orders dated 29.03.1989 passed by the Disciplinary
Authority should not be set aside. No show cause was filed by him. No
explanation was submitted by him and consequently the Reviewing Authority
passed an order dated 26.10.1995 setting aside the findings of the Inquiring
Authority and consequent order dated 29th March, 1989. Pursuant to and in furtherance of
the said order dated 26.10.1995 passed by the Managing Director of the
appellant bank issued a fresh charge sheet on 31.01.1996 on the following terms
are working as officer at our Rourkela branch
since 20.6.1974. Earlier you were working as accountant at our Jajpur Road, Orissa branch from 1.5.1985 to
Iron & Steel Industries is a constituent of our Jajpur Road branch. They were sanctioned an ML
limit of Rs. 10 lacs vide advances section I, circle office. Calcutta letter CC/ADV-1/0069/84T dated
6.1.1984. the loan was sanctioned on collateral security of Bearer bond of Rs.
2 lacs besides other securities. The details of the bearer bonds are given in
the statement of imputation .
bearer bonds were put in a loan paper cover and kept in double lock on 20.1.84.
23.1.86, M/s S.K. Sahu & Brothers the statutory auditors requisitioned the
bonds for verification. It was found, on verification, that the bonds were
missing and the cover contained a few blank sheets of B-2, attendance marking
has revealed that you had on 6.11.1985 removed the 20 special bearer bonds 1991
pledged by Shri R.K. Taparia, Managing Director of M/s. Utkal Iron & Steel
Industries from the strong room and out of these bearer bonds get bearer bonds
bearing Nos. A 160112. A 160136. A 160491 disposed of at Calcutta through a private person Sri Debipada
Bhattacharya of Balasore town for Rs. 59,500/-." The first respondent
questioned the legality and validity of the said charge sheet by filing a writ
petition in the High Court of Calcutta. A learned Single Judge of the said High
Court refused to pass an order of stay.
pendency of the said writ petition disciplinary proceedings were held by the
Inquiry Officer. A report was submitted finding him guilty of the charges; and
pursuant thereto the disciplinary authority imposed a punishment of dismissal
from service upon the first respondent by an order dated 4.12.1995. The said
order, however, was not given effect to in view of the pendency of the writ
learned Single Judge dismissed the said writ petition by an order dated
12.4.2000. Aggrieved by and dissatisfied therewith the first respondent
preferred a Letters Patent Appeal which has been allowed by a Division Bench of
the said High Court by reason of the impugned judgment holding
Director of the Bank could not have taken recourse to Regulation 18, as no
punishment had been imposed upon the first respondent.
In any event the
power under Regulations 18 could have been exercised within a period of six
months only and not thereafter
which empowers the bank to extend the time could not have been invoked in the
fact of the case.
As the charge
sheet was issued in terms of the said order of review, the same was liable to
having regard to the seriousness of charges, the first respondent was denied
the back wages. The bank was further given liberty to initiate fresh
proceedings on proper materials, if any. Both the parties have, thus, filed
appeals before us.
Kumar, learned counsel appearing on behalf of the appellant bank assailing the
judgment of the High Court would contend that in view of the fact that the
third charge sheet was issued on new grounds, the Division Bench of the High
Court committed a manifest error. In view of the fact that Regulation 21 of the
Regulations, it was submitted, confers power upon the bank to enlarge the time
for taking any action in terms thereof, the time for initiating the proceedings
of review must be held to have been extended and, thus, it was not necessary to
pass an order within a period of six months from the date of the first order,
as has been held by the High Court.
Murlidhar, learned counsel appearing on behalf of the first respondent, on the
other hand, would urge that the Reviewing Authority was bound to exceed his
jurisdiction under Regulation 18 of the Regulations while issuing the show
cause notice dated 31.1.1996. In respect of the appeal preferred by the first
respondent herein it was submitted that the High Court having found that the
bank could not have initiated any disciplinary inquiry afresh, committed a
patent illegality by granting liberty to the appellant to initiate fresh
inquiry on fresh materials and denying back wages to the first respondent.
have been framed under Section 19 of the Banking Companies (Acquisition &
Transfer of Undertakings) Act, 1970.
18 and 21 read as under :
Notwithstanding anything contained in these regulations, the Reviewing
Authority may at any time within six months from the date of the final order,
either on his own motion or otherwise review the said order, when any new
material or evidence which could not be produced or was not available at the
time of passing the order under review and which has the effect of changing the
nature of the case, has come or has been brought to his notice and pass such
orders thereon as it may deem fit:
If any enhanced
penalty, which the Reviewing Authority proposes to impose, is a major penalty
specified in Clauses (f), (g), (h), (i) or (j) of Regulation 4 and an enquiry
as provided under Regulation 6 has not already been held in the case, the
Reviewing Authority shall direct that such an enquiry be held in accordance
with the provisions of Regulation 6 and thereafter consider the record of the
enquiry and pass such orders as it may be deem proper;
If the Reviewing
Authority decides to enhance the punishment but an enquiry has already been
held in accordance with the provisions of Regulation 6, the Reviewing Authority
shall give show cause notice to the officer employee as to why the enhanced
penalty should not be imposed upon him and shall pass an order after taking
into account the representation, if any, submitted by the officer employee."
"21. Power to relax time-limit and to condone delay:
as otherwise expressly provided in these regulations the authority competent
under these regulations to make any order may, for good and sufficient reasons
or if sufficient cause is shown, extend the time specified in these regulations
for anything required to be done under these regulations or condone any
delay." (Emphasis supplied) The said Regulations have statutory force. An
authority exercising such statutory power was required to act within the four
corners thereof. He was bound by the limitations prescribed therein. Regulation
18 could have been applied in a case where the power of review is exercised in
respect of a proceeding which has not attained finality. In this case, however,
admittedly two charge sheets were issued and at least in one of them the first
respondent was exonerated. The said order attained finality. The second one was
not pursued despite a report having been submitted by the Inquiry Officer
evidently because of the first disciplinary proceeding. As the first respondent
was exonerated there was no question of enhancement of punishment and in that
view of the matter second part of Regulation 18 had also no application. As no
order had been passed extending the time, evidently the power under Regulation
21 had also not been exercised. We may notice that the first respondent was
exonerated by an order dated 29.3.1989 whereas the purported order of review
was passed on 25.7.1995, i.e. after a period of 6 years, which was much beyond
the period of limitation. The power was also not exercised within a reasonable
the charges levelled against the first respondent herein are in 2 parts;
that he had on
6.11.1985 removed 20 special bearer bonds pledged by the Managing Director of
M/s Utkal Iron & Steel Industries from the strong room of the bank; and
out of those
special bearer bonds five bearer bonds were disposed of at Calcutta for Rs.
59,500/-. Admittedly, the first part of the charge was covered by the first
charge sheet dated 20.5.1987.
having been exonerated therfrom, no fresh charge sheet could have been issued
in absence of any statutory power in this behalf. Only the second part of the
said charge sheet, is said to be based on new materials purported to have been
discovered by the Managing Director of the bank. An inquiry in the second part
of the charge sheet could have been possible, if the first part thereof charge
viz. the respondent had removed the said bonds pledged by M/s Utkal Iron &
Steel Industries was not required to be proved. As the bank cannot be permitted
to reopen the first part of the charge, it a fortiori cannot be allowed to
enquire into the second part also as both the parts of the charge are
interlinked with each other. In other words, proof of first part of the charge
was wholly dependent upon the first part. The impugned judgment to that extent
High Court, however, committed an error in granting liberty to the bank to
initiate a fresh inquiry. If the High Court was of the opinion that the new
materials purported to have been found were not sufficient for initiation of
the enquiry in question, we fail to understand as to on what basis liberty was
given to the bank to initiate a fresh inquiry, more so when the misconduct, if
any, was committed as far back as in the year 1985.
are, however, of the opinion that in the facts and circumstances of this case
the discretion exercised by the High Court in refusing back wages to the first
respondent herein need not be interfered with .
the aforementioned reasons, the appeal filed by the appellant bank being Civil
Appeal No. 1641 of 2004 is dismissed. The appeal filed by the first respondent
being Civil Appeal No. 1642 of 2004 is allowed in part and to the extent mentioned
hereinbefore. There shall be no order as to costs.