Pathrella Vs. Oriental Bank of Commerce  Insc 676 (19 October 2006)
Sema & P.K.Balasubramanyan
out of S.L.P.( C ) Nos.26084-26085 of 2005) H.K.SEMA,J Leave granted.
challenge in these appeals is to the order dated 7.12.2005 passed by the
Division Bench of the High Court of Delhi, whereby the appeal preferred by the
respondent-bank was allowed by setting aside the order dated 28.4.2005 of the
learned Single Judge passed in W.P.( C ) No.6805 of 2002.
have heard the parties.
appellant was appointed by the respondent- bank as Officer Grade Scale-I.
Thereafter, he was promoted to Officer Grade Scale-II, Scale-III and Scale-IV.
At the relevant time, he was working as Chief Manager at Gurgaon branch of the
order dated 23.12.1995, the appellant was placed under suspension in
contemplation of the drawing up of the disciplinary proceedings. By the
memorandum dated 20th August, 1998 he was served with the charge memo on the
ground that he has violated Regulation 3(1) of Oriental Bank of Commerce
Officer Employees (Conduct) Regulations, 1982 ( in short the Regulations,
statement of imputation of misconduct in respect of article of charge framed
against the appellant are as follows:- "Sh.Suresh Pathrella, Chief Manager
(under suspension) while posted and functioning as Incumbent-in-charge at B/O Gurgaon
had misappropriated an amount of Rs.10.00 lac of a customer namely Sh.G.C. Luthra
without his authority/consent.
27.1.1994, one party of B/O, Saket, New Delhi namely M/s Moradabad Builders Pvt. Ltd., had sent a Pay Order
No.536966/128/94 of Rs. 10.00 lacs in favour of Sh.G.C. Luthra to our B/O Gurgaon
for crediting to his account .
Pathrella while functioning as Incumbent-in-Charge at B/O. Saket,New Delhi with
an endorsement to the effect that 'Payee's account will be credited on realisation'
and also instructed vide his letter dated 27.1.94 to issue TPO in favour of Sh.G.C.Luthra
for the proceeds. Accordingly, a TPO No.153935/22/94 dated 28.1.94 for Rs.10.00
lac favouring Sh.G.C. Luthra was issued and sent by B/O Saket to B/O Gurgaon.
On 29.1.94, Sh. Suresh Pathrella opened a new saving bank account No.13392 with
the malafide intention in the name of Shri G.C.Luthra without obtaining any
account opening form and without the consent/authority of Sh.G.C.Luthra who was
already maintaining his saving bank account No.12154 at B/O. Gurgaon since
January, 1993. The proceeds of the said instrument amounting to Rs.10.00 lac
was credited to newly opened-saving bank account No.13392 of Sh.Luthra and Sh.Suresh
Pathrella himself with his own hand writing prepared and signed following three
transfer vouchers by debiting Rs.10.00 lacs to the said account on the same day
i.e. on 29.1.1994 without any authority;
Rs.2.00 lac transferred to Cash Credit A/C of M/s. M.K.Fertilizers.
Rs.3.00 lac transferred to current Account No.1408 of M/s. Maharishi Aurvedic
Rs.5.00 lac transferred to Cash Credit Account of M/s. Agro Chemicals.
the newly opened saving bank account No.13392 was closed on the same day
leaving nil balance. Thus, Sh.Suresh Pathrella had misappropriated an amount of
Rs.10.00 lac without the consent and authority of the beneficiary. By his above
acts Sh.Suresh Pathrella has violated Regulation 3(1) of Oriental Bank of
Commerce Officer Employees (Conduct) Regulations, 1982 which is punishable
under Officers' Discipline and Appeal Regulations." An Enquiry Officer was
appointed, who submitted a Report that the charge is proved. The disciplinary
authority accepted the findings of the Enquiry Officer and the appellant was
removed from service by an order dated 28.5.1998.
thereby, the appellant challenged the order by filing Writ Petition. The
learned Single Judge was of the view that the main allegation of
misappropriation of Rs.10 lacs is unfounded and the amount actually went to the
account of the Bank to be set off against overdrafts of the three firms. In
other words, no loss thereby was occasioned to the Bank. He was further of the
view that the main allegation of misappropriation of Rs.10 lacs was the crux in
both departmental proceedings and the criminal charge and that the Gurgaon
police after investigation has closed the case as unfounded before the CJM, Gurgaon,
therefore, nothing substantial remains in the matter for proceedings against
the appellant. The learned Single Judge was of the view that the argument of
the Bank that departmental proceedings and the criminal case are different does
not hold good and his removal from service was incorrect.
Division Bench of the High Court pointed out that on 27.1.1994 one party,
namely, M/s. Moradabad Builders Pvt. Ltd. had sent a pay order of Rs.10.00 lacs
to Shri G.C. Luthra to the branch office Gurgaon for crediting it to his
account. The appellant while working as Chief Manager at Gurgaon branch of the
respondent-bank sent the said pay order to the branch office Saket, New Delhi,
with an endorsement to the effect that payee's account will be credited on
realization and also instructed vide his letter dated 27.1.1994 to issue TPO in
favour of Shri G.C. Luthra for the proceeds. Accordingly, a TPO No.153925/22/94
dated 28.1.1994 for Rs.10.00 lacs favouring Shri G.C. Luthra was issued and
sent by branch office Saket to branch office Gurgaon on 29.1.1994 and the
appellant opened a saving bank account No.13392 with malafide intent in the
name of Shri G.C.Luthra without obtaining his authority and consent.
G.C. Luthra was already having a saving bank account No.12154 at the branch
office Gurgaon since 1993. The proceeds amount of Rs.10.00 lacs was credited to
the newly opened saving bank account No.13392 of Shri G.C. Luthra and the
appellant himself prepared and signed three transfer vouchers and debited Rs.10.00
lacs from the said account on 29.1.1994 without any authority from Shri G.C. Luthra.
It was also pointed out that the saving bank account No.13392 was closed on the
same day leaving a nil balance. It is in these circumstances, the Division
Bench was of the opinion that the transfer of amounts to the credit of three
parties without any instruction from the beneficiary amounts to
misappropriation of funds and, in any event, it was a grave irregularity in
financial transactions indulged in by the appellant. It was also pointed out
that the appellant had been indulging in all sorts of irregularities, which
were totally inconsistent with his duties as a bank officer. The Division Bench
held that the factum of crediting the proceeds of the pay order to a newly
opened saving bank account of Shri G.C.Luthra without his consent or authority
and thereafter withdrawing the same and transferring into three different
accounts shows lack of devotion to duty and integrity on the part of the
Division Bench further said that Shri G.C.Luthra appeared as a witness before
the Enquiry Officer.
appellant was given an opportunity to cross-examine Shri G.C.Luthra. In his
complaint dated 10.1.1996 he denied his signature on the letter dated
27.1.1994. The Division Bench was of the view that all these disputed questions
of fact have been considered by the disciplinary authority and the reviewing
authority and it is not open to the Court in writ jurisdiction to interfere
with the findings of fact. The Division Bench was of the view that the
subsequent statements made by Shri G.C. Luthra in criminal cases would have no
bearing on the concluded inquiry against the appellant.
also brought to the notice of the Division Bench that there are three other
criminal cases pending against the appellant being RC1(E)/97 SIU (X), RC
2(E)/96- SIU(X) and RC6(E)/96 SIU(X) where the amount of loss involved to the
bank is stated to be Rs.1.64 crores, Rs.1.77 crores and Rs.2.55 crores,
view, the findings recorded by the learned Single Judge are fallacious. This
Court has taken the view consistently that acquittal in a criminal case would
be no bar for drawing up a disciplinary proceeding against the delinquent
officer. It is well settled principle of law that the yardstick and standard of
proof in a criminal case is different from the disciplinary proceeding. While
the standard of proof in a criminal case is a proof beyond all reasonable
doubt, the proof in a departmental proceeding is preponderance of probabilities.
not the case of the appellant that the enquiry has been conducted without
affording an opportunity to the appellant or behind the back of the appellant
and thereby violated the principle of natural justice. It is, however,
contended by the counsel for the appellant that the opinion of hand writing
expert in respect of the complainant-GC Luthra said to have been procured by
the Enquiry Officer after the enquiry was closed had not been furnished to the
appellant, despite request and, therefore, a reasonable opportunity has been
denied to him.
went to the box as PW-2. He denied to have received the amount of Rs.10 lacs.
In cross- examination he denied to have given any letter of authority for
transfer of funds from one account to another account. He also denied to have
issued any receipt for Rs.10 lacs towards the disposal of any property to M/s Moradabad
Builders. Mr. G.C.Luthra in cross-examination further denied that he either
collected the TPO for Rs.10 lacs or gave instructions to the appellant for
crediting to various accounts. The appellant after obtaining adverse statement
against him in cross- examination did not further cross-examine Mr. G.C.Luthra
by confronting him with the alleged signature of Mr.G.C.Luthra.
close of the enquiry, the appellant himself requested the enquiry officer to
obtain the opinion of a handwriting expert.
done by him to test the denial of the statement of Mr. G.C.Luthra in
cross-examination. The report so obtained confirmed the statement of Mr.G.C.Luthra
in cross- examination. The appellant could not impeach the statement of Mr.G.C.Luthra
in cross-examination that he never gave any letter of authority for transfer of
funds from one account to another account. He had never issued any receipt of
Rs.10 lacs towards the disposal of any property to M/s Moradabad Builders. The
appellant has accepted the statement of Mr.G.C.Luthra. The handwriting expert
confirmed the statement of Mr. G.C.Luthra in cross-examination. No prejudice,
whatsoever, has been caused to the appellant by non-furnishing of the copy of
the handwriting expert confirming the statement of Mr.G.C.Luthra in cross-
examination. There is no allegation of malafides, bias or violation of
principles of natural justice, which has been brought to our notice.
next contention of counsel for the appellant is that the Board has decided the
memo filed by the appellant without considering the subsequent events.
According to him, the disclosure statement made by Mr. G.C.Luthra subsequently
on 19.7.2001 under Sections 406/420 IPC should have been considered. This
contention deserves to be rejected outright. The disciplinary enquiry was
completed on 3.2.1998. The appellant was removed from service by an order dated
28.5.1998. In the alleged disclosure statement made on 19.7.2001 under Sections
406/420 IPC Mr.G.C.Luthra is seen to have stated that he got a typed letter
issued to the Senior Manager, Oriental Bank of Commerce to open a new saving
bank account and credited in that new bank account the amount of Rs.10 lacs.
has referred to the decision of this Court in Sohan Singh vs. Union of India,
AIR 1984 SC 498. In that case, the appellant was accused in a criminal case and
was likely to be convicted of the charge of theft and on that ground he was
discharged considering him to be unsuitable.
he was acquitted of the charge of theft and in that connection this Court held
that he was entitled to be compensated by a lump sum amount in lieu of the
benefits to which he would have been otherwise entitled, had he continued in
service for the extended period of 6 years.
also referred to the decision of this Court rendered in Narinder Mohan Arya v.
United India Insurance Co. Ltd., JT 2006 (4) SC 404. In that case, the
appellant was an employee of insurance company. The disciplinary proceeding was
initiated against him on the ground of antedating an insurance cover, which was
decided against him. His appeal was dismissed by the appellate authority. The
firm whose goods were destroyed in fire filed a suit against the insurance
company impleading the appellant as a defendant. The Trial Court decreed the
suit holding that there was no antedating of the cover note. The appeal filed
by the insurance company was dismissed by the High Court.
the matter attained finality, since no further appeal was preferred by the
insurance company. It is in that given facts this Court held that the Managing
Director when approached by the appellant ought to have applied his mind to the
subsequent event namely the decision of the civil court rendered in the suit
filed by the firm. It is in these circumstances, this Court was of the view
that since the proceedings were initiated as late as in 1976, instead of
remitting the matter to the disciplinary authority, the appellant was directed
to be reinstated with only 50 per cent of back wages. The facts of that case
are distinguishable from the facts of the present case. In the present case
there was no such civil suit filed in which the decree was passed in favour of
the appellant. This decision, therefore, would be of no help to the appellant.
third contention of the appellant is that the charge as framed was for
misappropriation of Rs.10 lacs. But during the enquiry misappropriation of
Rs.10 lacs was not established and in fact no loss was occasioned to the bank
thereby. Therefore, the punishment of removal is disproportionate to the
offence charged and proved.
will be noticed that the appellant was charged for the alleged violation of
Regulation 3 (1) of the Regulations 1982. Regulation 3(1) reads:
officer employee shall, at all times take all possible steps to ensure and
protect the interests of the bank and discharge his duties with utmost
integrity, honesty, devotion and diligence and do nothing which is unbecoming
of a bank officer".
Regulation ensures that every officer at all times take all possible steps to
protect the interests of the bank and discharge his duties with utmost
integrity, honesty, devotion and diligence and do nothing which will be
unbecoming of a bank officer. Such regulations are made to instill the public
confidence in the bank so that the interests of customers/depositors are well
safeguarded. In such a situation the fact that no amount was lost to the bank
would be no ground to take a lenient view for the proved misconduct of a bank
Disciplinary Authority-cum-Regional Manager vs. Nikunja Bihari Patnaik, (1996)
9 SCC 69 this Court held that a bank officer's acting beyond his authority
constituted misconduct and no further proof of loss is necessary.
case of Regional Manager, U.P.SRTC. vs. Hoti Lal, (2003) 3 SCC 605, this Court
held in paragraph 10 at scc p.614 as under:
the charged employee holds a position of trust where honesty and integrity are
inbuilt requirements of functioning, it would not be proper to deal with the
in such cases has to be dealt with iron hands. Where the person deals with
public money or is engaged in financial transaction or acts in a fiduciary
capacity, the highest degree of integrity and trust-worthiness is a must and
unexceptionable. Judged in that background, conclusions of the Division Bench
of the High Court do not appear to be proper. We set aside the same and restore
order of the learned Single Judge upholding order of dismissal".
case of Chairman and Managing Director, United Commercial Bank vs. P.C.Kakkar,
(2003) 4 SCC 364, this Court said in paragraph 14 at scc p.376 as under:
Bank officer is required to exercise higher standards of honesty and integrity.
He deals with the money of the depositors and the customers. Every
officer/employee of the Bank is required to take all possible steps to project
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. Good conduct and discipline are inseparable from the functioning of
every officer/employee of the Bank. As was observed by this Court In
Disciplinary Authority-cum-Regional Manager v. Nikunja Bihari Patnaik, (1996) 9
SCC 69. It is no defence available to say that there was no loss or profit
resulted in case, when the officer/employee acted without authority. The very
discipline of an organization more particularly a Bank is dependent upon each
of its officers and officers acting and operating within their allotted sphere.
Acting beyond one's authority is by itself a breach of discipline and is a
misconduct. The charges against the employee were not casual in nature and were
serious. These aspects do not appear to have been kept in view by the High
present case the appellant acted beyond his authority in breach of bank's
Regulation. Regulation 3(1) of the bank's Regulation required that every
officer of the bank at all times take all possible steps to protect the
interest of the bank and discharge his duties with utmost integrity, honesty,
devotion and diligence and do nothing which will be unbecoming of a bank
officer. It is a case of loss of confidence in the officer by the bank. In such
a situation, it would be a futile exercise of judicial review to embark upon
the decision of the disciplinary authority removing the officer from service,
preceded by an enquiry, and to direct the bank to take back the officer in whom
the bank has lost confidence, unless the decision to remove the officer is
tainted with malafide, or in violation of principles of natural justice and
prejudice to the officer is made out. No such case is made out in the present
result, these appeals being devoid of merits are, accordingly, dismissed. There
will be no order as to costs.