Delhi High Court
Ashutosh Goel vs State Bank Of India And Ors on 28 February, 2025
Author: Jyoti Singh
Bench: Jyoti Singh
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 28th February, 2025
+ W.P.(C) 8652/2017 and CM APPL. 35560/2017
ASHUTOSH GOEL .....Petitioner
Through: Mrs. Prem Lata Bansal, Senior
Advocate with Mr. Shivang Bansal and Mr.
Praveen Jain, Advocates.
versus
STATE BANK OF INDIA AND ORS .....Respondents
Through: Mr. S.L. Gupta, Advocate.
CORAM:
HON'BLE MS. JUSTICE JYOTI SINGH
JUDGEMENT
JYOTI SINGH, J.
1. By this writ petition, Petitioner seeks quashing of order dated
26.07.2014 passed by the Appointing Authority imposing penalty of
‘reduction to a lower stage in the time scale of pay by two stages for a
period of two years, with further direction that officer will not earn
increments to pay during the period of such reduction and on the expiry of
such period, the reduction will have the effect of postponing the future
increments of his pay’ as also order dated 03.09.2015 passed by Appellate
Committee upholding the penalty. Writ of mandamus is sought to
Respondent No. 1/State Bank of India (‘SBI’) to reinstate the Petitioner at
the appropriate stage in the time scale of pay commensurate with the number
of years of service put by him with all consequential benefits.
2. Case of the Petitioner as set up in the writ petition is that Petitioner
joined SBI on 21.12.1981 as Probationary Officer and was promoted four
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times in his career to MMGS-II w.e.f. 01.08.1987, MMGS-III w.e.f.
01.08.1993, SMGS-IV w.e.f. 01.11.1998 and SMGS-V w.e.f. 29.07.2004.
Between February, 1998 to October, 2001, Petitioner worked in SBI Card
Division, a joint venture of SBI and GE Capital of USA on deputation as a
Project Team Member. Sales team led by the Petitioner was conferred the
Best Sales Team award. From November, 2001, to December, 2002,
Petitioner was posted at CAG Branch, Mumbai as Chief Manager (Forex) of
India’s biggest International Banking Division and from January, 2003 to
October, 2003, he was posted in CAG Central, Mumbai as Chief Manager &
Credit Analyst, where he handled high value accounts of steel sector such as
TISCO, Essar Steel, JSW etc. Thereafter, from November, 2003 to October,
2004, Petitioner worked in CAG Branch, Delhi as Head of the International
Banking Division and within 12 months the business grew over 50%.
3. It is averred that Petitioner was posted to Overseas Branch, New
Delhi as Assistant General Manager (AGM) and Relationship Manager
(RM) from November, 2004 to July, 2009, purely on the basis of his
performance. Duties of the Petitioner included marketing activities to bring
new credit accounts and to enhance the business by increasing the customer
base. Role of the Petitioner was restricted to marketing and business
development and he was not involved in day-to-day operational activities.
Petitioner’s performance during his tenure was assessed as extraordinary in
his Annual Appraisal Reports which is a matter of record.
4. Petitioner averred that he was instrumental in making recoveries from
the account of one Sudarshan Overseas Limited which was a stress account
and a consortium with State Bank of Patiala with an exposure of SBI being
Rs. 35 crore. Petitioner was able to recover Rs. 15.66 crore during financial
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year 2007-08 and Rs. 8.01 crore in April-December, 2008. In another
account which was declared NPA, a total recovery of Rs.6.04 crore was
made by the Petitioner in 13 months and resultantly, the team led by him
was declared No. 1 team in the ‘Monthly Performance Review Meetings’
during 2008-09 in the entire Region.
5. It is stated that despite the extraordinary performance and known
integrity of the Petitioner, to his surprise, a letter dated 28.05.2010 was
issued to him by General Manager, Mid-Corporate Group-Delhi Region,
alleging certain irregularities in sanctioning the loan account of M/s. Suhrit
Services Pvt. Ltd. to which Petitioner filed a reply dated 21.07.2010 denying
the allegations. A similar letter was sent to his deputy namely, Sushil
Kumar. In routine, the matter was referred to CVC and CBI, however, after
conducting requisite inquiry, CVC found nothing wrong against the
Petitioner but suggested criminal action to be initiated by CBI against Sushil
Kumar vide O.M. dated 22.05.2012.
6. Against the advice of CVC, SBI issued a Charge Sheet dated
12.07.2012 against the Petitioner, which he received on 01.08.2012 wherein
Article of Charge included 17 allegations, primarily relating to failure to
discharge duties and acting in violation of Rule 50(4) of ‘State Bank of India
Officers’ Service Rules, 1992′ (‘1992 Rules’) with respect to account of M/s.
Suhrit Services Pvt. Ltd. As per Rule 68(2), the Articles of Charge are to be
accompanied with a list of witnesses by whom the Articles of Charge are
proposed to be substantiated but in the present case, contrary to the Rule, the
Charge Sheet was not accompanied by a list of witnesses and the entire
inquiry proceeded only on the basis of documents tendered by the Presenting
Officer (‘PO’) without being proved by oral evidence.
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7. After conclusion of the inquiry, the Inquiry Officer (‘IO’) submitted
his report dated 20.05.2013 to the DA with copy to the Petitioner. As per the
report, allegations 2, 3, 4, 8, 10, 11 and 12 were held as ‘proved’ while
allegations 1, 5, 6, 7, 14 and 17 were held as ‘not proved’. Allegations 9, 13,
15 and 16 were held as ‘partly proved’. The findings were unsupported by
any reasoning and even where allegations were held to be partly proved, it
was not specified as to which part was proved and which was not. There was
no appreciation of evidence in the report. Petitioner filed a detailed
representation dated 15.06.2013 and a supplementary representation dated
26.06.2013 against the inquiry report bringing out the omissions and
irregularities and pointing out how the entire proceeding was vitiated.
8. It is stated that after a gap of 10 months, Petitioner received an order
dated 22.04.2014 whereby Appointing Authority proposed penalty of
‘reduction to a lower stage in the time scale of pay by two stages for a
period of two years, with further direction that officer will not earn
increments to pay during the period of such reduction and on the expiry of
such period, the reduction will have the effect of postponing the future
increments of his pay’, and called upon the Petitioner for personal hearing to
make submissions against the proposed penalty. After the personal hearing
on 07.05.2014 and upon receiving the written representation from the
Petitioner, the Appointing Authority passed the final order dated 26.07.2014
imposing the penalty as proposed. Petitioner filed an appeal before the
Appellate Committee, which was dismissed on 03.09.2015, whereafter
Petitioner approached this Court.
9. Ms. Prem Lata Bansal, learned Senior Counsel for the Petitioner
raised the following contentions assailing the penalty order as also the order
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passed by the Appellate Committee:-
(A) The impugned orders are illegal and arbitrary and unsustainable
in law as Petitioner has been held guilty and punished for not
maintaining financial discipline which was not even a part of the
Article of Charge against him in the Charge Sheet dated 12.07.2012.
Charge 1 was that Petitioner while working as RM, Overseas Branch,
New Delhi committed serious irregularities in adhering to the norms
laid down by the Bank in recommendation, conduct and follow-up of
account relating to M/s. Suhrit Services Pvt. Ltd. and thus failed to
discharge his duties with devotion and diligence and acted in a
manner unbecoming of a bank official and prejudicial to bank’s
interest in violation of Rule 50(4) of 1992 Rules. Rule 50(4) provides
that ‘every officer 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 unbecoming of the officer’. Allegation No. 17 was specific
that due to various lapses of the Petitioner, Bank is likely to suffer a
loss of Rs.14.06 crore approximately. In the inquiry report, IO has
clearly held that even those allegations which are substantiated merely
pertain to procedural irregularities and therefore, it is difficult to infer
that these irregularities have contributed to loss to the Bank and in this
backdrop rendered a finding that allegation No. 17 was ‘not proved’.
DA concurred with the finding of the IO and held that Petitioner could
not be held liable for the lapse and opinion of DA was confirmed by
the Appointing Authority in the final order. Therefore, once no
financial loss was suffered by the Bank on account of any act or
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omission of the Petitioner, it is not understood how Petitioner could
be found guilty and punished for not maintaining financial discipline.
(B) Assuming for the sake of argument that in the opinion of the
IO, the inquiry proceedings established any charge different from the
original Article of Charge, there is a procedure prescribed in Rule
68(2)(xxi)(a) of 1992 Rules, whereby reasonable opportunity was
required to be given to the Petitioner against the new charge
permitting him to lead evidence to defend himself.
(C) Charge Sheet also deserves to be quashed on the ground that it
was issued after an inordinate delay of 4 years. The loan transaction in
question pertains to the year 2008 whereas the Charge Sheet was
issued on 12.07.2012. In M.V. Bijlani v. Union of India and Others,
(2006) 5 SCC 88, the Supreme Court held that delay in issue of
Charge Sheet and initiation of disciplinary proceedings and
continuance thereof prejudices the charged officer and action on
delayed Charge Sheet cannot be countenanced in law. In State of
Punjab and Others v. Chaman Lal Goyal, (1995) 2 SCC 570, the
Supreme Court held that disciplinary proceedings must be initiated
and concluded without any delay as soon as irregularities committed
by an employee are discovered. Delay in initiation of proceedings
gives room for allegations of bias, mala fides and misuse of power
and prejudices the delinquent employee.
(D) Charge Sheet is inherently unsustainable as the allegations do
not constitute a misconduct. Strangely, one Article of Charge is
broken into 17 allegations but even put together they do not establish
any culpability on the part of the Petitioner and at best constitute an
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error of judgment. In Union of India and Others v. J. Ahmed, (1979)
2 SCC 286, the Supreme Court held that there may be negligence in
performance of duty but that may not necessarily constitute
misconduct unless the consequences, directly attributable to
negligence, are such that there is irreparable or resultant damage
which is huge and the degree of culpability is high. An error can be
indicative of negligence but not misconduct. Misconduct involves
moral turpitude and must include an improper or wrong behaviour,
wilful in character or a forbidden act, a transgression of established
and definite rule of action but not a mere error of judgment, as held by
the Supreme Court in State of Punjab and Others v. Ram Singh Ex-
Constable, (1992) 4 SCC 54. From the inquiry report itself it can be
inferred that at the highest, Petitioner was guilty of procedural
violations, which may constitute negligence but cannot be construed
as misconduct.
(E) The other glaring illegality in the conduct of the inquiry
proceedings, the object of which is to give an opportunity to the
Charged Officer to defend himself and controvert the allegations
levelled is that, not even a single witness was produced by SBI before
the IO to prove its case. In fact, a bare perusal of the Charge Sheet
shows that it was not accompanied by a list of witnesses, which is in
violation of Rule 68(2) of 1992 Rules, which provides that where it is
proposed to hold an inquiry, Disciplinary Authority shall frame
definite and distinct charges on the basis of the allegations against the
Charged Officer and the Article of Charge, together with the
statement of the allegations on which they are based, list of documents
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and witnesses relied on and as far as possible, copies of such
documents and statements of witnesses, if any, shall be communicated
in writing/sent to the officer, who shall be required to submit a written
statement of defence. The argument is that not a single witness was
produced by SBI and copies of the listed documents were simply
tendered by the PO. As per settled law, documents have to be proved
by examining witnesses and thus no reliance could have been placed
on the documents by the IO in the absence of their being proved
through oral testimonies. Reliance was placed for the said proposition
on the judgments of the Supreme Court in Roop Singh Negi v.
Punjab National Bank and Others, (2009) 2 SCC 570; Delhi
Transport Corporation v. Ashok Kumar Sharma, 2024 SCC OnLine
SC 1871; and Pawan Kumar Agarwala v. General Manager-II and
Appointing Authority, State Bank of India and Others, (2015) 15
SCC 184.
(F) Rule 68(2)(xxi)(a) of 1992 Rules provides that on conclusion of
the inquiry, IO shall prepare a report which shall contain gist of
Articles of Charge and statement of imputation of misconduct; gist of
defence of the Charged Officer; assessment of the evidence in respect
of each Articles of Charge; and finding on each Article of Charge and
reasons thereof. Plain reading of the inquiry report shows that IO has
merely given his conclusion without discussing the evidence or giving
any finding and/or reason in support of the conclusions or even
dealing with the defence put forth by the Petitioner. Even where the
allegations were held to be ‘partly proved’, it is not mentioned which
part of the allegations were ‘proved’. There is a clear violation of the
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statutory obligation by the IO and this vitiates the inquiry report and
the penalty imposed.
(G) Another illegality which goes to the root of the inquiry
proceedings and the penalty order is violation and disregard of Rule
68(3)(ii) of 1992 Rules which provides that ‘The Disciplinary
Authority shall, if it disagrees with the findings of the Inquiring
Authority on any article of charge, record its reasons for such
disagreement……’ From the order of DA dated 22.04.2014, it is
evident that it had disagreed with the IO with respect to allegation
Nos. 9, 13, 15 and 16, however, no disagreement note, recording
tentative disagreement, was issued by DA granting opportunity to the
Petitioner to represent against the same and DA proceeded to propose
the penalty vide Note dated 18.03.2014. This recommendation was
sent to the Appointing Authority, which by its Note dated 22.04.2014
took a decision to grant opportunity of personal hearing only to the
extent of quantum of penalty proposed and this was conveyed to the
Petitioner vide letter dated 22.04.2014, calling upon him for a
personal hearing as to why the proposed penalty be not imposed. It is
a settled law that where DA disagrees with the findings of the IO in
respect of any or all charges, it must form a tentative opinion that it
does not agree with the findings and grant an opportunity of hearing to
the Charged Officer to represent his case with respect to the reasons
for which DA has disagreed. In this context, reliance was placed on
the judgments of the Supreme Court and High Courts in Punjab
National Bank and Others v. Kunj Behari Misra, (1998) 7 SCC 84;
Yoginath D. Bagde v. State of Maharashtra and Another, (1999) 7
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SCC 739; M. Mohandas v. State Bank of India and Another, 2011
SCC OnLine Mad 2542; S.P. Malhotra v. Punjab National Bank
and Others, (2013) 7 SCC 251; and A.K. Shrivastava v. Indira
Gandhi Krishi Vishwavidyalaya Through its Registrar, Krishak
Nagar, Raipur (C.G.) and Another, 2017 SCC OnLine Chh 969.
(H) In the present case, DA and the Appointing Authority have
followed a strange procedure, unknown to law. Without calling upon
the Petitioner to present his case against the disagreement with the
findings of the IO in respect of charges ‘not proved’/partly proved’,
DA straightaway proposed the penalty and the Appointing Authority
fixed the date for personal hearing only with respect to the proposed
penalty, clearly implying that on the disagreement as also the merits
of the allegations, they had pre-judged that Petitioner was guilty. Both
the recommendation of the DA and the tentative and final orders of
the Appointing Authority also reflect that not a single issue raised by
the Petitioner in his representation against the inquiry report and/or
during the personal hearing, has been considered meaningfully. All
that the Appointing Authority has done in the final order dated
26.07.2014 is to extract the allegations and the views of the IO and
DA and then render its opinion. In the absence of a disagreement note,
the penalty and appellate orders are not sustainable in law.
(I) Petitioner took a consistent stand before the IO that as per
MCG Note dated 25.08.2004 elaborating the credit process, which
was an exhibited document, responsibility of the Petitioner as RM was
to handover the check list of documents to be submitted by the
prospective customer, which was duly done and the documents/
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information received from the customer were handed over to the
Credit Processing Cell (‘CPC‘) in the branch. It was the responsibility
of CPC to obtain all additional information as deemed fit from the
customer directly and to this extent, IO agreed with the Petitioner and
which is why allegation No. 1 i.e. before submission of the proposal,
financial status of associate companies and/or other companies
owned/promoted by Directors of M/s. Suhrit Services Pvt. Ltd. were
not obtained, was held as ‘not proved’. IO also agreed that it was the
responsibility of Credit Processing Team (CPT) to carry out pre-
sanction survey and yet erroneously held allegation No. 2, that
Petitioner did not follow-up the matter of pre-sanction, as ‘proved’.
(J) Allegation No. 3 was erroneously held as substantiated. The
STDR of Rs. 0.32 crore was to be obtained pending creation of
equitable mortgage (‘EM’) and was not in addition thereof. Bank
received a letter dated 11.06.2008 from the Syndicate Bank
confirming creation of EM of the flat in question and only thereafter
disbursement was made in the account on 12.06.2008 and therefore,
the allegation of not obtaining STDR was incorrect. In fact, the credit
audit report also evidenced that EM was created on four properties
with Syndicate Bank, as evident from their letter dated 11.06.2008.
None of these issues were looked into by the IO and the charge was
held as ‘proved’ merely on the ground that STDR was required
pending creation of EM of the property under reference, which was
not fully paid. Likewise, in respect to all other allegations also, the IO
completely overlooked the defence raised by the Petitioner and
rendered findings basis the allegations and case put forth by the
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prosecution in the form of documents. It is true that this Court under
Article 226 of the Constitution of India the scope of interference in
inquiry matters is limited, but in a case of no evidence or serious
violations of principles of natural justice and/or procedures of
departmental inquiries, Court can certainly step in to protect the
Charged Officer and quash the inquiry proceedings.
(K) There was no irregularity during the tenure of the Petitioner
from 12.06.2008 to 30.11.2008 and Charge Sheet deserves to be
quashed on this ground also. Loan was disbursed to M/s. Suhrit
Services Pvt. Ltd. on 12.06.2008 and was handled by the Petitioner till
30.11.2008. Credit audit was done by the auditors wherein it was
categorically stated that there were no warning signals/red flags
requiring urgent remedial measures till 24.01.2009. The credit audit
report, which was exhibited document, showed full score in the credit
account. Hence, no allegation can be levelled against the Petitioner
and in fact, PO was unable to establish any nexus between Petitioner’s
alleged acts and omissions and the misconduct. The Appellate
Committee in its order dated 03.09.2015 observed that alleged lapses
against the Petitioner regarding non-adherence to the bank norms in
recommending loan to M/s. Suhrit Services Pvt. Ltd. could not be
proved in the inquiry proceedings and yet did not absolve the
Petitioner on an erroneous and frivolous allegation that lapses by Mr.
Priyadarshan and Sachin Kumar were not brought to the notice of the
sanctioning authority i.e. Mid-Corporate Credit Committee (MCCC).
This observation was fallacious as Petitioner was never aware of the
irregularities, if any, committed by his superior officers and learnt of
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the allegations only during the inquiry. Moreover, as an RM, it was
not Petitioner’s duty to look into or flag faults with his superior
officers.
(L) The penalty imposed on the Petitioner is extremely
disproportionate. Petitioner was obliged only to expand the customer
base for business growth of SBI but as far as the loan was concerned,
the same was sanctioned by CPT i.e. team leader and branch head. In
fact, Mr. Priyadarshan Raut, Chief Manager, the then Credit Analyst
and Sachin Kumar, AGM, the then Team Leader were the persons
who recommended the proposal to MCCC for sanctioning the loan but
none of them were proceeded against and were instead rewarded by
timely promotions and out of turn postings, whereas Petitioner was
inflicted with a harsh penalty and remained without any promotion till
his retirement. The penalty may appear on the face of it to be a case of
reduction of pay by two stages for two years, but in fact it has far
reaching adverse consequences on the career and the emoluments of
the Petitioner. Penalty has resulted in reduction to a lower stage in the
time scale of pay by two stages for two years with loss of increments
in the reduction period as also postponement of future increments and
this has in turn adversely impacted the pension of the Petitioner, who
has retired on superannuation in October, 2015. There is no
gainsaying that reduction in pension is a serious punishment and is
awarded in case of grave misconduct, which is not the case here.
There is also violation of Article 14 of the Constitution inasmuch as
Petitioner and his subordinate Sushil Kumar were charge sheeted
together with almost the same allegations and yet Appellate Authority
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modified his penalty to reduction to a lower stage in time scale of pay
by one stage for one year with further direction that he will not earn
increments during the said period and on expiry of the period
reduction will have the effect of postponing future increments of his
pay. This is despite the fact that CVC had recommended no action
against the Petitioner but a criminal action along with major penalty
against Sushil Kumar. Even otherwise, the major penalty is not
commensurate looking into the fact that the allegation of loss caused
to the Bank due to the act of the Petitioner was not substantiated.
Reliance was placed on the judgments in Rajendra Yadav v. State of
Madhya Pradesh and Others, (2013) 3 SCC 73; Ishwar Chandra
Jayaswal v. Union of India and Others, (2014) 2 SCC 748; and
Punjab and Sindh Bank v. Raj Kumar, 2024 SCC OnLine Del 6431,
for the proposition that Courts can interfere where punishment is
disproportionate to the charges levelled and proved and that there
must be parity of punishment between employees with similar
allegations.
10. Mr. S.L. Gupta, learned counsel for SBI raised the following
contentions defending the inquiry proceedings and the impugned orders:-
(A) Charge Sheet was rightly issued against the Petitioner and there
is no infirmity in the penalty imposed or the order of the Appellate
Committee. The allegations levelled against the Petitioner are grave
and serious and as an officer of the Bank highest degree of integrity
and devotion to duty is expected and there can be no compromise with
these virtues. In 2008, Petitioner was working as RM and was Head of
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margin of 25% was sanctioned to M/s. Suhrit Services Pvt. Ltd. by the
Competent Authority and loan account was to be managed by the
AMT, headed by the Petitioner from the disbursement and during
day-to-day management. On 12.06.2008, on the basis of old stock
statement, Petitioner fixed the drawing power at Rs. 13 crores. The
account was withdrawn from the AMT w.e.f. 01.12.2008 because of
lack of proper management. The loan account turned NPA on
01.12.2008 and investigation revealed lapse on the part of the
Petitioner in the conduct, supervision and follow-up of loan account.
Explanation given by him was unsatisfactory and Charge Sheet was
issued to inquire into the matter with 17 allegations and 15 documents
duly served on him.
(B) Fair and transparent departmental inquiry was conducted
following the principles of natural justice and laid down procedures
granting sufficient opportunity to the Petitioner to defend himself.
Fairness in action can be seen from the fact that IO held only those
charges as ‘proved’ or ‘partly proved’ where there was evidence to
substantiate the allegations. Three Chief General Managers were part
of the Appellate Committee and carefully examined the evidence
before passing the final order imposing the penalty and there are no
allegations of bias or mala fide either against the IO or the DA or the
members of the Appellate Committee. It is a settled law that this
Court while exercising power of judicial review cannot re-appreciate
the evidence led before the IO and substitute its own wisdom to come
to a conclusion contrary to the findings of the IO and/or the DA.
Petitioner is unable to point out any violation of principles of natural
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justice and therefore, no interference is warranted in the writ petition.
In H.B. Gandhi, Excise and Taxation Officer-Cum-Assessing
Authority, Karnal and Others v. M/s Gopi Nath & Sons and Others,
1992 Supp (2) SCC 312, the Supreme Court held that scope of
judicial review can only extend to decision making process and not to
the decision.
(C) Charges were proved on documentary evidence. Bank produced
20 documents, P-1 to P-20 which were duly furnished to the Petitioner
and he accepted their genuineness and authenticity. In the proceeding
held on 02.11.2012, Petitioner admitted the authenticity of the
prosecution documents P-1 to P-15 and in the hearing on 19.11.2012
he admitted the authenticity of the documents P-16 to P-20. Once the
documents were admitted and were uncontroverted, there was no
requirement of their being proved through oral evidence and therefore,
the judgments relied on in Roop Singh Negi (supra), Ashok Kumar
Sharma (supra) and Pawan Kumar Agarwala (supra) are of no
consequence. In Tara Chand Vyas v. Chairman & Disciplinary
Authority and Others, (1997) 4 SCC 565, the Supreme Court held
that non-production of witnesses/oral evidence is not a manifest error
in the departmental inquiry if documentary evidence is produced and
copies of the documents are furnished to the charged employee. This
position was reiterated in Director General, Indian Council of
Medical Research and Others v. Dr. Anil Kumar Ghosh and
Another, (1998) 7 SCC 97. Even otherwise, as per Section 59 of the
Indian Evidence Act, 1872, only facts other than the contents of
documents are to be proved by oral evidence. It is not mandatory in
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departmental proceedings that oral evidence must necessarily be led.
In any case, no fact or allegation was sought to be proved beyond the
documents filed and relied upon and therefore, the contention of the
Petitioner that there was no list of witnesses cannot inure to his
advantage in this case.
(D) Petitioner is wrong in contending that he had no role in the loan
transaction and its follow-up and/or there was no allegation of
violating the financial discipline. Before the disbursal of the loan,
Petitioner failed to obtain a security by way of STDR of Rs. 0.32
crores and Rs. 11 lakhs, which were subject matter of allegations No.
3 and 4. Petitioner did not obtain the stocks statement as on the date of
disbursal of the loan/limit on 12.06.2008 and also failed to verify the
availability of the stock, in the absence of which limits could not be
disbursed because the drawing power is determined only basis the
recent stock statement and thus allegation No. 8 was established. The
borrower was a car dealer and its stock was moving and therefore, the
drawing power could not be decided on the basis of old stock
statements.
(E) Allegation No. 9 was serious and grave as Petitioner allowed
over drawings in the accounts within two months of the loan sanction
while he had no authority to grant the same beyond his sanctioning
limit. In Disciplinary Authority-cum-Regional Manager and Others
v. Nikunja Bihari Patnaik, (1996) 9 SCC 69, the Supreme Court held
that allowing overdrafts in the accounts cannot be treated as mere
error of judgment and thus the penalty of dismissal was proportionate.
Likewise, allegations No. 10 and 11 were proved inasmuch as when
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the borrower requested for over drawings vide letter dated 26.07.2008,
the same was allowed without any approval. The defence of the
Petitioner that his service officer had allowed the over drawing is of
no consequence as being an immediate superior officer, he was
responsible for the actions of his subordinates. Over drawings
were permitted casually without even ensuring the proper end
use of the funds by undertaking inspection of the stocks and
DA rightly observed that Petitioner had no control over the loan
account.
(F) Petitioner has not brought to the notice of the Court another
serious flaw in his conduct which was subject matter sof allegation
No. 12. The relevant account had started showing unsatisfactory
conduct in July, 2008 itself as 11 cheques drawn by M/s. Suhrit
Services Pvt. Ltd. were returned in July, 2008, while 24 cheques were
returned in August, 2008. Petitioner did not exercise effective
supervision over his subordinate officers and this allegation was
established during the inquiry. Being the team leader, it was his duty
to diligently manage and supervise the account and on this score, even
the claim for parity with Sushil Kumar, is misconceived. The onus
and responsibility of a superior officer is far more onerous than his
subordinates and it is not as if no action was initiated against Sushil
Kumar. Penalty has been imposed on Sushil Kumar commensurate
with his misconduct and criminal action against him is pending before
the competent Court.
(G) Even assuming that there are any procedural violations, it is a
settled law that each and every violation of laid down procedure
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cannot automatically vitiate the inquiry proceeding. Complaint of
violation of procedural provisions ought to be examined from the
point of view of prejudice i.e. whether the violation has prejudiced the
Charged Officer in defending himself properly and effectively. If
prejudice is found, the same must be remedied including by setting
aside the inquiry and/or the penalty order but where no prejudice is
established, no interference is warranted in the departmental
proceedings albeit there are certain procedural violations which
are of a fundamental character, whose violation by itself is
proof of prejudice. This is the view of the Supreme Court in
State Bank of Patiala and Others v. S.K. Sharma, (1996) 3
SCC 364 and has been reaffirmed in several judgments from time to
time.
11. Heard learned Senior Counsel for the Petitioner and learned counsel
for the Respondent.
12. Amongst myriad of arguments raised by learned Senior Counsel for
the Petitioner, the first and foremost issue that requires to be considered is
whether non-production of witnesses by SBI to prove the documents
tendered in support of the Article of Charge is fatal to the inquiry. It is well-
settled that in departmental/domestic inquiries, strict rules of evidence do
not apply but being quasi-judicial proceedings, IO has a duty to carefully
examine the evidence led before him and he cannot merely rely on the
documents filed by the PO to hold the Charged Officer guilty. Inference on
facts by an IO must be based on some evidence, which is led before the IO
in compliance of the principles of natural justice and IO is expected to
ensure that the evidence presented by the department is sufficient to prove
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the charge albeit the standard of proof required is preponderance of
probabilities. [Ref.: Anil Kumar Dhyani v. Union of India & Ors., 2017
SCC OnLine Del 9911].
13. Coming to the present case, Article of Charge along with statement of
allegations is as follows:-
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14. Along with the charge memorandum, SBI enclosed a list of
documents but admittedly, the charge memorandum was not accompanied
by a list of witnesses. Entire case of SBI is predicated on documentary
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evidence and plain reading of the inquiry report leaves no doubt that IO has
heavily relied on documents to hold some allegations as ‘proved’ or ‘partly
proved’ against the Petitioner. In the absence of list of witnesses, it can be
safely concluded that neither the documents relied upon by SBI nor their
contents can be said to be proved by SBI. Since no oral evidence was led to
prove the documents tendered, Petitioner did not have the opportunity to
cross-examine the witnesses for rebutting the documents and/or their
contents and therefore, Petitioner was unable to lead his defence, effectively
and meaningfully. Absence of list of witnesses renders the Charge Sheet
invalid and this vitiates the inquiry proceedings. I may, at this stage, allude
to the judgment of the Supreme Court in Roop Singh Negi (supra), relevant
paragraphs of which are as follows:-
“14. Indisputably, a departmental proceeding is a quasi-judicial
proceeding. The enquiry officer performs a quasi-judicial function. The
charges levelled against the delinquent officer must be found to have been
proved. The enquiry officer has a duty to arrive at a finding upon taking
into consideration the materials brought on record by the parties. The
purported evidence collected during investigation by the investigating
officer against all the accused by itself could not be treated to be evidence
in the disciplinary proceeding. No witness was examined to prove the said
documents. The management witnesses merely tendered the documents
and did not prove the contents thereof. Reliance, inter alia, was placed by
the enquiry officer on the FIR which could not have been treated as
evidence.
xxx xxx xxx
17. In Moni Shankar v. Union of India [(2008) 3 SCC 484 : (2008) 1
SCC (L&S) 819] this Court held: (SCC p. 492, para 17)
“17. The departmental proceeding is a quasi-judicial one. Although
the provisions of the Evidence Act are not applicable in the said
proceeding, principles of natural justice are required to be complied
with. The courts exercising power of judicial review are entitled to
consider as to whether while inferring commission of misconduct on
the part of a delinquent officer relevant piece of evidence has been
taken into consideration and irrelevant facts have been excluded
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the requirements of legal principles. The Tribunal was, thus, entitled
to arrive at its own conclusion on the premise that the evidence
adduced by the Department, even if it is taken on its face value to be
correct in its entirety, meet the requirements of burden of proof,
namely, preponderance of probability. If on such evidences, the test of
the doctrine of proportionality has not been satisfied, the Tribunal
was within its domain to interfere. We must place on record that the
doctrine of unreasonableness is giving way to the doctrine of
proportionality.””
15. Reiterating the principle, the Supreme Court in State of Uttar
Pradesh and Others v. Saroj Kumar Sinha, (2010) 2 SCC 772, held as
under:-
“27. A bare perusal of the aforesaid sub-rule shows that when the
respondent had failed to submit the explanation to the charge-sheet it was
incumbent upon the inquiry officer to fix a date for his appearance in the
inquiry. It is only in a case when the government servant despite notice of
the date fixed failed to appear that the inquiry officer can proceed with the
inquiry ex parte. Even in such circumstances it is incumbent on the inquiry
officer to record the statement of witnesses mentioned in the charge-sheet.
Since the government servant is absent, he would clearly lose the benefit of
cross-examination of the witnesses. But nonetheless in order to establish
the charges the Department is required to produce the necessary evidence
before the inquiry officer. This is so as to avoid the charge that the inquiry
officer has acted as a prosecutor as well as a judge.
28. An inquiry officer acting in a quasi-judicial authority is in the
position of an independent adjudicator. He is not supposed to be a
representative of the department/disciplinary authority/Government. His
function is to examine the evidence presented by the Department, even in
the absence of the delinquent official to see as to whether the unrebutted
evidence is sufficient to hold that the charges are proved. In the present
case the aforesaid procedure has not been observed. Since no oral
evidence has been examined the documents have not been proved, and
could not have been taken into consideration to conclude that the charges
have been proved against the respondents.
29. Apart from the above, by virtue of Article 311(2) of the
Constitution of India the departmental enquiry had to be conducted in
accordance with the rules of natural justice. It is a basic requirement of
the rules of natural justice that an employee be given a reasonable
opportunity of being heard in any proceedings which may culminate in
punishment being imposed on the employee.
30. When a departmental enquiry is conducted against the government
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servant it cannot be treated as a casual exercise. The enquiry proceedings
also cannot be conducted with a closed mind. The inquiry officer has to be
wholly unbiased. The rules of natural justice are required to be observed
to ensure not only that justice is done but is manifestly seen to be done.
The object of rules of natural justice is to ensure that a government
servant is treated fairly in proceedings which may culminate in imposition
of punishment including dismissal/removal from service.
31. In Shaughnessy v. United States [97 L Ed 956 : 345 US 206
(1952)] (Jackson, J.), a Judge of the United States Supreme Court has
said: (L Ed p. 969)
“… Procedural fairness and regularity are of the indispensable
essence of liberty. Severe substantive laws can be endured if they are
fairly and impartially applied.””
16. Relevant would it be to refer to the judgments of the Division
Benches of this Court on the same proposition of law. In Union of India
and Others v. Ritu Chaudhary, 2019 SCC OnLine Del 12063, the Division
Bench held as follows:-
“13. The Court is not persuaded by any of the above contentions of the
Petitioners. The Court notes that under Rule 14(3) & (4) of the CCS (CCA)
Rules, it was incumbent, where the Government proposes to hold an
inquiry, to draw the substance of imputations which would contain “a list
of documents by which and a list of witnesses by whom, the Articles of
Charge are proposed to be sustained”. The said rule reads as under:
“14 (3) Where it is proposed to hold an inquiry against a Government
servant under this rule and rule 15, the disciplinary authority shall
draw up or cause to be drawn up-
(i) the substance of the imputations of misconduct or misbehaviour
into definite and distinct articles of charge;
(ii) a statement of the imputations of misconduct or misbehaviour
in support of each article of charge, which shall contain-
(a) a statement of all relevant facts including any admission or
confession made by the Government servant;
(b) a list of documents by which, and a list of witnesses by
whom, the articles of charge are proposed to be sustained.
(4) The disciplinary authority shall deliver or cause to be delivered to
the Government servant a copy of the articles of charge, the statement
of the imputations of misconduct or misbehaviour and a list of
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to be sustained and shall require the Government servant to submit,
within such time as may be specified, a written statement of his
defence and to state whether he desires to be heard in person”.
14. Rule 14 (4) also envisages serving upon the Government servant
the copy of the Articles of Charge which would include “the list of
documents and witnesses by which each Articles of Charge is proposed to
be sustained”.
15. The following observations in LIC of India v. Ram Pal Singh Bisen,
(2010) 4 SCC 491 are relevant in this context:
“20. Thus, the question that arises, for consideration is whether in
absence of any oral evidence having been tendered by the appellants,
and especially in absence of putting their own defence to the
respondent during his cross examination in the Court, what is the
effect of documents filed by appellants and marked as Exhibits.
21. Despite our persistent requests made to the learned counsel
appearing for the appellants they have not been able to show
compliance of Order XII Rule 1 and 2 of the CPC, meaning thereby
that there has not been any compliance thereof.
…..
26. We are of the firm opinion that mere admission of document in
evidence does not amount to its proof. In other words, mere marking
of exhibit on a document does not dispense with its proof, which is
required to be done in accordance with law. As has been mentioned
herein above, despite perusal of the record, we have not been able to
come to know as to under what circumstances respondent plaintiff had
admitted those documents. Even otherwise, his admission of those
documents cannot carry the case of the appellants any further and
much to the prejudice of the respondent.
27. It was the duty of the appellants to have proved documents Exh. A-
1 to Exh. A-10 in accordance with law. Filing, of the Inquiry Report
or the evidence adduced during the domestic enquiry would not
partake the character of admissible evidence in a court of law. That
documentary evidence was also required to be proved by the
appellants in accordance with the provisions of the Evidence Act,
which they have failed to do.”
16. Although, as pointed out by learned counsel for the Petitioners, in
disciplinary inquiry proceedings the rules of the CPC and the Evidence
Act may not strictly apply, it is basic that the mere production of a
document is not sufficient even in a disciplinary inquiry. There has to be
some witness to prove such a document. Without a witness to prove the
documents, the Enquiry Officer cannot take it on record as a genuine
document. In the present case in the absence of any list of witnesses, there
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was no means by which the documents could have been proved by the
Department in the inquiry proceedings.
17. In the present cases, if indeed the MoC refer to documents, the
originals of which were not available with the Department, and the list of
the names of the witnesses who were sought to be examined to prove the
above documents, was not appended, clearly, the holding of the enquiry
would itself become a mere formality. As rightly pointed out by the CAT, if
in the absence of original documents and witnesses, an Enquiry Officer
was to find the charges to be proved, such a finding would obviously be
perverse and unsustainable in law. In other words, by allowing the
disciplinary proceeding to continue on the basis of the subject MoCs, the
Court or the Tribunal, as the case may be, would be effectively directing a
wasteful exercise to be undertaken, which would end up being invalidated
on obvious grounds.”
17. In Union of India v. Shameem Akhtar, 2015 SCC OnLine Del
14747, the Division Bench, relying on the judgment of the Supreme Court in
Kuldeep Singh v. The Commissioner of Police and Others, (1999) 2 SCC
10, held as follows:
“15. It is settled law that the charges levelled against a delinquent
official is to be proved in the inquiry before any penalty is imposed. Sub-
Rule (3) of Rule 14 provides that the Articles of Charge are to be
supported with documents and proved by witnesses during the hearing. In
our view, this in-built safeguard has been provided to allow a delinquent
employee to cross-examine the witnesses and to rebut the allegations
against him. In the absence of any witness and in the absence of any
opportunity to cross-examine a witness would be against the canon of
natural justice and the same cannot be treated as a mere formality.”
18. In A.K. Saxena v. Union of India & Ors., W.P.(C) 3127/2014,
decided on 10.08.2016, the Division Bench was again called upon to decide
the legality of a departmental inquiry and one of the issues was that
Memorandum of Charge was without a list of witnesses. Relying on the
judgments in Roop Singh Negi (supra) and Saroj Kumar Sinha (supra), the
Division Bench held that mere production of documents was not enough and
contents of the documents have to be proved by examining the witnesses as
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this is the requirement of principles of natural justice albeit provisions of
Evidence Act may not be strictly applicable to departmental proceedings. To
the same effect are the judgments of the Division Benches of this Court in
Union of India and Others v. Surender Kumar, 2023 SCC OnLine Del
3414; Anil Kumar Dhyani (supra); and Union of India v. Man Singh,
2018 SCC OnLine Del 7298. It would be relevant to refer to some passages
from the judgment in Anil Kumar Dhyani (supra) as under:
“16. We have heard learned counsel for the parties and considered their
rival contentions. From the facts noticed hereinabove, it is clear that in the
chargesheet itself, the Respondents have clearly stated, that they did not
propose to examine any witness. The short question of simple nature, but
considerable importance, which arises for our consideration in the present
case is as to whether in a domestic inquiry, documents can be relied upon
to hold the employee guilty, without producing even a single witness to
prove those documents and that too when the delinquent employee does
not admit those documents.
17. Though it is well settled that in a domestic inquiry, strict rules of
evidence do not apply and the inquiry officer is not expected to write a
judgment like a Judge of a Court but it is also equally a well settled
proposition, that the domestic inquiry is a quasi judicial proceeding and
the inquiry officer, while performing this quasi judicial function, has a
duty to carefully examine the evidence led before him and he cannot
merely rely on the documents filed by the Presenting Officer to hold the
delinquent employee guilty. Inference on facts by an inquiry officer must
be based on some evidence, which is led before the inquiry officer in
compliance of the principles of natural justice and he is expected to ensure
that at least the evidence presented by the management, is sufficient to
hold that the charge is proved.
18. Coming to the facts of the present case, we find that the Petitioner
had specifically denied the documents on which reliance had been placed
by the Respondents, and he had repeatedly requested for production of
original documents, so as to enable him to carry out admission/denial of
the documents relied upon. It is evident that the documentary evidence
relied upon in the chargesheet, was not admitted by the Petitioner
employee. In such a situation, in our considered view, it was imperative
for the Respondents management to, at least, examine some witness to
exhibit those documents before the inquiry officer, and only when the
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the witness, that reliance could have been placed on the same to hold the
Petitioner guilty.
xxx xxx xxx
23. In fact, from a perusal of the judgment of the Apex Court in the
case of State Bank of India v. Narendra Kumar Pandey (supra), which has
been relied upon by the Respondents, it becomes evident that only when
the documents are uncontroverted, it is open to the inquiry officer to
accept the same, to hold the employee guilty even without examining any
witness. In a case where the documents are not admitted by the delinquent
employee, the same have to be proved by the management by leading
oral evidence and in the absence of any witness, the same cannot be relied
upon by the inquiry officer while arriving at his finding in respect of the
charges.”
19. Recently, the Division Bench of this Court in Punjab National Bank
and Others v. S.K. Jain, 2024 SCC OnLine Del 8916, reiterated that
documents relied upon in disciplinary proceedings have to be proved
through oral evidence so that the employee gets an opportunity to rebut the
evidence by cross-examining the witnesses through whom the documents
are sought to be proved. The argument of SBI that Petitioner has admitted
the authenticity of the documents relied upon by SBI and tendered by the
PO, can be no avail to SBI for the simple reason that even assuming the
authenticity of the documents was accepted by the Petitioner, contents of the
documents were required to be proved through oral testimonies and
moreover, since no witnesses were cited, Petitioner lost the opportunity of
cross-examination and resultantly to rebut the documentary evidence
produced against him.
20. Matter can be seen from another angle. Rule 67 of 1992 Rules
provides the minor and major penalties that can be imposed on the bank
employee in a disciplinary proceeding. Procedure for disciplinary action is
laid down in Rule 68 of 1992 Rules. Rule 68(2)(i) provides that no order
imposing major penalty shall be made except after an inquiry held in
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accordance with sub-Rule (2). Rule 68(2) of 1992 Rules provides that along
with the Articles of Charge and statement of allegations, a list of documents
and list of witnesses shall be furnished to the Charged Officer who will then
submit a written statement of defence. Therefore, furnishing a list of
witnesses is a mandate of the procedure prescribed for holding an inquiry
before imposing a major penalty. Therefore, the procedure followed by SBI
by not having a list of witnesses accompanying the Charge Sheet is more in
breach of the Rule than in compliance and this to my mind is enough to
vitiate the Charge Sheet. Since the Charge Sheet itself is illegal and cannot
be sustained, the departmental inquiry together with the penalty stands
vitiated and this Court need not delve into any further argument raised by
the parties.
21. Be that as it may, Petitioner is also right in his contention that there is
another glaring illegality in the procedure followed by the DA and the
Appointing Authority. Rule 68(3)(ii) of 1992 Rules provides that DA shall,
if it disagrees with the findings of the IO on any Article of Charge, record its
reasons for such disagreement. As per settled law, once a disagreement note
is issued by the DA, the same has to be put to the Charged Officer to make
his representation and contest the reasons for disagreement. This position of
law is settled by the Supreme Court in Kunj Behari Misra (supra) and
Yoginath D. Bagde (supra). Relevant paragraph from Yoginath D. Bagde
(supra) is as follows:-
“31. In view of the above, a delinquent employee has the right of
hearing not only during the enquiry proceedings conducted by the enquiry
officer into the charges levelled against him but also at the stage at which
those findings are considered by the disciplinary authority and the latter,
namely, the disciplinary authority forms a tentative opinion that it does not
agree with the findings recorded by the enquiry officer. If the findings
recorded by the enquiry officer are in favour of the delinquent and it hasSignature Not Verified
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been held that the charges are not proved, it is all the more necessary to
give an opportunity of hearing to the delinquent employee before reversing
those findings. The formation of opinion should be tentative and not final.
It is at this stage that the delinquent employee should be given an
opportunity of hearing after he is informed of the reasons on the basis of
which the disciplinary authority has proposed to disagree with the findings
of the enquiry officer. This is in consonance with the requirement of
Article 311(2) of the Constitution as it provides that a person shall not be
dismissed or removed or reduced in rank except after an enquiry in which
he has been informed of the charges against him and given a reasonable
opportunity of being heard in respect of those charges. So long as a final
decision is not taken in the matter, the enquiry shall be deemed to be
pending. Mere submission of findings to the disciplinary authority does
not bring about the closure of the enquiry proceedings. The enquiry
proceedings would come to an end only when the findings have been
considered by the disciplinary authority and the charges are either held to
be not proved or found to be proved and in that event punishment is
inflicted upon the delinquent. That being so, the “right to be heard” would
be available to the delinquent up to the final stage. This right being a
constitutional right of the employee cannot be taken away by any
legislative enactment or service rule including rules made under Article
309 of the Constitution.”
22. Following the judgments of the Supreme Court in Kunj Behari Misra
(supra) and Yoginath D. Bagde (supra), the Division Bench of this Court in
K.C. Sharma v. BSES Yamuna Power Limited, 2015 SCC OnLine Del
8125, held as follows:-
“15. In the decisions reported as (1998) 7 SCC 84 Punjab National
Bank v. Kunj Bihari Misra and (1999) 7 SCC 739 Yoginath D. Bagde
v. State of Maharashtra, the Supreme Court held that a facet of the
principles of natural justice was that if the Disciplinary Authority
disagreed with the findings returned by an Enquiry Officer it should
record tentative reasons for the disagreement, leaving scope for an open
mind to consider the response of the Charged Officer, give the tentative
reasons for the disagreement to the Charged Officer and invite his
response and then dealing with the response pass a reasoned order.
16. The jurisprudence behind said principle of law is that unless a
person is given an opportunity to respond to a tentative reason to
disagree, the person affected loses a valuable right of being heard before a
decision adverse to his interest is taken and that the final decision must
contain the reasons because it is this reasons which would determine the
appellate remedy of the person whose interest is adversely affected by the
decision.
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17. In Yoginath D. Bagde‘s case (supra), the Supreme Court held:
“a delinquent employee has the right of hearing not only during the
enquiry proceedings conducted by the Enquiry Officer into the
charges levelled against him but also at the stage at which those
findings are considered by the Disciplinary Authority and the latter,
namely, the Disciplinary Authority forms a tentative opinion that it
does not agree with the findings recorded by the Enquiry Officer. If
the findings recorded by the Enquiry Officer are in favour of the
delinquent and it has been held that the charges are not proved, it is
all the more necessary to give an opportunity of hearing to the
delinquent employee before reversing those findings. The formation of
opinion should be tentative and not final. It is at this stage that the
delinquent employee should be given an opportunity of hearing after
he is informed of the reasons on the basis of which the Disciplinary
Authority has proposed to disagree with the findings of the Enquiry
Officer. This is in consonance with the requirement of Article 311(2)
of the Constitution as it provides that a person shall not be dismissed
or removed or reduced in rank except after an enquiry in which he has
been informed of the charges against him and given a reasonable
opportunity of being heard in respect of those charges. So long as a
final decision is not taken in the matter, the enquiry shall be deemed
to be pending. Mere submission of findings to the Disciplinary
Authority does not bring about the closure of the enquiry proceedings.
The enquiry proceedings would come to an end only when the findings
have been considered by the Disciplinary Authority and the charges
are either held to be not proved or found to be proved and in that
event punishment is inflicted upon the delinquent. That being so, the
“right to be heard” would be available to the delinquent up to the
final stage. This right being a constitutional right of the employee
cannot be taken away by any legislative enactment or Service Rule
including Rules made under Article 309 of the Constitution.”
18. An argument was advanced in Yoginath Bagde‘s case before the
Supreme Court that a post-decisional hearing may be granted. The
Supreme Court negative the plea holding that the same would not be
adequate because the Disciplinary Authority had already closed its mind
by taking a determinative view.”
23. To the same effect are the judgments relied upon by the Petitioner in
M. Mohandas (supra), S.P. Malhotra (supra), and A.K. Shrivastava
(supra). In the present case, there is an apparent violation of Rule 68(3)(ii)
inasmuch as DA disagreed with the findings of the IO on allegation Nos. 9,
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13, 15 and 16, however, no disagreement note was rendered recording
reasons for the disagreement and thus no opportunity was granted to the
Petitioner to represent and contest the reasons for disagreement. In fact, a
strange procedure was followed by the DA, wherein it rendered a tentative
opinion not on the findings it disagreed with but only on the quantum of
penalty and forwarded the recommendation to the Appointing Authority.
The Appointing Authority also did not care to pen down any disagreement
note and seek Petitioner’s comments but gave an opportunity with respect to
quantum of penalty only. This is a serious flaw in the disciplinary
proceedings and on this ground the penalty order deserves to be quashed.
24. Additionally, Petitioner is also correct in his submission that IO has
not taken into consideration the defence submitted by the Petitioner during
the inquiry and has merely noted the respective stands and returned a finding
on the allegations basing his conclusion on the documents tendered by SBI.
To deal with this aspect, I may illustratively refer to the findings on the
allegations held to be ‘proved’ against the Petitioner as follows:-
“Allegation No. 2
In a note dated 31,10.2008 (Note no, 85), the Concurrent Auditor at the
branch had stated that the pre sanction survey report had not been kept on
record in the relative file. Against that observation, he had given remarks
that the same was awaited from the Centralized Processing Cell (CPC).
No further follow up was evidenced nor the pre-sanction report is on
record.
My findings
1. Pex 18 conveys that the copy of pre sanction survey report is not kept in
branch record,
2. Dex 9/2 confirms responsibility of CPT to carry out pre sanction survey.
3. Dex 13/2 confirms only omission of note no 85 from the pending list but
does not confirm satisfactorily advising by CPC about resolution of issue
or follow up of issue by Concurrent auditor.
In view of the above documentary evidences & Arguments the charge
leveled against OPA regarding no further follow up is proved.
Signature Not Verified
Digitally Signed
By:KAMAL KUMAR W.P.(C) 8652/2017 Page 33 of 39
Signing Date:06.03.2025
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Allegation No. 3
As per page 18 of the proposal, under the head ‘collateral details’, the
branch was required to obtain a STDR of Rs.0.32 crs. being our share of
realizable value of the property i.e. a flat with an area of 198.30 Sq. mt. at
601, Vatika City, Gurgaon, as Equitable Mortgage was to be created later.
However, the required STDR for Rs.0.32 crs. was not obtained.
My findings
1. Pex 2/19 confirms requirement of obtaining a STDR of Rs. 0.32 cr under
exclusive charge of SBI pending creation of EM of property under
reference which was not fully paid.
2. Pex 4/1 confirms that property remains partly paid as on 12.06.2008.
3. Letter no 9044/NP/ADV/SUHRIT is not admitted as prosecution of
defense exhibit.
In view of the above documentary evidences & Arguments the charge
leveled against OPA Is proved.
Allegation No. 4
An STDR of Rs. 11 lacs was required to be provided as a part of collateral
security (in lieu of our stipulated share in an LIC insurance policy in the
name of Ms. Binita Pradhan-value Rs.30 lacs), but that was not done.
My findings
1. Pex 2/19 confirms stipulation of obtaining assignment of LIC policy in
the name of Binita Pardhan with surrender value of Rs 0.30 cr with
Syndicate Bank and our share being Rs 0.11 cr.
2. Pex 4/2 confirms non tendering of insurance policy.
3. Pex 2/1 does not permit any time for creation of security by way of
assignment subsequent to disbursement in the absence of which it is
implied to create the security upfront.
In view of the above documentary evidences & Arguments the charge
leveled against OPA is proved.
Allegation No. 8
Before first disbursement in the account on 12.06.2008, obtention of stock
statement and the verification of stocks were not carried out. There is no
pre-disbursement inspection report on record.
My findings
1. Prosecution document Dex 6/1 is the Transaction Enquiry of CC
Account No.30402018486 of M/s Suhrit Services which shows First debit
of Rs. 5,0012500/- on account of first disbursal.
2. Prosecution document PEX 6/1 to 4 is the copy of stock statement of M/s
Suhrit Services Pvt Ltd. It is as on 30.06.2008.
3. No stock statement of 12.06.2008 (Date of 1st disbursal) or prior to that
is on Branch record.
Signature Not Verified
Digitally Signed
By:KAMAL KUMAR W.P.(C) 8652/2017 Page 34 of 39
Signing Date:06.03.2025
19:06:58
4. Defense document D-7/2 refers to recording of Monthly stock statement
dated 31.05.2008 in the DP Register on 10,06,2008, This confirms that it
was obtained 2 days prior to the first disbursal.
5. Defense Document D-9/5 says Verification of stocks after first
disbursement is to be done by AVT as per MCG Note Para C (ii)(1).
No evidence of having carried out the pre disbursement inspection has
been produced. In view of the above documentary evidences &
Arguments the charge leveled against OPA is substantiated.
Allegation No. 10
The Company had requested for permitting over drawings vide their letter
dt.26.07.2008 for purchasing i10 cars, which do not bear any
remarks/recommendations by any official or approval by any authority.
However, on subsequent occasions, no request letter(s) from the
borrowers were obtained while permitting the overdrawings in the
account.
My findings
1. Prosecution document PEX 9/1-12 is the copy of Irregularity reports of
M/S Suhrit Services for the month of July 2008 & Aug 2008 put up by the
Branch to Mid Corporate Credit Committee for confirmation. Reports
show irregularity of Rs. 66.00 lacs in July 2008 (PEX 9/7) Irregularity of
Rs. 1.18 crores in the month of Aug 2008 (PEX 9/1).
2. Defence reply makes a mention of overdrawing permitted during the
month of August 2008 only and reply is silent about applications received
on other occasions like in July 2008 and beyond the expiry of period
requested in letter
In view of the above documentary evidences & Arguments the charge
leveled against OPA is proved.
Allegation No. 11
The decision to permit overdrawing in the account had been taken in a
casual manner by allowing drawings in the account and not ensuring
proper end use of funds by confirming that the i10 cars were actually
purchased. There is no record as to whether inspection was carried out
after permitting over drawings to verify creation of additional securities
(i.e. stocks).
My findings
1. Prosecution document PEX 9/7 to 12 is the Irregularity report of M/s
Suhrit Services for the month of July 2008 which shows irregularity of Rs.
66.00 lacs and document Pex 8 is the letter dt.26/07/2008 of M/s Suhrit
services requesting an addl. Overdrawing of Rs. 1.00 crore. Pex 9/1 to 9/7
is the Irregularity Report for the month of August 2008 showing
irregularity of Rs.1.18 crores in the account of borrower.
Signature Not Verified
Digitally Signed
By:KAMAL KUMAR W.P.(C) 8652/2017 Page 35 of 39
Signing Date:06.03.2025
19:06:58
2. Defense also mentions that no stock statement is on record showing that
the i10 cars were purchased and added to the hypothecated stock and the
stock were verified.
3. Defense cites document Dex 7/2 and stales that to ensure proper end use
of funds, the Company submitted its stock statement as on 31.08.2008
which shows Finished Goods stock of Rs.39.48 cr.
4. Prosecution document PEX 11/1 to PEX 11/23 are the relevant pages of
Inspection Report of Assets Verification Officer (AVO) who had carried
out inspection on 03.09.2008 and in his report he enclosed list of cars,
which were physically verified by him and list of cars in transit. Total 126
i10 cars were in inventory list (52 i10 cars were physically verified and 74
i10 cars were in transit as per the report).
The document Pex 11 refers to stock statement dated 31.07.2008 where as
overdrawing was permitted thereafter. In view of the above documentary
evidences & Arguments the charge leveled against OPA Is proved.
Allegation No. 12
The account had started throwing signals of unsatisfactory conduct in July
’08 itself as 11 cheques of the company were returned by the branch due to
insufficient funds in the month of July, 2008. In subsequent months also the
position did not improve which is evidenced by the number of cheques
returned due to insufficient funds as under:
August 2008 – 24 Cheques
September 2008 – 5 Cheques
October 2008 – 2 Cheques
This was in addition to the fact that account was allowed to be overdrawn
from the very beginning.
My findings
1. Prosecution document PEX 7/17, 7/21, 7/22, 7/23, 7/26, 7/27, 7/29,
7/31, 7/32 & 7/33 show that more than 11 cheques were returned unpaid
on account of insufficient funds in the month of July 2008.
2. Prosecution document PEX 7/37 to 7/45 show that 24 cheques were
dishonoured during the month of Aug 2008.
3. Prosecution document PEX 7/45 to 7/52 Show that 5 cheques were
dishonoured during the month of Sep 2008
4. Prosecution document PEX 7/53 shows returning of 2 Cheques during
the month of Oct 2008.
In view of the above documentary evidences & Arguments the charge
leveled against OPA is proved.”
25. With respect to allegation No. 2, it can be seen that Petitioner had
taken a stand that responsibility for pre-sanction survey report was of the
Signature Not Verified
Digitally Signed
By:KAMAL KUMAR W.P.(C) 8652/2017 Page 36 of 39
Signing Date:06.03.2025
19:06:58
credit analyst as per Ex.D9/2, who was member of the CPC and as RA,
Petitioner had no role to play. He also brought out that the concurrent
auditor never got back to him regarding non-receipt of the survey report
during the period Petitioner was handling the account and that Note 85
which stated that survey report was not on record, was not shown in the list
of pending audit notes, which confirms that the concurrent auditor was
satisfactorily advised by CPC and had closed the note as complied with. IO
found that responsibility of pre-sanction survey was of CPT and despite this
finding and overlooking the other issues raised by the Petitioner, IO simply
concluded that the allegation was ‘proved’. Similarly, in respect of
allegation No. 3, Petitioner had pointed out that a letter was received from
Syndicate Bank dated 11.06.2008 confirming creation of EM of the flat in
question before the first disbursement on 12.06.2008 and that STDR of Rs.
0.32 crore was not in addition to the EM. It was also brought out that EM
was created on four properties as confirmed by the Syndicate Bank,
however, overlooking all this and without dealing with the defence, the
allegation was held as ‘proved’.
26. In respect to allegation No. 4, Petitioner brought forth that the
sanction appraisal did not stipulate condition of Rs.11 lacs by way of STDR
and only required assignment of insurance policy with surrender value of
Rs.0.30 crore on pari passu basis with Syndicate Bank and that though the
account was transferred on 30.11.2008, Petitioner and his Service Officer
assisted RM-IV and arranged deposit of Rs.0.182 crore in the company’s
account, however, as SSPL account was transferred to RM-IV on
01.12.2008, it was the said officer, who had to decide whether to make
STDR for Rs.0.11 crore or not. Same is the position with respect to
Signature Not Verified
Digitally Signed
By:KAMAL KUMAR W.P.(C) 8652/2017 Page 37 of 39
Signing Date:06.03.2025
19:06:58
allegations No. 8, 10, 11 and 12. There is only a reference to the defence
put up by the Petitioner and/or the documents tendered by him, but there is
no discussion or analysis on the same. The inquiry report clearly shows a
mechanical exercise by the IO contrary to the settled law that the
Inquiring Authority must examine, discuss and analyse the evidence led by
prosecution and defence, before returning a finding on each Article of
Charge.
27. Since the Charge Sheet is illegal for want of list of witnesses, Court is
not delving into other contentions of the Petitioner on merits. For all the
aforesaid reasons, the Charge Sheet, the inquiry proceedings and the penalty
order cannot be sustained in law. Accordingly, Charge Sheet dated
12.07.2012, inquiry report dated 27.05.2013, order dated 26.07.2014
imposing the penalty and appellate order dated 01.01.2015 are hereby
quashed and set aside. It is, however, left open to SBI to take recourse to de
novo inquiry, if so advised, in accordance with law, from the stage of
issuance of Charge Sheet, with a caveat that if SBI is unable to comply with
the legal requirement of leading oral evidence to prove the documents relied
upon and/or witnesses are not available, it should not re-open the issue
considering that the Charge Sheet was issued in 2012 and penalty order
dates back to 26.07.2014 and Petitioner has suffered for over 13 years. In the
eventuality, SBI decides not to conduct a de novo inquiry, consequential
benefits of quashing the penalty shall be granted to the Petitioner which
will entail re-fixation of his pay from the date of the penalty order
and consequent re-fixation of pension. Arrears of pay and pension
upon re-fixation shall be released to the Petitioner within eight weeks from
today.
Signature Not Verified
Digitally Signed
By:KAMAL KUMAR W.P.(C) 8652/2017 Page 38 of 39
Signing Date:06.03.2025
19:06:58
28. Writ petition is disposed of in the aforesaid terms. Pending
application also stands disposed of.
JYOTI SINGH, J
FEBRUARY 28 , 2025/shivam
Signature Not Verified
Digitally Signed
By:KAMAL KUMAR W.P.(C) 8652/2017 Page 39 of 39
Signing Date:06.03.2025
19:06:58
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