Gauhati High Court
Page No.# 1/23 vs State Bank Of India And 5 Ors on 6 March, 2025
Page No.# 1/23
GAHC010067492022
2025:GAU-AS:2452-DB
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WA/132/2022
K. SUANTHANG S/O LT. KAMKHONGIN, CONVENTION ROAD, NEW
LAMKA, P.O. and DIST- CHURACHANDPUR, PIN-785128, MANIPUR
VERSUS
STATE BANK OF INDIA AND 5 ORS.
HEADQUARTERED AT CORPORATE CENTRE, STATE BANK BHAVAN,
MADAME CAMA ROAD, MUMBAI-400021 AND HAVING ITS LOCAL HEAD
OFFICE FOR NORTH EASTERN CIRCLE AT G.S. ROAD, DISPUR, GHY-6
2:APPELLATE AUTHORTY and CHIEF GENERAL MANAGER
SBI LOCAL HEAD OFFICE G.S.ROAD DISPUR GHY-6
3:APPOINTING AUTHORITY and GENERAL MANAGER NETWORK-I
SBI LOCAL HEAD OFFICE NORTH EASTERN CIRCLE G.S. ROAD
DISPUR GHY-6
4:DISCIPLINARY AUTHORITY and GENERAL MANAGER NETWORK-II
SBI LOCAL HEAD OFFICE G.S.ROAD DISPUR GHY-6
5:CHIEF MANAGER ENQUIRY and INQUIRING AUTHORITY/ENQUIRY
OFFICER SBI LOCAL HEAD OFFICE VIGILANCE DEPARTMENT
NORTH EASTERN CIRCLE G.S. ROAD DISPUR GHY-6
6:CHAIRMAN REVIEWING AUTHORITY FOR N.E. CIRCLE SBI
CORPORATE CENTRE STATE BANK BHAVAN MADAME CAMA ROAD
MUMBAI-2
Advocate for the Petitioner : MS N KALITA, MR. K DEKA
Advocate for the Respondent : MR. H BURAGOHAIN, MR S S SHARMA
Page No.# 2/23
:::BEFORE:::
HONOURABLE THE CHIEF JUSTICE
HONOURABLE MR. JUSTICE N. UNNI KRISHNAN NAIR
Date of hearing : 06.03.2025
Date of Judgment & Order : 06.03.2025
JUDGMENT & ORDER (ORAL)
(N. Unni Krishnan Nair, J.)
Heard Mr. S. Banik, and Mr. G. Khandalia, learned counsels, appearing
on behalf of the appellant. Also heard Mr. H. Buragohain, learned standing
counsel, State Bank of India(SBI), appearing on behalf of all the
respondents.
2. The present intra-Court appeal has been instituted by the appellant,
herein, assailing the judgment & order, dated 21.01.2022, passed by the
learned Single Judge in WP(c)302/2014, dismissing the same by refusing to
interfere with the order of penalty of “Removal from Service” as imposed
upon the appellant on conclusion of a disciplinary proceeding so instituted
against him.
3. The facts, in brief, requisite for adjudication of the issue arising in the
present proceeding, is noticed, as under:
During the tenure of the appellant as the Branch Manager of Lunglei
Branch of State Bank of India(SBI), certain allegations having been levelled
against him pertaining to the manner of sanction and disbursal of the
Housing Loans; a charge sheet came to be issued to him on 08.02.2010,
instituting a disciplinary proceeding against him.
Page No.# 3/23
In the said charge sheet, dated 08.02.2010; 3(three) allegations came
to be so levelled against the appellant, herein, and basing on the said
allegations, the appellant was charged of not having discharged his duties
with utmost devotion, diligence and of violating the provisions of Rule 68(2)
(iv) of the State Bank of India Officers Service Rules. The appellant, herein,
submitted his written statement in the matter on 02.03.2010, and denied
the allegations so levelled against him.
The disciplinary authority not being satisfied with the explanation as
set-out in the written statement so submitted by the appellant, herein;
directed for holding of an inquiry in the matter.
On conclusion of the inquiry; the Inquiring Authority submitted his
inquiry report and therein, held the allegations No. 1 & 3, so levelled
against the appellant, herein, to have been not proved while the allegation
No. 2 so levelled against him, was held to be proved.
The disciplinary authority while forwarding to the appellant, herein, the
inquiry Report, vide communication, dated 03.01.2011, had also forwarded
a disagreement note with regard to the conclusions reached by the
Inquiring Authority in respect of allegation No. 3.
In terms of the said disagreement note, the allegation No. 3 was held to
be proved against the appellant, herein.
The appellant, on 08.02.2011, submitted a representation against the
Page No.# 4/23
inquiry report as well as the disagreement note of the disciplinary authority
pertaining to the allegation No. 3.
In the representation, dated 08.02.2011, the appellant, herein, had not
dealt with the conclusions of the Inquiring Authority pertaining to the
allegation No.2.
The appointing authority, thereafter, vide communication, dated
06.05.2011, proposed to impose a major penalty of “Removal from
Service” upon the appellant, herein, and accordingly, required him to
appear before the appointing authority on 17.05.2011, for a personal
hearing and/or to make submissions, if any.
The appellant, herein, on 17.05.2011, while appearing before the
appointing authority, submitted a representation, and therein; had prayed
to not impose upon him, the penalty of “Removal from Service”.
The appointing authority, thereafter, on consideration of the inquiry
report as well as the representation so submitted by the appellant, herein,
in the matter; was pleased vide order, dated 21.05.2011, to impose upon
the appellant, herein, the penalty of “Removal from Service” under the
provisions of Rule 67(i) of the State Bank of India Officers Service Rules.
The appeal so preferred by the appellant, herein, against the order,
dated 21.05.2011, was, on consideration, rejected by the appellate
authority vide order, dated 08.09.2011.
Page No.# 5/23
The appellant, thereafter, approached the reviewing authority, praying
for review of the orders passed by the appointing authority and the
appellate authority. The said review petition was, however, returned by the
reviewing authority to the appellant, herein, as not being maintainable.
Thereafter, the appellant approached the writ Court by way of
instituting a writ petition being WP(c)302/2014, assailing the order, dated
21.05.2011, passed by the appointing authority, as well as the order, dated
08.09.2011, passed by the appellate authority.
The appellant, herein, in the said writ petition, had also presented a
challenge to the inquiry report of the inquiring authority, dated 15.12.2010,
as well as the communication, dated 15.10.2013, by which the review
petition so preferred by the appellant, was returned to him.
The learned Single Judge, thereafter, took-up the matter for final
consideration and on such consideration, being made; proceeded, vide
order, dated 21.01.2022, to dismiss the said writ petition being
WP(c)302/2014, by holding that no grant for interference with the order,
dated 21.05.2011, was made-out and accordingly, the aforesaid writ
petition came to be dismissed.
Being aggrieved, the appellant, herein, has instituted the present intra-
Court appeal before this Court.
4. The challenge, herein, being made to the judgment & order, dated
Page No.# 6/23
21.01.2022, passed by the learned Single Judge in WP(c)302/2014; the
operative part thereof, being relevant, is extracted hereinbelow:
“14. The petitioner in paragraph No. 18 (b) of the writ petition has stated as follows:-
“For that on 09.09.2010, in course of hearing in the disciplinary proceedings,
after the cross examination of the prosecution witnesses were over, the
Inquiring Authority permitted re-examination of those witnesses by the
Presenting Officer, thereby intending to nullify the very purpose for which the
cross-examination was conducted. Hence, the Inquiring Authority acted in a
biased manner in allowing re-examination by terming such re-examination as
cross-examination of PWs. No. 1 to 5”.
The above clearly shows that the petitioner was allowed to cross-examine all
the prosecution witnesses.
15. The petitioner’s written statement of defence dated 02.03.2010 states as follows:-
“Dear Sir,
STAFF SUPERVISING
DISCIPLINARY PROCEEDINGS
With a reference to your letter GM(NW-II)/VIG/2009-10/1709 dt.
08.02.2010, I am to state that:
a) I do accept that the five Housing Loans were sanctioned without
conducting pre-sanction survey as their residence was about 50/60 kms
from the Branch. As the applicants were government employees with
good social standing, we have full faith in their integrity and distance
from the branch does not permit us to carry out inspections. I am
extremely sorry for this lapse on my part and request you to kindly
condone me for this.
b) Regarding non issue of sanction letter to the borrowers, I have signed
the sanction letters in duplicate and the borrowers should obtain/collect
the sanction letter from the dealing assistant/clerk or FO. Delivering of
sanction letters by the BM or sanctioning authority is not normally done
in the Bank.
c) I deny the allegation that I have forced them to join Herbalife. The
complainants had joined Herbalife, on their own will. They were mature
and sane gentlemen who have the capacity to take their own decisions.
At no point of time in my career in the institution, I have asked
customers to part with money for my benefit or otherwise.
Therefore, I request you to kindly condone me of the allegations”.
Page No.# 7/23
16. A perusal of the above clearly shows that there is no denial by the petitioner that
he is doing the business of HERBALIFE and that the complainants had joined in the
business of HERBALIFE. However, it is not understood as to why all the 5 (five)
complainants/loanees would have suddenly joined the business of HERBALIFE after
they were sanctioned housing loans amounting to Rs. 5 to 6.9 Lakhs. In any event,
this Court cannot act as an appellate authority, as its jurisdiction is circumscribed by
limits of judicial review to correct errors of law or procedures leading to manifest
injustice or violation of the principles of natural justice. As held by the Apex Court in
Lalit Popli Vs. Canara Bank &Ors, (2003) 3 SCC 583 and B.C Chaturvedi Vs. Union of
India &Ors., (1995) 6 SCC 749, a Disciplinary Authority is the sole judge of facts and
that the Court cannot re-appreciate evidence.
17. With respect to the submission made by the petitioner’s counsel that there was no
friend of the 5 (five) complainants/loanees, who was examined or who gave Rs.
86,000/- per head to the petitioner, on behalf of the complainants/loanees, a reading
of the complaint shows that the complainants/loanees have used the term “friends” to
mean each other, i.e., the complainants/loanees themselves. The 2nd& 3rd
paragraphs of their complaint are reproduced below:-
“That Sir, We the undersigned of Government High School Staff Mualthuam (N)
and Government Middle School staff, Sekhum Village, in Lunglei District,
Mizoram, applied for Housing Loan to the Manager, Mr. K. Suanthang, SBI,
Lunglei Branch and we are given us by him for Rs. 500000 and Rs. 600000 and
so on.
But unexpectedly/unfortunately when the Loan was released on Dated 10 th Nov,
2006, the said Manager compelled us to submit/deposit to him a big amount of
Rs. 86,000/- (Rupees eighty six thousand) only per head which is for payment of
the delivery of the HERBALIFE goods. “Otherwise the loan given us by him will
be cancelled/ forfeited” said he. So that after drawing certain amount of money
from the cashier, he (the said Manager) led two of us, Mr. V. Challawma and Mr.
Engzawna at his residence at about 1:00 – 2:30 pm at lunch break and here the
total amount of Rs. 344000/- (Rupees three lakhs forty four thousand) only for
four of us i.e. Rs. 86000/- per head was taken by him from our friends under
compulsion. But, at the same time, he did not want to give us any receipt. We
really surprised at his attitude. Before this one of our friend P.C. Lalzarmawia,
W/E Teacher has already submitted Rs. 86000/- to him for the same reason.”
In view of the above extract of the complaint submitted by the 5 (five)
complainants/loanees, it is clear that the use of the words “friends” and “friend”,
when referring even to one amongst them, i.e., P.C Lalzarmawia, W/E Teacher, clearly
shows that the used of the words “friends”/”friend” is to denote each other. As such,
there was no question of any other person other than the 5 (five) complainants/loanees
being examined in the departmental proceeding.
18. On considering the fact that the irregularities and actions of the petitioner are
serious in nature, as it is made out that he has taken advantage of his position, while
sanctioning loans and making the loanees invest in business, which was not the
primary reason for taking out the loans, this Court is of the view that no grounds for
leniency has made out. Further, in the case of State of U.P Vs. J.P. Saraswat, the Apex
Court has held that judicial review is permissible in very rare cases, where
punishment is so disproportionate to the established charge, that it would appear
unconscionable and actuated by malice. In the present case, this Court does not find
the punishment to be unconscionable or actuated by malice.
Page No.# 8/23
19. In view of the reasons stated above and there being no procedural irregularities,
this Court is of the view that no ground for interfering with the impugned Order dated
21.05.2011 has been made out.”
5. Mr. Banik, learned counsel for the appellant, assailing the judgment &
order, dated 21.01.2022, passed by the learned Single Judge in
WP(c)302/2014, has submitted that the learned Single Judge without
appreciating the materials coming on record in the inquiry; had proceeded
to hold that the appellant, herein, was guilty of the misconduct as alleged
against him vide the charge sheet, dated 08.02.2010.
6. Mr. Banik, learned counsel, by referring to the allegation No. 1, so
levelled against the appellant, herein, vide the charge sheet, dated
08.02.2010; which alleges that the appellant had not ensured delivery of
the sanction-cum-arrangement letters to the loanees after the sanction of
their respective loans was so done, and, by referring to the conclusions in
the inquiry report of the inquiring authority, has submitted that in the
inquiry; the said allegation was found to have not been established, in-as-
much as, the beneficiaries of the Housing Loans who were also the
complainants and witnesses in the matter, had received their respective
sanction-cum-arrangement letters, pursuant to the sanction of the loans
with due acknowledgment. Accordingly, it is submitted that the conduct of
the complainants in resorting to falsehood, having come to the forefront;
the other allegations levelled against the appellant, herein, was also
required to be so examined by the Inquiring Authority as well as the
Disciplinary Authority, by keeping in mind, the same, in-as-much as, all the
allegations so levelled against the appellant, emanated from the same
transaction.
Page No.# 9/23
7. Mr. Banik, learned counsel, with regard to the allegation No. 2 so
levelled against the appellant, vide the charge sheet, dated 08.02.2010;
has submitted that the said charge, on the face of it, would not be
sustainable, in-as-much as, the appellant as the Branch Manager of Lunglei
Branch, State Bank of India(SBI), was not required to carry-out the pre-
sanction surveys as well as the post-disbursal inspections in respect of the
Housing Loans so sanctioned and involved in the matter.
8. Mr. Banik, learned counsel, by referring to the written statement
submitted by the appellant, herein, on 02.03.2010, has submitted that
although the appellant had accepted that 5(five) Housing Loans came to be
sanctioned, without conducting pre-sanction surveys, it was clarified by the
appellant that the same was on account of the fact that the residences of
the loanees were about 50/60 kms. from the Branch. The learned counsel
has further submitted that the loans involved, having not turned Non-
Performing Asset(NPA); the said allegation No. 2, ought not to have been
so levelled against the appellant, herein.
9. With regard to the allegation No. 3, Mr. Banik, learned counsel, has
submitted that the same is on the face of it, perverse and the Inquiring
Authority in the inquiry report; had arrived at the correct conclusion that
the said allegation which pertains to the appellant having forced the 5(five)
loanees who were sanctioned the Housing Loans, to part with an amount of
Rs. 86,000/-, each, for buying HERBALIFE products and for joining the
memberships of HERBALIFE for procuring their products on an on-going
basis was not established in the inquiry due to non-availability of
documentary evidence and eye-witness.
Page No.# 10/23
10. Mr. Banik, learned counsel, has further submitted that the disciplinary
authority vide communication, dated 03.01.2011, for the purpose of
disagreeing with the conclusions reached by the Inquiring Authority with
regard to the allegation No. 3, had not recorded any cogent ground in his
disagreement note and the ground so assigned, was vague. Accordingly, it
is submitted that the disagreement note came to be issued by the
disciplinary authority without a proper appreciation of the materials coming
on record.
11. Mr. Banik, learned counsel, has submitted that the learned Single
Judge vide the judgment & order, dated 21.01.2022, in WP(c)302/2014,
erred in arriving at a conclusion to the effect that the appellant, herein, had
taken advantage of his position while sanctioning the loans and had made
the loanees to invest in the business of HERBALIFE which was not the
primary reasons for taking the loans. It is submitted that materials on
record do not support such conclusion reached by the learned Single Judge.
It was further submitted that even, in the event, it is construed that the
appellant, herein, was involved in the business of selling the products of
HERBALIFE, the learned Single Judge ought to have appreciated the fact
that the same having no connection with the discharge of his duties; the
same could not have been a reason for imposition of such a major penalty
upon the appellant, herein.
12. Mr. Banik, learned counsel, has submitted that given the nature of the
allegations levelled against the appellant, herein, and the manner in which
the same were so proved, even, if it is held that the appellant was guilty of
the allegations so levelled against him, more particularly, the allegations
Page No.# 11/23
No. 2 & 3; the same would not mandate the imposition of the penalty of
“Removal from Service”. The learned counsel has, accordingly, submitted
that the penalty of “Removal from Service” so imposed upon the appellant,
herein, was clearly disproportionate to the allegations so levelled against
and proved against him in the proceedings, so held.
13. Mr. Banik, learned counsel, has, accordingly, submitted that this Court
would be pleased to interfere with the penalty of “Removal from Service” as
imposed upon the appellant, herein, and require the respondent State Bank
of India(SBI) to impose a lesser punishment which would facilitate the
appellant to receive his pensionary benefits. The learned counsel has
submitted that during the pendency of the proceedings so instituted by the
appellant, herein, before this Court; the appellant had retired from his
service on attaining the age of superannuation.
14. Per contra, Mr. Buragohain, learned standing counsel, State Bank of
India(SBI), has submitted that the allegations so levelled against the
appellant, herein, more particularly, the allegations No. 2 & 3, have been
established in the inquiry and accordingly, the penalty as imposed upon the
appellant, would not call for an interference.
15. Mr. Buragohain, learned standing counsel, has further submitted that
allegations so levelled against the appellant, herein, reflects the manner, in
which, he was discharging his duties. The authorities of the respondent
Bank on account of the misconduct committed by the appellant, herein,
having lost confidence upon him; the penalty as imposed upon the
appellant, herein, who was holding at the relevant point of time, the post of
Page No.# 12/23
Branch Manager of Lunglei Branch, State Bank of India(SBI), cannot be
termed to be disproportionate. Mr. Buragohain, learned standing counsel,
has, accordingly, submitted that once a loss of confidence had occasioned,
the penalty of “Removal from Service” so imposed upon the appellant,
herein; would not mandate any interference by this Court.
16. We have heard the learned counsels appearing for the parties and
also perused the materials available on record.
17. The article of charges so framed against the appellant, herein, being
relevant, is extracted hereinbelow:
“ARTICLES OF CHARGES FRAMED AGAINST SHRI KHAM SUANTHANG, MMGS-III, FOR
ALLEGED LAPSES (DETAILED IN ANNEXURE-II) WHILE SHRI SUANTHANG WAS
WORKING AS BRANCH MANAGER AT STATE BANK OF INDIA, LUNGLEI BRANCH, DURING
THE PERIOD 28.07.2004 TO 25.02.2008.
While you were posted and working as Branch Manager at State Bank of India,
Lunglei Branch, during the period 28.07.2004 to 25.02.2008, it is alleged that you
had committed some gross irregularities in pre sanction survey, disbursement and
post disbursement follow up in respect of five Housing loans sanctioned by you in a
very negligent manner by flouting Bank’s extant Rules and regulations in this regard.
You have not ensured delivery of the sanction cum arrangement letters to the
borrowers after sanction of the loans. You have also forced the borrowers to part with
Rs. 86,000/- each for buying HERBALIFE products and join membership of HERBALIFE
for procuring their products on an ongoing basis. Thus, you did not discharge your
duties with utmost devotion and diligence as expected. Thus you have violated Rule
50(4) of SBI Officers Service Rules, which is applicable to you. Imputations of lapses
on the basis of which the charges are based are shown in Annexure -II and the list of
evidences / witnesses are given in Annexure-III.”
18. The appellant, herein, was levelled 3(three) allegations in the
statement of imputation of lapses annexed to the charge sheet, dated
08.02.2010, as Annexure-II. The allegations so levelled against the
appellant, herein, being relevant, is extracted hereinbelow:
Page No.# 13/23
“STATEMENT OF IMPUTATION OF LAPSES AGAINST SHRI KHAM SUANTHANG, MMGS-III,
FOR ALLEGED LAPSES, IN RELATION TO ARTICLES OF CHARGE AGAINST HIM (VIDE
ANNEXURE-I) WHILE SHRI KHAM SUANTHANG WAS WORKING AS BRANCH MANAGER
AT STATE BANK OF INDIA, LUNGLEI BRANCH, DURING THE PERIOD 28.07.2004 TO
25.02.2008.
Allegation No:1
It is alleged that you had not ensured delivery of the sanction cum arrangement
letters to the following loan borrowers after sanctioning of loans to the borrowers.
i) Shri Lalhnuna Sailo - Rs. 6,00,000/-
ii) Shri R. Lalchangliana - Rs. 5,00,000/-
iii) Shri V. Challawma - Rs. 5,90,000/-
iv) Shri P.C. Lalzarmawli - Rs. 5,90,000/-
v) Shri Engzawma - Rs. 6,90,000/-
Allegation No:2
It is also alleged that pre sanction surveys and Post disbursal inspections in respect
of above housing loans were not conducted by you.
Allegation No:3.
It is also alleged that you forced the above 5 (five) customers, who had availed
housing loans sanctioned by you, to part with Rs. 86,000/- each for buying HERBALIFE
products and join membership of HERBALIFE for procuring their products on an on
going basis.”
19. The appellant, herein, in his written statement, dated 02.03.2010,
with regard to the allegation No. 1, had stated that he had signed the
sanction letters in duplicate and the loanees were required to take/collect
the sanction letter from the dealing assistant/clerk, or, F.O. of Lunglei
Branch, State Bank of India(SBI). It was further stated that the delivery of
the sanction letters by the Branch Manager, or, sanctioning authority, was
not normally done in the respondent Bank. With regard to the allegation
No. 2; the appellant, herein, had accepted the same and had contended
that the Housing Loans involved, were sanctioned without conducting pre-
sanction surveys and post-disbursal inspections as the residences of the
Page No.# 14/23
loanees were about 50/60 KMs. from the Bank, in question. It was further
pointed-out that the loanees were government servants with good social
standing. The appellant, herein, had apologized for the lapses on his part
and prayed for being condoned, therein.
20. With regard to the allegation No. 3; the appellant, herein, contended
that he had not forced anyone to join HERBALIFE and the loanees involved,
had joined the HERBALIFE business on their own volition. The appellant,
herein, had further denied of requiring any customer to part money for his
benefit or otherwise. The inquiring authority, on conclusion of the inquiry;
proceeded to submit his report and therein, held the allegations No. 1 & 3,
so levelled against the appellant, herein, vide the charge sheet, dated
08.02.2010, to have not been proved. With regard to the allegation No. 2,
the Inquiring Authority had held the same, to be proved.
21. The disciplinary authority while forwarding the inquiry report to the
appellant, herein, had also forwarded a disagreement note pertaining to the
conclusions of the Inquiring Authority in respect of allegation No. 3. The
disciplinary authority in his disagreement note, had stated that the
statement of the loanees in the inquiry, points to the fact that the amounts
claimed, were paid by them and basing thereon; the said charge was held
to be proved against the appellant, herein. The appellant, thereafter,
submitted a representation on 08.02.2011, against the inquiry report as
well as the disagreement note submitted by the disciplinary authority. In
the representation so submitted, the appellant did not deal with the
conclusions and findings of the Inquiring Authority in the inquiry report
pertaining to allegation No. 2.
Page No.# 15/23
22. With regard to the allegation No. 3; the appellant, herein, had stated
that in the complaints made by the loanees, there is a reference to their
friends who had also purportedly paid a sum of Rs. 86,000/-. However,
such friends of the loanees were not produced in the inquiry and
accordingly, the appellant, herein, was denied of an opportunity to cross-
examine them.
23. As noticed hereinabove, the matter being further processed; the
appointing authority vide order, dated 21.05.2011, imposed upon the
appellant, herein, the penalty of “Removal from Service”. The said order of
penalty was upheld by the appellate authority and the review petition so
preferred, was returned by the reviewing authority to the appellant, herein.
24. Having noticed the manner in which the Disciplinary proceeding had
proceeded against the appellant, herein; it would now be required to
examine the allegations so levelled against him, in the light of the materials
coming on record in the inquiry. As the allegation No. 1 was held to be not
proved in the inquiry; a discussion thereon, would not be called for.
25. With regard to the allegation No. 2 which pertains to the inaction on
the part of the appellant, herein, to carry-out the pre-sanction surveys and
post-disbursal inspections in respect of the Housing Loans involved in the
proceeding, sanctioned by him; the appellant, in his written statement, had
admitted to the same. The admission of the appellant of the allegation No.
2, would be proof of the same being established. The Inquiring Authority
basing on the materials coming on record, had recorded a finding to the
effect that there was no entry in the Unit Inspection Register of Housing
Page No.# 16/23
Loans. Accordingly, the said allegation No. 2, has to be held to have been
established against the appellant, herein, in the absence of any further
material being brought on record, disputing the admission made by him
and the findings so recorded in the matter by the inquiring authority.
26. With regard to the allegation No. 3 which alleges that the appellant,
herein, had forced 5(five) loanees to whom he had sanctioned Housing
Loans to part with an amount of Rs. 86,000/-, each, for buying HERBALIFE
products and also for becoming the members of the HERBALIFE for
procuring the products of HERBALIFE on an on-going process, the said
allegation although was held to be not proved by the inquiring authority;
the disciplinary authority by way of a disagreement note, had held the
same to be proved basing on the materials coming on record in the inquiry.
27. The appellant, herein, in his written statement, had not disputed the
fact that he had asked the loanees to buy products from HERBALIFE. The
only contention of the appellant was that he had not forced the loanees to
join HERBALIFE as members.
28. Mr. Banik, learned counsel for the appellant, during the course of
hearing of the present intra-Court appeal; has submitted that the said
action on the part of the appellant, herein, does not fall within the duties
required to be discharged by him as a Branch Manager of Lunglei Branch,
State Bank of India(SBI). Accordingly, for steps taken by the appellant,
which had got no nexus with the duties required to be discharged by him;
no allegation thereon, could have been alleged against the appellant,
herein.
Page No.# 17/23
29. As noticed hereinabove, the appellant had not denied the fact that at
his instance, the loanees had joined HERBALIFE by parting with an amount
of the loan so sanctioned to them. The materials brought on record does
not reflect that the appellant, herein, had categorically denied the
allegation No. 3 so levelled against him. What is revealed is that the
appellant had only contended that he had not forced the loanees to join
HERBALIFE. The learned Single Judge vide the judgment & order, dated
21.01.2022, in WP(c)302/2014, had considered the contentions of the
learned counsel for the appellant, herein, in the matter, and had recorded a
conclusion to the effect that there was no denial by the appellant that he
was involved in the business of HERBALIFE and the loanees had also joined
the business of HERBALIFE after the loans were sanctioned to them by the
appellant, herein.
30. The stand of the loanees in the complaint so made by them as well as
in the inquiry, was to the effect that they had joined HERBALIFE only at the
instance of the appellant, herein. It was further projected that the appellant
had compelled the loanees to part with an amount of Rs. 86,000/-, each,
and join the membership of HERBALIFE. Accordingly, the conclusion
reached in the matter by the learned Single Judge that the appellant had
misused his position, cannot be held to be erroneous.
31. In view of the above position, the allegation No. 3 so levelled against
the appellant, herein, has to be held to have been established in the
inquiry.
32. The above discussions have been so made with regard to the
Page No.# 18/23
allegations only to consider the contention so raised by Mr. Banik, learned
counsel, that the penalty so imposed upon the appellant, herein, was
disproportionate to the allegations so levelled and proved in the
departmental proceeding instituted against him.
33. Having noticed the above position, it is to be noted that the appellant,
herein, being in the banking sector; he was required to observe absolute
devotion, diligence, integrity and honesty, and if this is not so observed;
the confidence of the public/depositors upon the Bank, would be impaired.
34. The Hon’ble Supreme Court in the case of Chairman-cum-Managing
Director, United Commercial Bank & ors. v. P. C. Kakkar, reported in
(2003) 4 SCC 364, had noted that a Bank Officer/employee is required to
exercise higher standard of honesty and integrity. The Hon’ble Supreme
Court in this connection had proceeded to draw the following conclusions:
“14. A Bank officer is required to exercise higher standards of honesty and integrity.
He deals with money of the depositors and the customers. Every officer/employee of
the Bank is required to take all possible steps to protect the interests of the Bank and
to discharge his duties with utmost integrity, honesty, devotion and diligence and to
do nothing which is unbecoming of a Bank Officer. 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 Court.”
35. In the case on hand; it is seen that the manner in which the
appellant, herein, had discharged his duties as evident from the allegations
so levelled against him in the charge-sheet, in question; it is seen that the
Bank had lost confidence on him and the materials that had come on
Page No.# 19/23
record in the inquiry as well as the findings of the Inquiring Authority and
the disciplinary authority in the matter had affirmed such loss of confidence
upon him. In this connection; a reference is made to the decision of the
Hon’ble Supreme Court in the case of Divisional Controller, Karnataka
State Road Transport Corporation v. M. G. Vittal Rao, reported in (2012) 1
SCC 442. The conclusions in this connection pertaining to loss of confidence
on the employee by the employer, is extracted hereinbelow:
“Loss of confidence.
25. Once the employer has lost the confidence in the employee and the bona fide loss
of confidence is affirmed, the order of punishment must be considered to be immune
from challenge, for the reason that discharging the office of trust and confidence
requires absolute integrity, and in a case of loss of confidence, reinstatement cannot
be directed.
26. In Kanhaiyalal Agrawal v. Gwalior Sugar Co. Ltd. 32 this Court laid down the test
for loss of confidence to find out as to whether there was bona fide loss of confidence
in the employee, observing that, (SCC p. 614, para 9)
(i) the workman is holding the position of trust and confidence; (ii) by abusing such
position, he commits an act which results in forfeiting the same; and (iii) to continue
him in service/establishment would be embarrassing and inconvenient to the
employer, or would be detrimental to the discipline or security of the establishment.
Loss of confidence cannot be subjective, based upon the mind of the management.
Objective facts which would lead to a definite inference of apprehension in the mind
of the management, regarding trustworthiness or reliability of the employee, must be
alleged and proved.
27. In SBI v. Bela Bagchi this Court repelled the contention that even if by the
misconduct of the employee the employer does not suffer any financial loss, he can be
removed from service in a case of loss of confidence. While deciding the said case,
reliance has been placed upon its earlier judgment in Disciplinary Authority-cum-
Regional Manager v. Nikunja Bihari Patnaik.
28. An employer is not bound to keep an employee in service with whom relations have
reached the point of complete loss of confidence/faith between the two.
29. In Indian Airlines Ltd. v. Prabha D. Kanan, while dealing with the similar issue
this Court held that: (SCC p. 90, para 56)
“56. …loss of confidence cannot be subjective but there must be objective facts
which would lead to a definite inference of apprehension in the mind of the
employer regarding trustworthiness of the employee and which must be alleged
and proved.”
Page No.# 20/23
30. In case of theft, the quantum of theft is not important and what is important is
the loss of confidence of employer in employee. (Vide A.P. SRTC v. Raghuda Siva
Sankar Prasad 43.)
31. The instant case requires to be examined in the light of the aforesaid settled legal
proposition and keeping in view that judicial review is concerned primarily with the
decision-making process and not the decision itself. More so, it is a settled legal
proposition that in a case of misconduct of grave nature like corruption or theft, no
punishment other than the dismissal may be appropriate.”
36. It is also required to take notice of a decision of a co-ordinate Bench
of this Court in the case of Bijoy Rajkhowa v. State Bank of India & ors.,
reported in (2013) 2 GLR 6 wherein, in a matter pertaining to a misconduct
committed by a Bank employee, this Court had recorded the following
conclusion:
“24. Conduct of a bank employee must be above board. He is required to maintain
absolute integrity, which is of paramount consideration. On his conduct rests the
confidence of the customers of the bank. Compromise with doubtful integrity will not
only erode the faith of the people using the bank’s facilities but also in the
functioning of the bank itself. In such matters, quantum of misappropriation is
immaterial the factum of misappropriation itself would justify the disciplinary action
taken. Considering the above, in the present case, we do not find any good and
sufficient ground to interfere with the punishment imposed.”
37. In view of the position of law as brought to light by the decisions of
the Hon’ble Supreme Court and of this Court as noticed hereinabove; it has
to be held that the appellant, herein, had lost the confidence of his
employer on account of the misconduct as committed by him in the matter
and accordingly, the penalty of “Removal from Service” as imposed upon
the appellant, would not warrant an interference.
38. Having noticed the above position and the manner in which a Bank
employee is required to conduct himself; the contention of Mr. Banik,
learned counsel for the appellant, herein, that the penalty so imposed upon
the appellant, is grossly disproportionate to the allegations so levelled
Page No.# 21/23
against him, is being considered.
39. In this context, we would like to again refer to the decision of the
Hon’ble Supreme Court in the case of P. C. Kakkar(supra) wherein in this
connection, the following conclusions were drawn by the Court:
“15. It needs no emphasis that when a Court feels that the punishment is shockingly
disproportionate, it must record reasons for coming to such a conclusion. Mere
expression that the punishment is shockingly disproportionate would not meet the
requirement of law. Even in respect of administrative orders Lord Denning M.R. in
Breen v. Amalgamated Engineering Union [1971 (1) All E.R. 1148] observed “The giving
of reasons is one of the fundamentals of good administration”. In Alexander
Machinery (Dudley) Ltd. v. Crabtree (1974 LCR 120) it was observed: “Failure to give
reasons amounts to denial of justice”. Reasons are live links between the mind of the
decision taker to the controversy in question and the decision or conclusion arrived
at”. Reasons substitute subjectivity by objectivity. The emphasis on recording reasons
is that if the decision reveals the “inscrutable face of the sphinx”, it can, be its
silence, render it virtually impossible for the Courts to perform their appellate
function or exercise the power of judicial review in adjudging the validity of the
decision. Right to reason is an indispensable part of a sound judicial system. Another
rationale is that the affected party can know why the decision has gone against him.
One of the salutary requirements of natural justice is spelling out reasons for the
order made, in other words, a speaking out. The “inscrutable face of a sphinx” is
ordinarily incongruous with a judicial or quasi-judicial performance. But as noted
above, the proceedings commenced in 1981. The employee was placed under
suspension from 1983 to 1988 and has superannuated in 2002. Acquittal in the
criminal case is not determinative of the commission of misconduct or otherwise, and
it is open to the authorities to proceed with the disciplinary proceedings,
notwithstanding acquittal in criminal case. It per se would not entitle the employee to
claim immunity from the proceedings. At the most the factum of acquittal may be
circumstance to be considered while awarding punishment. It would depend upon
facts of each case and even that cannot have universal application.”
40. The allegations as levelled against the appellant, herein, on being
established in the inquiry held and the same having demonstrated a
misconduct being committed in the matter by the appellant who admittedly
was a responsible employee of the respondent Bank; it is to be noted that
the appellant, herein, cannot, in any manner, be extended with any
sympathy. The allegations levelled against the appellant having been held
to have been established and the misconduct as committed by him, being
apparent, the penalty as imposed upon him, cannot be stated to be
Page No.# 22/23
disproportionate to the proved misconduct. It is a settled position of law
that the penalty that is to be imposed upon the appellant, herein, is the
discretion of the disciplinary authority. Of course, this discretion has to be
examined objectively keeping in mind the nature and gravity of the charge.
The disciplinary authority is to decide a particular penalty specified in the
relevant Rules. A host of factors go into the decision making process while
exercising such a discretion which include, apart from the nature and
gravity of misconduct, past conduct, nature of duties assigned to the
delinquent, responsibility of duties assigned to the delinquent, previous
penalty, if any, and the discipline required to be maintained in the
establishment where he so works, as well as extenuating circumstances, if
any. Accordingly, the penalty as imposed upon the appellant, herein, in the
case in hand, in the considered view of this Court; is proportionate to the
allegations levelled against him and established in the inquiry. In the
present proceeding, we have also not found any special circumstance
warranting interference with the penalty as imposed upon the appellant,
herein.
41. In view of the settled position of law; it is clear that it is not for the
writ Court to interfere with the punishment imposed by the disciplinary
authority which is a matter within the domain and the jurisdiction of the
disciplinary authority. If the Bank has lost its confidence on the appellant,
herein, it is within its competence and jurisdiction to impose the penalty as
it may consider adequate commensurating to the misconduct attributed
and proved. It is not for the writ Court to prescribe another penalty in lieu
of the penalty imposed by the disciplinary authority. It will have to be borne
in mind that the job entrusted to the appellant, herein, being of a
responsible employee, in a financial institution like a Bank is that of faith
Page No.# 23/23
and confidence and once it is lost, it is for the bank to decide what penalty
is to be imposed. The amount involved is immaterial, what matters much,
is tarnishing the image of the Bank in the eyes of the valued customers and
public. The appellant, herein, being a Bank employee ought to have
maintained utmost integrity, devotion, diligence and honesty, which, he
admittedly, has failed to do so.
42. In view of the above discussions, we are of the considered view that
the conclusions drawn by the learned Single Judge vide judgment & order,
dated 21.01.2022, in WP(c)302/2014, being so drawn basing on the
materials available on record; would not call for any interference.
43. In view of the foregoing discussions; we are of the considered view
that this writ appeal is devoid of any merit and accordingly, the same
stands dismissed. However, there shall be no order as to costs.
JUDGE CHIEF JUSTICE Comparing Assistant
