IN THE GAUHATI HIGH COURT (THE HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) WRIT PETITION (C) NO.1723 OF 2009 Petitioner: Sri Sailendra Nath Kakati, Son of late Loknath Kakati, Resident of village- Betkuchi (Noonmati) Lakhara Road, Post office- Sawkuchi, District- Kamrup, Guwahati-34. By Advocates: Mr. A.M. Bujarbaruah, Mr. N. Haque, Mr. S.K. Deori, Mr. H.I. Choudhury, Mr. K.Uddin. Respondents : 1. UCO Bank, To be represented by General Manager (Personnel), UCO Bank, Head Office, 10, BTM Sarani, Kolkata-1. 2. General Manager (Personnel), UCO Bank, Head Office, 10, BTM Sarani, Kolkata-1. 3. Zonal Manager, UCO Bank, Zonal Office, Jorhat, T.N. Sarmah Path, Nehru Park, Jorhat, Assam-785001. By Advocates: Mr. P. C. Goswami, Mr. A. J. Das, Mr. N. Baruah. B E F O R E HON BLE MR. JUSTICE UJJAL BHUYAN Date of hearing : 08-04-2013. Date of Judgment : 06-08-2013 W.P.(C)No.1723/2009 Page 1 of 13
J U D G M E N T AND O R D E R (CAV) In this petition under article 226 of the Constitution of India, petitioner has challenged the legality and validity of the order dated 04-03-2008 passed by the Zonal Manager, UCO Bank, Zonal Office, Jorhat as the disciplinary authority imposing the penalty of removal from service on the petitioner. 2. Case of the petitioner is that while he was serving as MMGS-II in the Mukalmua Branch of UCO Bank, he was served with a show-cause notice dated 12-09-2006 issued by the disciplinary authority proposing to hold a disciplinary enquiry under Regulation 6 of the UCO Bank Officer Employees (Discipline and Appeal) Regulations, 1976 on the charges mentioned therein. The charges pertain to various acts, omissions and commissions allegedly committed by the petitioner in the sanctioning and disbursement of loans while serving as Assistant Manager of the Itanagar Branch. When he was transferred from Itanagar Branch to Mukalmua Branch, he had transferred the four loans accounts sanctioned and disbursed by him while functioning at the Itanagar Branch, to the Mukalmua Branch without authority with an intent to cover up the irregularities. 3. Petitioner submitted his written statement dated 27-09- 2006 denying all the allegations and requested the authority to exonerate him from the charges. W.P.(C)No.1723/2009 Page 2 of 13
4. The written statement of the petitioner was considered by the disciplinary authority but the same was not found satisfactory. It was, therefore, decided to hold an enquiry and for this, an Enquiry Officer was appointed. At the conclusion of the enquiry, the Presenting Officer submitted written brief on behalf of the management. Likewise, a written brief was submitted by the defence representative on behalf of the petitioner. 5. Enquiry Officer submitted a detailed report dated 08-09- 2007 to the disciplinary authority wherein out of the five charges, Charge Nos. 2, 3 and 4 were held proved. 6. The disciplinary authority vide the forwarding letter dated 18-09-2007 forwarded the report of the Enquiry Officer to the petitioner, who submitted his representation on the enquiry report on 05-10-2007. 7. Thereafter, the disciplinary authority passed final order dated 04-03-2008 imposing the following penalties for the charges proved i.e., Charge No.2 (proved) --- removal from service, which shall not be a disqualification for future employment. Charge No.3 (proved) --- removal from service, which shall not be a disqualification for future employment. W.P.(C)No.1723/2009 Page 3 of 13
Charge No.4 (proved) --- reduction to a lower grade i.e. from scale-ii to scale-i at the basic pay of Rs.1382/- for a period of three years. It was stated that all the three penalties would have concurrent effect. It was also stated that since petitioner was under suspension, he would not be entitled to any benefit other than the subsistence allowance paid to him during the period he remained under suspension. 8. Though petitioner filed an appeal against the order of penalty, no decision was taken thereon. Aggrieved, he has filed the present writ petition. 9. Contention of the petitioner is that the management failed to prove charge No.2 against the petitioner. Stand of the petitioner was that he was not the authority to sanction the loans in question. Petitioner had sought for certain documents to substantiate his stand but the Presenting Officer failed to produce those documents. Enquiry Officer erroneously put the onus on the petitioner. Disciplinary authority failed to consider this aspect of the matter. Documents such as the LIC policies furnished by the loan applicants were scrutinized and verified by various authorities before sanctioning of the loans. Only after the Senior Manager had signed the sanctioning forms, petitioner disbursed the loan amounts. There was also no evidence to show that petitioner had transferred the four loan accounts from Itanagar Branch to Mukalmua Branch. Further contention of the W.P.(C)No.1723/2009 Page 4 of 13
petitioner is that charge No.4 was not specific. Therefore, it is a case of no evidence. 10. Respondents have filed a common affidavit. It is stated that petitioner while serving as Assistant Manager of Mangaldoi Branch had in connivance with fraudsters sanctioned a loan against security of LIC policies belonging to one Narruddin Ali. He was arrested by the Mangaldoi police on an FIR filed by the said Narruddin Ali and was in police custody for the period from 16-09-2005 to 18-10- 2005. In so far the disciplinary proceeding is concerned, it is stated that the Enquiry Officer had conducted the enquiry giving reasonable opportunity to the petitioner. Enquiry Officer in his enquiry report found charge Nos. 2, 3 and 4 out of the five charges to have been proved. Copy of the enquiry report was duly served on the petitioner, who submitted his representation on the enquiry report. After due consideration, order of penalty dated 04-03-2008 was passed. Petitioner had filed appeal against the order of penalty. Appellate authority duly considered the same but rejected the appeal vide his order dated 11-06-2009. All the contentions raised by the petitioner have been denied. Punishment imposed is justified and calls for no interference. 11. Heard Mr. A.M. Bujarbaruah, learned Counsel for the petitioner and Mr. P.C. Goswami, learned Counsel for the respondents. 12. Mr. Bujarbaruah, learned Counsel for the petitioner submits that as per report of the Enquiry Officer, which was accepted by the disciplinary authority, charge Nos. 1 and 5 were not proved but W.P.(C)No.1723/2009 Page 5 of 13
charge Nos.2,3 and 4 were proved. Charge Nos. 1 and 2 are interrelated. When charge No.1 was held not proved, charge No.2 cannot stand independent of charge No.1. Therefore, it cannot be said that charge No.2 stood proved. He submits that petitioner had not sanctioned any loan but had only disbursed those loans which were sanctioned. Bank authority failed to produce the sanction orders. He did not sanction any loan at Mukalmua. At Mandaldoi also he had only disbursed what was sanctioned. He, therefore, submits that in this background, imposition of the penalty of removal from service is not justified. 13. Mr. P.C. Goswami, learned Counsel appearing for the respondents on the other hand submits that the charges against the petitioner were quite serious. His written statement in defence was duly considered but could not be accepted. Accordingly, enquiry was ordered. In the enquiry, Presenting Officer was appointed to represent the management whereas petitioner was represented by a defence representative. During the enquiry proceeding, reasonable and adequate opportunity was given to the petitioner to put up his defence. On completion of the enquiry, report of enquiry was submitted by the Enquiry Officer to the disciplinary authority. Three out of the five charges were held proved. Disciplinary authority on due consideration agreed with the findings of the Enquiry Officer and imposed the penalty of removal from service on the petitioner. Appeal submitted by the petitioner against the order of penalty was rejected by the appellate authority by a reasoned order by taking all relevant factors into consideration. As there is no violation of the principles of natural justice and a fair procedure was followed while conducting the W.P.(C)No.1723/2009 Page 6 of 13
disciplinary proceeding, no interference is called for. Punishment imposed on the petitioner cannot also be said to be disproportionate, excessive or shocking to the judicial conscience. He, therefore, seeks dismissal of the writ petition. Mr. Goswami, learned Counsel for the respondents has also produced the record of the enquiry. 14. In his brief reply, Mr. Bujarbaruah, learned Counsel for the petitioner submits that even though in a disciplinary proceeding, the standard of proof is not as strict as in a criminal trial or even in a civil proceeding, yet the charge has to be proved. In this case, on the basis of the available materials, charge Nos. 2, 3 and 4 cannot be said to have been proved. He further submits that no disciplinary proceeding was drawn up against the Senior Manager. In such circumstances, Court should intervene in the matter and quash the penalty imposed. 15. Submissions made have been considered. I have also perused the record produced. 16. Before proceeding further, the charges framed against the petitioner may be noted. The following were the charges framed against the petitioner:- 1. Sri Sailendranath Kakati while functioning as Asstt. Manager at Itanagar Branch had sanctioned and disbursed (4) four loans against the purported assignment LICI policies which were found to be fake on verification of the status of the policies from LIC of India, North Lakhimpur Branch where from the subject LIC Policies have W.P.(C)No.1723/2009 Page 7 of 13
purportedly been issued. Thus Sri S N Kakati had failed to discharge his duties with utmost integrity, honesty and failed to take all possible steps to protect the interest of the Bank, which is violative of Regulation 3 of UCO Bank Officer Employees (Conduct) Regulation 1976 as amended. 2. Sri Sailendranath Kakati had sanctioned and disbursed four loans against security of LIC policies without having any delegated power by grossly abusing his official capacity in absence of permanent Sr. Manager which is violative of Regulation 3 of UCO Bank Officer Employees (Conduct) Regulation 1976 as amended. 3. Sri Sailendranath Kakati had transferred all the four loan a/cs sanctioned and disbursed by him to Mukalmua Branch where he had been transferred from Itanagar Branch without the concurrence / prior approval from the Regional Office Jorhat and thus Sri Sailendranath Kakati had acted in a manner unbecoming of a bank officer which is violative of Regulation 3 of UCO Bank Officer Employees (Conduct) Regulation 1976 as amended. 4. Sri Sailendranath Kakati while functioning as Asstt. Manager at Mangaldoi branch and looking after the Advance Portfolios had processed as many as 24 loan a/cs in a very irregular way and had signed the loan disbursement vouchers of all the 24 borrowal a/cs and thus he failed to ensure and protect the interest of the Bank W.P.(C)No.1723/2009 Page 8 of 13
which is violative of Regulation 3 of UCO Bank Officer Employees (Conduct) Regulation 1976 as amended. 5. Sri Sailendranath Kakati while discharging duties as Asstt. Manager at Mangaldoi Branch had in connivance with fraudsters sanctioned a loan against security of a LIC Policy belonging to one Nuruddin Ali and Sri Sailendranath Kakati had been arrested by Mangaldoi Police on the basis of a complaint lodged by Nuruddin Ali, and was under Police and Judicial custody from 16-09-2005 to 18-10-2005. Thus Sri Sailendranath Kakati had acted in a manner that has tamished the image of the Bank before the public. He had committed breach of faith in performance of his duties which is violative of Regulation 3 of UCO Bank Officer Employees (Conduct) Regulation 1976 as amended. 17. While charge No.1 relates to sanctioning and disbursement of four loans by the petitioner against fake LIC polices while functioning as Assistant Manager at Itanagar Branch, the second charge relates to sanctioning and disbursement of the said four loans by the petitioner in the absence of permanent Senior Manager without having any delegated power, by grossly misusing his official capacity. Related to the second charge is charge No.3 whereby petitioner was charged with transferring the above four loan accounts from Itanagar Branch to Mukalmua Branch when he was transferred to Mukalmua Branch without concurrence / prior approval from the Regional office at Jorhat. W.P.(C)No.1723/2009 Page 9 of 13
18. As already noticed above, while charge No.1 was held to be not proved, charge Nos.2 and 3 were held proved. 19. The Enquiry Officer while dealing with the above two charges noted that sanction advice dated 19-02-2004 in the case of Shri Kamal Nath, who was one of the loanees, was issued by the petitioner when the Senior Manager was present though he had no authority to do so. Sanction advice to another loan applicant was not available. The defence could not produce any relevant record to show that these two loans were sanctioned by the Senior Manager. The defence could not produce the loan applications in respect of the four loan accounts duly approved by the Senior Manager. The loans were disbursed when the Senior Manager was absent. The Enquiry Officer finally held that there were gross irregularities in processing, sanctioning and disbursing the said loans by the petitioner, who showed scant regard to the laid down rules and procedure of the Bank. Thus, charge Nos. 2 was held proved. Regarding charge No.3, which dealt with transfer of the four loans accounts from Itanagar Branch to Mukalmua Branch, the Enquiry Officer noted that for such transfer of loan account, permission / concurrence of higher authority was required. Additionally, the Manager is also required to assess the suitability and desirability of transferring such loan accounts. Petitioner neither referred the matter to the Regional Office at Jorhat nor made the above assessment. The Enquiry Officer further observed that the loanees hailed from places like Harmoti and Gopalpur of Lakhimpur district of Assam whereas the Mukalmua Branch is situated in Nalbari district, which is far away from the residence of the loanees. Therefore, there could be no valid justification for transfer of W.P.(C)No.1723/2009 Page 10 of 13
such loan accounts. In such circumstances, the Enquiry Officer had drawn the inference that since petitioner was involved in granting the four loans, he transferred the said loan accounts to Mukalmua Branch where he was posted to cover up the irregularities in the sanctioning and disbursement of the said loan amounts. Thus, charge No.3 was held to have been proved. 20. The disciplinary authority in his order dated 04-03-2008 examined the materials produced at the enquiry proceedings, the report of the Enquiry Officer and representation of the petitioner on the enquiry report. He held that the enquiry proceedings were conducted in conformity with the laid down procedure and the petitioner was given all reasonable opportunity to put up his defence. He concluded that the petitioner had failed to take all possible steps to ensure and protect the interest of the Bank and had acted in a manner which was unbecoming of a Bank Officer. For this two charges, the disciplinary authority imposed the penalty of removal from service. 21. Since against charge No.4, which though proved, a lesser punishment was proposed by the disciplinary authority, in view of the more severe penalty of removal from service being imposed in respect of charge Nos. 2 and 3, the said penalty of reduction to lower grade would have no effect. In such circumstances, I am of the view that deliberation on charge No.4 may not be necessary. 22. At the appellate stage, the appellate authority considered the findings as regards charge Nos. 2, 3 and 4. Relevant portion of the W.P.(C)No.1723/2009 Page 11 of 13
appellate order dated 11-06-2009 dealing with charge Nos. 2 and 3 are as under:- 1.Shri Kakati has admitted that he had disbursed the said 4 loans against LIC policies. His submission that since the Senior Manager was present on the date and signed two demand drafts issued for the disbursement, therefore, he was aware of the disbursement is not tenable because defence could not produce any evidence/voucher, which contained the signature of the Senior Manager having sanctioned the loans. His claim that once Senior Manager signed the drafts issued on account of disbursement, his consent for sanction and disbursement was implied, is not maintainable because Bank has system and procedures in place as to how the loans be sanctioned at the branch level. He was expected to obtain sanction of Senior Manager on each of the loan proposal processed by him before making disbursement. Therefore, I am of the view that Shri Kakati has abused his official capacity. 2. As regards obtaining permission to transfer loan accounts from one branch to other branch, the contention of Shri Kakati that the responsibility lies on the transferring branch and for which he should not be blamed is not maintainable because while forwarding the applications of the borrowers for seeking transfer of the loan accounts to Mukalmua branch, which is far away from the recorded address of the borrowers, he did not refer the matter to the controlling office as per rules. I am of the view that since, W.P.(C)No.1723/2009 Page 12 of 13
Shri Kakati was involved in the irregularities in those four loan accounts, therefore, to cover up the irregularities, he got the accounts transferred to Mukalmua branch, where he had been transferred. Therefore, I consider that Shri Kakati had acted in a manner unbecoming of a bank officer. 23. Thus, I find that the respondents had followed the due procedure while conducting the disciplinary proceeding against the petitioner and he was given reasonable and adequate opportunity to defend himself. Charge Nos. 2 and 3 are quite grave and those have been proved in a regular disciplinary proceeding. In the circumstances of the case, the punishment imposed cannot also be said to be disproportionate or shocking to the judicial conscience. Charge No.2 is a separate charge, independent of charge No.1, which has been proved. Non-initiation of disciplinary proceeding against the Senior Manager would not absolve the petitioner of his misconduct. 24. For all the aforesaid reasons, I find no merit in the writ petition, which is accordingly dismissed. 25. No cost. 26. Record produced by Mr. P.C. Goswami, learned Counsel for the respondents is returned back. JUDGE aparna W.P.(C)No.1723/2009 Page 13 of 13