claimed certain amount by way of reimbursement for the exp

PJANARDHANA REDDY (Querist) 17 October 2009 This query is : Resolved
DEAR EXPERT AN IMPORTANT SC JUDGMENT ON SERVICE MATTER OF S.B.I

PETITIONER:

STATE BANK OF INDIA

Vs.

RESPONDENT:

SAMAREDRA KISHORE ENDOW

DATE OF JUDGMENT08/01/1994

BENCH:

JEEVAN REDDY, B.P. (J)
BENCH:
JEEVAN REDDY, B.P. (J)
HANSARIA B.L. (J)

JUDGMENT:
ORDER

1. This appeal is preferred by the State Bank of India
against the decision of the Gauhati High Court allowing the
writ petition filed by the respondent.
2. The respondent was appointed as a cashier in the
appellant bank in the year 1968. He was promoted to Officer
Grade-11 and then to Grade-1. While he was working at Phek
Branch in Nagaland, he was promoted to the rank of Branch
Manager and was transferred to Amarpur Branch in the State
of Tripura in January 1981. The appellant joined at Amarpur
and claimed certain amount by way of reimbursement for the
expenses incurred by him in shifting his belongings and
other articles to Amarpur from Phek. An inquiry was made
into the correctness of the receipts and other documents
produced by him in that connection (and into some other
alleged irregularities committed by him) and he was
subjected to a disciplinary inquiry on five charges. The
charges read as follows:
"CHARGE 1
That on February 10, 1982, you submitted a Travelling
Allowance Bill for Rs 12,194.80 in connection with your
permanent transfer from Phek Branch to Amarpur Branch. In
the said bill you make a claim of Rs 9500.00 being the
hiring charges incurred by you for a full truck and in
support of your claim you submitted a false money receipt
dated January 9, 1982 for Rs 9500.00 obtained from M/s
Balram Hariram, Church Road, Dimapur, whereas you neither
engaged a full truck nor spent Rs 9500.00 for the transport
of household goods. By your above act you failed to
discharge your duties with utmost integrity, honesty,
devotion and diligence and have violated Rule 32(4) of the
State Bank of India (Supervising Staff) Service Rules.
CHARGEII
That in your Travelling Allowance Bill for Rs 12,194.80
dated February 10, 1982 you made another claim for Rs 120
supported by two false separate money receipts dated
February 9, 1982 for Rs 60 each obtained from one Shri Ram
Prasad being the loading and unloading charges incurred for
household goods at Phek and Amarpur respectively. By your
above act again you have failed to discharge your duties
with
540
utmost integrity, honesty, devotion and diligence and
violated Rule 32(4) of the State Bank of India (Supervising
Staff) Service Rules.
CHARGEIII
That along with the Travelling Allowance Bill for Rs
12,194.80 dated February 10, 1982 you furnished a list of 19
packages of household items claimed to have been transported
from Phek to Amarpur whereas only 8 packages of household
goods were transported. Thus you knowingly famished an
inflated list of goods transported with an intention to
derive undue pecuniary benefit and thereby infringed Rule
32(4) of the State Bank of India (Supervising Staff) Service
Rules.
CHARGEIV
That during the period of your posting at our Phek Branch
your S.B. Account thereat showed frequent deposits by means
of cash as well as transfer transactions. These deposits
and various T.D. Rs., S.T.D. Rs. and other assets acquired
as detailed in the Statement of Allegation enclosed
herewith, indicate that you were having assets
disproportionate to your known sources of income the fact
which reflect adversely on your conduct with is unbecoming
of a bank official and thus you infringed Rule 32(4) of the
State Bank of India (Supervising Staff) Service Rules.
CHARGE V
That while you were holding temporary charge of the Phek
Branch you disbursed a construction loan to Shri A song
Snock in two instalments i.e. Rs 90,000.00 on May 7, 1981
i.e. as soon as you received the sanction from Regional
Office and Rs 10,000.00 on May 10, 1981, without taking into
account the progress of the construction of the building as
instructed by Regional Office. The said loan was not
utilised for the construction of the building and as a
result of which the account had become irregular. Thus you
have infringed Rules 32(1), 32(4) of the State Bank of India
(Supervising Staff) Service Rules."
3. An Inquiry Officer was appointed by the Disciplinary
Authority (the Chief General Manager) who held, after due
inquiry that all the five charges are proved. The
Disciplinary Authority perused the entire material and
agreed with the findings of the Inquiry Officer on charges
1, 2, 3 and 5 but did not agree with the finding on charge
4. He imposed the penalty of removal upon the respondent.
An appeal preferred by the respondent was dismissed by the
Board whereupon the respondent approached the High Court by
way of a writ petition. The High Court allowed the writ
petition on three grounds, namely (1) non-supply of Inquiry
Officer's report before imposing the penalty vitiates the
order of punishment, (2) the appellate order is not a
speaking order and is therefore not in conformity with Rule
51(2) of the S.B.I. (Supervisory Staff) Service Rules and
(3) the findings of the Inquiry Officer and the Disciplinary
Authority on charges 1 to 3 and 5 are based on no evidence
and must therefore be characterised as perverse.
541
4. in this appeal, Mr Goswami learned counsel for the
appellant bank assailed the correctness of all the said
three findings. So far as the first ground given by the
High Court is concerned, it must be held to be not
sustainable in law in view of the recent decision of the
Constitution Bench of this Court in Managing Director, ECIL,
Hyderabad v. B. Karunakarl inasmuch as the order of
punishment in this case is prior to November 20, 1990.
5. Before dealing with the second ground, we think it
appropriate to deal with the third ground in the facts and
circumstances of this case. So far as the charge 1 is
concerned, the respondent had produced a receipt in a sum of
Rs 9500 claiming that to be the expenses incurred by him for
transporting his belongings. It appears that when he came
to know that certain inquiries were being made by the bank
into the correctness of the receipts produced by him, he
produced the second receipt (in June 1982) in a sum of Rs
2755. (The first receipt was produced in January 1982). The
respondent's case was that though initially the transporter
charged him the sum of Rs 9500, which he paid partly in cash
and partly through a post-dated cheque, the transporter
later revised the charges downwards to Rs 2755. PW 1-the
transporter examined by the Bank, supported the respondent's
case in full. However, the Inquiry Officer refused to
believe his evidence for the various reasons given by him in
his report. After examining the evidence of PW 1 and other
documentary evidence at length, the Inquiry Officer found
that "there was no actual movement of household goods
belonging to Shri S.K. Endow on the dates represented by the
documents". The High Court, however, proceeded on the
assumption that the finding of the Inquiry Officer was to
the effect that there was no actual movement of household
goods belonging to him at all. In other words, it ignored
the words "on the dates represented by the documents" in the
above finding. The High Court held on that basis that the
Inquiry Officer was in error in holding that there was
absolutely no oral evidence in support of the finding that
there was no movement of goods. We are not satisfied with
the reasoning of the High Court. Firstly, it is based upon
an incomplete reading or if we may call it, misreading
of the finding recorded by the Inquiry Officer. Secondly,
it cannot be said that the finding of the Inquiry Officer
was based on no evidence. Once the explanation offered by
the respondent is disbelieved, there are two contradictory
receipts produced by him the earlier one claiming a far
higher amount and the latter one claiming a far lesser
amount. Apart from that the Inquiry Officer has relied upon
several documents, namely P.Ex-23, P.Exs-10 and 9 in support
of his finding. It cannot therefore be said that the
Inquiry Officer's finding is based on no evidence.
6. Charge 2 relates to claim of Rs 120 towards loading and
unloading charges, evidenced by two receipts dated January
9, 1982. The Inquiry Officer found that in view of the
grave discrepancies with respect to the dates of
transportation and also because Ram Prasad who is said to
have
1 (1993) 4 SCC 727: 1993 SCC (L&S) 11 84: (1993) 25 ATC
704: JT (1993) 6 SC 1
542
accompanied the goods in the truck was not examined, the
charge must be held proved. The Inquiry Officer found that
the loading and unloading did not take place on the dates
mentioned therein. This finding is again based upon the
documentary evidence and cannot be said to be not supported
by any evidence. The High Court was of the opinion that
there was no evidence in support of the Inquiry Officer's
finding that Ram Prasad is a fictitious person. We have
perused the finding of Inquiry Officer closely. The finding
is not that Ram Prasad is a fictitious person but that his
non-examination goes to show that the respondent's case that
the said person accompanied the goods is not established.
No doubt, he also added that Ram Prasad appears to be a
fictitious person, but that is only by way of an additional
reason; it is not the main reason.
7.With respect to charge 3, the reasoning of the High Court
is the same as is assigned by it with respect to charge 2.
The High Court has further proceeded on the assumption that
the finding of the Inquiry Officer is to the effect that
there was no movement of goods. We have pointed out
hereinabove that the finding is not that movement of goods
did not take place but that it did not take place on the
dates assigned by the respondent.
8. Now coming to charge 5, the Inquiry Officer has found
that the respondent has acted in violation of the
instructions of the bank that a loan sanctioned to be
disbursed in instalments, must be released in instalment/
instalments after verifying that the previous
instalment/instalments have been properly utilised. The
charge is that he released two instalments in a sum of Rs
90,000 on a single day, namely May 7, 1981 and again
released the balance amount of Rs 10,000 on May 10, 1981,
i.e. within three days, without verifying the progress of
construction of the building for which the loan was
sanctioned. The Inquiry Officer found that Ex. 20 which
contained terms and conditions of the loan does specifically
provide for disbursement of a loan in a phased manner and
that the release of the entire amount almost at once was in
violation of the said condition. The High Court found fault
with the Inquiry Officer for not recording the finding that
the account became irregular due to the said disbursement
and that there was no finding also that the building was not
constructed. The High Court concluded that the finding of
Inquiry Officer on this charge too is not based on evidence.
We are unable to agree with the approach and opinion of the
High Court. The finding of the Inquiry Officer is certainly
based upon the terms and conditions of the loan contained in
the loan document and the fact that the entire amount of
loan was disbursed. in the course of three days. We are
unable to see how it can be said that the said finding is
based on no evidence.
9. For the above reasons, the judgment of the High Court
is liable to be set aside and is accordingly set aside.
10. On the question of punishment, learned counsel for the
respondent submitted that the punishment awarded is
excessive and that lesser punishment would meet the ends of
justice. It may be noticed that the
543
imposition of appropriate punishment is within the
discretion and judgment of the Disciplinary Authority. It
may be open to the appellate authority to interfere with it
but not to the High Court or to the Administrative Tribunal
for the reason that the jurisdiction of the Tribunal is
similar to the powers of the High Court under Article 226.
The power under Article 226 is one of judicial review. It
"is not an appeal from a decision, but a review of the
manner in which the decision was made". (Per Lord Bright man
in Chief Constable of the North Wales Police v. Evans2 and
H.B. Gandhi, Excise and Taxation Officer-cum-Assessing
Authority v. Gopinath & Sons3.) In other words the power of
judicial review is meant "to ensure that the individual
receives fair treatment and not to ensure that the authority
after according fair treatment, reaches on a matter which it
is authorised by law to decide for itself, a conclusion
which is correct in the eyes of the Court". (Per Lord
Marylebone in Chief Constable v. Evans2). In fact in service
matters, it was held by this Court as far back as 1963 in
State of A. P. v. S. Sree Rama Rao4, that:
"The High Court is not constituted in a
proceeding under Article 226 of the
Constitution a court of appeal over the
decision of the authorities holding a
departmental inquiry against a public servant;
it is concerned to determine whether the
inquiry is held by an authority competent in
that behalf, and according to the procedure
prescribed in that behalf, and whether the
rules of natural justice are not violated.
Where there is some evidence, which the
authority entrusted with the duty to hold the
inquiry has accepted and which evidence may
reasonably support the conclusion that the
delinquent officer is guilty of the charge, it
is not the function of the High Court in a
petition for a writ under Article 226 to
review the evidence and to arrive at an
independent finding on the evidence. The High
Court may undoubtedly interfere where the
departmental authorities have held the
proceedings against the delinquent in a manner
inconsistent with the rules of natural justice
or in violation of the statutory rules
prescribing the mode of inquiry or where the
authorities have disabled themselves from
reaching a fair decision by some
considerations extraneous to the evidence and
the merits of the case or by allowing
themselves to be influenced by irrelevant
considerations or where the conclusion on the
very face of it is so wholly arbitrary and
capricious that no reasonable person could
ever have arrived at that conclusion, or on
similar grounds. But the departmental
authorities are, if the inquiry is otherwise
properly held, the sole judges of facts and if
there be some legal evidence on which the
findings can be based, the adequacy or
reliability of that evidence is not a matter
which can be permitted to be canvassed before
the High Court in a proceeding ... under
Article 226 of the Constitution."
2 (1982) 3 All ER 141,155:(1982) 1 WLR 1155
3 1992 Supp (2) SCC 312
4 AIR 1963 SC 1723: (1964) 3 SCR 25: (1964) 2 LLJ 150
544
11. Now, coming to the power of the Court exercising
judicial review to interfere on the question of penalty, it
was held by a Constitution Bench in State of Orissa v.
Bidyabhushan Mohapatra5 thus:
"But the Court in a case in which an order of
dismissal of a public servant is impugned, is
not concerned to decide whether the sentence
imposed, provided it is justified by the
rules, is appropriate having regard to the
gravity of the misdemeanour established. The
reasons which induce the punishing authority,
if there has been an inquiry consistent with
the prescribed rules, are not justiciable: nor
is the penalty open to review by the Court.
If the High Court is satisfied that if some
but not all of the findings of the Tribunal
were 'unassailable', the order of the Governor
on whose powers by the rules no restrictions
in determining the appropriate punishment are
placed, was final, and the High Court had no
jurisdiction to direct the Governor to review
the penalty for as we have already observed
the order of dismissal passed by a competent
authority on a public servant, if the
conditions of the constitutional protection
have been complied with, is not justiciable
misdemeanour for which the punishment can
lawfully be imposed, it is not for the Court
to consider whether that ground alone would
have weighed with the authority in dismissing
the public servant. The Court has no
jurisdiction if the findings of the inquiry
officer or the Tribunal prima facie make out a
case of misdemeanour, to direct the authority
to reconsider that order because in respect of
some of the findings but not all it appears
that there had been violation of the rules of
natural justice."
This principle was reiterated in Railway Board, Delhi v.
Niranjan Singh6. The same view was reiterated by this Court
in Union of India v. Parma Nanda7. It was an appeal from
the judgment and order of an Administrative Tribunal. K.
Jagannatha Shetty, J. speaking for the Bench observed in the
first instance that the jurisdiction of the Tribunal is
similar to the jurisdiction of the High Court in a writ
proceeding and then dealt with the power of the Tribunal to
interfere with the penalty imposed by the Disciplinary
Authority. The learned Judge referred to the holding in
State of Orissa v. Bidyabhushan Mohapatra5 (quoted by us
hereinabove) and after referring to several other judgments
of this Court, concluded thus: (SCC p. 189, para 27)
"We must unequivocally state that the
jurisdiction of the Tribunal to interfere with
the disciplinary matters or punishment cannot
be equated with an appellate jurisdiction.
The Tribunal cannot interfere with the
findings of the Inquiry Officer or competent
authority where they are not arbitrary or
utterly perverse. It is appropriate to
remember that the power to impose penalty on a
delinquent officer is conferred on the
competent authority either by an Act of
legislature or rules made under the proviso
5 AIR 1963 SC 779: 1963 Supp 1 SCR 648:
(1963) 1 LLJ 239
6 (1969) 1 SCC 502: AIR 1969 SC 966
7 (1 989) 2 SCC 177: 1989 SCC (L&S) 303:
(1989) 1 0 ATC 30: AIR 1989 SC 1185
545
to Article 309 of the Constitution. If there
has been an inquiry consistent with the rules
and in accordance with principles of natural
justice what punishment would meet the ends of
justice is a matter exclusively within the
jurisdiction of the competent authority. If
the penalty can lawfully be imposed and is
imposed on the proved misconduct, the Tribunal
has no power to substitute its own discretion
for that of the authority. The adequacy of
penalty unless it is mala fide is certainly
not a matter for the Tribunal to concern
itself with. The Tribunal also cannot
interfere with the penalty if the conclusion
of the Inquiry Officer or the competent
authority is based on evidence even if some of
it is found to be irrelevant or extraneous to
the matter." (emphasis supplied)
12. It is significant to mention that the learned Judge
also referred to the decision of this Court in Bhagat Ram v.
State of H.P.8 and held, on a consideration of the facts and
principle thereof, that, "This decision is, therefore, no
authority for the proposition that the High Court or the
Tribunal has jurisdiction to impose any punishment to meet
the ends of justice". And then added significantly "it may
be noted that this Court exercised the equitable
jurisdiction under Article 136 (in Bhagat Ram8) and the High
Court and Tribunal has no such power or jurisdiction". The
learned Judge also quoted with approval the observations of
Mathew, J. in Union of India v. Sardar Bahadur9 to the
following effect: (SCC p. 624, para 19)
"Now it is settled by the decision of this
Court in State of Orissa v. Bidyabhushan
Mohapatra5 that if the order of a punishing
authority can be supported on any finding as
to substantial misdemeanour for which the
punishment can be imposed, it is not for the
Court to consider whether the charge proved
alone would have weighed with the authority in
imposing the punishment. The Court is not
concerned to decide whether the punishment
imposed, provided it is justified by the
rules, is appropriate having regard to the
misdemeanour established."
13. It would perhaps be appropriate to mention at this
stage that there are certain observations in Union of India
v. Tulsiram Patel0 which, at first look appear to say that
the Court can interfere where the penalty imposed is
"arbitrary or grossly excessive or out of all proportion to
the offence committed or not warranted by the facts and
circumstances of the case or the requirements of that
particular government service". It must however be
remembered that Tulsiram Patel10 dealt with cases arising
under proviso (a) to Article 311(2) of the Constitution.
Tulsiram Patel10 overruled the earlier decision of this
Court in Chellappan . While holding that no notice need be
given before imposing the penalty in a case dealt with under
the said proviso, the Court held that if a disproportionate
or harsh punishment is
8 (1983) 2 SCC 442: 1983 SCC (L&S) 342: AIR 1983 SC 454
9 (1972) 4 SCC 618: (1972) 2 SCR 218
10 (1985) 3 SCC 398: 1985 SCC (L&S) 672: AIR 1985 SC 1416
11 Divisional Personnel Officer, Southern Rly. v. TR.
Chellappan, (1976) 3 SCC 190: 1976 SCC (L&S) 398: AIR 1975 S
C 2216
546
imposed by the disciplinary authority, it can be corrected
either by the appellate court or by the High Court. These
observations are not relevant to cases of penalty imposed
after regular inquiry. Indeed this is how the said
observations have been understood in Parma Nanda7 referred
to above (vide para 29). The same comment holds with
respect to the decision in Shankar Das v. Union of India12
which too was a case arising under proviso (a) to
Article 311(2).
14. Now coming to the facts of this case it would appear
that the main charge against the respondent is putting
forward a false claim for reimbursement of expenditure
incurred for transporting his belongings from Phek to
Amarpur. So far as charge 5 is concerned there is no
finding that the account become irregular or that any loss
was incurred by the bank on account of the irregularity
committed by the respondent. In the circumstances it may be
that the punishment of removal imposed upon the respondent
is harsh but this is a matter which the Disciplinary
Authority or the Appellate Authority should consider and not
the High Court or the Administrative Tribunal. In our
opinion, the proper course to be adopted in such situations
would be to send the matter either to the Disciplinary
Authority or the Appellate Authority to impose appropriate
punishment.
15. For the above reasons, the appeal is allowed and the
order of the High Court is set aside, with the observation
that the Appellate Authority shall consider whether a lesser
punishment is not called for in the facts and circumstances
of the case. The Appellate Authority shall pass orders in
this behalf within four months of the receipt of the copy
this Order. No costs.
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