IN THE HIGH COURT OF KARNATAKA, BANGALORE

Dated this the 2nd Day of November 2012

PRESENT

THE HON'BLE MR.JUSTICE N.KUMAR

AND

THE HON'BLE MR.JUSTICE V. SURI APPA RAO

Writ Appeal No.252/2006(S)

BETWEEN SYNDICATE BANK A BODY CONSTITUTED UNDER THE BANKING COMPANIES (ACQUISITION & TRANSFER OF UNDERTAKINGS) ACT 1970, HAVING ITS HEAD OFFICE AT MANIPAL – 576 104, REPRESENTED BY ITS GENERAL MANAGER(P). ... APPELLANT

(BY SRI P.S. SAWKAR, ADVOCATE, FOR M/s SUNDARASWAMY, RAMDAS & ANAND, Advs.) AND 1. SRI S R PADIYAR

S/O SRI RAMESH PADIYAR R/AT NO.204, LEGRACE CO-OPERATIVE HOUSING SOCIETY, CHRUCH ROAD, MAROL, ANDHERI (E) MUMBAI - 400 049

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2. N A SHANBHAG (R2 deleted as per Court INQUIRING AUTHORITY, Order dt : 26.09.2006) ASSISTANT GENERAL MANAGR SYNDICATE BANK, INTERNATIONAL DIVISION, MAKERS TOWERS 'F' SECOND FLOOR, CUFFE PARADE, MUMBAI – 400 005. ... RESPONDENTS

(By Sri P S RAJAGOPAL, SR. COUNSEL AND Sri

M.N.PRASASNNA, Adv. FOR R1)

THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER PASSED IN THE WRIT PETITION No.24783/1997 DATED 27/09/2005.

THIS APPEAL COMING ON FOR HEARING, THIS DAY,

N.KUMAR, J., DELIVERED THE FOLLOWING:

J U D G M E N T

This appeal is preferred against the order passed by the

learned single Judge who has set aside the order of removal

and the enquiry proceedings, solely on the ground of non-

production of seven documents, which was sought for by the

delinquent employee.

2. For the purpose of convenience, the parties in this

appeal are referred to as they are referred to in the writ

petition.

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3. The petitioner was functioning as Sub-Manager at

the Nariman Point Branch, Mumbai, of the Respondent –

Syndicate Bank. The Branch was headed by an Assistant

General Manager and the petitioner was working as Sub-

Manager. On 21.02.1995, office of the Directorate of Revenue

Intelligence, (‘DRI’ for short) Mumbai, apprehended five persons

carrying four gunny bags containing Indian currency. A

panchnama was prepared in which it was stated that the

gunny bags contained a total amount of Rs.1,00,78,000/-

which was seized from the said five persons. The DRI also

seized certain pay orders issued by the Bank on account of

some private parties. It was alleged by the DRI that the

account holders namely M/s.Acrobond Exports, M/s.Hitesh

Exports, M/s.Nahalchand Laloochand, M/s.Nucleus Securities

Ltd., and M/s. Wall Street Finance Limited, committed offences

under the Customs Act, 1962, and the officials of the Bank

abetted the same. The Bank appointed one Sri.N.R.Kamath, an

officer working in Vigilance Unit of the Bank and got conducted

an investigation. By a letter dated 08.08.1995, the petitioner

was called upon to submit his explanation in the matter of

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certain current accounts opened at Nariman Point Branch

between 31.01.1995 and 21.02.1995, on the introduction of

some customers of M/s.Bombay Mercantile Co-operative Bank

Limited, 11 current accounts opened at Nariman Point Branch,

Mumbai, during the period 03.02.1995 to 21.02.1995 on the

introduction of some customers of Malabar Hills and Nariman

Point Branches; and 30 current accounts opened during the

period between 09.05.1994 and 03.02.1995 on the

introduction of customers of local branches of the 1st

Respondent – Bank. Petitioner gave a reply on 08.09.1995

stating that he was functioning as a Sub-Manager of the

Branch looking after administration and was not attending any

frontline operations and had no contact with customers except

in the matter of exchange of cut notes and complaints. He also

pointed out that as a matter of routine, he was required to affix

second signature on certain instruments like cheques, drafts

and pay orders. The entire scrutiny and opening of the

account took place at the level of Departmental Officer, who

after verification of opening of the account, used to certify the

correctness by signing the account opening forms and the

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petitioner used to put the second signature after verification as

to whether the forms are filled up properly. The accounts were

opened within the legal frame work of the Banking Law in the

normal course of business and that no irregularity or wrong

was committed nor any rule violated in that regard.

4. Petitioner was placed under suspension on

22.9.1995. A charge sheet dated 30.10.1995 was served on the

petitioner. In addition to the aforesaid allegations, an

additional allegation that DRI, Mumbai, served a show cause

notice dated 16.8.1995 on the Nariman Point Branch of the

Bank seeking reasons as to why penalty should not be imposed

on the delinquent as the current accounts had been opened by

some unscrupulous persons and was utilised for smuggling out

foreign exchange. Petitioner submitted his reply to the charge

sheet on 11.11.1995 denying the charges and reiterating the

statements made in his reply to the show cause notice.

5. The bank proceeded with the disciplinary enquiry

by appointing an enquiry officer. Two witnesses were examined

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on behalf of the bank. 356 documents were produced. Both

the witnesses have been cross-examined fully. After the closure

of the side of the bank, the petitioner submitted a

representation on 19.4.1996 listing out 14 documents which

he required for his defence. Out of the 14 documents, 7

documents were supplied. Out of the remaining 7 documents,

documents 1 to 3 privilege was claimed and regarding

documents 4 to 7 it was stated that they are not available. The

delinquent did not step into the witness box. However, he

examined two witnesses on his behalf. After the conclusion of

the enquiry, the delinquent filed a written brief. After hearing

both the parties and taking into consideration the oral and

documentary evidence adduced, the enquiry officer submitted a

report holding that all the charges levelled against the

delinquent are proved. The disciplinary authority on receipt of

the said report issued a second show cause notice enclosing a

copy of the report to the petitioner. The disciplinary authority

after considering the reply held the charges levelled against the

delinquent is proved and passed an order of his removal from

service. Aggrieved by the said order, the delinquent preferred a

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statutory appeal. The Appellate Authority also dismissed the

appeal. Aggrieved by the said orders, the delinquent preferred

a Writ Petition before this Court.

6. The petitioner among other grounds contended

that, non-furnishing of 7 documents which are sought have

greatly prejudiced his defence and therefore the entire enquiry

is liable to be set aside. He also contended that the DRI has

not taken any coercive steps against the bank and therefore the

bank has no case to proceed against the delinquent. The

learned single Judge who heard the matter was of the view

that, denial of the document has undoubtedly prejudiced the

interest of the delinquent. In the absence of any reasons

assigned by the Presenting Officer stating as to how the supply

of these documents or the disclosure of the contents of the

audit report and the Special Inspection Report would

prejudicially affect the interest of the bank or for that matter

the public interest, having regard to the relevancy of the

documents and the prejudice that is bound to be caused to the

interest of the delinquent in his defence, he was of the view,

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non-supply of these documents has vitiated the enquiry. He

held the delinquent is denied full and fair opportunity to

effectively defend himself in the proceedings. Further he held,

the specific defence taken by the delinquent is he was only

acting as a Staff Manager in-charge of the administration and it

was not his responsibility to attend to the functions which are

set out in the show cause notice as well as the charge sheet.

He was putting his signature as a second signatory to most of

these transactions in respect of which misconduct is attributed

to him and therefore in order to enable him to prove that it was

not the petitioner who was responsible principally to discharge

these duties and that these duties were assigned to the

Assistant General Manager and other officers, the petitioner

wanted those documents to be produced and ultimately denial

of all those documents has prejudicially affected his interest.

Further, when the petitioner filed his statement of defence

enclosed a copy of the report dated 20.11.1995 submitted by

the bank through its advocate by way of reply to the show

cause notice dated 16.8.1995 issued by the DRI. The said

document was not taken into account by the enquiring

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authority on the ground that it is a xerox copy and that it is not

properly tendered in evidence and therefore he was of the view

production of the original in that context has affected the

enquiry and the punishment imposed. Therefore, he proceeded

to set aside the order of removal as well as the entire enquiry

and remanded the matter to the disciplinary authority for a de-

novo enquiry and directed that the period from the date of

passing of the order of removal till the completion of the

disciplinary proceedings shall be treated as one of suspension

and the petitioner shall be entitled for subsistence allowance in

accordance with law. Aggrieved by the said order, the bank has

preferred this appeal.

7. Sri Sawkar, learned counsel appearing for the

appellant-bank contended that, the enquiry that was initiated

against the petitioner was not based on the Investigating

Report or the Audit Report or on the basis of any of the

documents which were sought for by the petitioner. When the

bank did not rely on those documents, non-furnishing of the

copies of the said documents would in no way affect the

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interest of the petitioner. The law on the point is well settled.

The learned single Judge has not properly appreciated the facts

and the law on the point and committed a serious error in

setting aside a valid enquiry and the punishment imposed

solely on the ground of non-production of 7 documents which

is illegal and requires to be set aside.

8. Per contra, learned senior counsel Sri P.S.

Rajagopal, appearing for the delinquent employee contends

that, though the enquiry is not based on the said 7 documents

which were not furnished, those documents would have proved

the innocence of the delinquent. In the Investigating Report

and the Audit Report, the delinquent has been completely

exonerated. In so far as the other three documents sought for

are concerned, under the Regulations the said documents have

to be sought for from the person who is in possession of the

said documents. The request of the petitioner was never

forwarded to these persons in possession of the said

documents. It is the Presenting Officer himself has rejected his

request on the ground that it is not available. Therefore, the

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procedure prescribed under law has not been followed and

denial of those documents has seriously affected the interest of

the petitioner and the learned single Judge rightly set aside the

said order of removal as well as the enquiry and therefore he

submits no case for interference is made out.

9. From the aforesaid material on record and the rival

contentions it is clear that, a show cause notice was issued to

the petitioner. When the reply given by him was not

satisfactory, the bank decided to hold an enquiry. He was kept

under suspension. A charge sheet was served on him. He gave

a reply reiterating his stand made in the reply notice. Then an

enquiry officer was appointed. It is not in dispute between the

parties that the enquiry was not based on the said inspection

report or the concurrent audit report or the regular inspection

report for the year 1994-95. No persons were examined by the

authors of the report before preparing the said report. In fact,

the said report was prepared by one Sri N.R. Kamath who has

been examined in the case who in turn did not rely on the

report. The delinquent had full opportunity to cross-examine

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the said witness. In the enquiry, 356 documents were marked.

None of those documents were disputed. Even otherwise, he

had full opportunity to cross-examine the witnesses in relation

to the said 356 documents which were produced. It is only

after the side of the bank is closed, a request is made for

furnishing of 14 documents. Admittedly, 7 documents were

furnished. Out of the remaining 7 documents, 3 documents

are the aforesaid reports which were not furnished. In so far as

the remaining 4 documents are concerned, they are in the

nature of credit card, copies of office note and report of

financial standing of a client which was not furnished. It was

not furnished on the ground that it is not available. The case

of the bank was not laid on the basis of the said documents

and those documents were not relied on to prove the charges

levelled against the petitioner. In the reply filed to the show

cause notice, the petitioner has not denied the transactions.

His specific case is he was working under the directions and

instructions of A.Subramaniam, the Branch in-charge of

Nariman Point. He was not directly involved. He was only a

second signatory to all the documents and therefore he cannot

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be held liable and his grievance is others though found guilty of

the charges levelled against them, they are let off with a minor

punishment. After denial of these documents, when he filed a

written brief he did not complain of any serious prejudice in

the trial because of non-furnishing of the said documents. In

reply to the second show cause notice also he did not complain

of the said grievances. Even when he preferred a statutory

appeal that was not a ground at all. It is only in the Writ

Petition the said ground is urged. It is in that context, it is

necessary to know the law on the point.

10. The Apex Court in the case of SYNDICATE BANK

AND OTHERS vs V.VENKATESH GURURAO KURATI [AIR

2006 SC 3542] after referring to the various judgments of the

Supreme Court held as under : -

“18. In our view, non-supply of documents on

which the Enquiry Officer does not rely during the

course of enquiry does not create any prejudice to

the delinquent. It is only those documents, which

are relied upon by the Enquiry Officer to arrive at

his conclusion, the non-supply of which would

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cause prejudice being violative of principles of

natural justice. Even then, the non-supply of those

documents prejudice the case of delinquent officer

must be established by the delinquent officer. It is

well settled law that the doctrine of principles of

natural justice are not embodied rules. It cannot

be put in a straitjacket formula. It depends upon

the facts and circumstances of each case. To

sustain the allegation of violation of principles of

natural justice, one must establish that prejudice

has been caused to him for non-observance of

principles of natural justice”.

11. In the case of CHANDRAMA TEWARI vs UNION OF

INDIA [AIR 1988 SC 117], the Apex Court dealing with a

similar matter has held as under : -

“9. It is now well settled that if copies of relevant

and material documents including the statement

of witnesses recorded in the preliminary enquiry

or during investigation are not supplied to the

delinquent officer facing the enquiry and if such

documents are relied in holding the charges

framed against the officer, the enquiry would be

vitiated for the violation of principles of natural

justice. Similarly, if the statement of witnesses

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recorded during the investigation of a criminal

case or in the preliminary enquiry is not supplied

to the delinquent officer, as that would amount to

denial of opportunity of effective cross-

examination. It is difficult to comprehend

exhaustively the facts and circumstances which

may lead to violation of principles of natural

justice or denial of reasonable opportunity of

defence. This question must be determined on the

facts and circumstances of each case. While

considering this question it has to be borne in

mind that a delinquent officer is entitled to have

copies of material and relevant documents only

which may include the copy of statement of

witnesses recorded during the investigation or

preliminary enquiry or the copy of any other

document which may have been relied in support

of the charges. If a document has no bearing on

the charges or if it is not relied by the enquiry

officer to support the charges, or if such document

or material was not necessary for the cross-

examination of witnesses during the enquiry, the

officer cannot insist upon the supply of copies of

such documents, as the absence of copy of such

document will not prejudice the delinquent officer.

The decision of the question whether a document

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is material or not will depend upon the facts and

circumstances of each case”.

12. The Supreme Court in the case of VIJAY KUMAR

NIGAM (DEAD) THROUGH LRs vs STATE OF M.P. AND

OTHERS [AIR 1997 SC 1358] held as under:-

“3. … The main ground was that the report

of the preliminary enquiry conducted against him

before initiating departmental enquiry, was not

supplied to him and, therefore, it is violative of the

principle of natural justice. The High Court has

rejected the contention and, in our view, quite

rightly. The preliminary report is only to decide

and assess whether it would be necessary to

take any disciplinary action against the

delinquent officer and it does not form any

foundation for passing the order of dismissal

against the employee. ……..”

13. As against those judgments, the learned senior

counsel appearing for the petitioner relied on the judgment of

the Apex Court in the case of TIRLOK NATH vs UNION OF

INDIA [1967 SLR 759] wherein dealing with Rule 55 of the

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Civil Services (Classification, Control and Appeal) Rules, 1930

it was held as under:-

“10. ….. But this rule requires that the

public servant concerned must be afforded an

adequate opportunity of defending himself. It is

for this reason that it is obligatory upon the

Inquiry Officer not only to furnish the public

servant concerned with a copy of the charges

levelled against him, the grounds on which those

charges are based and the circumstances on

which it is proposed to take action against him.

Further, if the public servant so requires for his

defence, he has to be furnished with copies of all

the relevant documents, that is, documents

sought to be relied on by the Inquiry Officer or

required by the public servant for his defence.

…..”

In the facts of that case it was held

that,

“Therefore, in our view the failure of the

Inquiry Officer to furnish the appellant with copies

of the documents such as the first information

report and the statements recorded at the

Shidipura house and during the investigation must

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be held to have caused prejudice to the appellant in

making his defence at the Inquiry. The Inquiry held

must, in these circumstances, be regarded as one

in violation not only of R.55 but also of Art.311(2).

Accordingly, we quash the order of removal of the

appellant from service passed by the Chief

Commissioner of Delhi. ”

14. He also relied on a judgment of a learned single

Judge of this Court in the case of BHARGAVA P vs SUPDT. OF

POLICE, MANGALORE & ANR., [1983 (2) Kar. LJ 62] where it

was held that, if the preliminary enquiry report is required for

cross-examination by a concerned party, it must be furnished

and failure to do so would amount to denial of reasonable

opportunity which is guaranteed to him under Article 311(2) of

the Constitution.

15. In the case of G.V.ASWATHANARAYANA vs

CENTRAL BANK OF INDIA, BY CHAIRMAN, BOMBAY AND

OTHERS [ILR 2003 KAR 3066] a Division Bench of this Court

has held as under:-

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“20. … A delinquent in a departmental or

domestic enquiry is entitled to demand and receive

two sets of documents, namely, (i) all those

documents on the basis of which the disciplinary

authority has framed the charges and the

documents on which the disciplinary authority

places reliance to prove those charges and (ii) other

documents which may not be the basis for framing

the charges nor those on which the disciplinary

authority places reliance to prove the charges

agaisnt the delinquent, but, they are required by

the delinquent to effectively defend himself in the

enquiry and to effectively cross-examine the

witness of the disciplinary authority. If required

relevant documents are not made available to a

delinquent, it is trite, such delinquent would be

prejudiced greatly in defending himself against the

charge effectively. Departmental/domestic enquiry

in order to be valid, a disciplinary Authority not

only appraise the delinquent precisely and clearly

with the charges levelled against him but also

should supply all necessary information,

particulars and documents that may be required by

the delinquent to defend himself effectively in the

enquiry. If the Court finds that the disciplinary

authority has failed to furnish either of the two sets

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of documents referred to above to a delinquent, it

will be duty bound to step in and interfere with the

disciplinary action taken against such delinquent.”

16. In so far as the law laid down by this Court in

G.V.Aswathanarayana’s case as well as Bhargava’s case is

concerned, they run counter to the law declared by the Apex

Court in Syndicate Banks’ case (referred to supra) as well as

the judgment of the Apex Court in Vijay Kumar Nigam’s case.

17. Ultimately as laid down in all these judgments

there cannot be any hard and fast rule. Whether a document

which is sought for is relevant or not, is to be decided on the

facts of that particular case. Seen from that angle, in the

instant case the Bank relied on 356 documents which are not

disputed. Two witnesses examined by the bank were fully

cross-examined. It is only at the end of the trial, in so far as

the bank is concerned, it was pointed out that out of 14

documents, only 7 documents have been furnished and

remaining 7 documents have not been furnished. Out of the 7

documents which are not furnished, as stated earlier

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documents 1 to 3 are reports. The said documents were not

relied upon by the bank. While preparing the said report no

one was examined and the bank did not rely on such evidence.

Therefore, non-furnishing of the said reports cannot said to be

prejudicially affect the petitioner. In fact, in the written brief

filed nor in the reply to the show cause notice nor in the

memorandum of appeal, such a grievance is made out. That

grievance is made out for the first time in the Writ Petition. In

so far as other 4 documents are concerned, they were not

available. Assuming those documents were relevant, before it

could be held that the enquiry is vitiated, the delinquent has to

show how that document could have helped his defence. Then

the learned single Judge ought to have considered the said

contention with reference to the available evidence on record

and the finding recorded by the enquiry officer as well as the

Appellate Authority and only then if he was of the view that it

was relevant, he could have drawn an adverse inference. Such

an exercise is not done by the learned single Judge. Merely

because the petitioner says it is relevant, he wanted it for

cross-examination and it was not furnished, the enquiry would

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not get vitiated. Therefore the finding recorded by the learned

single Judge that the enquiry is vitiated for non-furnishing of

these 7 documents cannot be sustained and accordingly it is

liable to be set aside.

18. Yet another factor which has weighed with the

learned single Judge was others who were also accused of

misconduct, have been let off with minor punishments.

Therefore, it is clear the misconduct alleged against all of them

is proved. If that is the case, the learned single Judge ought to

have considered the material on record and should have found

out, having regard to the gravity of the misconduct proved

against the petitioner, whether the punishment of removal is

proper or not and he had ample power to decide whether a

lesser punishment could be imposed. That exercise has not

been done by the learned single Judge and therefore that

reasoning cannot be sustained.

19. Yet another reason given is the DRI which had

issued notice has not initiated any action against the Bank and

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on the contrary they have dropped the proceedings. Assuming

it to be true, the result would be one of the charges levelled

against the petitioner has to be dropped. That is not the only

charge levelled against the petitioner. On that ground, the

entire enquiry and the order of removal cannot be set aside.

Seen from that angle, the order passed by the learned single

Judge is unsustainable and requires to be set aside. As the

learned single Judge has not appreciated the case on merits, it

will not be proper for this Court to take upon itself the

responsibility of considering the case of merits for the first

time. Therefore, the proper course would be to set aside the

order of the learned single Judge and remand the matter back

to the learned single Judge to consider the case on merits and

in accordance with law except on the points which are decided

by this Court. That would meet the ends of justice. Hence, we

pass the following order:-

(a) Appeal is allowed.

(b) The impugned order passed by the learned

single Judge is hereby set aside.

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(c) The matter is remitted back to the learned

single Judge for considering the case on

merits and in accordance with law.

(d) In so far as the points which are decided in

this appeal are concerned, they are

concluded and are not to be reopened.

Parties to bear their own costs.

Sd/- JUDGE

Sd/- JUDGE

Dh/ckl/-