# Ramesh Chandra Sharma v. The Punjab National Bank and others

- **Citation:** (2006) 1 ILRA 416
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2006-01-03
- **Case number:** Civil Misc. Writ Petition No. 44373 of 1998
- **Bench:** Dr. B.S. Chauhan, Dilip Gupta
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/ramesh-chandra-sharma-v-the-punjab-national-bank-and-others-40748
- **Pages:** 5

## Headnote

Sri Satish Chaturvedi
Sri K.L. Grover

Bank Officer, Employees (Disciple and
Appeal)
Regulation
Regulation-4readwith circular dated 5.3.99-Dismissal
order petitioner working as managercommitted
certain
financial
irregularities-after serving the charge
sheet disciplinary proceeding concluded
with
punishment
of
dismissal
after
retirement-held-illegal only the Bank can
make recovery of financial loss and to
deprive
from
retirement
benefitdismissal
order
quashed
with
consequential direction.

Held: Para 15

The said circular provides that where the
departmental proceedings are instituted
while a person is in service and the said
proceedings are continuing after he has
reached the age of superannuation, then
none of the penalties as provided under
Regulation
4
of
the
Bank
Officers
Employees
(Discipline
and
Appeal)
Regulations can be imposed at the
conclusion of the proceedings but the
Bank can make recoveries in the event
the officer have been found guilty of
causing monetary loss to the Bank and
also deprive him of retiral benefits to the
permissible extent.
Case law discussed:
AIR 1972 SC-1343
AIR 1973 SC-1403
AIR 1987 SC-229
AIR 1971 SC-2414
2004 (8) SCC-218
AIR 1997 SC-2249
2005 (7) SCC-435
1996 (9) SCC-69
AIR 1987 SC-943
AIR 1988 SC-842
AIR 1989 SC-1843

## Text

416 INDIAN LAW REPORTS ALLAHABAD SERIES [2006
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 03.01.2006

BEFORE
THE HON'BLE DR. B.S. CHAUHAN, J.
THE HON'BLE DILIP GUPTA, J.

Civil Misc. Writ Petition No. 44373 of 1998

Ramesh Chandra Sharma
...Petitioner
Versus
The Punjab National Bank and others

 ...Respondents

Counsel for the Petitioner:
Sri S.N. Pandey
Km. Suman Sirohi

Counsel for the Respondents:
Sri Satish Chaturvedi
Sri K.L. Grover

Bank Officer, Employees (Disciple and
Appeal)
Regulation
Regulation-4readwith circular dated 5.3.99-Dismissal
order petitioner working as managercommitted
certain
financial
irregularities-after serving the charge
sheet disciplinary proceeding concluded
with
punishment
of
dismissal
after
retirement-held-illegal only the Bank can
make recovery of financial loss and to
deprive
from
retirement
benefitdismissal
order
quashed
with
consequential direction.

Held: Para 15

The said circular provides that where the
departmental proceedings are instituted
while a person is in service and the said
proceedings are continuing after he has
reached the age of superannuation, then
none of the penalties as provided under
Regulation
4
of
the
Bank
Officers
Employees
(Discipline
and
Appeal)
Regulations can be imposed at the
conclusion of the proceedings but the
Bank can make recoveries in the event
the officer have been found guilty of
causing monetary loss to the Bank and
also deprive him of retiral benefits to the
permissible extent.
Case law discussed:
AIR 1972 SC-1343
AIR 1973 SC-1403
AIR 1987 SC-229
AIR 1971 SC-2414
2004 (8) SCC-218
AIR 1997 SC-2249
2005 (7) SCC-435
1996 (9) SCC-69
AIR 1987 SC-943
AIR 1988 SC-842
AIR 1989 SC-1843

(Delivered by Hon'ble Dr. B.S. Chauhan, J.)

1. This writ petition has been filed
for quashing the order dated 13th
November, 1997, by which the Zonal
Manager Central, U.P. Zone, Agra of the
Punjab National Bank (hereinafter called
the ''Bank'), imposed the major penalty of
dismissal from service of the Bank and
the appellate order dated 21.10.1998 by
which the appeal filed by the petitioner
against the aforesaid order of dismissal
was dismissed by the Appellate Authority.
A further relief has been sought that a
direction
should
be
issued
to
the
respondents
to
pay
the
post-retiral
benefits to the petitioner.

2. The petitioner, who was working
as a Manager in the Bank, was served
with a charge sheet dated 06.03.1996 for
committing certain lapses. The petitioner
did not submit any statement of defence
even though the time was extended on his
request several times. The disciplinary
proceedings were initiated against the
petitioner vide order dated 23rd April,
1996 and the Inquiry Officer was
appointed. The Inquiry Officer found the
charges proved against the petitioner. The
copy of the enquiry report was thereafter
1 All] Ramesh Chandra Sharma V. The Punjab National Bank and others
417
sent to the petitioner for submission of his
representation. The petitioner submitted
his representation and after considering
the same, the order was passed by the
Disciplinary Authority. It was noticed in
the order that the petitioner had engaged
himself in reckless lending and thereby
violated the lending norms and disbursed
loans through middlemen. He also had
demanded
and
received
an
illegal
gratification from borrowers and failed to
keep the limitation alive in borrowal
accounts and incurred expenses beyond
his vested powers; and on account of his
reckless lending, the Bank had suffered
huge
loss
to
the
extent
of
Rs.1,14,87,164.76 (Rupees One Crore
Fourteen Lacs Eighty Seven Thousands
One Hundred Sixty Four and Paise
Seventy
Six
Only).
The
Appellate
Authority also rejected the appeal filed by
the petitioner. Hence the present petition.

3. We have heard learned counsel
for the petitioner and have perused the
material
available
on
record.
None
appeared for the respondents.

4. Learned counsel for the petitioner
submitted that while enquiring the matter,
the principles of natural justice had been
violated inasmuch as proper opportunity
had not been given to him.

5. We are unable to accept the
aforesaid contention
of the learned
counsel for the petitioner for the simple
reason that, in our opinion, the petitioner
himself avoided appearing before the
Inquiry Officer as is apparent from a bare
perusal of the inquiry report dated 30th
September, 1997, which clearly shows
that in spite of repeated notices informing
the date and venue of the enquiry sent to
the petitioner through registered post as
well as through courier and also through
the messenger, the petitioner did not
respond and so the enquiry was conducted
ex parte. It was only on 24.01.1997 that
the
petitioner
appeared
when
the
presentation by the Presenting Officer
was over and made a request to fix the
next date of enquiry after a week due to
his illness. This request was accepted by
the Inquiry Officer and 13th March, 1997
was fixed but the petitioner again
absented himself as a result of which the
enquiry proceedings were concluded ex
parte on 13th March, 1997. However, on
the request of the petitioner, the Inquiry
Officer granted one more opportunity to
the petitioner and fixed 29th May, 1997.
As the petitioner did not appear on the
said date also, another opportunity was
given by fixing 19th July, 1997. The
petitioner failed to utilize this opportunity
also and informed the Inquiry Officer that
he would not be able to attend as his sonin-law was ill. This request was accepted
by the Inquiry Officer and 2nd August,
1997 was fixed, which was noted by the
petitioner. The petitioner for the reasons
best known to him, did not turn up on the
said date also. The Inquiry Officer
however gave another opportunity to the
petitioner and fixed the enquiry for 19th
August, 1997. The petitioner failed to
utilize
all
these
opportunities
and,
therefore, the Inquiry Officer asked the
Presenting officer to submit his written
brief. The written brief was submitted by
the Presenting Officer and a copy of the
same was then sent to the petitioner for
submitting his reply but the petitioner did
not submit any reply to the same. It is,
therefore, clear that in spite of repeated
opportunities having been given to the
petitioner, he did not avail the same. It is,
thus, not open to the petitioner to now
418 INDIAN LAW REPORTS ALLAHABAD SERIES [2006
contend that proper opportunities had not
been given to him.

6. The charges leveled against the
petitioner, which were found proved upon
enquiry, are quite serious in nature. The
petitioner had engaged himself in reckless
lending causing huge financial loss to the
Bank to the extent of Rs.1,14,87,164,76.
It also shows that the petitioner had
disbursed loan through middlemen and
demanded
and
received
illegal
gratification from a borrower. We are of
the considered opinion that in such cases,
the officers of the Bank should not be
permitted to continue in service at all.

7. 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. A necessary implication which
must be engrafted on the contract of
service is that the servant must undertake
to serve his master with good faith and
fidelity. In a case of loss of confidence,
reinstatement
cannot
be
directed.
Granting such an employee the relief of
reinstatement would be "an act of
misplaced sympathy which can find no
foundation in law or in equity." (Vide Air
India Corporation Bombay Vs. V.A.
Ravellow, AIR 1972 SC 1343; The Binny
Ltd. Vs. Their Workmen, AIR 1973 SC
1403; Kamal Kishore Lakshman Vs.
Management of M/s. Pan American
World Airways Inc & Ors., AIR 1987 SC
229; Francis Kalein & Co. Pvt. Ltd. Vs.
Their Workmen, AIR 1971 SC 2414;
Regional Manager, Rajasthan SRTC Vs.
Sohan Lal, (2004) 8 SCC 218; and Bharat
Heavy
Electricals
Ltd.
Vs.
M.
Chandrashekhar Reddy & Ors., 2005 AIR
SCW 1232).

8. In Kanhaiyalal Agrawal & Ors.
Vs. Factory Manager, Gwaliar Sugar Co.
Ltd., (2001) 9 SCC 609, the Hon'ble
Supreme 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, (i) the
workman is holding the position of trust
and confidence; (ii) by abusing such
position, he commits 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.

9. In Sudhir Vishnu Panvalkar Vs.
Bank of India, AIR 1997 SC 2249, the
Apex Court while dealing with the issue
in hand, held that in certain cases, where
there is sufficient material available
against the employee and is a case of loss
of confidence, even the formal enquiry is
not required. However, in Chandu Lal Vs.
The Management of M/s. Pan American
World Airways Inc., AIR 1985 SC 1128,
the
Apex
Court
held
that
where
termination on the ground of loss of
confidence casts stigma, enquiry must be
held.

10. Be that as it may, in the instant
case, regular inquiry has been conducted.
1 All] Ramesh Chandra Sharma V. The Punjab National Bank and others
419
In State Bank of India Vs. Bela
Bagchi & Ors., (2005) 7 SCC 435, the
Hon'ble Supreme 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, particularly, in the services of
the financial institutions where the higher
standard of honesty and integrity is
required as he has to deal with the money
of the depositors and the customers.
Every 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
employee of the Bank. Whether the
charges are of the grave nature and not
merely casual, the major punishment is to
be inflicted even if there is absence of
pecuniary loss to the Bank. While
deciding the said case, reliance has been
placed upon its earlier judgment in
Disciplinary
Authority-cum-Regional
Manager Vs. Nikunja Bihari Patnaik,
(1996) 9 SCC 69.

11. In view of the above, we are not
in a position to accept the submissions on
behalf of the petitioner that in such a fact
situation punishment of dismissal from
service is not warranted.

12. Learned counsel for the
petitioner then contended that as the
petitioner had attained the age of
superannuation and stood retired on
31.01.1997, the order of dismissal from
services
of
the
Bank
was
wholly
unjustified
and
in
support
of
this
contention,
learned
counsel
for the
petitioner
placed
reliance
upon
the
decision of the Hon'ble Supreme Court in
State of Uttar Pradesh Vs. Shri Brahm
Datt Sharma & Anr., AIR 1987 SC 943
wherein it had been held that if the
disciplinary
proceedings
against
an
employee of the Government are initiated
in respect of misconduct committed by
him and he retires from service on
attaining the age of superannuation,
before the completion of the proceedings,
it is open to the State Government to
direct deduction from his pension on the
proof of allegations made against him.
However,
if
the
charges
are
not
established in disciplinary proceedings or
the disciplinary proceedings are quashed,
it is not permissible to the State
Government
to
direct
deduction
in
pension
on
the
same
allegations.
However, if the charges of misconduct
have been of serious nature and are
established and have bearing on the
question
of
rendering
efficient
and
satisfactory service, it would be open for
the Government to proceed against him in
accordance with law and to reduce his
pension and gratuity to the extent
demanded by the facts of a particular
case.

13. This proposition is worth
acceptance. The same view has been
reiterated by the Hon'ble Apex Court in
M. Narasimhachar Vs. The State of
Mysore, AIR 1960 SC 247; State of
Maharastra Vs. M.H. Mazumdar, AIR
1988 SC 842; and Takhatray Shivadattray
Mankad Vs. State of Gujarat, AIR 1989
SC 1843, while interpreting similar
provisions applicable in the cases.

14. Thus, in view of the above, it
can be held that once a person retires on
reaching the age of superannuating,
420 INDIAN LAW REPORTS ALLAHABAD SERIES [2006
punishment of dismissal or removal
cannot be imposed and the only option
left to the employer is to continue with the
enquiry initiated earlier when he was in
service, to reach its logical conclusion and
pass an order of withholding the retiral
benefits fully or to certain extent as per
the facts of the case applying the Rules
involved therein.

15. In the present case, admittedly, it
was not permissible for the respondents to
pass the order of dismissal after the
petitioner
had
reached
the age of
superannuation. Question of such an order
does not arise as the employee is no more
in service. He gets pension and other
retiral benefits for the services rendered
by him. However, in the counter affidavit,
the respondents have explained the order
by contending that the punishment of
dismissal results in legal consequences,
i.e. the punished employee is deprived of
pension, gratuity and leave encashment as
per the provisions of Punjab National
Bank
(Officers)
Service
Regulations
1977. The respondents have also filed a
copy of the Circular dated 5th March,
1999, though subsequent to the order
imposing punishment and the order of the
Appellate
Authority
is
relevant
to
determine
the
controversy.
Learned
counsel for the petitioner has insisted that
his case is to be considered under the said
circular. The said circular provides that
where the departmental proceedings are
instituted while a person is in service and
the said proceedings are continuing after
he has reached the age of superannuation,
then none of the penalties as provided
under Regulation 4 of the Bank Officers
Employees
(Discipline
and
Appeal)
Regulations can be imposed at the
conclusion of the proceedings but the
Bank can make recoveries in the event the
officer have been found guilty of causing
monetary loss to the Bank and also
deprive him of retiral benefits to the
permissible extent.

16. In view of the above, it may be
desirable that the matter be remanded to
the respondent authorities to pass an
appropriate
order
setting
aside
the
impugned orders. However, considering
the fact that the matter is pending since
long and in order to bring the litigation to
an end and considering the gravity of the
charges and financial loss suffered by the
Bank, we substitute the order of dismissal
by the order of withholding all retiral
benefits as has been explained in the
counter affidavit. However, no recovery
of the loss to the Bank to the tune of
Rs.1,14, 87,164.76 shall be made from
him.

Petition is disposed of accordingly.
---------
ORIGINAL JURISDICION
CIVIL SIDE
DATED: ALLAHABAD 12.09.2005

BEFORE
THE HON'BLE R.K. AGRAWAL, J.
THE HON'BLE (MRS.) M. CHAUDHARY, J.

Civil Misc. Writ Petition No. 30281 of 2003

Sangam
Eent
Nirmata
Samiti
and
another

 ...Petitioners
Versus
Zila panchayat Allahabad and others

 ...Respondents

Counsel for the Petitioner:
Sri R.N. Singh
Sri Vishnu Behari Tewari

Counsel for the Respondent:
Sri W.H. Khan
Sri A. Singh