# Santosh Kumar Shukla 3531 S/S2000 v. Syndicate Bank & Ors

- **Citation:** (2023) 3 ILRA 104
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-02-07
- **Case number:** Special Appeal No. 328 of 2014
- **Bench:** Ramesh Sinha, Subhash Vidyarthi
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/santosh-kumar-shukla-3531-s-s2000-v-syndicate-bank-ors-49766
- **Pages:** 7

## Headnote

A. Service Law - Dismissal - If the rules
for granting the advance themselves
provided the consequence of the breach of
conditions, it would be idle to go in search
of any other consequence by initiating any
disciplinary action in that behalf unless
the 1975 Rules specifically incorporate a
rule that the breach of House Building
Advance Rules would by itself constitute a
misconduct. Seeking advance and granting the
same under relevant rules, is at best a loan
transaction. The transaction may itself provide
for repayment and the consequence of failure to
repay or to abide by the rules. Any attempt to
go in search of a possible other consequence of
breach of contract itself appears to be arbitrary
and even motivated. (Para 20)

In the present case, the appellant had taken a
Housing Loan from the Bank under which he
was employed as an Attendant which is a ClassIV post. The loan was granted in the year 1988.
The rate of interest payable by the appellant
was 5% per annum. The loan of Rs.75,000/-
was payable in 24 years in monthly installment
of Rs.357.15/-, which installments continued to
be deducted from the appellant's salary or from
his subsistence allowance during the period of
his suspension and the entire loan amount has
been repaid. (Para 21)

-
The entire Housing Loan has been repaid by
the appellant, no loss has been occasioned
to the Bank by the appellant having sold
away the house and, therefore, the finding
3 All. Santosh Kumar Shukla 3531 S/S2000 Vs. Syndicate Bank & Ors.
105
-
that a serious loss was caused to the Bank
by the conduct of the appellant in selling
away the property, is not supported by the
material available on record and is not
sustainable.
-
The observation that the property had been
sold without permission of the Bank is
correct, but the observation that the same
was done without knowledge of the Bank, is
incorrect
as
from
the
letter
dated
27.10.1989, the appellant had informed the
Assistant General Manager of the Bank
confessing his guilt of making embezzlement
of Rs.3,40,700/- and that he would repay
the aforesaid amount of the Bank by selling
away the house constructed by him and by
collecting money from other sources as well.
(Para 22, 25)
-
Appellant's conduct has been alleged to be
in violation of Clause 19.5(J) of the Bipartite
Agreement amounting to misconduct. The
alleged Bipartite Agreement has not been
placed on record and there is nothing on
record to indicate that the appellant was a
party to the agreement or the conditions of
the agreement were otherwise binding on
the applicant. Moreover, assuming the
conditions of the Bipartite Agreement were
binding on the appellant, the breach of the
conditions of the agreement cannot amount
to a misconduct warranting disciplinary
action as an agreement cannot be equated
as Disciplinary Rules or Regulations through
which penal consequences may be imposed
upon an employee. (Para 24)
-
The charge sheet did not contain a charge
that any loss was caused to the Bank by the
conduct of the appellant. (Para 25)

Special appeal allowed. (E-4)

Precedent followed:

## Text

104 INDIAN LAW REPORTS ALLAHABAD SERIES
followed the mandate of the proviso
appended to the Regulation 5(2) of the
Regulations by not consulting the Central
Government.

39. There is yet another issue which
we notice and that is in relation to the
ambiguity which exists in the proviso
appended to Regulation 5(2) of the
Regulations. If we peruse the said proviso
with care and precision, what we find is
that the earlier part of the proviso states
that the Commission will take a decision in
its discretion to lower the minimum marks
in
consultation
with
the
Central
Government, however, the later part of the
said proviso itself states that marks so
lowered by the Central Government shall
be
applicable.
Thus
the
ambiguous
language in which the proviso is couched
has the potential of creating confusion in as
much as it is not clear as to in the matter of
lowering the cut-off marks for admission
which
is
the
final
authority,
the
Commission or the Government of India.

40. We thus call upon the Commission
and the Government of India in the
concerned department and ministry to look
into the aforesaid aspect of the matter and
take corrective measures so that ambiguity
which we have noticed in the proviso
appended to Regulation 5(2) of the
Regulations and its earlier and later parts
may be reconciled.

41. There will be no orders as to costs.
----------
(2023) 3 ILRA 104
APPELLATE JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 07.02.2023

BEFORE

THE HON'BLE RAMESH SINHA, J.
HON'BLE SUBHASH VIDYARTHI, J.

Special Appeal No. 328 of 2014

Santosh Kumar Shukla 3531 S/S2000
 ...Appellant
Versus
Syndicate Bank & Ors. ...Respondents

Counsel for the Appellant:
Mahendra
Pratap
Singh,
Anuj
Dayal,
Mahendra Bahadur Singh

Counsel for the Respondents:
Gopal Kumar Srivastava

A. Service Law - Dismissal - If the rules
for granting the advance themselves
provided the consequence of the breach of
conditions, it would be idle to go in search
of any other consequence by initiating any
disciplinary action in that behalf unless
the 1975 Rules specifically incorporate a
rule that the breach of House Building
Advance Rules would by itself constitute a
misconduct. Seeking advance and granting the
same under relevant rules, is at best a loan
transaction. The transaction may itself provide
for repayment and the consequence of failure to
repay or to abide by the rules. Any attempt to
go in search of a possible other consequence of
breach of contract itself appears to be arbitrary
and even motivated. (Para 20)

In the present case, the appellant had taken a
Housing Loan from the Bank under which he
was employed as an Attendant which is a ClassIV post. The loan was granted in the year 1988.
The rate of interest payable by the appellant
was 5% per annum. The loan of Rs.75,000/-
was payable in 24 years in monthly installment
of Rs.357.15/-, which installments continued to
be deducted from the appellant's salary or from
his subsistence allowance during the period of
his suspension and the entire loan amount has
been repaid. (Para 21)

-
The entire Housing Loan has been repaid by
the appellant, no loss has been occasioned
to the Bank by the appellant having sold
away the house and, therefore, the finding
3 All. Santosh Kumar Shukla 3531 S/S2000 Vs. Syndicate Bank & Ors.
105
-
that a serious loss was caused to the Bank
by the conduct of the appellant in selling
away the property, is not supported by the
material available on record and is not
sustainable.
-
The observation that the property had been
sold without permission of the Bank is
correct, but the observation that the same
was done without knowledge of the Bank, is
incorrect
as
from
the
letter
dated
27.10.1989, the appellant had informed the
Assistant General Manager of the Bank
confessing his guilt of making embezzlement
of Rs.3,40,700/- and that he would repay
the aforesaid amount of the Bank by selling
away the house constructed by him and by
collecting money from other sources as well.
(Para 22, 25)
-
Appellant's conduct has been alleged to be
in violation of Clause 19.5(J) of the Bipartite
Agreement amounting to misconduct. The
alleged Bipartite Agreement has not been
placed on record and there is nothing on
record to indicate that the appellant was a
party to the agreement or the conditions of
the agreement were otherwise binding on
the applicant. Moreover, assuming the
conditions of the Bipartite Agreement were
binding on the appellant, the breach of the
conditions of the agreement cannot amount
to a misconduct warranting disciplinary
action as an agreement cannot be equated
as Disciplinary Rules or Regulations through
which penal consequences may be imposed
upon an employee. (Para 24)
-
The charge sheet did not contain a charge
that any loss was caused to the Bank by the
conduct of the appellant. (Para 25)

Special appeal allowed. (E-4)

Precedent followed:

1. Divisional Controller, KSRTC (NWKRTC) Vs
A.T. Mane, (2005) 3 SCC 254 (Para 17)

2. A.L. Kalara Vs The Project & Equipment Corp.
of India Ltd., (1994) 3 SCC 316 (Para 20)

Precedent distinguished:

S.B.I. & anr. Vs Bela Bagchi & ors., (2005) 7
SCC 435 (Para 15)
Present special appeal challenges the
judgment and order dated 04.06.2014,
passed
by
learned
Single
Judge,
dismissing the Writ Petition No.3531 of
2000, which was filed by the appellant
challenging his dismissal from services by
means of an order dated 30.09.1999, as
also the Appellate order dated 20.03.2000.

(Delivered by Hon'ble Ramesh Sinha, J.
&
Hon'ble Subhash Vidyarthi, J.)

(1) Heard Shri Anuj Dayal, learned
counsel for the appellant and Shri Gopal
Kumar Srivastava, learned counsel for
respondent.

(2) The instant Special Appeal has
been filed by the appellant against the
judgment and order dated 04.06.2014
passed by learned Single Judge, dismissing
the Writ Petition No.3531 of 2000, which
was filed by the appellant challenging his
dismissal from services by means of an
order dated 30.09.1999, as also the
Appellate order dated 20.03.2000.

(3) Briefly stated, the facts of the case
are that the appellant was appointed as an
Attendant in Syndicate Bank on a Class-IV
post on 01.05.1982 and after successfully
completing the period of probation, his
services were confirmed. The appellant had
applied for a Staff Housing Loan of
Rs.75,000/-, which was granted to him and
the loan amount was payable along with
interest of 5% per year in 24 years by
paying monthly installment of Rs.357.15/-.
The appellant had purchased a plot from
Lucknow Development Authority for a
consideration of Rs.35,000/- and the
appellant was delivered the physical
possession of the plot on 18.01.1989.
Thereafter, the appellant submitted a
building plan to construct a house over the
106 INDIAN LAW REPORTS ALLAHABAD SERIES
said plot and the permission was granted to
him vide order dated 10.03.1989. The
appellant then was placed under suspension
by means of an order dated 31.10.1989.

(4) On 06.08.1998 a charge sheet was
issued to the appellant stating that he had
sold away the property that was purchased
by him after taking a Housing Loan from
the Bank, without repaying the loan amount
and without seeking permission from the
Bank, in violation of the Employee
Housing Loan Scheme. The charge sheet
alleged that the aforesaid act of the
appellant violated the Clause 19.5 of the
Bipartite
Agreement.
The
appellant
submitted a reply denying the charges. The
Enquiry Officer found the charges levelled
against the appellant as conclusively
proved and thereafter on 30.09.1999, an
order was passed dismissing the appellant
from the Bank's services.

(5) The appellant filed an appeal
against
the
dismissal
order
dated
30.09.1999 which was dismissed by means
of an order dated 20.03.2000.

(6) The aforesaid order has been
challenged by filing Writ Petition No.3531
(S/S) of 2000 and on 13.07.2000, an
interim order was passed whereby the
dismissal order dated 30.09.1999 and the
Appellate order dated 20.03.2000 were
stayed.

(7) The respondent- Bank filed
Special Appeal No.227 of 2000 against the
interim order dated 13.07.2000 and in
appeal, the interim order was modified to
the effect that as the appellant had been
convicted in a criminal case, he shall not be
reinstated, but he shall be paid his salary
regularly.

(8) Shri Anuj Dayal, learned counsel
for the appellant has submitted that the
appellant had taken a Housing Loan and he
had purchased a residential plot from
Lucknow Development Authority
and
possession of the plot was delivered to him.
The appellant thereafter
submitted a
building plan to the Lucknow Development
Authority and the Authority sanctioned the
plan
by means
of
an
order dated
10.03.1989. He constructed a house on the
plot from the said loan. On 31.10.1989, the
petitioner was placed under suspension and
on 09.03.1990, he had met with an accident
causing grievous head injuries to him. The
appellant was then admitted in the Civil
Hospital, Lucknow and thereafter he was
shifted to Sanjay Gandhi Postgraduate
Institute of Medical Sciences, Lucknow,
where he had to undergo a major surgical
operation and he had to incur expenses for
his treatment. For meeting out his medical
expenses, the appellant had to borrow
Rs.20,000/- from one Mr. Abdul Sageer
Siddiqee and when the appellant could not
repay the loan taken from Mr. Siddiqee, he
pressurized the appellant to sell the plot and
the house in favour of Smt. Sireen Rahman
for a sale consideration of Rs.1,25,000/-.
Mr. Siddiqee had handed over post-dated
cheques towards the sale consideration of
the property. However, the cheques were
dishonoured. The appellant had to file a
Regular Suit No.27 of 1991 in the Court of
Civil Judge, Lucknow and ultimately, a
compromise took place between them. It
has been pleaded in the writ petition that
the appellant had sold the property in
compelling circumstances.

(9) Shri Dayal has drawn attention of
this Court to the pleadings made in the
appeal to the effect that the appellant had
been suspended in a different matter by
means of order dated 31.10.1981 and his
3 All. Santosh Kumar Shukla 3531 S/S2000 Vs. Syndicate Bank & Ors.
107
suspension was revoked by means of an
order dated 03.06.1998 and the appellant
was reinstated in service and during the
entire period the monthly installment
towards the repayment of loan continued to
be deducted from the salary of the appellant
or from the subsistence allowance paid to
him. After his reinstatement the appellant
filed a representation claiming payment of
arrears of salary as well as revision and
fixation of his pay and, it was only
thereafter that the appellant was issued a
charge sheet dated 06.08.1998 stating that
he had sold away the property that had
been purchased after taking the Housing
Loan from the Bank and he had earned
profit at the cost of the Bank.

(10) Thus, it is evident that no loss
was occasioned to the Bank by any act of
the appellant as he had not misappropriated
the loan amount. The loan was to be repaid
in monthly installment in 24 years of
Rs.357.15, which amount continued to be
deducted regularly from the salary of the
appellant and within the entire year loan
amount has been repaid by the appellant.

(11) The learned Single Judge
dismissed the Writ Petition filed by the
appellant holding that the appellant had
misutilized the funds of the Bank for
personal gain as he had not created
equitable
mortgage
in
the
property
purchased out of the funds lent to him and
the property was sold by him without
permission and knowledge of the Bank.
The learned Single Judge held that the
conduct of the appellant in selling the
property and making profit, amounted to
mis-utilization of the Bank's funds causing
serious loss to the Bank.

(12) While challenging the aforesaid
order passed by the learned Single Judge,
Shri Anuj Dayal, the learned counsel for
the appellant has submitted that there was
no allegation that any loss had been caused
to the Bank by any act of the appellant and
there was no material placed on record to
prove any loss having been occasioned to
the Bank. He has submitted that the
findings of learned Single Judge, that
serious loss had been caused to the Bank by
the alleged conduct of the appellant, was
not supported by any material.

(13) He has further submitted that he
does not dispute the fact that selling away
the property, which had been purchased
from the Housing Loan given by the Bank,
was not an appropriate conduct, but still,
the consequence of this impropriety could
be as per the conditions of the loan
agreement only and such an act could not
have been a foundation for the disciplinary
proceedings leading to the appellant's
dismissal from the services.

(14) Per contra, Shri Gopal Kumar
Srivastava,
learned
counsel
for
the
respondent has vehemently opposed the
Special Appeal and he has submitted that
the appellant was an employee of the Bank
and any misconduct committed by a Bank's
employee
having
adverse
financial
implications on the Bank, has to be dealt
with seriousness. He has submitted that
being a Bank employee the Housing Loan
was granted to the appellant at a low
interest of 2-2.5% and the appellant had
availed the Housing Loan with an intention
of selling away the house to earn profit and
by this conduct of the appellant, the Bank
has suffered loss.

(15) He has relied upon a decision of
the Apex Court in the case of State Bank
of India and Anr. vs. Bela Bagchi and
Ors.; (2005) 7 SCC 435, which arose out
108 INDIAN LAW REPORTS ALLAHABAD SERIES
of an order of dismissal of an employee of
a Bank on the allegations that the employee
had received money from an account
holder for depositing in his Savings Bank
Account, but she did not do so and made a
fictitious credit entry in the pass-book of
the account holder. Similar misconduct was
repeated by a Bank employee on several
other occasions. In the aforesaid factual
backdrops, the Apex Court has held that "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 68,
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 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
charge
against
the
employee were not casual in nature and
were serious."

(16) However, the aforesaid dictum
of the Apex Court is not applicable to the
present case, as there is no allegation of
misconduct having been committed by
the appellant while discharging his duties
as an employee of the Bank. There is no
allegation
of
any
embezzlement
committed by the appellant. The sole
allegation against the appellant is that he
took a Housing Loan from the Bank, in
which he was employed, and he sold
away the house without prior permission
of the Bank. There is even no allegation
of non-payment of the money borrowed
by the appellant from the Bank. The loan
has been repaid as per the schedule and
the Bank did not even an occasion to
issue a demand notice for repayment of
the loan, what to say about initiating any
proceedings against the appellant for
recovery of the loan amount. Therefore,
the aforesaid decision of Bela Bagchi
(supra) is of no avail to the respondent/
Bank in the present case.

(17) Shri Srivastava has next relied
upon the judgment of Supreme Court in
the
case
of
Divisional
Controller,
KSRTC (NWKRTC) vs. A.T. Mane;
(2005) 3 SCC 254, wherein the Apex
Court
upheld
dismissal
of
a
bus
conductor on the ground that on a
surprise check he was found to be in
possession of unaccounted money of
Rs.93/- over and above the amount of
equivalent to the tickets issued by him.
This decision also has no application to
the facts of the present case.

(18) A copy of the loan agreement
executed between the appellant and the
respondent/ Bank indicates that it contained
a condition that "The employee shall not
sell the house without the previous
permission of the Bank. If he/she sells the
house, with or without the permission of the
Bank or allows or suffer the house to be
sold in execution of any decree against
him/her the entire loan or so much thereof
as may than remain unpaid shall become
immediately payable on the date on which
the sale is completed."
3 All. Santosh Kumar Shukla 3531 S/S2000 Vs. Syndicate Bank & Ors.
109

(19) From the aforesaid condition it
appears that although there was a condition
that the borrower will not sell the property
without prior permission of the respondent,
the
consequences
of
sale
without
permission was also provided in the loan
agreement and, therefore, it was open for
the respondent to have proceeded against
the appellant for breach of conditions of
loan agreement in accordance with the
provisions of the agreement itself.

(20) Shri Anuj Dayal, the learned
counsel for the appellant has placed before
us a judgment of the Apex Court in the case
of A.L. Kalara vs. The Project &
Equipment
Corporation
of
India
Limited; (1984) 3 SCC 316, wherein the
Apex Court held that "If the rules for
granting the advance themselves provided
the
consequence
of
the
breach
of
conditions, it would be idle to go in search
of any other consequence by initiating any
disciplinary action in that behalf unless the
1975 Rules specifically incorporate a rule
that the breach of House Building Advance
Rules
would
by
itself
constitute
a
misconduct. That is not the case here as
will be presently pointed out. Seeking
advance and granting the same under
relevant rules, is at best a loan transaction.
The transaction may itself provide for
repayment and the consequence of failure
to repay or to abide by the rules. That has
been done in this case. Any attempt to go in
search of a possible other consequence of
breach of contract itself appears to be
arbitrary and even motivated."

(21) When we examine the facts and
circumstances of the present case in light of
the aforesaid law laid down by the Apex
Court, we find that the appellant had taken
a Housing Loan from the Bank under
which he was employed as an Attendant
which is a Class-IV post. The loan was
granted in the year 1988. The rate of
interest payable by the appellant was 5%
per annum, and not 2-2.5% per annum as
submitted by Shri Gopal Kumar Srivastava,
the learned counsel for respondent-Bank.
The loan of Rs.75,000/- was payable in 24
years in monthly installment of Rs.357.15/-
, which installments continued to be
deducted from the appellant's salary or
from his subsistence allowance during the
period of his suspension and the entire loan
amount has been repaid.

(22) Shri Gopal Kumar Srivastava,
learned counsel for the respondent/ Bank
has drawn attention to a letter dated
27.10.1989, which was sent by the
appellant to the Assistant General Manager
of the Bank confessing his guilt of making
embezzlement of Rs.3,40,700/- and the
appellant had written that he would repay
the aforesaid amount of the Bank by selling
away the house constructed by him and by
collecting money from other sources as
well, through which he has tried to impress
upon this Court that the appellant had
intended to sell away the house even in the
year 1989. However, from the perusal of
the aforesaid letter indicates that the
appellant had brought it to the knowledge
of the Bank by means of his letter dated
27.10.1989 that he intended to sell his
house and, therefore, the observation of the
learned Single Judge that "the property was
sold to third party without permission and
knowledge of the Bank" is incorrect.

(23) Although Shri Srivastava has
vehemently argued that the appellant's conduct
has resulted in financial loss to the respondent/
Bank, but neither the charge sheet issued to the
appellant contains any such charge, nor has any
other material been brought on record before
this Court to substantiate the submission of Shri
110 INDIAN LAW REPORTS ALLAHABAD SERIES
Srivastava that the Bank has suffered any
financial loss due to the conduct of the
appellant. The Bank had created a Housing
Loan, also on certain terms and conditions
evident from the loan agreement. At the most,
by selling the house purchased / constructed by
the money borrowed from the Bank, the
appellant has committed a breach of the
conditions of the loan agreement but the Bank
chose not to take any action for enforcement of
the conditions of the agreement. The Bank
continued to receive repayment of the loan by
making deductions of the amount of monthly
installment towards the repayment of the loan
from the salary or the subsistence allowance
paid to the appellant, for the entire duration of
24 years till the complete loan amount was
repaid to the Bank.

(24) Shri Srivastava has submitted that
the appellant's conduct is in violation of
Clause 19.5 of the Bipartite Agreement and it
amounts to a misconduct as per Clause
19.5(J) of the Bipartite Agreement. The
alleged Bipartite Agreement has not been
placed on record and there is nothing on
record to indicate that the appellant was a
party to the agreement or the conditions of
the agreement were otherwise binding on the
applicant. Moreover, assuming the conditions
of the Bipartite Agreement were binding on
the appellant, the breach of the conditions of
the
agreement
cannot
amount
to
a
misconduct warranting disciplinary action as
an
agreement
cannot
be
equated
as
Disciplinary Rules or Regulations through
which penal consequences may be imposed
upon an employee.

(25) In view of the aforesaid discussions,
we are of the view that the entire Housing
Loan has been repaid by the appellant, no loss
has been occasioned to the Bank by the
appellant having sold away the house and,
therefore, the finding of the Hon'ble Single
Judge that a serious loss was caused to the
Bank by the conduct of the appellant in selling
away the property, is not supported by the
material available on record and is not
sustainable. The observation of the Hon'ble
Single Judge that the property had been sold
without permission of the Bank is correct, but
the observation that the same was done
without knowledge of the Bank, is incorrect as
from the letter dated 27.10.1989, the appellant
had informed the Bank that he would repay
the Bank's money after selling away the house.
Moreover, the charge sheet did not contain a
charge that any loss was caused to the Bank by
the conduct of the appellant and there is
nothing on record to support the finding of the
Hon'ble Single Judge that serious loss was
caused to the Bank by the conduct of the
petitioner.

(26) In view of the aforesaid discussions
the instant Special Appeal is allowed. The
judgment and order dated 04.06.2014 is
hereby set aside and the Writ Petition No.3531
of 2000 is allowed. The dismissal order dated
30.09.1999 and the Appellate order dated
20.03.2000 is hereby quashed.

(27) All the necessary consequences
shall follow. However, there will be no order
as to costs.
----------
(2023) 3 ILRA 110
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 15.03.2023

BEFORE

THE HON'BLE KARUNESH SINGH PAWAR, J.

Writ A No. 577 of 2011

Durga Prasad Pathak ...Petitioner
Versus
State of U.P. ...Respondent