2017 Supreme(SC) 1158

SUPREME COURT OF INDIA
ARUN MISHRA, MOHAN M. SHANTANAGOUDAR, JJ.
CANARA BANK AND ANOTHER – APPELLANTS
VERSUS
LALIT POPLI (DEAD) THROUGH LRS. – RESPONDENTS
CIVIL APPEAL NO. 9666 OF 2010
Decided On : 06-12-2017

IMPORTANT POINT
Loss to the bank has to be recovered from author of the forgery and not from them who were merely negligent.
Dismissal disentitles gratuity.
When an employee is dismissed for misconduct, bank can recover the loss from its contribution to employee’s provident fund.

Headnote:Service law – Disciplinary proceeding – Dismissal – Loss to the bank due to forgery in customer’s account – Recovery from author of the forgery – Instantly respondent’s dismissal upheld by Supreme Court finding him author of the forgery – Other three officials guilty of negligence and imposed punishment of censure – Amount of loss could not be recovered from them – Rule 12, Canara Bank Employees’ Gratuity Fund Rules; Clause 19, Canara Bank Staff Provident Fund Regulations, 1994; and Rule 3(4), Chapter VIII, General Conduct Rules – Respondent not entitled to gratuity on dismissal – Similarly, Bank entitled to recxiver loss from its contribution to respondent’s provident fund – Bank rightly recovering the loss from dues of respondent. (Para 6, 8)

       (2003) 3 SCC 583 – Referred

       Facts of the case:

       The respondent – Lalit Popli, now dead, was employed as a clerk in appellant bank and was dismissed from service on 30.06.1995, having been found guilty of fraudulently withdrawing an amount of Rs.1,07,000/-from the saving account of a customer.

       The Manager of the Bank (Shri Meenakshisundaram), an officer (Shri S.S. Bhutani) as well as Special Assistant (Shri Rakesh Tyagi) was also indicted and they were also found guilty of negligence in relation to the very same incident. The disciplinary authority awarded the punishment of ‘censure’ to Shri Meenakshisundaram and ordered recovery of Rs.77,000/-from him. Likewise, the disciplinary authority by its order dated 23rd January, 1995 awarded the punishment of ‘censure’ to Shri S.S. Bhutani and Shri Rakesh Tyagi and ordered recovery of Rs.15,000/-from each of them. The appeals filed by the said three employees challenging the orders of the disciplinary authority were also dismissed and they did not carry the matter any further and they deposited the amount, as ordered against them.

       Insofar as the respondent – Lalit Popli is concerned, the disciplinary authority awarded the punishment of ‘dismissal from service’.

       The respondent’s Writ Petition (Civil) came to be allowed by Single Judge of the High Court and the order of dismissal was set aside.

       During the pendency of the Letters Patent Appeal before the High Court, it was decided by the bank to withhold an amount of Rs.74,180.09, payable to the respondent, which included the gratuity and provident fund(employer’s contribution) and to keep the same in a fixed deposit with a view to adjust the said amount towards any loss caused to the bank by the respondent. LPA was allowed by the Division Bench of the High Court and the order of dismissal was restored. Further appeal by the respondent was dismissed by Supreme Court.

       The respondent made number of representations to the bank to release the amount of gratuity and the employer’s contribution towards provident fund, which was held up by the bank, by pointing out that the bank had already recovered the entire amount of loss caused to the bank from the other three employees, and therefore it was not justified on the part of the bank in withholding the terminal benefits payable to the respondent. The bank passed an order to recover Rs.1,07,000/-from the respondent and therefore the bank adjusted Rs.1,07,000/-out of Rs.1,08,923/-(the maturity value of Rs.74,180.09), towards loss caused to the bank by the respondent and remaining amount of Rs.1,923/- was released in favour of the respondent.

       The respondent approached the High Court and his petition came to be allowed by the Single Judge of the High Court. The order of the Single Judge is affirmed by the Division Bench of the High Court.

       Finding of the Court:

       Bank rightly recovered the loss from dues of respondent.

       Result: Appeal allowed.