JUDGMENT :

S. RAVINDRA BHAT, J.

1. The appellant (hereafter called “the bank”) is aggrieved by a judgment of the Calcutta High Court¹ [Dated 16.12.2008 in FMA No. 2696/2007]. By the impugned judgment, the division bench set aside the decision of a learned single judge of the High Court; the single judge had dismissed the challenge by the respondent (writ petitioner- hereafter called “the employee”) to his dismissal from the bank’s service.

2. The employee was initially appointed as a cashier-cum-clerk by the bank, on 18.01.1971. Later, he was promoted to Junior Management Officer Grade Scale-1. He served as branch manager of the bank’s Chandabila branch from 14.12.1988 to 30.05.1990. Disciplinary proceedings were initiated against him when a charge sheet on 23.10.1997 alleging his complicity in five major charges (stated in paragraph 15 below) was issued by the bank. The charge sheet was issued seven years after he was transferred from the Chandabila branch. During this time several audits were conducted in terms of the norms stipulated by the Reserve Bank of India.

3. The allegations against the employee pertained to the period when he was posted as Manager in the said Chandabila branch. The charge sheet alleged that he disbursed loan in favour of twelve fictitious persons in connection with the Integrated Rural Development Project (hereafter called “IRDP”) introduced by the Central Government. The loan had two components wherein 50% i.e. Rs. 5,000/- was repayable term and the remaining 50% i.e. Rs. 5,000/- was subsidy. In terms of the scheme, 93 applications were received which were to be examined and the applicants identified on the basis of joint inspection by the bank and the Gram Panchayat concerned. Once the identified applications were forwarded to the District Rural Development Agency (hereafter called “DRDA”) the latter had to submit the subsidy amount. The bank alleged that the applications were forwarded to DRDA which in turn released Rs. 4,68,833/- towards subsidy. However, the bank’s subsidy register reflected only Rs. 4,08,833/-, and did not reflect the remainder of Rs. 60,000/- along with the names of the twelve beneficiaries who purportedly received the said amount. The bank also alleged that the loan register showed that the loan and the subsidy was given to twelve beneficiaries against SSI Account Nos. 45/90 - 56/90. The employee/respondent denied the allegations. Other charges were that the employee, in connivance with another employee, deliberately ensured that the relevant papers were missing; more seriously it was alleged that the amount of Rs. 60,000/- forming the subsidy component (of the total Rs. 1,20,000/- disbursed to the beneficiaries) was misappropriated. The employee denied these allegations. The bank proceeded to conduct an enquiry.

4. The enquiry officer submitted his report on 05.05.2001. The report, inter-alia, held that Sri. Haradhan Bera, Pradhan of Chandabila Gram Panchyat, identified those persons claiming to be beneficiaries, in the enquiry. The enquiry officer relied on the evidence of seven beneficiaries, who deposed that no loan amount was disbursed, and that they had not received any reminder or letter from the bank, regarding return of loan amount and had not affixed their thumb impressions on the forms. The report also indicted the employee/ respondent for transferring the amounts to Sri. Madan Mohan Saha, another employee (CCG) of the bank. Furthermore, the report placed strong reliance on a confessional statement made by others charged, including Sri. Subhendu Dash, Ex-Pradhan of Chandabila at the time of the incident (document X, photocopy of the alleged confession dated 03.03.1994). The enquiry officer therefore, found that the employee was guilty of the charges. The report noted, interestingly, that the loan amount (i.e. Rs. 60,000/- out of Rs. 1,20,000/-) was deposited in the account of the bank, and that the balance was misappropriated.

5. By an order dated 07.10.2002, the Discip