Back
Andhra Pradesh High Court
Judges : C.V.NAGARJUNA REDDY
B.SRINIVASA RAO - Appellant
Versus
ANDHRA BANK CENTRAL OFFICE - Respondent
Decided On : 07/25/2007
Writ Petition 29959 Of 1995
Banking Regulation Act 1949 – Section 1 (a) to (o) – Employment and Service matter – Bank – Claiming all consequential benefits – Seeking quash the proceedings contained in letter – Letter of the Chairman and Managing Director of the Bank and for a consequential direction to the respondents to treat the petitioner to be continued in services of the Bank as its General Manager with all consequential benefits – Petitioner joined respondent No. 1 - Bank as Assistant General Manager before it was nationalized – Respondent No. 1 -Bank was nationalized in year 1980 and at relevant point of time petitioner was working as General manager of Bank – With a view to extend Banks activities to housing and merchant banking and financial services, like other nationalized banks such as canara Bank, State Bank of India, Bank of India etc. , petitioner established two subsidiary companies; one for merchant banking, housing and financial services and other for allied activities – This writ petition is concerned with one of two subsidiary companies namely; Andhra Bank Financial Services limited –Reserve Bank of India conveyed its No Objection vide its letter for setting up a wholly owned merchant banking subsidiary for undertaking equipment leasing, hire purchasing, merchant banking and activities incidental thereto – Said letter contains certain conditions which include a condition that ABFSL shall not undertake activities other than those mentioned in part-II without rbis prior approval – Held, Evidence available on record, both oral and documentary, was referred to by me with a view to examine whether findings on any of the five charges were based on some legally acceptable evidence or not and not with a view to re- appreciate evidence – On a careful scrutiny of entire material on record, findings of enquiry officer and reasons recorded by disciplinary and appellate authorities, I am of considered view that management of ABFSL had miserably failed to prove any of charges against petitioner on basis of any legal evidence – In Tata Cellular Vs. Union of India Supreme Court held that judicial review of an administrative action is concerned with decision making process and not with the merits of decision – Para-77 of judgment to extent it is relevant is extracted – Applying Wednesbury principle also, it is not possible to hold that on nature of charges and material available on record any authority taking a reasonable and logical view would reach a conclusion that charges against petitioner are based on any legally acceptable evidence in order to hold that they are proved against petitioner – Writ petition is allowed.
( 2 ) THE facts that are necessary for the disposal of the writ petition are narrated hereunder:
( 3 ) THE petitioner joined respondent No. 1 - Bank as Assistant General Manager before it was nationalized. Respondent No. 1 -Bank was nationalized in the year 1980 and at the relevant point of time the petitioner was working as the General manager of the Bank. With a view to extend the Banks activities to housing and merchant banking and financial services, like other nationalized banks such as canara Bank, State Bank of India, Bank of India etc. , the petitioner established two subsidiary companies; one for merchant banking, housing and financial services and the other for allied activities. This writ petition is concerned with one of the two subsidiary companies namely; Andhra Bank Financial Services limited (for short abfsl ). It was constituted on 25. 2. 1991. The Reserve Bank of India conveyed its No Objection vide its letter dated 6. 12. 1990 for setting up a wholly owned merchant banking subsidiary for undertaking equipment leasing, hire purchasing, merchant banking and activities incidental thereto. The said letter contains certain conditions which include a condition that the ABFSL shall not undertake activities other than those mentioned in part-II without rbis prior approval. In the annexure to the said approval it was clearly mentioned that ABFSL shall not carry out any other business under Section 1 (a) to (o) of the Banking Regulation Act 1949 without prior approval of the. The Department of Economic Affairs (Banking Division), Ministry of Finance, government of India also gave its approval for setting up of the financial subsidiary of the Bank through its letter dated 17. 1. 1991 wherein it was stipulated that the Bank shall ensure that the Subsidiary follows the guidelines given by the RBI and that it will not undertake any business other than that is permitted by the RBI without seeking prior approval of the.
( 4 ) ON the eve of promotion of two executives of the Bank as General Managers, the Bank has issued an office order whereby work was distributed among the five general Managers including the petitioner. The work that was entrusted to the petitioner reads "legal, Financial Subsidiary and Housing Subsidiary". On the appointment of the Managing Director, the Board of Directors of ABFSL issued an office order on 27. 8. 1991 wherein he was delegated with full power of purchase and sale of Central, State, other securities, shares, bonds for deployment of short term funds.
( 5 ) THE petitioner signed three security receipts (marked as Exs. S-18, S-19, s-20) on 31. 10. 1991, 2. 11. 1991 and 29. 10. 1991 respectively in respect of securities concerning Fair Growth Financial Services Limited (for short fgfsl) issued to M/s. Krishak Bharati Cooperative Limited (Kribhco ). It is in respect of these three transactions that disciplinary proceedings were initiated against the petitioner. On 29. 3. 1993, Sri A. T. Akolkar, Executive Director of the Bank issued charge sheet against the petitioner which comprises five charges and they read as under:
" 1. You have not ensured that funds of Andhra Bank Financial Services Limited were deployed only against physicals/bankers Receipts. Instead, large funds were deployed against "security Receipts" which have no legal backing. This fact was within your knowledge since you have signed the following security receipts issued by Andhra Bank Financial Services Limited to M/s. Krishak Bharati checking officials-operative Limited witho
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
