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2004 Supreme(Del) 448
High Court Of Delhi
R.P.CHHABRA - Appellant
Versus
PUNJAB NATIONAL BANK - Respondent
W.P.(C.) 640 of 1989
Decided On : 07/05/2004
A.B.Dial, R.S.Mathur, RAJ BIRBAL, RAVI BIRBAL, Sumati Anand
Headnote:
The court case of R. P. Chhabra v. Punjab National Bank & Ors. involves allegations of misconduct against a bank employee, specifically the petitioner, who was the Zonal Manager of the bank's London branch. The allegations were investigated through an inquiry, and the petitioner challenged the findings of the inquiry officer, the disciplinary authority, and the appellate authority. The court examined the allegations, the evidence presented, and the arguments of both parties to determine the validity of the petitioner's claims.
Fact of the Case:
The petitioner, R. P. Chhabra, was the Zonal Manager of Punjab National Bank's London branch. He was accused of various acts of misconduct, including unauthorized advances, failure to obtain proper documentation, and failure to follow bank procedures. An inquiry was conducted, and the inquiry officer found the petitioner guilty of several charges. The disciplinary authority and the appellate authority upheld the findings of the inquiry officer, and the petitioner was removed from service.
Finding of the Court:
The court found that the inquiry officer's findings were perverse and based on no evidence in some instances. Specifically, the court held that the petitioner was not responsible for obtaining an audited balance sheet in one case and that it was not necessary to obtain insurance for a vacant land in another case. However, the court upheld the findings of the inquiry officer in relation to other allegations, such as the petitioner's failure to obtain proper documentation and his failure to follow bank procedures. The court also found that the petitioner was not denied a fair defense and that the penalty imposed was not disproportionate to the gravity of the offense.
Issues: 1. Whether the findings of the inquiry officer were perverse and based on no evidence. 2. Whether the petitioner was denied a fair defense. 3. Whether the penalty imposed was disproportionate to the gravity of the offense.
Ratio Decidendi: The court held that the findings of the inquiry officer were perverse and based on no evidence in some instances. The court also found that the petitioner was not denied a fair defense and that the penalty imposed was not disproportionate to the gravity of the offense. The court's decision was based on the following principles: * The findings of an inquiry officer must be based on evidence and cannot be perverse. * A charged officer has the right to a fair defense, including the right to present evidence and cross-examine witnesses. * The penalty imposed for misconduct must be proportionate to the gravity of the offense.
Final Decision: The court dismissed the petitioner's writ petition, upholding the findings of the inquiry officer, the disciplinary authority, and the appellate authority. The court found that the petitioner was guilty of misconduct and that the penalty imposed was not disproportionate to the gravity of the offense.
( 1 ) PETITIONER challenges the order dated 7. 3. 1988 passed by the disciplinary authority imposing the penalty of removal from service which shall not be a disqualification for future employment as well as the decision dated 3. 1. 1989 of the Appellate Authority i. e. the Board of Directors of the respondent bank, rejecting the appeal filed by the petitioner as communicated to the petitioner under cover of letter dated 13. 1. 1989.
( 2 ) PETITIONER was posted as Zonal Manager, London of the respondent bank from 12/12/1984 upto end of March, 1985. Pertaining to his functioning as the Zonal Manager, London, under cover of memorandum dated 8. 4. 1986, a charge-sheet was served upon the petitioner. The said charge-sheet listed the following charges against the petitioner:-
"article OF CHARGE AGAINST SHRI R. P. CHHABRA, DY. GENERAL MANAGER, HO NEW DELHI PREV. ZONAL MANAGER, U. K. Shri RP Chhabra while working as Zonal Manager, London committed following irregularities: i) allowed/sanctioned advances to certain borrowers when the facilities to the group companies accounts of the borrowers were sanctioned by Board. ii) allowed unauthorised/irregular advances to certain borrowers over and above the limits sanctioned/drawing powers/value of security available in the account. iii) sanctioned facilities in certain accounts when the group companies accounts were already substantially irregular and doubtful of recovery. iv) failed to obtain proper documents from the borrowers. v) failed to obtain proper securities in certain loan accounts. vi) failed to obtain proper valuation reports on the properties proposed to be mortgaged to the bank. vii) failed to ensure compliance of bank s procedure with regard to various accounts. viii) failed to ensure compliance of terms and conditions in certain loan accounts. ix) allowed utilisation of facilities under lapsed sanction. x) failed to report unauthorised/irregular advances to HO and obtain confirmation of action. xi) allowed payment of expenses to the debit of Bank s revenue without obtaining proper sanction. As such, Shri RP Chhabra failed to protect the interest of the Bank and discharge his duties with utmost devotion and diligence and committed misconduct in terms of Regulation 3 (1) of PNB Officer Employees (Conduct) Regulations, 1977. "
( 3 ) SINCE counsel for the petitioner argued at length on the alleged perversity in the findings of the enquiry officer who was appointed to enquire into and submit a report pertaining to the charge-sheet in question, I would be advised to set out, in a little more detail, the statement of imputations in support of the charge-sheet.
( 4 ) STATEMENT of imputation alleged, against the petitioner, the following :-
I. M/s Primlaks Holding Co. (PANAMA) Inc. (Primlaks Group) m/s Primlaks Holding Co. (PANAMA) Inc. was sanctioned a letter of guarantee facility of US $ 5m by the Board on 20/04/1983 to cover liabilities of 4 associate companies in Nigeria. It was a term of the sanction that a counter indemnity from the associate company whose liabilities were intended to be covered would be obtained. Further, cash margin of 33% was to be obtained. On 1. 2. 1985, the Manager of London Branch put up a note to the petitioner for issuance of a letter of credit for US $ 1m on behalf of Primlaks (Europe) S. A. covering liabilities of M/s PEEKAY (USA) Inc. against 30% margin. Petitioner sanctioned the same. Based on the facts alleged as noted above, statement of imputation highlighted following irregularities:- a) as against the Board sanctioning a letter of guarantee, a letter of credit was permitted to be opened for which there was no sanction. b) in terms of the loaning power, sanction was beyond the scope of authority vested with the Zonal Manager, London pertaining to issuance of letter of credit. c) guarantee limit was sanctioned for one year on 20. 4. 1983. It had lapsed at the time when letter of credit was issued. In other words, even the faci
