Disciplinary proceedings against a retired bank officer can proceed if initiated prior to retirement, identifying lapses in loan sanctioning as misconduct warranting penalties.

JUDGMENT :

S.M.SUBRAMANIAM, J.

Prayer: Writ Appeal filed under Clause 15 of Letters Patent praying to allow the writ appeal, setting aside the order of the learned Judge, dated 07.12.2020 in W.P.No.15463 of 2014, directing the respondent Bank to pay due pension, gratuity and other retirement benefits and arrears from the date of superannuation, that is from 30.10.2011 with interest.

The intra Court appeal on hand has been instituted challenging the common order pronounced on 07.12.2020 in W.P.No.15463 of 2014.

FACTS OF THE CASE:

2. The writ appellant Late Mr.M.Rajagopal was holding the post of Chief Manager in the State Bank of India. He was due to retire from service on 31.10.2011 and in view of pending charge, the State Bank of India invoked Rule 19(3) of the State Bank of India Officers' Service Rules, and he was not permitted to retire from service. The domestic inquiry commenced after the date of superannuation of the deceased appellant and by treating the deceased appellant as deemed to be in service for the limited purpose of conduct of departmental disciplinary proceedings.

3. A charge memorandum was issued on 30.08.2011 framing 19 charges. The nature of the charges are regarding sanctioning of loans en masse, without adhering to the procedures contemplated under the Banking Rules. Broadly, the allegations in the charge memorandum would reveal that the appellant's failure to cross check the with banks' approved valuer on the estimates submitted by the borrowers; failure to exercise due diligence and care in assessing track record of builder; failure to conduct pre-sanctioned survey along with Deputy Manager in respect of 30 accounts; failure to ensure that the loan proposals were appropriately appraised/assessed by the Deputy Manager (Advance), these loan proposals were not properly sanctioned in respect of 17 accounts; failure to verify correlation between agreement to sale and sale deed, as the amount in the sale agreement is more than the sale deed; failure to submit controlled returns and failure to answer queries raised by the controller in respect of five accounts; failure to ensure that construction agreement between the builder and the borrowers were executed in respect of 47 accounts; failure to ensure that disbursement were made stage wise and as per cost estimates; failure to obtain administrative clearance from controlling authority for housing loans sanctioned to his daughter, who was working at Bangalore for purchase of Flat at Thiruneermalai beyond the jurisdiction of Thiruvallur Branch; sanctioning the housing loans to borrowers residing at Chennai with projects at Chennai which is outside Thiruvallur Jurisdiction.

4. The above acts are likely to cause loss of Rupees 4.20 Crores as 57 of 75 loans have become NPA (Non-Performing Assets). By way of an additional counter, the respondent/Bank, before the Writ Court has stated that at the time of issuance of charge sheet to the deceased appellant, the estimated loss in respect of 75 loans disbursed in the Thiruvallur Branch, for which the deceased appellant was held responsible, was about Rs.4,20,00,000/-, as provided under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002, certain loans were taken over by assets reconstruction companies. Still, as on date, the loss/NPA (Non-Performing Assets) in respect of the above loan transactions is at Rs.2,57,493.60/-. It is unlikely