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2025 Supreme(Mad) 4700
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
G.R.SWAMINATHAN, P.VADAMALAI, JJ.
The General Manager & Reviewing Authority - Appellant
Versus
S.V.Mothilal - Respondent
WA(MD)No.932 of 2021 and C.M.P.(MD)No.4238 of 2021
Decided on : 28-03-2025
Advocate Appeared:
For the Appellants : Mr.N.Dilip Kumar
For the Respondent: Mr.M.E.Ilango
Disciplinary proceedings must adhere to principles of fairness and due process; rapid inquiry procedures may infringe on the right to a fair hearing, justifying potential dismissal of charges.
Headnote:(A) Canara Bank Officer Employee's (Discipline and Appeal) Regulations, 1976 - Disciplinary proceedings - Fairness and procedural propriety are essential in conducting disciplinary inquiries, as codified in principles of natural justice - A mere charge memo does not necessitate punishment, and the timeline should allow for fair defense. (Paras 1, 10, 11)
(B) Justice of inquiry - The court noted that proceedings concluded in an unreasonable timeframe, raising concerns of fairness; the concept of 'whirlwind proceedings' applies where completion of inquiries does not allow support for a fair hearing. (Paras 9, 10)
(C) Accountability and time limits - The delay between the incident and issuance of charge memo can restrict the initiation of disciplinary action, especially when procedural lapses, not tangible misconduct, are involved. (Paras 11, 13)
Facts of the case:
The respondent was dismissed after being charged with several lapses related to loan sanctions that could cause financial loss to the bank. The inquiry was conducted within two weeks without adequate time for the respondent to prepare a defense.
Findings of Court:
The court found severe procedural fairness violations and that disciplinary action was effectively barred by the time elapsed since the alleged misconduct.
Issues: The key issues pertained to adherence to procedural fairness and the legitimacy of disciplinary actions based on delayed complaint and adherence to the governing bank regulations.
Ratio Decidendi: The court ruled that failure to provide adequate time for defense and the hasty conduct of disciplinary proceedings led to a lack of fairness, thus justifying interference with the penalty imposed.
Result: Writ appeal dismissed.
| Table of Content |
|---|
| 1. importance of fair disciplinary proceedings (Para 1) |
| 2. details of disciplinary actions against employee (Para 3 , 4 , 5) |
| 3. arguments from both parties (Para 6 , 7) |
| 4. court's analysis on procedural fairness (Para 8 , 9 , 10 , 11 , 12) |
| 5. final judgment on disciplinary action (Para 13) |
ORDER :
G.R. SWAMINATHAN, J.
1. A disciplinary proceeding should not resemble a point to point bullet train journey. A charge memo need not necessarily culminate in punishment. The delinquent employee stands the chance of being exonerated also. The proceeding should therefore be conducted in a manner that is pregnant with the possibility of “two roads diverging in the yellow woods”. There must be halting stations. And the halts should be meaningful and not for the sake of it. The process need not be necessarily slow. It can very well be carried on with reasonable speed and despatch. The Judge carrying out the task of judicial review must get the feeling that the entire process was permeated with fairness and that the end result was not predetermined.
2. The order passed by the disciplinary authority which was affirmed by the appellate and reviewing authorities would be tested on the aforesaid touchstone. Now let us move on to the facts.
3. The writ petitioner joined Canara Bank as Agricultural Extension Officer in the year 1982. Over the years, he was granted promotions. In the year 2007, he was working as Senior Manager in the grade of Scale III officer. Between August 2007 and July 2009, he was posted as Branch Manager, Madurai Pudhur Branch of the bank. During the said period, the petitioner has sanctioned a large number of loans in favour of a number of self help groups. He was transferred on 27.07.2009. On 13.07.2013, charge memo was issued to the petitioner. It contained as many as seven articles of charge. It was specifically alleged that on account of the lapses on the part of the writ petitioner, the bank stood exposed to a possible financial loss of Rs.1.66 crores.
4. Even though the petitioner was called upon to offer his explanation within fifteen days, without waiting for the petitioner's explanation, enquiry was commenced on 17.07.2013. Enquiry was completed on 18.07.2013. The petitioner's defence representative submitted his brief on 20.07.2013. The enquiry officer submitted his report on 23.07.2013 containing the following findings :
| S. No. | Issues | Findings |
| 1 | LOAN PROCEEDS NOT RECEIVED BY SHG AND SHGS HAVE NO KNOWLEDGE OF THE LOANS GRANTED TO THEM | GUILTY |
| 2 | IN RESPECT OF THE FOLLOWING GROUPS THE FULL LOAN AMOUNT WAS NOT RECEIVED BY THE GROUPS, ONLY PART AMOUNT WAS RECEIVED BY THE GROUPS THE LOAN AMOUNT WAS NOT DIRECTLY DISBURSED TO THE GROUPS BUT THE SAME WERE DISBURSED THROUGH THE NGO | NOT PROVED |
| 3 | SHG LOANS WERE GRANTED ON THE SAME DAY OF GROUP FORMATION. SIX MONTHS SUCCESSFUL FUNCTIONING OF THE GROUP WAS NOT ENSURED; FURTHER THE FOLLOWING DISCREPENCIES WERE OBSERVED IN SANCTION OF LOANS TO SHGS:- (1) Maintenance of records by groups was not ensured by the branch in all the above cases at the time of sanction of loans (2) Inter-se agreement was not witnessed by any of the branch official (3) CR copies were not submitted to CO/RO for review (4) Homogenity of the groups were not ensured | PARTLY GUILTY Guilty Partly guilty Partly guilty Guilty |
| 4 | SHG LOANS WERE SANCTIONED WITHOUT COMPLYING GUIDELINES PERTAINING TO KYC NORMS, SAVINGS-LENDING RATIO AND RATING OF THE GROUP | Guilty |
| 5 | PAYMENT OF COMMISSION OUT OF SHG LOANS TO GET DEPOSIT'S THROUGH AGENTS (Quantum specified in the charge sheet towards commission) | Guilty Not proved |
| 6 | Illegal Gratification | Not guilty |
| 7 | Loans to close relatives of employee | Not guilty |
| 8 | CSO HAS GRANTED 55 SHG LOANS THROUGH NGO M/S.PEACE TRUST FRAUDULENTLY | PARTLY GUILTY |
| 9 | Documents were not obtained in the presence of branch officials | GUILTY |
| 10 | Withdrawal order forms were not issued to the Authorised Signatories | Not Guilty |
| 11 | Loans sanctioned during 2007-09 and 2010-11 by the CSO without ensuring laid down norms | Partly Guilty |
| 12 | Financial Loss | Guilty |
