M.B. DHIWAR, S/O BABANRAO ABAJI, EARLIER WORKING AS CHIEF MANAGER (LAW) AND OFFICER IN SENIOR MANAGEMENT GRADE SCALE-IV, AT SYNDICATE BANK Vs. SYNDICATEBANK, A BODY CONSTITUTED UNDER THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKING

JUDGEMENT

(1.) HEARD the learned Counsel for the parties.

(2.) THE facts briefly stated are as follows: The Petitioner was a practising advocate of the Mumbai High Court. He had joined the services of the Dena Bank as a Law Officer. While so working, he was appointed as a Senior Law Officer in the Middle Management Grade Scale -III by direct recruitment in the Respondent - bank. He had joined the services of the bank on 23.1.1984. The Petitioner was working as an officer in Senior Management Grade Scale -IV with the Respondent and he was to retire from the services of the bank on reaching the age of superannuation on 28.2.2003. The Petitioner contends that having regard to the minimum qualifying service prescribed under the promotion policy, he was entitled to be promoted to Senior Management Grade Scale -IV in the year 1987 and Senior Management Grade Scale -V in the year 1990 and Top Executive Grade Scale -VI in the year 1993 and Top Executive Grade Scale -VII in the year 1997. Since he was denied promotion to Scale -IV while bringing in the concept of zone of consideration, he was denied promotion to further higher scales. Aggrieved by this, the Petitioner had initiated proceedings in WP 2488/1994 in the High Court of Mumbai seeking retrospective promotions. When the petition was pending final hearing, he was taken into confidence by the Chairman and Managing Director of the bank and was assured of promotion if the matter pending before the High Court was withdrawn. The Petitioner accordingly withdrew the same However, the bank resiled from its assurance. On the other hand, it is the Petitioner's contention that the bank initiated a series of actions to victimise the Petitioner only because he had chosen to air his legitimate grievances. Though the Petitioner was granted promotion to Senior Management Grade -IV with effect from 16.5.1998, the other aspects of the matter were ignored. It is his further allegation that even during the pendency of the aforesaid writ petition before the High Court of Mumbai, the bank had issued a show -cause notice dated 20.4.1998 questioning his action in furnishing a legal opinion in the matter of credit facility granted to one of its customers of the Bangalore Branch of the bank. This pertained to the year 1995, but was resurrected in the year 1998 and it was sought to be made the subject matter of disciplinary proceedings which was clearly aimed at victimising the Petitioner. Ultimately, the proceedings resulted in imposition of a penalty of reduction in the basic pay by three stages. That has been independently challenged by the Petitioner in another writ petition in WP No. 24438/2002, which is heard alongwith this petition. In any event, the order of penalty was confirmed by the appellate authority. Added to this, the bank had initiated yet another proceeding as per letter dated 21.1.2000. The same also adverted to a legal opinion of the Petitioner said to have been given on 14.11.1998 accepting another legal opinion dated 16.10.1998 furnished by a legal advisor of the bank. The Petitioner was called upon to show -cause why disciplinary proceedings ought not to be taken against him. The Petitioner was the Chief Manager of a branch and the show -cause notice was issued by another Chief Manager, which itself indicated that the bank only intended to humiliate and harass the Petitioner without regard to his position. The Petitioner however, replied to the notice and it was pointed out that the only aspect on which the Petitioner had been asked to express his opinion was about the propriety of accepting leasehold rights in respect of certain property as security for a loan transaction. It is pointed out by the Petitioner that the advance had been made at the Shoolay branch of the bank at Bangalore. The said branch had obtained a legal opinion from one Sanjeev Kanchan, a legal advisor of the bank, who had furnished his opinion as to the title to the property of the mortgagor and had further expressed that leasehold rights in respect of certain property, where the lease being for a period of 99 years, could be received as collateral security. This opinion had been referred by the Shoolay branch of the bank to the Bangalore Zonal office namely, whether the mortgage has to be put through at Bangalore where the loan is being granted on the security of property at Mumbai. This was the limited scope of reference that had been made to the zonal office. The Law Officer at the zonal office expressed his apprehension of receiving leasehold rights as security and sought clarification from the Mumbai office. It was the limited clarification expressed by the Petitioner that financial institutions such as the State Financial Corporations and Industrial Development Corporations accept such security and that there can be no impediment in accepting the leasehold rights as security for the loan and therefore, the Petitioner explained by way of reply to the notice that there was no impropriety committed by him insofar as the legal opinion furnished. The disciplinary authority, however; with a single -minded determination issued a charge -sheet while overlooking the explanation offered by the Petitioner. The charges wee verbatim reproduction of the contents of the show -cause notice. The Petitioner therefore, reiterated his explanation and the disciplinary authority ignoring the same, appointed an inquiry officer to inquire into the charges. The Petitioner raised an objection that the inquiry officer was not well -versed in the law and therefore, would not be in a position to address the legal aspects in considering the alleged misconduct committed by the Petitioner in respect of furnishing a legal opinion. This was rejected. An inquiry was conducted. The Presenting Officer had furnished a list of nine documents and a list of two witnesses, both of whom were not law officers or lawyers. MW.1 who was examined was working as a Chief Officer of the Vigilance unit of the bank at Mumbai and he was speaking on the basis of an investigation said to have been carried out by him. The investigation report itself was not produced at the inquiry nor was it made available to the Petitioner. The said witness admitted with reference to Clause 7.4 of Circular 14/1999 issued by the bank that housing loans could be granted even against leasehold land where the unexpired lease is 50 years or more. He also admitted that an unregistered equitable mortgage could be created even where the original title deeds were not available. He admitted that there was no mandatory requirement in the Manual of Instructions that it was only a registered simple mortgage which was to be accepted in respect of the properties where the original documents of title were not available. It was also admitted by the witness that the guarantor was a company governed by the Companies Act, 1956 and Form Nos. 8 and 13 registering the charge of the bank on the property had been filed before the Registrar of Companies at Mumbai. There were other admissions elicited from the said witness which according to the Petitioner clearly demonstrated and established the innocence of the Petitioner. M.W.2 was said to be an officer in the Vigilance Cell at the relevant time. He in turn had admitted that the Shoolay Branch had not taken any action to comply with the directions issued by the Law Officer of the Zonal Office at Bangalore and it was also admitted by him that the property in question had been attached by the Debt Recovery Tribunal in favour of the bank in proceedings for recovery of the dues. It was sought to be impressed upon the inquiry officer by the Petitioner that negligence or an error of judgment on the part of an advocate would not amount to misconduct even if it could be construed as such. In any event, the opinion expressed by the Petitioner could not be termed as illegal or a negligent opinion since it could be fully justified. It was further pointed out that the charge levelled against the Petitioner was a failure to take all possible steps to protect the interests of the bank and the alleged failure to discharge his duties with utmost diligence. There was however no allegation imputing dishonesty or want of integrity on the part of the Petitioner However, the bank having made a reference to the Central Vigilance Commission (hereinafter referred to as 'the CVC' for brevity), even though the charges lacked any character involving vigilance, a distorted version was attributed alleging that the Petitioner was instrumental in causing a loss of Rs. 133.45 lakh and the CVC in turn having advised that a stiff major penalty, which would, in other words, mean compulsory retirement or dismissal from service, be imposed, the bank had mechanically rejected the submissions of the Petitioner and acting in terms of the dictates of the CVC, imposed the penalty of compulsory retirement by an order dated 20.7.2001. The same was challenged by way of an appeal which was summarily dismissed. It is in that background that the present petition is filed.

(3.) THE learned Counsel for the Petitioner would submit that though the Petitioner was an officer of the bank as a Law Officer, his functions continued to be that of a lawyer or an advocate and in the course of his functioning in that capacity, even if it could be established that there was an error of judgment in furnishing his legal opinion, it would not amount to misconduct and to characterise the act of an advocate as a misconduct something more than a mere error of judgment would be required to be established. As is evident from the circumstances narrated, the Petitioner was consulted with regard to the limited aspect as to whether leasehold rights could be accepted as security to secure certain advances to be made. The Petitioner was not called upon to examine the title to the property or other aspects which had already been addressed by yet another legal advisor whose opinion was already on record. It was not a comprehensive legal opinion as regards all aspects of the matter that was solicited from the Petitioner. Therefore, the Respondent - bank seeking to proceed against the Petitioner was with a mala fide intention of victimising him for reasons already stated. It is also pointed out that the evidence on record and the admitted sequence of events would clearly demonstrate that there was no error of judgment or want of diligence in the opinion expressed by the Petitioner which is the subject matter of the inquiry. It is contended that the inquiry is also vitiated in the enquiry officer having failed to comply with the mandatory requirement under Rule 6(17) of the Regulations and it is also vitiated as the disciplinary authority has proceeded on the basis of the dictates of the CVC in imposing the extreme punishment of compulsory retirement insofar as the charges which alleged that he had caused loss to the bank by virtue of the alleged misconduct. The learned Counsel for the Petitioner places reliance on an unreported decision of this Court, in the case of A. Srinivasa v. State Bank of Mysore in W.P.30429/2003 dated 14.10.2009 and the writ Appeal arising therefrom in WA 4298/2009 decided on 25.10.2010 GK well as WA 67/2007 in the case of Syndicate Bank v. B. Ganesh Pai dated 3.12.2010 in support of his case.