V PARAMESWARA IYER Vs. CANARA BANK

JUDGEMENT

(1.) THE petitioner has filed this writ petition challenging the order of the first respondent confirming the order of the second respondent imposing punishment of censure and ordering recovery of a sum of Rs. 21, 000 together with interest on the ground that the petitioner was negligent in passing a loose leaf cheque.

(2.) THE facts leading to the filing of the writ petition are that the petitioner was an ex-serviceman and joined the services of the Canara bank on September 29, 1975 , as a clerk and became an officer on November 13, 1980. According to him, he had an unblemished record of service till the incident in question took place and while he was working as accountant of the Pallavaram branch of the Canara Bank, the incident in question is said to have taken place in the following manner : One Sudalaimani was having an S. B. Account No. 22624 in the Pallavaram branch of the Canara Bank and on March 10, 1988, a person claiming to be Sudalaimani came and asked the bank for a duplicate pass book stating that the original pass book was lost. THE counter staff issued a duplicate pass book, which according to the petitioner, was done after following the normal procedure for the issue of a duplicate pass book and on the very next day, i. e. , on March 11, 1988, the same person who obtained the duplicate pass book came to the Pallavaram branch of the Canara Bank and requested for the issue of a loose leaf cheque from the counter staff. According to the procedure, the counter clerk has to issue the loose leaf cheque only after getting specific permission from the manager, and the manager can also authorise issue of loose leaf cheque only after satisfying himself that the person who claims the loose leaf cheque is the person who owns the S. B. account. It seems that the said person was also issued a loose leaf cheque which he utilised and presented the same for encashment of a sum of Rs. 21, 000. THE counter clerk passed the cheque for payment, and he sent the same to the petitioner for sanctioning the payment as the amount involved was more than rs. 15, 000. According to the petitioner, he verified the signature which was in Tamil in the loose leaf cheque with the specimen signature found in the specimen card, and he passed the cheque for payment. On March 16, 1988 , the real account holder sudalaimani turned up at the bank and presented a cheque for Rs. 600 for encashment. At that time, he noticed that a sum of Rs. 21, 000 had been wrongly debited to his account, and he questioned the same stating that he had not withdrawn the money. Immediately, a police complaint was lodged and a claim was also lodged with the insurance. THE bank initiated proceedings by issue of a memo to the petitioner and also to others namely, the manager and the clerk. In so far as the manager is concerned, the charge levelled against him was that he had not followed the manual of instructions for issue of loose leaf cheque and he was negligent and contributed to the perpetration of the fraud. As per the memo, while issuing the duplicate pass book, the counter clerk should have noticed the variation between the signature found in the requisition letter and the specimen signature lodged with the bank and the counter clerk should have noticed the variance in the signature found in the loose leaf cheque with the specimen signature lodged with the bank and the conduct of the party in getting a duplicate pass book and making a request for a loose leaf cheque on the very next day and withdrawing a large sum of money should have created suspicion in his mind.

(3.) IN this view of the matter, I am not inclined to accept the submissions of Vaidyanathan, learned counsel for the petitioner that the petitioner was not liable or responsible for his failure to notice the forged signature found in the loose leaf cheque when the cheque was presented for payment and the penalty of censure, in my view, is quite justified on the facts and circumstances of the case. IN my view, the disciplinary authority has come to the correct conclusion that the petitioner was responsible and liable for the encashment of the forged cheque. But, the disciplinary authority has also held that the petitioner should also make good the loss caused to the bank as he was negligent in verifying the signatures and ordered recovery of the sum from his pay or such other amounts that may be due to the petitioner. Though the recovery of the alleged loss from the petitioner's pocket is a part of the penalty order passed by the authorities, yet, in my view, the penalty imposed for recovery of the entire amount from the petitioner is not justifiable on the facts of the case. The penalty has been imposed on the ground that the bank has suffered pecuniary loss and the letter of the Canara Bank dated April 3, 1989, was relied upon to show that the police also closed the complaint preferred by the Canara Bank. Even assuming that the bank has suffered pecuniary loss of Rs. 21, 000 in my view, it is not possible to impose a penalty of recovery of the entire pecuniary loss on the petitioner alone. The incident leading to the loss has already been set out in the earlier paragraphs of this judgment. To recapitulate, one person posing himself as Sudalaimani requested for a duplicate pass book and he was issued the same after verification of his signature and on the next day, the same person came and made a request for issue of a loose leaf cheque which was also issued in his favour after verifying his signature and he presented the cheque for Rs. 21, 000 and encashed the same on the basis of the authorisation given by the writ petitioner. The chain of events starting from the issue of duplicate pass book till the withdrawal of the money by that person from the bank, in my view, are so interlinked and interconnected with each other and in my view, the transaction should be regarded as a single and indivisible transaction. All persons who were parties to the transaction had contributed their share which ultimately resulted in the payment of Rs. 21, 000 and if there is one missing link in any one of the events, the ultimate event would not have taken place and if the transaction is viewed in such a manner, in my view, all those connected with the events would be liable, for the loss. The Canara Bank also has proceeded on the basis that it was only a single transaction as the preamble portion of the memos, issued to the manager, counter clerk and the petitioner narrated the same events and only in the notices and the charge-sheets seeking explanation there was a divergence in the nature of charge. Therefore, I am of the opinion that the transaction should be regarded as a single transaction, and the imposition of penalty of recovery of the entire amount of loss from the petitioner is not sustainable in law. As a matter of fact, in the counter-affidavit filed by the Canara Bank, the bank has also proceeded on the basis that there was negligence on the part of the manager, temporary supervisor, the counter staff and the petitioner but the negligence was not of the same degree, but according to the respondents, the petitioner had the last opportunity to prevent the loss and he must be responsible and liable for the loss. IN my view, this approach of the authorities is not justifiable as each one of them had contributed to some extent to the loss caused to the bank though there is a variation in the degree of contribution. Hence, I hold that the petitioner cannot be made solely responsible for the pecuniary loss suffered by the bank and the second part of the impugned order imposing penalty of recovery of the entire loss from the petitioner is not justifiable in law. It is no doubt true that this court after holding that the petitioner was responsible for the clearance of the cheque and after upholding the finding of the disciplinary authority as well as the appellate authority that the petitioner was negligent, should not normally interfere with the quantum of punishment as it is within the realm of the disciplinary authority or the appellate authority. However, where the punishment imposed shocks the conscience of the court, in my view it is one such case this court can interfere with the quantum of punishment imposed and this court has the power either to remit the matter to the authorities for reimposition of punishment or for the reasons to be stated can reduce the quantum of penalty. Since I have held that the petitioner cannot be made solely responsible for the pecuniary loss suffered by the bank, the latter part of the order impugned imposing recovery of the entire sum from the petitioner is not sustainable. The result is that the matter would have to be remitted and reconsidered on the question of imposition of penalty on the petitioner taking into consideration the transaction as a single and indivisible transaction. IN the normal circumstances, this court would have remitted the matter to the disciplinary authority for imposition of appropriate punishment on the petitioner, but on the facts of the case, it is seen, the incident had taken place in the year 1988 and more than ten years have passed. The petitioner at the time of filing the writ petition was aged 57 years and there are other persons also who contributed to the loss suffered service on the rolls of the respondent-bank. The bank though initially proceeded on the right path, however, separated the charges and proceeded against three different persons in different manner and if the proceedings are to be initiated once again, the proceedings have to be initiated against all the three or other persons who contributed to the loss caused to the bank. Considering the time lag and also the amount involved which is not so huge, I am of the view, the matter should be closed and the curtain drawn on the entire proceed. The writ petition is allowed to the above extent. The impugned order is quashed only to the extent of imposition of penalty of recovery of pecuniary loss suffered by the bank from the petitioner and in other respects, it is upheld. However, in the circumstances, there will be no order as to costs. .