M M YARDI Vs. BANK OF INDIA

JUDGEMENT

(1.) THE Petitioner was posted as the Zonal Manager of Bank of India (first Respondent). Initially, the Petitioner was posted in M.P. Zone. Thereafter, he was transferred to Pune Zone. On 20th November, 1991, the first Respondent Bank issued a letter to the Petitioner. In the said letter, allegations were made against the Petitioner as regards illegalities and irregularities in the credit facilities granted to Choudhary Group of companies. It is alleged that the Petitioner's son was associated with the borrowing companies. It was alleged that undue favours were shown by the Petitioner to Choudhary Group at each and every stage, right from the end of the year 1986 upto August, 1990 without adhering to sound principles of lending and thereby putting the bank's funds to the tune of Rs.4.35 crores in jeopardy. The comments of the Petitioner were invited on what was set out in the said letter. The Petitioner by reply dated 14th February, 1992 addressed to Shri P.S. Santhanam, General Manager of the first Respondent, submitted his comments and denied the allegations made against him.

(2.) THE charge sheet dated 31st December, 1992 was issued to the Petitioner alleging than the Petitioner has breached the Regulations 3(1) and 5(3) of the Bank of India Officer Employees' (Conduct) Regulations, 1976 (hereinafter referred to as ''the Conduct Regulations ''). Along with the charge sheet, statement of allegations was also issued. The Petitioner filed a reply dated 12th March, 1993 dealing with the allegations in the charge sheet and statement of allegations annexed to the charge sheet. The Enquiry Officer after holding an inquiry came to the conclusion that certain charges were proved. The Enquiry Officer held that out of Charge No.I, Charge A(i), A(ii)(b), A(ii)(c), A(ii)(d), A(ii)(e), A(iv), B(i) and C were proved. The charges A(ii)(a), A(iii), A(v) and B(ii) out of the Charge I were held as not proved. He held that Clauses (i) and (iii) out of Charge No.II and even Charge No.III were established, but the clause (ii) of Charge No.II was not proved. The report was submitted on 25th October, 1994. Prior to that on 31st August, 1994, the Petitioner retired as the Deputy General Manager by superannuation. The first Respondent Bank issued an order dated 12th August, 1994 informing the Petitioner that the disciplinary proceedings would continue as if the Petitioner was in service until final order was passed. Retiral benefits of the Petitioner were withheld till passing of the final order. The Petitioner made representation against the report of the Disciplinary Authority. The second Respondent by an order dated 23rd February, 1995 awarded punishment of dismissal and disqualified the Petitioner from future employment. The 2nd Respondent as the Disciplinary Authority did not agree with the findings of the Enquiry Officer on two charges. The Petitioner preferred an Appeal against the said order before the Appellate Authority. By an order dated 25th May, 1995, the Appeal was dismissed. On 22nd November, 1995, a show cause notice was issued to the Petitioner by the first Respondent calling upon the Petitioner to show cause as to why the entire gratuity payable to him should not be adjusted against the loss suffered by the first Respondent Bank. On 14th December, 1995, the Petitioner replied to the show cause notice. The present Petition was filed on 26th February, 1996 for challenging the orders of Disciplinary Authority as well as the Appellate Authority. After filing of the Petition, the Petitioner received the order dated 22nd February, 1996 passed by the concerned Authority of the first Respondent. By the said order, the entire gratuity payable to the Petitioner under the Bank of India Gratuity Funds Rules as well as the entire amount standing against the Employers' Contribution in his provident fund under the Bank of India Provident Fund Rules was adjusted against the loss allegedly suffered by the Bank aggregating to Rs.4.35 crores approximately. It is alleged that the loss was caused as a result of misconduct committed by the Petitioner. The Petition was amended for incorporating the challenge to the said order dated 22 February, 1996.

(3.) WE may note here that the Civil Application No. 1844 of 2001 was filed by the Petitioner for contending that substantial part of the amounts which have been allegedly jeopardized due to misconduct on the part of the Petitioner have been recovered. Reliance was placed on various documents which are annexed to the said Civil Application for contending that as per the compromise entered into in the suit filed in the Court at Indore, a total sum of Rs.7,92,07,000/ - has been recovered from the borrower companies and the respective accounts were closed. In the Reply to the Civil Application, the First Respondent Bank did not dispute the compromise, but stated that the Bank was required to sacrifice a sum of Rs.863.24 Lakhs by way of compromise. The Petitioner filed an additional affidavit dated 29th July, 2002 in which it was alleged that the first Respondent has recovered an amount of Rs.9,78,28,000/ - from the defaulting borrowers.