NARESH CHANDRA BHARDWAJ versus BANK OF INDIA & ORS. on 22 April 2019

240

SUPREME COURT REPORTS

[2019] 6 S.C.R.

A

NARESH CHANDRA BHARDWAJ

v.

BANK OF INDIA & ORS.

(Civil Appeal No. 4037 of 2019)

B

APRIL 22, 2019

[SANJAY KISHAN KAUL AND INDIRA BANERJEE, JJ.]

Service Law: Removal from service – Appellant-bank officersanctioned three loans while posted in one branch and recommendedtwo loans at another branch which were ultimately classified asCNon-Performing Assets – When the process of granting these loanswas scrutinised by the Bank, various procedural abnormalities werefound, which were likely to cause a loss of Rs.70.32 lakhs to theBank – Punishment of removal from service imposed on the appellant– Appellant prayed that, on parity, he should also be visited onlyDwith the punishment of compulsory retirement as there were two othercases of officers where also similar loss was caused on account ofthe same party and they were visited with the punishment ofcompulsory retirement – Held: Recommendation of the ChiefVigilance Officer showed that earlier the proposal was for removalfrom service for all the three officers – However, only in respect ofEother two officers, it was converted into compulsory retirement –The reason was stated to be the seriousness of the acts of misconductof the appellant and the fact that he was the recommending authorityin two cases and the sanctioning authority in three other cases –No mala fide was proved in case of the appellant – It was foundFthat there was one key person who defrauded many organisationsby proving his identity through different identity cards acquired byhim fraudulently – There was no significant difference in the conductof the three officers as would justify this differentiation in punishment– As per the counter affidavit submitted by the respondents-employer,in their own wisdom they had agreed to grant compassionateGallowance to the appellant, ensuring that no financial loss issuffered by the appellant on account of removal from service –Appellant was given maximum benefit under the Pension Regulations1995 dealing with compassionate allowance – Since there was nofinancial difference and the role was practically identical, there H

was no visible reason to not convert the punishment inflicted on theappellant from one of “removal from service” to “compulsoryretirement” – In the said facts & circumstances, the plea of theappellant to convert his punishment to one of “compulsoryretirement” is accepted.

Administrative law: Judicial review – Quantum of punishment– Scope of judicial review – Held: The domain of the courts on theissue of quantum of punishment is very limited – It is the disciplinaryauthority or the appellate authority, which decides the nature ofpunishment keeping in mind the seriousness of the misconductcommitted – However, if the punishment is so disproportionate thatit shocks the conscience of the court, the courts are not denuded ofthe authority to interfere with the same – Normally, even in suchcases, it may be appropriate to remit the matter back forconsideration by the disciplinary/appellate authority – However,one other cause for interference can be where the plea raised is ofparity in punishment but then the pre-requisite would be that theparity has to be in the nature of charges made and held against thedelinquent employee and the conduct of the employee post theincident – Service law.

Administrative law: Judicial review – Quantum of punishment– Principle of equality – When the concerned employee and co-delinquent are equally placed – There has to be complete paritybetween the two not only in respect of nature of charge butsubsequent conduct as well after the service of charge sheet in thetwo cases – If co-delinquent accepted the charges, indicating remorsewith unqualified apology, lesser punishment to him would bejustifiable.

Allowing the appeal, the Court

Conclusion

HELD: 1. It is the disciplinary authority or the appellateauthority, which decides the nature of punishment keeping in mindthe seriousness of the misconduct committed. This would notimply that if the punishment is so disproportionate that it shocksthe conscience of the court the courts are denuded of the authorityto interfere with the same. [Para 6][244-B-C]

Rajendra Yadav v. State of Madhya Pradesh & Ors.(2013) 3 SCC 73 : [2013] 1 SCR 1029 ; Lucknow A

BC

D

EF

G

H

AKshetriya Gramin Bank (Now Allahabad, Uttar PradeshGramin Bank) & Anr. v. Rajendra Singh (2013) 12 SCC372 : [2013] 17 SCR 309 – referred to.

2. In case of the other two officers, the likely loss to theBank was assessed in the range of about Rs.77.70 lakh in theBcase of one RKM and Rs.39.74 lakh in the case of VKS. Theamount is, at least, not very different from one as in the case ofRKM. However, what is more important is the role performed.RKM and VKS were both the sanctioning authorities in respectof the loans in questions and there were four loans each involvedin the case of both the officers. In the case of the appellant, heCwas the sanctioning authority in three loans while he was therecommending authority in two loans. No mala fide was provedin case of the appellant. It was found that one VD was the keyperson who is a cheat and has defrauded many organisations.[Paras 10-11][245-H; 246-A-C]

D

3. A reading of the recommendation of the Chief VigilanceOfficer shows that while earlier the proposal was for removalfrom service for all the three officers, in respect of other twoofficers it was converted into compulsory retirement while notdoing so in the case of the appellant. The rationale is stated to beEthe seriousness of the acts of misconduct of the appellant andthe fact that he was the recommending authority in two cases andthe sanctioning authority in three other cases. However, the realreason was that while the other two officers were provident fundoptees, the appellant was a pension optee. There was nodifference in the conduct of the three officers as would justifyFthis differentiation in punishment. Once there is no financialdifference and the role is practically identical, there was no reasonfor the respondents to not convert the punishment inflicted onthe appellant from one of “removal from service to “compulsoryretirement.” [Paras 13-15][246-H; 247-A-C; H]

G

Case Law Reference

[2013] 1 SCR 1029[2013] 17 SCR 309

referred toPara 6referred toPara 6

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4037of 2019.

From the Judgment and Order dated 25.10.2017 of the High Courtof Judicature at Allahabad in Writ A. No. 41237 of 2010.

Sanjay Ghose, Kaustubh Anshuraj, Baburam, Advs. for theAppellant.

Rajesh Kumar-I, Anant Gautam, Aakash Sehrawat, Ms. ShrutiVats, Ms. Sakshi Gaur, Ms. Khushboo Aggarwal, Anmol Mehta, Advs.for the Respondents.

The Judgment of the Court was delivered by SANJAY KISHAN KAUL, J. 1. Leave granted.

2. The appellant was employed with respondent No.1/Bank ofIndia (for short ‘Bank’) as Scale II Officer when he sanctioned threeloans while posted at the Lal Bangla Branch of the Bank at Kanpur.The appellant was also the recommending authority for two loans atHarsh Nagar Branch, once again, at Kanpur. These loans were ultimatelyclassified as Non-Performing Assets (‘NPAs’) and the process of grantingthese loans was scrutinised by the Bank when various proceduralabnormalities were found, which were likely to cause a loss to the Bankof Rs.70.32 lakh.

3. In pursuance of the disciplinary proceedings initiated theappellant was visited with the major penalty of removal from servicewhich shall not be disqualification for future employment upon theappellant. The endeavour of the appellant to assail the proceedingsvisiting him with these adverse consequences have throughout beenunsuccessful including vide impugned order dated 25.10.2017.

4. On 4.7.2018 the only aspect which persuaded this Court toissue notice was with respect to the quantum of penalty. This was onthe basis of the submission advanced by learned counsel for the appellantthat there were two other cases of officers, one Mr. R.K. Mishra andother Mr. V.K. Srivastava where also similar losses had been caused onaccount of the same party and they had been visited with the punishmentof compulsory retirement. In effect the appellant sought that on parityhe should be also visited only with the punishment of compulsoryretirement.

A

B

C

DE

F

G

H

A

A5. On the respondents entering appearance, learned counsel forthe respondent sought to obtain instructions whether the punishment couldbe so altered to compulsory retirement on parity with the other twodelinquent employees. A counter affidavit has been filed in this behalfwhich opposes the request made on behalf of the appellant. That is thelimited contour of controversy we have to examine in the present case.B

6. It is trite to say that the domain of the courts on the issue ofquantum of punishment is very limited. It is the disciplinary authority orthe appellate authority, which decides the nature of punishment keepingin mind the seriousness of the misconduct committed. This would notimply that if the punishment is so disproportionate that it shocks theCconscience of the court the courts are denuded of the authority to interferewith the same. Normally even in such cases it may be appropriate toremit the matter back for consideration by the disciplinary/appellateauthority. However, one other cause for interference can be where theplea raised is of parity in punishment but then the pre-requisite would beDthat the parity has to be in the nature of charges made and held against the delinquent employee and the conduct of the employee post theincident. It is the latter aspect which is sought to be advanced by learnedcounsel for the appellant by relying upon the judgment in Rajendra Yadavv. State of Madhya Pradesh & Ors.[1] On this very aspect learnedcounsel for the respondents drew out attention to a subsequent judgmentEin Lucknow Kshetriya Gramin Bank (Now Allahabad, Uttar PradeshGramin Bank) & Anr. v. Rajendra Singh[2] which had taken note ofthe earlier judgment referred to aforesaid.

7. There is really no difference in the proposition, which is soughtto be propounded except that in the latter judgment the principles haveFbeen succinctly summarised in the last paragraph of the judgment, whichread as under:

“19. The principles discussed above can be summed up andsummarized as follows:

19.1. When charge(s) of misconduct is proved in an enquiry thequantum of punishment to be imposed in a particular case isessentially the domain of the departmental authorities.

G

1 (2013) 3 SCC 73H2 (2013) 12 SCC 372

19.2. The Courts cannot assume the function of disciplinary/departmental authorities and to decide the quantum of punishmentand nature of penalty to be awarded, as this function is exclusivelywithin the jurisdiction of the competent authority.

19.3. Limited judicial review is available to interfere with thepunishment imposed by the disciplinary authority, only in caseswhere such penalty is found to be shocking to the conscience ofthe Court.

19.4. Even in such a case when the punishment is set aside asshockingly disproportionate to the nature of charges framed againstthe delinquent employee, the appropriate course of action is toremit the matter back to the disciplinary authority or the appellateauthority with direction to pass appropriate order of penalty. TheCourt by itself cannot mandate as to what should be the penalty in such a case.

19.5. The only exception to the principle stated in para (d) above,would be in those cases where the co-delinquent is awarded lesserpunishment by the disciplinary authority even when the chargesof misconduct was identical or the co-delinquent was foisted withmore serious charges. This would be on the Doctrine of Equality-when it is found that the concerned employee and the codelinquentare equally placed. However, there has to be a complete paritybetween the two, not only in respect of nature of charge butsubsequent conduct as well after the service of charge sheet inthe two cases. If co-delinquent accepts the charges, indicatingremorse with unqualified apology lesser punishment to him wouldbe justifiable.”

(emphasis supplied)

8. The principle, thus, culled out is that remitting a matter on theissue of quantum of punishment would be as set out in para 19.5 aforesaid,i.e., where a co-delinquent is awarded lesser punishment by thedisciplinary authority even when the charges of misconduct were identicalor the co-delinquent was foisted with more serious charges. This isbased on the principle of equality but then there has to be an absoluteparity.

A

B

C

DE

F

G

H

A9. We now proceed to analyse the facts of the present case in thecontours of the aforesaid principles.

10. If we look to the case of the other two officers, the likely lossto the Bank was assessed in the range of about Rs.77.70 lakh in thecase of Mr. R.K. Mishra and Rs.39.74 lakh in the case of Mr. V.K.BSrivastava. The amount is, at least, not very different from one as in thecase of Mr. R.K. Mishra. However, what is more important is the roleperformed. Mr. R.K. Mishra and Mr. V.K. Srivastava were both thesanctioning authorities in respect of the loans in questions and therewere four loans each involved in the case of both the officers. In thecase of the appellant, he was the sanctioning authority in three loansCwhile he was the recommending authority in two loans.

11. In order to appreciate this aspect, we would first refer to thefindings on the charges against the appellant. It is noteworthy that nomala fide was proved. It was found that one Mr. Vikram Dixit alias Mr.Vinny Sondhi was the key person who is a cheat and has defraudedDmany organisations by proving his identity through different identity cardsacquired by him fraudulently. Third important aspect is that the approvedadvocates and valuers submitted a report which was relied upon by theBank officials. These actually appear to be a common thread in all thethree cases.

E12. Now turning to the recommendations of the Chief VigilanceOfficer dated 20.8.2009, it would be relevant to reproduce para 6.2,which reads as under:

“6.2 The DA has recommended imposition of the major penaltyof “Compulsory Retirement” on all the three Officers. On perusalFof the records, we find that S/Shri V.K. Srivastava and R.K. Mishraare P.F. optees and Shri N.C. Bhardwaj is a pension optee. Earlier,we had proposed “Removal from Service” in respect of all thethree Officer, looking to the fact that in case compulsory retirementis imposed on Shri Bhardwaj, he would be entitled for compulsoryGretirement person. Looking to the seriousness of the acts ofmisconduct committed by Shri Bhardwaj, we feel that “Removalfrom Service” should be the appropriate penalty in his case. It isso because apart from his involvement as recommending authorityin 2 cases at Harsh Nagar Branch, he had sanctioned 3 moreloans from Lal Bangla Branch to accommodate the same partyHi.e., Shri Vikram Dixit.”

13. A reading of the aforesaid shows that while earlier the proposalwas for removal from service for all the three officers, in respect ofother two officers it was converted into compulsory retirement whilenot doing so in the case of the appellant. The rationale is stated to be theseriousness of the acts of misconduct of the appellant and the fact thathe was the recommending authority in two cases and the sanctioningauthority in three other cases. However, the real reason comes outfrom the earlier part of the paragraph, which is that while the other twoofficers were provident fund optees, the appellant was a pension optee.It is, however, not explained in any of the pleadings before us as to whatis the financial ramification in respect of the two options and as to whetherthe appellant would get a greater financial benefit by reason of being apension optee.

14. It is difficult for us to accept that there is any difference in theconduct of the three officers as would justify this differentiation inpunishment. The most important fact in this behalf to notice is that asper the counter affidavit submitted by the respondents, in their own wisdomthey have agreed to grant compassionate allowance to the appellant,which is 2/3[rd] of the full pension as would be payable to him had thepunishment of removal from service not been imposed on him. What isalso important to note is that it is further submitted in the same paragraph8.2 that even if the punishment is modified to compulsory retirement theappellant would receive 2/3[rd] of the full pension which is equivalent tothe 2/3[rd] of the full pension as received for compassionate allowance.The appellant has been given the maximum benefit under Regulations31 & 33 of the Pension Regulations 1995 dealing with compassionateallowance.

“8.2. …...It is further submitted that even in case a punishment of“Removal from service” is imposed upon the Petitioner is modifiedto that of “Compulsory Retirement”, he would receive 2/3[rd] of theFull Pension, which is equivalent to the 2/3[rd] of Full Pension whichhe is receiving at present as a “Compassionate Allowance.””

15. We fail to appreciate that once there is no financial differenceand the role is practically identical, why the respondents hesitatedthemselves to convert the punishment inflicted on the appellant fromone of “removal from service which shall not be disqualification for futureemployment” to “compulsory retirement.” The only aspect is the nature A

B

C

D

E

F

G

H

Aof punishment which appears to tar the appellant more than the othertwo officers without any financial implication for the respondent-Bank.

16. In the aforesaid facts & circumstances, we are, thus, inclinedto accept the plea of the appellant to convert his punishment in termsaforesaid to one of “compulsory retirement.”

B

17. The appeal is accordingly allowed leaving the parties to beartheir own costs.

C

Devika Gujral

Appeal allowed.

D

E

F

G

H