Allowed

Santosh Kumar Shukla 3531 S/S2000 v. Syndicate Bank through Its G. Manager Industrial and Ors.

Allahabad HC7 Feb 2023SPLA/328/2014

Case brief

AI extract

What is this about?

The High Court allowed an appeal against dismissal from service by a bank attendant. The court held that despite selling a house purchased with a bank loan without permission, there was no proof of loss to the bank. The loan was fully repaid with interest, making the finding of misutilization unsustainable.

What did the court decide?

The dismissal order dated 30.09.1999 and the appellate order dated 20.03.2000 were quashed. The writ petition was allowed.

Santosh Kumar Shukla 3531 S/S2000 Vs Syndicate Bank… — Property and Title | Allahabad HC (2023)

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Court No. - 1

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AFR

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Case :- SPECIAL APPEAL No. - 328 of 2014

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Appellant :- Santosh Kumar Shukla 3531 S/S2000 Respondent :- Syndicate Bank Through Its G. Manager Industrial And Ors Counsel for Appellant :- Mahendra Pratap Singh,Anuj Dayal,Mahendra Bahadur Singh Counsel for Respondent :- Gopal Kumar Srivastava

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Hon'ble Ramesh Sinha,J. Hon'ble Subhash Vidyarthi,J.

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(1) Heard Shri Anuj Dayal, learned counsel for the appellant and Shri Gopal Kumar Srivastava, learned counsel for respondent.

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(2) The instant Special Appeal has been filed by the appellant against the judgment and order dated 04.06.2014 passed by learned Single Judge, dismissing the Writ Petition No.3531 of 2000, which was filed by the appellant challenging his dismissal from services by means of an order dated 30.09.1999, as also the Appellate order dated 20.03.2000.

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(3) Briefly stated, the facts of the case are that the appellant was appointed as an Attendant in Syndicate Bank on a Class-IV post on 01.05.1982 and after successfully completing the period of probation, his services were confirmed. The appellant had applied for a Staff Housing Loan of Rs.75,000/-, which was granted to him and the loan amount was payable along with interest of 5% per year in 24 years by paying monthly installment of Rs.357.15/-. The appellant had purchased a plot from Lucknow Development Authority for a consideration of Rs.35,000/- and the appellant was delivered the physical

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possession of the plot on 18.01.1989. Thereafter, the appellant submitted a building plan to construct a house over the said plot and the permission was granted to him vide order dated 10.03.1989. The appellant then was placed under suspension by means of an order dated 31.10.1989.

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(4) On 06.08.1998 a charge sheet was issued to the appellant stating that he had sold away the property that was purchased by him after taking a Housing Loan from the Bank, without repaying the loan amount and without seeking permission from the Bank, in violation of the Employee Housing Loan Scheme. The charge sheet alleged that the aforesaid act of the appellant violated the Clause 19.5 of the Bipartite Agreement. The appellant submitted a reply denying the charges. The Enquiry Officer found the charges levelled against the appellant as conclusively proved and thereafter on 30.09.1999, an order was passed dismissing the appellant from the Bank's services.

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(5) The appellant filed an appeal against the dismissal order dated 30.09.1999 which was dismissed by means of an order dated 20.03.2000.

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(6) The aforesaid order has been challenged by filing Writ Petition No.3531 (S/S) of 2000 and on 13.07.2000, an interim order was passed whereby the dismissal order dated 30.09.1999 and the Appellate order dated 20.03.2000 were stayed.

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(7) The respondent- Bank filed Special Appeal No.227 of 2000 against the interim order dated 13.07.2000 and in appeal, the interim order was modified to the effect that as the appellant had been convicted in a criminal case, he shall not be reinstated, but he shall be paid his salary regularly.

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(8) Shri Anuj Dayal, learned counsel for the appellant has submitted that the appellant had taken a Housing Loan and he had purchased a residential plot from Lucknow Development Authority and possession of the plot was delivered to him. The appellant thereafter submitted a building plan to the Lucknow Development Authority and the Authority sanctioned the plan by means of an order dated 10.03.1989. He constructed a house on the plot from the said loan. On 31.10.1989, the petitioner was placed under suspension and on 09.03.1990, he had met with an accident causing grievous head injuries to him. The appellant was then admitted in the Civil Hospital, Lucknow and thereafter he was shifted to Sanjay Gandhi Postgraduate Institute of Medical Sciences, Lucknow, where he had to undergo a major surgical operation and he had to incur expenses for his treatment. For meeting out his medical expenses, the appellant had to borrow Rs.20,000/- from one Mr. Abdul Sageer Siddiqee and when the appellant could not repay the loan taken from Mr. Siddiqee, he pressurized the appellant to sell the plot and the house in favour of Smt. Sireen Rahman for a sale consideration of Rs.1,25,000/-. Mr. Siddiqee had handed over post-dated cheques towards the sale consideration of the property. However, the cheques were dishonoured. The appellant had to file a Regular Suit No.27 of 1991 in the Court of Civil Judge, Lucknow and ultimately, a compromise took place between them. It has been pleaded in the writ petition that the appellant had sold the property in compelling circumstances.

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(9) Shri Dayal has drawn attention of this Court to the pleadings made in the appeal to the effect that the appellant had been suspended in a different matter by means of order dated

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31.10.1981 and his suspension was revoked by means of an order dated 03.06.1998 and the appellant was reinstated in service and during the entire period the monthly installment towards the repayment of loan continued to be deducted from the salary of the appellant or from the subsistence allowance paid to him. After his reinstatement the appellant filed a representation claiming payment of arrears of salary as well as revision and fixation of his pay and, it was only thereafter that the appellant was issued a charge sheet dated 06.08.1998 stating that he had sold away the property that had been purchased after taking the Housing Loan from the Bank and he had earned profit at the cost of the Bank.

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(10) Thus, it is evident that no loss was occasioned to the Bank by any act of the appellant as he had not misappropriated the loan amount. The loan was to be repaid in monthly installment in 24 years of Rs.357.15, which amount continued to be deducted regularly from the salary of the appellant and within the entire year loan amount has been repaid by the appellant.

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(11) The learned Single Judge dismissed the Writ Petition filed by the appellant holding that the appellant had misutilized the funds of the Bank for personal gain as he had not created equitable mortgage in the property purchased out of the funds lent to him and the property was sold by him without permission and knowledge of the Bank. The learned Single Judge held that the conduct of the appellant in selling the property and making profit, amounted to mis-utilization of the Bank's funds causing serious loss to the Bank.

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(12) While challenging the aforesaid order passed by the learned Single Judge, Shri Anuj Dayal, the learned counsel for

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the appellant has submitted that there was no allegation that any loss had been caused to the Bank by any act of the appellant and there was no material placed on record to prove any loss having been occasioned to the Bank. He has submitted that the findings of learned Single Judge, that serious loss had been caused to the Bank by the alleged conduct of the appellant, was not supported by any material.

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(13) He has further submitted that he does not dispute the fact that selling away the property, which had been purchased from the Housing Loan given by the Bank, was not an appropriate conduct, but still, the consequence of this impropriety could be as per the conditions of the loan agreement only and such an act could not have been a foundation for the disciplinary proceedings leading to the appellant's dismissal from the services.

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(14) Per contra, Shri Gopal Kumar Srivastava, learned counsel for the respondent has vehemently opposed the Special Appeal and he has submitted that the appellant was an employee of the Bank and any misconduct committed by a Bank's employee having adverse financial implications on the Bank, has to be dealt with seriousness. He has submitted that being a Bank employee the Housing Loan was granted to the appellant at a low interest of 2-2.5% and the appellant had availed the Housing Loan with an intention of selling away the house to earn profit and by this conduct of the appellant, the Bank has suffered loss.

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(15) He has relied upon a decision of the Apex Court in the case of State Bank of India and Anr. vs. Bela Bagchi and Ors. ; (2005) 7 SCC 435 , which arose out of an order of dismissal of

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an employee of a Bank on the allegations that the employee had received money from an account holder for depositing in his Savings Bank Account, but she did not do so and made a fictitious credit entry in the pass-book of the account holder. Similar misconduct was repeated by a Bank employee on several other occasions. In the aforesaid factual backdrops, the Apex Court has held that " A Bank officer is required to exercise higher standards of honesty and integrity. He deals with money of the depositors and the customers. Every officer/employee of the Bank is required to take all possible steps to protect the interests of the Bank and to discharge his duties with utmost integrity, honesty, devotion and diligence and to do nothing which is unbecoming of a Bank officer. Good conduct and discipline are inseparable from the functioning of every officer/ employee of the Bank. As was observed by this Court in Disciplinary Authority-cum-Regional Manager v. Nikunja Bihari Patnaik, [1996] 9 SCC 68, it is no defence available to say that there was no loss or profit resulted in case, when the officer/employee acted without authority. The very discipline of an organization more particularly a bank is dependent upon of its officers and officers acting and operating within their allotted sphere. Acting beyond one's authority is by itself a breach of discipline and is a misconduct. The charge against the employee were not casual in nature and were serious. "

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(16) However, the aforesaid dictum of the Apex Court is not applicable to the present case, as there is no allegation of misconduct having been committed by the appellant while discharging his duties as an employee of the Bank. There is no allegation of any embezzlement committed by the appellant. The sole allegation against the appellant is that he took a

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Housing Loan from the Bank, in which he was employed, and he sold away the house without prior permission of the Bank. There is even no allegation of non-payment of the money borrowed by the appellant from the Bank. The loan has been repaid as per the schedule and the Bank did not even an occasion to issue a demand notice for repayment of the loan, what to say about initiating any proceedings against the appellant for recovery of the loan amount. Therefore, the aforesaid decision of Bela Bagchi (supra) is of no avail to the respondent/ Bank in the present case.

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(17) Shri Srivastava has next relied upon the judgment of Supreme Court in the case of Divisional Controller, KSRTC (NWKRTC) vs. A.T. Mane ; (2005) 3 SCC 254 , wherein the Apex Court upheld dismissal of a bus conductor on the ground that on a surprise check he was found to be in possession of unaccounted money of Rs.93/- over and above the amount of equivalent to the tickets issued by him . This decision also has no application to the facts of the present case.

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(18) A copy of the loan agreement executed between the appellant and the respondent/ Bank indicates that it contained a condition that " The employee shall not sell the house without the previous permission of the Bank. If he/she sells the house, with or without the permission of the Bank or allows or suffer the house to be sold in execution of any decree against him/her the entire loan or so much thereof as may than remain unpaid shall become immediately payable on the date on which the sale is completed. "

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(19) From the aforesaid condition it appears that although there was a condition that the borrower will not sell the property

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without prior permission of the respondent, the consequences of sale without permission was also provided in the loan agreement and, therefore, it was open for the respondent to have proceeded against the appellant for breach of conditions of loan agreement in accordance with the provisions of the agreement itself.

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(20) Shri Anuj Dayal, the learned counsel for the appellant has placed before us a judgment of the Apex Court in the case of A.L. Kalara vs. The Project & Equipment Corporation of India Limited ; (1984) 3 SCC 316 , wherein the Apex Court held that "If the rules for granting the advance themselves provided the consequence of the breach of conditions, it would be idle to go in search of any other consequence by initiating any disciplinary action in that behalf unless the 1975 Rules specifically incorporate a rule that the breach of House Building Advance Rules would by itself constitute a misconduct. That is not the case here as will be presently pointed out. Seeking advance and granting the same under relevant rules, is at best a loan transaction. The transaction may itself provide for repayment and the consequence of failure to repay or to abide by the rules. That has been done in this case. Any attempt to go in search of a possible other consequence of breach of contract itself appears to be arbitrary and even motivated."

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(21) When we examine the facts and circumstances of the present case in light of the aforesaid law laid down by the Apex Court, we find that the appellant had taken a Housing Loan from the Bank under which he was employed as an Attendant which is a Class-IV post. The loan was granted in the year 1988. The rate of interest payable by the appellant was 5% per

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annum, and not 2-2.5% per annum as submitted by Shri Gopal Kumar Srivastava, the learned counsel for respondent-Bank. The loan of Rs.75,000/- was payable in 24 years in monthly installment of Rs.357.15/-, which installments continued to be deducted from the appellant's salary or from his subsistence allowance during the period of his suspension and the entire loan amount has been repaid.

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(22) Shri Gopal Kumar Srivastava, learned counsel for the respondent/ Bank has drawn attention to a letter dated 27.10.1989, which was sent by the appellant to the Assistant General Manager of the Bank confessing his guilt of making embezzlement of Rs.3,40,700/- and the appellant had written that he would repay the aforesaid amount of the Bank by selling away the house constructed by him and by collecting money from other sources as well, through which he has tried to impress upon this Court that the appellant had intended to sell away the house even in the year 1989. However, from the perusal of the aforesaid letter indicates that the appellant had brought it to the knowledge of the Bank by means of his letter dated 27.10.1989 that he intended to sell his house and, therefore, the observation of the learned Single Judge that " the property was sold to third party without permission and knowledge of the Bank " is incorrect.

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(23) Although Shri Srivastava has vehemently argued that the appellant's conduct has resulted in financial loss to the respondent/ Bank, but neither the charge sheet issued to the appellant contains any such charge, nor has any other material been brought on record before this Court to substantiate the submission of Shri Srivastava that the Bank has suffered any

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financial loss due to the conduct of the appellant. The Bank had created a Housing Loan, also on certain terms and conditions evident from the loan agreement. At the most, by selling the house purchased / constructed by the money borrowed from the Bank, the appellant has committed a breach of the conditions of the loan agreement but the Bank chose not to take any action for enforcement of the conditions of the agreement. The Bank continued to receive repayment of the loan by making deductions of the amount of monthly installment towards the repayment of the loan from the salary or the subsistence allowance paid to the appellant, for the entire duration of 24 years till the complete loan amount was repaid to the Bank.

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(24) Shri Srivastava has submitted that the appellant's conduct is in violation of Clause 19.5 of the Bipartite Agreement and it amounts to a misconduct as per Clause 19.5(J) of the Bipartite Agreement. The alleged Bipartite Agreement has not been placed on record and there is nothing on record to indicate that the appellant was a party to the agreement or the conditions of the agreement were otherwise binding on the applicant. Moreover, assuming the conditions of the Bipartite Agreement were binding on the appellant, the breach of the conditions of the agreement cannot amount to a misconduct warranting disciplinary action as an agreement cannot be equated as Disciplinary Rules or Regulations through which penal consequences may be imposed upon an employee.

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(25) In view of the aforesaid discussions, we are of the view that the entire Housing Loan has been repaid by the appellant, no loss has been occasioned to the Bank by the appellant having sold away the house and, therefore, the finding of the Hon'ble

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Single Judge that a serious loss was caused to the Bank by the conduct of the appellant in selling away the property, is not supported by the material available on record and is not sustainable. The observation of the Hon'ble Single Judge that the property had been sold without permission of the Bank is correct, but the observation that the same was done without knowledge of the Bank, is incorrect as from the letter dated 27.10.1989, the appellant had informed the Bank that he would repay the Bank's money after selling away the house. Moreover, the charge sheet did not contain a charge that any loss was caused to the Bank by the conduct of the appellant and there is nothing on record to support the finding of the Hon'ble Single Judge that serious loss was caused to the Bank by the conduct of the petitioner.

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(26) In view of the aforesaid discussions the instant Special Appeal is allowed . The judgment and order dated 04.06.2014 is hereby set aside and the Writ Petition No.3531 of 2000 is allowed. The dismissal order dated 30.09.1999 and the Appellate order dated 20.03.2000 is hereby quashed.

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(27) All the necessary consequences shall follow. However, there will be no order as to costs.

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(Subhash Vidyarthi, J.) (Ramesh Sinha, J.)

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Order Date :- 7.2.2023 Arnima

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Digitally signed by :- ARNIMA SINGH High Court of Judicature at Allahabad, Lucknow Bench

Santosh Kumar Shukla 3531 S/S2000 v. Syndicate Bank through Its G. Manager Industrial and Ors.

Case brief

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Santosh Kumar Shukla 3531 S/S2000 v. Syndicate Bank through Its G. Manager Industrial and Ors.

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