W.P.(C) 8652/2017 Page 1 of 39

$~

* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Date of Decision: 28

th

February, 2025

+ W.P.(C) 8652/2017 and CM APPL. 35560/2017

ASHUTOSH GOEL .....Petitioner

Through: Mrs. Prem Lata Bansal, Senior

Advocate with Mr. Shivang Bansal and Mr.

Praveen Jain, Advocates.

versus

STATE BANK OF INDIA AND ORS .....Respondents

Through: Mr. S.L. Gupta, Advocate.

CORAM:

HON'BLE MS. JUSTICE JYOTI SINGH

JUDGEMENT

JYOTI SINGH, J.

1. By this writ petition, Petitioner seeks quashing of order dated

26.07.2014 passed by the Appointing Authority imposing penalty of

‘reduction to a lower stage in the time scale of pay by two stages for a

period of two years, with further direction that officer will not earn

increments to pay during the period of such reduction and on the expiry of

such period, the reduction will have the effect of postponing the future

increments of his pay’ as also order dated 03.09.2015 passed by Appellate

Committee upholding the penalty. Writ of mandamus is sought to

Respondent No. 1/State Bank of India (‘SBI’) to reinstate the Petitioner at

the appropriate stage in the time scale of pay commensurate with the number

of years of service put by him with all consequential benefits.

2. Case of the Petitioner as set up in the writ petition is that Petitioner

joined SBI on 21.12.1981 as Probationary Officer and was promoted four

W.P.(C) 8652/2017 Page 2 of 39

times in his career to MMGS-II w.e.f. 01.08.1987, MMGS-III w.e.f.

01.08.1993, SMGS-IV w.e.f. 01.11.1998 and SMGS-V w.e.f. 29.07.2004.

Between February, 1998 to October, 2001, Petitioner worked in SBI Card

Division, a joint venture of SBI and GE Capital of USA on deputation as a

Project Team Member. Sales team led by the Petitioner was conferred the

Best Sales Team award. From November, 2001, to December, 2002,

Petitioner was posted at CAG Branch, Mumbai as Chief Manager (Forex) of

India’s biggest International Banking Division and from January, 2003 to

October, 2003, he was posted in CAG Central, Mumbai as Chief Manager &

Credit Analyst, where he handled high value accounts of steel sector such as

TISCO, Essar Steel, JSW etc. Thereafter, from November, 2003 to October,

2004, Petitioner worked in CAG Branch, Delhi as Head of the International

Banking Division and within 12 months the business grew over 50%.

3. It is averred that Petitioner was posted to Overseas Branch, New

Delhi as Assistant General Manager (AGM) and Relationship Manager

(RM) from November, 2004 to July, 2009, purely on the basis of his

performance. Duties of the Petitioner included marketing activities to bring

new credit accounts and to enhance the business by increasing the customer

base. Role of the Petitioner was restricted to marketing and business

development and he was not involved in day-to-day operational activities.

Petitioner’s performance during his tenure was assessed as extraordinary in

his Annual Appraisal Reports which is a matter of record.

4. Petitioner averred that he was instrumental in making recoveries from

the account of one Sudarshan Overseas Limited which was a stress account

and a consortium with State Bank of Patiala with an exposure of SBI being

Rs. 35 crore. Petitioner was able to recover Rs. 15.66 crore during financial

W.P.(C) 8652/2017 Page 3 of 39

year 2007-08 and Rs. 8.01 crore in April-December, 2008. In another

account which was declared NPA, a total recovery of Rs.6.04 crore was

made by the Petitioner in 13 months and resultantly, the team led by him

was declared No. 1 team in the ‘Monthly Performance Review Meetings’

during 2008-09 in the entire Region.

5. It is stated that despite the extraordinary performance and known

integrity of the Petitioner, to his surprise, a letter dated 28.05.2010 was

issued to him by General Manager, Mid-Corporate Group-Delhi Region,

alleging certain irregularities in sanctioning the loan account of M/s. Suhrit

Services Pvt. Ltd. to which Petitioner filed a reply dated 21.07.2010 denying

the allegations. A similar letter was sent to his deputy namely, Sushil

Kumar. In routine, the matter was referred to CVC and CBI, however, after

conducting requisite inquiry, CVC found nothing wrong against the

Petitioner but suggested criminal action to be initiated by CBI against Sushil

Kumar vide O.M. dated 22.05.2012.

6. Against the advice of CVC, SBI issued a Charge Sheet dated

12.07.2012 against the Petitioner, which he received on 01.08.2012 wherein

Article of Charge included 17 allegations, primarily relating to failure to

discharge duties and acting in violation of Rule 50(4) of ‘State Bank of India

Officers’ Service Rules, 1992’ (‘1992 Rules’) with respect to account of M/s.

Suhrit Services Pvt. Ltd. As per Rule 68(2), the Articles of Charge are to be

accompanied with a list of witnesses by whom the Articles of Charge are

proposed to be substantiated but in the present case, contrary to the Rule, the

Charge Sheet was not accompanied by a list of witnesses and the entire

inquiry proceeded only on the basis of documents tendered by the Presenting

Officer (‘PO’) without being proved by oral evidence.

W.P.(C) 8652/2017 Page 4 of 39

7. After conclusion of the inquiry, the Inquiry Officer (‘IO’) submitted

his report dated 20.05.2013 to the DA with copy to the Petitioner. As per the

report, allegations 2, 3, 4, 8, 10, 11 and 12 were held as ‘proved’ while

allegations 1, 5, 6, 7, 14 and 17 were held as ‘not proved’. Allegations 9, 13,

15 and 16 were held as ‘partly proved’. The findings were unsupported by

any reasoning and even where allegations were held to be partly proved, it

was not specified as to which part was proved and which was not. There was

no appreciation of evidence in the report. Petitioner filed a detailed

representation dated 15.06.2013 and a supplementary representation dated

26.06.2013 against the inquiry report bringing out the omissions and

irregularities and pointing out how the entire proceeding was vitiated.

8. It is stated that after a gap of 10 months, Petitioner received an order

dated 22.04.2014 whereby Appointing Authority proposed penalty of

‘reduction to a lower stage in the time scale of pay by two stages for a

period of two years, with further direction that officer will not earn

increments to pay during the period of such reduction and on the expiry of

such period, the reduction will have the effect of postponing the future

increments of his pay’, and called upon the Petitioner for personal hearing to

make submissions against the proposed penalty. After the personal hearing

on 07.05.2014 and upon receiving the written representation from the

Petitioner, the Appointing Authority passed the final order dated 26.07.2014

imposing the penalty as proposed. Petitioner filed an appeal before the

Appellate Committee, which was dismissed on 03.09.2015, whereafter

Petitioner approached this Court.

9. Ms. Prem Lata Bansal, learned Senior Counsel for the Petitioner

raised the following contentions assailing the penalty order as also the order

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passed by the Appellate Committee:-

(A) The impugned orders are illegal and arbitrary and unsustainable

in law as Petitioner has been held guilty and punished for not

maintaining financial discipline which was not even a part of the

Article of Charge against him in the Charge Sheet dated 12.07.2012.

Charge 1 was that Petitioner while working as RM, Overseas Branch,

New Delhi committed serious irregularities in adhering to the norms

laid down by the Bank in recommendation, conduct and follow-up of

account relating to M/s. Suhrit Services Pvt. Ltd. and thus failed to

discharge his duties with devotion and diligence and acted in a

manner unbecoming of a bank official and prejudicial to bank’s

interest in violation of Rule 50(4) of 1992 Rules. Rule 50(4) provides

that ‘every officer shall, at all times, take all possible steps to ensure

and protect the interest of the bank and discharge his duties with

utmost integrity, honesty, devotion and diligence, and do nothing

which is unbecoming of the officer’. Allegation No. 17 was specific

that due to various lapses of the Petitioner, Bank is likely to suffer a

loss of Rs.14.06 crore approximately. In the inquiry report, IO has

clearly held that even those allegations which are substantiated merely

pertain to procedural irregularities and therefore, it is difficult to infer

that these irregularities have contributed to loss to the Bank and in this

backdrop rendered a finding that allegation No. 17 was ‘not proved’.

DA concurred with the finding of the IO and held that Petitioner could

not be held liable for the lapse and opinion of DA was confirmed by

the Appointing Authority in the final order. Therefore, once no

financial loss was suffered by the Bank on account of any act or

W.P.(C) 8652/2017 Page 6 of 39

omission of the Petitioner, it is not understood how Petitioner could

be found guilty and punished for not maintaining financial discipline.

(B) Assuming for the sake of argument that in the opinion of the

IO, the inquiry proceedings established any charge different from the

original Article of Charge, there is a procedure prescribed in Rule

68(2)(xxi)(a) of 1992 Rules, whereby reasonable opportunity was

required to be given to the Petitioner against the new charge

permitting him to lead evidence to defend himself.

(C) Charge Sheet also deserves to be quashed on the ground that it

was issued after an inordinate delay of 4 years. The loan transaction in

question pertains to the year 2008 whereas the Charge Sheet was

issued on 12.07.2012. In M.V. Bijlani v. Union of India and Others,

(2006) 5 SCC 88, the Supreme Court held that delay in issue of

Charge Sheet and initiation of disciplinary proceedings and

continuance thereof prejudices the charged officer and action on

delayed Charge Sheet cannot be countenanced in law. In State of

Punjab and Others v. Chaman Lal Goyal, (1995) 2 SCC 570, the

Supreme Court held that disciplinary proceedings must be initiated

and concluded without any delay as soon as irregularities committed

by an employee are discovered. Delay in initiation of proceedings

gives room for allegations of bias, mala fides and misuse of power

and prejudices the delinquent employee.

(D) Charge Sheet is inherently unsustainable as the allegations do

not constitute a misconduct. Strangely, one Article of Charge is

broken into 17 allegations but even put together they do not establish

any culpability on the part of the Petitioner and at best constitute an

W.P.(C) 8652/2017 Page 7 of 39

error of judgment. In Union of India and Others v. J. Ahmed, (1979)

2 SCC 286, the Supreme Court held that there may be negligence in

performance of duty but that may not necessarily constitute

misconduct unless the consequences, directly attributable to

negligence, are such that there is irreparable or resultant damage

which is huge and the degree of culpability is high. An error can be

indicative of negligence but not misconduct. Misconduct involves

moral turpitude and must include an improper or wrong behaviour,

wilful in character or a forbidden act, a transgression of established

and definite rule of action but not a mere error of judgment, as held by

the Supreme Court in State of Punjab and Others v. Ram Singh Ex-

Constable, (1992) 4 SCC 54. From the inquiry report itself it can be

inferred that at the highest, Petitioner was guilty of procedural

violations, which may constitute negligence but cannot be construed

as misconduct.

(E) The other glaring illegality in the conduct of the inquiry

proceedings, the object of which is to give an opportunity to the

Charged Officer to defend himself and controvert the allegations

levelled is that, not even a single witness was produced by SBI before

the IO to prove its case. In fact, a bare perusal of the Charge Sheet

shows that it was not accompanied by a list of witnesses, which is in

violation of Rule 68(2) of 1992 Rules, which provides that where it is

proposed to hold an inquiry, Disciplinary Authority shall frame

definite and distinct charges on the basis of the allegations against the

Charged Officer and the Article of Charge, together with the

statement of the allegations on which they are based, list of documents

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and witnesses relied on and as far as possible, copies of such

documents and statements of witnesses, if any, shall be communicated

in writing/sent to the officer, who shall be required to submit a written

statement of defence. The argument is that not a single witness was

produced by SBI and copies of the listed documents were simply

tendered by the PO. As per settled law, documents have to be proved

by examining witnesses and thus no reliance could have been placed

on the documents by the IO in the absence of their being proved

through oral testimonies. Reliance was placed for the said proposition

on the judgments of the Supreme Court in Roop Singh Negi v.

Punjab National Bank and Others, (2009) 2 SCC 570; Delhi

Transport Corporation v. Ashok Kumar Sharma, 2024 SCC OnLine

SC 1871; and Pawan Kumar Agarwala v. General Manager-II and

Appointing Authority, State Bank of India and Others, (2015) 15

SCC 184.

(F) Rule 68(2)(xxi)(a) of 1992 Rules provides that on conclusion of

the inquiry, IO shall prepare a report which shall contain gist of

Articles of Charge and statement of imputation of misconduct; gist of

defence of the Charged Officer; assessment of the evidence in respect

of each Articles of Charge; and finding on each Article of Charge and

reasons thereof. Plain reading of the inquiry report shows that IO has

merely given his conclusion without discussing the evidence or giving

any finding and/or reason in support of the conclusions or even

dealing with the defence put forth by the Petitioner. Even where the

allegations were held to be ‘partly proved’, it is not mentioned which

part of the allegations were ‘proved’. There is a clear violation of the

W.P.(C) 8652/2017 Page 9 of 39

statutory obligation by the IO and this vitiates the inquiry report and

the penalty imposed.

(G) Another illegality which goes to the root of the inquiry

proceedings and the penalty order is violation and disregard of Rule

68(3)(ii) of 1992 Rules which provides that ‘The Disciplinary

Authority shall, if it disagrees with the findings of the Inquiring

Authority on any article of charge, record its reasons for such

disagreement…...’ From the order of DA dated 22.04.2014, it is

evident that it had disagreed with the IO with respect to allegation

Nos. 9, 13, 15 and 16, however, no disagreement note, recording

tentative disagreement, was issued by DA granting opportunity to the

Petitioner to represent against the same and DA proceeded to propose

the penalty vide Note dated 18.03.2014. This recommendation was

sent to the Appointing Authority, which by its Note dated 22.04.2014

took a decision to grant opportunity of personal hearing only to the

extent of quantum of penalty proposed and this was conveyed to the

Petitioner vide letter dated 22.04.2014, calling upon him for a

personal hearing as to why the proposed penalty be not imposed. It is

a settled law that where DA disagrees with the findings of the IO in

respect of any or all charges, it must form a tentative opinion that it

does not agree with the findings and grant an opportunity of hearing to

the Charged Officer to represent his case with respect to the reasons

for which DA has disagreed. In this context, reliance was placed on

the judgments of the Supreme Court and High Courts in Punjab

National Bank and Others v. Kunj Behari Misra, (1998) 7 SCC 84;

Yoginath D. Bagde v. State of Maharashtra and Another, (1999) 7

W.P.(C) 8652/2017 Page 10 of 39

SCC 739; M. Mohandas v. State Bank of India and Another, 2011

SCC OnLine Mad 2542; S.P. Malhotra v. Punjab National Bank

and Others, (2013) 7 SCC 251; and A.K. Shrivastava v. Indira

Gandhi Krishi Vishwavidyalaya Through its Registrar, Krishak

Nagar, Raipur (C.G.) and Another, 2017 SCC OnLine Chh 969.

(H) In the present case, DA and the Appointing Authority have

followed a strange procedure, unknown to law. Without calling upon

the Petitioner to present his case against the disagreement with the

findings of the IO in respect of charges ‘not proved’/partly proved’,

DA straightaway proposed the penalty and the Appointing Authority

fixed the date for personal hearing only with respect to the proposed

penalty, clearly implying that on the disagreement as also the merits

of the allegations, they had pre-judged that Petitioner was guilty. Both

the recommendation of the DA and the tentative and final orders of

the Appointing Authority also reflect that not a single issue raised by

the Petitioner in his representation against the inquiry report and/or

during the personal hearing, has been considered meaningfully. All

that the Appointing Authority has done in the final order dated

26.07.2014 is to extract the allegations and the views of the IO and

DA and then render its opinion. In the absence of a disagreement note,

the penalty and appellate orders are not sustainable in law.

(I) Petitioner took a consistent stand before the IO that as per

MCG Note dated 25.08.2004 elaborating the credit process, which

was an exhibited document, responsibility of the Petitioner as RM was

to handover the check list of documents to be submitted by the

prospective customer, which was duly done and the documents/

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information received from the customer were handed over to the

Credit Processing Cell (‘CPC’) in the branch. It was the responsibility

of CPC to obtain all additional information as deemed fit from the

customer directly and to this extent, IO agreed with the Petitioner and

which is why allegation No. 1 i.e. before submission of the proposal,

financial status of associate companies and/or other companies

owned/promoted by Directors of M/s. Suhrit Services Pvt. Ltd. were

not obtained, was held as ‘not proved’. IO also agreed that it was the

responsibility of Credit Processing Team (CPT) to carry out pre-

sanction survey and yet erroneously held allegation No. 2, that

Petitioner did not follow-up the matter of pre-sanction, as ‘proved’.

(J) Allegation No. 3 was erroneously held as substantiated. The

STDR of Rs. 0.32 crore was to be obtained pending creation of

equitable mortgage (‘EM’) and was not in addition thereof. Bank

received a letter dated 11.06.2008 from the Syndicate Bank

confirming creation of EM of the flat in question and only thereafter

disbursement was made in the account on 12.06.2008 and therefore,

the allegation of not obtaining STDR was incorrect. In fact, the credit

audit report also evidenced that EM was created on four properties

with Syndicate Bank, as evident from their letter dated 11.06.2008.

None of these issues were looked into by the IO and the charge was

held as ‘proved’ merely on the ground that STDR was required

pending creation of EM of the property under reference, which was

not fully paid. Likewise, in respect to all other allegations also, the IO

completely overlooked the defence raised by the Petitioner and

rendered findings basis the allegations and case put forth by the

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prosecution in the form of documents. It is true that this Court under

Article 226 of the Constitution of India the scope of interference in

inquiry matters is limited, but in a case of no evidence or serious

violations of principles of natural justice and/or procedures of

departmental inquiries, Court can certainly step in to protect the

Charged Officer and quash the inquiry proceedings.

(K) There was no irregularity during the tenure of the Petitioner

from 12.06.2008 to 30.11.2008 and Charge Sheet deserves to be

quashed on this ground also. Loan was disbursed to M/s. Suhrit

Services Pvt. Ltd. on 12.06.2008 and was handled by the Petitioner till

30.11.2008. Credit audit was done by the auditors wherein it was

categorically stated that there were no warning signals/red flags

requiring urgent remedial measures till 24.01.2009. The credit audit

report, which was exhibited document, showed full score in the credit

account. Hence, no allegation can be levelled against the Petitioner

and in fact, PO was unable to establish any nexus between Petitioner’s

alleged acts and omissions and the misconduct. The Appellate

Committee in its order dated 03.09.2015 observed that alleged lapses

against the Petitioner regarding non-adherence to the bank norms in

recommending loan to M/s. Suhrit Services Pvt. Ltd. could not be

proved in the inquiry proceedings and yet did not absolve the

Petitioner on an erroneous and frivolous allegation that lapses by Mr.

Priyadarshan and Sachin Kumar were not brought to the notice of the

sanctioning authority i.e. Mid-Corporate Credit Committee (MCCC).

This observation was fallacious as Petitioner was never aware of the

irregularities, if any, committed by his superior officers and learnt of

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the allegations only during the inquiry. Moreover, as an RM, it was

not Petitioner’s duty to look into or flag faults with his superior

officers.

(L) The penalty imposed on the Petitioner is extremely

disproportionate. Petitioner was obliged only to expand the customer

base for business growth of SBI but as far as the loan was concerned,

the same was sanctioned by CPT i.e. team leader and branch head. In

fact, Mr. Priyadarshan Raut, Chief Manager, the then Credit Analyst

and Sachin Kumar, AGM, the then Team Leader were the persons

who recommended the proposal to MCCC for sanctioning the loan but

none of them were proceeded against and were instead rewarded by

timely promotions and out of turn postings, whereas Petitioner was

inflicted with a harsh penalty and remained without any promotion till

his retirement. The penalty may appear on the face of it to be a case of

reduction of pay by two stages for two years, but in fact it has far

reaching adverse consequences on the career and the emoluments of

the Petitioner. Penalty has resulted in reduction to a lower stage in the

time scale of pay by two stages for two years with loss of increments

in the reduction period as also postponement of future increments and

this has in turn adversely impacted the pension of the Petitioner, who

has retired on superannuation in October, 2015. There is no

gainsaying that reduction in pension is a serious punishment and is

awarded in case of grave misconduct, which is not the case here.

There is also violation of Article 14 of the Constitution inasmuch as

Petitioner and his subordinate Sushil Kumar were charge sheeted

together with almost the same allegations and yet Appellate Authority

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modified his penalty to reduction to a lower stage in time scale of pay

by one stage for one year with further direction that he will not earn

increments during the said period and on expiry of the period

reduction will have the effect of postponing future increments of his

pay. This is despite the fact that CVC had recommended no action

against the Petitioner but a criminal action along with major penalty

against Sushil Kumar. Even otherwise, the major penalty is not

commensurate looking into the fact that the allegation of loss caused

to the Bank due to the act of the Petitioner was not substantiated.

Reliance was placed on the judgments in Rajendra Yadav v. State of

Madhya Pradesh and Others, (2013) 3 SCC 73; Ishwar Chandra

Jayaswal v. Union of India and Others, (2014) 2 SCC 748; and

Punjab and Sindh Bank v. Raj Kumar, 2024 SCC OnLine Del 6431,

for the proposition that Courts can interfere where punishment is

disproportionate to the charges levelled and proved and that there

must be parity of punishment between employees with similar

allegations.

10. Mr. S.L. Gupta, learned counsel for SBI raised the following

contentions defending the inquiry proceedings and the impugned orders:-

(A) Charge Sheet was rightly issued against the Petitioner and there

is no infirmity in the penalty imposed or the order of the Appellate

Committee. The allegations levelled against the Petitioner are grave

and serious and as an officer of the Bank highest degree of integrity

and devotion to duty is expected and there can be no compromise with

these virtues. In 2008, Petitioner was working as RM and was Head of

Account Management Team-III. Cash credit limit of Rs.15 crores with

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margin of 25% was sanctioned to M/s. Suhrit Services Pvt. Ltd. by the

Competent Authority and loan account was to be managed by the

AMT, headed by the Petitioner from the disbursement and during

day-to-day management. On 12.06.2008, on the basis of old stock

statement, Petitioner fixed the drawing power at Rs. 13 crores. The

account was withdrawn from the AMT w.e.f. 01.12.2008 because of

lack of proper management. The loan account turned NPA on

01.12.2008 and investigation revealed lapse on the part of the

Petitioner in the conduct, supervision and follow-up of loan account.

Explanation given by him was unsatisfactory and Charge Sheet was

issued to inquire into the matter with 17 allegations and 15 documents

duly served on him.

(B) Fair and transparent departmental inquiry was conducted

following the principles of natural justice and laid down procedures

granting sufficient opportunity to the Petitioner to defend himself.

Fairness in action can be seen from the fact that IO held only those

charges as ‘proved’ or ‘partly proved’ where there was evidence to

substantiate the allegations. Three Chief General Managers were part

of the Appellate Committee and carefully examined the evidence

before passing the final order imposing the penalty and there are no

allegations of bias or mala fide either against the IO or the DA or the

members of the Appellate Committee. It is a settled law that this

Court while exercising power of judicial review cannot re-appreciate

the evidence led before the IO and substitute its own wisdom to come

to a conclusion contrary to the findings of the IO and/or the DA.

Petitioner is unable to point out any violation of principles of natural

W.P.(C) 8652/2017 Page 16 of 39

justice and therefore, no interference is warranted in the writ petition.

In H.B. Gandhi, Excise and Taxation Officer-Cum-Assessing

Authority, Karnal and Others v. M/s Gopi Nath & Sons and Others,

1992 Supp (2) SCC 312, the Supreme Court held that scope of

judicial review can only extend to decision making process and not to

the decision.

(C) Charges were proved on documentary evidence. Bank produced

20 documents, P-1 to P-20 which were duly furnished to the Petitioner

and he accepted their genuineness and authenticity. In the proceeding

held on 02.11.2012, Petitioner admitted the authenticity of the

prosecution documents P-1 to P-15 and in the hearing on 19.11.2012

he admitted the authenticity of the documents P-16 to P-20. Once the

documents were admitted and were uncontroverted, there was no

requirement of their being proved through oral evidence and therefore,

the judgments relied on in Roop Singh Negi (supra), Ashok Kumar

Sharma (supra) and Pawan Kumar Agarwala (supra) are of no

consequence. In Tara Chand Vyas v. Chairman & Disciplinary

Authority and Others, (1997) 4 SCC 565, the Supreme Court held

that non-production of witnesses/oral evidence is not a manifest error

in the departmental inquiry if documentary evidence is produced and

copies of the documents are furnished to the charged employee. This

position was reiterated in Director General, Indian Council of

Medical Research and Others v. Dr. Anil Kumar Ghosh and

Another, (1998) 7 SCC 97. Even otherwise, as per Section 59 of the

Indian Evidence Act, 1872, only facts other than the contents of

documents are to be proved by oral evidence. It is not mandatory in

W.P.(C) 8652/2017 Page 17 of 39

departmental proceedings that oral evidence must necessarily be led.

In any case, no fact or allegation was sought to be proved beyond the

documents filed and relied upon and therefore, the contention of the

Petitioner that there was no list of witnesses cannot inure to his

advantage in this case.

(D) Petitioner is wrong in contending that he had no role in the loan

transaction and its follow-up and/or there was no allegation of

violating the financial discipline. Before the disbursal of the loan,

Petitioner failed to obtain a security by way of STDR of Rs. 0.32

crores and Rs. 11 lakhs, which were subject matter of allegations No.

3 and 4. Petitioner did not obtain the stocks statement as on the date of

disbursal of the loan/limit on 12.06.2008 and also failed to verify the

availability of the stock, in the absence of which limits could not be

disbursed because the drawing power is determined only basis the

recent stock statement and thus allegation No. 8 was established. The

borrower was a car dealer and its stock was moving and therefore, the

drawing power could not be decided on the basis of old stock

statements.

(E) Allegation No. 9 was serious and grave as Petitioner allowed

over drawings in the accounts within two months of the loan sanction

while he had no authority to grant the same beyond his sanctioning

limit. In Disciplinary Authority-cum-Regional Manager and Others

v. Nikunja Bihari Patnaik, (1996) 9 SCC 69, the Supreme Court held

that allowing overdrafts in the accounts cannot be treated as mere

error of judgment and thus the penalty of dismissal was proportionate.

Likewise, allegations No. 10 and 11 were proved inasmuch as when

W.P.(C) 8652/2017 Page 18 of 39

the borrower requested for over drawings vide letter dated 26.07.2008,

the same was allowed without any approval. The defence of the

Petitioner that his service officer had allowed the over drawing is of

no consequence as being an immediate superior officer, he was

responsible for the actions of his subordinates. Over drawings

were permitted casually without even ensuring the proper end

use of the funds by undertaking inspection of the stocks and

DA rightly observed that Petitioner had no control over the loan

account.

(F) Petitioner has not brought to the notice of the Court another

serious flaw in his conduct which was subject matter sof allegation

No. 12. The relevant account had started showing unsatisfactory

conduct in July, 2008 itself as 11 cheques drawn by M/s. Suhrit

Services Pvt. Ltd. were returned in July, 2008, while 24 cheques were

returned in August, 2008. Petitioner did not exercise effective

supervision over his subordinate officers and this allegation was

established during the inquiry. Being the team leader, it was his duty

to diligently manage and supervise the account and on this score, even

the claim for parity with Sushil Kumar, is misconceived. The onus

and responsibility of a superior officer is far more onerous than his

subordinates and it is not as if no action was initiated against Sushil

Kumar. Penalty has been imposed on Sushil Kumar commensurate

with his misconduct and criminal action against him is pending before

the competent Court.

(G) Even assuming that there are any procedural violations, it is a

settled law that each and every violation of laid down procedure

W.P.(C) 8652/2017 Page 19 of 39

cannot automatically vitiate the inquiry proceeding. Complaint of

violation of procedural provisions ought to be examined from the

point of view of prejudice i.e. whether the violation has prejudiced the

Charged Officer in defending himself properly and effectively. If

prejudice is found, the same must be remedied including by setting

aside the inquiry and/or the penalty order but where no prejudice is

established, no interference is warranted in the departmental

proceedings albeit there are certain procedural violations which

are of a fundamental character, whose violation by itself is

proof of prejudice. This is the view of the Supreme Court in

State Bank of Patiala and Others v. S.K. Sharma, (1996) 3

SCC 364 and has been reaffirmed in several judgments from time to

time.

11. Heard learned Senior Counsel for the Petitioner and learned counsel

for the Respondent.

12. Amongst myriad of arguments raised by learned Senior Counsel for

the Petitioner, the first and foremost issue that requires to be considered is

whether non-production of witnesses by SBI to prove the documents

tendered in support of the Article of Charge is fatal to the inquiry. It is well-

settled that in departmental/domestic inquiries, strict rules of evidence do

not apply but being quasi-judicial proceedings, IO has a duty to carefully

examine the evidence led before him and he cannot merely rely on the

documents filed by the PO to hold the Charged Officer guilty. Inference on

facts by an IO must be based on some evidence, which is led before the IO

in compliance of the principles of natural justice and IO is expected to

ensure that the evidence presented by the department is sufficient to prove

W.P.(C) 8652/2017 Page 20 of 39

the charge albeit the standard of proof required is preponderance of

probabilities. [Ref.: Anil Kumar Dhyani v. Union of India & Ors., 2017

SCC OnLine Del 9911].

13. Coming to the present case, Article of Charge along with statement of

allegations is as follows:-

W.P.(C) 8652/2017 Page 21 of 39

W.P.(C) 8652/2017 Page 22 of 39

14. Along with the charge memorandum, SBI enclosed a list of

documents but admittedly, the charge memorandum was not accompanied

by a list of witnesses. Entire case of SBI is predicated on documentary

W.P.(C) 8652/2017 Page 23 of 39

evidence and plain reading of the inquiry report leaves no doubt that IO has

heavily relied on documents to hold some allegations as ‘proved’ or ‘partly

proved’ against the Petitioner. In the absence of list of witnesses, it can be

safely concluded that neither the documents relied upon by SBI nor their

contents can be said to be proved by SBI. Since no oral evidence was led to

prove the documents tendered, Petitioner did not have the opportunity to

cross-examine the witnesses for rebutting the documents and/or their

contents and therefore, Petitioner was unable to lead his defence, effectively

and meaningfully. Absence of list of witnesses renders the Charge Sheet

invalid and this vitiates the inquiry proceedings. I may, at this stage, allude

to the judgment of the Supreme Court in Roop Singh Negi (supra), relevant

paragraphs of which are as follows:-

“14. Indisputably, a departmental proceeding is a quasi-judicial

proceeding. The enquiry officer performs a quasi-judicial function. The

charges levelled against the delinquent officer must be found to have been

proved. The enquiry officer has a duty to arrive at a finding upon taking

into consideration the materials brought on record by the parties. The

purported evidence collected during investigation by the investigating

officer against all the accused by itself could not be treated to be evidence

in the disciplinary proceeding. No witness was examined to prove the said

documents. The management witnesses merely tendered the documents

and did not prove the contents thereof. Reliance, inter alia, was placed by

the enquiry officer on the FIR which could not have been treated as

evidence.

xxx xxx xxx

17. In Moni Shankar v. Union of India [(2008) 3 SCC 484 : (2008) 1

SCC (L&S) 819] this Court held: (SCC p. 492, para 17)

“17. The departmental proceeding is a quasi-judicial one. Although

the provisions of the Evidence Act are not applicable in the said

proceeding, principles of natural justice are required to be complied

with. The courts exercising power of judicial review are entitled to

consider as to whether while inferring commission of misconduct on

the part of a delinquent officer relevant piece of evidence has been

taken into consideration and irrelevant facts have been excluded

therefrom. Inference on facts must be based on evidence which meet

W.P.(C) 8652/2017 Page 24 of 39

the requirements of legal principles. The Tribunal was, thus, entitled

to arrive at its own conclusion on the premise that the evidence

adduced by the Department, even if it is taken on its face value to be

correct in its entirety, meet the requirements of burden of proof,

namely, preponderance of probability. If on such evidences, the test of

the doctrine of proportionality has not been satisfied, the Tribunal

was within its domain to interfere. We must place on record that the

doctrine of unreasonableness is giving way to the doctrine of

proportionality.””

15. Reiterating the principle, the Supreme Court in State of Uttar

Pradesh and Others v. Saroj Kumar Sinha, (2010) 2 SCC 772, held as

under:-

“27. A bare perusal of the aforesaid sub-rule shows that when the

respondent had failed to submit the explanation to the charge-sheet it was

incumbent upon the inquiry officer to fix a date for his appearance in the

inquiry. It is only in a case when the government servant despite notice of

the date fixed failed to appear that the inquiry officer can proceed with the

inquiry ex parte. Even in such circumstances it is incumbent on the inquiry

officer to record the statement of witnesses mentioned in the charge-sheet.

Since the government servant is absent, he would clearly lose the benefit of

cross-examination of the witnesses. But nonetheless in order to establish

the charges the Department is required to produce the necessary evidence

before the inquiry officer. This is so as to avoid the charge that the inquiry

officer has acted as a prosecutor as well as a judge.

28. An inquiry officer acting in a quasi-judicial authority is in the

position of an independent adjudicator. He is not supposed to be a

representative of the department/disciplinary authority/Government. His

function is to examine the evidence presented by the Department, even in

the absence of the delinquent official to see as to whether the unrebutted

evidence is sufficient to hold that the charges are proved. In the present

case the aforesaid procedure has not been observed. Since no oral

evidence has been examined the documents have not been proved, and

could not have been taken into consideration to conclude that the charges

have been proved against the respondents.

29. Apart from the above, by virtue of Article 311(2) of the

Constitution of India the departmental enquiry had to be conducted in

accordance with the rules of natural justice. It is a basic requirement of

the rules of natural justice that an employee be given a reasonable

opportunity of being heard in any proceedings which may culminate in

punishment being imposed on the employee.

30. When a departmental enquiry is conducted against the government

W.P.(C) 8652/2017 Page 25 of 39

servant it cannot be treated as a casual exercise. The enquiry proceedings

also cannot be conducted with a closed mind. The inquiry officer has to be

wholly unbiased. The rules of natural justice are required to be observed

to ensure not only that justice is done but is manifestly seen to be done.

The object of rules of natural justice is to ensure that a government

servant is treated fairly in proceedings which may culminate in imposition

of punishment including dismissal/removal from service.

31. In Shaughnessy v. United States [97 L Ed 956 : 345 US 206

(1952)] (Jackson, J.), a Judge of the United States Supreme Court has

said: (L Ed p. 969)

“… Procedural fairness and regularity are of the indispensable

essence of liberty. Severe substantive laws can be endured if they are

fairly and impartially applied.””

16. Relevant would it be to refer to the judgments of the Division

Benches of this Court on the same proposition of law. In Union of India

and Others v. Ritu Chaudhary, 2019 SCC OnLine Del 12063, the Division

Bench held as follows:-

“13. The Court is not persuaded by any of the above contentions of the

Petitioners. The Court notes that under Rule 14(3) & (4) of the CCS (CCA)

Rules, it was incumbent, where the Government proposes to hold an

inquiry, to draw the substance of imputations which would contain “a list

of documents by which and a list of witnesses by whom, the Articles of

Charge are proposed to be sustained”. The said rule reads as under:

“14 (3) Where it is proposed to hold an inquiry against a Government

servant under this rule and rule 15, the disciplinary authority shall

draw up or cause to be drawn up-

(i) the substance of the imputations of misconduct or misbehaviour

into definite and distinct articles of charge;

(ii) a statement of the imputations of misconduct or misbehaviour

in support of each article of charge, which shall contain-

(a) a statement of all relevant facts including any admission or

confession made by the Government servant;

(b) a list of documents by which, and a list of witnesses by

whom, the articles of charge are proposed to be sustained.

(4) The disciplinary authority shall deliver or cause to be delivered to

the Government servant a copy of the articles of charge, the statement

of the imputations of misconduct or misbehaviour and a list of

documents and witnesses by which each article of charges is proposed

W.P.(C) 8652/2017 Page 26 of 39

to be sustained and shall require the Government servant to submit,

within such time as may be specified, a written statement of his

defence and to state whether he desires to be heard in person”.

14. Rule 14 (4) also envisages serving upon the Government servant

the copy of the Articles of Charge which would include “the list of

documents and witnesses by which each Articles of Charge is proposed to

be sustained”.

15. The following observations in LIC of India v. Ram Pal Singh Bisen,

(2010) 4 SCC 491 are relevant in this context:

“20. Thus, the question that arises, for consideration is whether in

absence of any oral evidence having been tendered by the appellants,

and especially in absence of putting their own defence to the

respondent during his cross examination in the Court, what is the

effect of documents filed by appellants and marked as Exhibits.

21. Despite our persistent requests made to the learned counsel

appearing for the appellants they have not been able to show

compliance of Order XII Rule 1 and 2 of the CPC, meaning thereby

that there has not been any compliance thereof.

…..

26. We are of the firm opinion that mere admission of document in

evidence does not amount to its proof. In other words, mere marking

of exhibit on a document does not dispense with its proof, which is

required to be done in accordance with law. As has been mentioned

herein above, despite perusal of the record, we have not been able to

come to know as to under what circumstances respondent plaintiff had

admitted those documents. Even otherwise, his admission of those

documents cannot carry the case of the appellants any further and

much to the prejudice of the respondent.

27. It was the duty of the appellants to have proved documents Exh. A-

1 to Exh. A-10 in accordance with law. Filing, of the Inquiry Report

or the evidence adduced during the domestic enquiry would not

partake the character of admissible evidence in a court of law. That

documentary evidence was also required to be proved by the

appellants in accordance with the provisions of the Evidence Act,

which they have failed to do.”

16. Although, as pointed out by learned counsel for the Petitioners, in

disciplinary inquiry proceedings the rules of the CPC and the Evidence

Act may not strictly apply, it is basic that the mere production of a

document is not sufficient even in a disciplinary inquiry. There has to be

some witness to prove such a document. Without a witness to prove the

documents, the Enquiry Officer cannot take it on record as a genuine

document. In the present case in the absence of any list of witnesses, there

W.P.(C) 8652/2017 Page 27 of 39

was no means by which the documents could have been proved by the

Department in the inquiry proceedings.

17. In the present cases, if indeed the MoC refer to documents, the

originals of which were not available with the Department, and the list of

the names of the witnesses who were sought to be examined to prove the

above documents, was not appended, clearly, the holding of the enquiry

would itself become a mere formality. As rightly pointed out by the CAT, if

in the absence of original documents and witnesses, an Enquiry Officer

was to find the charges to be proved, such a finding would obviously be

perverse and unsustainable in law. In other words, by allowing the

disciplinary proceeding to continue on the basis of the subject MoCs, the

Court or the Tribunal, as the case may be, would be effectively directing a

wasteful exercise to be undertaken, which would end up being invalidated

on obvious grounds.”

17. In Union of India v. Shameem Akhtar, 2015 SCC OnLine Del

14747, the Division Bench, relying on the judgment of the Supreme Court in

Kuldeep Singh v. The Commissioner of Police and Others, (1999) 2 SCC

10, held as follows:

“15. It is settled law that the charges levelled against a delinquent

official is to be proved in the inquiry before any penalty is imposed. Sub-

Rule (3) of Rule 14 provides that the Articles of Charge are to be

supported with documents and proved by witnesses during the hearing. In

our view, this in-built safeguard has been provided to allow a delinquent

employee to cross-examine the witnesses and to rebut the allegations

against him. In the absence of any witness and in the absence of any

opportunity to cross-examine a witness would be against the canon of

natural justice and the same cannot be treated as a mere formality.”

18. In A.K. Saxena v. Union of India & Ors., W.P.(C) 3127/2014,

decided on 10.08.2016, the Division Bench was again called upon to decide

the legality of a departmental inquiry and one of the issues was that

Memorandum of Charge was without a list of witnesses. Relying on the

judgments in Roop Singh Negi (supra) and Saroj Kumar Sinha (supra), the

Division Bench held that mere production of documents was not enough and

contents of the documents have to be proved by examining the witnesses as

W.P.(C) 8652/2017 Page 28 of 39

this is the requirement of principles of natural justice albeit provisions of

Evidence Act may not be strictly applicable to departmental proceedings. To

the same effect are the judgments of the Division Benches of this Court in

Union of India and Others v. Surender Kumar, 2023 SCC OnLine Del

3414; Anil Kumar Dhyani (supra); and Union of India v. Man Singh,

2018 SCC OnLine Del 7298. It would be relevant to refer to some passages

from the judgment in Anil Kumar Dhyani (supra) as under:

“16. We have heard learned counsel for the parties and considered their

rival contentions. From the facts noticed hereinabove, it is clear that in the

chargesheet itself, the Respondents have clearly stated, that they did not

propose to examine any witness. The short question of simple nature, but

considerable importance, which arises for our consideration in the present

case is as to whether in a domestic inquiry, documents can be relied upon

to hold the employee guilty, without producing even a single witness to

prove those documents and that too when the delinquent employee does

not admit those documents.

17. Though it is well settled that in a domestic inquiry, strict rules of

evidence do not apply and the inquiry officer is not expected to write a

judgment like a Judge of a Court but it is also equally a well settled

proposition, that the domestic inquiry is a quasi judicial proceeding and

the inquiry officer, while performing this quasi judicial function, has a

duty to carefully examine the evidence led before him and he cannot

merely rely on the documents filed by the Presenting Officer to hold the

delinquent employee guilty. Inference on facts by an inquiry officer must

be based on some evidence, which is led before the inquiry officer in

compliance of the principles of natural justice and he is expected to ensure

that at least the evidence presented by the management, is sufficient to

hold that the charge is proved.

18. Coming to the facts of the present case, we find that the Petitioner

had specifically denied the documents on which reliance had been placed

by the Respondents, and he had repeatedly requested for production of

original documents, so as to enable him to carry out admission/denial of

the documents relied upon. It is evident that the documentary evidence

relied upon in the chargesheet, was not admitted by the Petitioner

employee. In such a situation, in our considered view, it was imperative

for the Respondents management to, at least, examine some witness to

exhibit those documents before the inquiry officer, and only when the

documents were exhibited through a witness, before the inquiry officer,

and sufficient opportunity granted to the Charged Officer to cross-examine

W.P.(C) 8652/2017 Page 29 of 39

the witness, that reliance could have been placed on the same to hold the

Petitioner guilty.

xxx xxx xxx

23. In fact, from a perusal of the judgment of the Apex Court in the

case of State Bank of India v. Narendra Kumar Pandey (supra), which has

been relied upon by the Respondents, it becomes evident that only when

the documents are uncontroverted, it is open to the inquiry officer to

accept the same, to hold the employee guilty even without examining any

witness. In a case where the documents are not admitted by the delinquent

employee, the same have to be proved by the management by leading

oral evidence and in the absence of any witness, the same cannot be relied

upon by the inquiry officer while arriving at his finding in respect of the

charges.”

19. Recently, the Division Bench of this Court in Punjab National Bank

and Others v. S.K. Jain, 2024 SCC OnLine Del 8916, reiterated that

documents relied upon in disciplinary proceedings have to be proved

through oral evidence so that the employee gets an opportunity to rebut the

evidence by cross-examining the witnesses through whom the documents

are sought to be proved. The argument of SBI that Petitioner has admitted

the authenticity of the documents relied upon by SBI and tendered by the

PO, can be no avail to SBI for the simple reason that even assuming the

authenticity of the documents was accepted by the Petitioner, contents of the

documents were required to be proved through oral testimonies and

moreover, since no witnesses were cited, Petitioner lost the opportunity of

cross-examination and resultantly to rebut the documentary evidence

produced against him.

20. Matter can be seen from another angle. Rule 67 of 1992 Rules

provides the minor and major penalties that can be imposed on the bank

employee in a disciplinary proceeding. Procedure for disciplinary action is

laid down in Rule 68 of 1992 Rules. Rule 68(2)(i) provides that no order

imposing major penalty shall be made except after an inquiry held in

W.P.(C) 8652/2017 Page 30 of 39

accordance with sub-Rule (2). Rule 68(2) of 1992 Rules provides that along

with the Articles of Charge and statement of allegations, a list of documents

and list of witnesses shall be furnished to the Charged Officer who will then

submit a written statement of defence. Therefore, furnishing a list of

witnesses is a mandate of the procedure prescribed for holding an inquiry

before imposing a major penalty. Therefore, the procedure followed by SBI

by not having a list of witnesses accompanying the Charge Sheet is more in

breach of the Rule than in compliance and this to my mind is enough to

vitiate the Charge Sheet. Since the Charge Sheet itself is illegal and cannot

be sustained, the departmental inquiry together with the penalty stands

vitiated and this Court need not delve into any further argument raised by

the parties.

21. Be that as it may, Petitioner is also right in his contention that there is

another glaring illegality in the procedure followed by the DA and the

Appointing Authority. Rule 68(3)(ii) of 1992 Rules provides that DA shall,

if it disagrees with the findings of the IO on any Article of Charge, record its

reasons for such disagreement. As per settled law, once a disagreement note

is issued by the DA, the same has to be put to the Charged Officer to make

his representation and contest the reasons for disagreement. This position of

law is settled by the Supreme Court in Kunj Behari Misra (supra) and

Yoginath D. Bagde (supra). Relevant paragraph from Yoginath D. Bagde

(supra) is as follows:-

“31. In view of the above, a delinquent employee has the right of

hearing not only during the enquiry proceedings conducted by the enquiry

officer into the charges levelled against him but also at the stage at which

those findings are considered by the disciplinary authority and the latter,

namely, the disciplinary authority forms a tentative opinion that it does not

agree with the findings recorded by the enquiry officer. If the findings

recorded by the enquiry officer are in favour of the delinquent and it has

W.P.(C) 8652/2017 Page 31 of 39

been held that the charges are not proved, it is all the more necessary to

give an opportunity of hearing to the delinquent employee before reversing

those findings. The formation of opinion should be tentative and not final.

It is at this stage that the delinquent employee should be given an

opportunity of hearing after he is informed of the reasons on the basis of

which the disciplinary authority has proposed to disagree with the findings

of the enquiry officer. This is in consonance with the requirement of

Article 311(2) of the Constitution as it provides that a person shall not be

dismissed or removed or reduced in rank except after an enquiry in which

he has been informed of the charges against him and given a reasonable

opportunity of being heard in respect of those charges. So long as a final

decision is not taken in the matter, the enquiry shall be deemed to be

pending. Mere submission of findings to the disciplinary authority does

not bring about the closure of the enquiry proceedings. The enquiry

proceedings would come to an end only when the findings have been

considered by the disciplinary authority and the charges are either held to

be not proved or found to be proved and in that event punishment is

inflicted upon the delinquent. That being so, the “right to be heard” would

be available to the delinquent up to the final stage. This right being a

constitutional right of the employee cannot be taken away by any

legislative enactment or service rule including rules made under Article

309 of the Constitution.”

22. Following the judgments of the Supreme Court in Kunj Behari Misra

(supra) and Yoginath D. Bagde (supra), the Division Bench of this Court in

K.C. Sharma v. BSES Yamuna Power Limited, 2015 SCC OnLine Del

8125, held as follows:-

“15. In the decisions reported as (1998) 7 SCC 84 Punjab National

Bank v. Kunj Bihari Misra and (1999) 7 SCC 739 Yoginath D. Bagde

v. State of Maharashtra, the Supreme Court held that a facet of the

principles of natural justice was that if the Disciplinary Authority

disagreed with the findings returned by an Enquiry Officer it should

record tentative reasons for the disagreement, leaving scope for an open

mind to consider the response of the Charged Officer, give the tentative

reasons for the disagreement to the Charged Officer and invite his

response and then dealing with the response pass a reasoned order.

16. The jurisprudence behind said principle of law is that unless a

person is given an opportunity to respond to a tentative reason to

disagree, the person affected loses a valuable right of being heard before a

decision adverse to his interest is taken and that the final decision must

contain the reasons because it is this reasons which would determine the

appellate remedy of the person whose interest is adversely affected by the

decision.

W.P.(C) 8652/2017 Page 32 of 39

17. In Yoginath D. Bagde's case (supra), the Supreme Court held:

“a delinquent employee has the right of hearing not only during the

enquiry proceedings conducted by the Enquiry Officer into the

charges levelled against him but also at the stage at which those

findings are considered by the Disciplinary Authority and the latter,

namely, the Disciplinary Authority forms a tentative opinion that it

does not agree with the findings recorded by the Enquiry Officer. If

the findings recorded by the Enquiry Officer are in favour of the

delinquent and it has been held that the charges are not proved, it is

all the more necessary to give an opportunity of hearing to the

delinquent employee before reversing those findings. The formation of

opinion should be tentative and not final. It is at this stage that the

delinquent employee should be given an opportunity of hearing after

he is informed of the reasons on the basis of which the Disciplinary

Authority has proposed to disagree with the findings of the Enquiry

Officer. This is in consonance with the requirement of Article 311(2)

of the Constitution as it provides that a person shall not be dismissed

or removed or reduced in rank except after an enquiry in which he has

been informed of the charges against him and given a reasonable

opportunity of being heard in respect of those charges. So long as a

final decision is not taken in the matter, the enquiry shall be deemed

to be pending. Mere submission of findings to the Disciplinary

Authority does not bring about the closure of the enquiry proceedings.

The enquiry proceedings would come to an end only when the findings

have been considered by the Disciplinary Authority and the charges

are either held to be not proved or found to be proved and in that

event punishment is inflicted upon the delinquent. That being so, the

“right to be heard” would be available to the delinquent up to the

final stage. This right being a constitutional right of the employee

cannot be taken away by any legislative enactment or Service Rule

including Rules made under Article 309 of the Constitution.”

18. An argument was advanced in Yoginath Bagde's case before the

Supreme Court that a post-decisional hearing may be granted. The

Supreme Court negative the plea holding that the same would not be

adequate because the Disciplinary Authority had already closed its mind

by taking a determinative view.”

23. To the same effect are the judgments relied upon by the Petitioner in

M. Mohandas (supra), S.P. Malhotra (supra), and A.K. Shrivastava

(supra). In the present case, there is an apparent violation of Rule 68(3)(ii)

inasmuch as DA disagreed with the findings of the IO on allegation Nos. 9,

W.P.(C) 8652/2017 Page 33 of 39

13, 15 and 16, however, no disagreement note was rendered recording

reasons for the disagreement and thus no opportunity was granted to the

Petitioner to represent and contest the reasons for disagreement. In fact, a

strange procedure was followed by the DA, wherein it rendered a tentative

opinion not on the findings it disagreed with but only on the quantum of

penalty and forwarded the recommendation to the Appointing Authority.

The Appointing Authority also did not care to pen down any disagreement

note and seek Petitioner’s comments but gave an opportunity with respect to

quantum of penalty only. This is a serious flaw in the disciplinary

proceedings and on this ground the penalty order deserves to be quashed.

24. Additionally, Petitioner is also correct in his submission that IO has

not taken into consideration the defence submitted by the Petitioner during

the inquiry and has merely noted the respective stands and returned a finding

on the allegations basing his conclusion on the documents tendered by SBI.

To deal with this aspect, I may illustratively refer to the findings on the

allegations held to be ‘proved’ against the Petitioner as follows:-

“Allegation No. 2

In a note dated 31,10.2008 (Note no, 85), the Concurrent Auditor at the

branch had stated that the pre sanction survey report had not been kept on

record in the relative file. Against that observation, he had given remarks

that the same was awaited from the Centralized Processing Cell (CPC).

No further follow up was evidenced nor the pre-sanction report is on

record.

My findings

1. Pex 18 conveys that the copy of pre sanction survey report is not kept in

branch record,

2. Dex 9/2 confirms responsibility of CPT to carry out pre sanction survey.

3. Dex 13/2 confirms only omission of note no 85 from the pending list but

does not confirm satisfactorily advising by CPC about resolution of issue

or follow up of issue by Concurrent auditor.

In view of the above documentary evidences & Arguments the charge

leveled against OPA regarding no further follow up is proved.

W.P.(C) 8652/2017 Page 34 of 39

Allegation No. 3

As per page 18 of the proposal, under the head 'collateral details', the

branch was required to obtain a STDR of Rs.0.32 crs. being our share of

realizable value of the property i.e. a flat with an area of 198.30 Sq. mt. at

601, Vatika City, Gurgaon, as Equitable Mortgage was to be created later.

However, the required STDR for Rs.0.32 crs. was not obtained.

My findings

1. Pex 2/19 confirms requirement of obtaining a STDR of Rs. 0.32 cr under

exclusive charge of SBI pending creation of EM of property under

reference which was not fully paid.

2. Pex 4/1 confirms that property remains partly paid as on 12.06.2008.

3. Letter no 9044/NP/ADV/SUHRIT is not admitted as prosecution of

defense exhibit.

In view of the above documentary evidences & Arguments the charge

leveled against OPA Is proved.

Allegation No. 4

An STDR of Rs. 11 lacs was required to be provided as a part of collateral

security (in lieu of our stipulated share in an LIC insurance policy in the

name of Ms. Binita Pradhan-value Rs.30 lacs), but that was not done.

My findings

1. Pex 2/19 confirms stipulation of obtaining assignment of LIC policy in

the name of Binita Pardhan with surrender value of Rs 0.30 cr with

Syndicate Bank and our share being Rs 0.11 cr.

2. Pex 4/2 confirms non tendering of insurance policy.

3. Pex 2/1 does not permit any time for creation of security by way of

assignment subsequent to disbursement in the absence of which it is

implied to create the security upfront.

In view of the above documentary evidences & Arguments the charge

leveled against OPA is proved.

Allegation No. 8

Before first disbursement in the account on 12.06.2008, obtention of stock

statement and the verification of stocks were not carried out. There is no

pre-disbursement inspection report on record.

My findings

1. Prosecution document Dex 6/1 is the Transaction Enquiry of CC

Account No.30402018486 of M/s Suhrit Services which shows First debit

of Rs. 5,0012500/- on account of first disbursal.

2. Prosecution document PEX 6/1 to 4 is the copy of stock statement of M/s

Suhrit Services Pvt Ltd. It is as on 30.06.2008.

3. No stock statement of 12.06.2008 (Date of 1

st

disbursal) or prior to that

is on Branch record.

W.P.(C) 8652/2017 Page 35 of 39

4. Defense document D-7/2 refers to recording of Monthly stock statement

dated 31.05.2008 in the DP Register on 10,06,2008, This confirms that it

was obtained 2 days prior to the first disbursal.

5. Defense Document D-9/5 says Verification of stocks after first

disbursement is to be done by AVT as per MCG Note Para C (ii)(1).

No evidence of having carried out the pre disbursement inspection has

been produced. In view of the above documentary evidences &

Arguments the charge leveled against OPA is substantiated.

Allegation No. 10

The Company had requested for permitting over drawings vide their letter

dt.26.07.2008 for purchasing i10 cars, which do not bear any

remarks/recommendations by any official or approval by any authority.

However, on subsequent occasions, no request letter(s) from the

borrowers were obtained while permitting the overdrawings in the

account.

My findings

1. Prosecution document PEX 9/1-12 is the copy of Irregularity reports of

M/S Suhrit Services for the month of July 2008 & Aug 2008 put up by the

Branch to Mid Corporate Credit Committee for confirmation. Reports

show irregularity of Rs. 66.00 lacs in July 2008 (PEX 9/7) Irregularity of

Rs. 1.18 crores in the month of Aug 2008 (PEX 9/1).

2. Defence reply makes a mention of overdrawing permitted during the

month of August 2008 only and reply is silent about applications received

on other occasions like in July 2008 and beyond the expiry of period

requested in letter

In view of the above documentary evidences & Arguments the charge

leveled against OPA is proved.

Allegation No. 11

The decision to permit overdrawing in the account had been taken in a

casual manner by allowing drawings in the account and not ensuring

proper end use of funds by confirming that the i10 cars were actually

purchased. There is no record as to whether inspection was carried out

after permitting over drawings to verify creation of additional securities

(i.e. stocks).

My findings

1. Prosecution document PEX 9/7 to 12 is the Irregularity report of M/s

Suhrit Services for the month of July 2008 which shows irregularity of Rs.

66.00 lacs and document Pex 8 is the letter dt.26/07/2008 of M/s Suhrit

services requesting an addl. Overdrawing of Rs. 1.00 crore. Pex 9/1 to 9/7

is the Irregularity Report for the month of August 2008 showing

irregularity of Rs.1.18 crores in the account of borrower.

W.P.(C) 8652/2017 Page 36 of 39

2. Defense also mentions that no stock statement is on record showing that

the i10 cars were purchased and added to the hypothecated stock and the

stock were verified.

3. Defense cites document Dex 7/2 and stales that to ensure proper end use

of funds, the Company submitted its stock statement as on 31.08.2008

which shows Finished Goods stock of Rs.39.48 cr.

4. Prosecution document PEX 11/1 to PEX 11/23 are the relevant pages of

Inspection Report of Assets Verification Officer (AVO) who had carried

out inspection on 03.09.2008 and in his report he enclosed list of cars,

which were physically verified by him and list of cars in transit. Total 126

i10 cars were in inventory list (52 i10 cars were physically verified and 74

i10 cars were in transit as per the report).

The document Pex 11 refers to stock statement dated 31.07.2008 where as

overdrawing was permitted thereafter. In view of the above documentary

evidences & Arguments the charge leveled against OPA Is proved.

Allegation No. 12

The account had started throwing signals of unsatisfactory conduct in July

‘08 itself as 11 cheques of the company were returned by the branch due to

insufficient funds in the month of July, 2008. In subsequent months also the

position did not improve which is evidenced by the number of cheques

returned due to insufficient funds as under:

August 2008 - 24 Cheques

September 2008 - 5 Cheques

October 2008 - 2 Cheques

This was in addition to the fact that account was allowed to be overdrawn

from the very beginning.

My findings

1. Prosecution document PEX 7/17, 7/21, 7/22, 7/23, 7/26, 7/27, 7/29,

7/31, 7/32 & 7/33 show that more than 11 cheques were returned unpaid

on account of insufficient funds in the month of July 2008.

2. Prosecution document PEX 7/37 to 7/45 show that 24 cheques were

dishonoured during the month of Aug 2008.

3. Prosecution document PEX 7/45 to 7/52 Show that 5 cheques were

dishonoured during the month of Sep 2008

4. Prosecution document PEX 7/53 shows returning of 2 Cheques during

the month of Oct 2008.

In view of the above documentary evidences & Arguments the charge

leveled against OPA is proved.”

25. With respect to allegation No. 2, it can be seen that Petitioner had

taken a stand that responsibility for pre-sanction survey report was of the

W.P.(C) 8652/2017 Page 37 of 39

credit analyst as per Ex.D9/2, who was member of the CPC and as RA,

Petitioner had no role to play. He also brought out that the concurrent

auditor never got back to him regarding non-receipt of the survey report

during the period Petitioner was handling the account and that Note 85

which stated that survey report was not on record, was not shown in the list

of pending audit notes, which confirms that the concurrent auditor was

satisfactorily advised by CPC and had closed the note as complied with. IO

found that responsibility of pre-sanction survey was of CPT and despite this

finding and overlooking the other issues raised by the Petitioner, IO simply

concluded that the allegation was ‘proved’. Similarly, in respect of

allegation No. 3, Petitioner had pointed out that a letter was received from

Syndicate Bank dated 11.06.2008 confirming creation of EM of the flat in

question before the first disbursement on 12.06.2008 and that STDR of Rs.

0.32 crore was not in addition to the EM. It was also brought out that EM

was created on four properties as confirmed by the Syndicate Bank,

however, overlooking all this and without dealing with the defence, the

allegation was held as ‘proved’.

26. In respect to allegation No. 4, Petitioner brought forth that the

sanction appraisal did not stipulate condition of Rs.11 lacs by way of STDR

and only required assignment of insurance policy with surrender value of

Rs.0.30 crore on pari passu basis with Syndicate Bank and that though the

account was transferred on 30.11.2008, Petitioner and his Service Officer

assisted RM-IV and arranged deposit of Rs.0.182 crore in the company’s

account, however, as SSPL account was transferred to RM-IV on

01.12.2008, it was the said officer, who had to decide whether to make

STDR for Rs.0.11 crore or not. Same is the position with respect to

W.P.(C) 8652/2017 Page 38 of 39

allegations No. 8, 10, 11 and 12. There is only a reference to the defence

put up by the Petitioner and/or the documents tendered by him, but there is

no discussion or analysis on the same. The inquiry report clearly shows a

mechanical exercise by the IO contrary to the settled law that the

Inquiring Authority must examine, discuss and analyse the evidence led by

prosecution and defence, before returning a finding on each Article of

Charge.

27. Since the Charge Sheet is illegal for want of list of witnesses, Court is

not delving into other contentions of the Petitioner on merits. For all the

aforesaid reasons, the Charge Sheet, the inquiry proceedings and the penalty

order cannot be sustained in law. Accordingly, Charge Sheet dated

12.07.2012, inquiry report dated 27.05.2013, order dated 26.07.2014

imposing the penalty and appellate order dated 01.01.2015 are hereby

quashed and set aside. It is, however, left open to SBI to take recourse to de

novo inquiry, if so advised, in accordance with law, from the stage of

issuance of Charge Sheet, with a caveat that if SBI is unable to comply with

the legal requirement of leading oral evidence to prove the documents relied

upon and/or witnesses are not available, it should not re-open the issue

considering that the Charge Sheet was issued in 2012 and penalty order

dates back to 26.07.2014 and Petitioner has suffered for over 13 years. In the

eventuality, SBI decides not to conduct a de novo inquiry, consequential

benefits of quashing the penalty shall be granted to the Petitioner which

will entail re-fixation of his pay from the date of the penalty order

and consequent re-fixation of pension. Arrears of pay and pension

upon re-fixation shall be released to the Petitioner within eight weeks from

today.

W.P.(C) 8652/2017 Page 39 of 39

28. Writ petition is disposed of in the aforesaid terms. Pending

application also stands disposed of.

JYOTI SINGH, J

FEBRUARY 28 , 2025/shivam