G.M.(OPERATIONS) S.B.I. & ANR. Vs. R.PERIYASAMY : Supreme Court - Article 226 of the Constitution of India


Supreme Court of India

CIVIL APPEAL No.10942 OF 2014 [Arising out of SLP (Civil) No. 4648 of 2008] Judgment Date: Dec 10, 2014


                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                       CIVIL  APPEAL No.10942 OF 2014
                [Arising out of SLP (Civil) No. 4648 of 2008]

G.M. (OPERATIONS) S.B.I & ANR.               .. APPELLANT(S)


R. PERIYASAMY                               ..RESPONDENT(S)



Leave granted.

2.          The appellant, General Manager of the State Bank  of  India  has
preferred this appeal against the Judgment and Final Order dated  30.08.2007
passed by the High Court of Judicature at Madras in Writ Appeal No. of  2375
of 1999.  By the        impugned  Judgment  the  High  Court  dismissed  the
appellant's Writ Appeal and  confirmed  the  finding  and  Judgment  of  the
learned Single Judge by which the respondent's  Writ  Petition  was  allowed
and the orders dismissing him from service were set aside.

3.          The respondent - Periyasamy, was serving  as  a  Permanent  Cash
Officer at the Dharmapuri Branch of the State Bank of India in 1986.   In  a
departmental enquiry, he was charged with being accountable for  a  shortage
detected in the currency chest in his joint custody along with one  Ganesan.
  By the second charge, he was charged with not adhering to  the  laid  down
instructions  regarding  currency  chest  transactions  and  for  committing
lapses in the maintenance of the currency  chest  register.   By  the  third
charge, he was charged with excessive outside  borrowings  in  violation  of
Rule 41(i) of the State Bank of India (Supervising Staff) Service Rules.

4.     An enquiry was duly conducted.  The charged officer, the  respondent,
was given an opportunity to defend  himself  and  an  Inquiry  Report  dated
03.11.1986 was submitted to the disciplinary  authority.   The  disciplinary
authority considered the entire report and after discussing  the  same  came
to the conclusion that there was a preponderance  of  the  probability  that
the respondent had been surreptitiously removing  currency  notes  from  the
chest over a period  of  time,  the  shortage  being  Rs.  1,25,000/-.   The
disciplinary authority also took note of the fact that he was lending  money
to others, even without a pro-note indicating that he had large  amounts  of
cash.  The disciplinary authority, therefore, recommended the  dismissal  of
the respondent from the service of the Bank in terms of Rule  49(h)  of  the
State Bank of India (Supervising Staff) Rules by an order dated  27th  July,
1989.  Thereafter, the Chief General Manager considered the  Inquiry  Report
and the recommendation of the disciplinary authority and concurred with  the
views of the disciplinary authority.  Against the dismissal, the  respondent
preferred an appeal under the Service  Rules  of  the  Bank.   However,  the
appeal was also turned down by the order dated 14.05.1990. Against the  said
orders, the respondent preferred a Writ  Petition  before  the  Madras  High
Court.  As observed earlier, the learned Single Judge allowed  the  petition
and the Division Bench dismissed the appeal against  the  petition.   Hence,
the Bank has preferred this appeal.

5.          While the respondent was working  as  a  Cash  Officer,  at  the
Dharmapuri  Branch  with  Ganesan,  the  branch-accountant,   as   a   joint
custodian,  the  Branch  inspection  took  place   between   20.02.1986   to
05.04.1986.  The respondent had  been  working  as  the  Cash  Officer  from
16.11.1985.  Certain irregularities were found  in  the  inspection.   As  a
result of the irregularities, instructions were given  to  follow  the  dual
locking system for the storage bins  where  cash  was  stored  and  for  the
dividing doors with  effect  from  05.04.1986.   On  that  very  night,  the
respondent met with an accident.  The strong room keys which  were  supposed
to be in the physical  possession  of  the  respondent  were  found  in  his
Cupboard in the Branch.  From  07.04.1986  to  09.04.1986,  one  Swaminathan
officiated as the Cash  Officer.   From  10.04.1986  to  11.04.1986,  one  N
Krishnan officiated as the Cash Officer.   From  12.04.1986  to  17.04.1986,
again, Shri Swaminathan officiated as the Cash Officer.   According  to  the
appellant, there was no transfer of notes from the  operative  bins  of  the
bank to the storage bins and there was no cash withdrawal from  the  storage
bins between 05.04.1986 to 14.04.1986.  On 15.4.1986,  a  cash  shortage  of
Rs.40,000/- was noticed by the officiating  Cash  Officer.   Therefore,  the
verification of the entire currency chest  was  conducted,  which  showed  a
total cash shortage of            Rs.1,25,000/-. An  internal  investigation
was conducted wherein it was found that  the  shortage  in  cash  had  taken
place between 16.11.1985 and 05.04.1986  when  the  respondent  and  Ganesan
were joint custodians.  Show cause notices were  issued  to  the  respondent
and Ganesan.  Apparently, the other joint custodian, Ganesan has  also  been
punished but he has not challenged his punishment.   In  the  reply  to  the
show cause notice, the  respondent  admitted  various  lapses  on  his  part
regarding the maintenance of the currency chest books.  In  particular,  the
respondent stated in his reply that perhaps the shortage of  Rs.  1,25,000/-
escaped his attention due to various reasons and was thus  unfortunate.  The
respondent sought permission to peruse the relevant books and  registers  at
the Dharmapuri branch and was allowed  to  do  so.   The  Inquiring  Officer
eventually submitted a report and held the respondent guilty of  charges  as
stated earlier.  The following are the important  features  of  the  Inquiry

a)  When the branch inspection was concluded on 05.04.1986, it  was  noticed
that during the tenure of the respondent as the permanent  Cash  Officer  of
the Branch, several currency storage  bins  inside  the  branch  strong-room
were not locked with dual pad locks and some were kept open when  they  were
not being operated upon.

b) Shortages were detected in the note  bundles  by  the  respondent.   Upon
further inspection, shortages in three more sections from the  bundles  last
handled by the respondent, were also discovered.

c) The  two  employees,  who  acted  as  Cash  Officers  after  the  charged
officials, i.e.  the  respondent  and  Ganesan  exited  on  05.04.1985,  had
performed their duties, during the period 05.04.1986 to 14.04.1986 when  the
storage strong room was locked with dual pad locks and they  had  functioned
in the presence of the permanent Accountant of the Branch.

d) Unlike in the case of acting Cash Officers, when the respondent  used  to
function as Cash Officer, the Accountant Shri Ganesan was in  the  habit  of
leaving him alone inside the Strong Room while he attended to his desk  work
outside.  The significance of this last finding is that the  shortages  were
found to have occurred between 16.11.1985 to 5.4.1986  when  the  respondent
worked as the Cash  Officer  of  the  Branch  and  not  from  05.04.1986  to
15.04.1986, when others had acted as Cash Officers for  the  reasons  stated
hereinbefore.   The  respondent  was  also  convicted  of  the   other   two
relatively minor charges.

6.          The learned Single Judge, at the  instance  of  the  respondent,
went into the entire matter in tedious detail.  The Single Judge  considered
the entire evidence, even reproduced it in parts, and  upon  re-appreciation
of the evidence, virtually disagreed with the findings of facts recorded  by
the Inquiry Officer and set aside the respondent's dismissal.

7.          Shri Vikas Singh, the learned senior counsel for  the  appellant
submitted that both, the learned  Single  Judge  as  well  as  the  Division
Bench, in confirming the order, have violated the  well  settled  parameters
of the scope of the Jurisdiction of the High Court under Article 226 of  the
Constitution of India in such matters.  Shri Singh submitted that  the  High
Court embarked on the unusual and unwarranted  exercise  of  re-appreciating
the evidence and reversed the well considered findings of fact  recorded  by
the Inquiry Officer. The learned counsel for the appellant  brought  to  our
notice the very first decision, which authoritatively  settled  the  law  on
this point in the State of Andhra Pradesh and others vs. Shri  Rama  Rao[1],
where this Court observed as follows:

"This report was considered by the authority competent to impose  punishment
and a provisional conclusion  that  the  respondent  merited  punishment  of
dismissal for the charges held established by the  report  was  recorded.  A
copy of the report of the Enquiry Officer was sent to the respondent and  he
was called upon to submit his representation against the action proposed  to
be taken in regard to  him.  The  respondent  submitted  his  representation
which was considered by the Deputy Inspector  General  of  Police,  Northern
Range, Waltair. That Officer referred to the evidence of witnesses  for  the
State about the arrest of Durgalu on March 5, 1954, and the handing over  of
Durgalu to the respondent on the same day. He observed that the evidence  of
Durgalu that after he was arrested on March 5: 1954, he had  made  good  his
escape and was again arrested on March  8,  1954,  could  not  be  accepted.
Holding that the charge against the respondent was serious and  had  on  the
evidence been adequately proved, in his view the only punishment  which  the
respondent deserved was of dismissal from the police force."

8.          In State Bank of Bikaner and Jaipur Vs. Nemi  Chand  Nalwaya[2],
this Court observed as follows:-

"7. It is now well settled that the courts will  not  act  as  an  appellate
court and reassess the evidence led in the domestic enquiry,  nor  interfere
on the ground that another view is possible on the material  on  record.  If
the enquiry has been fairly and properly held and the findings are based  on
evidence, the question of adequacy of the evidence or  the  reliable  nature
of the evidence will not be grounds for interfering  with  the  findings  in
departmental enquiries. Therefore, courts will not interfere  with  findings
of fact recorded in departmental enquiries, except where such  findings  are
based on no evidence or where they are clearly perverse. The  test  to  find
out perversity is to see whether a tribunal  acting  reasonably  could  have
arrived at such conclusion or  finding,  on  the  material  on  record.  The
courts will however interfere with the findings in disciplinary matters,  if
principles of natural justice or statutory regulations  have  been  violated
or if the order is found to be arbitrary, capricious, mala fide or based  on
extraneous considerations. (Vide B.C. Chaturvedi v. Union of India :  (1995)
6 SCC 749, Union of India v. G. Ganayutham :  (1997)  7  SCC  463,  Bank  of
India  v.  Degala  Suryanarayana :  (1999)  5  SCC  76  and  High  Court  of
Judicature at Bombay v. ShashiKant S Patil (2000) 1 SCC 416)."

            It is not necessary  to  multiply  authorities  on  this  point.
Suffice it to say that the law is well settled in this regard.

9.          It is not really necessary to deal  with  the  judgment  of  the
learned Single Judge  since  that  has  merged  with  the  judgment  of  the
Division Bench.  However, some  observations  are  necessary.   The  learned
Single Judge committed an error in approaching the issue by  asking  whether
the findings have been arrived on acceptable evidence or not and  coming  to
the conclusion that there was no acceptable evidence, and that in  any  case
the evidence was not sufficient.  In doing  so,  the  learned  Single  Judge
lost sight of the fact that the permissible enquiry was whether there is  no
evidence on which the enquiry officer could have arrived at the findings  or
whether there was any perversity in the findings. Whether the  evidence  was
acceptable or not, was a wrong question, unless  it  raised  a  question  of
admissibility.  Also, the learned Single Judge was not entitled to  go  into
the question of the adequacy of evidence and come  to  the  conclusion  that
the evidence was not sufficient to hold the respondent guilty.

10.         It is interesting to note that the learned Single Judge went  to
the extent of observing that the concept of preponderance  of  probabilities
is alien to domestic enquiries.  On the contrary, it is well known that  the
standard of proof that must be employed in domestic  enquiries  is  in  fact
that of the preponderance of probabilities.  In Union of  India  Vs.  Sardar
Bahadur[3], this  Court  held  that  a  disciplinary  proceeding  is  not  a
criminal trial  and  thus,  the  standard  of  proof  required  is  that  of
preponderance of probabilities and not proof beyond reasonable doubt.   This
view was upheld by this Court in State Bank  of  India  &  ors.  Vs.  Ramesh
Dinkar Punde[4].  More recently, in State Bank of India Vs.  Narendra  Kumar
Pandey[5], this Court observed that a disciplinary authority is expected  to
prove the charges leveled against a bank-officer  on  the  preponderance  of
probabilities and not on proof beyond reasonable doubt.   Further, in  Union
Bank of India Vs. Vishwa Mohan[6], this Court was  confronted  with  a  case
which was similar to the present one.  The respondent  therein  was  also  a
bank employee, who was  unable  to  demonstrate  to  the  Court  as  to  how
prejudice  had  been  caused  to  him  due  to  non-supply  of  the  inquiry
authorities report/findings in his  case.   This  Court  held  that  in  the
banking business absolute devotion, diligence, integrity and  honesty  needs
to be preserved by every bank employee and in particular the  bank  officer.
If this were not to be observed, the Court held that the confidence  of  the
public/depositors would be impaired.  Thus in that case the Court  set-aside
the order of the High Court and upheld the dismissal of the  bank  employee,
rejecting the ground that any prejudice had been caused to  him  on  account
of non-furnishing of the inquiry report/findings to him.

            While dealing with the question as  to  whether  a  person  with
doubtful integrity ought to be allowed to work in a  Government  Department,
this Court in Commissioner of Police New Delhi & Anr.  Vs.  Mehar  Singh[7],
held that while the standard of proof in a criminal  case  is  proof  beyond
all reasonable doubt, the proof in a departmental proceeding is  merely  the
preponderance  of  probabilities.   The  Court  observed  that  quite  often
criminal  cases  end  in  acquittal  because  witnesses  turn  hostile   and
therefore, such acquittals are not acquittals on merit.  An acquittal  based
on benefit of doubt would not stand on par with a clean acquittal  on  merit
after a full-fledged trial, where there is no indication  of  the  witnesses
being won over.  The long standing view on this subject was settled by  this
Court in R.P. Kapur Vs. Union of  India[8],  whereby  it  was  held  that  a
departmental proceeding can proceed even though a person is  acquitted  when
the acquittal is other than honourable.   We  are  in  agreement  with  this

      In administrative law, it is a settled  principle  that  the  onus  of
proof rests upon the party alleging the invalidity of an order[9]. In  other
words, there is a presumption  that  the  decision  or  executive  order  is
properly and validly made,  a  presumption  expressed  in  the  maxim  omnia
praesumuntur rite esse acta which means 'all things are presumed to be  done
in due form[10].'

11.         The Division Bench, in appeal, apparently found it fit  to  rely
on an additional affidavit filed for the first time  by  the  respondent  in
his Writ Petition, referring to the letter dated  30.12.1987  by  which  the
respondent is purported to have sought the production of certain  documents.
 It is not disputed that the respondent had not at any  stage  earlier  made
any grievance that he had written a letter  dated  30.12.1987  calling  upon
the bank to produce certain documents for his perusal and which was  denied.
 It is further not in dispute that there is no record  of  the  bank  having
received the letter and there is no proof  for  it.   The  bank  has  denied
receiving the letter and according to the bank they had  received  a  letter
dated 28.12.1987 and they had replied by their letter dated  14.01.1988.  In
their reply, there was no reference to the letter dated  30.12.1987  because
they had not received it. We find that in the  absence  of  proof  that  any
such letter demanding certain documents was received by  the  bank,  it  was
not permissible for the High Court to proceed  to  draw  an  inference  that
there was a failure of natural justice in the  bank  having  denied  certain
documents.  Thus it may be said, that an administrative  authority  such  as
the Appellant, cannot be put to proof of the facts or  conditions  on  which
the validity of its order must depend, unless  the  Respondent  can  produce
evidence which will shift the burden  of  proof  on  the  shoulders  of  the
Appellant. How much evidence  is  required  for  this  purpose  will  always
depend on the nature of that particular case. In Potato Marketing  Board  v.
Merricks[11], it was held that if an order has  an  apparent  fault  on  the
face of it, the burden is easily transferred. However,  if  the  grounds  of
attack are bad-faith or unreasonableness, the Plaintiff's task is heavier.

12.          On the question  of  shortage  of  money,  the  Division  Bench
merely upheld the findings of the learned Single Judge  that  there  was  no
clinching evidence in support of the charges.  The Division  Bench  approved
the findings of the Single Judge that the inquiry report that  the  shortage
of  cash  occurred  only  between  16.11.1985  and  05.04.1986,   when   the
respondent was a joint custodian, was based on surmise and conjecture.   The
Division Bench did not care  to  advert  to  the  evidence.   That  evidence
rightly relied  on  by  the  enquiry  officer  which  established  that  the
shortage did occur between 16.11.1985 and 05.04.1986. In fact the  inquiring
officer has given  cogent  reasons  for  rendering  the  findings  that  the
shortage could not have occurred after  05.04.1986  upto  the  discovery  of
15.04.1986,  when  two  acting  cashiers  had  functioned.   Moreover,   the
observation that there is no clinching evidence in support  of  the  charges
is another way of saying that the evidence is  insufficient  or  inadequate,
which is not permissible.  It bears repetition that sufficiency or  adequacy
of evidence is not the ground on which the findings of  facts  may  be  set-
aside by the High Court under Article 226.   The  justification  offered  by
the Division Bench that the  learned  Single  Judge  had  to  undertake  the
exercise of analysing the  findings  of  the  enquiry  officer  because  the
appellants  had  deprived  the  respondent  of  his  livelihood  is   wholly
untenable. A transgression  of  jurisdiction  cannot  be  justified  on  the
ground of consequences, as has been done.  Moreover,  the  reliance  by  the
Division Bench on Mathura Prasad Vs. Union of India & Ors.[12]  is  entirely
misplaced,  since  that  case  arose  in  an  entirely  different   set   of
circumstances.  We also find it difficult to  understand  the  justification
offered by the Division Bench that there was no failure on the part  of  the
respondent to observe utmost devotion to duty because the case was  not  one
of misappropriation but only of a shortage of  money.   The  Division  Bench
has itself stated the main reason why its order  cannot  be  upheld  in  the
following words,  "on  reappreciation  of  the  entire  material  placed  on
record, we do not find any reason to interfere with the well considered  and
merited order passed by the learned Single Judge."

13.         We accordingly set-aside the  impugned  order  and  dismiss  the
writ petition of the respondent.

14.         Having regard to the circumstances  of  the  case,  we  find  it
appropriate to direct the appellant to pay an adhoc sum of Rs.3,00,000/-  to
the respondent who has retired long ago and has drawn pension  of  which  he
will be deprived hereafter.  Appeal disposed off as allowed.

                                                            [J. CHELAMESWAR]

                                                                [S.A. BOBDE]
New Delhi,
December 10, 2014