Calcutta High Court Upholds Removal Of Govt Bank Officer Accused Of Diverting ₹40 Lakh From Account
The Calcutta High Court has upheld the removal from service of an officer of Bangiya Gramin Vikas Bank who was found guilty in a departmental proceeding of diverting ₹40 lakh from a bank account, holding that the officer failed to establish that the disciplinary proceedings were conducted in wilful violation of an earlier court order.
Justice Md. Shabbar Rashidi was hearing a writ petition filed by Sudip Mandal challenging his removal from service and the subsequent dismissal of his statutory appeal.
Mandal had joined Bangiya Gramin Vikas Bank as a Probationary Officer in JMG Scale-I in June 2014. According to the records, on April 13, 2015, he allegedly increased the cash credit limit of an account from ₹10,000 to ₹45 lakh and, on the same day, ₹40 lakh was transferred through NEFT from that account to another account.
An FIR was subsequently registered and the petitioner was suspended in September 2015. A departmental proceeding was also initiated and a chargesheet was served on March 18, 2016.
The inquiry officer ultimately found him guilty of cheating and misappropriation of bank funds causing wrongful loss of ₹40 lakh. The disciplinary authority, the General Manager, thereafter imposed the penalty of “removal from service which shall not be a disqualification for future employment” on December 30, 2016.
The petitioner challenged the removal on two principal grounds.
First, he argued that the General Manager was subordinate to the Chairman, who had appointed him, and therefore the removal violated Article 311(1) of the Constitution.
Second, he contended that the disciplinary proceedings had been continued in breach of an earlier interim order of the High Court which had directed that the inquiry should not commence without the Court's leave.
Article 311 Protection Not Available To Regional Rural Bank Officer
Rejecting the first contention, the Court held that an employee of Bangiya Gramin Vikas Bank does not hold a civil post under the Union or a State and therefore cannot claim the protection of Article 311.
Justice Rashidi relied on the Supreme Court's decision in S.L. Agarwal v. General Manager, Hindustan Steel Ltd., holding that employees of an independent statutory/corporate entity do not become holders of a civil post merely because of the entity's governmental connection.
The Court noted that the service conditions of BGVB employees were governed by the Bangiya Gramin Vikash Bank (Officers and Employees) Service Regulations, 2010.
Under the amended regulations, the General Manager was the competent disciplinary authority for Scale-I and Scale-II officers. The petitioner had also agreed, at the time of his appointment, to be governed by those regulations.
The Court therefore held that the petitioner could not invoke Article 311 to contend that his removal had to be ordered by the Chairman.
Earlier Interim Order Did Not Render Disciplinary Proceeding A Nullity
The petitioner also relied upon an order passed in an earlier writ petition, WP 8286(W) of 2016, on May 12, 2016.
That order had directed that although the petitioner was required to file his reply to the chargesheet, “the inquiry proceedings should not be commenced without the leave of court.”
The writ petition was subsequently dismissed for default on June 13, 2016 and restored on August 5, 2016. The petitioner argued that the interim protection automatically revived upon restoration of the writ petition.
The High Court noted that the Supreme Court in Vareed Jacob v. Sosamma Geevarghese had held that interlocutory orders generally revive when a proceeding dismissed for default is restored, unless the order of restoration indicates otherwise.
However, the Court distinguished the present case on its facts.
It noted that there was nothing on record to demonstrate that the relevant orders were communicated to the respondents or the inquiry officer in a manner that required them to halt the departmental proceedings.
The Court further noted that the petitioner had never appeared during the inquiry despite notices being issued on each date. He had, however, submitted his written defence, sought documents and sought an adjournment at the commencement of the proceedings.
The inquiry commenced on April 26, 2016 and concluded on September 9, 2016.
The Court also took note of the fact that the earlier writ petition was eventually dismissed again for default on July 24, 2024, with the order specifically recording that “interim order, if any, shall stand vacated.”
₹40 Lakh Diversion Was Serious Misconduct
The Court also rejected the challenge to the disciplinary findings, emphasising the heightened standard of honesty and integrity expected from bank officers.
Referring to the Supreme Court's judgment in State Bank of India v. Bela Bagchi, the Court observed that bank officers deal with depositors' and customers' money and are required to discharge their duties with utmost integrity, honesty, devotion and diligence.
It noted that the petitioner had been found guilty of embezzling ₹40 lakh in the departmental proceeding.
The Court reiterated that in exercise of writ jurisdiction, it does not ordinarily sit as an appellate court over departmental inquiries or reappreciate evidence. Interference is warranted in cases involving violation of natural justice or statutory regulations, perversity, arbitrariness or other recognised grounds.
Justice Rashidi ultimately held that the petitioner had failed to demonstrate that the disciplinary authority had acted with knowledge and in wilful disobedience of the earlier High Court order in a manner that would render the punishment order a nullity.
Case No: W.P.A. 10285 of 2019
Case: Sudip Mandal Vs. Bangiya Gramin Vikas Bank And Others