Even If Inquiry Is Vitated, Punishment Can Stand If Misconduct Is Independently Established: MP High Court

The Madhya Pradesh High Court has upheld the disciplinary authority's order of compulsory retirement of a Branch Manager working in MP Gramin Bank, despite acknowledging procedural flaws in the disciplinary inquiry conducted against him.The bench of Justice Ashish Shroti observed that the procedural lapses vitiated the inquiry, but the independent evidence of financial misconduct was sufficient to uphold the punishment of compulsory retirement. The bench emphasized;"Being a senior officer of the Bank, the petitioner was expected to understand the meaning of routing of funds, other than his salary, from his personal accounts. If the transactions are made, they must be justified by supporting documents. Therefore, even though the report submitted by enquiry officer was found to have vitiated for the reasons recorded above, the ultimate punishment of compulsory retirement imposed on petitioner does not warrant interference in view of aforesaid discussion with regard to charge no.13. The finding on this charge itself is sufficient to justify the punishment of compulsory retirement on petitioner". The petitioner held the post of Scale II officer in the Bank, serving as Branch Manager. Certain irregularities related to loan sanctioning and disbursement were initially identified during a preliminary inquiry, including a three-member team of officers. A chargesheet comprising 14 charges was issued to the petitioner in May, 2015. A departmental inquiry was subsequently conducted by an appointed inquiry officer, who submitted a report to the disciplinary authority. After receiving the petitioner's explanation, the disciplinary authority imposed punishment of compulsory retirement on November 30, 2016. The petitioner's appeal against punishment was dismissed by the Appellate Authority on September 13, 2022, prompting him to approach the High Court. The counsel for the petitioner argued that a Scale IV officer had sought illegal gratification and later conducted an unscheduled audit with a predetermined intent to implicate him. He also conteded that relevant documents were not supplied during the inquiry. The counsel for the Bank argued that the petitioner had habitually violated the instructions while sanctioning loans, acted recklessly in financing loans and ignored bank guidelines. The court observed that the non-supply of documents can vitiate an inquiry only in delinquent demonstrates how omission caused prejudice. The petitioner, however, failed to establish specific prejudice. Similarly, on allegations of bias against the Scale IV officer, the court noted that the allegations remained disputed and unproven by the petitioner. On the procedural aspect, the court clarified that an inquiry officer functions as quasi-judicial authority, epected to be independent and impartial. The bench emphasized, "The direction for denovo enquiry, however, can be given only for cogent reasons to be recorded by Disciplinary Authority. However, directing the Inquiry Officer to submit a fresh report on the basis of the same set of evidence is impermissible and unacceptable in law".Further, the bench clarified that when a report is submitted by an inquiry officer, the disciplinary authority had three options,"(i) he may accept the inquiry report and pass appropriate orders; (ii) he may disagree with the findings of the Inquiry Officer by giving his own reasons for disagreement and proceed further in the enquiry; and (iii) if he is satisfied that the inquiry has not been conducted properly, he may remit the matter for a fresh or de-novo inquiry". Therefore, the court held that the inquiry conducted against the petitioner was procedurally flawed and therefore vitiated. Despite procedural flaws, the court noted that the petitioner's financial conduct raised serious concerns, including unexplained deposits and transactions in his savings account and overdraft accounts, as well as personal use of official funds. The independent evidence of financial misconduct was sufficient to uphold the punishment of compulsory retirement. Thus, the court dismissed the petition.Case Title: Sanjay Bansal v MP Gramin Bank, Writ Petition No. 28612 of 2022For Petitioner: Advocate Chetan KanungoFor Bank: Advocate DS ChauhanClick here to read/download the Order

Even If Inquiry Is Vitated, Punishment Can Stand If Misconduct Is Independently Established: MP High Court

Jayanti Pahwa

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