Patna High Court Upholds Forfeiture Of Senior SBI Official’s Gratuity, Says Irregularities Weren't Mere Lapses But Deliberate Acts For Personal Gain

Dismissing an appeal challenging the forfeiture of entire gratuity of a senior State Bank of India (SBI) officer, the Patna High Court said no other punishment could have been awarded to him for the proved charges against him. The bank official was accused of serious irregularities. 

The division bench comprising Justice Ashutosh Kumar and Justice Harish Kumar observed,

"A senior officer of the Bank, who is the custodian of the money of the Bank and, in turn, the money of the investors/depositors is not expected to commit such irregularities. These irregularities are not mere lapses in the performance of the duty but are deliberate acts which has caused serious losses to the Bank and personal gain to the appellant".

Background

The appellant was a direct recruit as Probationary Officer in one of the branches of State Bank of India. He was officiating as Deputy General Manager (Credit) as also the Officiating Manager (PB) of Samastipur Branch of the State Bank of India when the departmental proceeding was initiated against him.

It was alleged that he had committed serious financial irregularities constituting misconduct in terms of the Rules of the bank. He was put on suspension and a departmental proceeding was initiated against him.

A criminal case also was lodged against him by the CBI for the offences under Sections 120B, 420, 409, 467, 468 and 471 of the Indian Penal Code and Section 13 (2) read with Section 13 (1) (c) (d) of the Prevention of Corruption Act, 1988. Another criminal case was registered by CBI against him and two others in 2006.

He was alleged to have kept several loan documents at his residence and accused of manipulating salary slips with a view to sanction personal loans of higher limits beyond the eligibility of the borrowers. The other charges against him were that a number of personal loan accounts were opened with lower limits and only after a few months, loans for higher limits were sanctioned and earlier loan accounts were closed with the amount of fresh loans while the borrowers were not eligible for the enhanced amount and that a number of housing loan accounts were authorized in the Bank Master System under his I.D. without sanction having been recorded on such loan application forms.

Out of the twenty charges levelled against him, fifteen were proved, four were partially proved, and only one could not be proved. Based on the enquiry report, the appellant was dismissed from service and his entire gratuity amount, approximately Rs. 3,50,000, was forfeited, considering the actual loss suffered by the Bank. The period of suspension was treated as "not on duty."

His counsel Arvind Kumar Tewary raised three issues to challenge the single judge judgement that affirmed the punishment of dismissal and forfeiture of gratuity.

His first argument was that according to Rule 68(6) of the Bank's Rules, a joint enquiry should have been held as two other officers faced identical charges in departmental proceedings, but separate enquiries were held and they were given lesser punishment without justification.

He further argued that the Single Judge did not give enough importance to the argument that no show-cause notice was served regarding the quantum of punishment.

It was also submitted that the total gratuity amount could not have been forfeited for the services rendered before suspension and dismissal from service.

Advocate Chittranjan Sinha, appearing for SBI, argued that the appellant held a high position and was implicated in financial misconduct, with loan documents recovered from his possession. He further stated that the appellant had been given a fair opportunity to defend himself in the disciplinary proceedings and that there were no flaws in the decision-making process or the decision itself.

Verdict

The bench continued by stating that these irregularities aren't just lapses in duty but deliberate acts that have resulted in significant losses for the bank and personal gain for the appellant.

"The contention of the appellant that the charges against the other officers were also identical is irrelevant for the purposes of assessing the proportionality of the punishment imposed upon him in accordance with his senior position in the Institution and lapses in almost all the areas of his work profile," said the court.

The bench observed that though there does not appear to be any specific calculation of the losses, but with the loans having been given to ineligible persons and higher limits having been approved by him and such loans having become bad, the losses are almost sure to accrue to the Bank.

The number of charges levelled and proved against the appellant clearly signifies his dishonest intentions, the court said.

"The gravest of all allegations, according to us is his possession of approximately seventy three spurious documents of loan, safely stashed at his residence for being used in future towards his nefarious designs of duping the Bank,” the bench further observed.

While dismissing the appeal, the bench held, "In the afore-noted background, it cannot at all be inferred that the sentence imposed upon the appellant was unconscionable or outrageous for any interference by us. The forfeiture of the entire amount of gratuity earned by the appellant is also within the parameters of law as forfeiture could be within the extent of losses, which is far more than what the appellant has earned as gratuity during the period that he had served the Bank before his suspension and ultimate dismissal."

Case Title: Ashok Kumar Sinha vs. State Bank of India and Ors. Civil Writ Jurisdiction Case No.6748 of 2011

Citation: 2023 LiveLaw (Pat) 27

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