(Prayer: This writ appeal is filed under Section 4 of the Karnataka High Court Act praying to set aside the order dated 19/12/2024 passed by the learned single judge in WP no.24054/2012 by allowing this appeal and consequently dismiss the writ petition in wp no.24054/2012 with costs.)

Oral Judgment:

D K Singh, J.

1. The present writ appeal has been filed impugning the judgment and order dated 19.12.2024 passed by the learned Single Judge in W.P.No.24054/2012 (S-DE) instituted by the respondent/employee in the present appeal.

2. The parties are referred to as per their ranking in the writ petition, for the sake of convenience.

3. The petitioner was working as a Senior Manager in RCC Branch at Bangalore, i.e., Middle Management Grade Scale-III. He was placed under suspension on 30.10.2006 and charge sheet was issued containing the following charges:-

                  "CHARGE NO.1

                  As Branch Manger of BO: Bangalore Cantt., from 18.02.05 to 18.02.06 he failed to ensure that the duties are performed by the members of staff as per the Office Orders issued and also as per the systems and procedures of the bank.

                  1. Stock of debit cards received from HO was not maintained properly, thereby violating the guidelines under Inventory Management as contained in Para 40 to 50 chapter XII Vol I of banks book of instruction for the purpose of control on debit cards received which are construed as stock of security forms; Stock of debit cards received during the month of July 2005 and after was not got entered in the 'Stock Register'.

                  2. The unused stock of debit cards to be kept under dual custody of two officers was not periodically checked by him as Incumbent In charge of the branch as at the close of every month

                  3. Issue of debit cards to the deposit a/c holders was entrusted to a clerk/typist instead of an Officer. The entire stock was left under the custody of, In charges of the department instead of ensuring that only small quantities are delivered to the officers against proper acknowledgements".

                  4. He did not ensure that mandatory reports are generated by DBA on daily basis and also be failed to check the same as the Incumbent In charge.

                  5. The debit card issue register was not maintained properly. Important details such as date of issue and date of receipt by the a/c holder are not available. The stock of debit cards should have been entered in the serial order and then issued to a/c holders in the same order. Instead as and when the cards were issued, the same were entered without putting even the date of issue, thereby putting the banks interest at stake. Cards were issued at random instead of following a chronological order based on the card numbers."

                  CHARGE II

                  1. On 19.07.2006, he visited the branch got one Debit Card NO.5048840040010000077 issued for his SF account. While getting this Card issued he gained access to the stock of all the cards lying in the branch, selected one card and entered the same in his own handwriting in the Card issue register, though not being authorized to do so.

                  2. He got his Debit Card bearing No. 5048840010000077 entered in the system in his presence by Sh. Ayyakutty, CTO who was not entrusted with this duty, instead of getting the same done by Smt. Muthumani, Clerk/Typist who was assigned the duty of issuing debit Card. The procedure for entering the Debit Card was enquired by him from Smt. Muthumani with an intention to get himself acquainted with the procedure for issuing Debit Cards.

                  3. He the passwords took from Smt. Manonmani and Shri Ramesh, Officers of BO:Cantt on the pretext that the same was required in official business in violation of bank guidelines. Thereafter on 20.07.06, he unauthorisedly unfroze the SB a/c. No. 0040000100143520 of Mohd Mustafa with the ID and passwords of Mrs. Manonmani & Shri Ramesh Officers of the branch and on the same date the Card bearing No. 5048840040010000762 was entered by him with the ID & password of Mrs. Manonmani Officer BO: Cantt. He also verified the transaction for entry of the Card to the system on 25.07.2006 with the ID & Password of Shri. Ramesh Officer BO:Cantt.

                  4. He unauthorisedly withdrew an amount of Rs. 2.85 lacs from 26.07.2006 onwards through various ATMs using the aforesaid debit Card from the SF No.0040001000143520 of late Md. Mustafa as per the details given here under:

                  

                  

                  5. On 16.08.2006, he visited BO:Cantonment at 3.00 pm without called by the Chief Manager, Sh.A. Nepalia or being directed by Office to visit the branch. He discussed about the fraud with the Manager, Smt. Manonmani Ranganathan and Sh. Ramesh, Officers branch and he insisted upon them to make good the amount an Rs. 20,000/ to Sh.Ramesh by cash and credited Rs.45,000/ to OD Smt. Manonmani to debit of his OD a/c on 17.08.2006 with an intention to cover up his fraudulent activities and preventing the bank from filing FIR with the police.

                  6. He thus misused his official position as previous Incharge of BO: Cantonment, Bangalore in which capacity he was conversant with the SF account of late Sh. Mohd. Mustafa and was also aware about the system maintenance, the bank to the extent of Rs.285255.00 which is proving difficult for recovery."

4. After conclusion of the inquiry by the Inquiry Officer, the Disciplinary Authority issued show-cause notice to the petitioner, proposing major penalty. After considering the response to the show cause-notice and having heard the petitioner, the Discipline Authority inflicted punishment vide order dated 28.10.2010 whereby the petitioner's grade from Middle Management Grade Scale-III was reduced to Junior Management Grade Scale-1. The Appellate Authority also confirmed the order passed by the Disciplinary Authority vide order dated 15.03.2011 and dismissed the appeal. Against these two orders imposing punishment of reduction of the Grade by two stages and dismissal of appeal by the Appellate Authority, the aggrieved employee filed Writ Petition No.24054/2012 (S- DE). The learned Single Judge vide impugned judgment and order dated 19.12.2024 framed the following points for consideration:

                  "1. Whether DE conducted by DA was fair and proper and petitioner was afforded an opportunity substantiate and offer explanations to charges?

                  2. Whether penalty inflicted by DA is disproportionate when the charges that are held to be proved are too trivial in nature while the serious allegation under charge II(3) that petitioner has misused and has unauthorizedly accessed the account of one Mohammed Mustafa is not substantiated?

                  3. Whether major penalty of reduction of grade from MMG scale-III to JMG scale I by invoking regulation P&B officers regulation 4G, 1977 runs contrary to regulation 4?"

5. In respect of point No.1 the learned Single Judge held that petitioner was denied sufficient opportunity to confront the allegations for want of relevant documents and then decided the first issue in favour of the petitioner. In respect of point Nos.2 and 3 the learned Single Judge held that grave charge under Charge No.II(3) i.e., regarding siphoning of money from the account of deceased customer, was not substantiated and the Inquiry Officer also found that the said charge was not proved. The Inquiry Officer on the charge of siphoning of money from the account of the deceased customer found not proved, and therefore this fundamentally dismantled the foundation of the case of the Bank against the petitioner/employee.

6. The learned Single Judge therefore, was of the view that if the major charge of siphoning of money from the account of the deceased customer was not proved during the inquiry and in fact the Inquiry Officer had submitted that the said charge II(3) was not proved, and the other charges are only in relation to some procedural irregularity/impropriety in respect of the Banking operations.

7. The learned Single Judge therefore, was of the view that the punishment for the minor procedural infraction in Banking operation would not attract the major penalty and such penalty imposed on the petitioner/employee was highly disproportionate to the alleged misconduct and entirely unjustified.

8. The learned Single Judge further held that once the charge of financial implication was not proved against the respondent, the infliction of major penalty by the Disciplinary Authority and upholding such penalty by the Appellate Authority were without proper application of mind by the two authorities. It has been therefore, held that the decision of Disciplinary Authority is wholly arbitrary and contrary to the principles of proportionality.

9. The learned Single Judge has also placed reliance on Regulation 4 of the Punjab National Bank Officers Employees' on Disciplinary Authority Regulation, 1977, (for short 'the Regulation') which provides for penalties. There was no material to substantiate the grave allegation under Charge No.II(3), the imposition of the major penalties under Regulation 4 of the aforesaid Regulation would be unsustainable. In view thereof, the learned Single Judge has modified the order of punishment to withholding of one increment of pay without cumulative effect.

10. The learned counsel, Mr. Pradeep S. Sawkar. appearing for the appellant/Bank summits that even if the learned Single Judge was of the opinion that the punishment imposed on the employee was highly disproportionate, instead of substituting the punishment by the learned Single Judge, the matter should have been remanded back to the Disciplinary Authority or the Appellate Authority for reconsideration of the penalty.

11. Learned counsel for the appellant further submits that the punishment of reduction from Middle Management Grade Scale-III to Junior Management Grade Scale-I was not excessive and it does not require any interference.

12. On the other hand, learned counsel for the respondents submits that when the major charge of financial impropriety was not proved, the charges of procedural infraction in conducting of the Banking business were not such that, should attract such a major penalty of reduction of the petitioner's ranking by two stages and therefore, the learned Single Judge was right in holding that the impugned punishment was highly excessive and disproportionate to the misconduct alleged.

13. We have considered the submissions of learned counsel for the parties and perused the judgment impugned in the present appeal.

14. Learned Single Judge has also noted that fair opportunity of representing the petitioner was not granted. The petitioner was not confronted with all the material against him and the opportunity was not afforded to him.

15. The learned Single Judge further has been of the opinion that the major Charge No.II(3) of misappropriating the money from the account of deceased was not proved even during the inquiry conducted by the Inquiry Officer and in fact Inquiry Officer was of the opinion that the charge was not proved and therefore, for other charges which are very minor in respect of the procedural impropriety, the infliction of the major penalty of reduction of rank by two stages is highly disproportionate.

16. We do not disagree with the finding of the learned Single Judge. However, instead of substituting the opinion of the Court to that of the Disciplinary/Appellate Authority on quantum of punishment, i.e., reduction of the punishment of reducing two stages of ranking of the petitioner to withholding of one increment that too without cumulative effect, should not have been substituted by the learned Single Judge. Instead of exercising such a discretion, the learned Single Judge ought to have remanded the matter back to the Appellate Authority to see that whether major penalty of reduction of two stages of ranking of the petitioner to one increment without cumulative effect would be sufficient in view of the findings recorded in the order.

17. Therefore, substituting the punishment by the learned Single Judge to that extent from reduction of two stages ranking of the petitioner to withholding of one increment without cumulative effect is set aside and we deem it appropriate to remand the matter back to the Appellate Authority to consider whether the imposition of the major penalty by the Disciplinary Authority in the light of the findings recorded by the learned Single Judge would be justified.

18. In view thereof, the instant appeal is allowed and the matter is remanded to the Appellate Authority with a direction to reconsider the whole case in the light of the findings recorded by the learned Single Judge, and then take a considered and informed decision for imposing the appropriate penalty on the petitioner.

19. It is needless to say the petitioner/employee shall be issued a notice by the Appellate Authority before inflicting the appropriate punishment on him as directed.

20. Accordingly, pending applications if any, stands dismissed.