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Karnataka High Court Upholds Dismissal of Bank Manager for Fraud and Corruption: Disciplinary and Criminal Convictions Validated

Blog, Karnataka High Court , , , , , , , ,

 Case title:   VIJAYA BANK VS M RAVINDRA SHETTY

Case no.:   WRIT APPEAL NO. 7791 OF 2003 (S-DIS)

Dated on: 04th May 2024

Quorum:  Hon’ble. MR Justice KRISHNA S DIXIT and HON’BLE MR JUSTICE RAMACHANDRA D. HUDDAR

FACTS OF THE CASE

The respondent-employee who was in the Senior Manager Cadre i.e., MMGS-III was charged for certain lapses in relation to lending money to the fictitious persons without duly securing the repayment of loans. This happened during the period between 02.06.1986 and 11.05.1990. On account of this, the bank has been put to a huge financial loss. The disciplinary proceedings having been held, penalty order by way of dismissal from service came to be passed by the Competent Authority on 03.04.1997. The Departmental Appeal laying a challenge to the same came to be negatived by the Appellate Authority namely the General Manager (Personnel) on 05.08.1997. In the meanwhile, the same set of facts had resulted into the prosecution of employee in Spl.CC No.141/2005 for the offences punishable u/ss. 120B r/w Secs.420, 468, 471 of IPC and u/ss.13(1)(d) & Sec.13(2) of the Prevention of Corruption Act, 1988. The charges having been framed, trial was held by the Criminal Court that eventually resulted into his conviction vide order dated 19.06.2010 and he was sentenced to undergo a Simple Imprisonment for a period of 3 years coupled with levy of fine of Rs.70,000/- in aggregate, with a usual default clause. His Criminal Appeal No.664/2010 c/w Crl. Appeal No.678/2010 came to be negatived by a learned Single Judge of this court vide order dated 19.09.2022. The matter having been carried in SLP No.12145/2022, the Apex Court vide order dated 02.01.2023 granted some reprieve to him. The sentence came to be modified by reducing the period of Imprisonment from three years to one year; however, the fine came to be enhanced from Rs.70,000/- to Rs.2 lakh.

 ISSUES

  • Whether the disciplinary proceedings conducted by the bank and the subsequent penalty of dismissal from service imposed on the respondent-employee were valid and justified.
  • Whether the writ court overstepped its jurisdiction by interfering with the disciplinary authority’s decision, considering that its role is limited to reviewing the decision-making process rather than the decision itself.
  • Whether the involvement of the Central Vigilance Officer in the disciplinary proceedings was justified and in compliance with Regulation 19 of the Vijaya Bank Officer Employees’ (Discipline and Appeal) Regulations, 1981.
  • Whether these developments provide additional grounds for the bank’s decision to dismiss the respondent-employee from service.

LEGAL PROVISIONS

The Indian Penal Code (IPC)

Section 120B (Criminal Conspiracy): This section deals with the punishment for criminal conspiracy.

Section 420 (Cheating and Dishonestly Inducing Delivery of Property): This section punishes cheating and inducing delivery of property.

Section 468 (Forgery for Purpose of Cheating): This section deals with forgery intended for the purpose of cheating.

Section 471 (Using as Genuine a Forged Document or Electronic Record): This section punishes using a forged document as genuine.

Sections 13(1)(d) and 13(2) of the Prevention of Corruption Act, 1988

Section 13(1)(d) (Criminal Misconduct by a Public Servant): This section deals with the criminal misconduct by a public servant involving abuse of position or obtaining pecuniary advantage.

Section 13(2) (Punishment for Criminal Misconduct): This section prescribes the punishment for criminal misconduct by a public servant.

Section 10(1)(b)(i) of the Banking Regulation Act, 1949 This section mandates the termination of an employee convicted of an offence involving moral turpitude.

Vijaya Bank Officer Employees (Discipline and Appeal) Regulations 1981

Regulation 6 (Procedure for Disciplinary Action): Outlines the procedure to be followed for disciplinary action against bank officers.

Regulation 11 (Penalties): Lists the penalties that can be imposed on bank officers for misconduct.

Regulation 19 (Role of the Central Vigilance Officer): Details the involvement of the Central Vigilance Officer in disciplinary proceedings.

Central Vigilance Commission Act, 2003

Section 3 (Establishment of Central Vigilance Commission): Establishes the Central Vigilance Commission and outlines its functions.

CONTENTIONS OF THE APPELLANT

The Learned Panel Counsel appearing for the appellant-bank seeks to falter the impugned order of the learned Single Judge arguing that: Once the disciplinary proceedings are duly held and penalty order has been passed, a Writ Court should be loath to interfere and it is more so when delinquent employee’s departmental appeal has been negatived. Secondly, on the same set of facts the employee having tried is convicted & sentenced for the offences involving moral turpitude. This happened subsequent to disciplinary proceedings and therefore even otherwise he is liable to be discontinued from service in terms of Sec.10(1)(b)(i) of the Banking Regulation Act, 1949. He has placed reliance on certain rulings in support of his submission. So contending, he seeks for allowing of the appeal. As already mentioned above, there is none to controvert the above submission from the side of respondent-employee. Learned counsel for the appellant is right in contending that no error has been committed by the management in taking the opinions of Central Vigilance Officer inasmuch as, such a course is internalized vide Regulation 19 of Vijaya Bank Officer Employees’ (Discipline and Appeal) Regulations, 1981. The CVC is constituted under Section 3 of the Central Vigilance Commission Act, 2003 and it has statutory duties. One such duty is to advice the banks in matters of disciplinary proceedings of the kind. that the apprehension of the employee that the decision was taken under pressure, could not be ruled out. However, the ratio in these decisions could have been invoked from the side of delinquent employee, had there been no provision like regulation 19 of 1981 Regulations. Such a provision was conspicuously absent in the aforesaid two decisions. This aspect has not been discussed in the impugned order even though it was very essential. Mr. Sawkar is also right in contending that there is a wealth of material on record that justified dismissal of the delinquent employee. That being the position, we hardly find any reason for upsetting the findings of guilt as recorded by the Enquiry Officer and accepted by the disciplinary authority while awarding the punishment of dismissal from service. The same has been examined by the Appellate Authority who has upheld the same. Therefore, the impugned order of the learned Single Judge who has treated the matter as if he was sitting in appeal suffers from legal infirmity and therefore cannot be sustained. It hardly needs to be reiterated that the focal point of examination of record in writ proceedings is the decision-making process and not the decision itself. Such an approach is not reflected in the impugned order. Thus, the same suffers from grave infirmities warranting our interference.

 CONTENTIONS OF THE RESPONDENTS

SRI.MOHITH KUMR K., ADVOCATE-ABSENT

 COURT’S ANALYSIS AND JUDGEMENT

THIS WRIT APPEAL FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER PASSED The Apex Court at para 16 has specifically stated that the offences punishable inter alia under the provisions of PC Act, 1988 do involve moral turpitude. Apparently, the respondent-employee in the subject Criminal Case has been convicted & sentenced not only for the offences punishable under the aforesaid provisions of IPC but also u/ss.13(1)(d) & 13(2) of the PC Act. The provisions of Section 10(1) of the 1949 Act enact a Parliamentary injunction to the bank to discontinue the employment of a person who is convicted for an offence involving moral turpitude, whether he is sentenced or not. In other words, mere conviction results into the obligation to disrupt employer-employee relationship. This provision leaves with the bank no discretion to disobey the direction. It is relevant to state that there is no challenge to the vires of this provision, which continues on the Statute Book with impunity & efficacy. When one is convicted for the offence involving Sec.420, 468 & 471 of IPC, it cannot be contended that his conduct does not involve moral turpitude. Once an employee of a bank is convicted for an offence involving moral turpitude as has happened in this case, he is liable to be discontinued from employment as discussed above. However, the text of Sec.10(1)(b)(i) does not indicate as to whether such disruption of vinculum juris is by way of dismissal or discharge implicatory. When moral turpitude is involved and the bank is put to considerable financial loss, one can safely assume that the legislative intent is dismissal of the delinquent employee. True it is that the respondent-employee has been dismissed from service after holding a disciplinary enquiry in terms of Regulation 6. We are adverting to the provisions of Regulation 11 only as an additional ground that has been generated subsequent to disciplinary proceedings that eventually resulted into dismissal from service and after the disposal of writ petition. As already mentioned above, there were criminal appeals that ended in vain. Matter was carried forward to the highest court of the country that did not set aside the conviction although the period of imprisonment was reduced; in fact, fine has been enhanced almost three-fold. All this subsequent development adds extra merits to the case of appellant bank and against the respondent – employee. In the above circumstances, this appeal succeeds the impugned order of learned Single Judge is set aside and respondent-employee’s writ petition is dismissed, costs having been made easy.

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Judgement Reviewed by – HARIRAGHAVA JP

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Words said in a fit of rage do not amount to abetment of suicide: Supreme Court.

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CASE TITLE: KUMAR @ SHIVA KUMAR V. STATE OF KARNATAKA

CASE NO: SLP CRIMINAL APPEAL NO. 1427 OF 2011

DECIDED ON: 1.03.2024

QUORUM: HON’BLE JUSTICE UJJAL BHUYAN

FACTS OF THE CASE

The appellant has filed a special leave petition against the judgment passed by the trial court, and the high court dismissed the criminal revision petition. The trial court had convicted the appellant under section 306 of the IPC, sentencing him to undergo rigorous imprisonment for three years. It imposed a fine of Rs. 2000. If the appellant fails to pay the fine, he shall undergo strict punishment for four months.

The appellant was a tenant living in the deceased’s house. However, on the day of the incident, he was residing elsewhere since the term of his tenant agreement had ended. On 5.7.2000, when the deceased was returning home after dropping her sister’s kids at school, she saw the appellant waiting for her near Canara Bank. The appellant eve teased her, asking her to marry him. When the deceased did not respond, the appellant threatened to destroy her sister’s family, outraging their modesty and causing death. Upon arrival at the house, the deceased informed her sisters of the same and ingested poison. The neighbours saw the deceased lying on the floor in pain from the window and rushed to help. They opened the house door, and during this time, one of her sisters had also arrived with her husband. The deceased was taken to Nirmala Devi Hospital, after which she was relocated to Mission Hospital. She died on 06.07.2000 at 7:30 pm. Raju, the dead’s father, lodged an FIR on 07.07.2000 at 6:30 pm, alleging the appellant was liable for his daughter’s death. During the investigation, post-mortem was done, and the viscera of the deceased was sent for chemical analysis to the Forensic Science Laboratory, Bangalore. The doctor who did the examination stated that the death was caused by respiratory failure due to the consumption of a substance having Organophosphate. After the investigation, the police submitted the chargesheet, where the appellant was the accused.

The prosecution examined eleven witnesses and produced eleven documents as exhibits. The trial court gave its verdict after hearing both sides. The prosecution, beyond any reasonable doubt, had proved that the appellant was responsible for abetting the suicide of the deceased. Hence, the trial court convicted the appellant. As previously stated, the appellant had filed an appeal in the High Court of Karnataka, which upheld the judgement passed by the trial court and dismissed the petition. Following that, the aggrieved filed a special leave petition. The appellant was also granted bail contingent on the trial court’s satisfaction.

LEGAL PROVISIONS

Section 107 of the IPC deals with abetment of a thing.

Section 306 of the IPC deals with abetment of suicide.

Section 309 of the IPC deals with attempt to commit suicide.

Section 161 of the CRPC deals with examination of witnesses by police.

Section 313 of the CRPC deals with power to examine the accused.

Section 374 of the CRPC deals with appeals from convictions.

APPELLANTS CONTENTIONS

The counsel for the appellant contends that the evidence produced by the prosecution has not been interpreted and analysed correctly since it does not aid the appellant’s conviction under section 306 of the Indian Penal Court. There are inconsistencies in the witness statements and the evidences produced by the prosecution which cannot be overlooked. It can be inferred that no case of instigation, abetment or conspiracy can be drawn against the appellant in this scenario.

The statements made by Prosecution Witness (PW) No. 1, 2, 3, 4 and 12 are highly unreliable. The gaps in their testimony prove that they have improved and changed their story. The counsel for the appellant also revealed that the front of the right wrist of the deceased had a partially healed superficial linear incised injury. The prosecution has not explained the same. Since the injury was only partially recovered, it suggests it happened before the appellant teased her. This shows the appellant did not instigate her suicidal nature, and it might be something else. Although the deceased was hospitalised on 05.07.2000, the FIR was only lodged on 07.07.2000 at 6:30 pm. Additionally, the deceased had not told anyone about the appellant allegedly harassing her. Moreover, the appellant had gotten married two months before the incident took place so there was no reason for him to threaten, he was deceased making the accuracy of the prosecution’s case questionable.

 

RESPONDENT CONTENTIONS

The respondent asserts that the appellant has been convicted rightfully. The prosecution has proved his liability without any reasonable doubt before the trial court. Even the high court has upheld the impugned order. Hence, the question of credibility does not arise. There is no such rule in any legislation that a conviction cannot be made on the statements given by the family members. A simple reading of the witness statements of PW 1, 2 and 4 which is further substantiated by the testimony of PW 13 the doctor will point towards the appellant’s conviction. Hence, there is no substance in the case presented by the appellant.

 

COURT ANALYSIS AND JUDGEMENT

The Court has thoroughly analysed the evidence in this case, and the revelations have been astounding. It has only served to weaken the case of the prosecution. The accused had lived on the ground floor of his house for five years till the tenancy period was over. The deceased used to take the children of Raju’s other daughter to school daily. During that time, the accused used to ask for her hand in marriage and, upon her refusal, threatened to murder her family. Upon further examination of PW 1, 05.07.2000 was corrected to 06.07.2000. This very day, the accused had threatened to pour acid on the deceased and her sisters and murder them. Raju was informed about the accused’s marital status only after the death of his daughter. He was unaware of his whereabouts after he left his house.

Meena, PW 2, is the deceased’s sister residing with her. She stated that she saw her father in the hospital the next day at around 5:00 pm. Additionally, her father resided with some other woman outside marriage. Meena’s testimony contradicts the claims made by her father about living in the same house and reaching the hospital by 1 pm. The behaviour of Raju, whose daughter had been admitted to the hospital because of the consumption of poison, is very abnormal.

According to PW 4, Shantha, the second daughter of Raju, the deceased, had telephoned her and told them that she had consumed poison because of the incident that took place earlier that day. They rushed to her residence and took her to the hospital with the help of neighbours who were already there. This again contradicts PW 1’s statement that he had come home at 10 am and received the news that his daughter had already been taken to the hospital. PW 8 and 9, who were amongst the neighbours who saw the deceased in an unconscious state through the window while the telephone was ringing, turned out to be hostile witnesses. Only PW 8 and 9 were examined among all the neighbours present, and the reasons for not examining the others are unknown. Both the neighbours turned out to be hostile witnesses, stating that they didn’t know the reason behind the girl’s death. They also stated that the police hadn’t recorded their statements. It is also pertinent to note that if the telephone receiver hung, how could it keep ringing? In addition to the inconsistencies and loopholes that have already dented the prosecution case, the court stated that the credibility of the evidence produced cannot be trusted.

The court referred to the case M. Mohan v. State[1] to look into the meaning of suicide. In this case, it was observed that since “Sui” means self and “cide” means killing, a clear inference can be drawn that suicide means self-killing. In the case of Ramesh Kumar v. State of Chhattisgarh[2], it was held that instigation refers to an act of provocation and encouragement. When someone is provoked to perform an act, it is instigation. It is immaterial whether the words are spoken or unspoken. The accused’s act must indicate the resultant circumstance or situation. However, words said in a rage will not be considered as instigation.

Thus, the court, in this case, has laid down essentials that need to be proved to convict an accused for the offence of abetment of suicide. They are as follows:

  • the accused constantly irritates and annoys the deceased with spoken words, actions, deliberate omissions and deliberate silence to provoke and compel the deceased to take action swiftly
  • it is very important to establish mens rea of the accused in doing the aforementioned acts, which goes hand in hand with instigation.

Another point which is pertinent to note is that when a person dies by the consumption of poison, traces of poison must be discovered in such cases. PW 13 testified that there were injection marks on the front of both elbows of the deceased, including a partially healed wound on the wrist of the deceased. When he received the final chemical analysis, he opined that the death was caused by respiratory failure due to the consumption of the compound organophosphate. In the instant case, the doctors who treated the deceased were not called upon by the court for their testimony. It would have been crucial since they could have given information regarding the compound’s amount and way of consumption. No evidence pertaining to the bottle or the container from which the deceased had consumed poison or any syringe or needle used to inject was retrieved by the police.  

The court said that there can be a plethora of reasons as to why a person can commit suicide. It can be due to societal pressures or some mental illness. Hence, suicide is not always abetted. In the present case, the appellant cannot be convicted of abetment to suicide when suicide itself has not been proven. Considering the defaults in the prosecution case, the Hon’ble Court quashed the order given by the trial court and subsequently upheld by the High Court. The appellant’s conviction under section 306 has been set aside, hereby acquitting him of all the charges. The appellant is already out on bail, so the bail bonds shall no longer be in effect.

[1] 1 (2011) 3 SCC 626

[2] (2001) 9 SCC 618

Judgement Written by-Rashi Hora

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