Allahabad High Court quotes Arthashastra, cancels banker’s dismissal over 1999 ‘fraud’

The September 18 order quoted Chanakya’s Sanksrit treatise Arthashastra, saying, “Punishment should be awarded to the offenders in proportion to their crime. Justice should be administered properly. A second offense should not be forgiven for anyone.”

The court concluded that the findings of guilt recorded by the enquiry officer were based on mere conjectures, assumptions, and hearsay, rendering it a classic case of “no evidence”.

Petitioner challenged 2012 dismissal

The petitioner was initially appointed as clerk-cum-cashier at PNB and joined service in December, 1978. He was later promoted to Officer Grade-I in 1984 and, on account of his service and eligibility, he was promoted as assistant manager in 1987. His work and conduct throughout the service remained excellent, the officer claimed.

Justice Irshad Ali concluded that the findings of guilt recorded by the enquiry officer were based on assumptions and hearsay, rendering it a classic case of ‘no evidence’.

During his tenure as assistant manager in Vidhan Sabha Marg in Lucknow, an FIR was registered against the officer in February 1999 under sections related to cheating and other offences, alleging fraud and misuse of bank funds. He was arrested in March 1999 and chargesheeted in April 2002.

The petitioner, on his part, requested 48 key documents to defend himself. The bank, however, failed to produce the original documents and relied on unverified photocopies of the documents, failed to examine key authors or material witnesses, including the primary complainant, and refused to allow him to call key defence witnesses.

The proceedings were conducted ex parte on several dates without giving proper notice to the petitioner, he said, and his requests to cross-examine witnesses were denied. In November 2012, the disciplinary authority held all charges proved against the officer and dismissed him from service, making him ineligible for future employment and forfeiting his salary during the suspension period. In 2014, the appellate authority dismissed his departmental appeal through a short order, stating that he failed to disprove the charges.

The petitioner challenged his dismissal before high court, arguing that the entire enquiry was a case of “no evidence”, violated principles of natural justice, ignored binding judicial findings regarding his job role, and wrongly placed the burden of proof on him to prove his innocence rather than requiring the bank to prove his guilt.

‘Serious financial irregularities’

Representing the bank, advocates D K Pathak and Gopal Kumar Srivastava submitted that the allegations against the petitioner arose out of serious financial irregularities and unauthorised banking transactions committed during his tenure.

The charges were considered in the departmental enquiry on the basis of oral and documentary evidence and the petitioner was suspended in accordance with the applicable service regulations and departmental proceedings were initiated after that.

Bank failed to prove allegations: Order

The high court observed that both the disciplinary authority and appellate authority wrongly placed the burden of proof on the employee to disprove the allegations, rather than requiring the bank to prove them.

“The present case does not involve a mere disagreement with the appreciation of evidence by the departmental authorities. The challenge strikes at the very foundation of the disciplinary proceedings,” the court said.

“The material demonstrates denial of relevant documents, failure to produce originals despite specific objection, non-examination of material witnesses, denial of relevant defence evidence, proceeding upon a foundational fact which was not established by the management and failure on the part of the disciplinary and appellate authorities to deal meaningfully with the objections raised by the petitioner,” it pointed out.

The court noted that PNB failed to establish that the petitioner was ever posted as a “system administrator”. A civil court had already given a clear finding in a civil suit filed by the bank itself that the bank could not prove he held that post.

“The petitioner consistently denied that he had ever been appointed or posted as system administrator. The management did not produce the office order or other contemporaneous documentary material establishing such appointment,” it stated.