N. Ratnakumar Raju Vs Tamil Nadu Grama Bank (Madras High Court)
Following Predecessors’ Practice Cannot Justify Loans Beyond Authority: Madras HC Upholds Removal
Introduction
The Madras High Court has upheld the removal of a bank manager for irregularities in sanctioning loans, holding that following practices adopted by predecessors cannot justify acting beyond authorised limits.
The Court rejected challenges concerning overlapping charges, documentary evidence, alleged discrimination and the proportionality of punishment. It found that the disciplinary conclusions were supported by evidence and that the appellate authority had demonstrated application of mind.
Emphasising the limited scope of judicial review, the Court declined to reassess the evidence or substitute its own conclusions for those of the disciplinary authorities.
Background of the Case
The petitioner joined the bank as a Probationary Officer on 15 April 1988. While serving as Manager of its Cuddalore Branch, he faced disciplinary proceedings concerning loans sanctioned in violation of mandatory guidelines.
He was placed under suspension on 29 August 2008. The disciplinary enquiry involved 19 charges and 114 documents.
The Enquiry Officer found all charges proved except Charges 8 and 10. The disciplinary authority disagreed with those findings, treated all charges as established and imposed removal from service on 27 October 2009.
The punishment expressly stated that removal would not disqualify the petitioner from future employment.
Following earlier rounds of litigation and remand, the appellate authority passed a fresh order on 23 April 2024, again confirming removal. The petitioner challenged that order and sought reinstatement with continuity of service, back wages and consequential benefits.
Petitioner’s Main Objections
The petitioner argued that certain charges were identical, indicating non-application of mind in initiating the proceedings.
He also questioned the disciplinary authority’s disagreement with the favourable findings on Charges 8 and 10 and alleged non-compliance with the applicable service rules.
Another objection concerned the production of documents through the Presenting Officer without examining the respective witnesses. According to the petitioner, the charges lacked proper evidentiary support.
He further alleged discrimination, pointing to the absence of proceedings against predecessors and other employees involved in the transactions. Alternatively, he contended that removal was shockingly disproportionate.
Bank’s Defence
The bank maintained that the petitioner had sanctioned loans beyond his discretionary authority, failed to assess borrowers’ repayment capacity and neglected necessary safeguards.
It submitted that his conduct caused a loss of approximately ₹5.64 crore.
The bank argued that practices followed by earlier officers could not authorise departures from prescribed limits. It also maintained that overlapping allegations did not invalidate otherwise sustainable disciplinary proceedings.
Overlapping Charges Did Not Establish Non-Application of Mind
The Court examined the challenged charges and found that, although some imputations overlapped, they addressed distinguishable aspects of the lending irregularities.
For example, one charge concerned multiple facilities sanctioned without assessing repayment capacity, while another concerned loans to ineligible persons and amounts exceeding prescribed limits.
The Court also found that the fresh appellate order examined the borrowers, missing records and relevant allegations in detail. The deficiency underlying the earlier remand had therefore been addressed.
The appellate authority’s reasoning demonstrated adequate application of mind.
Documentary Evidence and Standard of Proof
The Court rejected the contention that the documents could not support the disciplinary findings.
The records belonged to the bank, and the petitioner had not alleged that they were forged or fabricated. Despite having defence assistance, he had not objected to their marking or admissibility before the disciplinary and appellate authorities.
The Court considered it too late to raise that objection during judicial review in these circumstances.
It reiterated that disciplinary proceedings apply the standard of preponderance of probabilities. The findings were supported by substantial documentary material and could not be characterised as conclusions based on no evidence.
Predecessors’ Practice Was No Defence
The petitioner’s explanation was that he followed procedures adopted by his predecessors.
The Court held that acting beyond one’s authority constitutes misconduct. Bank officers dealing with public money cannot justify exceeding their powers by relying on earlier practices.
It also rejected the discrimination argument. The absence of proceedings against other employees did not, on these facts, establish an Article 14 violation. As the responsible manager, the petitioner could not avoid accountability merely by relying on documents prepared by subordinate staff.
Judicial Review and Proportionality
The Court explained that judicial review is not an appeal on facts. Its role is to examine procedural fairness, compliance with natural justice and whether findings suffer from perversity or lack evidentiary support.
A possible alternative view does not justify replacing the disciplinary authority’s conclusion.
On punishment, the Court considered the serious financial loss and failure to exercise due diligence. It found no disproportionality warranting interference with removal from service.
Conclusion
The High Court dismissed the writ petition without costs and closed the connected application.
The ruling underscores the personal responsibility of bank officers to observe lending limits, borrower assessment requirements and documentary safeguards. Established workplace practices cannot legitimise action beyond delegated authority, while disciplinary findings supported by evidence ordinarily remain outside fresh factual appraisal in judicial review.
Cases Discussed
- Roop Singh Negi Vs Punjab National Bank & Others (Supreme Court); (2009) 2 SCC 570 — Cited by the petitioner and distinguished by the High Court on the evidentiary requirements for proving documents in departmental proceedings.
- Anil Kumar Vs Presiding Officer & Others (Supreme Court); (1985) 3 SCC 378 — Considered concerning the need for reasons in disciplinary and quasi-judicial decisions.
- Ram Chander Vs Union of India & Others (Supreme Court); (1986) 3 SCC 103 — Considered regarding the appellate authority’s duty to examine the disciplinary appeal.
- Dev Singh Vs Punjab Tourism Development Corporation Ltd. (Supreme Court); (2003) 8 SCC 9 — Cited by the petitioner in support of his challenge to the punishment.
- Naresh Chandra Bhardwaj Vs Bank of India & Others (Supreme Court); (2019) 15 SCC 786 — Cited by the petitioner concerning disciplinary proceedings.
- Orissa Mining Corporation Vs Ananda Chandra Prusty (Supreme Court); (1996) 11 SCC 600 — Cited by the respondent bank.
- State Bank of India Vs A.G.D. Reddy (Supreme Court); (2023) 14 SCC 391 — Cited by the respondent bank.
- State of Haryana Vs Rattan Singh (Supreme Court); (1977) 2 SCC 491 — Applied in discussing the evidentiary standard in disciplinary proceedings.
- B.C. Chaturvedi Vs Union of India (Supreme Court); (1995) 6 SCC 749 — Relied upon for the limitations of judicial review concerning disciplinary findings and punishment.
- Disciplinary Authority-cum-Regional Manager Vs Nikunja Bihari Patnaik (Supreme Court); (1996) 9 SCC 69 — Relied upon for the principle that acting beyond delegated authority constitutes misconduct.
- State Bank of India Vs Bela Bagchi (Supreme Court); (2005) 7 SCC 435 — Referred to concerning the special responsibility of bank officers handling public money.
- General Manager (Operations) Vs R. Periyasamy (Supreme Court); (2015) 3 SCC 101 — Cited by the respondent bank.
- Katra Educational Society Vs State of Uttar Pradesh (Supreme Court); 1966 SCC OnLine SC 61 — Cited by the respondent bank.
- National Carbon Company Vs Labour Court, Madras (Madras High Court); 1987 1 LLN 405 — Cited by the respondent bank.
- Lucknow Kshetriya Gramin Bank Vs Rajendra Singh (Supreme Court); (2013) 12 SCC 372 — Relied upon regarding limits on writ-court interference with disciplinary findings.
- AAI Vs Pradip Kumar Banerjee (Supreme Court); (2025) 4 SCC 111 — Expressly discussed and quoted regarding the reasoning required in disciplinary orders.
- Boloram Bordoloi Vs Lakhimi Gaolia Bank (Supreme Court); (2021) 3 SCC 806 — Quoted within the Supreme Court judgment in AAI Vs Pradip Kumar Banerjee regarding acceptance of enquiry findings and reasons for punishment.
- Deputy General Manager (Appellate Authority) Vs Ajai Kumar Srivastava (Supreme Court); (2021) 2 SCC 61 — Referred to in explaining the scope of judicial review.
- Indian Oil Corporation Vs Ajit Kumar Singh (Supreme Court); 2023 LiveLaw (SC) 478 — Referred to concerning judicial review, perversity and disciplinary punishment.
FULL TEXT OF THE ORDER OF MADRAS HIGH COURT
This Writ Petition has been filed challenging the impugned order of the first respondent bearing Ref. No.PGB/ VIG/ OF/ PUN/ SPKG ORDER/2/2009-10 dated 27.10.2009 imposing the punishment of “Removal from service, which shall not be disqualification for future employment”.
2. The brief facts which are necessary for the disposal of the present writ petition is that, the petitioner joined the service of the Respondent-Bank as Probationary Officer on 15.04.1988. Thereafter, when he was serving as a Manager of the Cuddalore Branch, he was placed under suspension on 29.08.2008 and was also served with the Charge Memorandum. The crux of the charge was that, he granted loans violating the mandatory guidelines. Since the petitioner’s explanation was not satisfactory, a disciplinary proceedings was initiated and after having considered 114 documents, out of 19 charges, except the charges 8 and 10, the Enquiry Officer held that other charges are proved. But, the Disciplinary Authority has disagreed with the findings of the Enquiry Officer with reference to the charges 8 and 10. Thus, the Disciplinary Authority has found that all the charges framed against the petitioner was proved and imposed with a penalty of removal from service on 27.10.2009. Aggrieved by the order of removal from service, the petitioner preferred an appeal before the Appellate Authority. However, vide order dated 07.12.2019, the Appellate Authority has confirmed the findings of the Disciplinary Authority. Aggrieved with the same, the petitioner preferred a writ petition in WP.No.9048 of 2010, in which this Court vide order dated 13.02.2018 has remitted back the matter to the Appellate Authority. Even after the order of the Appellate Authority, once again the petitioner preferred a writ petition in WP.No.9279 of 2020, wherein, the order of the Appellate Authority was set aside and again the matter was remitted back. As per the directions of this Court in WP.No.9279 of 2020, the impugned order dated 23.04.2024 was passed again confirming the order of removal from service. Aggrieved with the same, the present Writ Petition has been filed.
3. Heard the learned Senior Counsel Mr.K.M.Ramesh, appearing for the petitioner and the learned counsel Mr.P.Raghunathan for the respondents.
4. The learned Senior Counsel appearing for the petitioner would contend that the entire disciplinary proceedings were initiated without application of mind, which could be demonstrated from the identical charges framed as the charge 1 and 1A and charge 1(d) and 1(e) are identical. It is also the contention of the learned Senior Counsel that the Enquiry Officer having held that the charges 8 and 10 were not proved, the Disciplinary Authority without recording reasons, has differed with the findings of the Enquiry Officer. It is also his contention that when the petitioner was serving in Pallavan Grama Bank, the charges were issued. However, they have not followed the relevant Service Rules. It is the submission of the learned Senior Counsel that initially the petitioner joined in Vallalar Grama Bank, which was later renamed as “Adhiyaman Grama Bank” and subsequently to “Pallavan Grama Bank”. It is the specific submission of the learned Senior Counsel that there was a blatant discrimination in initiating the disciplinary proceedings between the petitioner and the other employees those who are also responsible for such alleged irregularity. It is his further submission that, without examining the respective witnesses, the Enquiry Officer has permitted to mark all the documents through the presenting Officer. Hence, having no proof, the findings rendered by the Enquiry Officer as well as the Disciplinary Authority are erroneous. It is also his contention that the Disciplinary Authority has not assigned any reasons as to the defence documents. The learned Senior Counsel would contend that the findings of the Enquiry Officer is perverse. Notwithstanding the above submissions, it is also the contention of the learned Senior Counsel that the punishment of removal from service is shockingly disproportionate to the gravity of the charges. To support his contention, he would rely upon the following judgments:-
1. Roop Singh Negi Vs. Punjab National Bank and others reported in (2009) 2 SCC 570;
2. Anil Kumar Vs. Presiding Officer and Others reported in (1985) 3 SCC 378;
3. Ram Chander Vs. Union of India and others reported in (1986) 3 SCC 103;
4. Dev Singh Vs. Punjab Tourism Development Corporation Ltd., and another reported in (2003) 8 SCC 9;
5. Naresh Chandra Bhardwaj Vs. Bank of India and others reported in (2019) 15 SCC 786.
5. Per contra, the learned Standing counsel appearing for the respondents would submit that while the petitioner was serving as a Branch Manager, a vigilance inspection was conducted on 10.11.2007 and in pursuance thereof, a show cause notice was issued to him on 12.12.2007. After that, the petitioner has given his explanation. Not satisfying with the explanation, the charges were framed and later on, the domestic enquiry was conducted and ultimately, the Enquiry Officer held that except charges 8 and 10, the other charges were proved. It is his submission that on account of the petitioner’s callous conduct, there was a huge loss to the Bank to the tune of Rs.5.64 crores. It is his submission that the loan, which had been sanctioned by the petitioner was exceeding his authority, and in respect of many barred loans, he miserably failed to get the acknowledgement of debt. Though the petitioner would contend that, he has followed the business practice of his predecessors, that by itself will not confer any right to the petitioner to act beyond his statutory limits and powers. Though the petitioner would contend that the charges are similar, that by itself will not confer any right to the petitioner to get rid of the disciplinary proceedings. The mere overlapping of charges cannot be construed as a ground to discharge. Even according to the petitioner, the charges are not fictitious. He would contend that in the absence of any mala fide, the petitioner has no right to go into the minute details of the evidences, as the present proceedings is only a judicial review and this Court could act only within the contours as prescribed by the Apex Courts under the various decisions. In order to substantiate his contention, he relied upon the following judgments:-
1. Orissa Mining Corporation and another Vs. Ananda Chandra Prusty reported in (1996) 11 SCC 600;
2. State Bank of India Vs. A.G.D.Reddy reported in (2023) 14 SCC 391
3. State of Haryana and another Vs. Rattan Singh reported in (1977) 2 SCC 491;
4. B.C.Chaturvedi Vs. Union of India and others reported in (1995) 6 SCC 749;
5. Disciplinary Authority-cum-Regional Manager and others Vs.Nikunja Bihari Patnaik reported in (1996) 9 SCC 69;
6. State Bank of India and another Vs. Bela Bagchi and others reported in (2005) 7 SCC 435;
7. General Manager (Operations) and another Vs. R.Periyasamy reported in (2015) 3 SCC 101;
8. Katra Educational Society Vs. State of Uttar Pradesh and others reported in 1966 SCC OnLine SC 61;
9. National Carbon Company Vs. Labour Court, Madras and another reported in 1987 1 LLN 405;
10. Lucknow Kshetriya Gramin Bank and another Vs. Rajendra Singh reported in (2013) 12 SCC 372.
6. I have given my anxious consideration to either side submissions.
7. While perusing the order of the Disciplinary Authority dated 27.10.2009, there were 19 charges. The sum and substance of those charges are in respect of irregularity committed by the petitioner while sanctioning the loan. The learned counsel for the petitioner has relied upon the charge nos.“1” and “1A”, and would contend that both the charges are identical. Though the said submissions cannot be outrightly denied, on the same breadth, we may say that such submission is not fully correct. While closely reading the above charges, there are some overlapping of the imputations. In the “charge No.1”, they simply stated in a plain language that the petitioner had sanctioned multiple facility to the same parties, without assessing their repaying capacity, whereas in “charge 1A”, they fine tuned the charge and they have expressly stated that the petitioner had sanctioned loans to the ineligible persons and the amount sanctioned are excess to the prescribed limit. Therefore, the contention that the respondents had not applied their mind while framing the charge, can have no legs to stand.
8. Similarly, he has also contended that the “charges 1(b)” and “1(e)” are identical. But, this Court would look at the issue in a different perspective. While looking into the 2nd remand order dated 23.11.2023 in WP.No.9279 of 2020, the order of the Appellate Authority was not set aside on the ground that the charges are irregular, but on the ground that there were no discussions with reference to his ground. At this juncture, it is relevant to refer the judgment of the Hon’ble Supreme Court in AAI v. Pradip Kumar Banerjee, reported in (2025) 4 SCC 111. The relevant portions of the above judgment are extracted hereunder:-
“35. It is trite law that in disciplinary proceedings, it is not necessary for the disciplinary authority to deal with each and every ground raised by the delinquent officer in the representation against the proposed penalty and detailed reasons are not required to be recorded in the order imposing punishment if he accepts the findings recorded by the Enquiry Officer. Our view stands fortified by the decision of this Court in Boloram Bordoloi v. Lakhimi Gaolia Bank [Boloram Bordoloi v. Lakhimi Gaolia Bank, (2021) 3 SCC 806 : (2021) 1 SCC (L&S) 624] , wherein it was held : (SCC p. 810, para 11)
“11. … Further, it is well settled that if the disciplinary authority accepts the findings recorded by the enquiry officer and passes an order, no detailed reasons are required to be recorded in the order imposing punishment. The punishment is imposed based on the findings recorded in the enquiry report, as such, no further elaborate reasons are required to be given by the disciplinary authority.
36. All that is required on the part of the disciplinary authority is that it should examine the evidence in the disciplinary proceedings and arrive at a reasoned conclusion that the material placed on record during the course of enquiry establishes the guilt of the delinquent employee on the principle of preponderance of probabilities. This is precisely what was done by the disciplinary authority and the appellate authority while dealing with the case of the respondent.”
9. According to the above ratios, when the Appellate Authority concurs with the findings of the Disciplinary Authority, there is no necessity to traverse each and every grounds raised by the petitioner. However, there should be a clear indication as to the application of mind. In the case in hand, while looking into the orders of the Appellate Authority, it has discussed each and every minute aspects and has ultimately come to the conclusion that the petitioner has sanctioned loans beyond his discretionary limits. Though the petitioner would contend that the charges 1(e) and 1(d) are identical, the Appellate Authority has dealt the issue with threadbare details and has identified the borrowers against whom the petitioner failed to assess their repaying capacity, and had failed to obtain the relevant revenue records. Only after listing out those names, the Appellate Authority has given finding.
10. Therefore, as rightly contented by the learned counsel for the respondents, though the charges appear to be identical, the crux and fulcrum have got a minute difference, which had been elaborately dealt by the Appellate Authority in the impugned order. It is in this background, this Court is of the view that the main ground for 2nd remand viz., there is no reason assigned in respect of their defence of identical charges, has now been cured on account of the elaborate discussion made in the impugned order. As already observed, though the charges are similar, it is not really similar. In respect of every charges, the Appellate Authority has elaborately dealt the issue in the backdrop of the facts, documents and law. Therefore, there are abundant material to demonstrate that there was an application of mind while passing the order by the Appellate Authority.
11. At this juncture, it is relevant to refer the contours of the judicial review. In this regard, this Court would like to refer to the following judgments:-
(i) B.C.Chaturvedi Vs. Union of India reported in (1995) 6 SCC 749
(ii) Deputy General Manager (Appellate Authority) Vs. Ajai Kumar Srivastava reported in (2021) 2 SCC 61.
(iii) The Indian Oil Corporation & Ors., Vs. Ajit Kumar Singh & Anr., reported in 2023 LiveLaw (SC) 478.
Through the above judgements, the following principles would emerge:-
(i) Power of Judicial review is not like an appeal. But such power is meant to ensure that the individual receives fair treatment and the compliance of natural justice.
(ii) The power of judicial review is not like an appellate remedy to substitute its own finding, unless the findings of the Original Authority and Appellate Authority is perverse and without evidence.
(iii) The High Court had no jurisdiction to review the penalty, unless the same is shockingly disproportionate.
(iv) The mere possibility to arrive at yet another finding, cannot be a reason to substitute the finding of the disciplinary Authority.
(v) The judicial review is meant only to ensure fairness in treatment and not to ensure fairness of conclusion.
(vi) While exercising the power of judicial review, so long as there is some evidence to support the conclusion arrived at by the original authority, the same has to be sustained.
12. Though the learned counsel for the petitioner relied upon the judgment of Roop Singh Negi [cited supra] to contend that there are no proof before the Disciplinary Authority, this Court respectfully differ from the above submission. The above reported judgment is distinguishable from the facts of the present case. The principle in Roop Singh Negi [cited supra] is reliability upon the Criminal Court records, without examining the Investigating Officer and the persons who attested to the confession statement. But, in the present case, the documents are related to the very same Department and nowhere the petitioner has raised an objection that the documents are forged, fabricated or self serving. The main contention put forth by the petitioner is that, while sanctioning loan acted in accordance with the established procedures. When on production of the documents if the Disciplinary Authority could be able to find that the defence of the petitioner has not been established, nothing wrong to rely upon those documents. Besides, these documents are produced by the presenting Officer, though he plays a role of a Prosecutor, there are no material available before this Court or it is not the case of the petitioner that he has objected to the production of those documents.
13. It is relevant to mention that the petitioner had a defence assistance. Therefore, having not raised any objection for marking of those documents and having not raised any objection before the Disciplinary Authority as well as the Appellate Authority in respect of the admissibility of those documents, it is too late for the petitioner to raise such a defence in a judicial review.
14. Though the petitioner relied upon the judgment of Anil Kumar [cited supra], it deals about the reasoned order. The reasoning is inexorable requirement in any order of the quasi judicial authority. He has elaborated the reason as to how they arrived at such conclusion. Here, the Disciplinary Authority and the Appellate Authority have narrated the reasons.
15. Though the learned Senior Counsel relied upon the judgment of Ram Chander case [cited supra], as already observed, in the present case the Appellate Authority has dealt the issue on every aspects and passed a detailed order. Therefore, there is no scope to have a use of this precedent.
16. At this juncture, it is relevant to mention that nowhere the petitioner has pleaded that he acted within his bounds. But, it is the contention that he acted in accordance with the existing procedure followed by his predecessors. But, the Hon’ble Supreme Court in Nikunja Bihari Patnaik’s case [cited supra] has held that acting beyond one’s authority is a misconduct. It is not expected from the Bank Officers to act liberally in respect of the public money. In this regard, it is also relevant to refer Bela Bagchi case [cited supra]. As already referred, while exercising the power of judicial review, what is essential is, the correctness of the procedures followed by the Authorities and not the correctness of the decision. Unless there is a perversity in the order, the Writ Court normally should not interfere with the findings rendered by the Disciplinary Authority, as the Writ Court cannot assume the functions of the Disciplinary Authority as held in Rajendra Singh’s case [cited supra].
17. Here, to substantiate the petitioner’s case, they relied upon 114 documents. Though the petitioner would contend that no documents had been proved, which contention was rejected by this Court [as held supra], it is equally relevant to mention that the standard of proof in a disciplinary proceedings is only preponderance of probability. For which, there should be some evidence. It is not that the proof to the hilt. While perusing the orders of the Disciplinary Authority and the Appellate Authority, there are abundant evidences supporting the finding of the Authority. In this regard, it is relevant to refer the judgment of the Hon’ble Supreme Court in Rattan Singh’s case [cited supra].
18. Though the petitioner pleads about the discrimination, it was the contention that out of various documents relied upon by the petitioner, 56 documents were dealt by his predecessors, against whom no disciplinary proceedings was initiated. However, it was contended that the petitioner’s predecessors since retired at the time of unearthing the misconducts. He would also contend that the staffs were not prosecuted. The petitioner, being a responsible person and who had ultimate control over the Bank, ought not have acted on the basis of the documents prepared by his sub-staffs. Therefore, the mere absence of any disciplinary proceedings against other employees cannot be construed that there was a discrimination to the petitioner, that too where this Court could not find any perversity in the impugned order. In fact, this Court could not find any substance of real discrimination invoking Article 14 of the Constitution of India. Therefore, this Court is of the firm view that the findings rendered by the Disciplinary Authority and the Appellate Authority are on the basis of some evidences. Though the learned Senior Counsel would raise various defences, this Court, while exercising the power of judicial review normally should not re-appreciate the evidences as long as the findings of the authority are not perverse. Therefore, this Court is of the firm view that, there are no ground to interfere in the finding of guilt.
19. With regard to the punishment, it is the contention of the learned Senior Counsel that the punishment is disproportionate to the gravity of the charges. It is well settled principle of law that unless the punishment is disproportionate to the gravity of charge, this Court could not take the mantle of a Disciplinary Authority to modify the punishment. In the case in hand, there is a huge financial loss to the respondent-Bank and this petitioner, being a responsible officer, has failed to exercise his due diligence.
20. In such view of the above factual position, this Court absolutely does not find any disproportionality in imposition of punishment. Therefore, even in respect of the punishment, this Court could not find any grounds to interfere with.
21. Accordingly, the present writ petition stands dismissed. No costs. Consequently, connected WMP is also closed.
