- 1 - HC-KAR NC: 2025:KHC:47941-DB WA No. 619 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF NOVEMBER, 2025 PRESENT THE HON'BLE MR. JUSTICE D K SINGH AND THE HON'BLE MS. JUSTICE TARA VITASTA GANJU WRIT APPEAL NO. 619 OF 2025 (S-DIS) BETWEEN: 1. INDIAN BANK A BODY CONSTITUTED UNDER THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT, 1970, HAVING ITS CORPORATE OFFICE AT 254-260, AVVAI SHANMUGAM SALAI, REPRESENTED BY ITS CHAIRMAN AND MANAGING DIRECTOR. 2. THE ASSISTANT GENERAL MANAGER, DISCIPLINARY AUTHORITY, INDIAN BANK CIRCLE OFFICE, NO.26-27, M.G.ROAD, BENGALURU-560 001. 3. THE DEPUTY GENERAL MANAGER, APPELLATE AUTHORITY, VIGILANCE DEPARTMENT, INDIAN BANK, CORPORATE OFFICE, 254-260, AVVAI SHANMUGAM SALAI, ROYAPETTAH, CHENNAI-600 014. 4. THE GENERAL MANAGER, REVIEWING AUTHORITY, INDIAN BANK, CORPORATE OFFICE, 254-260, AVVAI SHANMUGAM SALAI, ROYAPETTAH, CHENNAI-600 014. - 2 - HC-KAR NC: 2025:KHC:47941-DB WA No. 619 of 2025 5. THE ZONAL MANAGER, INDIAN BANK, ZONAL OFFICE, RAHEJA TOWERS, NO.26-27, M.G.ROAD, BENGALURU-560 001. 6. THE DEPUTY GENERAL MANAGER, HRM DEPARTMENT AND THE TRUSTEE, PENSION CELL, INDIAN BANK, CORPORATE OFFICE, 254-260, AVVAI SHANMUGAM SALAI, ROYAPETTAH, CHENNAI-600 014. …APPELLANTS (BY SRI. UDAYA SHANKAR RAI.P., ADVOCATE) AND: SRI. M.D.CHANDRASHEKAR S/O LATE.DAKSHINA MURTHY, AGED ABOUT 58 YEARS, EARLIER WORKING AS AN MANAGER MIDDLE MANAGEMENT SCALE-II, SR NO.16330, INDIAN BANK, J.P.NAGARA BRANCH, SINCE ILLEGALLY REMOVED FROM SERVICE, AND RESIDING AT NO.150, 18TH MAIN, BTM II STAGE, KUVEMPU NAGAR, BENGALURU-560 076. …RESPONDENT (BY SRI. S.VITTAL SHETTY., ADVOCATE) THIS WRIT APPEAL FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT, 1961, PRAYING TO SET ASIDE THE ORDER IN WP No-60037/2014 DATED 01.10.2024 PASSED BY THE LEARNED SINGLE JUDGE. THIS APPEAL, COMING ON FOR PRELIMINARY HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: - 3 - HC-KAR NC: 2025:KHC:47941-DB WA No. 619 of 2025 CORAM: HON'BLE MR. JUSTICE D K SINGH & HON'BLE MS. JUSTICE TARA VITASTA GANJU ORAL JUDGMENT (PER: HON'BLE MR. JUSTICE D K SINGH) The present writ appeal has been filed by the appellants being aggrieved by the judgment and order dated 01.10.2024 passed by the learned Single Judge in W.P.No.60037/2014. 2. For the sake of convenience, the parties are referred to as per their ranking in the writ petition. 3. The petitioner was working as a Bank Manager in the J.P.Nagar Branch of the respondents/bank. He faced departmental proceedings for the following charges: “Mr.M.D.Chandrashekar SR No. 16330 Manager (u/s) Indian Bank J.P.Nagar Branch Residence No.150, 18 Main, BTM II Stage. Kuvembu Nagar, Bangalore-560 076. - 4 - HC-KAR NC: 2025:KHC:47941-DB WA No. 619 of 2025 Articles of charge Please refer letter BG:CO VIG:4024:2009-10 dated 03.08.2009 issued to you by Asst General Manager calling upon you to submit your explanation for the acts of omission and commission reportedly committed by you in Sec.OD A/c M/s Matrix Build Tech Designers Pvt. Ltd. and CA M/s Shree Omigos Buildcon Pvt. Ltd, during your tenure as Branch Manager of J.P Nagar Branch from 05.06.2008 to 23.06 2009. I have carefully considered your reply thereto dated 25.08.2009 and the same is not acceptable to me i therefore frame against you the following charges 1. On 30.06.2005, you had purchased a local cheque for Rs.3.00 to the credit of Sec. OD A/c M/s Matrix Build Tech Designers Pvt. Ltd. The cheque was returned unpaid for the reason funds insufficiant. Instead of reversing the BP by taking the item to BP returned unpaid account or by recovery from the party, you had allowed the same pending in BP for nearly six months and reversed the item only on 29.12.2008 by debiting the Sec. OD account. Further, you had failed to reverse the pending item in BP from the credit of Rs. 19.00 lakhs received in the account on 19.07.2008. Thus you had allowed a concealed limit of Rs.3.00 lakhs to the party 2 M/s Matrix Build Tech Designers Pvt. Ltd. was sanctioned with an adhoc SOD limit of Rs.25.00 lakhs on 21.06.2008, which is repayable within 30 days. Though there was a credit of Rs. 19.00 lakhs in the account on 19.07.2008, you had failed to recover the adhoc SOD limit out of this credit and allowed the party to withdraw the same. Thus you had failed to protect the interest of the Bank 3. As per terms of rephasement sanction in respect of Funding Interest position of Rs.25.00 lakhs, M/s Matrix Build Tech Designers Pvt. Ltd. had to pay Rs.5.00 lakhs by 27.12.2008 and Rs.20.00 lakhs by 15.01.2009. As the party had failed to pay the committed amount of Rs.5.00 lakhs on 27.12.2008, you had instructed Mr. Gopal H. Ritti, Asst. Branch Manager to manipulate the - 5 - HC-KAR NC: 2025:KHC:47941-DB WA No. 619 of 2025 accounts so as to make it appear that the party has made the payment of Rs 5.00 lakhs into his account as per terms of sanction and the same was carried out by the ABM in clandestine manner. Thus you had favoured the party by manipulating the accounts with the active cooperation of ABM 4. You had faxed a letter dated 03.02.2009, received from M/s Matrix Build Tech Designers Pvt. Ltd., wherein they have a made false statement, that they have paid Rs. 5.00 lakhs towards the Funded Interest position of Rs 25.00 lakhs as per There was no sanction terms and the balance amount of Rs. 20.00 lakhs would be paid before February 2009, to Circle Office, though you were fully aware that remittance of Rs 5.00 lakhs from the party as stated in their letter. Thus by forwarding the above letter containing a false statement, you had colluded with the party to mislead the Circle Office in order to restructure the account. 5. You had, with the active cooperation of ABM of the Branch, unduly favoured M/s Matrix Build Tech Designers Pvt. Ltd. and M/s Shree Omigos Buildcon Pvt. Ltd by not returning the cheques received in inward clearing when there were no sufficient funds in the accounts. You had retained these cheques without recording the same in the funds book and released them only when sufficient balance was provided by the parties in their respective accounts. By doing so, you had allowed the parties a concealed TOD and to that extent the Inward Clearing account was showing debit balances. Because of your above acts, the Branch had suffered leakage of income to the extent of Rs.235472/-. Thus you had failed to follow the HO guidelines with regard to inward clearing cheques and thereby failed to protect the interest of the Bank. 6. On 13.11.2008, you had provided funds of Rs.210000/- to M/s Shree Omigos Boscon Pvt. Ltd on an lilegal way by transferring the amount from System Inward Clearing account to their current account. The amount so transferred from System Inward Clearing account was reversed on 11.12.2008 by debiting the current account. Thus you had allowed interest free - 6 - HC-KAR NC: 2025:KHC:47941-DB WA No. 619 of 2025 funds of Rs.210000/- for a period of 28 days and there was a loss of interest income of Rs 3222/- to the Bank 7. You had purchased local cheques in the Sec, OD A/c Mis Matrix Build Tech Designers on various dates for which you have no power under MDL as the credit limits in the said account were sanctioned by higher level sanctioning authority and you had failed to report the purchase of cheques under BP to Circle Office Thus you had violated HO guidelines and failed to protect the interest of the Bank. The A/c M/s Matrix Build Tech Designers Pvt. Ltd. became NPA and recovery of book balance of Rs 198.22 lakhs plus MOI of Rs.25.26 lakhs is posing problem and the Branch has initiated action under SARFAESI proceedings for recovery. Your acts of irregularities as above had also contributed to the financial indiscipline of the borrower and for the present position of the account. Your above reported acts of omission and commission, if proved, would constitute misconducts under Regulation 24 of the Indian Bank Officer Employees' (Conduct) Regulations, 1976 (as amended from time to time), in as much as they would be in breach of Regulation 3(1) of the said Regulations, for your failing to take all possible steps to ensure and protect the interests of the Bank and discharge your duties with utmost integrity, honesty, devotion and diligence and do nothing which is unbecoming of an Officer employee. The misconducts, if proved, are punishable under Regulation 4 of Indian Bank Officer Employees' (Discipline & Appeal) Regulations, 1976, as amended from time to time. A statement of imputations of misconduct based on which these Articles of Charge are framed and the list of documents and witnesses relied upon for framing the charges are enclosed. Please let me have your reply in defence to the charges within 15 days from the date of receipt hereof, failing which it will be construed that you have no reply to offer and the matter will be proceeded with further, without any further notice to you. - 7 - HC-KAR NC: 2025:KHC:47941-DB WA No. 619 of 2025 4. From perusal of the charge, it is evident that charge was not in respect of the misappropriation or causing loss to the bank. The charges are not in effect regarding the integrity of the petitioner but only for going overboard. The Disciplinary authority has imposed punishment of removal from service of the petitioner who had put in 32 years of service in the bank. 5. The learned Single Judge in para 23 has observed as Under: “23. One another fact that the disciplinary authority failed to consider was that when the sum of Rs.19,00,000-00 was available in the account of M/s. MBTDPL on 19.07.2008, the overdraft facility was still in force and therefore, legally also, the said amount could not have been adjusted before the last date prescribed for repayment of the overdraft i.e., on 21.07.2008. Having regard to the transactions of M/s. MBTDPL at the branch, it was not unnatural for the petitioner to believe the representation made by M/s. MBTDPL that there is a likelihood of cash flow. The petitioner being a Manager at the branch is invested with immense responsibility beginning from running the branch, finding customers, ensuring disbursals and recoveries, submitting frequent statements, complying the circulars and guidelines issued by the Head Office of the bank from time to time etc., It is undisputed that there were only two people at the J.P Nagar Branch of bank and it is quite probable that some issues would have either gone unnoticed or would have been deliberately ignored so as to keep the customer in good humour and to retain him in the branch. The charges against the petitioner borders on the same and though the petitioner had compromised - 8 - HC-KAR NC: 2025:KHC:47941-DB WA No. 619 of 2025 the interest of the bank in not timely appropriating the amount lying in the account of M/s. MBTDPL, it is not as if the sufficient surety was not there in the hands of the bank to ensure recovery. Therefore, the disciplinary authority must have been considerate while imposing a serious punishment of removal from service, which has serious socio-economic impact on the petitioner, who has served the respondent No.1 all his life. The punishment of removal from service is ordinarily imposed when a delinquent official is guilty of gross indiscipline or insubordination or accused of defalcation of accounts for personal gain or misappropriation of funds. In the instant case, there is not even a whisper that the petitioner had indulged in favouring two entities for personal or financial gain. Therefore, the disciplinary authority was not justified in imposing punishment of removal from service. The Appellate Authority and the Reviewing Authority have also blindly followed suit in concurring with the order of the disciplinary authority. Under the circumstances, this Court is of the opinion that the petitioner being the Manager of the branch was bound to be more alert and concerned about the interest of the bank and by allowing M/s. MBTDPL to hold the longer end of stick, he had compromised the interest of the bank to some extent. Therefore, the petitioner did not deserve to be continued in service”. 6. When the charge is not regarding the integrity or causing loss to the bank or misappropriation of fund of the bank, learned Single Judge has found that the punishment of removal from service is shockingly disproportionate to the alleged misconduct of the petitioner. 7. Learned counsel for the respondents/bank does not dispute the fact that the charge was not regarding any - 9 - HC-KAR NC: 2025:KHC:47941-DB WA No. 619 of 2025 misconduct of integrity or causing loss the bank. The charge is only for going overboard by the petitioner. Learned counsel for the respondents/bank also submits that no loss was quantified which the bank could have suffered because of the alleged misconduct committed by the petitioner. The Disciplinary Authority has resorted to impose a major punishment of removal from service on the charges which are not gross as mentioned above. Therefore, we are of the view that learned Single Judge has rightly opined that punishment of removal from service imposed on the petitioner who had put in 32 long and unblemished years of service in the bank was shockingly disproportionate to the alleged misconduct of the petitioner and has rightly modified the punishment of removal from service of the petitioner to the compulsory retirement from service. Therefore, we do not find any ground to interfere with the impugned order. - 10 - HC-KAR NC: 2025:KHC:47941-DB WA No. 619 of 2025 8. Accordingly, the writ appeal is dismissed. (D K SINGH) JUDGE (TARA VITASTA GANJU) JUDGE YN List No.: 1 Sl No.: 7 Digitally signed by DINESH KUMAR SINGH Location: HIGH COURT OF KARNTAKA Digitally signed by TARA VITASTA GANJU Location: HIGH COURT OF KARNTAKA