Holding

A writ petition challenging a service dismissal cannot be entertained after a delay of nearly ten years, and a supervisory officer remains liable for negligence resulting in loss.

Summary

Govindrao, an agent of the State Bank of Indore, was charged with causing loss to the bank by allowing large loans to be granted in violation of banking rules, which later became irrecoverable. The disciplinary authority dismissed him from service, and his subsequent appeals—including a special appeal—were rejected. After a gap of nearly ten years, Govindrao filed a writ petition under Article 226 of the Constitution, which the Madhya Pradesh High Court quashed, deeming him retired and ordering payment of his dues. The Supreme Court held that a writ petition challenging a dismissal cannot be entertained after such a prolonged delay, as it would amount to laches. It also affirmed that a supervisory officer cannot escape liability for negligence that results in loss, irrespective of the subordinate who actually granted the loans. Consequently, the High Court's order was set aside and the dismissal stood. The appeal by the bank was allowed.

Issues considered

The propriety of entertaining a writ petition under Article 226 challenging a service dismissal after a lapse of nearly ten years.
Whether a supervisory officer can be held liable for losses caused by loans granted by a subordinate officer.
The correctness of the High Court's decision to quash the dismissal and deem the petitioner retired.

Legislation cited

Constitution of Indias. Article 226

Subjects

service lawdismissalsupervisory liabilitydelaylacheswrit petitionArticle 226bankingloan lossdisciplinary proceedings

Judgment

A THE STATE BANK OF INDORE
v.
GO VIND RAO

JANUARY 17, 1997

B [J.S. VERMA, SUHAS C. SEN AND S.P. KURDUKAR, JJ.]

Constitution of India-Article 226-Delay/Laches--Dismissal from ser-
vice-Appeal •against the dismissal was dismissed-Nearly after four years
special appeal was prefmed which was also dismissed-Writ petition after ten
C years challenging the order of dismissal-Held, writ petition after such a long
lapse of time cannot be entertained-Service Law.

Service Law-Bank-Grant of loan-Responsibility/Liability of the of-
ficer acting in supervisory, capacity-Loan granted in disregard of rnles,
became i"ecoverable-Power of granting loan was conferred 011 other
D employee-Held, it would not absolve the officer who had acted in supervisory
capacity, from the charge of causing loss to the Bank, since higher the position
of an officer, the greater is his responsibility.

G was an agent of a Bank. Some loans were granted by the Bank in
E total disregard of the specified rules; as such the loans became completely
irrecoverable. G was served with a charge sheet for causing loss to the
Bank. Enquiry officer submitted inquiry report to the Disciplinary
Authority that G was guilty of negligence. G objected that the D.O was
primarily responsible for granting of loans, he had acted only in super-
visory capacity. Disciplinary Authority after considering the report and the 1
(.
F objection, passed an order and dismissed G from the service. ',.- '

On 2-6-1978, G preferred an appeal against the order of dismissal,
which was dismissed by the appellate authority. Nearly after four years,
another appeal (described as special appeal) was filed by G, which was
G also dismissed on 12-5-1982. Five years thereafter i.e. on 6-4-1987 G filed
a Writ Petition challenging the validity of the order of dismissal passed
on 3.10-1977 before the High Court.

High Court quashed the order of dismissal on the ground that if the ,__.._
charges put together, they merely point to lack of supervision or negligence
H and held that G deemed to have retired on his due date of retirement and
300
STATE BANK OF INDORE v. GOVINDRAO [S.C.SEN,J.] 301
~ )' directed the Bank to pay all the dues to the writ petitioner. Hence, this A
appeal.

Allowing the appeal, this Court

HELD: 1. In any event, the writ petition challenging the order of
dismissal passed on 3-10-1977cannot be entertained and set aside by the B
r writ court after a lapse of nearly 10 years by re-evaluating the evidence and
J
......, >( reappraisal of the charge-sheet. [303-B]

2. The lack of supervision or negligence of G resulted in grant of
huge irrecoverable loans by the Bank. The higher the position of an officer
the greater is his responsibility. The power conferred on D.O. in the matter
c
of granting loans cannot absolve G. The order passed by the High Court
is set aside. [303-A-B; C]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3136 of
1991. D
~
From the Judgment and order dated 21.6.90 of the Madhya Pradesh
High Court in M.P. No. 417 of 1987.

AK. Chitaley and S.K. Gambhir for the Appellant.
E
Sushi! Kr. Jain, Ms. P. Jain and AP. Dhamija for the Respondent.

The Judgment of the Court was delivered by

SEN, J. Govindrao was agent of Ujjain Branch of the State Bank of
-.... Indore. On 18th March, 1977 a chargesheet was served upon him in which F
it was alleged that loans were granted from his Branch of the Bank in total
disregard of the rules regulating grant of such loans which had become
irrecoverable and thereby had caused loss to the Bank. Govindrao was
supplied with copies of all the documents demanded by him and was
permitted to inspect records, vouchers, etc. but he did not file any reply to
the allegations made against him. The Enquiry Officer found Govindrao G
guilty of negligence in the matter of granting of the Joans and made his
report after waiting for the reply from Govindrao for a considerable period
~ of time. Thereupon the Disciplinary Authority issued a show cause notice
to Govindrao calling upon him to show cause why he should not be
dismissed. On 28.9.77 Govindrao informed the Disciplinary Authority that H
302 SUPREME COURT REPORTS (1997] 1 S.C.R.
A the Development Officer, Shri Sharda, was primarily responsible for grant-
ing of the irrecoverable loans. Govindrao had acted only in supervisory
capacity.

On 3rd October, 1977 the Disciplinary Authority, after taking into
consideration the ob.iection filed by Govindrao, passed an order dismissing
B him from service. On 2nd June, 1978 the Bank paid Govindrao full
Provident Fund which was forwarded along with a letter of the same date.
On 5th June, 1978 Govindrao accepted the Provident Fund amount subject
to certain objections and claim of interest. On 18th July, 1978, appeal
preferred by Govindrao against the order of dismissal, was dismissed by
C the Appellate Authority. Nearly four years thereafter, another appeal
(described as Spedal Appeal) was filed by Govindrao which was again
dismissed.

Nothing happened thereafter for nearly five years. On 6th April, 1987
Govindrao decided to move a writ petition challenging the validity of the
D order of dismissal passed on 3.10.1977. The writ petition came to be heard
by a Division Bench of the Madhya Pradesh High Court. By a judgment -r
and order dated 21.6.1990, V.D. Gyani and A.G. Qureshi, JJ. quashed the
order of dismissal. V.D. Gyani, J ., speaking for the Bench, held that the
writ petitioner must be deemed to have retired on his due date of retire-
E ment i.e. 9th October, 1977. The Bank was directed to pay all the dues,
Provident Fund, pension, gratuity to the writ petitioner within three months
from the date of the judgment.

The Bank has come up in appeal against this Judgment.

F It is difficult to see how this writ petition was entertained at all by ,.. '
the High Court. The date of dismissal was 3rd October, 1977. The appeal
against that order was dismissed on 18th July 1978. The writ petitioner did
not choose to challenge that appellate order by way of a writ petition. What
was described as Special Appeal was again dismissed on 12th May, 1982.
G There was no reason for the High Court, after a long lapse of nearly ten
years from the date of the order of dismissal, to entertain the writ petition
and quash the order of dismissal. We are of the view that the High Court
should not have entertained that at all. It should have been dismissed in
limine.

H Gyani, J. examined the charges framed against Govindrao and held
STATE BANK OF INDORE v. GOVINDRAO [S.C. SEN, J.) 303

that "the charges put together, merely points to lack of supervision or A
negligence".

This lack of supervision or negligence resulted in grant of huge
irrecoverable loans by the Bank. The higher the position of an officer the
greater is his responsibility. The power conferred on Sharda in the matter
of granting of loans cannot absolve Govindrao in any way. In any event, an B
order of dismissal passed on 3.10.1977 cannot be entertained and set aside
by a writ court after a long lapse of nearly 10 years by re-evaluating the _
evidence and re-appraisal of the chargesheet.

. This appeal is allowed. The order passed by the High Court dated
21.6.1990 is set aside.
c
When the Special Leave Petition was moved, on 26.11.1990 an inter-
im order was passed directing the appellant Bank to pay the respondent
an amount of Rs.15,000 subject to adjustment within four weeks. It is
directed that the respondent will be entitled to retain the said sum of Rs. D
15,000. The ~ank will pay off all the outstanding dues to the respondent
which may be payable to him in accordance with the rules, if any, as
expeditiously as possible.

There will be no order as to costs.
E
B.K.S. Appeai allowed.