The Bombay High Court recently dismissed a petition filed by a former assistant general manager of the State Bank of India challenging an order by the bank to compulsorily retire him. The bank’s action against A D Padhey was based on “certain serious irregularities in discharge of his duties” in relation to the 1992 securities scam, which had resulted in a loss of Rs 812 crore. Padhey’s contention was that as a criminal court had acquitted him in the case, he should not be dismissed from service. “We find that the charges against the petitioner were not casual in nature but were serious. The disciplinary authority has taken all these aspects into consideration and the findings of the inquiry officer are based on the evidence on record. We do not find any perversity in the findings so recorded,” said the court.
Harshad Mehta was the kingpin of the securities scam. In connivance with officers of National Housing Bank, State Bank of India and various other banks and financial institutions, he had illegally siphoned-off crores of rupees. Mehta died in 2001. Padhey, who was the assistant general manager heading the personal banking division of SBI, had challenged a March 8, 2000 order to compulsorily retire him. A division bench of Justice A A Sayed and Justice M S Karnik was hearing his petition.
The transactions in question were carried out by the securities division, Mumbai main branch of SBI. Padhey was served with a chargesheet in November 1993, whose allegations he denied in a written statement.The amount of Rs 812 crore was later recovered.
The disciplinary authority upon considering the material on record and the inquiry report recommended that Padhey failed to take all possible steps to ensure and protect the interests of the bank and discharge his duties with utmost devotion and diligence, thereby violating rules of the State Bank of India Officers Service Rules. The Appointing Authority therefore imposed the penalty of compulsory retirement.
Meanwhile, criminal proceedings initiated against Padhey resulted in his acquittal by a special court on April 12, 2006. “We are unable to uphold the contention of the petitioner that since he was acquitted by a criminal Court, the order dismissing him from service deserves to be quashed and set aside,” said the court.
“It is well settled that the proceedings in criminal case and departmental proceedings operate in different fields. The standards of proof and evidence required in the two proceedings are also different. The disciplinary proceedings are concerned with ensuring that the employees conform to the rules of conduct which are prescribed by the employer and maintain discipline in relation to their employment. The disciplinary proceedings are to weed out persons who are considered unworthy of being a part of the employer organisation. The criminal proceedings are with an object to punish the offender. Acquittal by a criminal court would not debar an employer from exercising disciplinary power in accordance with the rules and regulations in force,” said the bench.
