1
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 9666 OF 2010
CANARA BANK AND ANOTHER ..APPELLANTS
VERSUS
LALIT POPLI (DEAD) THROUGH LRS. ..RESPONDENTS
J U D G M E N T
MOHAN M. SHANTANAGOUDAR, J.
1. The judgment dated 12.09.2008 in LPA No. 553 of 2008
passed by the Division Bench of the High Court of Delhi is called in
question in this appeal.
2. Brief facts leading to this appeal are:
The respondent – Lalit Popli, who is now dead and
represented through his legal heirs, was employed as a clerk in
appellant’s bank and was dismissed from service on 30.06.1995,
2
consequent upon a departmental enquiry in which he was found
guilty of fraudulently withdrawing an amount of Rs.1,07,000/- from
the saving account of a customer. The Manager of the Bank (Shri
Meenakshisundaram), an officer (Shri S.S. Bhutani) as well as
Special Assistant (Shri Rakesh Tyagi) was also indicted and they
were also found guilty of negligence in relation to the very same
incident. The disciplinary authority by its order dated 18th
September, 1994 awarded the punishment of ‘censure’ to the
Manager of the Bank (Shri Meenakshisundaram) and ordered
recovery of Rs.77,000/- from him. Likewise, the disciplinary
authority by its order dated 23rd January, 1995 awarded the
punishment of ‘censure’ to Shri S.S. Bhutani and Shri Rakesh Tyagi
and ordered recovery of Rs.15,000/- from each of them. The
appeals filed by the said three employees challenging the orders of
the disciplinary authority were also dismissed and they did not
carry the matter any further and they deposited the amount, as
ordered against them.
Insofar as the respondent – Lalit Popli is concerned, the
disciplinary authority by its order dated 30th June, 1995 awarded
the punishment of ‘dismissal from service’.
3
3. The respondent preferred Writ Petition (Civil) No. 2269 of
1995 challenging the order of dismissal, which came to be allowed
by learned Single Judge of the High Court vide his order dated 7th
August, 1998 and the order of dismissal was set aside. The
appellant – Bank filed an appeal against the order of the learned
Single Judge of the High Court being LPA No. 465 of 1998. During
the pendency of the Letters Patent Appeal before the High Court, it
was decided by the bank to withhold an amount of Rs.74,180.09,
payable to the respondent, which included the gratuity and
provident fund(employer’s contribution) and to keep the same in a
fixed deposit with a view to adjust the said amount towards any
loss caused to the bank by the respondent. LPA No. 465 of 1998,
after hearing, was allowed by the Division Bench of the High Court
and the order of dismissal was restored. Further appeal by the
respondent was dismissed by this Court by a detailed judgment on
18.02.2003 (reported as Lalit Popli vs. Canara Bank, (2003) 3 SCC
583).
After the dismissal of the matter by this Court, the
respondent made number of representations to the bank to release
the amount of gratuity and the employer’s contribution towards
4
provident fund, which was held up by the bank, by pointing out
that the bank had already recovered the entire amount of loss
caused to the bank from the other three employees as mentioned
supra, and therefore it was not justified on the part of the bank in
withholding the terminal benefits payable to the respondent. The
bank replied to the respondent that since the matter was sub judice
before the Court, the bank was unable to accede to his request.
After the dismissal of the matter by this Court, the bank vide its
order dated 24.06.2003 decided to recover the amount of
Rs.1,07,000/- from the respondent and to refund the amount
already recovered from the other three employees, to them. By
then, the amount of Rs.74,180.09, which was kept in a fixed
deposit, had attained the maturity value of Rs.1,08,923/-. The
bank ordered that out of Rs.1,08,923/-, an amount of
Rs.1,07,000/- be adjusted against the loss caused to the bank by
the respondent, who had withdrawn the said amount by forging the
signature of the account holder. Though, the bank had earlier
decided to recover the said amount from the respondent, the bank
could not recover from the respondent since the matter as against
the respondent was sub judice before the Courts of law at various
5
stages. Only after the litigation ended in finality up to this Court,
the bank passed an order to recover Rs.1,07,000/- from the
respondent and therefore the bank adjusted Rs.1,07,000/- out of
Rs.1,08,923/- (the maturity value of Rs.74,180.09), towards loss
caused to the bank by the respondent and remaining amount of
Rs.1,923/- was released in favour of the respondent.
4. Being aggrieved by such action of the bank, the
respondent approached the High Court by preferring Writ
Petition(Civil) No. 6149 of 2003, which came to be allowed by the
learned Single Judge of the High Court holding that the bank had
already recovered the loss caused to the bank from the other three
employees, who were indicted and punished in relation to the very
incident and therefore any further amount sought to be recovered
from the respondent would be impermissible inasmuch as the bank
would be doubly enriching itself. The order of the learned Single
Judge is affirmed by the Division Bench of the High Court in LPA
No. 553/2008, which is impugned before this Court in this appeal.
5. Heard learned counsel for the parties, who argued in
support of their respective cases.
6
6. This Court in the first round of litigation by its judgment
dated 18.02.2003 had given a categorical finding that it was the
respondent who committed forgery which ultimately led to the loss
caused to the bank. Thus, his case stood on a different footing from
the other three employees. Since the amount recovered from the
other three employees, who were imposed penalty of ‘censure’, is
refunded to them, the bank had to recover the amount of loss
caused to it from the person who was the author of the forgery.
Looking to the material on record, we find that the other
three officials were held to be negligent in their duty and as held by
this Court in its judgment dated 18.02.2003, that it was the
respondent, who committed forgery of the signature of the account
holder, consequent upon which the bank had suffered loss to the
tune of Rs.1,07,000/-. Therefore, the bank has taken an equitable
decision to recover the entire amount from the respondent and to
refund the amount already recovered from the other three officials,
because they were only found to be negligent in their duty.
7. Rule 12 of the Canara Bank Employees’ Gratuity Fund
Rules (for short, ‘Gratuity Rules’), Clause 19 of the Canara Bank
Staff Provident Fund Regulations, 1994 (for short, Provident Fund
7
Regulations) and Rule 3(4) of Chapter VIII of the General Conduct
Rules, governing the services of the employees fully support the
action taken by the bank against the respondent in withholding the
amount of gratuity and employer’s contribution towards provident
fund.
8. Rule 3(4) of Chapter VIII of the General Conduct Rules
states that “an employee who is dismissed for misconduct shall not
be entitled to gratuity”.
Rule 12 of Gratuity Rules reads thus:
“Rule 12. Notwithstanding anything contained in the
preceding Clauses where an employee has been
dismissed for misconduct and such misconduct has
caused financial loss to the Bank, he shall not be
eligible to receive the gratuity to the extent of the
financial loss caused to the Bank.”
Likewise, Clause 19 of Provident Fund Regulations reads
thus:
“Clause 19. If a member causes financial loss to the
Bank by misconduct, fraud, gross negligence or other
conduct of like nature and is dismissed from the
service of the Bank or is permitted to leave the service
of the Bank in consequence of such misconduct,
fraud, gross negligence or other like conduct, the
amount of such financial loss sustained by the Bank
shall be deduced by the Trustees from the Bank’s
8
contribution out of the amount due to the member and
be paid to the Bank.”
Special Rules relating to gratuity, mentioned supra,
makes it amply clear that the employee who has been dismissed for
his misconduct and if such misconduct has caused financial loss to
the bank, he shall not be eligible to receive the gratuity to the extent
of financial loss caused to the bank. So also, Clause 19 of the
Provident Fund Regulations permits the bank to deduct the
payment of provident fund to the extent of financial loss caused to
the bank from the bank’s contribution. Both the aforementioned
Clauses are plain and simple. They are unambiguous. Since Rule
12 of the Gratuity Rules and Clause 19 of the Provident Fund
Regulations permit the bank to withhold gratuity and deduct the
bank’s contribution towards provident fund, in such matters, the
bank was justified in recovering the amount of financial loss
sustained by it, which was caused by the respondent, from out of
the gratuity and employer’s contribution towards provident fund
payable to the respondent/employee.
9. Thus, in our considered opinion, the High Court was not
justified in setting aside the decision of the bank to recover the
9
amount of loss sustained by it from the respondent, particularly
when the bank is empowered to do so, as discussed supra.
Accordingly, the instant appeal is allowed. The judgment and order
passed by the Division Bench of the High Court in LPA No.
553/2008 dated 12.09.2008 dismissing the appeal filed by the
bank, as also, by the learned Single Judge of the High Court
allowing Writ Petition(C) No.6149 of 2003 dated 30.05.2008 filed by
the respondent are set aside and the Writ Petition(C) No. 6149 of
2003 filed by the respondent stands dismissed and it is held that
the bank has rightly recovered the loss of Rs.1,07,000/- sustained
by it from the respondent. However, there shall be no order as to
costs.
……………………………………J.
[ARUN MISHRA]
NEW DELHI; …………………………………….J.
DECEMBER 6, 2017. [MOHAN M. SHANTANAGOUDAR]
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 9666 OF 2010
CANARA BANK AND ANOTHER ..APPELLANTS
VERSUS
LALIT POPLI (DEAD) THROUGH LRS. ..RESPONDENTS
J U D G M E N T
MOHAN M. SHANTANAGOUDAR, J.
1. The judgment dated 12.09.2008 in LPA No. 553 of 2008
passed by the Division Bench of the High Court of Delhi is called in
question in this appeal.
2. Brief facts leading to this appeal are:
The respondent – Lalit Popli, who is now dead and
represented through his legal heirs, was employed as a clerk in
appellant’s bank and was dismissed from service on 30.06.1995,
2
consequent upon a departmental enquiry in which he was found
guilty of fraudulently withdrawing an amount of Rs.1,07,000/- from
the saving account of a customer. The Manager of the Bank (Shri
Meenakshisundaram), an officer (Shri S.S. Bhutani) as well as
Special Assistant (Shri Rakesh Tyagi) was also indicted and they
were also found guilty of negligence in relation to the very same
incident. The disciplinary authority by its order dated 18th
September, 1994 awarded the punishment of ‘censure’ to the
Manager of the Bank (Shri Meenakshisundaram) and ordered
recovery of Rs.77,000/- from him. Likewise, the disciplinary
authority by its order dated 23rd January, 1995 awarded the
punishment of ‘censure’ to Shri S.S. Bhutani and Shri Rakesh Tyagi
and ordered recovery of Rs.15,000/- from each of them. The
appeals filed by the said three employees challenging the orders of
the disciplinary authority were also dismissed and they did not
carry the matter any further and they deposited the amount, as
ordered against them.
Insofar as the respondent – Lalit Popli is concerned, the
disciplinary authority by its order dated 30th June, 1995 awarded
the punishment of ‘dismissal from service’.
3
3. The respondent preferred Writ Petition (Civil) No. 2269 of
1995 challenging the order of dismissal, which came to be allowed
by learned Single Judge of the High Court vide his order dated 7th
August, 1998 and the order of dismissal was set aside. The
appellant – Bank filed an appeal against the order of the learned
Single Judge of the High Court being LPA No. 465 of 1998. During
the pendency of the Letters Patent Appeal before the High Court, it
was decided by the bank to withhold an amount of Rs.74,180.09,
payable to the respondent, which included the gratuity and
provident fund(employer’s contribution) and to keep the same in a
fixed deposit with a view to adjust the said amount towards any
loss caused to the bank by the respondent. LPA No. 465 of 1998,
after hearing, was allowed by the Division Bench of the High Court
and the order of dismissal was restored. Further appeal by the
respondent was dismissed by this Court by a detailed judgment on
18.02.2003 (reported as Lalit Popli vs. Canara Bank, (2003) 3 SCC
583).
After the dismissal of the matter by this Court, the
respondent made number of representations to the bank to release
the amount of gratuity and the employer’s contribution towards
4
provident fund, which was held up by the bank, by pointing out
that the bank had already recovered the entire amount of loss
caused to the bank from the other three employees as mentioned
supra, and therefore it was not justified on the part of the bank in
withholding the terminal benefits payable to the respondent. The
bank replied to the respondent that since the matter was sub judice
before the Court, the bank was unable to accede to his request.
After the dismissal of the matter by this Court, the bank vide its
order dated 24.06.2003 decided to recover the amount of
Rs.1,07,000/- from the respondent and to refund the amount
already recovered from the other three employees, to them. By
then, the amount of Rs.74,180.09, which was kept in a fixed
deposit, had attained the maturity value of Rs.1,08,923/-. The
bank ordered that out of Rs.1,08,923/-, an amount of
Rs.1,07,000/- be adjusted against the loss caused to the bank by
the respondent, who had withdrawn the said amount by forging the
signature of the account holder. Though, the bank had earlier
decided to recover the said amount from the respondent, the bank
could not recover from the respondent since the matter as against
the respondent was sub judice before the Courts of law at various
5
stages. Only after the litigation ended in finality up to this Court,
the bank passed an order to recover Rs.1,07,000/- from the
respondent and therefore the bank adjusted Rs.1,07,000/- out of
Rs.1,08,923/- (the maturity value of Rs.74,180.09), towards loss
caused to the bank by the respondent and remaining amount of
Rs.1,923/- was released in favour of the respondent.
4. Being aggrieved by such action of the bank, the
respondent approached the High Court by preferring Writ
Petition(Civil) No. 6149 of 2003, which came to be allowed by the
learned Single Judge of the High Court holding that the bank had
already recovered the loss caused to the bank from the other three
employees, who were indicted and punished in relation to the very
incident and therefore any further amount sought to be recovered
from the respondent would be impermissible inasmuch as the bank
would be doubly enriching itself. The order of the learned Single
Judge is affirmed by the Division Bench of the High Court in LPA
No. 553/2008, which is impugned before this Court in this appeal.
5. Heard learned counsel for the parties, who argued in
support of their respective cases.
6
6. This Court in the first round of litigation by its judgment
dated 18.02.2003 had given a categorical finding that it was the
respondent who committed forgery which ultimately led to the loss
caused to the bank. Thus, his case stood on a different footing from
the other three employees. Since the amount recovered from the
other three employees, who were imposed penalty of ‘censure’, is
refunded to them, the bank had to recover the amount of loss
caused to it from the person who was the author of the forgery.
Looking to the material on record, we find that the other
three officials were held to be negligent in their duty and as held by
this Court in its judgment dated 18.02.2003, that it was the
respondent, who committed forgery of the signature of the account
holder, consequent upon which the bank had suffered loss to the
tune of Rs.1,07,000/-. Therefore, the bank has taken an equitable
decision to recover the entire amount from the respondent and to
refund the amount already recovered from the other three officials,
because they were only found to be negligent in their duty.
7. Rule 12 of the Canara Bank Employees’ Gratuity Fund
Rules (for short, ‘Gratuity Rules’), Clause 19 of the Canara Bank
Staff Provident Fund Regulations, 1994 (for short, Provident Fund
7
Regulations) and Rule 3(4) of Chapter VIII of the General Conduct
Rules, governing the services of the employees fully support the
action taken by the bank against the respondent in withholding the
amount of gratuity and employer’s contribution towards provident
fund.
8. Rule 3(4) of Chapter VIII of the General Conduct Rules
states that “an employee who is dismissed for misconduct shall not
be entitled to gratuity”.
Rule 12 of Gratuity Rules reads thus:
“Rule 12. Notwithstanding anything contained in the
preceding Clauses where an employee has been
dismissed for misconduct and such misconduct has
caused financial loss to the Bank, he shall not be
eligible to receive the gratuity to the extent of the
financial loss caused to the Bank.”
Likewise, Clause 19 of Provident Fund Regulations reads
thus:
“Clause 19. If a member causes financial loss to the
Bank by misconduct, fraud, gross negligence or other
conduct of like nature and is dismissed from the
service of the Bank or is permitted to leave the service
of the Bank in consequence of such misconduct,
fraud, gross negligence or other like conduct, the
amount of such financial loss sustained by the Bank
shall be deduced by the Trustees from the Bank’s
8
contribution out of the amount due to the member and
be paid to the Bank.”
Special Rules relating to gratuity, mentioned supra,
makes it amply clear that the employee who has been dismissed for
his misconduct and if such misconduct has caused financial loss to
the bank, he shall not be eligible to receive the gratuity to the extent
of financial loss caused to the bank. So also, Clause 19 of the
Provident Fund Regulations permits the bank to deduct the
payment of provident fund to the extent of financial loss caused to
the bank from the bank’s contribution. Both the aforementioned
Clauses are plain and simple. They are unambiguous. Since Rule
12 of the Gratuity Rules and Clause 19 of the Provident Fund
Regulations permit the bank to withhold gratuity and deduct the
bank’s contribution towards provident fund, in such matters, the
bank was justified in recovering the amount of financial loss
sustained by it, which was caused by the respondent, from out of
the gratuity and employer’s contribution towards provident fund
payable to the respondent/employee.
9. Thus, in our considered opinion, the High Court was not
justified in setting aside the decision of the bank to recover the
9
amount of loss sustained by it from the respondent, particularly
when the bank is empowered to do so, as discussed supra.
Accordingly, the instant appeal is allowed. The judgment and order
passed by the Division Bench of the High Court in LPA No.
553/2008 dated 12.09.2008 dismissing the appeal filed by the
bank, as also, by the learned Single Judge of the High Court
allowing Writ Petition(C) No.6149 of 2003 dated 30.05.2008 filed by
the respondent are set aside and the Writ Petition(C) No. 6149 of
2003 filed by the respondent stands dismissed and it is held that
the bank has rightly recovered the loss of Rs.1,07,000/- sustained
by it from the respondent. However, there shall be no order as to
costs.
……………………………………J.
[ARUN MISHRA]
NEW DELHI; …………………………………….J.
DECEMBER 6, 2017. [MOHAN M. SHANTANAGOUDAR]
