Recovery of loss to bank, through fraud of employee, Supreme Court Judgment fixing liability, in appeal filed by the heirs of employee
December 7, 2017
A Bench of Justice Arun Mishra and Justice Mohan M. Shantanagoudar pronounced Judgment in an appeal filed by the heirs of a diseased bank employee who was fraudulently taken out money from the account of a customer. The appellants argued that the payment of loss amount is the collective responsibility of all accused. But in this case other accused were charged only for negligence.
The facts of the case is that 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,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, an officer as well as Special Assistant 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 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 other two accused 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'.
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 Bank filed LPA No. 465 of 1998. After hearing, the LPA 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).
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.
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 Supreme Court by an Appeal.
The Court said that "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."
The Court opined and directed that "Thus, in our considered opinion, the High
Court was not justified in setting aside the decision of the bank to recover the
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."
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Read the Judgment of Supreme Court dated 06.12.2017