2003 PLP 251 (SCMR)

Rs.300000 26‑12‑95 5-9-85 iv. 007494 Nadeem‑ul‑Islam s/o Zaheer‑ul‑Islam Rs.300000 18‑2‑86 5-9-85 v. 009922 Mr. Muhammad Yousaf servant of Zaheer‑ul‑ Islam/co‑sharer 5-9-85

3. He with mala fide intention misreported and placed fake utilization reports on different dates in the following loan cases against the factual position on spot:‑ S.No. IC No. Date of Utilization Reports. i. 006961 27‑4‑86,15‑7‑86 ii. 006972 9‑7‑86 iii. 006983 9‑7‑86 iv. 007494 27‑4‑86 v. 009922 13‑7‑87

4. He entertained, appraised and recommended following five load cases without giving cross‑references in the relevant loan case file about 'the relationship of the borrowers with each other in order to conceal; the factual position:‑‑ 006972,006961,006983, 007494,00992.

5. In violation of pare 7.16.2 he entertained, appraised and recommended loan of Rs.3,00,000 in LC No.009922 exclusively against the security; of future assets. Due to connived misutilization the entire loan disbursed is without any security.

6. In the N.I.C. of Mr. Mohammad Yousaf loanee in IC No.009922 his permanent and present addresses are shown of Skardu District and without ascertaining his previous indebtness in terms of par, 2.85 from Skardu Branch, his loan case was entertained are processed.

7. He recommended loans against the security of future assets in loan cases. 006972. 006961, 006983, 007494, 009922 He in connivance with the borrower assisted misutilization in the loan cases causing insecurity to bank funds where presently amount of Rs. 1.731 million is stuck up with no hope of recovery.

8. He has proved to be inefficient and negligent in discharge of his duties as Mobile Credit Officer." The appellant in reply to the charge‑sheet denied the allegations. The Regional Manager, ADBP who was appointed Inquiry Officer, having ,inducted inquiry, submitted the inquiry report and the General Manager. ADBP, after considering the reply of the appellant and the inquiry report, dismissed the appellant from bank service vide order dated 17‑10‑1991. The departmental appeal preferred by the appellant was also dismissed vide order dated 21‑9‑1992. Sajid Saeed, appellant in Criminal Appeal No.82 of 2001 was charge‑sheeted on 30‑12‑1990 for the following allegations as contained it the statement of allegations:‑ "Mr. Sajid Saeed (P.P.No.040337) AD/MCO, ADBP Rawalpindi Branch has committed following serious irregularities.

1. He entertained, processed and recommended loans of Rs.3,23,600 each in the names of Mst. Naghat Sultana. wife of Muhammad Ghayur and Mr. Sajid Asghar Son of Pirzada Shamshad in IC.No.01,0005 and 010016 respectively. against the newly acquired land, he during the course of investigation failed to point out that loans amounting to Rs.1,500 million in five loan cases has already been disbursed and misutilized by other co‑shares on the same development area bearing Khasra No.676 situated in village Kolianpur.

2. L.A. fee on loan amount of Rs.23,000 included subsequently it each of the two loan cases No.010005 and 010016 has not been charged in violation to the instructions contained in Para 2.5 of the credit manual.

3. He gave fake utilization reports in the following Loan cases of different dates given against each where no structure had ever beer, raised in any of the area accepted as security and development area. S.No. IC No. Date of Utilization Reports. 1 006961 3‑12‑1987 2 006972 4‑12‑1987 3 006983 4‑12‑1987 4 007494 4‑12‑1987 5 009922 16‑9‑1987 6 010005 8-12‑1987 7 010016 8‑12‑1987

4. He with ulterior motives misreported the utilization and loan disbursed against the security of future assets in IC.No.010005 and 010016 has been rendered insecure 'to the extent of Rs.0.821 million due to non creation of any structure. Entire loan in both the loan cases is stock up with no hope of recovery.

5. In violation of Para No.4.21 of the Credit Manual he had failed to obtain relevant documents required in case of buildings in IC No.010005 and 010016.

6. He has proved to be inefficient and negligent in discharge of his duties as Mobile Credit Officer." The appellant in his reply, denied the allegations. The competent authority appointed the Regional Manager as Inquiry Officer who having conducted the inquiry submitted his report on 15‑5‑1991. The competent authority having considered the reply of the appellant in the light of inquire. report, dismissed him from bank service vide order dated 17‑10‑1991. The departmental appeal preferred by the appellant failed and was dismissed vide order dated 21‑9‑1992. The appellants challenged their dismissal from bank service in the Lahore High Court, Rawalpindi Bench, Rawalpindi through , the Constitution petitions but the same were dismissed through a common; judgment dated 20‑12‑1994. in limine. "The appellants filed separate petitions before this Court against the judgment of High Court an d pending disposal of the matter before this Court, section 2‑A was inserted in Civil Servants Act, 1973, by virtue of which the remedy e appeal was made available to the employees of ADBP before the Federal Service Tribunal and their petitions before this Court were disposed of accordingly. The appellants then approached the Federal Service Tribunal but their appeals were dismissed with the following observations:‑ "

8. The appellants have also indicated that in two of the cases Manage Muhammad Ashraf, who though equally involved in the offence bi. was exonerated vide office order No.E & D/DP‑III/2(297)/95/1409 dated 15‑3‑1995. . We, have found that in such cases of corruption and irregularity, it is a practice that junior staff is punished and the senior staff is either totally exonerated or gets away with a minor censure. The ADBP is, therefore; directed to hold an inquiry afresh against the Manager, Muhammad Ashraf in order to establish whether he was colluding with the two of the appellants in the misdeeds or not." Leave was granted by this Court vide order dated 25‑1‑2001 to consider the following contentions:‑ "(1) The rules governing the petitioners are statutory in nature and that the inquiry report was not furnished to the petitioner which violated principles of natural justice. (2) The authorized officer failed to issue any notice to the petitioners after receiving the inquiry report which has prevented the petitioners from explaining his position qua the inquiry report. (3) The learned Federal Service Tribunal in the impugned judgment did not discuss the merits of the case of the petitioner in C.P.No.1252 of 1999 in spite of the fact that he was proceeded against on entire different charges than the one levelled against the petitioner in C. P.No.1250 of 1999. (4) The concerned authority lacked jurisdiction under the rules to deride the matter." Learned counsel for the appellant in C.A. 80 of 2001 has contended that Muhammad Ashraf, the then Manager of the concerned branch, was also proceeded for misconduct for the same allegation as he being the Branch Manager had sanctioned the loans in question in favour of his two real brothers but later he was exonerated from the charges vide order dated 15‑3‑1995 and the appellant who in the capacity of a subordinate official processed the loan cases was dismissed from service. The learned counsel has produced a copy of Office Memorandum dated 15‑3‑1995 through which Muhammad Ashraf the then Manager was exonerated from the charge. Office Memorandum is reproduced hereunder:‑‑ "In compliance with the directives of the Prime Minister's Secretariat received under Finance Division, Government of Pakistan (Internal,Finance Wing)'letter No.F‑3(6) ‑ IF‑1/94‑Vol‑II dated 16‑1‑1995, the Chairman ADBP has been pleased to reinstate Mr. Muhammad Ashraf, Ex‑Dy. Director ADBP (P. P. No.001451) in service of the ‑ Bank with immediate effect. The period from 9‑10‑1991 i.e. from the date of his dismissal to his reinstatement is treated as EOL (without pay) recovery in the following 14 loan cases of Rawalpindi Branch relating to Mr. Zaheer ul Islam and his other family members/associates/servants is not fully effected till his retirement from service, the balance amount outstanding in these loan cases shall be recovered from his retirement benefits, as per Bond dated. 15‑3‑1995 executed by him:‑ S.No. IC No. Name of Borrower 1 006961 Mr. Zaheer‑ul‑Islam 2 006972 Mr. Rashida Sheikh 3 006983 Haseema Tabassam 4 007494 Nadeem‑ul‑Islam 5 009922 Mr. Muhammad Yousaf 6 010005 Nighat Sultan 7 010016 Mr. Sajid Asghar 8 011376 Mr. Hamayun Zaheer 9 011367 Mr. Khurram Zaheer 10 011396 Mr. Javed Zaheer 11 011402 Mr. Asim Zaheer 12 013479 Uzma Zaheer 13 013480 Lubna Zaheer 14 013620 Uzma Zaheer On reinstatement in service he is posted as Regional Recovery Officer, Rawalpindi." Learned counsel next contended that neither copy of inquiry report was supplied to the appellant nor second show‑cause notice was given to him to enable him to offer his explanation with regard to the findings given by the Inquiry Officer. Learned counsel added that the defect of non‑supply of inquiry report was not curable and similarly the second show‑cause notice was necessary in the given facts. Learned counsel submitted that although there is no provision in the relevant rules for supply of inquiry report or issue of a second show‑cause notice but still in the light of principle of natural justice it was essential for the respondents to supply the copy of inquiry report and fulfil the requirement of second show‑cause notice and that violation of this golden rule of natural justice would render the proceedings invalid. In support thereof reliance has been placed on Sharafat Ali Nadeem v. Federal Service Tribunal (1987 SCMR 1774), Inayatullah Khan v. Provincial Government N.‑W.F.P. (1985 SCMR 1747), Faizul Haq v. N.‑W.F.P. Chief Secretary (1984 SCMR 45,1). Learned counsel representing the respondent‑bank, on the other hand, contended that ADBP Officers (Efficiency and Discipline) Rules, 1975 do not contain any provision for supply of copy of inquiry report and issuance of second show‑cause notice therefore, non‑supply of the inquiry report and issue of second show‑cause notice to the appellants, would not invalidate the departmental proceeding and the order of dismissal from service. He argued that the judgments referred to above would not be applicable to the appellants as in the said cases the Government Servants (Efficiency & Discipline) Rules, 1973 were under discussion according to which the supply of the copy of inquiry report and issue of second show cause notice was necessary. In support of his arguments, reliance has been placed on Fouzia Ahmad v. First Women Bank Ltd. (1999 PLC (CS) 1194) and Mir Muhammad v. N.‑W.F.P. Government through Chief Secretary (PLD 1981 SC 176). The learned counsel next argued that notwithstanding the question of nature of loss caused to bank, the appellants having committed the procedural irregularities in the matter have misled the sanctioning authority and consequently, would be guilty of gross misconduct. Learned counsel, however, has not denied that Muhammad Ashraf, the then Manager was exonerated from the charges and vide order dated 15‑3‑,995 was reinstated in service. Admittedly none of the appellant was holding authority to sanction the loan rather their function as Mobile Credit Officers, was to process the loan cases for approval of the sanctioning authority. It is conceded by the learned counsel appearing for the bank that not the appellants but the Managers of the concerned branches were authorized to sanction the loan and that the major portion of the loans has already been recovered and only a small amount was outstanding against the loanees. The charge‑sheet did not contain the allegation of misappropriation or embezzlement of bank money by the appellants rather they were charge‑sheeted for allegation that they processed the loan cases in violation or rule 2.28 of the Credit Manual of ADBP and failed to ask for adequate security for the loan as a result of E which there was risk of non‑payment as per terms of the loan agreement. The plea of the appellants was that they proceeded under the directions and advice of their seniors who were directly responsible to satisfy them about the sufficiency of security in terms of rule 2.28 of the Credit Manual. The detail examination of the matter would reveal that neither the departmental authorities nor the Service Tribunal have taken pain to ascertain the correct position and fix the responsibility. for violation of the ibid rule. The plea of the appellants that they having processed the loan cases placed the same before the sanctioning authority for approval and that it was the duty of sanctioning authority to satisfy himself about the fulfilment of the requirement of rule 2.28 of the Credit Manual is not without substance. The ibid rule reads as under‑ "2.28 With a view to ensuring prompt disposal of secured loans to the employees of the Agricultural Development Bank of Pakistan, and to their relatives, the' following procedure should be followed:‑ (i) In case of applications from Clerical and Non‑Clerical employees of the Bank or their relatives, the Branch Manager may process and sanction loans if otherwise in order, provided the amount of loan is within his sanctioning powers; (ii) in the case of application from Officers and their relatives, the Regional Manager may process and sanction loans if otherwise in order, provided the amount of loan ‑ is within his sanctioning powers; (iii) in case of Senior Officers and their relatives, the Direct General Credit Operation Department may sanction loans if otherwise in order, provided the amount of loan is within his sanctioning powers; and (iv) the cases above the sanctioning powers of aforesaid officers will be sanctioned by higher authorities vested with powers." There is no cavil to the proposition that the procedural irregularities in the financial institutions cannot be taken lightly and the officials responsible for such irregularities must ‑be proceeded against for an appropriate action under the relevant rules by the competent authority. The perusal of rule 2.28 supra would show that it is the duty of sanctioning authority to satisfy himself about the fulfilment of the requirement of the rules and in case of failure, the said authority shall directly be responsible for violation of the rule in question . This is noticeable .that the appellants were not charged for committing the alleged irregularities for financial gain or that they extended favour to the loanees in violation of rules without the knowledge of Manager and the bank authorities under the directions of Prime Minister's Secretariat vide letter dated 16‑1‑1995 exonerated Muhammad Ashraf, the then manager of Gujar Khan Branch, from the allegation for which Muhammad Saleem, appellant in CA 80 of 2001, was dismissed from service. In the case of appellants in C.As. 81 and 82 of 2001 the concerned managers were not even proceeded against under the ADBP Officers (Efficiency and Discipline) Rules, 1975: The perusal of record would show that no evidence was brought on the record to suggest that the concerned managers were misled and misguided in discharge of their duty by the appellants but the departmental authorities without taking notice of negligence of managers who sanctioned the loans in violation of rule 2.28 of the Credit Manual, shifted the burden to their subordinates through discrimination as the managers were either exonerated from the charge or were not proceeded against at all. The learned counsel appearing on behalf of respondent bank without distinguishing the collective responsibility of the appellants and the managers, has contended that since the concerned managers sanctioned the, loans on the basis of recommendations made by the appellants therefore, they would not be deemed to be responsible for the violation of rule 2.28 of the Credit Manual. We are afraid, the contention has no force. The manager being incharge of the branch would ultimately be responsible for all affairs of the branch and neither could shift his responsibility to his subordinates nor can claim any immunity from such responsibility on the ground that he while discharging the functions of sanctioning authority was not supposed to undertake the exercise of scrutiny of documents. The managers in his capacity as sanctioning authority would not only share the responsibility in such irregularities rather his responsibility would be greater to that of his subordinate and therefore, the departmental action only against the appellants for violation of rule 2.28 of the Credit Manual on the basis of irregularities mentioned in the statement of allegation, was not fair and was discriminatory. The contention of the learned counsel for the appellants that non supply of copy of inquiry report and issue of second show‑cause notice, would render the dismissal order illegal, has no force. The appellants during the proceedings before the departmental authorities have not demanded for supply of the copy of inquiry report and also under the rules, it was not essential to supply the copy of inquiry report and issue second show‑cause notice. The appellants have neither raised such objection in the departmental appeal or in the appeal before the Tribunal nor pleaded that because of non supply of inquiry report and non‑issuance of second show‑cause notice, they were caused any prejudice. in the proceedings before the Inquiry Officer' and authorized officer. The supply of a copy of inquiry report or issue of the second show‑cause notice was not the requirement of relevant rules and the judgment cited by the learned counsel in support of the above contention being distinguishable would not be applicable to the appellants. We having carefully examined the matter and gone through the record, find that Service Tribunal has not attended the crucial question relating to the responsibility of the managers and the discriminatory treatment meted with the appellants by exonerating the managers. The bank while adopting the policy of pick and choose, proceeded only against the subordinate officials in departure to the rule of fairplay and equal treatment in the matter of fixing the responsibility of all concerned. We may observe that in case of default in payment of loan by the loanee, a complete procedure is provided under the law for initiating the process for recovery of loans from the defaulter but in the present case, the bank instead of taking any step for recovery of loan from the defaulters through the process of law, proceeded against the bank officials. In the light of above discussion, we find that the appellants were not exclusively responsible for the irregularities in question to be proceeded against for departmental action and further the question as to whether the non recovery of the loans was due to the fault and negligence of the appellants or the loanees failed to discharge their liability was not properly determined. For the foregoing reasons, we set aside the judgment dated 15‑5‑1999 passed by the Federal Service Tribunal in the service appeals preferred by the appellants and direct their reinstatement in service within one month. from receipt of copy of this judgment. The appellants were discharging sensitive duty of processing the loan cases, therefore, we keeping in view the nature of allegation against them, do not find them entitled to the back benefits: However, they shall be deemed to be in service continuously in all respects including seniority, promotion and pension. These appeals are allowed with no order as to costs. S.A.K./M‑621/S Appeals allowed.