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Petitioner: MUHAMMAD SALEEM VS Respondent: AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN, ISLAMABADHonorable Justice Muhammad Nawaz AbbasiShan Abdur Rashid, Advocate Supreme Court and Ch. Akhtar Ali,Hafiz S.A. Rehman, Senior Advocate Supreme Court and Mehr Khan Malik
2003 P L C (C
2003 P L C (C.S.) 36
[Supreme Court of Pakistan]
Present: Nazim Hussain Siddiqui and Muhammad Nawaz Abbasi, JJ
MUHAMMAD SALEEM and 2 others
Versus
AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN, ISLAMABAD and another
Civil Appeals No.80 to 82 of 2001, decided on 28th June, 2002.
(On appeal from the judgment of Federal Service Tribunal, Islamabad, dated 15‑5‑2001 passed, in Appeals No.448 to 450/98).
(a) Agricultural Development Bank of Pakistan Officers Service (Efficiency and Discipline) Regulations, 1975‑‑‑-
‑‑‑‑Credit Manual of Agricultural Development Bank of Pakistan, Rr.2.17 & 2.28‑‑‑Service Tribunals Act (LXX of 1973), S.4‑‑‑Constitution of Pakistan 1,1973), Art‑212(3) ‑‑‑Dismissal from service on charge of gross misconduct, negligence and inefficiency‑‑‑Leave to appeal was granted by the Supreme Court to consider as to whether the rules governing the petitioners were statutory in nature and that inquiry report was not furnished to them, which had violated principles of natural justice; whether authorised officer had tailed to issue any notice to petitioners after receiving inquiry report, which had prevented petitioners from explaining their position qua inquiry report; whether Service Tribunal in impugned judgment had not discussed the merits of case of petitioner in spite of the fact that he had been proceeded against on entirely different charges than the one levelled against petitioner in the other petition and whether concerned authority lacked jurisdiction under the rules to decide the matter.
(b) Civil service‑‑‑
‑‑‑‑ Official responsible for procedural irregularities in financial institutions‑‑ Duty of competent authority‑‑‑Such irregularities cannot be taken lightly‑‑ Such officials must be proceeded against for an appropriate action under relevant rules by competent authority.
(c) Agricultural Development Bank of Pakistan Officers Service (Efficiency and Discipline) Regulations, 1975‑‑‑-
‑‑‑‑Service Tribunals Act (LXX of 1973),' S.4‑‑‑Constitution of Pakistan (1973), Art.212‑‑‑Dismissal from service‑‑‑Charge of gross misconduct, inefficiency and negligence‑‑‑Dismissal of departmental appeals as well as appeals before Service Tribunal‑‑‑Plea of appellants was that non‑supply of copy of inquiry report and non‑issuance of second show‑cause notice had rendered such dismissal order illegal‑‑‑Validity‑‑‑Appellants during departmental proceedings had neither: demanded for supply of copy of inquiry report nor supply of such copy and issuance of second show‑cause notice was essential under Agricultural Development Bank of Pakistan Officers Service (Efficiency and Discipline) Regulations, 1975‑‑‑Appellants had neither raised such plea in departmental appeals nor before Service ~tribunal nor pleaded that because of such reason, they had been caused any prejudice in proceedings before Inquiry Officer and authorised officer‑‑ Supreme Court repelled such plea as having no force.
(d) Agricultural Development Bank of Pakistan Officers Service (Efficiency and Discipline) Regulations, 1975‑‑‑-
‑‑‑‑Credit Manual of Agricultural Development Bank of Pakistan R.2.28‑‑ Service Tribunal Act (LXX of 1973), S.4‑‑‑Constitution of Pakistan (1973), Art‑212 ‑‑‑Dismissal from service‑‑‑Charge against appellants (Mobile Credits Officers of Bank) to have committed gross irregularities to grant of loan‑‑‑Award of such punishment to appellants‑‑‑Dismissal of departmental appeals as well as appeals before Service Tribunal‑‑‑Plea of appellants was that they having processed loan cases had placed same for approval before sanctioning authority, who was duty bound to satisfy himself about fulfilment of requirement of Rule 2.28 of Credit Manual and in case of failure, such authority would directly be responsible for violation of such rules‑‑‑Validity‑‑‑Charge sheet did not contain allegation of misappropriation or embezzlement of bank money by appellants, rather they had been charge sheeted for allegation of having processed loan cases in violation of Rule 2.28 of Credit Manual and having failed to ask for adequate security for loan, as a result of which there was risk of its non‑payment‑‑‑None of appellants was holding authority to sanction loan, rather their function as Mobile Credit Officer was to process loan cases for approval of sanctioning authority‑‑‑Managers of concerned Branches were authorised to sanction loan and not the appellants‑‑‑Manager being incharge of Branch would ultimately be responsible for all affairs of the Branch‑‑‑Manager could neither shift his responsibility to his subordinates nor claim any immunity therefrom on the ground that he, while discharging the function of sanctioning authority, was not supposed to undertake the exercise of scrutiny of documents‑‑‑Appellants had not been charged for committing alleged irregularities for financial gain or that they had extended favour to loanees in violation of rules without knowledge of Managers‑‑‑Nothing was available on record to show that concerned Managers had been misled and misguided in discharge of their duty by appellants‑‑‑Departmental authorities without taking notice of negligence of Managers. who had sanctioned loans in violation of Rule 2.28 of Credit Manual, had shifted burden to their subordinates through discrimination as such Manager had either been exonerated from the charge or had not been proceeded against under the rules‑‑‑Bank had adopted policy of pick and choose in departure of rule of fair play and equal treatment in matter of fixing responsibility of all concerned‑‑‑Neither departmental authorities nor Service Tribunal had taken pain to ascertain correct position and fix the responsibility for violation of the rule ‑‑‑Appellants were not exclusively responsible for alleged irregularities to be proceeded against for departmental action‑‑‑Question as to whether non‑recovery of loans was due to fault or negligence of appellants or the loanees failed to discharge their liability. had not been properly determined‑‑‑Supreme Court accepted appeals, set aside impugned judgment and reinstated appellants in service‑‑ Appellants were not granted back benefits in view of the nature of allegation against them as they were discharging sensitive duty of processing loan cases, but they would be deemed to be in service continuously in all respects including seniority, promotion and pension.
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 451; 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 ref.
Gal Zarin Kiani, Advocate Supreme Court and Ch. Akhtar Ali, Advocate‑on‑Record (in C.A. 8(1 of 2001) for Petitioner.
Shan Abdur Rashid, Advocate Supreme Court and Ch. Akhtar Ali, advocate‑on‑Record (in C.A. 81‑82 of 2001) for Petitioner.
Hafiz S.A. Rehman, Senior Advocate Supreme Court and Mehr Khan Malik, Advocate‑on‑Record (Absent) for Respondent No.1 (in all cases).
Sardar Muhammad Aslam, Dy. A.G. and M.S. Khattak, Advocate -on‑Record for Respondent No.2 (in all cases).
Dates of hearing: 26th to 28th June, 2002.
JUDGMENT
MUHAMMAD NAWAZ ABBASI, J.‑‑‑Civil Appeals Nos. 80 to 82 of 2001 by leave of the Court arising out of a common judgment dated 15‑5‑1999 passed by Federal Service Tribunal, Islamabad, are proposed to be disposed of through this single judgment.
The relevant facts in small compass are that the appellants were employed in Agricultural Development Bank of Pakistan (ADBP) and were posted to discharge functions as Mobile Credit Officer in different areas. The appellants were proceeded against. under ADBP Officers Service (Efficiency and Discipline) Regulations .1975 for the charge of committing the gross irregularities in grant of agricultural loans. The authorized officer duly notified by the Chairman ADBP vide circular dated 20‑8‑1990 having issued charge‑sheet proceeded for regular inquiry into the allegations against the appellants.
Muhammad Saleem, appellant in Criminal Appeal No.80 of 2001 posted in Gujar Khan Branch, was charge‑sheeted on 10‑9‑1990 under ADBP Officers Service (Efficiency and Discipline) Regulations, 1975. The statement of allegation contained the following allegations:‑
Statement of allegation against Mr. Muhammad Saleem EAD(P.P.No.053398) posted as M.C.O. ADBP Guiar Khan.
1. While posted as MCO in Gujar Khan you entertained and reported the following loan cases of the real brothers of Mr. Shoukat Hussain, the then Manager, ADBP Gujar Khan
IC.No.
Name of borrower
Relation purpose
Securities Existing
Future Assets
012819 1,6,88
Mr. Mukhtar Hussain son of Qurban Hussain R/O Ward, No.7, G.T. Road Gujar Khan.
Real Brother of Manager
Poultry Structure
Rs.3,56,480 Loan Advance Rs.3,50,000
012831 1.6.88
Mr. Muhammad Masood Pervez S/o Qurban Hussain R/O Ward No.2, Gujar Khan.
‑do‑
‑do‑
Rs.1,28,000 276500 Rs.3,00,000
You were not authorized to entertain process these cases under the provision of para 2.28 (ii) of Credit Manual. But with mala fide intention you concealed this fact and not brought it on record.
2. It was in your knowledge that both the applicants were permanent residents of Sargodha which was also evident from their National Identity Cards, but without obtaining No Default Certificate from Sargodha Branch you processed the loan cases.
3. In both the above loan cases Agricultural Pass Books were not issued by Tehsil Office, Gujar Khan and in spite of this fact you processed the loan cases under pass book system rendering the entire loan as insecure.
4. The landed property offered and accepted in security in both the cases was newly acquired and in order to defeat the instructions in para 4.18 of Credit Manual it was mutated as gift as detailed below:‑
Name Area Acquired Date of Village through Sanction. Mutation No.
Mr. Mukhar Hussian 27‑17 1964 Haryal, Gujrat Khan Mr. Muhammad Masood 2‑0 2002 ‑do Pervez.
But you with mala fide intention misreported it as inherited in document‑3 appraisal report against the facts and entertained both the cases on 1‑6‑1988.
5. The landed property offered and accepted in security is reported as uncultivable, which is not acceptable to bank in security but contrary to the fact you on the one hand concealed it and on the other hand evaluated the land at the rites of cultivated and put the entire bank loan in jeopardy.
6. You in connivance with the then Manager, Mr. Shoukat Hussain and with ulterior motives did not check the utilization right from the self investment of the borrower to the final payment of loan in total disregard to your assigned duties and rendered the entire loan insecure due to non‑construction of future assets.
7. It has been proved that due to your gross negligence and active connivance, loan amounting to Rs.6,50,000 had been released and embezzled. "
The Inquiry Officer having found the appellant guilty of the charges, submitted inquiry report on 24‑3‑1991, and the Regional Manager in exercise of his power as competent authority, after considering the reply of the appellant, to the charge‑sheet and .the inquiry, report formed the opinion that appellant was guilty of gross misconduct, negligence and inefficiency. Consequently, vide order dated 30‑3‑1991 appellant from bank service. The departmental appeal preferred by the appellant was dismissed by the Appellate Authority and the order was conveyed to the appellant by the Joint Director (Adorn) vide letter dated 26‑1‑1992.
Atiq‑ur‑Rehman, appellant in Criminal Appeal No.81 of 200: while posted in Rawalpindi Branch of ADBP, was charge‑sheeted vide letter dated 2‑12‑1990 for the following allegations as contained in the statement of allegations:‑
"Mr. Atiq‑ur‑Rehman, P.P. No.039903, the then MCO, ADBP Rawalpindi now AD/Regl. Credit Officer, Regional Office, Rawalpindi is alleged to have committed following serious irregularities in connivance with the borrowers for ulterior motives:‑
1. In violation to the instructions contained in para 2.17 of the Credit Manual, he entertained appraised and recommended following five loan cases of Mr. Zaheer‑ul‑Islam and the members of his family/servant/co‑sharer for similar schemes:‑
Sr. No.
IC No.
Name of borrower
Amount Applied
Date of entertainment.
Purpose
i.
006961
Mr. Zaheer‑ul‑Islam
Rs.300000
26‑12‑85
poultryshed/ store etc. feed, chicken utensils
ii.
006972
Mrs. Rashida Sheikh w/o Mr.Zaheer‑ul‑Islam
Rs.300000
26‑12‑85
iii.
006913
Mrs. Naeema Tabassum w/o Zaheer‑ul‑Islam
Rs.300000
26‑12‑95
iv.
007494
Nadeem‑ul‑Islam s/o Zaheer‑ul‑Islam
Rs.300000
18‑2‑86
v.
009922
Mr. Muhammad Yousaf servant of Zaheer‑ul‑ Islam/co‑sharer
2 poultry shedstructurc 72 Sq.ft.
2. In violation of the instructions contained in para 4.80 of the Credit Manual he accepted the newly purchased land in security while entertaining, appraising and recommending following 4 loan cases before the expiry of pre‑emption period:‑
Sr. No.
IC No.
Name of the borrower
Amount Applied
Date of entertainment.
Purpose
i.
006961
Mr. Zaheer‑ul‑Islam
Rs.300000
26‑12‑85
5‑9‑85
ii.
006972
Mrs. Rashida Sheikh w/o Mr. Zaheer‑ul‑Islam
Rs.300000
26‑12‑85
5‑9‑85
iii.
006983
Mrs. Naeema Tabassum w/o Zaheer‑ul‑Islam
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 loan cases without giving cross‑references in the relevant loan case files about the relationship of the borrowers with each other in order to conceal; the factual position:‑ 006972, 006961, 006983, 007494, 009922.
5. In violation of para 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 para 2.85 from Skardu Branch, his loan case was entertained and 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 all 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 conducted 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 in 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 1C.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. LA, tee on loan amount of Rs.23,000 included subsequently to each f 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 on different dates given against each where no structure had over been 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 inquiry 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 and pending disposal of the matter before this Court, section 2‑A was inserted in Civil Servants Act, 1973, by virtue of which the remedy of appeal was made available to the employees of ADBP before the Federal Service Tribunal and their petitions before this Court were disposed of according:‑
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 Manager, Muhammad Ashraf, who though equally involved in the offence but 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 Ashrat in order to establish whether he was colluding with the two of the appellants in their 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's 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 decide the matter."
Learned counsel for the appellant in C.A. k0 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 Ashrat 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.007451) 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 pasted as Regional Recover 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 enable him to offer his explanation with regard to the findings given by the Inquiry Officer. Learned counsel added that the detect of non‑supple 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 451).
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 15‑3‑1995 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…
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