The Allahabad High Court has directed for the supply of report of the Zonal Office Committee Report to the delinquent Bank Employee classifying him as 'fraud'.

The Court was considering a Writ Petition against an order passed by the Zonal Office Committee for Classification of Fraud whereby actions of the Petitioner were declared fraudulent under category of misappropriation of funds and criminal breach of trust and unauthorized transaction.

The single bench of Justice Saurabh Shyam Shamshery observed, "This case could be disposed of with a direction to respondents to supply a copy of report of ZOCCF to petitioner with liberty to take a legal remedy if so advised...."

The Petitioner was represented by Advocate Devansh Misra while the Respondent was represented by Additional Solicitor General of India Anadi Krishna.

Facts of the Case

The Petitioner was initially appointed on a post of Assistant Manager in Bank of Baroda and later on, he was promoted as Manager and subsequently took charge of another branch. Later, certain complaints were made against him alleging that he issued overdraft facility, loans and cleared certain cheques for payment without approval from different customers and a disciplinary proceedings were initiated and petitioner was suspended. Later on, by interference of the Court, suspension order was set aside, however, no further disciplinary proceedings were commenced. It was further case of Petitioner that even thereafter, some complaints were made before RBI Ombudsman alleging that amount of ₹45,00,000/- were debited from complainant’s account without her permission or without any cheque issued by her. An award was passed and the same was challenged in a before the Court wherein an interim order came to be passed.

The Respondent-Bank initiated proceedings to classify him as fraud in terms of RBI Master Direction on Fraud Risk Management in Commercial Banks including Regional Rural Banks and All India Financial Institutions. As per the procedure, the matter was considered by a Committee viz. Zonal Office Committee for Classification of Fraud (ZOCCF) and accordingly a report was submitted with a recommendation to declare the incident as fraud.

Counsel for the Petitioner further submitted that report of ZOCCF was not provided to Petitioner, therefore, Petitioner is not able to respond to said report. Reliance was placed on State Bank of India and others vs. Rajesh Agarwal and others, (2023) 6 SCC 1 and M/s Shree Saraiwwalaa AGRR Refineries Ltd. vs. Union of India, (2022) to emphasize that since classification of an account as fraud not only results in reporting the crime to investigating agencies but it has other penal and civil consequences, therefore, application of audi alterem partem is a mandatory part of proceedings under Master Direction.

Reasoning By Court

The Court at the outset noted that on basis of a complaint in terms of Master Direction on Fraud, a notice was issued to the Petitioner on serious allegations of fraud and that he submitted a detailed reply to it and according to procedure prescribed, matter was considered by ZOCCF though undisputedly its report and decision was not communicated to Petitioner and only legal consequence of it was communicated by impugned order wherein a recommendation to declare action of the petitioner as “Fraudulent” was made.

"Court is of considered view that said report of ZOCCF ought to have been served upon petitioner so that petitioner may take a legal remedy against said report. Court is also of the view that if ZOCCF has taken a decision and made a recommendation and was communicated by impugned order, all procedure prescribed in Master Direction are substantially complied with," it thus ordered.

The Petition was accordingly disposed of.

Cause Title: Rohit Dahiya vs. Union Of India And 3 Others

Appearances:

Petitioner- Advocate Devansh Misra

Respondent- Additional Solicitor General of India Anadi Krishna, Advocate Anant Kumar Tiwari

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Allahabad High CourtJustice Saurabh Shyam Shamshery

Sheetal Joon