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How to Conduct/Defend Departmental Inquiry
Principles of Vigilance to Public Sector Banks
The Role And Functions of The CVC(Contd)

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[Reproduced from Publication of CVC]
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Vigilance Management In Public Sector Banks vis-a-vis The Role And Functions of The CVC
(Page: 2 of 4)
Investigation Reports Received from the CBI:(Paragraph 7 Contd.)
  1. In cases, where the CBI recommends RDA for major/minor penalty action or 'such action as deemed fit' against the officials and the Commission is to be consulted, the CVO should ensure that the comments of the department on the CBI report are furnished to the Commission within one month of the receipt of the CBI's investigation report. Further action in such cases may be taken as per the Commission's advice. In other cases, the CVO should take expeditious action to ensure that charge-sheets, if necessary, are issued within two months of the receipt of the investigation report from the CBI. It would not be necessary for the CBI to follow the matter in such cases after the disciplinary authority has initiated action for RDA against the concerned officials in accordance with their recommendations. However, in case of difference of opinion between the CBI and administrative authorities, the matter would be referred to the Commission for advice irrespective of the level of the official involved. The organisation would take further action in accordance therewith.

  2. The law of the land permits prosecution as well as RDA to proceed simultaneously (Jang Bhagdur Singh v/s Baijnath Tewari, 1969 SCR, 134). Where the suspect officer is primarily accountable for conduct which legitimately lends itself to both criminal prosecution in a court of law as well as RDA, as a general rule, both should be launched simultaneously after consultation with the CBI or other investigating agencies charged with conducting the prosecution. Such simultaneous conduct of RDA and criminal prosecution should be resorted to especially if the prosecution case is not likely to be adversely affected by the simultaneous conduct of RDA. Keeping RDA in abeyance should be an exception rather than rule. The copies of all the relevant documents authenticated by the charged employees may be retained, for the purpose of RDA, before the original documents are sent to the Court. If the documents have already been sent to a Court of Law for the purpose of criminal proceedings, certified copies may be procured for the purpose of RDA. Care, however, should be taken to draft the charge-sheet for the purpose of RDA in such a manner that it makes the suspect official accountable for violation of various provisions of Conduct Rules without reference to criminal misconduct. No Bipartite Agreement should stand in the way of disciplinary action continuing parallelly with the criminal investigation/trial. This is necessary in the interest of speedy action in vigilance cases.

Complaints and Action Thereon (Paragraph 8)
  1. Information about corruption, malpractices or misconduct on the part of public servants may come to the CVO's notice through various sources, such as,

    1. the complaints received from the public, or through the administrative Ministry, CBI and the CVC;
    2. departmental inspection reports and stock verification surveys
    3. scrutiny of property returns and the transactions reported by the concerned employee under the Conduct Rules,
    4. audit reports,
    5. press reports,
    6. reports of parliamentary committees etc.

    Information received verbally should be reduced to writing and dealt with similarly. In the first instance, the CVO or his nominee in consultation with disciplinary authority should decide if the information involves a vigilance angle. If so, he would register the information as a complaint in the Vigilance Complaint Register. He would then process the matter further to decide as to whether the allegations are general or vague and deserve to be filed/ or the matter requires further investigation. In the latter case, he would also have to decide as to whether the investigation into the allegations should be entrusted to the CBI or local police or taken up departmentally. The case may, with the approval of the CMD, be entrusted to the CBI if the allegations:

    1. are criminal in nature (e.g. bribery, corruption, forgery, criminal breach of trust, possession of assets disproportionate to known sources of income, cheating, etc.; or

    2. require inquiries to be made from non-official persons; or
    3. involve examination of private records; or
    4. need expert police investigation for arriving at a conclusion; or
    5. need investigation abroad.

  2. In exercise of its extraordinary jurisdiction, the Commission has the power to call for a report in respect of any case with a vigilance angle in so far as it relates to any public servant falling within its jurisdiction. It also has the power to advise further course of action to the disciplinary authority in respect thereof. Therefore, whenever the Commission advises the CVO to investigate such a case, he shall not only submit his investigation report but subsequently also seek first stage advice on par with other cases falling with the Commission's ordinary jurisdiction.

  3. A complaint involving a Presidential appointee may be forwarded to the CVO of the Banking Division. The latter in the first instance would decide whether the information involves a vigilance angle or not. If so, he would register that as a complaint in the Vigilance Complaint Register and would process the matter further to decide whether the allegations are general in nature or vague and deserve to be filed, or the matter requires further investigation. In the latter case, he would also decide as to whether the investigation into the allegations should be entrusted to the CBI or taken up departmentally. If it is decided to investigate the matter departmentally he may, in his discretion, take assistance of or seek factual reports from the RBI or the CVO or any other authority of the Bank concerned.

Investigation by CVO (Paragraph 9)
  1. Anonymous/Pseudonymous Complaints

    1. Many anonymous/pseudonymous complaints are false and malicious. Inquiries into such complaints adversely affect the morale of the Organisation's personnel. Ordinarily, therefore, all such complaints should be ignored and filed. Occasionally however, such complaints do constitute an important source of information especially in respect of influential officials against whom the complainant may be afraid to make open allegations. The discretion to inquire into such complaints, containing verifiable details, will vest in the disciplinary authority who will exercise the same in consultation with the CVO or his nominee. While taking such selective cognizance to pursue such a complaint, a copy of all information, as far as possible, should be made available to the official concerned for his comments. Further action should be considered only after considering his reply. If further investigation is necessary, all the relevant documents should be taken into custody to avoid any chance of their being tampered with subsequently. Such investigation into the allegations contained in an anonymous/pseudonymous complaint would be carried out along the same lines as that prescribed for any other type of complaint.

    2. Anonymous/pseudonymous complaints received through the Commission for investigation and report however may be treated as "source information" and dealt with accordingly.

  2. Other Complaints

    1. After it has been decided that the allegations contained in a complaint should be looked into departmentally, the CVO should proceed to make a preliminary enquiry (generally termed as investigation). He may conduct the preliminary enquiry himself or entrust it to one of the Vigilance Officers. He may also suggest to the administrative authority to entrust the investigation to any other officer considered suitable for the purpose in the particular circumstances. The purpose of such an enquiry is to determine whether, prima-facie, there is some substance in the allegations.

    2. The preliminary enquiry may be made in several ways depending upon the nature of allegations and the judgment of the investigating officer, e.g.

      1. If the allegation contain information, which can be verified from documents, files or other departmental records, the investigating officer should, without loss of time, secure such records etc. for personal inspection. If any paper is found to contain evidence supporting the allegations, it should be taken over by him for retention in his personal custody to guard against the possibility of available evidence being tampered with later on. If the papers in question are required for any current action, it may be considered whether the purpose would be served by substituting authenticated copies of the relevant portions of the record, the originals being retained by the investigating officer in his custody. If that is not feasible, the officer requiring the documents or papers in question for current action should be made responsible for their safe custody after retaining authenticated copies for the purpose of enquiry;

      2. In cases where the alleged facts are likely to be known to any other employee of the department, the investigating officer should interrogate them orally or ask for their written statement. In case of oral interrogation, a full record of interrogation may be kept and the person interrogated may be asked to sign as a token of his confirmation of his statement.

      3. Wherever necessary, important facts disclosed during oral interrogation on in written statements should be sought to be corroborated.

      4. If it is necessary to make enquiries from the employees of any other Government department or bank or PSU the investigating officer should seek the assistance of the concerned CVO for providing the necessary facilities.

    3. During the course of preliminary enquiry, the concerned employee may as a fundamental administrative requirement also be given an opportunity to tender his version of the facts so as to find out if he has any plausible explanation. In the absence of such an explanation, the concerned employee may be proceeded against unjustifiably. There is, however, no question of making available to him any document at this stage. Such an opportunity, need not be given in cases in which a decision to institute department proceedings is to be taken without any loss of time, e.g. in cases in which the public servant is due to retire or superannuate soon and it is necessary to issue the charge sheet to him before retirement.

    4. After the preliminary enquiry has been completed, the investigating officer should prepare a self-contained report, containing inter alia the material to controvert the defence, and his own recommendations. This should be forwarded to the disciplinary authority through the CVO. The investigating officer/CVO or his nominee should make a meticulous evaluation of the actions of various officials with reference to the nature of their duties. They are also required to assess the gap between what the managers at different levels of the decision-making hierarchy actually did and what they were required to do. They may follow the following criteria for the purpose and highlight in the report if the answer to any of the questions is in the affirmative:-

      1. Can malafides be inferred or presumed from the actions of any of the concerned officials?

      2. Could any of the officials be said to have engaged in a misconduct or misdemeanor?
      3. Was the conduct of any of the officials reflective of lack of integrity?
      4. Did the official(s) act in excess of their delegated powers/jurisdiction and failed to report the same to the competent authority?
      5. Did they or any of them show any gross or willful neglect of their official functions?>
      6. Is their any material to indicate that any of them acted recklessly?
      7. Has the impugned decision caused any undue loss to the organisation?
      8. Has any person/party or a set of persons/parties either within the Organisation or outside it been caused any undue benefit?
      9. Have the norms or systems and procedures of the Organisation been flagrantly violated?

    5. Where a case involves both criminal misconduct as well as flagrant violation of systems and procedures of the organisation, further investigation into the former should be left to the CBI. The bank concerned however may simultaneously consider the latter and initiate appropriate disciplinary proceedings, in accordance with the prescribed procedure, if required. The CVO of the bank or his nominee and the DIG concerned of the CBI should coordinate their efforts to ensure that violation of rules, regulations and banking norms which are best covered under RDA are left to the disciplinary authority to deal with; the CBI on the other hand should focus their investigation on the criminal aspects of the case.

    6. Timeliness in the conduct of the preliminary inquiry cannot be overemphasised. Both the courts as well as administrative instructions have indicated that there should not be an inordinate delay between the occurrence of the impugned events and the issue of the charge sheet. The current instructions of the Government are that the preliminary inquiry should be completed within 3 months. In the State of MP Vs. Bani Singh, 1990 Suppl. S.C.C. 738 it was held that an inordinate and inexplicable delay in finalisation of the charge sheet can itself be a ground for quashing of the same on the ground of denial of reasonable opportunity. Similarly, delayed charge-sheets can also be legally challenged on grounds of staleness. Further, in State of Punjab Vs. Chaman Lal Goyal SLR (1995) (1) 700 S.C. it was held that in the case of inordinate delay the burden of proving that the delay was due to a reasonable cause would be on the department. Thus, although it may not be desirable to indicate a time limit for staff accountability, the need to ensure that the same is done at the earliest, needs to be reiterated.

Action on Investigation Report (Paragraph 10)
  1. The disciplinary authority would consider the investigation report and decide, on the basis of the facts disclosed in the preliminary enquiry, whether the complaint should be dropped or warning/caution administered or regular departmental proceedings launched. The test to be applied at this juncture is to see as to whether a prima-facie case has been built up on the basis of the evidence collected during the course of preliminary enquiry. Generally, if any of the criteria indicated in the preceding paragraph is satisfied, a prima-facie case for instituting regular departmental proceedings could be said to exist. If on the other hand the evidence on record falls short of establishing such a prima-facie case, the disciplinary authority may either close the matter, or may take recourse to other formal forms of disapproval, such as reprimanding the concerned employee, issuing him an advisory memo or warning, or communicating the Organisation's displeasure. While taking such a decision, the disciplinary authority should bear in mind that a departmental proceeding is not a criminal trial; and that the standard of proof required is based on the principle of ' preponderance of probabilities' rather than 'proof beyond reasonable doubt'.
    [Union of India Vs. Sardar Bahadur - SLR 1972 p. 352; State of A.P. Vs.Sree Rama Rao - SLR 1974 - p.25; and Nand Kishore Prasad Vs. State of Bihar and others - SLR 1978 - p.46].

  2. If any of the employees involved in the case falls within the Commission's jurisdiction, the latter's advice would be required and any decision of the disciplinary authority at this juncture may be treated as "tentative" . Such a reference would be required to be made even in respect of the officer/staff who are not within the Commission's jurisdiction if they are involved along with other officers who are within the jurisdiction of the Commission, as the case has to be considered as a composite one. The matter may be referred to the Commission, through the CVO, for its advice. However, if an administrative authority investigates into an anonymous or pseudonymous complaint under the impression that it is a genuine signed complaint, or for any other reason, the Commission need not be consulted if it is found that the allegations are without any substance. Further action in the matter should be taken on receipt of the Commission's advice, wherever the same has been sought. Certain types of vigilance cases where it is desirable to initiate major penalty proceedings have been mentioned in para 11.4 of Chapter X by way of illustrative guidelines. In addition the following lapses/irregularities in the banking operations could also be considered for such action:

    1. Irregularities in opening of accounts leading to the creation of fictitious accounts;

    2. Recurrent instances of sanction of ODs in excess of discretionary powers/sanctioned limits without reporting;

    3. Frequent instances of accommodation granted to a party against norms e.g. : Discounting bills against bogus MTRs; purchase of bills when bills had earlier been returned unpaid; Affording credits against uncleared effects in the absence of limits and opening LCs when perviously opened LCs had devolved. Where a group of officers are involved in the same set of lapses in a branch/zonal office, having different disciplinary authorities, there could be delay in the processing of the cases and also differences in perception of the lapses. Therefore, the Disciplinary Authority of the senior most officer in that group may institute and complete the disciplinary proceedings in respect of the different officers involved in the same case.

  3. The Commission has noticed that references made to it both at the first as well as second stage are incomplete, resulting in back references to the banks. It has therefore become necessary for the Commission to reiterate the extant procedure to be followed in this regard.

Continued Next Chapter
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