Page 23 - Banking Finance December 2020

LEGAL UPDATE

Legal

Cases

Court stays out of credit Further, if the opinion is intelligible, him, the enquiry officer, after comple-
convincing, and based on reasoning, no tion of the enquiry, held only the
ratings decree declaring the said opinion as charge pertaining to grant of advance

The credit rating of a company is usu- null and void, unenforceable and inef- by the appellant to his wife as proved.
ally rendered after taking into account fective can be passed." Thereafter, on the recommendation of
all positive or negative factors and it is the disciplinary authority , the punish-
an opinion rendered by experts in the Ganesh Santa Ram Sirur ing/appointing authority imposed on
field. A court will not interfere unless the appellant the punishment of reduc-
the opinions is "perverse, arbitrary and Vs. State Bank of India & tion in substantive salary by one stage.
mala fide". A court cannot also stop the Anr. (2005) 1 SCC 13 On appeal, the appellate authority ini-
rating agency from disclosing or publish- tially proposed to enhance the punish-
Service Law - Dishonest sanction of
ing it. So stated the Delhi High Court in ment to dismissal. However, after ex-
its judgment in the case, Jindal Power loan - Removal from service - Held, amining the reply given by the appel-
Ltd vs ICRA Ltd. JPL filed a suit request- Sanctioning of loan by a bank manager lant to the proposed punishment, the
ing the court to quash its downgrading to his spouse in contravention of ser- appellate authority imposed on the
from BBB+ (stable outlook) to BBB vice rules not an honest decision and appellant the punishment of removal
(negative outlook) by ICRA, which is a therefore punishment of removal from from service.
rating agency following the SEBI (Credit service is just and proper.
The appellant’s request for a review
Rating Agencies) Regulations. Natural Justice - Personal hearing – by the Chairman of the respondent
Both parties had signed an agreement Held, principles of natural justice can- bank was also not entertained. The writ
in 2016 on rating and there was no not be put in a straitjacket – Where petition filed by the appellant to quash
dispute for the past few years. How- relevant service rule did not provide the order of the appellate authority
ever after the economic stress and the for a personal hearing, then a decision and for directions to reinstate him with
Covid pandemic, several issues were taken with full application of mind but back wages and arrears of service and
raised by the rating agency. Rejecting without giving personal hearing cannot other service benefits was dismissed by
the stand of JPL, the court observed be said to be vitiated. the Division Bench of High Court of
that "the evidentiary value of opinion Facts Bombay. Being aggrieved by the same,
of a expert has to be decided on the The appellant was issued with a charge the appellant preferred the present
basis of the credibility of the expert and sheet for certain irregularities commit- appeal.
the relevant facts supporting the opin- ted by him while working as Branch Issues
ion. The emphasis has to be on the data Manager of the respondent bank. Out 1. Whether enhancement of punish-
on the basis of which opinion is formed. of the various charges imputed against ment by the appellate authority to

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