DELHI DEVELOPMENT AUTHORITY versus SKIPPER CONSTRUCTION CO. (PVT.) LTD. AND ANR.

DELHI DEVELOPMENT AUTHORITY versus SKIPPER CONSTRUCTION CO. (PVT.) LTD. AND ANR.

The Court, upon reviewing reports and findings, determined that responsibility for irregularities in granting the bank guarantee should not be foisted on one individual, but rather assessed among the board as a collective. The quantum of loss suffered by the banks must be determined, and proper investigation is required by the Central Vigilance Commission, including assessment of malfeasance/misfeasance by bank officials, irrespective of death or retirement. Previous proceedings against officials are dropped based on Wednesbury principles, but further inquiry is ordered.

Parties
Appellant: Delhi Development Authority; Respondent: Skipper Construction Co. (Pvt.) Ltd.; Respondent: Canara Bank
Jurisdiction
India
Judgment Date
13 November 2002
Procedural Posture
Special Leave Petition (civil) / Order After Judgment, Further Directions Issued
Outcome
Further investigation ordered, proceedings against bank officials dropped (as per previous judgment), directions issued to Central Vigilance Commission
Legal Topics
Bank Guarantee, Malfeasance and Misfeasance, Disciplinary Proceedings, Wednesbury Principles, Role of Bank Officials, Central Vigilance Commission Investigation
Banking Law Administrative Law Public Sector Governance Bank Guarantee Malfeasance and Misfeasance Disciplinary Proceedings Wednesbury Principles Role of Bank Officials +1 more

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Parties

Delhi Development Authority

Appellant

Skipper Construction Co. (Pvt.) Ltd.

Respondent

Canara Bank

Respondent

Procedural Posture

Special Leave Petition (civil) / Order After Judgment, Further Directions Issued

Legal Issues

  1. 1 Whether bank officials committed malfeasance and misfeasance in issuing bank guarantees in violation of statutory norms
  2. 2 Whether appropriate disciplinary action and administrative response were undertaken against erring officials
  3. 3 Whether administrative decisions regarding punishment were arbitrary under Article 14 and subject to Wednesbury principles

Ratio Decidendi

The Court, upon reviewing reports and findings, determined that responsibility for irregularities in granting the bank guarantee should not be foisted on one individual, but rather assessed among the board as a collective. The quantum of loss suffered by the banks must be determined, and proper investigation is required by the Central Vigilance Commission, including assessment of malfeasance/misfeasance by bank officials, irrespective of death or retirement. Previous proceedings against officials are dropped based on Wednesbury principles, but further inquiry is ordered.

Court Disposition

Further investigation ordered, proceedings against bank officials dropped (as per previous judgment), directions issued to Central Vigilance Commission

Orders

  • Central Vigilance Commission shall investigate and ascertain quantum of loss suffered by the banks due to malfeasance and misfeasance of officials, irrespective of death or retirement.
  • CVC to take note of CBI report as well.