' DR. AKHTAR HASAN KHAN, (MEMBER).---The appellant, Sulaiman Jafferi, was working as Bank Manager, Saleh Muhammad Street, United Bank Limited (UBL), Karachi. He negotiated or allowed to negotiate 51 Usance Bills involving Rs,67.870 Millions during the period 21-2-1993 to 29-7-1993. Out of the above amount Rs,32.430 Millions representing 16 bills remained unpaid on their maturity and are still outstanding for any time schedule for clearance.
2. Messrs Tawakkal Group of Companies had established East Mediterranean Trust and Banking Corporation Limited in Turkey in order to open letters of credit. The Manager (appellant) was directed by the Assistant Vice President (Mr. Hatim Ali), UBL, International Division vide Letter No,ID:HA:1584 dated 29-7-1993, stating that the "LC opening bank is neither on our approved list nor is listed as Banker in the Banker Almanac but keeping in view the market credibility of the exporters, you may negotiate documents only against usual guarantee". The exporters were all members of the Tawakkal Group of Companies whose market reputation was shady and doubtful according to different newspapers' reports. The appellant being the Manager of the respondent-Bank had great responsibility in exercising the necessary caution in dealing with Tawakkal Group which were operating through a bank which was neither on the approved list nor included in the Bankers Almanac. He should have realised that the LC opening bank should be a reputed financial institution and hence he should have asked about the credential of the bank from their correspondent bank in Turkey and non-inclusion of the LC opening bank in Bankers Almanac should have made the Bank Manager more than more cautious in making payment to them:
3. Finally Mr. Ali stated that you may negotiate documents only against usual guarantee. First, Mr. Hatim Ali, give him the option to negotiate or not negotiate by using the word "may". Secondly, he stated that the documents may be negotiated only against usual guarantee. The word usual guarantee is not easily defined in banking language. Guarantee can either be bank guarantee or personal guarantees whereby a person pledges property or other movable or immovable assets to the bank.
4. The Bank Manager (appellant) failed to take either of two these guarantees and hence an amount of Rs,32.43 Million remains unpaid till date. The doubtful credentials of the correspondent bank as well as of the parties required the Bank Manager to obtain castiron guarantees. The Bank Manager violated the instructions issued to him by Mr. Hatim Ali of the International Division.
5. The appellant has argued that the Tawakkal Group is not only a famous group in Pakistan but was given award for export performance. He also argued that the procedure adopted in the inquiry was not according to their Staff Rules and there are procedural lapses.
6. The learned counsel for the respondent-Bank argued that the rules are not statutory in nature and the relationship between Mr. Jaffery (appellant) and the Bank is that of master and servant. He also pointed out that this decision of the dismissal of the appellant alongwith five others had been endorsed by the Board of Directors vide their Circular Resolution No,28 of 1997 dated 15-9-1997.
7. The financial scene in Pakistan is full of irregularities committed by different layers of officers working in nationalized banks which have struck up loans running into Billions of rupees. The job of Branch Manager is of great responsibility, because he has to deal with large sums of money without reference to his superiors. However, the Bank Manager failed to realise that the depositor's money is sacred trust with the bank. Branch Manager, therefore, need to exercise all the precaution and circumspection in dealing with shady business houses who operate through unknown financial institutions located in foreign countries for cheating public banks. The Bank Manager, therefore, either through intention or innocence, which is doubtful, failed to correctly interpret the letter of Mr. Hatim Ali from the International Division and exercised very little care in obtaining the guarantees which were mandatory.
8. There may have been some procedural lapses in the inquiry but if the Staff Rules as pointed out by the learned counsel for the respondent are not statutory in nature then a person cannot be acquitted because of minor deviation from the Staff Rules. The officer was given show-cause notice/charge-sheet to which he replied. The inquiry was conducted and on the recommendations of the Inquiry Committee and with approval of the Board of Directors of the Bank, he was dismissed.
Therefore, essential steps were taken and the appellant was not condemned unheard.
9. The mala fides of the appellant were proved as he failed to exercise the precautions necessary for the Branch Manager of the Bank and hence was rightly dismissed for causing the Bank a loss of amount of more than three crores.
10. In view of the above facts, we are of the view that the appeal has no merits and it is, therefore, dismissed with no order as to costs.
11. Parties be informed.