Liability of ex-ceo of the bank for loss incurred by bank

Querist : Anonymous (Querist) 23 July 2018 This query is : Open
CAN BOARD OF NOMINEE HOLD LIABLE A CHIEF OFFICER, FOR TRANSACTIONS DONE BY BANK PRIOR TO HIS JOINING BANK.

My friend Ex CEO of Bank C had joined the bank on 1.7.06 and resigned on 16.6.08
There was an arrangement between Bank A in Bhuj and Bank C in Rapar (both in kutch district of Gujarat) that cheques of Bank A , when presented by the account holders of Bank A, to Bank C, it should be honoured for payment after observing a formality of sending Fax to Bank A for confirming by Bank A that they have verified all the aspect of the cheque,including sufficiency of balance and genuineness of drawer’s signature. After verifying as above, Bank A will re-fax confirmation and then Bank C was will make payment. Bank C had opened an account in the name of Bank A, which was being debited by that amount, and at the end of the day, a statement also was being sent by Bank C to Bank A for reconciliation and affording credit to Bank C for all the entries.
During audit by auditors observed that following two entries, payment for which was made by Bank C but credit was not afforded by Bank A.
a) Entry dated 15.5.2006 for Rs.3,15,000/-
b) Entry dated 17.6.2006 for Rs.1,40,000/-
c) Entry dated 13.9.2006 for Rs 90,000/-
In this connection, Board of nominees,Rajkot, initiated actions and sent investigating officer and to submit report in the matter.
Thereafter, neither Bank C or Board of Nominee, sent any notice or communication and passed an order under Sec.93 of Guj.State.co-op.soc.Act.,1961, holding liable three persons viz.,,CEO, Chairman and Cashier/officer for loss incurred to Bank C., and instructed them to make payment of aggregate amount of Rs.5,45,000/-plus Rs.12,000/- being fees and cost towards investigation process.within a period of 30 days from the date of the order.
The communication of the above order was sent to Cashier/officer by Bank C, three days back per their letter dated 18.5.2018 (letter perported to be back dated by Bank C)
My friend Ex-CEO has not received any communication till date.
In this connection, entries in a) and b) are of the period when my friend Ex-CEO, had not joined bank.
As regards third entry c) , my friend Ex-CEO had observed all the formalities as per the arrangement framed by both the banks.
Thereafter, also, since the payment of Rs.90,000/- was not forthcoming from Bank A, Bank C, filed suit against Bank A (suit No.46/209 dtd 31.8.2009).
Under the circumstances, whether my friend Ex-CEO should approach Bank C, or directly approach Tribunal for quashing and setting aside or amending the judgement of Board of Nominees.

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