Allahabad High Court Upholds Dismissal Order Of Bank Employee For Sharing Official ID-Password, Illegal Debiting Of Funds

The Allahabad High Court upheld the dismissal order of a bank employee for sharing his official ID and password, leading to illegal debits to the tune of Rs. 10 lakhs.

The Court noted that once an individual is employed in a bank, he is entrusted with a password and ID and therefore, has both a legal and moral obligation to maintain confidentiality.

The Court further emphasized the paramount importance of honesty and integrity for all bank employees. This elevated standard of conduct reflects the crucial role Bank Officers play in safeguarding sensitive financial information and upholding the public trust.

The Bench comprising Justice Attau Rahman Masoodi and Justice Om Prakash Shukla observed, “Once a person is employed in the Bank and he has been given password/ID, so long as he is in the Bank, it is the legal and moral duty of the appellant/petitioner to keep secrecy of the password/ID. If it is misused, he ought to have reported the matter to the higher officials”.

Senior Advocate HGS Parihar appeared for the Appellant and Advocate Shrikant Mishra appeared for the Respondents.

The Appellant had joined UCO Bank in 1984. He was promoted to various positions but faced disciplinary proceedings based on allegations of unauthorized entries and withdrawals. Despite the Appellant's denial and submission of a satisfactory reply, he was suspended and later dismissed from service. The Inquiry Officer's report found the allegations proved, leading to the issuance of a dismissal order. The Appellant filed a statutory appeal, citing a lack of computer access and misuse of his password by the Branch Manager. However, the Appeal was rejected by the Appellate Authority. The Appellant then filed a Writ Petition, which was dismissed by the Single Judge of the High Court. Aggrieved, the Appellant approached the Division Bench by way of an Intra-Court Appeal.

The Court noted that per Clause 7 of Schedule III Part D of the Circular of 2010, the duties of the Head Cashier (Class III) include independently clearing and transferring cheques, vouchers, etc., up to and including Rs.50,000, and handling cash vouchers up to the same amount jointly with an authorized person. During the Appellant’s tenure at UCO Bank, an entry of Rs.10,00,000 was made in the account of Zila Panchayat Raj Adhikari. Subsequently, this amount was credited to 20 fictitious savings bank accounts, and the funds were withdrawn in cash from these respective accounts.

The Bench held the Appellant accountable for the misuse of his password/ID. The Bench noted that once an individual is employed in a bank and provided with a password/ID, it is both a legal and moral obligation to maintain the confidentiality of such credentials. The Bench observed that the Appellant knowingly shared his password/ID with the then-branch manager, who subsequently made numerous fictitious entries using this information. The repetition of such actions is evident from the Appellant's reply submitted to the Inquiry Officer/Disciplinary Authority.

Additionally, the Court observed that the record indicated that the Appellant had ample opportunity to defend himself during the inquiry, and his failure to substantiate his case implies that the principles of natural justice were not violated.

The Court referred to the Supreme Court Judgment in the case of Chairman & Managing Director, United Commercial Bank v P.C. Kakkar [(2003) 4 SCC 364] and reiterated the high level of responsibility and credibility expected in banking matters. The Court noted that bank officers are held to elevated standards of honesty and integrity. Given their role in handling depositors' and customers' money, every bank officer/employee is obligated to protect the bank's interests and perform their duties with the utmost integrity, honesty, devotion, and diligence. The Court emphasized that good conduct and discipline are integral to the functioning of every officer/employee in a bank.

“Hon’ble Apex Court held that a Bank Officer is required to exercise higher standards of honesty and integrity. He deals with the money of the depositors and the customers. Every Officer/employee of the bank is required to take all possible steps to protect the interests of the bank and to discharge his duties with utmost integrity, honesty, devotion and diligence and becoming of a bank officer. Good conduct and discipline are inseparable from functioning of every officer/employee of the bank”, the Bench noted.

The Court observed that the punishment of dismissal from service, given the nature of the allegations, is not disproportionate.

Accordingly, the Court dismissed the Appeal.

Cause Title: Nagendra Kumar Pandey v General Manager UCO Bank Hazratganj Lucknow And Ors. (2023:AHC-LKO:79477-DB)

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