Demonstrable Lacunae In Disciplinary Proceedings Can Be A Relevant Factor For Reduction Of Punishment Awarded To Employee: Karnataka HC
The Karnataka High Court observed demonstrable lacunae in the disciplinary proceedings can also be a relevant factor while deciding the claim for reduction of punishment awarded to an employee.
The Bench modified the penalty imposed on the employee formerly working as a branch manager in the Syndicate Bank (now Canara Bank) [Bank] from the penalty of dismissal from service to compulsory retirement. While the Court did reduce the punishment imposed, it stated that, ordinarily, awarding of punishment to a delinquent employee was the domain of the employer/Disciplinary Authority.
A Division Bench of Justice Krishna S Dixit and Justice Ramachandra D. Huddar observed, “We need not reiterate the sanctity of the principles of natural justice. Law & Literature are replete with instances where punitive actions are invalidated for the violation of these principles, inasmuch as, without the relevant documents, the delinquent employee ordinarily will not be in a position to structure his defence effectively. We are of the considered view that the demonstrable lacunae in the disciplinary proceedings can also be a relevant factor while deciding the claim for reduction of punishment awarded to an employee. A view in variance would run the risk of being branded unjust & unfair.”
Advocate M Subramanya Bhat represented the appellant, while Advocate Santhosh S Nagarale appeared for the respondents.
Following a disciplinary enquiry that found him guilty of reckless lending and negligent compromise of securities, the employee was dismissed from service. His departmental appeal was also dismissed.
The employee argued that he was not provided with the documents including the investigation report. He also contended that the bank's claim of privilege to deny documents was unjustified and that the disciplinary and appellate authorities failed to consider the employee’s long and spotless service record, promotions, and recovery of loans. The extreme punishment of dismissal was argued as unreasonable.
The Court stated that the bank not providing the employee with the relevant documents would not allow the delinquent employee to structure his defence effectively. “An employer more particularly Article 12 Entity like the Bank cannot deny charge documents just by invoking privilege,” the Court added.
“Most of the outstanding loans having been repaid, the loan accounts are closed. We hasten to add that, learned Panel Counsel is right in pointing out that absence of loss to the Bank per se would not result into a clean chit,” the Court remarked.
The Bench also clarified that the question of setting aside termination from service for facilitating the reinstatement of the employee would not arise remotely.
Consequently, the Court held that “this Appeal succeeds in part; the impugned order of the learned Single Judge is set at naught…the order of punishment of dismissal stands modified to the one of compulsory retirement from service.”
Accordingly, the High Court partly allowed the appeal.
Cause Title: Sri. M R Nagarajan v. The Syndicate Bank & Ors. (Neutral Citation: 2024:KHC:21044-DB)