Removal Of Service Can Be Substituted By Compulsory Retirement In Case Of Loss Of Confidence In The Employee By The Bank: SC

In this case, the Appellant served as a Branch Officer at Pratap Pur Branch of the Respondent Bank. He had put in 28 years of service. A complaint was made against the Appellant by one borrower of the Bank namely Karamjeet Singh who alleged that the Appellant had sanctioned the limit of a loan of Rs.1,50,000/­ which was later on reduced to Rs.75,000/­. On receiving the complaint against the Appellant ­ the Chairman of the Bank transferred him to another branch of the Bank, during the pendency of the inquiry pertaining to aforesaid complaints.

The Appellant replied to the show cause notice and stated that the allegations in the complaint were baseless, frivolous, and fabricated. He also contended malice and bias against the Chairman of the Bank. The disciplinary proceedings were initiated against the Appellant. Thereafter after considering the inquiry report and giving an opportunity to the Appellant, the disciplinary authority/Chairman of the Bank passed an order of removal of the Appellant from service. The Appellate Authority dismissed the appeal. The Appellant preferred an appeal before the Uttarakhand High Court. Another petition was filed which sought a writ of mandamus commanding the Bank to grant promotion from Scale-II to Scale III. Both the petitions were heard together and dismissed by the Uttarakhand High Court. This impugned judgment was challenged before the Supreme Court.

Counsel, Chandra Bhushan Prasad appeared for the Appellant while Counsel, Suhaas Ratna Joshi represented the Respondent Bank before the Apex Court.

The primary issue in this case was –

• Whether was the order of removal of service was disproportionate to the charges and misconduct held to be proved.

The Court noted that there was no financial loss caused to the Bank and on the contrary, a decision was taken by the Appellant to reduce the loan amount from Rs.1,50,000/­ to Rs.75,000/­ in the case of Karamjeet Singh ­the complainant, which could be said to be the decision in the bank's interest.

Moreover, according to the Court, the fact that the Appellant had worked for 28 years and during those 28 years there were no allegations against him, in the facts and circumstances of the case, the punishment of removal for the charges proved and the misconduct established, was too harsh and disproportionate. Hence, in a case of loss of confidence in the employee by the Bank, the Court deemed it just and proper to substitute the punishment from that of removal of service to that of compulsory retirement.

The Court observed that the Uttarakhand High Court was justified in holding that in the limited jurisdiction available to the High Court in the exercise of powers under Article 226 of the Constitution of India, the High Court was not required to reappreciate the evidence and/or interfere with the findings recorded by the inquiry officer accepted by the disciplinary authority. However, the order of removal of service was disproportionate to the charges and misconduct held to be proved.

Thus, the impugned judgment and order passed by the Uttarakhand High Court was hereby modified to the extent of substituting the punishment from that of removal of service to that of compulsory retirement. Additionally, since the High Court had not decided the petition praying for promotions on merits, the impugned judgment which dismissed the said Writ Petition was set-aside and the matter was remanded back to the High Court to decide the same afresh in accordance with law and on its own merits.

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