Telangana High Court
Chairman And Managing Director vs V. Sambasiva Rao on 21 February, 2025
Author: Abhinand Kumar Shavili
Bench: Abhinand Kumar Shavili
HON'BLE SRI JUSTICE ABHINAND KUMAR SHAVILI
AND
HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY
WRIT APPEAL Nos.541, 689 and 709 of 2022
COMMON JUDGMENT:
(per Hon’ble Sri Justice Laxmi Narayana Alishetty)
Writ Appeal No.541 of 2022 is filed by the employee seeking
the following substantive reliefs:-
(i) To modify the impugned common order dated 19.07.2022,
passed by learned single Judge of this Court in respect of
W.P.No.20347 of 2014, by altering the penalty from
“stoppage of one increment with cumulative effect” to
“stoppage of one increment without cumulative effect” and
for release of all the increments due from the date of
suspension till the date of superannuation, with
recalculation of all terminal benefits.
(ii) To direct the employer-Bank to pay him eligible pension,
including commuted pension, from the date of dismissal
with interest @ 10%, along with all consequential benefits
as permissible for superannuated officers.
(iii) To direct the employer-Bank to pay interest @ 10% on the
gratuity amount, as was determined by the Controlling
Authority and further confirmed by the Appellate Authority
under the Payment of Gratuity Act, 1972, after adjusting
the previously paid interest.
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(iv) To direct the employer-Bank to pay interest on the invested
gratuity amount @10% against the current interest rate of
3%.
2. Writ Appeal No.689 of 2022 is filed by the employer-Bank
seeking to set aside the aforesaid impugned common order,
whereunder W.P.No.23403 of 2016 is dismissed, upholding the order
of the Controlling Authority under the Payment of Gratuity Act, as
was confirmed by the Appellate Authority, with respect to payment of
the gratuity amount to the respondent-employee.
3. Writ Appeal No.709 of 2022 is also filed by the employer-Bank
seeking to set aside the aforesaid impugned common order passed in
W.P.No.20347 of 2014, whereby the order of punishment of dismissal
from service imposed on the respondent is modified to that of
stoppage of once increment with cumulative effect.
4. Since all the aforesaid Writ Appeals arise out of the common
order passed by learned single Judge and common issues are involved,
all the Writ Appeals are heard together and are being disposed of by
this common judgment.
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5. In Writ Appeal No.709 of 2022, the appellants are the
employer-Bank and the respondent is the employee.
6. For convenience, hereinafter the parties will be referred to as
they are arrayed in Writ Appeal No.709 of 2022 and W.A.No.709 of
2022 is taken up as the lead case insofar as the facts of the case are
concerned.
7. Heard Sri A.Krishnam Raju, learned counsel for the appellants-
Bank and Sri K.Lakshmi Narayana, learned counsel for the
respondent-employee.
8. In nutshell, the facts of the case, shorn off unnecessary details,
are that the respondent has been an employee in the appellants-bank
since 1981 and was promoted to Junior Management Grade (JMG-1)
in the year 2006; that since then, he has been posted in various
branches; and that in the year 2007, he was transferred to Borabanda
Branch. While so, he was accused of misconduct/impropriety and
accordingly, a charge sheet was issued, along with a suspension order,
alleging that he committed irregularities in various accounts and that
he had debited amounts from the accounts of the customers without
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their permission and credited the said amounts to the accounts of his
friends and relatives. Accordingly, an inquiry officer was appointed,
who, on completion of enquiry, submitted his report dated 02.06.2012
holding that all the charges framed against the respondent are proved.
8.1. The Disciplinary authority, after affording reasonable
opportunity to the respondent and considering the reply submitted by
him, passed the order of dismissal from service, vide proceedings
dated 16.08.2012. Aggrieved by the said order, the respondent
preferred an appeal before the appellate authority, however, the same
was dismissed, vide proceedings dated 01.10.2013. Challenging the
same, the respondent filed WP.No.20347 of 2014 before this Court.
8.2. Meanwhile, the respondent filed an application before the
Controlling Authority under the Payment of Gratuity Act, 1972,
Hyderabad, for necessary directions to the appellants-Bank to pay the
gratuity amount to him along with interest for the delay. The
Controlling Authority directed the appellants-Bank to pay the gratuity
and interest to the respondent, vide order dated 20.12.2014. Aggrieved
by the same, the appellants-Bank preferred an appeal before the
Appellate Authority under the Payment of Gratuity Act, 1972 and the
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said appeal was dismissed, vide order dated 01.03.2016. Aggrieved by
the said order of the Appellate Authority, the appellants-Bank filed
WP.No.23403 of 2016 before this Court.
8.3. The learned single Judge passed a common order dated
19.07.2022 in WP.Nos.20347 of 2014 and 23403 of 2016, wherein
and whereby WP.No.20347 of 2014 was partly allowed, modifying
the punishment of the dismissal from service imposed on the
respondent-employee to that of stoppage of one increment with
cumulative effect, and further directed the appellants-Bank to treat the
respondent to be notionally in service from the date of dismissal to the
date of superannuation only for the purpose of
retirement/consequential benefits, but, however, ordered that the
respondent was not eligible for any back wages, and further,
WP.No.23403 of 2016 filed by the appellants-Bank was dismissed.
Hence, the present Writ Appeals.
9. Learned counsel for the appellants-Bank submitted that the
impugned common order dated 19.07.2022 is ex facie illegal as the
learned single Judge ought to have taken note of the fact that the
punishment awarded by the disciplinary authority and later confirmed
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by the appellate authority, can be interfered with by this Court, if and
only if the principles of natural justice are not complied with or if the
inquiry is not held by the competent authority or if there is any
violation of statutory Rules or the findings are based on no evidence.
He further submitted that the scope of judicial review is limited and
this Court, while exercising the power of judicial review, cannot act as
an appellate court and re-appreciate the evidence and arrive at its own
conclusion. Learned counsel further submitted that the order of
dismissal was issued after considering the explanation submitted by
the respondent-employee and after hearing the defence putforth by
him and therefore, the punishment of dismissal from service imposed
on him is not shockingly disproportionate to the proven misconduct of
fraudulently debiting the amounts from the accounts of the customers
and crediting the said amounts to the accounts of his friends and
relatives. Hence, learned counsel prayed to allow WA.No.709 of 2022
by setting aside the impugned order, dated 19.07.2022, passed by the
learned single Judge in WP.No.20347 of 2014.
10. Learned counsel for the appellants-Bank further submitted that
the learned single Judge failed to discuss the merits and demerits of
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the order passed by the Appellate Authority under the Payment of
Gratuity Act and dismissed WP.No.23403 of 2016 on the sole ground
that no pecuniary loss was caused to the appellants-Bank by the acts
of the respondent. He further submitted that the learned single Judge
failed to consider the evidence which clearly establishes the financial
loss caused to the bank due to the acts of the respondent. Hence,
learned counsel prayed this Court to allow WA.No.689 of 2022 by
setting aside the impugned order, dated 19.07.2022, passed in
WP.No.23403 of 2016, whereby the order of the Appellate Authority
under the Payment of Gratuity Act was upheld.
11. Per contra, learned counsel appearing for the respondent-
employee submitted that the learned single Judge has rightly
appreciated the facts of the case; and that taking into consideration the
fact that the respondent has rendered 32 years of unblemished service
in the appellants-Bank, learned single Judge held that the respondent
was unfairly treated by imposing the punishment of dismissal from
service and by treating him differently than other similarly placed
officers, who were punished with minor penalty of stoppage of one
increment without cumulative effect; and that the learned single Judge
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having held so, shown discrimination in the case of respondent by
imposing the punishment of stoppage of one increment with
cumulative effect and hence, prayed to grant the reliefs sought for by
the employee in W.A.No.541 of 2022. He further submitted that there
are no merits in the appeals filed by the appellants and the same are
liable to be dismissed.
Consideration:-
12. From the aforesaid factual matrix of the case and the material
placed on record, it is evident that the respondent has been allowed to
give explanation to the charges levelled against him and that his
counsel was present during the inquiry proceedings and further, in the
impugned common order, the learned single Judge has observed that
the enquiry officer has followed the procedure as laid down under the
Regulations of the bank, therefore, the question of violating the
principles of natural justice does not arise.
13. The main contention of the respondent is that other officers,
who were charge sheeted for the same transactions as that of him,
were let off by imposing minor penalty of stoppage of one increment
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without cumulative effect on them. In contrast, major punishment of
dismissal from service was imposed on the respondent without
considering his 32 years of unblemished service in the appellants-
bank. It is also the case of the respondent that no complaints were
given by the customers alleging that he debited amounts from their
accounts and credited the same into the accounts of his friends and
relatives. The respondent further claims that while dismissing him
from the service, the disciplinary authority did not consider the letters
given by the customers from whose accounts the amounts were
alleged to have been debited nor did the authority give reasons for not
considering the same.
14. As per the report of the inquiry officer, the letters given by the
customers were dated prior to the explanation given by the
respondent, but were submitted to the inquiry officer after the
evidence was recorded. As correctly observed by the inquiry officer,
the respondent had prior knowledge of the letters given by the
customers, however, he did not choose to file the same along with his
explanation, and instead filed the same after the evidence was
recorded and hence, no weightage can be attached to the said letters.
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In the impugned order, the learned single Judge also did not find fault
with the said finding of the inquiry officer.
15. To strengthen the submissions advanced by him, learned
counsel for the appellants-Bank has placed reliance on the judgment
of the Hon’ble Supreme Court in State Bank of India v. Tarun
Kumar Banerjee.1 The relevant portion of the said judgment is
reproduced hereunder:
“A customer of the Bank need not be involved in a domestic
inquiry conducted as such a course would not be conducive
to a proper banker-customer relationship and, therefore,
would not be in the interest of the Bank. Further, when
money was secured a prudent banker would deposit the
same in the account of the customer complaining of loss of
money and, therefore, non-production of money also would
not be of much materiality. When in the course of the
domestic enquiry no reliance was placed on the so-called
confessional statement made by the first respondent, then
non-production of the same is also of no significance. Thus,
in our opinion, these circumstances are irrelevant and the
Tribunal could not have placed reliance on the same to
reach the conclusion it did and, therefore, the learned
Single Judge was justified in interfering with the same.”
1 (2000) 8 SCC 12
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16. In the above judgment, it is well settled that a customer of
Bank need not be involved in a domestic inquiry.
17. By applying the above ratio to the present case, it is to be held
that the contention of the respondent that the customers were not
examined as witnesses in the departmental inquiry is untenable.
18. As regards the aspect of not receiving any complaint from
customers against the respondent, the Appellate Authority has rightly
observed that the customers were not aware that the respondent had
collected excess amount from them, contrary to the guidelines of the
bank and therefore, naturally there would be no complaints from the
customers.
19. It is a well settled principle of law that this Court while
exercising the power of judicial review under Article 226 of the
Constitution of India, can only review the decision-making process for
ensuring fair treatment rather than the correctness of the conclusion,
and it cannot act as an appellate Court. In the cases of misconduct and
its inquiry, the Court/Tribunal should only assess whether a competent
authority conducted the inquiry by duly following the principles of
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natural justice and the decision was based on evidence. The strict rules
of the Evidence Act do not bind the disciplinary proceedings. The
Court/Tribunal, while exercising the power of judicial review, cannot
re-appreciate the evidence, but can intervene only if the disciplinary
proceedings are in violation the principles of natural justice or
statutory rules or if the findings are perverse or not supported by any
evidence.
20. Learned counsel for the appellants-Bank has relied on the
following judgments of the Hon’ble Supreme Court, wherein the
above principle of law was reiterated:-
(i) B.C. Chaturvedi v. Union of India, 2
(ii) Union of India v. G. Ganayutham, 3
(iii) State of NCT of Delhi v. Sanjeev,4
(iv) Om Kumar v. Union of India, 5
(v) State Bank of India v. Samarendra Kishore Endow, 6
(vi) Anil Kumar Upadhyay v. SSB, 7
2 (1995) 6 SCC 749
3 (1997) 7 SCC 463
4 (2005) 5 SCC 181
5 (2001) 2 SCC 386
6 (1994) 2 SCC 537
7 2022 SCC OnLine SC 478
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(vii) Lucknow Kshetriya Gramin Bank v. Rajendra Singh, 8
(viii) Canara Bank v. V.K. Awasthy,9
21. Learned Counsel for the appellants-Bank has also placed
reliance on the judgment of the Hon’ble Supreme Court in
Disciplinary Authority-cum-Regional Manager v. Nikunja Bihari
Patnaik,10 wherein it is held that acting beyond one’s authority
constitutes misconduct and is a breach of discipline within the
meaning of Regulations and further held that no proof of loss is
required to establish misconduct, although the case includes findings
that several advances and overdraws made by the respondent beyond
their authority have become irrecoverable.
22. Hence, applying the same to the instant case, though in the
charge sheet, the appellants have alleged that the acts of the
respondent have exposed the Bank to likely financial loss of huge
funds, proof of such loss is not required to be established for passing
the order of removal against the respondent when there is clear
misconduct on his part and breach of discipline.
8 (2013) 12 SCC 372
9 (2005) 6 SCC 321
10 (1996) 9 SCC 69
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23. Learned counsel for the appellants-Bank further submitted that
it is a settled principle of law that once an employer loses confidence
in the employee and though there is no actual financial loss to the
employer, the order of punishment shall be considered immune from
challenge, for the reason that discharging the office of trust and
confidence requires absolute integrity, and in the case of loss of
confidence, reinstatement of an employee cannot be directed. In
support of his submission, the learned counsel has relied upon the
following judgments of the Hon’ble Supreme Court:-
(ii) State Bank of Bikaner & Jaipur v. Nemi Chand Nalwaya, 12
24. With respect to the claim of the respondent that 32 years of
unblemished service rendered by him was not taken into account,
learned counsel for the appellants-Bank has contended that the gravity
11 (2012) 1 SCC 442
12 (2011) 4 SCC 584
13 (2005) 3 SCC 254
14 (2007) 1 SCC 222
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of allegations against the person concerned should be the determining
factor for placing a person under suspension and not the term/tenure
of his/her service in the organization or the remaining years of service.
In fact, the learned single Judge partly allowed WP.No.20347 of 2014
and modified the punishment of removal from service, only on the
ground that the disciplinary authority had not considered 32 years of
unblemished service rendered by the respondent and that differential
treatment was given between the respondent and other similarly
placed officers who were let off with minor punishments.
25. It is pertinent to note that in the instant case, as already stated
supra, disciplinary proceedings are conducted in accordance with the
Regulations of the appellants-Bank and in the enquiry, the charges
levelled against the respondent-employee that he debited amounts
from the accounts of the customers without their permission and
contrary to the Rules and Regulations of appellants-Bank and has
credited the said amounts to the accounts of his friends and family are
proved. Furthermore, in the light of the judgments of the Hon’ble
Apex Court cited supra, the gravity of allegations against the
employee is the determining factor for imposing punishment
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irrespective of length of service rendered by him/her. Thus, in the
light of the aforesaid judgments of the Hon’ble Apex Court and also in
view of the proven misconduct and breach of discipline on the part of
the respondent-employee, the order of the learned single Judge
modifying the punishment on the ground that the respondent-
employee has rendered 32 years of unblemished service cannot be
countenanced. As such, this Court is of the considered view that the
learned single Judge erred in modifying the punishment imposed by
the disciplinary authority to that stoppage of one increment with
cumulative effect. When the appellants-Bank lost confidence/trust in
the respondent-employee, in the face of proven misconduct on his part
in the disciplinary proceedings, it is not appropriate to continue the
employment of the respondent in the appellants-Bank.
26. With regard to gratuity payable to the respondent, the law is
well-settled that forfeiture of gratuity is not automatic on dismissal of
an employee from service. To reiterate the said principle, the learned
counsel for the respondent has relied on the judgment of the Hon’ble
Supreme Court in Union Bank of India v. C.G.Ajay Babu15. In the
15 (2018) 9 SCC 529
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light of the said judgment, this Court does not find any fault with the
findings of the Controlling Authority as well as the Appellate
Authority under the Payment of Gratuity Act, wherein it was ordered
for payment of gratuity to the respondent along with interest @ 10%
till the date of the order of the Controlling Authority. Further, in view
of the findings and observations of this Court as regards the
disciplinary proceedings stated supra, this Court is of the considered
view that the respondent is not entitled for the reliefs sought for in
W.A.No.541 of 2022 and accordingly, the same is liable to be
dismissed.
27. The appellants-Bank also failed to point out any illegality or
irregularity in the impugned order of the learned single Judge,
whereby the order passed by the appellate authority under Payment of
Gratuity Act was confirmed and therefore, W.A.No.689 of 2022 is
liable to be dismissed.
CONCLUSION:
28.. In view of the above discussion and having regard to the facts
and circumstances of the case and further, in the light of the settled
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principles of the Hon’ble Supreme Court in the aforesaid judgments,
this Court is of the considered view that the learned single Judge was
not justified in partly allowing W.P.No.20347 of 2014, by modifying
the punishment imposed on the respondent by the disciplinary
authority. Accordingly, the order passed in W.P.No.23047 of 2014 is
liable to be set aside and the punishment of ‘stoppage of one
increment with cumulative effect’ imposed on the respondent by the
learned single Judge is modified to that of ‘compulsory retirement
from service’.
29. In the result, Writ Appeal No.709 of 2022 is allowed and Writ
Appeal Nos.541 and 689 of 2022 are dismissed.
30. As a sequel, the miscellaneous applications pending, if any,
shall stand closed. There shall be no order as to costs.
______________________________
ABHINAND KUMAR SHAVILI, J
_________________________________
LAXMI NARAYANA ALISHETTY, J
Dated:21.02.2025
dr
