Supreme Court Restores Disciplinary Findings Against Bank Manager but Reduces Dismissal to Minor Penalty

A bench of Justices Abhay S. Oka and Augustine George Masih heard an appeal by Syndicate Bank challenging a High Court order which had set aside departmental orders of dismissal and ordered reinstatement of a former branch manager. The appeal questioned whether the High Court erred in interfering with the findings of a disciplinary inquiry that had held the employee guilty of misappropriation and irregularities while serving as branch manager of the Mudigubba branch.

The Court allowed the appeal in part, restored the disciplinary finding that misconduct was proved, but found the penalty of dismissal disproportionate and modified it to a minor penalty. The Court held that an acquittal in criminal proceedings did not automatically exonerate the delinquent in disciplinary proceedings and reiterated the limited scope of judicial review in disciplinary matters. The Court, in its reasoning, observed: “12. Judicial review is not an appeal from a decision but a review of the manner in which the decision is made. Power of judicial review is meant to ensure that the individual receives fair treatment and not to ensure that the conclusion which the authority reaches is necessarily correct in the eye of the court. When an inquiry is conducted on charges of misconduct by a public servant, the Court/Tribunal is concerned to determine whether the inquiry was held by a competent officer or whether rules of natural justice are complied with. Whether the findings or conclusions are based on some evidence, the authority entrusted with the power to hold inquiry has jurisdiction, power and authority to reach a finding of fact or conclusion. But that finding must be based on some evidence. Neither the technical rules of Evidence Act nor of proof of fact or evidence as defined therein, apply to disciplinary proceeding. When the authority accepts that evidence and conclusion receives support therefrom, the disciplinary authority is entitled to hold that the delinquent officer is guilty of the charge. The Court/Tribunal in its power of judicial review does not act as appellate authority to reappreciate the evidence and to arrive at its own independent findings on the evidence. The Court/Tribunal may interfere where the authority held the proceedings against the delinquent officer in a manner inconsistent with the rules of natural justice or in violation of statutory rules prescribing the mode of inquiry or where the conclusion or finding reached by the disciplinary authority is based on no evidence. If the conclusion or finding be such as no reasonable person would have ever reached, the Court/Tribunal may interfere with the conclusion or the finding, and mould the relief so as to make it appropriate to the facts of each case.” The Court also observed that “the penalty of dismissal was disproportionate to the misconduct established against the respondent and his unblemished career for a long time.”

Background The respondent joined Syndicate Bank in 1985 and served without blemish until his tenure as branch manager at Mudigubba between 11 June 2007 and 3 November 2008. Vigilance inquiries alleged that he made fictitious debits to crop insurance accounts, credited amounts to SKCC accounts without borrowers' knowledge, sanctioned an irregular vehicle loan, and misappropriated branch receipts, causing alleged financial irregularities aggregating around ₹1,10,000 and excess payments to certain customers. An Investigating Officer submitted a report on 2 December 2010 and the Bank issued a charge sheet on 17 October 2011. A departmental inquiry produced 95 documents and testimony; the inquiry officer held the charges proved and, on 3 May 2012, the Disciplinary Authority dismissed the respondent from service. The Appellate Authority confirmed that order on 30 March 2013.

The respondent was acquitted in related criminal proceedings and sought relief before the High Court. A Single Judge on 15 June 2022 set aside the dismissal on grounds including breach of natural justice and no evidence; a Division Bench dismissed the Bank’s writ appeal, treating it as a case of no evidence. On appeal to the Supreme Court, the Bank contended that the respondent had admitted many transactions, documentary evidence supported the inquiry, and the High Court improperly reappreciated evidence. The respondent argued that losses were recovered, earlier supervisory advice precluded subsequent disciplinary action, and the inquiry suffered from lack of evidence.

The Supreme Court found that the disciplinary inquiry complied with principles of natural justice, that the respondent had accepted several imputations and the documentary record and cross-examination demonstrated some evidence to support the disciplinary findings. While restoring the finding of misconduct, the Court held dismissal disproportionate and substituted a minor penalty under Regulation 4(e) of the Syndicate Bank Officer Employees (Discipline and Appeal) Regulations, 1976 — reducing the respondent one stage in the time scale of pay for one year, without cumulative effect and not affecting pension — and directed restoration/payment of retiral dues within four months.

Case Details: Case No.: Civil Appeal No. 6327 of 2024 (2025 INSC 89) Case Title: The General Manager Personnel, Syndicate Bank & Ors v. B S N Prasad Appearances: For the Petitioner(s): [Not indicated in judgment] For the Respondent(s): [Not indicated in judgment]