Departmental removal for proved customer-fund misappropriation is not disproportionate despite criminal acquittal.

The petitioner, an Office Assistant at Haripur Branch, Uttar Bihar Gramin Bank, joined service on 7 April 2014.

Departmental proceedings were initiated after two customers alleged that, although the petitioner accepted deposits of ₹57,000 and ₹49,600 and issued counterfoils, the amounts were not credited to their savings accounts. The charge alleged misappropriation of ₹1,06,600 for personal gain.

In the departmental inquiry, the Bank relied on nine management exhibits and one management witness; the petitioner produced seven defence exhibits but no witness. The Enquiry Officer found the charge proved.

The petitioner was given the inquiry report and a second show-cause notice, submitted his explanation, and was thereafter removed from service by order dated 17 October 2023.

His departmental appeal was dismissed on 15 November 2023.

Separately, an FIR was registered under Sections 420 and 409 of the Indian Penal Code, and the petitioner was acquitted on 8 May 2023.

Whether the departmental proceedings and consequential punishment violated the principles of natural justice or suffered from procedural irregularity, particularly when the petitioner’s defence was allegedly not duly considered.

Whether the petitioner’s acquittal in the criminal case required the disciplinary proceedings and punishment to be set aside.

Whether removal from service was disproportionate or exorbitant in relation to the proved misconduct involving misappropriation of customers’ money.

The Court applied the principles of natural justice governing departmental inquiries, including the requirement that the delinquent employee receive the inquiry report and an opportunity to submit a representation before final punishment.

It also applied the principle that disciplinary proceedings and criminal prosecutions operate in distinct fields, and an acquittal in a criminal case does not, by itself, invalidate a departmental finding of misconduct.

The Court considered Regulation 39(2)(b)(v) of the Uttar Bihar Gramin Bank (Officers & Employees) Service Regulations, 2010, read with the 2013 Amendment Regulations, under which removal from service is not a disqualification for future employment.

On proportionality, it considered State Bank of India & Ors. v. Samarendra Kishore Endow & Ors., (1994) 2 SCC 537, which permits reconsideration of punishment where a lesser penalty may be appropriate, but distinguished that decision on its facts.

The Court found that the petitioner was afforded adequate procedural safeguards: the inquiry was conducted on the basis of management evidence, the petitioner produced defence exhibits, the inquiry report was supplied with a second show-cause notice on 4 September 2023, his explanation was submitted on 15 September 2023, and the final order followed on 17 October 2023.

Accordingly, there was no violation of natural justice or procedural irregularity.

The criminal acquittal did not displace the departmental finding because the disciplinary charge concerned service misconduct and was assessed on the material placed in the departmental inquiry.

As to proportionality, the Court treated the alleged withholding and subsequent deposit of customers’ money—after the charges were levelled—as serious financial misconduct.

It distinguished Samarendra Kishore Endow, where the irregularity concerned transportation of goods, and held that removal, particularly when not carrying a disqualification from future employment, was not exorbitant.

The writ petition was accordingly dismissed, and the disciplinary order dated 17 October 2023 and appellate order dated 15 November 2023 were left undisturbed.