Dismissal for loan irregularities was disproportionate where superior authorities had ratified the sanctioned loans.

The petitioner, appointed as a Probationary Clerk in the respondent Bank on 8 December 1982, was subsequently promoted and served as Branch Manager at various branches, including Goa, Jadavpur and Bhowanipore.

He had received letters of appreciation for maintaining a “Nil NPA status” at the Goa branch.

Following an internal inspection report concerning irregularities in 36 loans sanctioned during his tenure, the Bank initiated disciplinary proceedings.

The petitioner was charge-sheeted, subjected to an enquiry, found guilty by the Enquiry Officer, and dismissed from service on 6 July 2007.

A further penalty involving forfeiture of provident fund dues was imposed, and his appeal was dismissed on 13 November 2007.

During the writ proceedings, the Bank admitted that no criminal case had been initiated in respect of the alleged irregularities.

The Court consequently directed the Bank to disclose the authorities who had ratified the 36 loans and whether those authorities had also been proceeded against.

The Bank reported that the relevant Zonal Office authority, B. N. Sathish, had ratified the loan proposals and had been subjected only to minor-penalty proceedings; in his reply, he admitted the ratification and referred to procedural lapses.

The Court found that the loans sanctioned by the petitioner had been duly ratified by the Zonal Office.

Whether the High Court, exercising judicial review under Article 226 of the Constitution, could interfere with the disciplinary proceedings, findings and punishment imposed upon the petitioner without re-appreciating evidence as an appellate court.

Whether dismissal from service was proportionate to the petitioner’s misconduct when the loans in question had subsequently been ratified by the superior authorities of the Bank.

Whether the punishment ought to be modified in the interests of justice.

In disciplinary proceedings, the applicable standard is preponderance of probabilities and not proof beyond reasonable doubt; technical rules of evidence do not strictly apply, provided there is some material on record on which a reasonable person could conclude that misconduct was committed, as held in High Court of Judicature at Bombay v. Uday Singh, (1997) 5 SCC 129.

The High Court exercising writ jurisdiction ordinarily cannot act as an appellate authority or re-appreciate evidence in disciplinary proceedings, as reaffirmed in Director General of Police, Railway Protection Force v. Rajendra Kumar Dubey, 2021 (14) SCC 735.

The Court also referred to State of Bihar v. Phulpari Kumari, (2020) 2 SCC 130, and Allahabad Bank v. Krishna Narayan Tiwari, (2017) 2 SCC 308, concerning the limited scope of review of disciplinary findings.

Further, relying on John D’Suza v. Karnataka State Road Transport Corporation, AIR ONLINE 2019 SC 1202, the Court reiterated that the legality and propriety of a domestic enquiry must first be assessed before permitting or undertaking any further evidentiary exercise, and that the domestic enquiry standard remains preponderance of probabilities.

The punishment imposed in disciplinary matters must also bear a reasonable and proportionate relationship to the misconduct established.

Although the Court acknowledged the limited scope of judicial review and the rule against re-appreciating disciplinary evidence, it considered the Bank’s own report concerning ratification of the 36 loans to be a material circumstance.

The loans alleged to have been irregularly sanctioned by the petitioner had been ratified by the Zonal Office, and the ratifying authority had admitted both the ratification and the existence of procedural lapses.

In that context, the Court held that dismissal was disproportionate to the charges, particularly since the superior authorities had approved or ratified the transactions.

The Court further characterised the imposition of the penalty, in the circumstances disclosed, as inconsistent with natural justice and an abuse of the process of law.

Balancing the established procedural irregularities against the mitigating circumstance of ratification, the Court substituted dismissal with compulsory retirement.

The writ petition was allowed.

The Bank was directed to pay all outstanding dues and entitlements of the petitioner within three months from the date of the judgment.