Dismissal for procedural irregularities without proven financial loss is grossly disproportionate and warrants a lesser penalty.

The original petitioner joined the respondent bank as a Clerk in 1952 and rose to the rank of General Manager.

In July 1993, two months prior to his retirement, he was served a charge-sheet alleging procedural lapses committed between 1986 and 1990 while serving as Chief Manager.

The charges involved failure to verify inflated stocks and lack of control over export packing credit (EPC) accounts.

While the inquiry officer found the petitioner guilty, there were no findings of misappropriation or actual financial loss to the bank.

Despite his retirement on 31.10.1993, he was continued in service for the proceedings and was dismissed on 06.05.1994.

After a series of litigations and a withdrawn writ petition to seek a sympathetic review, the Chairman and Managing Director (CMD) rejected his representation on 24.07.2003, citing the "financial impact" of the misconduct.

The petitioner’s legal heirs (LHs) continued the challenge after his death, seeking to set aside the "stigmatic" dismissal while waiving any monetary benefits.

Regulation 4 of the Central Bank of India Officer Employees (Discipline and Appeal) Regulations, 1976, which categorizes minor and major penalties, including reduction in pay [Reg 4(f)] and dismissal [Reg 4(j)].

The principle of proportionality in judicial review, which allows interference if a punishment is "shockingly disproportionate" or based on an erroneous factual premise.

The court found that the CMD had "flagrantly violated" the High Court’s previous direction to consider the petitioner's representation sympathetically.

The CMD’s conclusion regarding "financial impact" was deemed an "astonishing" lack of application of mind because the inquiry officer and disciplinary authority had explicitly noted that no financial loss was caused to the bank.

While acknowledging that bank officers must maintain high integrity, the court observed that the petitioner had 41 years of unblemished service.

Since the proven charges related only to procedural irregularities and the appellants had voluntarily forgone monetary claims, the court determined that the "economic and social death" of dismissal was disproportionate.

The court held that a non-stigmatic major penalty under Regulation 4(f) was more appropriate to the facts of the case.

The court directed the respondent bank to pass consequential orders reflecting this substitution, but held that the bank is not liable to pay any monetary benefits or arrears resulting from this reduction in punishment based on the appellants' undertaking.