High Court Reaffirms Limited Scope of Judicial Review in Bank Disciplinary Proceedings over Procedural Misconduct

The petitioner, a former Branch Manager at Central Madhya Pradesh Gramin Bank, was dismissed from service following a departmental enquiry into allegations of misconduct, including procedural deficiencies in loan sanctions.

This is the second round of litigation; previously, the High Court in W.P. No. 4930/2015 had directed the appellate authority to reconsider the matter.

On 10.03.2026, the appellate authority rejected the petitioner's appeal, affirming the dismissal.

The petitioner challenged this order under Article 226 of the Constitution, alleging lack of evidence, non-supply of documents, and proportionality of punishment.

1. Whether the High Court, in exercising judicial review under Article 226, can act as an appellate authority to reappreciate evidence in a departmental enquiry.

2. Whether the lack of actual financial loss and the alleged joint responsibility of a successor manager vitiate the finding of misconduct and the penalty of dismissal.

judicial review is confined to the decision-making process, not the merits of the decision.

State of Karnataka v. N. Gangraj (2020) and B.C. Chaturvedi v. Union of India (1995), establishing that courts cannot interfere with findings of fact unless they are perverse or based on "no evidence".

State Bank of India v. Ramesh Dinkar Punde (2006) and United Commercial Bank v. P.C. Kakkar (2003), the court emphasized that bank officers are held to higher standards of integrity, and acting beyond authority constitutes misconduct regardless of whether a financial loss occurred.

The court reasoned that since the departmental enquiry was conducted by a competent authority following the principles of natural justice and statutory rules, it lacked jurisdiction to re-examine the evidentiary weight of the charges.

The court noted that the petitioner failed to demonstrate any procedural illegality or perversity in the findings.

Regarding the petitioner's defense that no financial loss occurred, the court observed that in the banking sector, "absolute devotion, diligence, and integrity" are mandatory, and procedural lapses in loan sanctions undermine public confidence.

The court further determined that the choice of punishment (dismissal) is a discretionary power of the disciplinary authority and was not so disproportionate as to shock the conscience of the court.

The Court affirmed that misconduct by a bank official is not mitigated by the absence of monetary loss.

Consequently, the Writ Petition was dismissed, with the court finding no illegality or infirmity in the orders of the disciplinary and appellate authorities.