Karnataka HC Sets Aside Gramin Bank Penalties Imposed Without Charge Sheets Or Inquiries, Orders Consequential Benefits For Three Retirees And A Widow

The petitioners, former employees of Karnataka Gramin Bank and the legal heirs of a deceased employee, challenged disciplinary orders imposing penalties including reduction to a lower stage in the pay scale and censure.

They contended that the Bank had imposed the penalties without issuing articles of charge or conducting an enquiry.

The Court considered the petitions together and noted a prior decision of the Karnataka High Court concerning a similar challenge to the Bank’s disciplinary procedure.

The Court proceeded under Articles 226 and 227 of the Constitution of India, invoked in the petitions.

It relied on Subbarao v. The Board of Directors and Appellate Authority, Karnataka Gramin Bank and Others, W.P. No. 201832/2023, decided on 21 July 2026, which held that comparable Bank orders were unsustainable due to procedural lapses and violation of the principles of natural justice.

The Court applied that precedent to the materially similar disciplinary orders before it.

The Court identified the petitioners’ central challenge as the Bank’s imposition of disciplinary penalties without articles of charge or an enquiry.

It found the disputes materially similar to the one decided in Subbarao, where comparable orders had been held procedurally defective and contrary to natural justice.

On that basis, it followed the coordinate Bench’s reasoning and set aside the impugned orders.

It directed the Bank to grant, pay, disburse or release all consequential benefits, including admissible interest as permissible in law, within three months of receiving a copy of the order.

No order was made as to costs.