Limited Judicial Review Sustains Discharge of Bank Employee for Misappropriation Despite Subsequent Repayment of Funds

The petitioner, joined as a Clerk in 1985 and later served as a Clerk-cum-Cashier at Punjab National Bank.

In 2008, he was charged with three counts of gross misconduct involving financial irregularities: failure to post a voucher of ₹15,000 resulting in a cash imbalance, a system discrepancy of ₹15,508 leading to alleged embezzlement, and a cash shortage of ₹83,650.

A departmental inquiry found the charges proved.

Consequently, on 04.07.2011, the Disciplinary Authority passed an order of discharge from service with superannuation benefits, which was upheld by the Appellate Authority on 16.02.2012.

The petitioner challenged these orders via a writ petition, primarily arguing that the amount was subsequently deposited and the punishment was disproportionate.

1. Whether the High Court, under Article 226, can reappreciate evidence in a departmental proceeding where the inquiry was conducted in accordance with the principles of natural justice?

2. Whether the punishment of discharge from service with superannuation benefits is shockingly disproportionate to the gravity of the misconduct involving bank funds?

The Court applied the restrictive scope of judicial review under Article 226 of the Constitution, relying on Union of India v. P. Gunasekaran (2015), which prohibits the High Court from acting as a second court of appeal or reappreciating evidence unless the findings are perverse or based on no evidence.

It further utilized the principles from Central Industrial Security Force v. Abrar Ali (2017) regarding the finality of facts in departmental inquiries.

Regarding the standard of conduct for bank employees, the Court relied on UCO Bank v. P.C. Kakkar (2003) and SBI v. S.N. Goyal (2008), establishing that bankers deal with public trust and even temporary misappropriation constitutes serious misconduct requiring severe punishment.

The Court observed that the petitioner did not fundamentally dispute the finding of misconduct but sought leniency.

Applying the Gunasekaran guidelines, the Court found no violation of natural justice or perversity in the inquiry officer's report.

The court reasoned that bank employees occupy a position of high trust, and any financial irregularity jeopardizes the bank’s interest.

It noted that the petitioner admitted to the cash imbalances and subsequent deposits, which confirmed the element of misconduct.

Regarding proportionality, the Court applied the "shocks the conscience" test from Director General, RPF v. Ch. Sai Babu (2003), concluding that the Disciplinary Authority had already exercised leniency by granting superannuation benefits despite the gravity of the embezzlement charges.

The Court affirmed that the punishment was not disproportionate given the loss of confidence in a bank employee handling public money.

The writ petition was dismissed, and the orders dated 04.07.2011 and 16.02.2012 were upheld.