Removal from bank service for gross misconduct warrants superannuation benefits under Clause 6(b) of Bipartite Settlement.

In brief

The question

1. Whether the departmental inquiry was conducted by a competent authority and followed the principles of natural justice regarding the production of documents and cross-examination

The court held

The Court upheld the findings of the inquiry, confirming that the charges of gross misconduct were proved

It also directed

The Court remanded the matter to the Respondent-Bank to pass a fresh order specifically on the nature of punishment, taking into account Clause 6(b) of the Bipartite Settlement and the Vijay Kumar Handa precedent regarding superannuation benefits

The writ petition was disposed of accordingly

01Facts

The petitioner, a Manager at UCO Bank’s Ghaziabad Branch, was charged on 29.03.2005 with issuing and extending a fraudulent Bank Guarantee (BG) of ₹47.00 Lacs in favor of U.P. Jal Nigam without following bank procedures or maintaining records

¶ 2

Parallel criminal proceedings were also initiated

¶ 3

An inquiry was conducted by an Ex-Scale-IV Officer, which the petitioner allegedly delayed through multiple medical adjournments

¶ 5, 15

The Enquiry Authority found the charges proved, concluding the petitioner acted beyond his authority and caused financial risk/loss

¶ 13

Consequently, the Disciplinary Authority (DA) passed an order dated 22.03.2007 removing the petitioner from service

¶ 15

This was upheld by the Appellate and Reviewing Authorities. The petitioner challenged these orders primarily on grounds of procedural irregularity and lack of original documents

¶ 16, 17

02Issues

i.1. Whether the departmental inquiry was conducted by a competent authority and followed the principles of natural justice regarding the production of documents and cross-examination

¶ 11, 24, 27

ii.2. Whether the findings of misconduct were based on sufficient evidence in the absence of original Bank Guarantee bonds

¶ 31(B)

iii.3. Whether the punishment of removal from service was in violation of the Bipartite Settlement regarding superannuation benefits

¶ 40, 41

03Law Applied

The court applied the scope of judicial review under Article 226 as defined in Union of India v. P. Gunasekaran, which limits the High Court's intervention to procedural errors, competence, or "no evidence" cases

¶ 22

It relied on Disciplinary Authority-cum-Regional Manager v. Nikunja Bihari Patnaik to establish that acting beyond authority in a bank constitutes misconduct regardless of actual loss

¶ 13, 15

Regarding the penalty, the court applied Clause 6(b) of the Bipartite Settlement dated 10.04.2002 and the Supreme Court’s interpretation in UCO Bank v. Vijay Kumar Handa (2025 INSC 442), which mandates that removal for gross misconduct may include superannuation benefits if the employee is otherwise eligible

¶ 41, 43

Provisions in the judgment · 6 · Linked ones open on LawLens

Indian Penal Code, 1860 Section 21 Section 409 Section 420 Section 467 Section 468 Section 471

04Reasoning

The Court first held the inquiry was competent under Regulation 6(2) of the 1976 Regulations as the DA can appoint any public servant (including retired officers) as Enquiry Authority

¶ 25-26

It rejected the plea of natural justice violation, noting that the petitioner was granted numerous opportunities to cross-examine witnesses but failed to do so, thus waiving his right

¶ 11, 29

The Court observed that in disciplinary proceedings, charges are proved on a "preponderance of probability"; the absence of original documents did not invalidate the case as secondary evidence and witness testimonies (MW-1 to MW-3) sufficiently linked the petitioner’s signature to the "Fake BG"

¶ 31(B), 32-33

However, the Court found merit in the argument regarding the nature of the punishment. It noted that the DA failed to consider the Bipartite Settlement which allows for removal "with superannuation benefits"

¶ 44