Removal from service is disproportionate where inquiry finds credential misuse without the employee’s knowledge.

The petitioner, an Assistant Manager of Tripura Gramin Bank, was posted at Manubazar Branch. He alleged that the then Branch Manager, Sri Chiranjit Goswami, had used the petitioner’s Finacle user ID and password to create and disburse irregular loans without proper documentation. The petitioner reported the alleged irregularities to the Bank by email dated 4 May 2023. The Bank thereafter issued a show-cause notice and, on 22 February 2024, framed ten articles of charge against him for negligence, failure to protect his credentials, and violation of the Bank’s service regulations

A departmental enquiry was conducted. The Enquiry Officer found Articles 1, 2, 3, 4 and 7 partially proved and Articles 5, 6, 8, 9 and 10 proved. However, the report also recorded that the petitioner’s user ID had been used without his knowledge, that no signatures of the petitioner appeared on the loan documents, and that the Branch Manager had admitted creating the loans

The Enquiry Officer ultimately concluded that the petitioner had negligently failed to protect the secrecy of his password, resulting in financial loss to the Bank.

The Disciplinary Authority imposed the major penalty of removal from service under Regulation 39(1)(b)(iv) of the Tripura Gramin Bank (Officers and Employees) Service Regulations, 2010. The petitioner’s departmental appeal was rejected on 27 March 2025. He consequently invoked Article 226 of the Constitution challenging both orders

The Court recognised that judicial review under Article 226 over disciplinary findings is limited and ordinarily does not extend to reappreciating evidence.

However, relying on M.V. Bijlani v. Union of India, (2006) 5 SCC 88, it held that disciplinary findings must be based on relevant material and a preponderance of probability; an Enquiry Officer cannot rely on surmises, ignore relevant evidence, shift the burden of proof, or enquire into matters not covered by the charges.

The Court also referred to Dakamuri Nethaji Arjun Kumar v. Central Bank of India, where failure to consider evidence of password misuse was treated as vitiating the disciplinary findings, and to the Supreme Court’s modification of the punishment in Central Bank of India v. Dakamuri Netaji Arjun Kumar.

Regulation 39 of the Tripura Gramin Bank Regulations authorises penalties for negligence or misconduct and prescribes removal from service as a major penalty, while requiring a written charge, enquiry, and reasonable opportunity of defence.

The Court found an internal inconsistency in the Enquiry Officer’s report. The report recorded that the petitioner’s user ID had been used without his knowledge, that there were no signatures of the petitioner on the loan documents, that the loan creation and verification occurred within unusually short intervals, that the user ID was accessed when the petitioner was absent, and that the Branch Manager had admitted creating the loans.

Despite these findings, the Enquiry Officer attributed negligence to the petitioner merely because he had failed to protect the secrecy of his password. The Court held that the Bank had not specifically established how the credentials were misused beyond the petitioner’s knowledge, nor adequately considered that he had reported the irregularities once they came to his notice.

Although the petitioner could not entirely escape responsibility for safeguarding his credentials, the Court considered removal from service excessive in view of the Enquiry Officer’s own finding that the loans were created by using the petitioner’s credentials without his knowledge.

The Disciplinary Authority, in imposing removal, failed to properly reconcile these findings and did not apply its mind to the mitigating circumstances. The punishment was therefore held to be too harsh and not commensurate with the proved misconduct.

It remanded the matter to the Chairman of Tripura Gramin Bank to reconsider the appropriate punishment in light of the Enquiry Officer’s report and the Court’s observations, after giving the petitioner a reasonable opportunity of hearing.

The Disciplinary Authority was directed to pass a fresh order under Regulation 39 within four months from the date of judgment.