Removal from service was disproportionate; compulsory retirement was substituted to preserve pensionary benefits.

The petitioner, a Fire Officer who had served the State Bank of India since 15 February 1992, was posted at the Bank’s Delhi office in 2007.

Following an anonymous email complaint alleging that he demanded illegal gratification from Bank vendors and received deposits in his personal account, the Bank initiated a preliminary investigation and issued a charge-sheet under Rules 67/68 of the State Bank of India Officers’ Service Rules, 1992, for violation of Rule 50(4).

Allegation No. 1 concerned eleven deposits totalling ₹75,000 allegedly made by Bank vendors; Allegation No. 2 concerned ten deposits totalling ₹1,78,000, allegedly beyond the petitioner’s known sources of income.

The Enquiry Officer held Allegation No. 1 not proved and Allegation No. 2 partly proved only in respect of four Jaipur transactions totalling ₹48,000.

The Appointing Authority nevertheless imposed removal from service under Rule 67(i) on 30 December 2011, and the Appellate Authority rejected the petitioner’s appeal on 4 April 2012, additionally referring to an earlier punishment imposed in 2007.

The petitioner challenged the disciplinary orders under Article 226 of the Constitution, seeking reinstatement, back wages and service benefits.

Whether the finding that Allegation No. 2 was partly proved in respect of four Jaipur transactions was liable to be interfered with in judicial review.

Whether the penalty of removal from service under Rule 67(i), on the basis of the misconduct ultimately found proved, was disproportionate.

Whether the petitioner’s prior punishment could be relied upon for determining the appropriate penalty without prior notice to him.

The Court applied the limited scope of judicial review over departmental enquiries under B.C. Chaturvedi v. Union of India, (1995) 6 SCC 749, and State Bank of India v. A.G.D. Reddy, 2023 SCC OnLine SC 1063: a writ court does not reappreciate evidence or substitute its own view, but may interfere where the enquiry violates natural justice or statutory rules, the finding is based on no evidence, or no reasonable person could have reached it.

On proportionality, the Court relied on B.C. Chaturvedi and Umesh Kumar Pahwa v. Board of Directors, Uttarakhand Gramin Bank, (2022) 4 SCC 385, holding that a penalty may be modified when it shocks the conscience of the Court.

Rule 67 of the 1992 Rules prescribes graded penalties, including compulsory retirement under Rule 67(h), removal under Rule 67(i), and dismissal under Rule 67(j).

Under State of Mysore v. K. Manche Gowda, AIR 1964 SC 506, Mohd. Yunus Khan v. State of U.P., (2010) 10 SCC 539, and Union of India v. Bishamber Das Dogra, (2009) 13 SCC 102, past conduct may be considered in imposing punishment only after the delinquent is given reasonable notice and an opportunity to meet it.

The Court declined to reassess the evidence supporting the four Jaipur deposits because the Enquiry Officer had relied on material including the signatures of different persons on the vouchers, the absence of a convincing explanation regarding the petitioner’s relatives, and the non-reflection of the amounts in his Assets and Liabilities Statements; the finding therefore was not perverse or unsupported by evidence.

However, the proved misconduct was materially narrower than the original allegations: Allegation No. 1 was entirely unproved, and Allegation No. 2 was proved only as to four of ten transactions, amounting to ₹48,000.

No financial loss to the Bank was alleged or established, and the petitioner had nearly twenty years of service, being only forty-five days short of qualifying for pension.

Removal, unlike compulsory retirement, extinguished his pensionary and terminal benefits.

The Court also found that the Appellate Authority had relied on the petitioner’s 2007 punishment without informing him that it would be considered in determining the present penalty, contrary to the principles in Manche Gowda and Mohd. Yunus Khan.

In light of the limited misconduct proved, the absence of financial loss, the petitioner’s length of service and the consequences of removal, the penalty was held shockingly disproportionate.

Removal was substituted with compulsory retirement under Rule 67(h), effective from the date on which the petitioner completed twenty years of service; the preceding period of approximately forty-five days was directed to be treated as leave without pay.

The petitioner was held entitled to the benefits flowing from compulsory retirement, including pension, gratuity and provident fund, in accordance with the applicable Rules.