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2025 Supreme(SC) 1231

SUPREME COURT OF INDIA
RAJESH BINDAL, MANMOHAN, JJ.
State Bank of India & Others – Appellants
Versus
Ramadhar Sao – Respondent
Civil Appeal No. 10680 of 2025 (Arising out of S.L.P.(C)No.6722 of 2023)
Decided On : 20-08-2025

Advocates appeared:
For the Appellant(s) : Mr. Sanjay Kapur, AOR Mr. Surya Prakash, Adv. Ms. Shubhra Kapur, Adv. Ms. Mahima Kapur, Adv. Ms. Akankasha Bhatia, Adv. Mr. Annu Mishra, Adv.
For the Respondent(s): Mr. Devashish Bharuka, Sr. Adv. Ms. Rita Jha, AOR Ms. Sarvshree, Adv.

Headnote:(A) The Banking Regulation Act, 1949 - Judicial review in disciplinary proceedings - Principles of natural justice not violated; Inquiry Officer's findings based on evidence; Disciplinary Authority's acceptance of report without elaborate reasons permitted. (Paras 11.4, 14.1, 14.3)

(B) Employment Law - Disciplinary Authority retains discretion to impose punishment; judicial review limited to procedural compliance and manifest injustice. (Paras 13, 14)

(C) Employment Rights - Class IV employees can be held liable for misconduct if evidence supports involvement in fraudulent activities. (Para 14.2)

Facts of the case:
Respondent, a bank messenger since 1997, was found guilty of facilitating loan fraud, leading to dismissal later reduced to removal from service. The High Court upheld the Single Bench's order for reinstatement with back wages, prompting the bank's appeal.

Findings of Court:
The procedural requirements were met; sufficient evidence supported misconduct; the orders of the High Court challenged were unsustainable.

Issues: The key issue was whether the punishment imposed was justified and whether the respondent's role warranted such action.

Ratio Decidendi: The Court emphasized the limited scope of judicial interference in disciplinary matters, affirming the need for proper procedure but allowing the Disciplinary Authority its discretion in imposing penalties based on substantial evidence.

Result: Appeal allowed, order of removal from service restored.

Table of Content
1. appeal challenged high court's judgment (Para 1 , 2)
2. background of disciplinary proceedings (Para 3 , 4 , 5)
3. arguments supporting the bank's appeal (Para 6)
4. response from the respondent's counsel (Para 7)
5. court's initial consideration of the facts (Para 8)
6. details of show cause notice and charges (Para 9 , 10)
7. evidence presented during the inquiry (Para 11)
8. single bench's reasoning on disciplinary proceedings (Para 12)
9. judicial review principles and findings (Para 13 , 14)
10. court restores appellate authority's order (Para 15)
11. conclusion and final order issued (Para 16 , 17)

JUDGMENT :

Rajesh Bindal, J.

1. The present appeal has been filed by the appellants1.[For short, ‘the Bank’] aggrieved by the judgment of the Division Bench of the High Court2[High Court of Judicature at Patna] in appeal3[LPA No.1283 of 2018] filed by them. By the impugned judgment intra-court appeal filed by the Bank was dismissed against the order4[Dated 16.05.2018 in C.W.J.C. No.3594 of 2013] passed by the Single Bench of the High Court.

2. The respondent had approached the High Court by filing writ petition5[C.W.J.C. No.3594 of 2013] challenging order dated 07.12.2012 passed in statutory appeal filed by him before the Appellate Authority, by which his punishment was reduced from ‘dismissal’ to ‘removal from service’ with superannuation benefits.

3. Briefly the facts available on record are that the respondent joined the Bank as a messenger in the year 1997. In April 2008, complaints were received against the respondent for taking bribe for coordination in sanction of loans. Vide notice dated 15.11.2008, the Bank called upon the respondent to explain his absence from duty and that he had been executing some loan documents at his residence and bank branch as well.

4. Not being satisfied with the reply of the respondent, the Bank issued a formal Memo of Charge to the respondent on 05.01.2010 regarding allegation of his being a conduit for getting the loans sanctioned and taking illegal gratification. The respondent, on 12.02.2010, submitted his reply to the chargesheet. On 10.03.2010, the Disciplinary Authority appointed inquiry officer to enquire into the truthfulness of the allegations made against the respondent. On 04.10.2010, the Inquiry Officer submitted his report by holding the respondent guilty of acting as a middleman for sanction and disbursement of loans at the branch by taking illegal gratification and his unauthorized absence from duty from 20.04.2008 to 25.04.2008 was also proved. Copy of the report was supplied to the respondent and show cause notice was issued on 29.12.2010, before imposition of penalty. He appeared before the Disciplinary Authority on 08.01.2011 claimed innocence and sought forgiveness for any mistake committed.

5. Vide order dated 08.01.2011, accepting the report of the Inquiry Officer, punishment of ‘dismissal from service’ was imposed upon the respondent. Aggrieved against the same, the respondent preferred statutory appeal. Taking a compassionate view, the Appellate Authority vide order dated 07.12.2012, reduced the penalty from ‘dismissal’ to ‘removal from service’ with superannuation benefits. Still not satisfied with the order of the Appellate Authority, the respondent preferred writ petition6[C.W.J.C. No.3594 of 2013] before the High Court. The same was allowed by the Single Bench. The order of punishment was set aside and the respondent was directed to be reinstated with back wages. The Single Bench also granted liberty to initiate fresh proceeding against the petitioner therein including all other persons involved in the said misconduct. Aggrieved against the order passed by the Single Bench, the Bank preferred intra-court appeal7[L.P.A. No.1283 of 2018] which was dismissed8[Dated 14.12.2022] by the Division Bench of the High Court. Aggrieved against the same, the present appeal has been filed before this Court.

6. Learned counsel for the appellants submitted that the Division Be

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