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2025 Supreme(Kar) 2007

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
JAYANT BANERJI, UMESH M.ADIGA, JJ.
Canara Bank (E-Syndicate Bank) Rep. by its Assistant General Manager Shashidhar Aithal – Appellant
Versus
The General Secretary, Dharwad District Bank, Employees Association – Respondent 
Writ Petition No. 51262 of 2019
Decided On : 08-12-2025

Advocates Appeared:
For the Appellant : T.P. Muthanna
For the Respondent: Veda Murthy M.V.

The employer failed to prove misconduct in disciplinary proceedings, thus affirming the Labour Court’s ruling on insufficient evidence and breach of natural justice.

Headnote:(A) Constitution of India - Articles 226 and 227 - Industrial Disputes Act, 1947 - Section 10 - Legality of reference and disciplinary proceedings challenged - Employee of Bank committed forgery to obtain housing loan but was not provided adequate opportunity during proceedings - Labour Court ruled inquiries were not fair and awarded compensation to employee. (Paras 14, 16, 29)

(B) Principles of Natural Justice - Employer must follow proper procedures to ensure fairness - Failure to prove misconduct by the employer led to the Labour Court’s decision to compensate employee. (Paras 18, 22, 26)

Facts of the case:
Employee was accused of forgery to obtain additional loan installments, but he claimed procedures were not properly followed during disciplinary actions against him.

Findings of Court:
Bank failed to prove the misconduct allegations against the employee.

Issues: The core issue was the fairness of the disciplinary inquiry conducted against the employee and whether proper principles of natural justice were observed.

Ratio Decidendi: The court found that the Bank did not sufficiently prove the charges of misconduct, affirming the Labour Court’s decision regarding the unfairness of proceedings.

Result: Writ petition dismissed.

Table of Content
1. employee committed alleged forgery to secure loan installments. (Para 2 , 3 , 4)
2. disciplinary proceedings against the employee questioned for lack of fairness. (Para 9 , 10 , 12)
3. labour court found insufficient evidence to substantiate fraud claims against the employee. (Para 13 , 25 , 26)
4. court emphasized the importance of due process in disciplinary inquiries. (Para 18 , 22 , 29)

JUDGMENT :

UMESH M. ADIGA, J.

1. This writ petition is filed under Article 226 and 227 of Constitution of India by the second party-employer, calling in question the correctness of the judgment and award dated 26.07.2019, passed by the Central Government Industrial Tribunal-cum-Labour Court, Bengaluru (for short, `Labour Court'), in case No.CR.131/2007, seeking for the following reliefs :-

"(a) Call for records in C.R.No.131 of 2007 from the Central Government Industrial Tribunal-cum-Labour Court, Bengaluru.

(b) declare that the Reference made by the Central Government in Reference in C.R.No.131 of 2007 to the Central Government Industrial Tribunal-cum-Labour Court, Bengaluru, is illegal, without jurisdiction and contrary to the provisions of Section 10 of the Industrial Disputes Act, 1947 and the proceedings pursuant to such reference are null and void.

(c) issue a writ of certiorari or any other appropriate writ, order or direction and quash the Award dated 26.07.2019 in C.R.No.131 of 2007 passed by the Central Government Industrial Tribunal-cum-Labour Court, Bengaluru, and produced as Annexure-`A' and grant such other and further reliefs deemed fit under the circumstances."

2. The brief facts of the case as per the materials available on record are that, one H.S. Chandrasekhar Pandit (hereafter referred to as `an employee'), was working as a Clerk in Syndicate Bank, Basarikatte Branch, Shivamogga, at the time of incident. He is a member of the first party, i.e., Labour Union. The said employee availed a housing loan at a concessional rate admissible to an employee of the Bank, for purchasing a site, as well as putting up construction thereon. The said loan was granted according to the terms and conditions of the agreement and it was also agreed between the employee and the Bank that the amount would be released in stages based on the progress of the house construction made by the employee.

3. It is the further case of the Bank that the employee purchased the site and amount of the said site was directly paid to the owner of the land. As per the terms of the agreement, the employee had to furnish a certificate from the concerned Civil Engineer regarding progress in the construction. The employee obtained forged and fabricated certificate of a Civil Engineer-cum- Contractor and he had also forged the signature of Manager of Syndicate Bank, Hindupura Branch, stating regarding progress in the construction of the said building and with the help of the said forged documents, from time to time, availed installments of the said loan amount. But in fact, he had not constructed the building above the plinth level.

4. The second party-Bank came to know that the said documents were forged and falsely created just to avail additional loan/instalments. On enquiry with the employee, he confessed his guilt and admitted that he had created the said documents to get the installment of the loan amount and he has also stated that he utilized the said amount of loan for performing marriage of his sister who was depending upon him.

5. The said act of an employee was a grave misconduct and hence, the Bank proceeded to initiate a disciplinary enquiry against the employee. The Bank had issued charge sheet dated 28.12.1990, calling upon the employee to furnish explanation. It is stated that the employee did not file any counter or explanation to the articles of charge supplied to him. Thereafter, Bank decided to hold a disciplinary enquiry and appointed an Enquiry Officer.

6. The Enquiry Officer held enquiry and recorded the evidence of witnesses on behalf o

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