Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2018 Supreme(Online)(P&H) 569

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Sandeep Moudgil, J
Lovleen Sethi – Appellant
Versus
State Bank of India – Respondent
CWP-38123-2018

Advocates:
For the Appellants/Petitioners: Sangeeta Dhanda, Anirudh Dhanda
For the Respondents: Madhu Dayal

The withdrawal of a duly granted promotion without issuing a show-cause notice or granting an opportunity of hearing constitutes a violation of the principles of natural justice and Article 14, rendering the action arbitrary and unsustainable, especially when such withdrawal entails civil consequences like reduction in pay and status.

Headnote:(A) Constitution of India - Art. 226 - Promotion - Withdrawal of promotion - Natural Justice - Petitioner was promoted to MMGS-III after rigorous selection process - Later, Bank withdrew promotion alleging non-fulfillment of mandatory rural posting, citing log-in records - No show-cause notice or opportunity of hearing provided before taking adverse action having civil consequences - Held, action is arbitrary and violates principles of natural justice and Article 14. (Paras 10, 11, 16, 20)

(B) Service Law - Reduction in rank - Punitive action - Withdrawal of promotion after successful appointment, causing financial and reputational loss, functions as a penalty - Principles of natural justice including show-cause notice and inquiry are mandatory before such reduction. (Paras 13, 15, 20)

Facts of the case:
Petitioner, selected as Probationary Officer and later promoted to JMGS-I and MMGS-II, was further promoted to MMGS-III in 2017 after clearing competitive selection. Respondents later withdrew the promotion retrospectively, claiming mandatory rural posting condition was not met due to working at urban RBO, and initiated recovery of salary. The petitioner denied these claims, asserting the posting was official per management instructions.

Findings of Court:
The Court found no evidence of fraud and determined that the Bank had verified eligibility during the promotion process. The withdrawal of promotion without prior notice or hearing violated constitutional guarantees of fairness and natural justice.

Issues: Whether the unilateral withdrawal of a promotion without notice or enquiry for alleged non-fulfillment of eligibility criteria violates the principles of natural justice under Article 14.

Ratio Decidendi: Even in the absence of explicit statutory requirements, the principles of natural justice must be observed when an administrative action entails severe civil consequences or loss of a vested right, such as demotion or withdrawal of promotion.

Result: Petition allowed; impugned orders quashed with directions to restore promotion and release consequential benefits with 9% interest.

Table of Content
1. summary of grievances and brief factual background of the dispute. (Para 1 , 2)
2. contentions regarding mandatory rural posting eligibility and evidence of performance. (Para 3 , 4 , 5 , 6 , 7)
3. judicial scrutiny of the arbitrariness in rescinding promotion without due process. (Para 8 , 9 , 10 , 11 , 12)
4. application of natural justice principles to punitive service actions. (Para 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20)
5. rejection of fraud allegations due to lack of evidence and established procedural failure. (Para 21 , 22 , 23 , 24)
6. final relief granted for restoration of rank and consequential benefits. (Para 25 , 26 , 27)

Sandeep Moudgil, J.

(1). The jurisdiction of this Court has been invoked under Article 226 of the Constitution of India, inter alia, for issuing a writ of certiorari for quashing the orders dated 12.12.2018 (Annexure P5), 17.12.2018 (Annexure P6), 18.12.2018 (Annexure P7) and 04.12.2018 (Annexure P7A) vide which promotion granted to him has been ordered to be withdrawn besides recovery of perquisites and allowances. He seeks a direction restraining the respondents from effecting recovery and to continue paying full salary to the petitioner. Also, a direction is sought to the respondents to promote the petitioner as per promotion policy dated 04.04.2014 (Annexure P1) from the date of his eligibility taking into consideration the fact that the similarly situated and batchmate officers of the petitioner have already been promoted as such.

(2). Brief facts of the case are that the petitioner was selected and appointed as a Probationary Officer in the Respondent Bank on 30.04.2012. Upon successful completion of two years of service, the petitioner was confirmed as Junior Management Grade Scale-I (JMGS-I) on 30.04.2014. Meanwhile, the respondent bank issued a promotion policy on 04.04.2014 (Annexure P1). The petitioner qualified the All India level in-house competitive examination and was promoted as Deputy Manager in Middle Management Grade Scale-II (MMGS-II) on 22.08.2014. Subsequently, on 28.03.2015, the petitioner was posted as Field Officer at Tosham Road Dabra Branch, District Hissar, to fulfill the mandatory rural posting requirement for further promotion. After a rigorous selection process, the petitioner was promoted as MMGS-III on 10.10.2017 with effect from 31.07.2017, in accordance with Rule 17 of the State Bank of India Officers' Service Rules . On 13.06.2018, the Regional Manager notified the Head Office that the petitioner had been verbally assigned duties at RBO for promotion, business, marketing, and cross selling. However, while working at the branch on 17.12.2018, the petitioner came across an email sent by respondent No.5, copy-marked to respondent No.4, confirming compliance of the order dated 12.12.2018 that withdrew the petitioner’s promotion with effect from 31.07.2017. This was followed by another email on 18.12.2018 from the controlling office, instructing recovery of an amount from the petitioner’s account as a consequence of the withdrawn promotion order. The petitioner also received, on 24.12.2018, a letter dated 04.12.2018 from respondent no.2, stating that a competent authority had decided to withdraw his promotion to MMGS-III on the ground that the Officer was not entitled for promotion to OMMGS-III as he had not completed the mandatory rural assignment for being eligible for the said promotion and as such, the excess salary amounting to Rs.2,05,636.44 has been ordered to be recovered. Hence this writ petition.

(3). Ms. Madhu Dayal, Advocate appearing on behalf of respondent Bank has filed a comprehensive written running into more than 400 pages containing the details of login report to demonstrate that the promotion to Middle Management Grade Scale III (MMGS-III) is governed by a promotion policy dated 04.04.2014, which expressly requires every candidate to complete at least two years of service in rural or semi-urban branches, in addition to satisfactor

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2018 Supreme(Online)(P&H) 569

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARHSandeep Moudgil, JLovleen Sethi – AppellantVersusState Bank of India – RespondentCWP-38123-2018

Cases Referred (5)

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Sandeep Moudgil, J
Lovleen Sethi – Appellant
Versus
State Bank of India – Respondent
CWP-38123-2018