Dismissal For Serious Financial Irregularities ; Terminal Benefits Can't Be Granted : Telangana High Court

Background Facts

The appellant (employee) was working as a Manager with the Bank (respondent). The disciplinary proceedings were initiated against him in respect of 16 charges relating to his tenure as Branch Manager of the Mahabubabad and Kothaguda Branches. Therefore, he was dismissed from service.

The allegations were that amounts under the crop loan incentive scheme was not credited directly to the accounts of beneficiaries, but it was credited to a parking account. Later it was transferred to a sundry deposit account and withdrawn in cash on different dates. In the inquiry, 10 charges were proved, 3 were partially proved, and 3 were not proved.

The dismissal order was upheld in appeal and revision. The employee challenged the dismissal, appellate, and revisional orders before the Single Judge. The employee argued that the inquiry had not been properly conducted. He also sought return of the documents pledged for a house loan on the ground that the loan had been fully repaid and the account stands closed.

The Bank supported the disciplinary proceedings. It was argued by the Bank that the employee had misused his position as a Scale-II Manager by diverting funds meant for beneficiaries and withdrawing it in cash, which caused loss to the Bank.

The Single Bench held that the punishment of dismissal was proportionate with the gravity of the charges proved. Aggrieved by the same, both parties filed Writ Appeals before the Telangana High Court.

It was argued by the employee that the appeal and the review application were rejected with total bias against him. It was submitted that there were no complaints either in writing or oral against the employee. There were no irregularities observed by the internal audit and statutory audit of the records of the Branch.

It was further contended that 4 charges were held as not proved and 3 charges as partially proved. It was argued that service jurisprudence on disciplinary matters does not provide for charges being partially proved. It was also contended that employee did not violate any specific rule which was indicated in the charge sheet.

On the other hand, it was argued by the Bank that the employee misused his official position and committed several irregularities like misappropriation of funds held in parking account and sundry deposit account, unauthorised cash withdrawals, and issuance of DDs in favour of totally unrelated parties

It was further contended that the employee was having more than 30 years of experience in the banking sector as on the date of the issuance of the charge-sheet. It was argued that the employee indulged in a series of serious violations with an attempt to derive pecuniary advantage to himself, therefore his continuance in the Bank would pose a severe threat to the reputation of the Bank and also to the public interest.

Findings and Observations of the Court

It was observed by the Division Bench that the employee was afforded adequate opportunity to participate in the inquiry and to defend himself against each of the charges. The employee had not been able to demonstrate any material illegality, procedural irregularity, or violation of the principles of natural justice which would warrant interference with the findings recorded by the disciplinary authority, appellate authority, or revisional authority.

It was further observed by the Bench that certain charges were held not proved and others only partially proved but it does not detract from the fact that 10 charges were held fully proved on the basis of the material available.

It was further observed by the Division Bench that and an acquittal in a criminal case does not by itself entitle an employee to exoneration in departmental proceedings, particularly where the evidence and documents in the two proceedings are not identical. It was held that criminal proceedings and departmental proceedings operate in different fields and serve different objectives.

It was held that employee was a senior banking official with more than 30 years of experience, and he was found to have misused his official position and committed serious financial irregularities which caused loss to the Bank, therefore, the punishment of dismissal cannot be said to be disproportionate or to shock the conscience of the Court.

It was further held that termination of the employee along with terminal benefits cannot go together as it would amount to rewarding misconduct. With the aforesaid observations, Writ Appeal filed by the employee was dismissed by the Division Bench.

Further, the order of the Single Judge granting terminal benefits to the employee was set aside, while the dismissal from service was upheld. Consequently, the Writ Appeal filed by the Bank was allowed by the Division Bench.

Counsel for the Appellant : V.V.S Gupta

Counsel for the Respondents : Chairman and Managing Director, Corporate Office, Avvai Shanmugam Salai, Royapettah