'Shockingly Disproportionate': Allahabad HC Quashes ₹2.14 Cr Recovery From Employee; Says No Finding Of Financial Loss Or Personal Gain
Upasna Agrawal
11 April 2026 2:30 PM IST
Recently, the Allahabad High Court observed that punishment of recovery of Rs. 214.87 lacs from a delinquent employee was “shockingly disproportionate” when there were no findings regarding any financial loss suffered by the department or any monetary gain by the employee due to his misconduct.
Justice Saurabh Shyam Shamshery held
“There was no charge that department has suffered financial loss. There is no finding that due to misconduct petitioner has gained monetary or any other benefit. Therefore, the Court finds that punishment of 'Censure' and “stoppage of one financial increment with cumulative effect” might have proportionate punishment but punishment of recovery of Rs. 214.87 lacs
only from petitioner without any reason and without even a charge to this effect, the Court is of the view that this punishment is shockingly disproportionate.”
Petitioner was initially appointed on the post of Assistant Accountant in U.P. Power Corporation Ltd. and was later transferred to Electricity Distribution Division-III, Shamli and was subsequently transferred from there. For the period that the petitioner was posted in Shamli, he is alleged to have committed misconduct and the impugned punishment order was passed against him.
It was alleged that the electricity department did not participate in the IBC proceedings of M/s Sikka Papers Ltd. due which the department suffered losses. Petitioner was alleged to be non-diligent in carrying out his duties due and recover Rs. 214.87 lacs. Though the inquiry officer exonerated the petitioner, the Managing Director disagreed with the exoneration and held the petitioner guilty for not noticing the huge demand pending against M/s Sikka Papers Ltd.
The punishment order was passed to the effect of punishment of 'Censure' and “withholding of one financial increment with cumulative effect” and also recovery Rs. 214.87 lacs was to be made from the petitioner. The petitioner challenged the punishment order before the High Court.
The Court observed that though the petitioner was liable to take accounts of huge pending payments from the earlier accountants, the petitioner was not diligent in carrying out his duties.
Referring to the decision of the Supreme Court in Punjab & Sind Bank vs. Sh. Raj Kumar, the Court observed that even though the charge was proved against the petitioner, no reason was assigned for imposing the recovery of Rs. 214.87 lacs on the petitioner alone.
Holding that there was no finding regarding petitioner being solely responsible for such loss, and no charge being made out against the petitioner for causing loss to the department and unjustly enriching himself, the Court set aside the order of recovery of Rs. 214.87 lacs against the petitioner.
Case Title: Satyaverat v. State Of U.P. And 3 Others