Disciplinary Orders Attain Finality Upon Communication, Can't Be Unilaterally Modified: AP HC

Andhra Pradesh High Court: A Single Judge Bench of Justice Harinath N set aside UCO Bank's unilateral revision of disciplinary punishment against a former Assistant Manager. The court held that the bank's act of enhancing punishment without issuing notice or seeking response from the affected employee was illegal and manifestly arbitrary. The court clarified that disciplinary authorities cannot arbitrarily modify penalty orders and impose harsher punishments. Further, it held that compulsory retirement automatically entitles an employee to service benefits. Background B. Asheervadam joined UCO Bank as a clerk in 1985 and was promoted to Assistant Manager in 2007. He was posted at the Attili Branch, where he handled loan disbursements. He later alleged workplace harassment by the Senior Manager and sought reversion to clerical cadre, but his request was denied. Meanwhile, the bank conducted an inquiry into alleged irregularities in loan processing and suspended him in 2009. In 2010, the disciplinary authority found him guilty of violating loan sanction norms and imposed compulsory retirement with service benefits. However, within two weeks, the disciplinary authority revised its own order and removed the service benefits, without issuing a fresh notice or hearing him. Asheervadam challenged this unilateral modification. Aggrieved, he filed a writ petition at the Andhra Pradesh High Court. Arguments Asheervadam contended that the disciplinary authority lacked the power to suo motu revise its own punishment order, especially to impose a harsher penalty. He argued that the initial order of compulsory retirement with service benefits was communicated and finalized, leaving no room for further modification. He also argued that he had no direct role in loan approvals, and those were handled entirely by the Senior Manager. UCO Bank's counsel defended the revision, asserting that the initial order and the subsequent modification were part of a single process. He argued that disciplinary authorities had discretion to alter penalties and that the revision was merely a “corrigendum.” The bank maintained that Asheervadam's misconduct was severe and justified the harsher penalty. Court's Findings Firstly, the court held that once an order of punishment is communicated to an employee, it attains finality. Any subsequent modification that worsens the punishment requires a separate notice and an opportunity to be heard. It held that the disciplinary authority's decision to unilaterally enhance Asheervadam's penalty by withdrawing service benefits was manifestly illegal and lacked any statutory backing. Secondly, the court rejected the bank's argument that the revised order was a mere corrigendum. It noted that the modification imposed an additional penalty, which could not be treated as a minor correction. The court observed that had the bank been dissatisfied with the original punishment, it should have pursued an appeal instead of arbitrarily revising its order. Thirdly, the court relied on General Manager, Syndicate Bank v. B.S.N. Prasad (Civil Appeal No. 6327 of 2024) to reaffirm that disciplinary actions must adhere to the principles of proportionality and fair play. It ruled that the unilateral imposition of a harsher penalty without due process violated these principles. Fourthly, the court cited Kamalesh Kumar v. Union of India (W.P.(C) 6906 of 2016) to clarify that compulsory retirement automatically entitles an employee to service benefits unless explicitly barred by applicable rules. It ruled that even if the applicable regulation is silent on this aspect, it should go without saying that compulsory retirement automatically entitles the employee to service benefits. Lastly, the court emphasized that judicial review of disciplinary matters is limited only to cases of procedural illegality and disproportionate punishment. It held that while the punishment of compulsory retirement cannot be interfered with, the denial of service benefits was unlawful. Thus, the petition was partly allowed. Since Asheervadam had already attained superannuation during the proceedings, the court did not consider reinstatement. However, it directed the bank to release his pending benefits within six weeks. Decided on: 24.01.2025 Neutral Citation: 2025:APHC:2016 | B. Asheervadam v. UCO Bank Counsel for the Petitioner: Sri Bondili Ravikiran Singh Counsel for the Respondents: Sri N.V. Subba Raju Click Here To Read/Download The Order

Disciplinary Orders Attain Finality Upon Communication, Can't Be Unilaterally Modified: AP HC

Pranav Kumar

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