'Bank Officers Expected To Maintain Higher Standards Of Honesty' : Supreme Court Affirms Dismissal Of Staff For Bank Fraud

While deciding an appeal pertaining to disciplinary proceedings against a bank manager, the Supreme Court reiterated that acquittal in a criminal case does not exonerate the person in disciplinary proceedings. The Court reasoned that the standard of proof differs in both of these scenarios. The Bench of Justices Abhay S. Oka and Augustine George Masih also stressed that "bank officers are expected to maintain a higher standard of honesty, integrity, and conduct". It also referred to its decision in Damoh Panna Sagar Rural Regional Bank & Another v. Munn Lal Jain., (2005) 10 SCC 84. Therein, the Court observed that every bank employee should take all possible steps to protect the bank's interests and discharge his duties with the utmost integrity.To provide a brief background, the respondent worked as a branch manager at Syndicate Bank. There were several allegations against him including that he made fictitious debits/releases under Syndicate Kisan Credit Cards accounts and, in certain cases, exceeded the sanctioned limit.Consequently, disciplinary inquiry was conducted and he was dismissed from the service. Since he was absolved in criminal proceedings, he made representations against his dismissal. Following this, he also filed a writ petition challenging his dismissal order. The single-judge bench of the High Court set aside the same on the ground that principles of natural justice were not followed. The Division Bench affirmed the same. Thus, the present appeal.At the outset, the Court observed that the adequacy of evidence presented during disciplinary inquiry cannot be determined in a writ jurisdiction. Reliance was placed on B.C. Chaturvedi v. Union of India and Others, wherein the Court opined:“When the authority accepts that evidence and conclusion receives support therefrom, the disciplinary authority is entitled to hold that the delinquent officer is guilty of the charge. The Court/Tribunal in its power of judicial review does not act as appellate authority to reappreciate the evidence and to arrive at its own independent findings on the evidence.”Apart from this, the Court also noted that the principles of natural justice were followed during the disciplinary inquiry. Thus, the High Court's finding in this regard was incorrect. The entire premise on which the High Court had interfered is without basis., the Court said.Adverting to the facts of the case, the Court noted the respondent's contention that there was a threat to his life and that he worked under pressure. Thus, he pleaded for condoning his mistakes. Imperatively, he also accepted almost all allegations while also pointing out his earlier achievements in the previous branch.“The respondent, while replying to the notice and the letters addressed to him by the appellant, repeatedly pointed out that he had to deal with more than 4,800 SKCC accounts during a short period of 60 days. Therefore, he worked under pressure all along. Moreover, he stated that he was in short receipt of crop insurance claims pertaining to 2,500 farmers to the extent of ₹ 50 lakhs. Therefore, the farmers and political leaders pressurized him. The respondent was employed in the appellant bank on 5th August, 1985 and had an unblemished record for more than 21 years till 11th June 2007”, the Court said.Taking a cue from this, the Court also observed that the disciplinary authority's powers are always subject to principles of proportionality and fair play. In view of the above finding, the Court concluded that the penalty of dismissal was disproportionate. Thus, the penalty was modified by reducing the respondent to a lower stage in the time scale of pay for one year.“However, fact remains that the misconduct alleged and proved against the respondent was of a serious nature considering the fact that a very high standard of conduct is expected from a branch manager of a Bank. Considering the facts of the case, we are of the view that a minor penalty, as provided in Regulation 4(e) of the Disciplinary Regulations, would be appropriate. The penalty will be of reducing the respondent to a lower stage in the time scale of pay for a period of one year, without cumulative effect and not adversely affecting his pension.”Thus, the impugned orders were quashed and the Court directed that the pay of necessary retiral dues, if any, to the respondent within four months.Case Name: THE GENERAL MANAGER PERSONNEL SYNDICATE BANK VS B S N PRASAD., CIVIL APPEAL NO. 6327 OF 2024Citation : 2025 LiveLaw (SC) 92Click here to read/ download the judgment

'Bank Officers Expected To Maintain Higher Standards Of Honesty' : Supreme Court Affirms Dismissal Of Staff For Bank Fraud

Gyanvi Khanna

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