Supreme Court overturns dismissal of bank employee in United Bank of India vs. Biswanath Bhattacharjee (2022)

Date of the Judgment: 31 January 2022

Citation: (2022) INSC 75

Judges: K.M. Joseph, J. and S. Ravindra Bhat, J.

Can a disciplinary authority’s decision be overturned if it is found to be unsupported by evidence? The Supreme Court of India addressed this question in a recent case concerning the dismissal of a bank employee. The core issue revolved around whether the High Court was correct in overturning the disciplinary authority’s decision, which had dismissed an employee based on charges of misconduct. The Supreme Court bench, comprising Justices K.M. Joseph and S. Ravindra Bhat, delivered the judgment, with Justice S. Ravindra Bhat authoring the opinion.

Case Background

The case involves Biswanath Bhattacharjee, an employee of United Bank of India, who was initially appointed as a cashier-cum-clerk on 18 January 1971. He was later promoted to Junior Management Officer Grade Scale-I. From 14 December 1988 to 30 May 1990, he served as the branch manager of the bank’s Chandabila branch. Disciplinary proceedings were initiated against him on 23 October 1997, seven years after his transfer from the Chandabila branch, alleging his involvement in five major charges related to his tenure as branch manager. The charges pertained to the disbursement of loans to twelve fictitious persons under the Integrated Rural Development Project (IRDP) and the alleged misappropriation of funds.

Timeline

Course of Proceedings

The disciplinary authority accepted the enquiry report and terminated the employee’s services on 7 October 2002. The employee’s appeal was dismissed by the appellate authority on 28 April 2003. Subsequently, the employee filed a writ petition before the Calcutta High Court, which was initially rejected by a single judge on 15 May 2007. However, a division bench of the High Court allowed the employee’s appeal on 16 December 2008, setting aside the orders of the disciplinary and appellate authorities. The bank then appealed to the Supreme Court.

Legal Framework

The judgment primarily revolves around the scope of judicial review under Article 226 of the Constitution of India in cases of departmental proceedings. It examines the extent to which High Courts can interfere with the findings of disciplinary authorities. The Supreme Court refers to previous judgments to clarify that while courts cannot act as appellate authorities, they can intervene if the findings are based on no evidence, are perverse, or are based on irrelevant considerations.

Arguments

Arguments by the Bank:

• The High Court re-evaluated the evidence, which is beyond the scope of judicial review in disciplinary matters.
• The High Court acted as an appellate authority, which is not permissible.
• The disciplinary authority’s findings were based on sufficient evidence, and the High Court erred in concluding otherwise.
• The employee authenticated entries in the subsidy register, making him responsible for its maintenance.
• The High Court should not have questioned the confession statement of other employees, which was not denied by the employee.
• The employee was not prejudiced by the non-production of certain documents, as they were untraceable and their removal was a charge against him.
• Allowing the High Court’s judgment would undermine discipline in banks, where employees are expected to maintain a high standard of integrity.

Arguments by the Employee:

• The enquiry findings were not based on any evidence and were purely conjectural.
• The conclusions were based on surmises and not on concrete evidence.
• The management withheld crucial documents, which caused prejudice to the employee.
• The enquiry officer relied on a photocopy of a confession statement, which was not signed or admitted by the employee.
• The High Court can interfere with the findings of an enquiry if they are procedurally unfair, illegal, or based on irrelevant facts.
• The confession was not verified by examining the persons who allegedly made it.
• The findings were perverse and not based on sufficient evidence.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issue that the court addressed was:

• Whether the High Court was justified in interfering with the disciplinary authority’s decision to dismiss the employee, particularly when the High Court found the decision to be based on “no evidence”.

Treatment of the Issue by the Court

Authorities

Cases Relied Upon by the Court:

Legal Provisions Considered by the Court:

• Article 226 of the Constitution of India: The Supreme Court discussed the scope of judicial review by High Courts under this article in the context of departmental proceedings.

Judgment

How each authority was viewed by the Court:

• Union of India v. H.C. Goel [(1964) 4 SCR 718]:* The Court relied on this case to reiterate that judicial review is warranted when there is no evidence to support the findings of a disciplinary authority.
• B.C. Chaturvedi v. Union of India [(1995) 6 SCC 749]:* The Court cited this case to clarify that judicial review is not an appeal and that courts should not re-appreciate evidence. However, it also noted that courts can intervene if the findings are based on no evidence.
• Roop Singh Negi v. Punjab National Bank [(2009) 2 SCC 570]:* The Court used this case to support its conclusion that a confession made to the police cannot be the sole basis for a departmental inquiry and that such evidence is inadequate.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the lack of evidence supporting the charges against the employee. The Court emphasized that while judicial review is limited, it is necessary to ensure that disciplinary proceedings are fair and based on some evidence. The Court noted that the disciplinary authority relied on a confession not made by the employee and failed to consider the lack of evidence linking the employee to the alleged misconduct. The Court also highlighted the fact that the employee was penalized more severely than the other employee who confessed to the misconduct, which was a major factor in its decision.

Logical Reasoning:

The Court considered alternative interpretations, but rejected them because the evidence did not support the charges against the employee. The Court emphasized that while it cannot act as an appellate authority, it must intervene when the findings are based on no evidence. The Court’s reasoning was based on a careful review of the record, and it concluded that the High Court’s decision was correct.

The majority opinion was delivered by Justice S. Ravindra Bhat, with Justice K.M. Joseph concurring. There were no dissenting opinions.

The court quoted the following from the judgment:

• “…the finding which is implicit in the appellant’s order dismissing the respondent that Charge 3 is proved against him is based on no evidence.”
• “Judicial review is not an appeal from a decision but a review of the manner in which the decision is made.”
• “If the enquiry has been fairly and properly held and the findings are based on evidence, the question of adequacy of the evidence or the reliable nature of the evidence will not be grounds for interfering with the findings in departmental enquiries.”

Key Takeaways

• High Courts can interfere with disciplinary authority decisions if they are not based on evidence.
• Disciplinary proceedings must be fair, and the charged employee must be given a reasonable opportunity to defend themselves.
• Confessions made by others cannot be used against an employee unless there is other evidence linking them to the misconduct.
• Courts will not act as appellate authorities but will ensure that the disciplinary process is fair and based on evidence.
• The penalty imposed should be proportionate to the misconduct.

Directions

The Supreme Court directed the appellant bank to reinstate the respondent’s services and calculate all his benefits, including arrears of salary, pay increases, increments, and all consequential benefits. The bank was also directed to calculate his terminal benefits and fix his pension, if admissible. The payment of all amounts was to be made within three months from the date of the judgment.

Development of Law

The judgment reinforces the principle that disciplinary proceedings must be based on evidence and that High Courts can intervene when findings are not supported by evidence. It clarifies the scope of judicial review in departmental proceedings, emphasizing that while courts cannot act as appellate authorities, they must ensure fairness and adherence to the principles of natural justice. The ratio decidendi of the case is that disciplinary actions must be based on evidence and that the High Court can intervene if the findings are not based on any evidence. This is not a change in the previous position of law, but a reaffirmation of existing principles.

Conclusion

The Supreme Court dismissed the appeal, upholding the High Court’s decision to set aside the dismissal of the bank employee. The Court found that the disciplinary authority’s decision was not based on any evidence and that the High Court was justified in exercising its power of judicial review. The judgment emphasizes the importance of fairness and evidence-based decision-making in disciplinary proceedings.