Supreme Court quashes dismissal of bank employee due to lack of evidence: United Bank of India vs. Biswanath Bhattacharjee (2022)

Date of the Judgment: 31 January 2022

Citation: [Not Available in Source]

Judges: K.M. Joseph, J., S. Ravindra Bhat, J. (authored the judgment)

Can a disciplinary authority’s decision be upheld if it is not supported by any evidence? The Supreme Court of India recently addressed this critical question in a case involving the dismissal of a bank employee. The court examined the extent to which High Courts can review findings of departmental inquiries, especially where the findings are based on no evidence. This judgment clarifies the limits of judicial review in service matters.

Case Background

The employee, Biswanath Bhattacharjee, was initially appointed as a cashier-cum-clerk at United Bank of India on 18 January 1971. He was later promoted to Junior Management Officer Grade Scale-1. From 14 December 1988 to 30 May 1990, he served as the branch manager of the bank’s Chandabila branch. A charge sheet was issued against him on 23 October 1997, seven years after his transfer from the Chandabila branch. The charges related to his tenure as branch manager, specifically concerning the disbursement of loans under the Integrated Rural Development Project (IRDP).

The bank alleged that the employee disbursed loans to twelve fictitious individuals. The IRDP scheme involved a 50% loan and 50% subsidy. The bank claimed that while ₹4,68,833 was released as subsidy by the District Rural Development Agency (DRDA), only ₹4,08,833 was reflected in the bank’s subsidy register. The remaining ₹60,000, along with the names of the twelve beneficiaries, were missing. The bank also alleged that the loan register showed the loan and subsidy were given to twelve beneficiaries against SSI account numbers 45/90-56/90. The employee denied all allegations. The bank proceeded with a disciplinary enquiry.

Timeline:

Course of Proceedings

The disciplinary authority accepted the enquiry report on 7 October 2002 and terminated the employee’s service, citing his past conduct. The appellate authority dismissed his appeal on 28 April 2003. Aggrieved, the employee filed a writ petition before the Calcutta High Court, which was dismissed by a single judge on 15 May 2007. The employee then filed an appeal. The division bench of the Calcutta High Court allowed the appeal on 16 December 2008, setting aside the orders of the appellate and disciplinary authorities.

Legal Framework

The Supreme Court considered the principles of judicial review in departmental proceedings. The court referred to previous judgments which established that while the technical rules of the Evidence Act, 1872 do not apply to departmental proceedings, the findings must be based on some evidence. The court also noted that the scope of judicial review is limited and it is not an appeal from a decision but a review of the manner in which the decision is made. The court emphasized that the disciplinary authority is the sole judge of facts, but the findings must not be perverse or based on no evidence.

Arguments

Arguments of the Bank:

• The High Court re-appreciated the evidence, which is not permissible in judicial review.
• The High Court erred in acting as an appellate authority.
• The enquiry officer’s finding of guilt was based on evidence.
• The employee had authenticated entries made by another employee, Sri Madan Mohan Saha.
• The High Court should not have questioned the confession statement of Sri Madan Mohan Saha and Sri Subhendu Kumar Das.
• The employee was not prejudiced by the non-production of certain documents.
• The judgment undermines discipline in banks, as bank officials are expected to maintain a higher standard of integrity.

Arguments of the Employee:

• The findings of the enquiry were not based on any evidence and were purely conjectural.
• The enquiry was conducted seven years after the employee left the branch.
• The management withheld documents that would have vindicated his position.
• The enquiry officer was swayed by a photostat copy of a document which claimed to be the admission of guilt of misappropriation of funds signed by the Ex-Pradhan and ex-cashier Sri Madan Mohan Saha.
• The confession was not signed or admitted by the employee.
• The High Court can interfere with findings of an enquiry that are not based on any evidence.
• The two persons whose confession was allegedly recorded were not examined as witnesses to verify it.
• The findings were perverse and not based on sufficient evidence.

[TABLE] of Submissions:

Issues Framed by the Supreme Court

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

1. Whether the High Court was justified in interfering with the findings of the disciplinary authority in the departmental proceedings.
2. Whether the findings of the disciplinary authority were based on no evidence, warranting interference by the High Court.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Supreme Court relied on the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

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 establish the official’s guilt.
• B.C. Chaturvedi v. Union of India (1995) 6 SCC 749*: The court cited this case to emphasize that judicial review is not an appeal but a review of the manner in which the decision is made.
• T.N.C.S. Corpn. Ltd. v. K. Meerabai (2006) 2 SCC 255*: The court referred to this case to highlight the limited scope of judicial review in departmental proceedings.
• Bank of India v. Degala Suryanarayana (1999) 5 SCC 762*: The court used this case to show that while strict rules of evidence are not essential, the procedure has to be fair and reasonable.
• Punjab & Sind Bank v. Daya Singh (2010) 11 SCC 233*: The court cited this case as it followed the principles established in Bank of India v. Degala Suryanarayana.
• Moni Shankar v. Union of India (2008) 3 SCC 484*: The court relied on this case to explain that courts can consider whether relevant evidence was considered and irrelevant facts excluded.
• State Bank of Bikaner and Jaipur v. Nemi Chand Nalwaya (2011) 4 SCC 584*: The court cited this case to reiterate that courts will not interfere with findings of fact except where they are based on no evidence or are perverse.
• Roop Singh Negi v. Punjab National Bank (2009) 2 SCC 570*: The court used this case to show that a confession before the police without any other material is inadequate evidence in departmental proceedings.
• J.D. Jain v. Management of State Bank of India 1982 (1) SCC 143*: The court mentioned this case as an example where witness depositions about a charged employee’s confession were held admissible.
• State Bank of India v. Hemant Kumar 2011 (2) SCC 22*: The court cited this case as an example where witness depositions about a charged employee’s confession were held admissible.
• UP State Road Transport Corporation v Har Narain Singh 1998 (9) SCC 220*: The court noted that the bank used this case to argue that courts cannot weigh evidence appreciated by a domestic tribunal but rejected this argument.
• State Bank of India v Ram Dinkar Punde 2006 (7) SCC 212*: The court noted that the bank used this case to argue that courts cannot weigh evidence appreciated by a domestic tribunal but rejected this argument.
• Government of A.P & Ors. v Mohd. Narsulla Khan 2006 (2) SCC 373*: The court noted that the bank used this case to argue that courts cannot weigh evidence appreciated by a domestic tribunal but rejected this argument.
• Sher Bahadur v. Union of India & Ors (2002) 7 SCC 141*: The court noted that the employee used this case to argue that the High Court could interfere with findings of an enquiry which were not based on any evidence and accepted the argument.
• Narinder Mohan Arya v United India Insurance Co. Ltd (2006) 4 SCC 713*: The court noted that the employee used this case to argue that the High Court could interfere with findings of an enquiry which were not based on any evidence and accepted the argument.

The Supreme Court, after reviewing the record, found that the disciplinary authority’s findings were not based on sufficient evidence. The court noted that the employee was charged seven years after the alleged incident. The court also emphasized that while the strict rules of evidence do not apply to departmental proceedings, the findings must be based on some evidence. The court found that the disciplinary authority relied on extraneous and unproven factors, such as a confession not signed by the employee and the identity of the beneficiaries not being independently verified. The court also highlighted that the employee was penalized more severely than another employee, Sri Madan Mohan Saha, who had confessed to the misconduct.

The Court quoted from the judgment:

“The only test which we can legitimately apply in dealing with this part of the respondent’s case is, is there any evidence on which a finding can be made against the respondent that Charge 3 was proved against him? In exercising its jurisdiction under Article 226 on such a plea, the High Court cannot consider the question about the sufficiency or adequacy of evidence in support of a particular conclusion… but the High Court can and must enquire whether there is any evidence at all in support of the impugned conclusion.”

“The disciplinary authority is the sole judge of facts. Where appeal is presented, the appellate authority has co-extensive power to reappreciate the evidence or the nature of punishment. In a disciplinary enquiry, the strict proof of legal evidence and findings on that evidence are not relevant. Adequacy of evidence or reliability of evidence cannot be permitted to be canvassed before the Court/Tribunal.”

“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. Therefore, courts will not interfere with findings of fact recorded in departmental enquiries, except where such findings are based on no evidence or where they are clearly perverse.”

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 departmental proceedings do not require strict adherence to the Evidence Act, they must still be based on some evidence. The court was particularly critical of the disciplinary authority’s reliance on a confession not signed by the employee and the failure to independently verify the identities of the alleged beneficiaries. Additionally, the court noted the disproportionate penalty imposed on the employee compared to another employee who had confessed to the misconduct, indicating a lack of fairness in the proceedings.

Sentiment Analysis of Reasons Given by the Supreme Court:

Fact:Law Ratio Table:

Logical Reasoning:

Key Takeaways

• Departmental inquiries must be based on some evidence, even if strict rules of evidence do not apply.
• Confessions made by others cannot be used as evidence against an employee unless they are verified and the employee has admitted to it.
• Disciplinary authorities must ensure fairness and proportionality in imposing penalties.
• High Courts can interfere with findings of disciplinary authorities if they are based on no evidence or are perverse.
• The scope of judicial review is limited but essential to ensure fairness in disciplinary proceedings.

Directions

The Supreme Court directed the appellant bank to:

• Reinstate the respondent’s services.
• Calculate all his benefits, including arrears of salary, pay increases, increments, and all consequential benefits.
• Calculate his terminal benefits and fix his pension, if admissible under the bank’s regulations.
• Ensure all payments are made within three months from the date of the judgment.

Development of Law

The ratio decidendi of this case is that while the scope of judicial review in departmental proceedings is limited, High Courts can and must interfere when the findings of the disciplinary authority are based on no evidence or are perverse. This judgment reinforces the principle that disciplinary actions must be based on credible evidence and fair procedures, even when strict rules of evidence do not apply.

Conclusion

The Supreme Court dismissed the appeal of the United Bank of India, upholding the Calcutta High Court’s decision to quash the dismissal of the employee, Biswanath Bhattacharjee. The court emphasized that departmental inquiries must be based on evidence, and disciplinary authorities cannot rely on extraneous factors or unverified confessions. This judgment reinforces the importance of fair and evidence-based procedures in departmental proceedings and clarifies the scope of judicial review in such cases.