Supreme Court Reinstates Bank Employee Dismissed on Insufficient Evidence: United Bank of India vs. Biswanath Bhattacharjee (2022)

Date of the Judgment: 31 January 2022

Citation: 2022 INSC 117

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

Can a disciplinary authority’s decision stand when it’s based on flimsy evidence or a misreading of facts? The Supreme Court of India recently tackled this question, examining whether a bank employee’s dismissal was justified. The Court ultimately ruled in favor of the employee, emphasizing that disciplinary actions must be supported by solid evidence, not mere suspicion or conjecture. This case highlights the importance of fair process and evidentiary standards in disciplinary proceedings. The judgment was authored by Justice S. Ravindra Bhat, with Justice K.M. Joseph concurring.

Case Background

Biswanath Bhattacharjee, the respondent, 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.

Disciplinary proceedings were initiated against him on 23 October 1997, seven years after his transfer from the Chandabila branch. The charge sheet alleged his involvement in five major charges related to his tenure at the Chandabila branch. These charges primarily concerned the disbursement of loans under the Integrated Rural Development Project (IRDP) to twelve fictitious persons. The bank alleged that while ₹4,68,833/- was released towards subsidy, only ₹4,08,833/- was reflected in the bank’s subsidy register, with ₹60,000/- unaccounted for. The bank also alleged that the loan and subsidy were given to twelve beneficiaries against SSI account nos. 45/90 – 56/90. The employee denied these allegations.

The bank further alleged that the employee, in collusion with another employee, ensured that relevant documents were missing and that the unaccounted ₹60,000/- of the subsidy component was misappropriated. The employee denied these allegations, and an inquiry was conducted.

Timeline:

Course of Proceedings

The inquiry officer submitted his report on 05 May 2001, holding the employee guilty of the charges. The Disciplinary Authority accepted the report and terminated the employee’s services on 07 October 2002. The employee’s appeal was dismissed by the appellate authority on 28 April 2003.

The employee then approached the Calcutta High Court under Article 226 of the Constitution. A single judge of the High Court rejected the writ petition on 15 May 2007. However, a division bench of the same High Court, in its judgment dated 16 December 2008, allowed the employee’s appeal and set aside the orders of the appellate and disciplinary authorities.

Legal Framework

The Supreme Court considered the scope of judicial review in departmental proceedings. It noted that while strict rules of evidence do not apply in such proceedings, the principles of natural justice must be followed. The Court referred to previous judgments that emphasized that findings of guilt must be based on some evidence and not on mere suspicion or conjecture. The Court also noted that judicial review is not an appeal from a decision but a review of the manner in which the decision is made.

The Court highlighted that it could interfere with the findings of a disciplinary authority if the findings were based on no evidence, or on irrelevant material, or by ignoring relevant material, or if the findings were perverse or such that they could not have been rendered by any reasonable person.

Arguments

Arguments of the Bank:

• The bank argued that the High Court had re-appreciated the evidence, which is beyond the scope of judicial review.
• The bank contended that the High Court erred in acting as an appellate authority and that the enquiry officer’s finding of guilt was based on evidence.
• It was submitted that the employee had authenticated entries made by another employee, Sri Madan Mohan Saha, and therefore, his plea that he was not responsible for maintaining the subsidy register was unsustainable.
• The bank argued that the High Court was wrong to conclude that there was inadequate evidence to prove that loan and subsidy had been disbursed to twelve fictitious persons, especially since seven individuals deposed that they had not received any loan or subsidy.
• The bank also argued that the High Court should not have questioned the admissibility of the confession statement of Sri Madan Mohan Saha and Sri Subhendu Kumar Das, as the contents of that confession were not denied by the employee.
• The bank further argued that the employee was not prejudiced by the non-production of certain documents, as those documents were untraceable and the employee was charged with their removal.
• The bank emphasized that bank officials should display a higher degree of integrity and that the disciplinary and appellate authorities had acted within their rights to impose the penalty of dismissal.

Arguments of the Employee:

• The employee argued that the findings of guilt were not based on any evidence and were purely conjectural and perverse.
• It was submitted that despite seven borrowers deposing favorably, the employee was held guilty without independent verification of the identity of persons.
• The employee argued that the management withheld documents which were crucial to his defense, thus causing serious prejudice.
• The employee contended that the enquiry officer relied on a photostat copy of a document which was an alleged admission of guilt by the Ex-Pradhan and ex-cashier, which was not signed or admitted by the employee, and thus, could not be used against him.
• The employee argued that the scope of judicial review allows interference when the outcome of the enquiry is procedurally unfair, illegal, based on irrelevant facts, or manifestly unreasonable.
• The employee submitted that the persons who allegedly confessed were not examined as witnesses, and therefore, the finding of guilt was perverse and not based on sufficient evidence.

Submissions Table:

Issues Framed by the Supreme Court

The Supreme Court considered the following issues:

1. Whether the High Court was justified in interfering with the findings of the disciplinary authority.
2. Whether the findings of the disciplinary authority were based on any evidence.
3. Whether the High Court had exceeded its jurisdiction under Article 226 of the Constitution in re-appreciating the evidence.

Treatment of the Issue by the Court

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

Authorities

The Supreme Court considered the following authorities:

On the scope of judicial review in departmental proceedings:

• Union of India v. H.C. Goel [ (1964) 4 SCR 718] – Supreme Court of India: This case established that judicial review is warranted when there is no evidence to establish an official’s guilt.
• B.C. Chaturvedi v. Union of India [ (1995) 6 SCC 749] – Supreme Court of India: This case clarified that judicial review is not an appeal but a review of the manner in which a decision is made, and that courts should not re-appreciate evidence.
• T.N.C.S. Corpn. Ltd. v. K. Meerabai [ (2006) 2 SCC 255] – Supreme Court of India: This case emphasized the limited scope of judicial review.
• Bank of India v. Degala Suryanarayana [ (1999) 5 SCC 762] – Supreme Court of India: This case held that while strict rules of evidence are not required, the procedure must be fair and reasonable.
• Punjab & Sind Bank v. Daya Singh [ (2010) 11 SCC 233] – Supreme Court of India: This case reiterated the principle in Bank of India v. Degala Suryanarayana.
• Moni Shankar v. Union of India [ (2008) 3 SCC 484] – Supreme Court of India: This case outlined that courts can consider if relevant evidence was excluded and irrelevant facts were included.
• State Bank of Bikaner and Jaipur v. Nemi Chand Nalwaya [ (2011) 4 SCC 584] – Supreme Court of India: This case held that courts should not interfere with findings of fact unless based on no evidence or are perverse.

On the admissibility of confessional statements:

• Roop Singh Negi v. Punjab National Bank [ (2009) 2 SCC 570] – Supreme Court of India: This case held that a confession before the police must be proved, and that there should be some evidence to show the employee had committed the misconduct.
• J.D. Jain v. Management of State Bank of India [1982 (1) SCC 143] – Supreme Court of India: This case held that witness depositions stating that the charged employee had previously confessed or admitted his role and guilt were admissible.
• State Bank of India v. Hemant Kumar [2011 (2) SCC 22] – Supreme Court of India: This case also held that witness depositions stating that the charged employee had previously confessed or admitted his role and guilt were admissible.

Legal Provisions:

• Article 226 of the Constitution of India: This article empowers High Courts to issue writs for the enforcement of fundamental rights and for other purposes.

Table of Authorities:

Judgment

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

How each authority was viewed by the Court?

The Court relied on several authorities to support its decision:

• Union of India v. H.C. Goel [ (1964) 4 SCR 718]: The Court cited this case to emphasize that judicial review is warranted when there is no evidence to establish an official’s guilt.
• B.C. Chaturvedi v. Union of India [ (1995) 6 SCC 749]: The Court used this case to clarify that judicial review is not an appeal but a review of the manner in which a decision is made.
• Roop Singh Negi v. Punjab National Bank [ (2009) 2 SCC 570]: The Court relied on this case to emphasize that a confession must be proved and that there should be some evidence to show the employee had committed the misconduct.

The Court distinguished the facts of the present case from J.D. Jain v. Management of State Bank of India [1982 (1) SCC 143] and State Bank of India v. Hemant Kumar [2011 (2) SCC 22], noting that in those cases, the confession was by the charged employee, whereas in the present case, the confession was by other individuals and was not binding on the employee.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the lack of credible evidence linking the employee to the alleged misconduct. The Court emphasized that disciplinary proceedings must be based on evidence and not on mere suspicion or conjecture. The Court also considered the procedural lapses in the inquiry, such as the reliance on a document not admitted into evidence and the non-examination of key witnesses.

Sentiment Analysis of Reasons:

Fact:Law Ratio:

Logical Reasoning:

Judgment

The Supreme Court held that the disciplinary authority’s findings were not based on any evidence and that the High Court was justified in interfering with the same. The Court emphasized that disciplinary proceedings must be based on evidence and not on mere suspicion or conjecture. The Court also noted that the enquiry officer had relied on extraneous matters and that the employee was not given a fair chance to defend himself.

The Court rejected the bank’s argument that the High Court had re-appreciated the evidence, stating that the High Court had merely scrutinized the record to determine if the findings were based on any evidence. The Court also rejected the bank’s argument that the employee was responsible for maintaining the subsidy register, finding that the evidence indicated that another employee was primarily responsible for the same.

The Court also rejected the bank’s argument that the confession statement was admissible, noting that the employee was not a signatory to the confession and that the authors of the confession were not examined. The Court held that the confession could not be used against the employee.

The Court noted the interesting fact that the employee who confessed to the misconduct received a mild penalty, while the respondent, against whom there was no credible evidence, was dismissed.

The Court quoted from Union of India v. H.C. Goel, stating: “…the High Court can and must enquire whether there is any evidence at all in support of the impugned conclusion. In other words, if the whole of the evidence led in the enquiry is accepted as true, does the conclusion follow that the charge in question is proved against the respondent?”

The Court also quoted from B.C. Chaturvedi v. Union of India, stating: “Judicial review is not an appeal from a decision but a review of the manner in which the decision is made. Power of judicial review is meant to ensure that the individual receives fair treatment and not to ensure that the conclusion which the authority reaches is necessarily correct in the eye of the court.”

The Court further quoted from Roop Singh Negi v. Punjab National Bank, stating: “We have noticed hereinbefore that the only basic evidence whereupon reliance has been placed by the enquiry officer was the purported confession made by the appellant before the police… The appellant being an employee of the Bank, the said confession should have been proved.”

The Court concluded that the findings of the disciplinary authority were not based on any evidence and that the High Court was justified in interfering with the same. The Court directed the bank to reinstate the employee and to calculate all his benefits, including arrears of salary, pay increase, increments, and all consequential benefits, within three months from the date of the judgment.

There were no minority opinions in this case.

Key Takeaways

• Disciplinary actions must be based on concrete evidence and not on mere suspicion or conjecture.
• Enquiry officers must follow fair procedures and ensure that all parties are given a reasonable opportunity to defend themselves.
• Confessional statements of third parties cannot be used against an employee unless they are examined as witnesses.
• Courts can interfere with the findings of a disciplinary authority if the findings are based on no evidence or a misappreciation of evidence.
• The principles of natural justice must be followed in all disciplinary proceedings.

Directions

The Supreme Court directed the appellant bank to ensure that the respondent’s services are deemed to be reinstated. The bank was further directed to calculate all his benefits, including arrears of salary, pay increase (as applicable), increments, and all consequential benefits, and calculate his terminal benefits, and fix his pension, if admissible to him under the bank’s regulations. The determination of these benefits and the payment of all amounts were to be made within three months from the date of the judgment.

Specific Amendments Analysis

There was no discussion on specific amendments in this judgment.

Development of Law

The ratio decidendi of the case is that disciplinary proceedings must be based on evidence and not on mere suspicion or conjecture. The court reiterated that judicial review is warranted when there is no evidence to establish an official’s guilt. This case reinforces the importance of fair procedures and evidentiary standards in disciplinary proceedings. There was no change in the previous positions of law.

Conclusion

The Supreme Court’s judgment in United Bank of India vs. Biswanath Bhattacharjee is a significant ruling that emphasizes the importance of evidence-based disciplinary actions and fair procedures. The Court overturned the dismissal of a bank employee, finding that the disciplinary authority’s findings were not based on any credible evidence. The Court also highlighted the procedural lapses in the inquiry and the misappreciation of evidence by the disciplinary authority. This judgment serves as a reminder to all disciplinary authorities that their decisions must be based on evidence and not on mere suspicion or conjecture. The Court directed the bank to reinstate the employee with all consequential benefits.