Supreme Court Upholds Disciplinary Action Against Bank Manager for Misconduct: General Manager, UCO Bank vs. Krishna Kumar Bhardwaj (2022)

Date of the Judgment: 18 February 2022

Citation: 2022 INSC 2043

Judges: Justice Ajay Rastogi and Justice Abhay S. Oka

Can a High Court overturn a disciplinary action against an employee when the inquiry was conducted as per the rules and the charges were specific? The Supreme Court recently addressed this question in a case involving a UCO Bank manager who was charged with misconduct. The core issue was whether the High Court was correct in setting aside the disciplinary proceedings initiated against the manager. The Supreme Court bench comprised Justice Ajay Rastogi and Justice Abhay S. Oka, with the judgment authored by Justice Rastogi.

Case Background

The respondent, Krishna Kumar Bhardwaj, while working as an officiating Manager at UCO Bank’s Taharpur branch, was accused of committing irregularities. A charge sheet dated 15th May 1993 was issued to him under Regulation 6 of the UCO Bank Officers Employees’ (Conduct) Regulations, 1976. The charges included opening accounts without proper verification, mishandling cash deposits, and issuing false certificates.

Specifically, the charges were that:
✓ He opened two savings accounts on 24th December 1991 without proper introductions.
✓ He did not follow the correct procedure while depositing cash at the Meerut currency chest.
✓ He facilitated unscrupulous individuals to gain benefits under government schemes by issuing false certificates.
✓ He was absent from duty for several months without proper leave sanction.

Timeline:

Course of Proceedings

The inquiry officer found the respondent guilty of charges 1, 2, and 3, but not guilty of charge 4. The disciplinary authority confirmed this finding and imposed penalties on 12th August 1996. On appeal, the appellate authority upheld the guilt on charges 1, 2, and 3, but modified the punishment on 14th November 1998. The respondent then challenged this order in a writ petition before the High Court of Judicature at Allahabad.

The High Court set aside the disciplinary proceedings, stating that charge no. 1 was vague and lacked necessary particulars, thus depriving the respondent of a fair opportunity to defend himself. The bank then appealed to the Supreme Court.

Legal Framework

The disciplinary proceedings against the respondent were initiated under Regulation 6 of the UCO Bank Officers Employees’ (Conduct) Regulations, 1976. The charges specifically alleged violation of Regulation 3 of the same regulations, which mandates that officers must discharge their duties with utmost honesty, integrity, diligence, and devotion. The relevant regulations are as follows:

Regulation 6 of the UCO Bank Officers Employees’ (Conduct) Regulations, 1976 deals with the procedure for disciplinary action against employees.

Regulation 3 of the UCO Bank Officers Employees’ (Conduct) Regulations, 1976 states that every officer employee shall, at all times, maintain absolute integrity, devotion to duty, and do nothing which is unbecoming of a bank officer.

Arguments

Appellant’s Arguments (UCO Bank):

• The High Court incorrectly assumed that the appellate authority had exonerated the respondent on charges 2 and 3. The appellate authority had, in fact, upheld the guilt on all three charges (1, 2, and 3) and only modified the punishment.
• Charge no. 1 was specific and explicit, not vague as claimed by the High Court. The respondent participated in the inquiry at all stages and never claimed that the charge lacked material particulars.
• The High Court exceeded its jurisdiction by acting as an appellate authority and re-evaluating the evidence.

Respondent’s Arguments (Krishna Kumar Bhardwaj):

• Although the respondent did not dispute the factual findings, he argued that the punishment was not supported by the evidence.
• The respondent contended that the High Court was correct in setting aside the punishment.

Issues Framed by the Supreme Court

The Supreme Court framed the following issues:

1. Whether the High Court was correct in setting aside the disciplinary proceedings based on the premise that the appellate authority had exonerated the respondent on charges 2 and 3.
2. Whether charge no. 1 was vague and lacked material particulars, thus depriving the respondent of a fair opportunity to defend himself.
3. Whether the High Court exceeded its jurisdiction by re-evaluating the evidence and acting as an appellate authority.

Treatment of the Issue by the Court:

Authorities

The Supreme Court considered the following:

• The UCO Bank Officers Employees’ (Conduct) Regulations, 1976

Judgment

How each authority was viewed by the Court?

The Court relied on the UCO Bank Officers Employees’ (Conduct) Regulations, 1976* to determine the procedure for disciplinary action and the standards of conduct expected from bank officers. The court emphasized that the inquiry was conducted as per these regulations.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• The factual inaccuracy of the High Court’s assumption regarding the appellate authority’s order.
• The clarity and specificity of the charges against the respondent.
• The limited scope of judicial review in disciplinary matters.

Fact:Law Ratio

The Supreme Court’s reasoning was based on a combination of factual errors made by the High Court and the legal principles governing judicial review in disciplinary matters. The factual aspect of the case, particularly the misinterpretation of the appellate order, played a more significant role in the court’s decision.

Logical Reasoning

Key Takeaways

• High Courts should not act as appellate authorities in disciplinary matters and should only intervene if there are errors of law or procedure, or violations of natural justice.
• Charges in disciplinary proceedings must be specific and clear, but they need not be overly detailed if the employee has a clear understanding of the allegations.
• Factual accuracy is paramount in judicial review, and courts must not proceed on incorrect assumptions.

Directions

The Supreme Court set aside the judgment of the Division Bench of the High Court of Allahabad dated 19th February, 2021. No specific directions were given.

Development of Law

The Supreme Court’s judgment reinforces the established principles of judicial review in disciplinary matters, emphasizing that High Courts should not act as appellate authorities. The ratio decidendi of the case is that the High Court cannot interfere with the disciplinary proceedings when the inquiry was conducted as per the procedure and the charges were not vague. This decision does not introduce any new legal principles but reaffirms the existing legal framework.

Conclusion

The Supreme Court allowed the appeal, setting aside the High Court’s judgment. The Court held that the High Court had erred in its assessment of the facts and had exceeded its jurisdiction by acting as an appellate authority. The disciplinary proceedings against the respondent were upheld, and the punishment imposed by the appellate authority was deemed valid.