Supreme Court Upholds Dismissal of Bank Officer: State Bank of India vs. Kamal Kishore Prasad (2023)

Date of the Judgment: 09 January 2023
Citation: 2023 INSC 21
Judges: Krishna Murari, J., Bela M. Trivedi, J.
Can a disciplinary proceeding against a bank officer, initiated before their retirement, continue after they have reached superannuation? The Supreme Court of India addressed this question in a recent case, clarifying the scope of the State Bank of India Officer Service Rules (SBIOSR). The court examined whether the Appointing Authority of the bank could dismiss an employee after the employee had attained superannuation, when disciplinary proceedings were initiated before superannuation. The judgment was delivered by a two-judge bench comprising Justice Krishna Murari and Justice Bela M. Trivedi, with the opinion authored by Justice Bela M. Trivedi.

Case Background

The respondent, Kamal Kishore Prasad, was a Branch Manager at State Bank of India (SBI). While serving at various branches, he was found to have committed certain lapses. Consequently, he was suspended on 14 June 1993, under Rule 50A(i)(a) of the SBIOSR, 1992. A departmental inquiry was conducted, and the Inquiry Authority submitted its report on 9 March 1998. The report found some allegations to be proved and some partly proved. The Disciplinary Authority agreed with some of the findings and asked the respondent for his submissions. Subsequently, the matter was referred to the Appointing Authority, which ordered his “Dismissal from Service” on 11 August 1999.

Timeline

Course of Proceedings

The respondent challenged the dismissal order by filing a Writ Petition No. 2739 of 2000 in the High Court. A Single Bench of the High Court allowed the petition on 26 March 2003, setting aside the dismissal order. The Appellant-Bank filed LPA No. 378 of 2003, and the Division Bench stayed the implementation of the Single Bench order on 9 May 2003. The Division Bench eventually dismissed the LPA on 22 April 2010. In the meantime, the respondent reached the age of superannuation on 30 November 2009. The Appellant-Bank then filed SLP (C) No. 16541 of 2010, which the Supreme Court allowed on 25 November 2013, setting aside the Division Bench’s order and directing the Appointing Authority to take a fresh decision within two months, keeping all contentions open. Following this, the Appointing Authority issued a show-cause notice on 6 February 2014, and after a personal hearing on 14 February 2014, passed an order on 17 February 2014, again dismissing the respondent from service with effect from 11 August 1999. The respondent then filed a departmental appeal, which was dismissed on 9 August 2014. The respondent then approached the High Court again, which allowed the petition on 22 August 2016. The Appellant-Bank filed LPA No. 2035 of 2016, which was dismissed by the Division Bench on 1 February 2018, leading to the present appeal before the Supreme Court.

Legal Framework

The case primarily revolves around the interpretation of Rule 19(1) and 19(3) of the State Bank of India Officer Service Rules (SBIOSR), 1992. Rule 19(1) deals with the age of retirement of an officer, stating that an officer shall retire from the service of the Bank on attaining the age of fifty-eight years or upon the completion of thirty years’ service or thirty years’ pensionable service if he is a member of the Pension Fund, whichever occurs first. It also provides for the possibility of extension of service under certain conditions. Rule 19(3) states that:

“In case disciplinary proceedings under the relevant rules of service have been initiated against an officer before he ceases to be in the Bank’s service by I the operation of, or by virtue of, any of the said rules or the provisions of these rules, the disciplinary proceedings m’ay, at the discretion of the Managing Director, be continued and concluded by the authority by which the proceedings were initiated in the manner provided for in the said rules as if the officer continues to be in service, so however, that he shall be deemed to be in service only for the purpose of the continuance and conclusion of such proceedings.”

Essentially, Rule 19(3) allows for the continuation of disciplinary proceedings even after an officer’s retirement, treating them as if they were still in service for the purpose of those proceedings.

Arguments

Appellant-Bank’s Arguments:

• The Appellant-Bank argued that the High Court misinterpreted Rule 19(1) and 19(3) of the SBIOSR, 1992.
• The Supreme Court in the first round of litigation had directed the Appointing Authority to take an appropriate decision within two months, keeping all contentions open.
• The Appointing Authority had issued a show-cause notice to the respondent and after giving him an opportunity of hearing, had passed the order of dismissal.
• The Appointing Authority’s order was in line with the Supreme Court’s direction and should not have been set aside.

Respondent’s Arguments:

• The respondent contended that the Supreme Court’s order on 25 November 2013, required the Appellant-Bank to take an affirmative action since the respondent had already reached superannuation.
• The Supreme Court had agreed with the view of the Single Bench that the person who hears the matter should pass the order.
• The Appointing Authority should have either extended the respondent’s service under Rule 19(1) or continued the disciplinary proceedings under Rule 19(3).
• The discretion to continue the disciplinary proceedings had to be exercised as an affirmative action by taking a conscious decision.
• The Appointing Authority failed to take such a conscious decision and passed the order of dismissal with retrospective effect, which was not legally permissible.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues. However, the core issue before the court was:

1. Whether the Appointing Authority could dismiss the respondent after he had reached superannuation, based on disciplinary proceedings initiated before his retirement.

Treatment of the Issue by the Court

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

Authorities

The court did not cite any cases or books. However, the court considered the following legal provisions:

• Rule 19(1) of the SBIOSR Rules: This rule deals with the retirement age of bank officers.
• Rule 19(3) of the SBIOSR Rules: This rule allows for the continuation of disciplinary proceedings even after an officer’s retirement.

Judgment

How each authority was viewed by the Court?

• Rule 19(1) of the SBIOSR Rules: The Court clarified that this rule deals with the retirement age and does not prevent the continuation of disciplinary proceedings.
• Rule 19(3) of the SBIOSR Rules: The Court interpreted this rule to mean that disciplinary proceedings can continue even after retirement, but it does not mandate an affirmative action to continue the proceedings.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the fact that the disciplinary proceedings against the respondent had already been initiated and had culminated in his dismissal before he reached superannuation. The court emphasized that the order of the Single Bench setting aside the dismissal was stayed, and the Supreme Court had kept all contentions open when it set aside the Division Bench’s order. Therefore, the Appointing Authority was correct in passing the order of dismissal after giving the respondent an opportunity to be heard. The court found no requirement for an affirmative action to extend the service or to continue the disciplinary proceedings, as the proceedings had already been initiated and culminated into dismissal. The court also found that the High Court had misconstrued the rules.

Logical Reasoning:

The Court’s reasoning was based on the procedural history of the case and the interpretation of the relevant rules. The Court emphasized that the disciplinary proceedings had already been initiated and had culminated in the dismissal order before the respondent reached superannuation. The Court also noted that the Supreme Court had kept all contentions open when it set aside the Division Bench’s order, and therefore the Appointing Authority was correct in passing the order of dismissal after giving the respondent an opportunity to be heard.

The Court rejected the argument that the Appointing Authority was required to take an affirmative action to extend the service or to continue the disciplinary proceedings, as the proceedings had already been initiated and culminated into dismissal. The Court also rejected the argument that the dismissal order with retrospective effect was not legally permissible, as the Court upheld the dismissal order.

The Court stated,

“The reliance placed by the learned counsel for the respondent on Rule 19(3) of the Rules is also thoroughly misplaced in as much as Rule 19(3) contemplates a situation, when the disciplinary proceedings against a bank officer, have already been initiated, and are pending when the officer ceases to be in the Bank’s service, and in that case the Managing Director in his discretion may continue and conclude the disciplinary proceedings against the officer as if the officer continues to be in service.”

“However, in the instant case, there was no question of Managing Director exercising such discretion under Rule 19(3) as the disciplinary proceedings initiated against the respondent had already culminated into his dismissal as per the order dated 11.08.1999 passed by the Appointing Authority.”

“Since all the contentions were kept open by this Court while allowing the appeal filed by the Appellant-Bank, as such no affirmative action was expected from the Appellant-Bank, as sought to be submitted by the learned counsel for the respondent.”

Key Takeaways

• Disciplinary proceedings initiated before an employee’s retirement can continue even after they reach superannuation.
• The Appointing Authority is not required to take an affirmative action to continue the disciplinary proceedings if the proceedings had already been initiated and culminated into dismissal.
• The Supreme Court’s direction to keep all contentions open allows the Appointing Authority to pass a fresh order after giving an opportunity of hearing.

Directions

No specific directions were given by the Supreme Court, other than setting aside the High Court’s order and upholding the dismissal order passed by the Appointing Authority.

Development of Law

The ratio decidendi of the case is that disciplinary proceedings initiated before an employee’s retirement can continue even after they reach superannuation and the Appointing Authority is not required to take an affirmative action to continue the disciplinary proceedings if the proceedings had already been initiated and culminated into dismissal. This clarifies the interpretation of Rule 19(3) of the SBIOSR Rules.

Conclusion

The Supreme Court allowed the appeal filed by the State Bank of India, setting aside the High Court’s order. The court upheld the dismissal of the respondent, Kamal Kishore Prasad, by the Appointing Authority. The court clarified that disciplinary proceedings initiated before an employee’s retirement can continue even after superannuation, and no affirmative action is required to continue the proceedings if they had already been initiated and culminated into dismissal. The judgment provides clarity on the interpretation of Rule 19(3) of the SBIOSR Rules.