Supreme Court Upholds SBI’s Dismissal of Employee in Fraud Case: State Bank of India & Anr. vs. K.S. Vishwanath (20 May 2022)

Case Background

The respondent, K.S. Vishwanath, was working as a Deputy Manager (Cash) at the State Bank of India’s (SBI) SSI Peenya II Stage Branch in Bangalore. On August 6, 1996, a fraudulent letter was used to withdraw ₹10 lakhs from the Peenya Industrial Estate Branch. This letter, purportedly signed by A.R. Balasubramanian, the AGM of the SSI Branch, was later found to be forged. The ₹10 lakhs was not accounted for at the SSI Branch. Following a complaint to the CBI on November 10, 1998, an FIR was registered. A departmental inquiry was initiated, and the respondent was charged with:

• Preparing a fraudulent cash remittance document and withdrawing ₹10 lakhs.
• Failing to disclose investments in Kisan Vikas Patra and Special Term Deposits.

Timeline

Course of Proceedings

The Enquiry Officer found the respondent guilty of charge no. 1 (fraudulent withdrawal) and partly guilty of charge no. 2 (non-disclosure of investments). The Appointing Authority agreed with these findings and dismissed the respondent. The Appellate Authority confirmed the dismissal. The respondent then filed a writ petition before the High Court, which set aside the dismissal order and directed the bank to provide all consequential benefits, except back wages, as he had reached superannuation. The bank appealed this decision, and the respondent also appealed for back wages. The Division Bench of the High Court dismissed both appeals.

Legal Framework

The case primarily revolves around the scope of judicial review by High Courts in departmental disciplinary proceedings. The Supreme Court emphasized that High Courts should not act as appellate authorities and re-appreciate evidence. The court referred to previous judgments that clarified the limited scope of judicial review in such cases.

Arguments

Appellant (SBI) Arguments:

• The High Court erred in interfering with the findings of the Enquiry Officer, which were based on evidence.
• The management had presented nine witnesses and 41 documents to prove the charges.
• Witnesses confirmed the practice of cash remittance and the respondent’s presence during the withdrawal.
• The Branch Manager confirmed that the signature on the letter was not his.
• A witness from a photo shop confirmed that the respondent had the fraudulent letter typed in her shop.
• The High Court acted beyond the scope of its writ jurisdiction by re-appreciating the evidence.
• Relied on State of Karnataka vs. N. Ganga Raj [(2020) 3 SCC 423], arguing that judicial review is limited to the decision-making process and not a re-evaluation of evidence.

Respondent (K.S. Vishwanath) Arguments:

• The respondent had an unblemished record of 28 years with two promotions.
• The ₹10 lakhs was allegedly paid to M.N. Kiran, not the respondent.
• An initial investigation by M.R. Srinath, AGM, absolved the respondent.
• The respondent was acquitted in the criminal proceedings.
• The enquiry was vitiated due to violation of natural justice principles.
• The enquiry officer relied on surmises and conjectures.
• The witness from the photocopying shop was unreliable.
• Relied on Nand Kishore Prasad vs. State of Bihar & Others [AIR 1978 SC 1277], arguing that domestic tribunals must base their conclusions on cogent evidence.
• Relied on Rajinder Kumar Kindra vs. Delhi Administration [(1984) 4 SCC 635], arguing that findings based on no legal evidence are invalid.

Issues Framed by the Supreme Court

The Supreme Court addressed the following key issues:

1. Whether the High Court was justified in interfering with the findings recorded by the Enquiry Officer in the departmental proceedings?
2. Whether the order of dismissal was disproportionate to the charges proved against the delinquent officer?

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on the following authorities:

• State of Karnataka vs. N. Ganga Raj [(2020) 3 SCC 423] – The Court reiterated that judicial review is limited to the decision-making process, not a re-evaluation of evidence.
• Nand Kishore Prasad vs. State of Bihar & Others [AIR 1978 SC 1277] – The Court clarified that domestic tribunals must base their conclusions on cogent evidence.
• Rajinder Kumar Kindra vs. Delhi Administration [(1984) 4 SCC 635] – The Court stated that findings based on no legal evidence are invalid.
• State of A.P. v. S. Sree Rama Rao [AIR 1963 SC 1723] – The High Court is not a court of appeal over the decision of the authorities holding a departmental enquiry.
• B.C. Chaturvedi v. Union of India [(1995) 6 SCC 749] – Power of judicial review is not an appeal from a decision but a review of the manner in which the decision is made.
• State Bank of Bikaner & Jaipur v. Nemi Chand Nalwaya [(2011) 4 SCC 584] – Courts will not act as an appellate court and reassess the evidence led in the domestic enquiry.
• Union of India v. P. Gunasekaran [(2015) 2 SCC 610] – The High Court shall not re-appreciate the evidence, interfere with the conclusions in the enquiry, go into the adequacy of the evidence, or correct the error of fact.
• Allahabad Bank v. Krishna Narayan Tewari [(2017) 2 SCC 308] – If the disciplinary authority records a finding that is not supported by any evidence, the writ court could interfere.
• Union of India v. H.C. Goel [(1964) 4 SCR 718] – If the conclusion reached by the disciplinary authority is perverse or suffers from patent error, a writ of certiorari could be issued.
• High Court of Bombay v. Shashikant S. Patil [(2000) 1 SCC 416] – Interference with the decision of departmental authorities is permitted if such authority had held proceedings in violation of the principles of natural justice.

Judgment

How each authority was viewed by the Court?

• State of Karnataka vs. N. Ganga Raj [(2020) 3 SCC 423]*: The Court followed this authority to emphasize that judicial review is limited to the decision-making process and not a re-evaluation of evidence.
• Nand Kishore Prasad vs. State of Bihar & Others [AIR 1978 SC 1277]*: The Court acknowledged this authority but found that the Enquiry Officer’s findings were based on sufficient evidence.
• Rajinder Kumar Kindra vs. Delhi Administration [(1984) 4 SCC 635]*: The Court distinguished this authority, stating that the findings were not based on no legal evidence.
• State of A.P. v. S. Sree Rama Rao [AIR 1963 SC 1723]*: The Court followed this authority to reiterate that the High Court is not a court of appeal over the decision of the authorities holding a departmental enquiry.
• B.C. Chaturvedi v. Union of India [(1995) 6 SCC 749]*: The Court followed this authority to emphasize that judicial review is a review of the decision-making process.
• State Bank of Bikaner & Jaipur v. Nemi Chand Nalwaya [(2011) 4 SCC 584]*: The Court followed this authority to reiterate that courts will not reassess evidence in domestic enquiries.
• Union of India v. P. Gunasekaran [(2015) 2 SCC 610]*: The Court followed this authority to emphasize that the High Court shall not re-appreciate evidence in disciplinary proceedings.
• Allahabad Bank v. Krishna Narayan Tewari [(2017) 2 SCC 308]*: The Court distinguished this authority, stating that the findings were not entirely unsupported by evidence.
• Union of India v. H.C. Goel [(1964) 4 SCR 718]*: The Court followed this authority to reiterate that a writ of certiorari can be issued if the conclusion is perverse.
• High Court of Bombay v. Shashikant S. Patil [(2000) 1 SCC 416]*: The Court followed this authority to reiterate that interference is permitted if proceedings violate principles of natural justice.

What weighed in the mind of the Court?

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

• The evidence presented by the management was deemed sufficient to prove the charges against the respondent.
• The High Court overstepped its jurisdiction by re-appreciating the evidence.
• The seriousness of the misconduct (misappropriation of ₹10 lakhs) justified the dismissal.
• The modus operandi of the respondent demonstrated a criminal intent.
• The court emphasized the limited scope of judicial review in departmental proceedings.

Logical Reasoning

Key Takeaways

✓ High Courts should not act as appellate authorities in departmental disciplinary matters.

✓ Judicial review is limited to the decision-making process, not a re-evaluation of evidence.

✓ Disciplinary authorities’ findings, if based on some evidence, should not be easily overturned.

✓ Criminal acquittals do not automatically invalidate disciplinary proceedings.

✓ The seriousness of the misconduct and the employee’s intent are important factors in determining the proportionality of punishment.

Directions

The Supreme Court quashed the High Court’s judgment and restored the order of dismissal passed by the disciplinary authority.

Development of Law

The ratio decidendi of this case is that High Courts should not act as appellate authorities when reviewing decisions of disciplinary authorities. The Supreme Court reinforced the principle that judicial review is limited to the decision-making process and does not extend to re-appreciating evidence. This judgment reaffirms the limited scope of judicial review in departmental proceedings and emphasizes the importance of maintaining the integrity of disciplinary processes.

Conclusion

The Supreme Court allowed the appeal by the State Bank of India, setting aside the High Court’s order. The court upheld the dismissal of the respondent, emphasizing that the High Court had exceeded its jurisdiction by re-appreciating the evidence. The judgment reinforces the limited scope of judicial review in departmental proceedings and highlights the importance of maintaining the integrity of disciplinary processes.