Supreme Court Affirms Bank's Compulsory Retirement Order and Sets Aside Tribunal and High Court Awards

A bench of Justice J.K. Maheshwari and Justice Vijay Bishnoi heard an appeal by the General Manager (P), Canara Bank challenging a Karnataka High Court judgment that had upheld a Central Government Industrial Tribunal award directing reinstatement of a bank employee. The appeal questioned whether the Tribunal and the High Court had exceeded their appellate role while reviewing a departmental disciplinary order imposing compulsory retirement.

The Court allowed the appeal, set aside the Tribunal's final award dated 25.09.2019 and the High Court order dated 12.08.2022, and affirmed the disciplinary authority's order of compulsory retirement. The Court emphasised the limited scope of judicial review in disciplinary matters and the principle that a tribunal exercising powers under Section 11-A of the Industrial Disputes Act could not reappraise evidence as an appellate body. The Court, in its reasoning, observed: The Court further noted that the Tribunal “had acted in a manner as if it was hearing an appeal,” and directed that, while compulsory retirement remained, the respondent was entitled to “gratuity and other pensionary benefits in accordance with law.”

Background

The respondent joined Canara Bank in 1990 and rose to the post of Sub-Staff Leader. An investigation into alleged irregularities at the V.G. Doddi branch in 2004 found unauthorised loan-related entries favouring the respondent’s father and wife and alterations in bank records. The respondent was suspended on 19.08.2004, shown a chargesheet on 28.04.2005, and a departmental enquiry concluded on 09.01.2006 that charges were proved. The Disciplinary Authority imposed compulsory retirement on 15.03.2006; the Appellate Authority (General Manager) confirmed the penalty on 22.11.2006.

The Central Government referred the dispute to the Industrial Tribunal under Section 10 of the Industrial Disputes Act. The Tribunal earlier held in an interlocutory order (17.05.2013) that the domestic enquiry was fair but, on the final award (25.09.2019), reappreciated evidence and set aside the punishment as the management had not produced conclusive proof that the respondent authored the disputed entries; it directed reinstatement with continuity of service but without back wages. The High Court dismissed Canara Bank’s writ petition and affirmed the Tribunal’s award.

Canara Bank argued that the Tribunal went beyond the narrow ambit of judicial review and converted itself into an appellate forum despite the departmental findings, reliance on documentary and oral evidence and admissions by the respondent. The respondent contended that key witnesses were not examined, handwriting/forensic opinion was not obtained, and admissions were involuntary, arguing innocence or lack of direct authorship of the entries.

The Supreme Court applied settled principles from precedents including B.C. Chaturvedi, Standard Chartered Bank v. R.C. Srivastava, and Indian Overseas Bank v. Om Prakash Lal Srivastava, reiterating that courts and tribunals could interfere only where enquiry was held by an incompetent authority, rules of natural justice were breached, or findings were unsupported by any evidence or were perverse. The Court found the disciplinary and appellate authorities had recorded findings based on evidence and bank officers’ assessment (a “banker’s eye”) and concluded the Tribunal and High Court impermissibly reappreciated evidence.

Case Details: Case No.: 2025 INSC 1088 (Civil Appeal arising out of SLP(C) No. 20343 of 2022) Case Title: THE GENERAL MANAGER (P) CANARA BANK v. GANGANARASIMHAIAH Appearances: For the Petitioner(s): [Not indicated in the judgment] For the Respondent(s): [Not indicated in the judgment]