Supreme Court restores bank's removal order in disciplinary case over alleged loan irregularities

A bench of Justice Rajesh Bindal and Justice Manmohan heard an appeal by the State Bank of India challenging orders of the Patna High Court which had set aside departmental punishment and directed reinstatement with back wages. The Bank contested the Single Bench's decision in a writ petition and the Division Bench's dismissal of the Bank's intra‑court appeal, seeking restoration of the appellate disciplinary order.

The Supreme Court allowed the Bank's appeal, set aside the High Court orders and restored the Appellate Authority's decision dated 07.12.2012 which had reduced the original punishment of dismissal to "removal from service" with superannuation benefits. The Court held that interference by constitutional courts in departmental proceedings was limited to correcting errors of law, procedural infirmity or breach of natural justice and was not equivalent to re‑adjudicating merits. The Court, in its reasoning, observed: The Court further relied on the settled proposition that "if the disciplinary authority accepts the findings recorded by the enquiry officer and passes an order, no detailed reasons are required to be recorded in the order imposing punishment."

Background

The respondent joined the Bank as a messenger in 1997. In April 2008 complaints alleged that he acted as a conduit in sanction and disbursement of several small loans and took illegal gratification; a show‑cause notice dated 15.11.2008 and a formal chargesheet dated 05.01.2010 followed. An inquiry officer recorded evidence including testimony of multiple loanees who stated they paid money to the respondent to get loans sanctioned. The Inquiry Officer found him guilty of acting as a middleman and proved unauthorized absence; the Disciplinary Authority accepted the report and on 08.01.2011 imposed "dismissal from service." On statutory appeal the Appellate Authority took a compassionate view and reduced the penalty to "removal from service" with superannuation benefits on 07.12.2012.

The respondent challenged that order by writ petition; the Single Bench allowed the petition, set aside punishment and directed reinstatement with back wages while granting liberty to the Bank to initiate fresh proceedings. The Division Bench dismissed the Bank's intra‑court appeal, prompting the present appeal to the Supreme Court. The Bank argued the High Court erred in re‑appraising evidence, that procedural fairness had been observed, and that senior officers were separately punished; the respondent contended he was a Class IV employee with no authority to sanction loans and had earlier received a promotion and favourable attestations.

The Supreme Court reviewed the record, held that the inquiry complied with principles of natural justice, that findings were based on preponderance of probabilities supported by loanees' testimony and the respondent's plea for mercy at the disciplinary stage, and that the High Court erred in substituting its view for the disciplinary and appellate authorities. The Court referred to authorities including SBI v. Ajai Kumar Srivastava and Boloram Bordoloi v. Lakhimi Gaolia Bank, allowed the appeal and restored the Appellate Authority's order; the appeal was allowed with no order as to costs. The Single Bench's liberty to initiate fresh proceedings and the respondent's subsequent superannuation were noted in the record.

Case No.: Civil Appeal No. 10680 of 2025 (Arising out of S.L.P.(C) No. 6722 of 2023)
Case Title: State Bank of India & Others v. Ramadhar Sao
Appearances:
For the Petitioner(s): Counsel not indicated in reported text
For the Respondent(s): Counsel not indicated in reported text