Mitigating Factors Like Long Service, Promotions To Be Considered While Imposing Punishment On Delinquent Employee: Karnataka High Court

The Karnataka High Court has said that punishment upon a delinquent employee should be commensurate with the gravity of guilt and while awarding punishment, factors like the long and spotless service rendered by the delinquent, the number and nature of promotions earned by him till initiation of disciplinary proceedings, the encomia awarded to him, the shortness of the period remaining for superannuation, etc. be considered.

A division bench of Justice Krishna S Dixit and Justice Ramchandra D Huddar made the observation while allowing in part the appeal filed by M R Nagarajan, a former employee of Syndicate bank, who was charged of reckless lending of the Bank funds to the unscrupulous borrowers and of negligently compromising securities for the repayment. The Appellant-Bank Officer was awarded punishment of dismissal from service.

The appellant raised two grounds in support of his appeal. One, it was argued that a copy of the Investigation Report was not furnished to him despite demand and that has disabled him from taking up effective defence. Secondly, both the Disciplinary Authority and the Appellate Authority failed to see that there was no evidentiary material enough to hold the charges proved as there is a specific finding in the Enquiry Report that almost the entire amount of loan has been recovered and the loan accounts have been closed.

Opposing the plea, the bank submitted that the scope of intra-Court appeal is very limited; findings of guilt recorded by the Disciplinary Authority and accepted by the Appellate Authority cannot be examined by the Writ Court; if there is substantial compliance with the principles of natural justice, no grievance can be made by pointing out some defects.

Moreover, what punishment should be awarded to the delinquent employee pertains to the domain of the employer and therefore, Courts cannot substitute the punishment awarded by the competent authority.

Court at the outset observed that the question of setting aside termination and facilitating reinstatement would not arise since the Appellant would anyway have demitted office on attaining the age of superannuation by now.

However, it pulled up the bank for not furnishing documents like copy of the Investigation Report to the Appellant, claiming “privilege”. The court said, “In matters like this, what privilege could have been claimed, remains a mystery wrapped in enigma. It is not that the “security of State” or the like was involved and therefore, kind of the norm enacted in Section of 128 of the Indian Evidence Act, 1972 was invokable. An employer more particularly Article 12 Entity like the Bank cannot deny “charge documents” just by invoking privilege. As of necessity, he has to share copies of the documents on which he wants to prove the charge. At least those documents could have been produced before the learned Single Judge with a note “For your eyes only”. Even that has not happened in this case.”

Court then considered the issue of proportionality of punishment and noted that Appellant gained entry to service in 1979 as a Clerk, earned first promotion as an Officer in 1996, second promotion as Manager the very next year and he was conferred the award of Star Performer. He was also given a Certificate for best performance in recovery of outstanding loans of Rs.400 crore.

It said Appellant cannot be given a "clean chit" merely because most of the outstanding loans had been repaid and there was no loss to the Bank. However, it said the extreme punishment of dismissal should be trimmed down to compulsory retirement.

Thus allowing the appeal in part, the court directed the bank that whatever financial benefits accruing to the appellant employee on account of compulsory retirement shall be released to him after deducting what is due from him.

Appearance: Advocate M Subramanya Bhat for Appellant.

Advocate Santhosh S Nagarale for Respondents.

Citation No: 2024 LiveLaw (Kar) 285

Case Title: M R Nagarajan AND The Syndicate Bank & Others

Case No: WRIT APPEAL NO. 1337 OF 2015

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