Bank Employees Owe Larger Responsibility To Uphold Customers' Trust, Even Suspicion Of Fraud With Some Credibility Sufficient To Dismiss From Service: Delhi HC

The Delhi High Court has observed that the employees and officials working in banks have a larger responsibility of ensuring the integrity of the banking system and maintaining the trust of the millions of customers, who repose faith in them.

Observing that the banking system is the backbone of any country's economy, Justice Pratibha M Singh said that once there is a loss of confidence, that too by a Bank qua one of its officials, the standard on which such loss of faith or confidence is to be tested cannot be a very high standard.

"Even a suspicion or doubt, with some credibility or some evidence, would be sufficient to objectively uphold the dismissal from service," it

The Court was dealing with a case where a bank's employee had misused his status of being a single window operator for his own personal benefit by getting the amounts deposited by the customers in his own personal account, although returning them later with interest.

The State Bank of India had filed the petition challenging orders dated 14th March 2016 passed by the Presiding Officer, CGIT as well as the final Award dated 28th December 2016 in the claim filed by the employee.

The Respondent employee was working as a single-window operator at the Bank and was dealing with the Senior Citizens Saving Scheme. In 2010, he was terminated by the Bank effect from 20th May 2010, for allegedly making entries of customers in his personal accounts.

Vide the first impugned order dated 14th March 2016, the CGIT held while deciding as a preliminary issue, that the departmental enquiry conducted by the Bank was violative of principles of natural justice and was illegal.

The CGIT, vide the second impugned Award dated 28th December 2016, held that the Bank could not adequately discharge its burden to prove misconduct by the respondent and reinstated the employee with full back wages and his claim petition was allowed.

"The question whether the Bank suffered any loss as a consequence of his actions would not be relevant for the defense of the Respondent. In any event, this Court is of the opinion that the incidents which have surfaced, may just be those which have come to the knowledge of the officials of the Bank. Such incidents in any branch of a Bank would lead to a loss of trust and faith in the Bank, especially in the case of local customers as they can spread such incidents through word of mouth," the Court said.

It added:

"Thus the loss is not to be adjudged only monetarily but also in terms of the goodwill/ faith of the customers in the Bank, and the consequent loss of trust for a Bank. This by itself is sufficient. It is the clear conclusion of this Court that when there is loss of confidence, reinstatement ought not to be permitted."

The Court also took note of the Respondent's statement before the Enquiry Officer, wherein he prayed for leniency and reinstatement. The Court said that it was a clear admission by the Respondent of the irregularities committed by him.

"In such a situation, the Bank cannot be punished for not showing leniency. The Bank, in the opinion of this Court, has rightly held its employee accountable to a higher degree, as is expected of any financial institution," the Court said.

The Court concluded that the Respondent had indulged in improper conduct, and hence his dismissal, under such circumstances, after holding a detailed departmental enquiry, was not illegal and could not be faulted with.

The Court therefore set aside the two impugned orders and upheld the punishment of termination awarded to the Respondent.

"Further, since the termination has been held to be valid only today, the Respondent, if he had worked during this period would have earned his monthly salary owing to the CGIT's order, if the stay had not been granted. Under these circumstances, this Court is of the opinion that a sum of Rs. 20 Lakhs ought to be released as lumpsum payment to the Respondent, in the facts and circumstances of this case," the Court added.

It directed the Bank to pay a lump sum amount of Rs. 20 lakhs within four weeks.

"The remaining amounts in the FDR, including the interest component shall be encashed by the Bank itself. In addition, the Respondent shall be released all his statutory dues such as Provident Fund, gratuity etc., without making any deductions, until the date of termination, in case the same has not already been released, within four weeks," the Court said.

Case Title: ASSTT GENERAL MANAGER STATE BANK OF INDIA v. ASHOK KUMAR BHATIA

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