37 years of service, fired on retirement day: Delhi High Court slams PNB for ‘singling out’ officer

Justice Sanjeev Narula said that the judicial interference is justified only where the penalty is so disproportionate to the misconduct proved that it shocks the conscience.

‘Duty to explain punishment’ 

• The petitioner has long service since December, 1980, in PNB and the dismissal was imposed on October 31, 2017, the last day of service, with an acknowledged cascading impact on terminal benefits under the PNB regime. 
• The high court found that this consequence is a relevant consideration in proportionality. 
• The requirement is not of identical punishment, but of rational and reasoned differentiation.
• Judicial interference is justified only where the penalty is so disproportionate to the misconduct proved that it shocks the conscience.
• A departmental enquiry is not re-tried, nor is the evidence re-weighed as if the court were hearing a statutory appeal. 
• Judicial review against disciplinary decisions remains directed to the legality of the decision-making process, not to the merits of the conclusion as such.
• A departmental enquiry is not governed by the strict rules of the Evidence Act. 
• The test is whether there is material which a reasonable person may act upon and whether a fair opportunity is afforded. 

‘Reconduct enquiry’

• PNB is correct in principle in submitting that any objection to the admissibility of a document should have been taken at the stage when the document was introduced into the enquiry record, so that the enquiry authority could rule upon it in the course of proceedings. 
• In the absence of a demonstrated contemporaneous objection and a demonstrated refusal to consider it, the court does not ordinarily set aside the enquiry by treating all exhibited records as non-existent. 
• A departmental enquiry is tested by fairness, not by the rigid evidentiary rules applicable to a criminal trial.
• Where the report and the final orders sufficiently disclose what was held against the delinquent, and to what extent, it cannot be said that there was a failure to return findings in law.
• The high court found that the petitioner was given a sufficient opportunity to vitiate the enquiry related to PNB.
• The high court said that the accepted course in this case is to remit the matter for reconsideration of the penalty, while leaving the findings of misconduct intact.
• The competent authority should reconsider the punishment afresh, keeping in view the petitioner’s role vis-àvis other PNB officials in the same credit chain, and should pass a fresh, reasoned order within a period of six weeks from today. 
• If the petitioner remains aggrieved by the decision so taken, he should be at liberty to avail remedies in accordance with the law.
• The high court directed the authority concerned to give due weight to the fact that the penalty of dismissal was imposed on the last day of his service, carrying severe consequences, including the forfeiture of his entire retirement benefits. 
• PNB’s present case rests substantially on the proposition that the petitioner has not superannuated and is dismissed from service. 
• However, if the penalty changes, the consequential entitlements would require fresh determination under the applicable regulations and circulars. 

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‘Employment since 1980’

• The petitioner joined PNB in December 1980, and from May, 2012 to April, 2015, he was serving as assistant general manager and incumbent-in-charge at the branch office of Mumbai. 
• On July 26, 2017, the petitioner was served with a chargesheet for major penalty proceedings.
• The charges mentioned that while sanctioning credit facilities to various borrowers, the PNB official allegedly failed to exercise due diligence, departed from PNB’s guidelines, and did not ensure a proper pre-sanction appraisal.
• It was also alleged in the chargesheet that the petitioner did not ensure effective post-sanction monitoring and follow-up, thereby jeopardising PNB’s interest. 
• A departmental enquiry followed, and a report was submitted in October 2017. This report allegedly had a mix of “proved”, “partly proved” and “not proved” findings across several sub-items of the imputations. 
• The petitioner furnished a representation to the report. However, on October 31, 2017, the disciplinary authority awarded the major punishment of dismissal to the petitioner. 
• The petitioner’s departmental appeal was rejected by an order of March 28, 2018, which was the very date of his superannuation, with the consequence that his terminal benefits have been withheld.

‘Non-speaking dismissal order’

• Appearing for the petitioner, advocate Rajinder Gulati mounted a multipronged challenge, directed both at the integrity of the enquiry process and at the sustainability of the punishment.
• It was submitted that the disciplinary and appellate orders are non-speaking and lacking meaningful engagement with the defence. 
• The disciplinary order proceeds on a general narrative of lapses without addressing the petitioner’s principal defence regarding the division of responsibilities in a specialised credit branch. 
• The alleged lapses relate to the petitioner’s tenure between May 2012 and April 2015, whereas the chargesheet was issued in July, 2017, shortly before his retirement. He added that this belated action caused serious prejudice.
• The procedure adopted fell short of the safeguards ordinarily associated with such cases, including consultation with the central vigilance commission before major penalty proceedings were set in motion.
• The petitioner submitted that he alone was visited with the severest penalty, while other PNB officials involved in processing and recommending the same proposals were, at least in some instances, visited only with minor penalties such as censure. 

• He further pointed out that the petitioner was dismissed on the last day of service, with the foreseeable consequence of depriving him of pensionary and other terminal benefits. 
• He further added that cascading civil consequences are a relevant factor while judging whether the penalty is excessive in relation to the nature of the proved misconduct. 
• On terminal benefits, it was argued that PNB’s approach proceeds on the erroneous assumption that dismissal automatically extinguishes all post-service entitlements. 

‘Lapses resulted in Rs 31.84 crore’

• Representing PNB, advocate Rajesh Kumar Gautam opposed the plea principally on the ground that it invites this court to sit as an appellate forum over a departmental enquiry. 
• It was further submitted that several objections now raised by the petitioner were never urged during the course of the departmental enquiry and therefore cannot be permitted to be raised for the first time in this plea. 
• On merits, it was contended that the proved lapses span five borrower accounts and have resulted in substantial exposure and an apprehended loss quantified at approximately Rs 31.84 crore. 
• It was argued that disciplinary action had also been taken against other bank officials involved in the concerned accounts, and therefore, the allegation of discriminatory treatment is unfounded.
• The terminal benefits were released strictly to the extent admissible under the governing statutory and service-regulatory framework.
• It was mentioned that the petitioner was paid gratuity under the Payment of Gratuity Act, while other benefits, including pension, were not admissible consequent upon dismissal from bank service

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