Telangana High Court
Mr. K. Babu Rao, Hyderabad vs Union Bank Of India on 21 July, 2026
Author: Juvvadi Sridevi
Bench: Juvvadi Sridevi
IN THE HIGH COURT FOR THE STATE OF TELANGANA
AT HYDERABAD
THE HONOURABLE SMT. JUSTICE JUVVADI SRIDEVI
WRIT PETITION No.19350 of 2011
DATED: 21ST JULY, 2026
BETWEEN:
K.Babu Rao ...Petitioner
AND
Union Bank of India and two others ...Respondents
O R D E R:
This Writ Petition is filed by the petitioner seeking the
following relief:
“…to issue an order, direction or writ more particularly
one in the nature of Writ of Mandamus or any other
appropriate writ (i) declare the Proceedings
No.666/20/V/T-996/1131, dated 31.12.2010 issued to
the petitioner by the Respondents in imposing the
punishment of dismissal from service is illegal and
arbitrary, (ii) declare the proceedings No.666/20/V/T-
996/90, Dated 20.04.2011 of the Appellate Authority
in confirming the punishment of major penalty of
dismissal from service is illegal and arbitrary; and (iii)
consequently set aside the said proceedings with a
further direction to the Respondents to reinstate the
petitioner into service with full back wages, continuity
of service and all other consequential benefits and
pass such other order or orders …”
02. Heard Sri P.Sudheer Rao, learned counsel,
representing Ms. K.Udaya Sri, learned counsel, on record, for the
petitioner and Dr. K. Lakshmi Narasimha, learned Standing
2
Counsel appearing for the respondents-bank. Perused the
material available on record.
03.1. Aggrieved by the action of the respondents in
imposing the punishment of dismissal from service, the petitioner
has filed the present writ petition.
03.2. Learned counsel for the petitioner submits that the
petitioner joined the erstwhile Andhra Bank as a Clerk-cum-
Cashier on 07.09.1982. Subsequently, he was promoted as a
Scale-I Officer in December, 1986, and thereafter as a Scale-II
Officer on 10.06.2003. Subsequently, the petitioner was
transferred to Mohammednagar Branch, Nizamsagar Mandal,
Nizamabad District, in April, 2006, where he worked as Branch
Manager till 31.01.2008. Thereafter, he was transferred to
Bhainsa Branch and, subsequently, to Indalvai Branch and
Lakshmapur Branch.
03.3. Learned counsel further submits that while the
petitioner was working as Deputy Manager (MMGS-II) at
Lakshmapur Branch, he was placed under suspension by
proceedings dated 06.01.2010 pending enquiry into certain
allegations pertaining to the period during which he worked as
3
Branch Manager at Mohammednagar Branch. Thereafter, a
charge sheet dated 30.04.2010 was issued alleging that the
petitioner had disbursed further installments of housing loans
without verifying the progress of construction, sanctioned housing
loans in violation of the Head Office guidelines, disbursed
amounts in excess of the sanctioned limits, failed to obtain link
documents relating to gift deeds mortgaged to the Bank, and
sanctioned and disbursed housing loans without recording the
particulars of other outstanding loans in the process notes.
03.4. It is contended that the petitioner submitted a detailed
explanation dated 17.05.2010 categorically denying all the
allegations levelled against him. Thereafter, a departmental
enquiry was initiated by appointing an Enquiry Officer and a
Presenting Officer. During the enquiry, the petitioner actively
participated in the proceedings, availed the assistance of a
Defence Representative, cross-examined the management
witness, and produced documentary evidence in support of his
defence.
03.5. Learned counsel further submits that, despite the
material placed by the petitioner, the Enquiry Officer erroneously
4
held Charges Nos.1 to 6 and 8 as proved, while holding Charge
No.7 as not proved. It is contended that the findings recorded by
the Enquiry Officer are contrary to the evidence available on
record and are based on surmises and conjectures. Upon receipt
of the enquiry report dated 20.11.2010, the petitioner submitted
detailed objections pointing out the factual and legal infirmities in
the findings of the Enquiry Officer. However, the disciplinary
authority failed to consider the objections in their proper
perspective and, without assigning cogent reasons, imposed the
extreme penalty of dismissal from service by proceedings dated
31.12.2010.
03.6. It is further contended that the petitioner preferred a
statutory appeal on 24.02.2011 before the Appellate Authority.
However, the Appellate Authority, without independently
appreciating the grounds urged in the appeal or assigning any
valid reasons, mechanically confirmed the order of dismissal by
proceedings dated 20.04.2011.
03.7. It is submitted that the disciplinary proceedings
initiated against the petitioner are wholly illegal and arbitrary. It is
submitted that with respect to the first charge regarding release of
5
housing loan installments to Sri M. Balaji and Smt. J. Lakshmi,
housing loans of Rs. 3.00 lakhs each were sanctioned to the said
borrowers. Before releasing the installments, an inspection was
conducted during the course of construction. The borrowers
showed the petitioner the houses which were under construction.
The petitioner along with the panel Engineer visited the sites and
verified the same. Based on the said inspections, the installments
were released.
03.8. It is submitted that after the release of the
installments, it came to light that the houses shown by the
borrowers did not belong to them. Upon coming to know of the
same, further installments were immediately withheld. By that
time, a sum of Rs. 2.00 lakhs had been released to each of the
borrowers out of the sanctioned loan amount of Rs. 3.00 lakhs
each. It is submitted that the loans were sanctioned based on the
legal opinion issued by Sri L. Lakshmaiah, an Approved Advocate
of the Bank, who certified that the borrowers had clear,
marketable and transferable title and that an equitable mortgage
could be created. The petitioner acted in good faith by relying
upon the opinion of the Bank’s approved advocate. It is submitted
that subsequent to his transfer from the said branch, the Bank
6
obtained another legal opinion from Sri P. Prabhakar Rao,
another Approved Advocate of the Bank, stating that the title of
the borrower could not be traced in the absence of link
documents and therefore an equitable mortgage was not
permissible. As there are two conflicting opinions from two Bank-
approved advocates regarding the title to the property, the
petitioner cannot be held responsible for the alleged irregularity.
03.9. It is further submitted that the finding of the Enquiry
Officer that the loans were released in rapid succession without
obtaining stage-wise certificates is incorrect. In fact, the
installments were released only after conducting inspections
along with the approved Civil Engineer, Sri P. Jagan Mohan, and
after verifying the progress of construction.
03.10. It is further submitted that the Enquiry Officer relied
upon the certificate given by Mr. P. Raj Kumar, which was
obtained subsequent to the petitioner relieving from the said
branch. The said approved Engineer was never involved at the
time of releasing the installments of the loan. Therefore, the
findings of the Enquiry Officer as confirmed by the Disciplinary
Authority and Appellate Authority are irrational and contrary to the
7
evidence available on record. Thus, a perverse finding has been
recorded with regard to Charge No.1.
03.11. It is further submitted that with respect to Charge
No.2.1 alleged against the petitioner that he had sanctioned loans
under the HLPS category to persons who had already availed
houses under the Indiramma Padakam scheme of the
Government of Andhra Pradesh, it is submitted that on the date of
sanction of housing loans in favour of Smt. K. Bharathi and Sri
Potharaju Mogulavva on 06-05-2007, there was no record
available with the bank to show that there was any sanction in
their favour under the Indiramma Padakam scheme. The Enquiry
Officer failed to appreciate that no material was placed during the
enquiry to show that the bank was aware of the sanction of loan
under Indiramma Padakam prior to the sanction of the loan by the
bank. Further, the application under the Indiramma Padakam
scheme by the said loanees was not within the knowledge of the
bank. Therefore, the loans sanctioned in favour of the above two
borrowers were done after fulfilling the conditions specified in the
Head Office instructions only. Therefore, the petitioner cannot be
found fault with for sanctioning the loans to the said loanees.
8
Thus, the findings of the Enquiry Officer are perverse and
contrary to the evidence available on record.
03.12. It is further submitted that with respect to Charge
No.2.2 alleged against the petitioner that he had sanctioned
housing loans to three persons whose family members had
already been sanctioned houses under Indiramma Padakam.
The finding of the Enquiry Officer that the petitioner was expected
to verify from the competent authority whether any housing loan
had been sanctioned to the family members of borrowers under
the Indiramma Padakam scheme is misconceived. The Enquiry
Officer failed to establish that the petitioner had knowledge of the
fact that the family members of the borrowers had already availed
loans. In the absence of such material, the charge is wholly
unsustainable. It is submitted that the Enquiry Officer proceeded
to record a finding that the petitioner failed to gather required
information from the competent authorities, which was not even a
charge alleged against him. Therefore, the Enquiry Officer has
traversed beyond the scope of the enquiry.
03.13. It is further submitted that the Enquiry Officer failed
to appreciate that a letter dated 25.07.2007 was addressed to the
9
Gram Panchayat, Velutla Village, Yellareddy Mandal, Nizamabad
District, notifying that applications had been received from 8
persons for housing loans. However, there were no objections
from the Gram Panchayath stating that their applications were
being processed under the Indiramma Padakam scheme. In view
of the same, the Charge Nos.2.1 and 2.2 ought to have been held
as not proved.
03.14. It is further submitted that with respect to Charge
No.3 alleged against the petitioner that he had sanctioned
housing loans in excess of the sanctioned limits and failed to
obtain confirmation from the Zonal Office. The charge is that the
petitioner distributed amounts in excess of the limit in respect of
Smt.Neeradi Sujatha, whose housing loan was Rs. 3,50,000/-.
The 1st installment of Rs.1,05,000/- was released on 24.05.2007,
the 2nd installment of Rs. 50,000/- was released on 31.05.2007,
and the 3rd installment of Rs.1,50,000/- was released on
30.06.2007. Subsequently, on the advice of the Inspector,
Rs.1,00,000/- was reverted from her account as the loanee had
not withdrawn the amounts. Thus, as on the date, there was no
excess amount distributed. The same position exists in respect of
the other three loanees as well. It is submitted that the Enquiry
10
Officer failed to appreciate that although the loan amount was
credited, the amounts were not withdrawn by the loanees in
excess of the limit. Therefore, there is no violation and the
allegation is only an imagination on the part of the department.
Thus, the charge ought not to have been held proved.
03.15. It is further submitted that the findings of the Enquiry
Officer that the first 3 loan borrowers have also availed the
subsidized State Government housing loans under Indiramma
Padakam is equally in correct. It is further contended that Smt.
Neeradi Sujatha is not even referred to in Charge Nos.2.1 and
2.2. It is submitted that the availment of subsidized State
Government Housing Loans by the other two loanees was not
within the knowledge of the bank or the Petitioner. The exhibits
referred to in the charge do not establish that the Petitioner
distributed amounts in excess of the sanctioned limits. Therefore,
the findings of the Enquiry Officer are vague and misconceived.
03.16. It is submitted that with respect to Charge No.4
alleged against the Petitioner regarding sanctioning of housing
loans and creation of mortgage against gift deeds without
obtaining link documents. On receipt of the loan applications, the
11
bank obtained legal opinion from Sri L. Laxmaiah, Panel
Advocate. The legal opinion given by the panel advocate was that
the borrowers had clear, marketable and transferable title and
that an equitable mortgage could be created on the property. It is
submitted that the management witness who was examined failed
to prove that the Petitioner did not obtain any other link
documents for creation of proper equitable mortgage. Therefore,
the charge cannot be substantiated against the Petitioner.
03.17. It is submitted that the title deeds referred to only
establish the title of the borrowers and the same cannot be a
basis to conclude that link documents were not obtained.
Further, the loan was sought on the basis of gift deeds and the
property originally belonged to the predecessors. The loan was
sanctioned strictly on the basis of the legal opinion. Hence, the
Petitioner cannot be found fault with. It is submitted that the
finding of the Enquiry Officer that the defence could have verified
the link documents in the branch and produced the same if they
were obtained and maintained on record by the Controlling Office
is misconceived. The burden is on the prosecution to prove the
charge and the same cannot be shifted onto the Petitioner on the
ground that he should have verified the link documents after
12
having left the branch, much before the initiation of the
disciplinary proceedings against him.
03.18. It is submitted that with respect to Charge No.5
alleged against the Petitioner that he disbursed housing loans in
favour of five persons who were already enjoying other loans, and
that the existence and status of the said other loans were not
mentioned in the process notes, thereby suppressing facts. The
said charge is vague and misconceived. It is submitted that
during the enquiry it was clearly established that in the loan
application cum appraisal report, it was mentioned that the said
persons were availing other loans and that they were good
customers of the bank. This itself shows that the bank was aware
of the existing loans. Keeping in view the security and mortgage
of the property, the loans were sanctioned. It is submitted that
mere non-mentioning of the specific loan account number in the
application cum appraisal report does not amount to misconduct.
Further, it is not the case of the bank that non-mentioning of the
other loans violated any procedure or caused any financial loss to
the bank. It is submitted that the Enquiry Officer failed to
appreciate that every minor lapse does not amount to misconduct
and that the charge does not refer to any misconduct on the part
13
of the Petitioner. Therefore, the finding of the Enquiry Officer that
the Petitioner is guilty of the allegation is misconceived and
vague.
03.19. It is submitted that with respect to Charge No.6
alleged against the Petitioner that three persons who had earlier
availed crop loans from the bank were sanctioned housing loans,
and the said crop loans were converted into Converted Crop
Loans (CCATL). It is submitted that the Enquiry Officer failed to
appreciate that the conversion of crop loans into CCATL was
done by the predecessors and the Petitioner was only processing
the housing loan applications. At the relevant point of time, the
repayment of the said loans was prompt and regular. It is
submitted that the reasons for conversion of crop loans into
CCATL have no relevancy while sanctioning housing loans,
inasmuch as the loans were being regularly repaid. It is further
submitted that the Enquiry Officer failed to appreciate that even
after conversion of a crop loan into CCATL for the previous
farming season, the same person may be eligible for a fresh crop
loan for the next farming season. Therefore, at a given point of
time, one customer may have both a CCATL loan and a crop
loan, provided the said loans are repaid regularly.
14
03.20. It is further submitted that while sanctioning the
housing loan, if the fact of existing loans was reflected in the
application cum appraisal report, no irregularity can be fastened
on the officer concerned. These aspects were not taken into
consideration by the Enquiry Officer while holding the Petitioner
guilty of the charge.
03.21. It is submitted that the findings of the Enquiry Officer
in respect of Charge No. 8 are misconceived. The charge alleged
against the Petitioner is that he sanctioned housing loans to 12
persons without the proposals being appraised by another officer.
The charge is vague. It is submitted that at the relevant point of
time, the concerned Field Officer had left the bank by tendering
resignation. Therefore, appraisal by another officer of the branch
could not be undertaken. It is submitted that since the loan
amounts were within the limits of the Branch Manager and since
the customers were trustworthy, the loans were sanctioned. It is
submitted that the allegation that the Petitioner did not send the
process/approval review to the Zonal Office is misconceived.
Due to pressure of work and in the absence of the Field Officer,
the same was not immediately forwarded to the Zonal Office.
However, the same was subsequently forwarded as per
15
procedure. Further, non-forwarding to the Zonal Office is not the
charge alleged against the Petitioner. Thus, the findings of the
Enquiry Officer are vague and misconceived.
03.22. It is further submitted that the Disciplinary Authority
and the Appellate Authority failed to take into consideration the
explanation of the Petitioner and mechanically proceeded to hold
him guilty of the charges based on the findings of the Enquiry
Officer. As submitted above, the findings of the Enquiry Officer
are vague and misconceived and are not borne out by the
evidence available on record. It is submitted that the Disciplinary
Authority failed to appreciate that housing loans are long-term
loans spread over 15 years. Therefore, any subsequent lapse on
the part of the loanees in not paying regular installments cannot
be termed as misconduct on the part of the Petitioner. The
averment that the bank is exposed to risk of Rs.62.9 lakhs is a
vague statement. In fact, during the tenure of the petitioner as a
Sub-Manager of Laxmapur Branch, there was a recovery to a
tune of Rs.15.16 Lakhs and he was put in unblemished record all
through in the Bank, as such, the findings of the Disciplinary
Authority are irrational and arbitrary.
16
03.23. It is further contended that the Disciplinary authority
failed to appreciate that the petitioner put in 28 years of
unblemished service in the Bank and the lapses referred to in the
charge sheet while he was working as Branch Manager of
Mohammednagar Branch are trevail in nature and do not warrant
major penalty of dismissal from service, as such the imposition of
punishment of dismissal from service vide proceedings, dated
31.12.2010 is illegal and arbitrary. Hence, he prayed to allow this
Writ Petition by setting aside the enquiry proceedings and the
order of dismissal from service.
03.24. During the course of further submissions, it is also
contended, orally, that the respondents failed to issue any show-
cause notice prior to imposing the punishment of dismissal from
service. It is further submitted that, during the pendency of the
present Writ Petition, the petitioner attained the age of
superannuation and retired from service in the year 2013, and is
now a senior citizen. It is, therefore, prayed that the punishment
of dismissal from service be modified and that the petitioner be
extended pensionary benefits and gratuity with effect from the
date of his retirement or, in the alternative, that any other suitable
17
lesser penalty, as this Court may deem fit and proper, be
imposed.
03.25. In support of his contentions, the learned counsel for
the petitioner relied upon a decision of the Hon’ble Supreme
Court in Managing Director, ECIL, Hyderabad and others v. B.
Karunakar and others1 wherein it was held at Paragraph Nos.25
and 28 that:
“25. While the right to represent against the findings in
the report is part of the reasonable opportunity
available during the first stage of the inquiry viz.,
before the disciplinary authority takes into
consideration the findings in the report, the right to
show cause against the penalty proposed belongs to
the second stage when the disciplinary authority has
considered the findings in the report and has come to
the conclusion with regard to the guilt of the employee
and proposes to award penalty on the basis of its
conclusions. The first right is the right to prove
innocence. The second right is to plead for either no
penalty or a lesser penalty although the conclusion
regarding the guilt is accepted. It is the second right
exercisable at the second stage which was taken
away by the Forty-second Amendment.
28. The position in law can also be looked at from a
slightly different angle. Article 311(2) says that the
employee shall be given a “reasonable opportunity of
being heard in respect of the charges against him”.
The findings on the charges given by a third person
like the enquiry officer, particularly when they are not
borne out by the evidence or are arrived at by
overlooking the evidence or misconstruing it, could
themselves constitute new unwarranted imputations.
1
(1993) 4 Supreme Court Cases 727
18
What is further, when the proviso to the said Article
states that “where it is proposed after such inquiry, to
impose upon him any such penalty, such penalty may
be imposed on the basis of the evidence adduced
during such inquiry and it shall not be necessary to
give such person any opportunity of making
representation on the penalty proposed”, it in effect
accepts two successive stages of differing scope.
Since the penalty is to be proposed after the inquiry,
which inquiry in effect is to be carried out by the
disciplinary authority (the enquiry officer being only
his delegate appointed to hold the inquiry and to
assist him), the employee’s reply to the enquiry
officer’s report and consideration of such reply by the
disciplinary authority also constitute an integral part of
such inquiry. The second stage follows the inquiry so
carried out and it consists of the issuance of the
notice to show cause against the proposed penalty
and of considering the reply to the notice and deciding
upon the penalty. What is dispensed with is the
opportunity of making representation on the penalty
proposed and not of opportunity of making
representation on the report of the enquiry officer. The
latter right was always there. But before the Forty-
second Amendment of the Constitution, the point of
time at which it was to be exercised had stood
deferred till the second stage viz., the stage of
considering the penalty. Till that time, the conclusions
that the disciplinary authority might have arrived at
both with regard to the guilt of the employee and the
penalty to be imposed were only tentative. All that has
happened after the Forty-second Amendment of the
Constitution is to advance the point of time at which
the representation of the employee against the
enquiry officer’s report would be considered. Now, the
disciplinary authority has to consider the
representation of the employee against the report
before it arrives at its conclusion with regard to his
guilt or innocence of the charges.”
19
03.26. Further, he relied upon another decision of the
Hon’ble Supreme Court in State Bank of Hyderabad and
another v. P. Kata Rao2 wherein it was held at Paragraph
Nos.21 and 32 that:
“21. The case at hand is an exceptional one. The
respondent was a responsible officer. He was holding
a position of trust and confidence. He was proceeded
with both on the charges of criminal misconduct as
also civil misconduct on the same set of facts,
subject, of course, to the exception that Charges 11
and 15 stricto sensu were not the subject-matter of
criminal proceedings, as integrity and diligence,
however, were not in question. Before us also it has
not been contended that he had made any personal
gain.
32. As the respondent has merely been found to be
guilty of commission of procedural irregularity, we are
of the opinion that it is not a fit case where we should
exercise our discretionary jurisdiction under Article
136 of the Constitution of India, particularly in view of
the fact that the respondent has now reached his age
of superannuation, and the appropriate authority of
the appellant would be entitled to impose any suitable
penalty upon him.”
04.1. Learned Standing Counsel appearing for the Union
Bank of India submitted that the writ petition is devoid of merit
and liable to be dismissed, both on facts and in law. He
submitted that the petitioner, while working as Branch Manager,
Mohammed Nagar Branch, Nizamabad District, during the period
from April, 2006 to January, 2008, committed several grave
2
(2008) 15 Supreme Court Cases 657
20
financial irregularities in the sanction and disbursement of
housing loans and other advances in complete violation of the
Loan Policy Guidelines and established banking procedures,
thereby exposing the Bank to a financial risk of Rs.61.93 lakhs.
Pending enquiry into the said misconduct, the petitioner was
placed under suspension on 06.01.2010 and was thereafter
served with a detailed charge-sheet containing eight distinct
charges.
04.2. Learned Standing Counsel further submitted that,
upon denial of the charges by the petitioner, a full-fledged
departmental enquiry was conducted strictly in accordance with
the Andhra Bank Officer Employees’ (Discipline and Appeal)
Regulations, 1981 and the principles of natural justice. The
petitioner actively participated in the enquiry with the assistance
of his Defence Representative. The management examined one
witness and marked nine documents, whereas the petitioner
examined no witness and marked only two documents. After
considering the entire oral and documentary evidence and the
written submissions of both parties, the Enquiry Officer submitted
a detailed report holding Charge Nos.1 to 6 and 8 proved, while
holding Charge No.7 not proved.
21
04.3. It is further submitted that the Disciplinary Authority
furnished a copy of the enquiry report to the petitioner, invited his
objections and, after duly considering the same, passed a
reasoned order dated 31.12.2010 imposing the penalty of
dismissal from service. The Appellate Authority also
independently examined the entire material and, by a detailed
speaking order dated 20.04.2011, confirmed the penalty, finding
no mitigating circumstance warranting interference. Thus, the
disciplinary proceedings have attained finality after due
compliance with the prescribed procedure.
04.4. Learned Standing Counsel submitted that each of the
charges established against the petitioner pertains to serious
lapses affecting the financial discipline of the Bank. The
petitioner released housing loan installments without verifying the
stage-wise progress of construction or ensuring the end-use of
the funds; sanctioned housing loans under the Priority Sector
Scheme without verifying whether the borrowers or their family
members had already obtained houses under the Indiramma
Housing Scheme; disbursed loan amounts in excess of the
sanctioned limits; created equitable mortgages without obtaining
proper link documents; suppressed the details of existing loan
22
liabilities of borrowers; ignored outstanding Converted Crop Loan
Agricultural Term Loans (CCATLs) while assessing
creditworthiness; and sanctioned several housing loans without
appraisal by another officer, contrary to the mandatory Loan
Policy Guidelines. All these charges were established on the
basis of documentary evidence and not on mere assumptions or
conjectures.
04.5. Learned Standing Counsel contended that the
petitioner has not been able to demonstrate any procedural
irregularity, violation of the principles of natural justice or
perversity in the findings recorded by the Enquiry Officer, the
Disciplinary Authority or the Appellate Authority. The findings are
based on appreciation of evidence and are supported by
adequate material on record. The explanations offered by the
petitioner were duly considered and rightly rejected by the
disciplinary authorities.
04.6. It is further submitted that the contention of the
petitioner that there was no actual financial loss to the Bank is
wholly misconceived. In matters concerning banking discipline,
the relevant consideration is not merely the actual loss suffered
23
but the grave financial risk to which the institution was exposed
by the delinquent officer’s conduct. The petitioner, by acting in
blatant disregard of the prescribed banking norms and
procedures, exposed the Bank to substantial financial risk and
thereby eroded the confidence reposed in him as a Branch
Manager. Such misconduct strikes at the very foundation of
banking administration and integrity.
04.7. Learned Standing Counsel also submitted that the
petitioner’s plea regarding his previous unblemished service is of
no consequence. A satisfactory past record cannot absolve an
employee of serious misconduct involving financial discipline and
fiduciary responsibility. Considering the nature and gravity of the
established charges, the punishment of dismissal is proportionate
and fully justified.
04.8. It is further submitted that, during the pendency of the
writ petition, Andhra Bank stood amalgamated with Union Bank of
India with effect from 01.04.2020 and, therefore, Union Bank of
India, being the successor-in-interest, is entitled to defend and
prosecute the present proceedings.
24
04.9. Learned Standing Counsel submitted that the scope
of judicial review under Article 226 of the Constitution in
disciplinary matters is limited and this Court does not sit as an
appellate authority over departmental findings and cannot re-
appreciate the evidence unless the findings are shown to be
perverse or unsupported by any material, which is not the case
here. Since the enquiry was conducted fairly, the findings are
based on evidence and the punishment is commensurate with the
gravity of the misconduct, no interference is warranted.
Therefore, he prayed that the writ petition be dismissed.
04.10. In support of his contentions, learned counsel for the
respondents relied upon a decision of the Hon’ble Supreme Court
in Union of India and others v. Ex. Constable Ram Karan 3
wherein it was held at Paragraph Nos.23 to 25:
“23. The well-ingrained principle of law is that it is the
disciplinary authority, or the appellate authority in
appeal, which is to decide the nature of punishment to
be given to the delinquent employee. Keeping in view
the seriousness of the misconduct committed by such
an employee, it is not open for the courts to assume
and usurp the function of the disciplinary authority.
24. Even in cases where the punishment imposed by
the disciplinary authority is found to be shocking to
the conscience of the court, normally the disciplinary
authority or the appellate authority should be directed3
(2022) 1 Supreme Court Cases 373
25to reconsider the question of imposition of penalty.
The scope of judicial review on the quantum of
punishment is available but with a limited scope. It is
only when the penalty imposed appears to be
shockingly disproportionate to the nature of
misconduct that the courts would frown upon. Even in
such a case, after setting aside the penalty order, it is
to be left to the disciplinary/appellate authority to take
a call and it is not for the court to substitute its
decision by prescribing the quantum of punishment.
However, it is only in rare and exceptional cases
where the court might to shorten the litigation may
think of substituting its own view as to the quantum of
punishment in place of punishment awarded by the
competent authority that too after assigning cogent
reasons.
25. The principles have been culled out by a three-
Judge Bench of this Court way back in B.C.
Chaturvedi v. Union of India [B.C. Chaturvedi v. Union
of India, (1995) 6 SCC 749 : 1996 SCC (L&S) 80]
wherein it was observed as under : (SCC p. 762, para
18) “18. A review of the above legal position would
establish that the disciplinary authority, and on appeal
the appellate authority, being fact-finding authorities
have exclusive power to consider the evidence with a
view to maintain discipline. They are invested with the
discretion to impose appropriate punishment keeping
in view the magnitude or gravity of the misconduct.
The High Court/Tribunal, while exercising the power
of judicial review, cannot normally substitute its own
conclusion on penalty and impose some other
penalty. If the punishment imposed by the disciplinary
authority or the appellate authority shocks the
conscience of the High Court/Tribunal, it would
appropriately mould the relief, either directing the
disciplinary/appellate authority to reconsider the
penalty imposed, or to shorten the litigation, it may
itself, in exceptional and rare cases, impose
appropriate punishment with cogent reasons in
support thereof.””
26
04.11. Further, he relied upon another decision of the
Hon’ble Supreme Court in State of Karnataka and another v.
Umesh4 wherein it was held at Paragraph Nos.16 and 17 that:
“16. The principles which govern a disciplinary
enquiry are distinct from those which apply to a
criminal trial. In a prosecution for an offence
punishable under the criminal law, the burden lies on
the prosecution to establish the ingredients of the
offence beyond reasonable doubt. The accused is
entitled to a presumption of innocence. The purpose
of a disciplinary proceeding by an employer is to
enquire into an allegation of misconduct by an
employee which results in a violation of the service
rules governing the relationship of employment.
Unlike a criminal prosecution where the charge has to
be established beyond reasonable doubt, in a
disciplinary proceeding, a charge of misconduct has
to be established on a preponderance of probabilities.
The rules of evidence which apply to a criminal trial
are distinct from those which govern a disciplinary
enquiry. The acquittal of the accused in a criminal
case does not debar the employer from proceeding in
the exercise of disciplinary jurisdiction.
17. In a judgment of a three-Judge Bench of this
Court in State of Haryana v. Rattan Singh [State of
Haryana v. Rattan Singh, (1977) 2 SCC 491 : 1977
SCC (L&S) 298 : (1977) 1 SLR 750] , V.R. Krishna
Iyer, J. set out the principles which govern disciplinary
proceedings as follows : (SCC p. 493, para 4)
“4. It is well settled that in a domestic enquiry the strict
and sophisticated rules of evidence under the
Evidence Act, 1872 may not apply. All materials which
are logically probative for a prudent mind are
permissible. There is no allergy to hearsay evidence
provided it has reasonable nexus and credibility. It is
true that departmental authorities and Administrative
Tribunals must be careful in evaluating such material
4
(2022) 6 Supreme Court Cases 563
27and should not glibly swallow what is strictly speaking
not relevant under the Evidence Act. For this
proposition it is not necessary to cite decisions nor
text books, although we have been taken through
case-law and other authorities by counsel on both
sides. The essence of a judicial approach is
objectivity, exclusion of extraneous materials or
considerations and observance of rules of natural
justice. Of course, fairplay is the basis and if
perversity or arbitrariness, bias or surrender of
independence of judgment vitiate the conclusions
reached, such finding, even though of a domestic
tribunal, cannot be held good. However, the courts
below misdirected themselves, perhaps, in insisting
that passengers who had come in and gone out
should be chased and brought before the tribunal
before a valid finding could be recorded. The
“residuum” rule to which counsel for the respondent
referred, based upon certain passages from American
Jurisprudence does not go to that extent nor does the
passage from Halsbury insist on such rigid
requirement. The simple point is, was there some
evidence or was there no evidence — not in the
sense of the technical rules governing regular court
proceedings but in a fair commonsense way as men
of understanding and worldly wisdom will accept.
Viewed in this way, sufficiency of evidence in proof of
the finding by a domestic tribunal is beyond scrutiny.
Absence of any evidence in support of a finding is
certainly available for the court to look into because it
amounts to an error of law apparent on the record.
We find, in this case, that the evidence of Chamanlal,
Inspector of the Flying Squad, is some evidence
which has relevance to the charge levelled against
the respondent. Therefore, we are unable to hold that
the order is invalid on that ground.””
04.12. Further, he relied upon another decision of the
Hon’ble Supreme Court in Union of India and others v. P.
28Gunasekaran5 wherein it was held at Paragraph Nos.12 to 14
that:
“12. Despite the well-settled position, it is painfully
disturbing to note that the High Court has acted as an
appellate authority in the disciplinary proceedings,
reappreciating even the evidence before the enquiry
officer. The finding on Charge I was accepted by the
disciplinary authority and was also endorsed by the
Central Administrative Tribunal. In disciplinary
proceedings, the High Court is not and cannot act as
a second court of first appeal. The High Court, in
exercise of its powers under Articles 226/227 of the
Constitution of India, shall not venture into
reappreciation of the evidence. The High Court can
only see whether:
(a) the enquiry is held by a competent
authority;
(b) the enquiry is held according to the
procedure prescribed in that behalf;
(c) there is violation of the principles of natural
justice in conducting the proceedings;
(d) the authorities have disabled themselves
from reaching a fair conclusion by some
considerations extraneous to the evidence and merits
of the case;
(e) the authorities have allowed themselves to
be influenced by irrelevant or extraneous
considerations;
(f) the conclusion, on the very face of it, is so
wholly arbitrary and capricious that no reasonable
person could ever have arrived at such conclusion;
(g) the disciplinary authority had erroneously
failed to admit the admissible and material evidence;
(h) the disciplinary authority had erroneously
admitted inadmissible evidence which influenced the
finding;
(i) the finding of fact is based on no evidence.
5
(2015) 2 Supreme Court Cases 610
29
13. Under Articles 226/227 of the Constitution
of India, the High Court shall not:
(i) reappreciate the evidence;
(ii) interfere with the conclusions in the enquiry,
in case the same has been conducted in accordance
with law;
(iii) go into the adequacy of the evidence;
(iv) go into the reliability of the evidence;
(v) interfere, if there be some legal evidence on
which findings can be based.
(vi) correct the error of fact however grave it
may appear to be;
(vii) go into the proportionality of punishment
unless it shocks its conscience.
14. In one of the earliest decisions in State of
A.P. v. S. Sree Rama Rao [AIR 1963 SC 1723] ,
many of the above principles have been discussed
and it has been concluded thus : (AIR pp. 1726-27,
para 7)
“7. … The High Court is not constituted in a
proceeding under Article 226 of the Constitution as a
court of appeal over the decision of the authorities
holding a departmental enquiry against a public
servant : it is concerned to determine whether the
enquiry is held by an authority competent in that
behalf, and according to the procedure prescribed in
that behalf, and whether the rules of natural justice
are not violated. Where there is some evidence,
which the authority entrusted with the duty to hold the
enquiry has accepted and which evidence may
reasonably support the conclusion that the delinquent
officer is guilty of the charge, it is not the function of
the High Court in a petition for a writ under Article 226
to review the evidence and to arrive at an
independent finding on the evidence. The High Court
may undoubtedly interfere where the departmental
authorities have held the proceedings against the
delinquent in a manner inconsistent with the rules of
natural justice or in violation of the statutory rules
prescribing the mode of enquiry or where the
authorities have disabled themselves from reaching a
30fair decision by some considerations extraneous to
the evidence and the merits of the case or by allowing
themselves to be influenced by irrelevant
considerations or where the conclusion on the very
face of it is so wholly arbitrary and capricious that no
reasonable person could ever have arrived at that
conclusion, or on similar grounds. But the
departmental authorities are, if the enquiry is
otherwise properly held, the sole judges of facts and if
there be some legal evidence on which their findings
can be based, the adequacy or reliability of that
evidence is not a matter which can be permitted to be
canvassed before the High Court in a proceeding for
a writ under Article 226 of the Constitution.”
05. Having regard to the submissions made by the either
side and upon perusal of the material placed on record, it is not in
dispute that the departmental enquiry was conducted by a
competent authority in accordance with the Andhra Bank Officer
Employees’ (Discipline and Appeal) Regulations, 1981. The
petitioner was served with a charge-sheet, participated in the
enquiry with the assistance of a Defence Representative, cross-
examined the management witness, submitted his written
defence, and, after the enquiry report was furnished to him, also
submitted his objections before the Disciplinary Authority. Thus,
the record discloses substantial compliance with the principles of
natural justice. The petitioner has not been able to establish that
the enquiry suffered from any procedural illegality or that the
findings are based on no evidence.
31
06. On a careful perusal of the record, the charges
established against the petitioner relate to sanction and
disbursement of housing loans in violation of the prescribed
banking norms and procedures. The petitioner, while functioning
as Branch Manager, sanctioned and disbursed housing loans
without ensuring strict compliance with the Bank’s Loan Policy
Guidelines, released installments without proper verification of the
stage-wise progress of construction, sanctioned loans in
circumstances where due diligence required under the guidelines
was not adhered to, sanctioned amounts beyond the permissible
limits without obtaining approval from the competent authority,
accepted title documents without ensuring the availability of
necessary link documents for creation of valid equitable
mortgages, omitted material particulars regarding existing
liabilities of borrowers, and sanctioned several loans without the
mandatory appraisal by another officer. These lapses
undoubtedly constitute misconduct affecting financial discipline in
a banking institution, where officers discharge responsibilities
involving public funds. Therefore, the submission of the learned
counsel for the petitioner that the findings recorded by the
32
Enquiry Officer are perverse or unsupported by evidence, is of no
water and cannot be accepted.
07. Further, a perusal of the record reveals that the
enquiry report was furnished to the petitioner and his objections
thereto were considered before the Disciplinary Authority passed
the final order. The ratio laid down in B. Karunakar‘s case cited
supra, only recognizes the right of the delinquent employee to
represent against the findings recorded in the enquiry report
before the disciplinary authority arrives at its final conclusion.
That requirement stands satisfied in the present case. Therefore,
the disciplinary proceedings cannot be invalidated on the said
ground alone. Therefore, this Court cannot accept the contention
that the entire disciplinary proceedings stand vitiated merely
because no separate show-cause notice on the proposed
punishment was issued.
08. In view of the above facts and circumstances of the
case, the question that survives for consideration is whether the
punishment of dismissal from service is proportionate to the
nature of misconduct established against the petitioner. It is well
settled that ordinarily this Court would not interfere with the
33
quantum of punishment. Nevertheless, where the punishment
imposed is so disproportionate as to shock the conscience of the
Court, judicial review on the question of proportionality is
permissible. Though the normal course would be to remit the
matter to the disciplinary authority for reconsideration of the
penalty, the Hon’ble Supreme Court in B.C. Chaturvedi v. Union
of India and Union of India v. Ex. Constable Ram Karan has
recognized that, in rare and exceptional cases, the High Court
may itself substitute an appropriate punishment in order to
shorten litigation, provided cogent reasons are assigned.
09. In the present case, several mitigating circumstances
deserves due consideration. Firstly, though the petitioner has
been found guilty of procedural and supervisory lapses in
sanctioning and disbursement of loans, there is no finding
recorded either by the Enquiry Officer or by the Disciplinary
Authority that the petitioner had acted with any dishonest
intention or had derived any pecuniary benefit for himself. There
is also no allegation of misappropriation, embezzlement, fraud or
personal enrichment. The misconduct established against the
petitioner essentially relates to serious procedural irregularities
committed while discharging official duties. Secondly, the
34
petitioner had rendered nearly twenty-eight years of service in the
Bank prior to the initiation of the disciplinary proceedings and
there is no material on record showing that he had previously
suffered any major punishment or that his past service record
was blemished. Thirdly, though the Bank has contended that it
was exposed to substantial financial risk, there is no finding that
the entire amount had actually become an irrecoverable loss
solely attributable to the petitioner. Fourthly, during the pendency
of this writ petition, the petitioner attained the age of
superannuation as early as in the year 2013 and has remained
out of service ever since. At present, he is a senior citizen.
Remanding the matter to the disciplinary authority after the lapse
of more than fifteen years from the date of dismissal would only
prolong the litigation without serving any useful purpose.
10. The observations of the Hon’ble Supreme Court in P.
Kata Rao‘s case cited supra, while noticing that the delinquent
officer was guilty of procedural irregularities and had already
attained the age of superannuation, the Hon’ble Supreme Court
considered it appropriate to leave open the imposition of a
suitable lesser punishment. The factual matrix of the present
case is substantially comparable insofar as there is no allegation
35
of personal gain and the petitioner has long since crossed the
age of superannuation. These peculiar circumstances persuade
this Court to mould the relief instead of relegating the parties to
another round of disciplinary proceedings.
11. This Court is conscious that officers of nationalised
banks occupy positions of trust and are expected to maintain the
highest standards of diligence and financial discipline. The
misconduct established against the petitioner cannot therefore be
trivialized or ignored. At the same time, the punishment must
bear a reasonable nexus with the gravity of the misconduct.
Considering the absence of any allegation of corruption or
personal enrichment, the petitioner’s long service, the fact that the
misconduct essentially relates to procedural irregularities in
discharge of official functions, and the long passage of time
coupled with his attainment of the age of superannuation, this
Court is of the considered opinion that the punishment of
dismissal from service is unduly harsh and disproportionate. The
ends of justice would be adequately served if the punishment is
modified to one of compulsory retirement.
36
12. In view of the foregoing discussion, observations and
findings, this Writ Petition is partly allowed and the proceedings
No.666/20/V/T-996/1131, dated 31.12.2010, passed by the
Disciplinary Authority, and the appellate authority proceedings
No.666/20/V/T-996/90, dated 20.04.2011, are modified only to the
extent of the punishment imposed. In substitution of the
punishment of ‘dismissal from service’, the petitioner is imposed
with the penalty of ‘compulsory retirement’ with effect from
31.12.2010. Consequently, the petitioner shall be entitled to all
consequential retiral and pensionary benefits, including pension,
gratuity and other terminal benefits, as admissible under the
applicable Service Regulations, by treating him as having been
compulsorily retired from service with effect from 31.12.2010.
However, since the petitioner has not rendered any service after
31.12.2010, he shall not be entitled to back wages, salary,
increments, continuity of service for monetary purposes, or any
other service benefits for the period subsequent to the date of
compulsory retirement, except to the extent necessary for
computation and release of his retiral and pensionary benefits.
The respondents are directed to calculate and disburse the
admissible retiral and pensionary benefits payable to the
37
petitioner within a period of eight (8) weeks from the date of
receipt of a copy of this Order, after giving due adjustment to any
amounts already paid or otherwise legally recoverable, in
accordance with the applicable Rules and Service Regulations.
There shall be no order as to costs.
As a sequel, pending miscellaneous applications, if any,
shall stand closed.
__________________
JUVVADI SRIDEVI, J
Date: 21-JUL-2026
Ksk/khrm
