Calcutta High Court (Appellete Side)
The Institution Of Engineers (India) vs Union Of India & Ors on 30 March, 2026
2026:CHC-AS:519
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
APPELLATE SIDE
Present:
The Hon'ble Justice Shampa Dutt (Paul)
WPA 10679 of 2025
The Institution of Engineers (India)
Vs
Union of India & Ors.
For the Petitioner : Mr. Soumya Majumder, Ld. Sr. Adv.
Mr. Indranil Munshi,
Ms. Anuska Sarkel,
Ms. Ahona Guha Majumder.
For the State : Mr. K.J. Yusuf,
Mr. Sudip Kumar Maity.
For the Respondent no. 4 : Mr. Shiv Mangal Singh.
For the Union of India Mr. Siddhartha Bhattacharjee (Virtual),
Mr. Subit Majumder.
For the Respondent no. 6 : Mr. Sugata Shankar Roy.
For the E.D. : Mr. Arijit Chakraborty,
Mr. Debsoumya Basak,
Ms. Swati Kumari Singh.
Judgment reserved on : 16.03.2026
Judgment delivered on : 30.03.2026
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Shampa Dutt (Paul), J.:
1. The writ application has been preferred praying for setting aside of
orders dated 30th December, 2023 and 28th April, 2025, passed by the
Controlling authority and the Appellate authority.
2. The petitioner has further prayed for direction upon the the respondent
no.2 to declare the Form N dated 18th October, 2022 submitted by the
respondent no. 6 as illegal, null and void and also set aside the notice
dated 1st May, 2025
3. The petitioner has also prayed for return of the demand drafts dated
29th January, 2024 vide no. 895212 and 30th August, 2024 vide no.
229879.
4. The petitioner’s case is follows :-
a. The petitioner is an organisation established under Royal Charter in
the year 1935. On or about 11.09.2019 and 14.10.2020, the
Petitioner was subjected to a large scale financial fraud amounting
to Rs. 35 Crores (Approximately). During this period, Respondent No.
6 held the position of Director (Finance) of the Petitioner. On or
about 31st October, 2020, a complaint was filed in Muchipara P.S.
and consequently FIR no. 205 was registered by the police authority.
b. A Departmental Enquiry Committee was constituted on 03.12.2020
to investigate the role of Respondent No. 6 in the aforementioned
financial fraud following which Respondent No. 6 was placed under
suspension on 31.12.2020. Upon conclusion of the departmental
proceedings, Respondent No. 6 was dismissed from service on 29th
April, 2021
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c. Thereafter, Respondent No. 6 on 18.10.2022 filed an application
before the controlling authority. On or about 30.12.2023 order was
passed by respondent no. 3, directing the Petitioner to pay Rs.
9,98,662/- to Respondent No. 6 in the form of Gratuity. The
Petitioner filed an appeal before the Deputy Chief Labour
Commissioner i.e. Respondent no. 2. Consequently, impugned order
was passed by the said Respondent on 28th April, 2025, upholding
the order dated 30.12.2023. The Respondent No. 3 then issued a
show cause notice dated 1st May, 2025, directing the petitioner to
respond within 15 days, failing which the gratuity amount with
interest of Rs. 13,23,228/- would be released to Respondent No. 6.
5. Hence the writ petition.
6. The respondent no. 6 has argued by way of filing written notes
that:-
i. The Departmental Enquiry Committee had on 06.01.2021
recommended lodging an FIR inter alia against the Respondent
No. 6 and accordingly a Complaint was made by then Deputy
Director (Finance) of the Petitioner before the Officer-in-Charge
Bhowanipur Police Station suggesting to lodge an FIR against
Respondent 6 and another.
ii. It is stated that the enquiry proceeding was not in accordance
with law and that this is a case of wrongful dismissal on the
ground of alleged Major Misdemeanor without giving Enquiry
Report and the same was given after 3 and half years as per the
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direction of the Appellate Authority under Payment of GratuityAct, 1972 on 28.08.2024.
iii. On 15.06.2024, 726th Council Meeting at Kathmandu of the
Petitioner, Minute about observation of the Enforcement
Directorate (ED) that they have already filed a chargesheet
wherein 10 names were there. None of the 10 persons were either
IEI employees or Corporate Members of IEI.
ED also mentioned that they have cross-checked the
statements of all 10 persons, but none of them had any mention
of any IEI employee or Corporate members of IEI.
iv. Muchipara PS case no 205 of 2020 has been investigated and
ended in a Charge Sheet and observed that it would be an abuse
of process if this case were further allowed to be continued.
Final Order was pronounced and the Case was dropped
against Respondent 6 and 8 others.
v. The respondent no. 6 has stated as follows:-
“I submit that as a qualified professional person with more
than 10 years experience of working at IEI the Respondent
6 supposed to work in good faith treating a Nationalized
Bank as a reliable and responsible banker. Opening of
Bank account was not mandatory for which supporting
document placed before Enquiry Officer. Accordingly, the
Investment Committee certainly took the offer of highest
rate of interest and for bulk deposit granted.IEI Kolkata
received interest against those Investments in their bank
account. IEI, Investment Committee trusted upon the
Allahabad Bank, Bowbazar Branch and believed that their
investment in safe custody. In view of the above, holding
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the Respondent no 6 exclusively responsible terming the
lapse as gross negligence is a figment of imagination and
hence denied as mischievous and mindless.”
vi. The respondent no. 6 contends that no criminal case could be
substantiated against him and as such the disciplinary
proceeding was conducted violating the principle of natural justice
and abuse of process of law.
7. From the materials on record, it appears that on 31.10.2020, a written
complaint was filed by the petitioner with the Joint Commissioner of
Police (Crime), Lalbazar.
8. Several officials of the Bank, being Indian Bank (previously Allahabad
Bank). Both the Branches were named in the said complaint.
9. The private respondent was named in the FIR, being Muchipara P.S.
Case No. 205 dated 02.11.2020, where in the following allegations were
made against him:-
“a. The brief fact of the case is that the accused persons entered
into a criminal conspiracy among themselves and in pursuant
thereof issued letters by Allahabad Bank, Bowbazar Branch,
used the same as genuine before The Institution of Engineers
(India) and allured them to invest for fixed deposits at highest
rate of interest.
b. Thereafter the then branch manager made RTGSs of the
invested amount after insertion into the account numbers
50500106596 and 50464814920 with Allahabad bank.
c. The said bank employee in conspiracy with others issued forged
F.D.s purportedly issued by Allahabad Bank, Bowbazar
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Branch. Therefore total amount of Rs. 35 Crores (approx) was
debited from different bank accounts of the Institution of
Engineers (India) on different dates through RTGS and siphoned
off to the different bank accounts and withdrawal causing
wrongful loss on the part of the complainant organization and
subsequent gain on the part of the accused persons which is
punishable U/S 120B/420/467/471 and 409 IPC.”
10. A specific written complainant was lodged against the private
respondent and another before the Bhavanipore police station on
06.01.2021.
11. Suspension order in respect of the private respondent herein was
served on 31.12.2020.
12. Charge Sheet dated 24th February, 2021 was served upon the private
respondent, containing the several charges against the private
respondent herein, on completion of a Departmental Enquiry by a
Committee.
13. The Charge included gross irregularities and negligence on the part
of the petitioner in carrying out his official duties and transactions,
related to the bank, including depositing FD’s worth Rs. 35 .09 crores as
Director (finance) without opening a Bank account, necessary for the
transferring money.
14. The charges were stated in detail, clear and are specific in nature
with no ambiguity.
15. Penalty was imposed on completion of enquiry proceedings and
submission of enquiry report dated 22.04.2021.
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16. The letter dated 29th April, 2021 imposing penalty notes as
follows:-
“a. The above Charge Sheet, the written explanation, proceeding of
the Enquiry Committee, the Documents exchanged between the
petitioner and the Enquiry Committee, the report of the Enquiry
Committee have been considered by the Undersigned.
b. The Charge Sheet would show that the allegations made
against the petitioner is of very serious in nature involving
gross negligence in your responsibilities and duties as
Director (Finance) which may cause huge financial loss to the
Institution of Engineers (India).
c. In the Enquiry the petitioner had been extended all
opportunities to defend yourself in rebutting the
charges. To do so the petitioner intended to produce some
documents mentioned in the proceedings and report of the
Enquiry. In spite of extending the ample opportunity, the
petitioner could not produce the documents intended to be
produced in support of his defence. In such circumstances, in
the proceedings held on 21.04.2021, the Enquiry Committee
upheld the charges made against you as Major
Misdemeanours under Clauses 5(i), 5(xi) and 5(xxxiii) of the
Appendix IV (Conduct, Discipline and Appeal Rules) of the
Service Rules of the Employees of IEI as stated in the Charge
Sheet under reference.
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d. The entire proceedings of the Enquiry including thecorrespondence between the petitioner and the Enquiry
Committee has been considered independently. The charges
have been proved by the Enquiry committee and now the
question would arise as to what penalty to be imposed.
e. As stated, the charges made against the petitioner very
serious in nature involving huge financial loss to the
Institution due to gross negligence of yourself in
responsibilities and duties as Director (Finance) as
mentioned in the Charge Sheet.
f. The petitioner has been charged for the major misdemeanours
as proved by the Enquiry Committee in its report.
g. The institution having suffered from huge financial loss, the
question of discipline of the Institution being involved and
some of the charges also amounting to very serious in nature
and hence it is stated that the petitioner deserve
commensurate punishment and as such in accordance with the
clause no 08 (Penalties) and its sub-clause no (iii) of the
Conduct, Discipline and Appeal Rules for the Employees
(Appendix IV of the existing Service Rules), the petitioner is
hereby dismissed from the services of the Institution of
Engineers (India) with immediate effect.”
17. The private respondent no. 6 then prayed for review on 5th Feb, 2022 on
the ground that:-
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“There was no criminal case registered against the then Director(Finance)/petitioner herein nor did the police/ED find any involvement of
the then Director (Finance)/petitioner herein in the extant Bank Fraud
case.”
18. The respondent no. 6 was dismissed from service w.e.f. 29th April, 2021,
on account of major mindemeanors on disciplinary ground.
19. Form N are submitted on 18.10.2022 by the respondent before the
controlling authority on ground of wrongful termination and claiming
gratuity.
20. The controlling authority vide order dated 30.12.2023, held:-
“The contention of the opposite party to forfeit
the gratuity of the applicant as the applicant has caused
huge financial loss to the Opposite Party is not in
consonance with the provision and rules of the Payment of
Gratuity Act, 1972. Opposite Party took liberty to decide
upon the issues on their own, will and whims,
circumventing, statutory mandates, and thus deprived the
applicant of statutory right. Though, the opposite party
has intimated the applicant about forfeiture of
gratuity the controlling authority is of the opinion
that there was a clear violation of rule-8 of the Payment of
Gratuity Act, Central Rules, 1972 as neither any intimation
was given by the Opposite Party to the controlling authority
with respect to forfeiture of gratuity, or any permission was
sought by the Opposite Party to forfeit the gratuity of the
102026:CHC-AS:519
applicant an order regarding forfeiture of gratuity of thepetitioner, passed by the employer without affording any
opportunity of hearing to the employee-petitioner in
unsustainable since it has been passed in violation of
concept of principles of natural justice.
In view of the above the Controlling Authority findings the
action of Opposite Party to withhold the gratuity of the
applicant unjust and unlawful.”
21. Finally the authority granted gratuity in favour of the private respondent
no. 6.
22. The petitioner preferred an appeal, where in the appellate authority
vide an order dated 28th April, 2025 decided as follows:-
“ORDER
Going through the facts of the case, the investigation of Appellant
may still be in process and the initial investigation seems to have
proven the loss to the organization because of the
negligence/intention of the Respondent to do so. However, on
technical grounds if the Gratuity is required to be forfeited, an
intimation to that effect is required to be sent to the Controlling
Authority so that any action required to be taken at that point of time
can be taken by the Authority. In this instant case no such intimation
has been endorsed to the Controlling Authority informing that the
claim for Gratuity to the Respondent is not found admissible. No
notice in Form-M has been issued to the Respondent specifying
112026:CHC-AS:519
the reasons as to why the claim of Gratuity is not consideredadmissible.
There is no evidence to reason out claim of the Respondent as there
is a long set of process on going to decide the amount of
damage done to the organization and to hold the Respondent
responsible for the same. But as this office has to go by the conditions
laid down in the Payment of Gratuity Act, in violation of Section 8(1)(ii),
the Gratuity to the Respondent seems to be payable.
The order of the Controlling Authority is hereby upheld and
payment of Gratuity as well as the interest amount is payable to the
Respondent which is already deposited with the Controlling Authority.
This is my order on this day of 28th April, 2025.
-Sd/-
Dy. Chief Labour Commissioner (Central)
Kolkata and Appellate Authority under
the payment of Gratuity Act. 1972″
23. Written notes and judgments relied upon have been filed by the parties.
24. The petitioner in it’s Written notes has stated that after issuing the
dismissal order, the respondent’s claim for gratuity was rejected on 8th
March, 2022.
25. The petitioner’s further argument is that Section 4(6) of the Act does not
provide for any separate opportunity of hearing to be provided for the
purpose of forfeiture of gratuity. The provision of section 4(6) of the Act
read with Rule 7 of the Central Rules, automatically constitute statutory
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notice through implementation of law with regard to forfeiture of
gratuity of an employee who has been terminated from service.
26. Additionally, Appendix III of the Service Rules of IEI clearly puts an
employee on notice, that no gratuity shall be paid to him, if he is
dismissed for gross misconduct causing damage to the property of the
Institution.
27. That, there is no provision in the Act of 1972 to seek permission from
the Controlling Authority to forfeit gratuity amount of terminated
employee.
28. It is further stated that the order of the Appellate Authority is bad
in law for the following reasons:-
i. By letter dated 8th March, 2022 (Page no 44 of the Writ
Petition), IEI had already rejected the claim for gratuity by
reference to clause 3 of Appendix III of the Service Rules.
Therefore, in essence, the purpose of Form-M was complied
with through letter dated 8th March, 2022. Procedural rule is
handmaid of justice and cannot orverride a substantive
provision of section 4(6) of the Act of 1972.
ii. In the appellate order itself it was recorded that investigation of
the employer seems to have proven the loss to the organisation.
This investigation is obviously referable to the disciplinary
proceeding conducted by the employer, and not to any other
investigation.
iii. The order of the disciplinary proceeding has been accepted by the
employee, and the disciplinary authority/proceeding has
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clearly mentioned about the quantified loss of Rs. 35 crores(approximately) and finally the proving of charges in the
departmental action, operates as an ostensible ground for denial
of gratuity in terms of Service rules of IEI.
iv. The power to forfeit gratuity has been explained by the Apex Court
in the judgment of Western Coal Fields Limited Vs. Manohar
Govinda Fulzele reported in 2025 SCC Online SC 345 (Paras
9 and 10), wherein the Supreme Court held:-
“9. With all the respect at our command, the
interpretation in C.G. Ajay Babu does not come out of
the statutory provision; Section 4(6)(b)(ii) of the Act.
Normally we would have referred the matter for
consideration by a Larger Bench, but, as we noticed,
the statutory provision does not make it a requirement
that the misconduct alleged & proved in a
departmental enquiry should not only constitute an
offence involving moral turpitude, but also should be
duly established in a Court of Law. The words “duly
established in a Court of Law” cannot be supplied to
the provision. Moreover, as we observed; the
interpretation of sub-clause (b)(ii) of sub-section (6) of
Section 4 was uncalled for in C.G. Ajay Babu since the
provisions of the Section 4, including sub-section (6)
was found to be inapplicable to the employer Bank and
its employee, by virtue of sub-section (5) of Section 4.
The interpretation, hence, with due respect was an
obiter making a reference unnecessary.
10. As has been argued by the learned Solicitor
General and the learned Counsel appearing for
MSRTC, sub-clause (ii) of Section 4(6)(b) enables
forfeiture of gratuity, wholly or partially, if the
delinquent employee is terminated for any act which
constitutes an offence involving moral turpitude, if the
offence is committed in the course of his employment.
An „Offence‟ as defined in the General Clauses Act,
means „any act or omission made punishable by any
law for the time being‟ and does not call for a
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conviction; which definitely can only be on the basis of
evidence led in a criminal proceeding. The standard of
proof required in a criminal proceeding is quite different
from that required in a disciplinary proceeding; the
former being regulated by a higher standard of „proof
beyond reasonable doubt‟ while the latter governed by
„preponderance of probabilities‟. The provision of
forfeiture of gratuity under the Act does not speak of a
conviction in a criminal proceeding, for an offence
involving moral turpitude. On the contrary, the Act
provides for such forfeiture; in cases where the
delinquent employee is terminated for a misconduct,
which constitutes an offence involving moral turpitude.
Hence, the only requirement is for the
Disciplinary Authority or the Appointing
Authority to decide as to whether the misconduct
could, in normal circumstances, constitute an
offence involving moral turpitude, with a further
discretion conferred on the authority forfeiting
gratuity, to decide whether the forfeiture should
be of the whole or only a part of the gratuity
payable, which would depend on the gravity of
the misconduct. Necessarily, there should be a notice
issued to the terminated employee, who should be
allowed to represent both on the question of the nature
of the misconduct; whether it constitutes an offence
involving moral turpitude, and the extent to which such
forfeiture can be made. There is a notice issued and
consideration made in the instant appeals; the efficacy
of which, has to be considered by us separately.”
v. It is further stated by the petitioner that this is without prejudice
to the submission that respondent no. 6 is not entitled to
gratuity because of Appendix III of the service rules, and no
element of forfeiture under section 4(6) of the act is required to
be examined in the instant case.
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vi. The aforesaid decision also takes care of the position that right of
an employer to forfeit gratuity is independent of the outcome of
criminal proceeding.
vii. Disciplinary proceeding and criminal proceeding operate in
different fields with different standards of tests, State of Jammu
and Kashmir & Ors. Vs. Farid Ahmas Tak, reported in 2019
(7) SCC 278 (para 16 and 17).
viii. In the instant case, the charges in the disciplinary proceeding
were completely different from the charges involved in the
criminal trial. In disciplinary proceeding, the charge is
predominantly of culpable negligence causing huge loss to
IEI.
ix. Thus, a reference to a probable outcome of the criminal
proceedings made by the Appellate Authority is completely de-
hors the settled proposition of law.
29. It is further stated that the criminal proceeding has no relevance with
the forfeiture of gratuity amount which is a civil action taken against an
employee found to be guilty of misconduct as per Service Rules of the
organisation.
30. Petitioner relies upon the Judgments of the Supreme Court in:-
i. Karam Pal & Ors. vs Union of India & Ors. reported in AIR 1985 SC
711.
ii. State of Jammu and Kashmir & Ors. vs Farid Ahmad Tak, reported
in 2019(7) SCC 278.
31. The respondent no. 6 has relied upon the following judgments:-
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(i) Khem Chand vs Union of India & Ors. 1957 SCC OnLine SC
6.
(ii) D.V. Kapoor vs Union of India & Ors. (1990) 4 SCC 314.
(iii) Union Bank of India & Ors. vs C.G. Ajay Babu & Anr., (2018)
9 SCC 529.
(iv) Western Coal Fields Ltd. vs Manohar Govinda Fulzele & Anr.,
in Civil Appeal No. 2608 of 2025, decided on February 17,
2025.
32. In the report filed by the Enforcement Directorate, it appears that the
private respondent has been named as witness no. 6 in the prosecution
Complaint filed.
33. The state in its report has stated that the IEI staff acted believing the
fake representations and documents of the then Branch Manager of
Allahabad Bank, Bowbazar Branch, to be genuine. Considering the
higher rate of interest, they followed his instructions and, after
maintaining all formalities to book the FDs, put the mentioned account
numbers in the RTGS advice form, while always mentioning “Allahabad
Bank” as the beneficiary name.
34. From the minutes dated 30-31 March of 2024, 726th Council
Meeting, the following was noted:-
During deliberation on the Rs.35 Cr Fraud Case at the 726th Council
meeting and being asked by the President, the members of the
Committee apprised the following:-
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1. Fresh application has been submitted to the Enforcement Directorate
(ED).
2. A visit was made by the Committee members to the office of the ED
where they highlighted all the procedural lapses.
3. ED stated that they had already submitted chargesheet wherein 10
names were there.
4. All the 10 persons are now out on bail.
5. None of the 10 persons were either IEI employee or Corporate
Members of IEI.
6. One of the 10 persons was the Bank Manager.
7. The ED had duly investigated and crosschecked the statements of all
the 10 persons. But none of them had any mention of any IEI employee
or Corporate Member of IEI. Although there was no internal
involvement in the crime, there were huge procedural lapses and
negligence.
35. During investigation, it was revealed that Samrat Paul, the then
Branch Manager of Allahabad Bank, Bowbazar Branch, was directly
involved in this crime. He provided fake proposal letters and FD
certificates with malicious intent, and the IEI personnel acted upon
his misrepresentation (negligence). Samrat Paul has been arrested
and a chargesheet has been submitted against him as Accused No. 3.
36. The Respondent Bank on the basis of records maintained by way of
a report in the form of affidavit has stated as follows:-
“i. Upon careful perusal and scrutiny of the bank records as
it appears that there was no savings or current accounts
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opened in the of the petitioner namely “The Institute ofEngineers (India)” with the Indian Bank, Bowbazar
Street Branch;
ii. The Respondent bank further states that there were four
current/saving accounts standing in the names of “M/s
Kadamtala Rural Health Service Society being Account
No. 50500106596”, “M/s Sattya Seba Sangha being
Account No. 50464814920”, “M/s ALL Bank being
Account No. 50497767399” and “M/s ALL Bank being
Account No. “50529292569” maintained with the Indian
Bank, Bowbazar Branch, wherein various amounts on
different dates were credited in the aforesaid accounts.”
37. From the report as filed by the respondent bank, it appears that prima
facie, the whole process undertaken by the private respondent on behalf
of the petitioner appears to a clear case of severe negligence, if at all
the same is not taken to be an offence, in view of the report of the
investigating agency, including the enforcement directorate.
38. The petitioner in the case of the private respondent, for the said gross
negligence and huge loss caused to the institute, conducted an enquiry
and then a disciplinary proceeding, where in the private respondent was
given proper and sufficient opportunity to defend his case. Principle of
natural justice was duly followed.
39. In The State of Rajasthan & Ors. vs Heem Singh, in Civil Appeal
No. 3340 of 2020 (arising out of SLP (C) No. 30763 of 2019),
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decided on October 29, 2020, wherein the Supreme Court in Para 13,
33 held:-
“13. The standard of standard of proof in disciplinary
proceedings is different from that in a criminal trial. In
Suresh Pathrella v. Oriental Bank of Commerce4, a
two judge Bench of this Court differentiated between the
standard of proof in disciplinary proceedings and criminal
trials in the following terms:
” …the yardstick and standard of proof in a criminal case
is different from the disciplinary proceeding. While the
standard of proof in a criminal case is a proof beyond all
reasonable doubt, the proof in a departmental proceeding
is preponderance of probabilities.”
This standard is reiterated by another two-Judge Bench of
this Court in Samar Bahadur Singh v. State of U.P. :
“Acquittal in the criminal case shall have no bearing or
relevance to the facts of the departmental proceedings as
the standard of proof in both the cases are totally different.
In a criminal case, the prosecution has to prove the
criminal case beyond all reasonable doubt whereas in a
departmental proceedings, the department has to prove
only preponderance of probabilities.”
33. In exercising judicial review in disciplinary matters,
there are two ends of the spectrum. The first embodies a
rule of restraint. The second defines when interference is
permissible. The rule of restraint constricts the ambit of
judicial review. This is for a valid reason. The
determination of whether a misconduct has been
committed lies primarily within the domain of the
disciplinary authority. The judge does not assume the
mantle of the disciplinary authority. Nor does the judge
wear the hat of an employer. Deference to a finding of fact
by the disciplinary authority is a recognition of the idea
that it is the employer who is responsible for the efficient
conduct of their service. Disciplinary enquiries have to
abide by the rules of natural justice. But they are not
governed by strict rules of evidence which apply to judicial
proceedings. The standard of proof is hence not the strict
standard which governs a criminal trial, of proof beyond
reasonable doubt, but a civil standard governed by a
preponderance of probabilities. Within the rule of
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preponderance, there are varying approaches based on
context and subject. The first end of the spectrum is
founded on deference and autonomy – deference to the
position of the disciplinary authority as a fact finding
authority and autonomy of the employer in maintaining
discipline and efficiency of the service. At the other end of
the spectrum is the principle that the court has the
jurisdiction to interfere when the findings in the enquiry
are based on no evidence or when they suffer from
perversity. A failure to consider vital evidence is an
incident of what the law regards as a perverse
determination of fact. Proportionality is an entrenched
feature of our jurisprudence. Service jurisprudence has
recognized it for long years in allowing for the authority of
the court to interfere when the finding or the penalty are
disproportionate to the weight of the evidence or
misconduct. Judicial craft lies in maintaining a steady sail
between the banks of these two shores which have been
termed as the two ends of the spectrum. Judges do not
rest with a mere recitation of the hands-off mantra when
they exercise judicial review. To determine whether the
finding in a disciplinary enquiry is based on some
evidence an initial or threshold level of scrutiny is
undertaken. That is to satisfy the conscience of the court
that there is some evidence to support the charge of
misconduct and to guard against perversity. But this does
not allow the court to re-appreciate evidentiary findings in
a disciplinary enquiry or to substitute a view which
appears to the judge to be more appropriate. To do so
would offend the first principle which has been outlined
above. The ultimate guide is the exercise of robust common
sense without which the judges‟ craft is in vain.”
40. Admittedly, no appeal has been preferred by the private respondent
against the finding of the disciplinary authority nor has he approached
any other forum against the said order finding him guilty and imposing
penalty.
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41. In the present case, the disciplinary authority has not only proved the
severe prejudice caused to the petitioner herein, but has also
quantified the loss caused to the bank due to the sheer and gross
negligence of the private respondent herein. The enforcement
directorate as noted in the minutes dated 30-31 March, 2024 that
the ED had duly investigated and crosschecked the statements of
all the 10 persons. But none of them had any mention of any IEI
employee or Corporate Member of IEI. Although there was no
internal involvement in the crime, there were huge procedural
lapses and negligence.
42. The disciplinary proceeding conducted and penalty of dismissal by the
petitioner, has not been challenged till date by the respondent no. 6.
But both the controlling authority and more so the appellate authority
have taken into consideration the proceeding against the respondent no.
6, while passing the impugned orders.
43. The appellate authority (central) has held that no notice in Form-M has
been issued to the respondent.
44. The said observation is found to be in contradiction to the findings of
the controlling authority, who has categorically stated that the applicant
was informed about the forfeiture of gratuity.
45. The controlling authority thus found violation of rule 8 of the payment
of gratuity Act, Central Rules, 1972 and the appellate authority agreeing
with the same found violation of Section 8(1)(ii) of the rules.
46. It appears that though the technical formalities under the act has prima
facie not been complied with, the petitioner has invoked Section 4(6)(a)
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of the Act and has done the same in accordance with law, having duly
proved that severe prejudice has been caused to the petitioner, due to
the gross negligence of the private respondent, causing damages and
loss of Rs. 35 crores (quantified), by way of a disciplinary proceedings
conducted in accordance with law by following the principles of natural
justice and thus calls for no interference in judicial review.
47. Admittedly, the private respondent has been duly show caused and
informed of the said forfeiture.
48. The filing of Form -M has been left out by an institute having suffered
huge loss, which is a curable defect and the same be completed by the
petitioner forthwith.
49. Thus the order of the controlling authority dated 30.12.2023, the order
of the appellate authority dated 28th April, 2025, and the notice dated
1st May, 2025, being not in accordance with law, are set aside. The
demand drafts dated 29th January, 2024 vide no. 895212 and 30th
August, 2024 vide no. 229879 be returned to the petitioner forthwith.
50. WPA 10679 of 2025 is allowed.
51. Connected application, if any, stands disposed of.
52. Interim order, if any, stands vacated.
53. Urgent Photostat certified copy of this judgment, if applied for, be
supplied to the parties expeditiously after due compliance.
(Shampa Dutt (Paul), J.)
