STATE BANK OF INDIA AND ORS. versus T.J. PAUL

Citation: [1999] 2 S.C.R. 1060 · Decided: 04-05-1999 · Supreme Court of India · Bench: M. JAGANNADHA RAO · Disposal: Case Partly allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
STATE BANK OF INDIA AND ORS. 
v. 
T.J. PAUL 
MAY 4, 1999 
B 
[M. JAGANN.ADHA RAO AND S.N. PHUKAN, JJ.] 
Service Laws : 
Misconduct-Respdi{eient, a bank manager, charge-sheeted for 
C sanctioning loans without adeq~.ate.. security and without prior approval/ 
ratification from superior authorities and contrary to departmental 
instructions-Relevant rules defined "gross misconduct" as 'doing any act 
prejudicial to the interests of the Bank, or gross negligence involving or 
likely to involve bank In serious. loss '-Held, proof of actual loss was not 
D necessary to ·attract this clause-Negligence-Sanctioning of loans-Bank 
of Cochin Service Code, Chapter VI, para 22{iv)(I). 
Departmental Enquiry-Penalty-Imposition of-Respondent working 
in Bank of Cochin as Manager, was served with a charge sheet for alleged 
irregularities in disbursement of loans for the period 1977-81-Bank of 
E Cochin amalgamated with State Bank of India on 27-4-1985-Inquiry Officer 
found the respondent guilty of gross negligence and awarded dismissal 
without notice-Appellate Authority commuted the penalty of dismissal to 
removal as per the SBI Rules on 30-7-1987-Held, penalty could have been 
passed only 1under the Bank of Cochin Rules as the alleged misconduct 
pertained to period prior. to the amalgamation· of the Bank of Cochin with 
F the SBl-The application of SB/ Rules were inapplicable-Bank of Cochin 
Service Code, Para 22(v)-State Bank of India (Supervising Stajj) Service 
Rules, Rule 49(g)-Banks-Amalgarnation of-Applicability of Rules prior 
to amalgamation-Constitution of /,ufia, Article 20(1)-Protection against 
penalty by ex post facto laws. 
G 
Departmental Enquiry-Penalty-Imposition of-Other than the one 
prescribed under the relevant rules-Penalty of dismissal commuted by the 
Appellate Authority to removal though removal was not prescribed under the 
relevant rules-Matter remanded back to appellate authority for fresh 
imposition of penalty as prescribed under the relevant rules-Bank of Cochin 
H Service Code, Chapter VI/, Para 22(v)-Administrative /aw-Ultra vires. 
1060 
S.B.I. v. T.J. PAUL 
1061 
Renistatement---Consequential benefit-Penalty of removal found to be ultra A . 
vires-Under the relevant rules, lesser punishment provided than losing a 
job-High Court directing payment of back wages, promotions, increments, 
etc.-Direction sustained. 
Penalty~Discharge and removal-Difference between the two-
Condonation of misconduct and mere discharge from service-Appellate B 
authority imposing penalty of removal not prescribed under the rules-Held, 
removal was not same as discharge from service by condoning misconduct. 
Words and Phrases-Words "removal" and "discharge"-"-Meaning of 
c 
The Bank of Cochin was amalgamated with State of Bank of India w.e.f. 
27.04.1985 and the respondent was in the service of Bank of Cochin !Duch 
prior to its amalgamation. Some advances given by him while working as 
manager at Madras during 1977-81 could not be recovered and he was 
transferred back to Madras for the purposes of recovery. Later on, the 
respondent was suspended and was handed over a charge-sheet with the D 
allegation that advances were given unauthorisedly without discretionary 
power/prior permission/observing lending norms and that his action amounted 
to 'serious misconduct' which involved financial loss and violation of Head 
Office prescription with vested interest and causing wilful damage to the 
interests and affairs of the Bank. The Inquiry Officer while observing E 
certain findings in his favour such as that the respondent did not act with 
vested interest and with the intention of causing wilful damage and financial 
loss to the Bank, however, found him guilty of having committed gross 
negligence. On these findings, the disciplinary authority issued a notice 
proposing dismissal without notice. The respondent then approached the 
appellate authority of the Bank. The 'integrity' of respondent was not in F 
doubt as per his past records in the bank. The appellate authority modified 
the order or 'dismissal' into one of 'removal from S\;rvice' in term of Rule 
49(g) of State bank of India (Supervisory Staff) Rules; The order of the 
appellate authority was challenged by the respondent before the High Court 
in a writ petition and the same was allowed by Single Judge by holding that G 
as per Inquiry Officer's report, there was no actual loss caused by reason 
of any wilful act of the respondent and that there was n

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