The Supreme Court has reiterated that compulsory retirement of an employee does not amount to denial of retirement benefits, which can only be forfeited in cases of dismissal from service.
A Civil Appeal was filed by the General Manager of Canara Bank challenging a Karnataka High Court judgment that had upheld the award of the Central Government Industrial Tribunal (CGIT), Labour Court.
A Division Bench of Justice J.K. Maheshwari and Justice Vijay Bishnoi observed:
“It is well settled that compulsory retirement of an employee from the services does not mean that the employee is not entitled to retirement benefits, which can only be denied in a case of dismissal from service. Unfortunately, the High Court, without considering the settled principle of law in judicial review of disciplinary proceedings, and while adding irrelevant reasons, confirmed the Tribunal’s order.”
The Court also emphasized that strict rules of evidence do not apply to departmental proceedings, and charges can be proved on the basis of a preponderance of probabilities.
Facts of the Case
- The Respondent joined Canara Bank as a daily wage Sub-Staff in 1990 and was confirmed as Duftery-cum-Cash Peon in 1992.
- In 2004, an investigation report revealed serious irregularities, including unauthorized loans advanced to his wife, coercion of the Branch Manager, and tampering with official bank records.
- During the preliminary inquiry, the Respondent admitted to these acts.
- He was suspended, chargesheeted, and after a full inquiry, found guilty.
- The Disciplinary Authority issued a show-cause notice and, after a personal hearing, imposed the punishment of compulsory retirement.
The Respondent’s appeal was dismissed by the Appellate Authority. However, the Tribunal directed reinstatement with continuity of service (without back wages), which was later upheld by the Karnataka High Court.
Supreme Court’s Observations
The Apex Court criticized both the Tribunal and the High Court for failing to follow established principles of judicial review in disciplinary matters. It clarified that when misconduct charges are proved through a valid inquiry, the scope of judicial review is limited to examining:
- Whether the inquiry was held by a competent authority,
- Whether principles of natural justice were followed, and
- Whether the findings are supported by evidence.
The Court also noted that bank officers, by their experience, could identify signatures in routine banking practice, thereby lending credibility to the inquiry findings.
Importantly, the Bench highlighted that the Tribunal wrongly acted as an Appellate Authority and interfered with the disciplinary punishment, despite acknowledging the Respondent’s direct benefit from the irregular loans.
Final Ruling
The Supreme Court held that:
- The punishment of compulsory retirement was valid and proportionate.
- The Respondent remains entitled to gratuity and other pensionary benefits under law.
Accordingly, the Court set aside the Karnataka High Court’s judgment and restored the order of the Disciplinary Authority.
Case Title: The General Manager (P) Canara Bank v. Ganganarasimhaiah (Neutral Citation: 2025 INSC 1088)
Appearance:
- For Appellant: AOR Rajesh Kumar Gautam with Advocates Anant Gautam, Rishi Chauhan, Deepanjal Chudhary, and Likvi K. Jhakalu.
- For Respondent: AOR Chand Qureshi with Advocate Mujahid Ahmad.