‘Disproportionate, stigmatic’: 32 years on, Gujarat HC quashes bank employee’s dismissal

Senior Advocate Bhaskar Tanna, who appeared for the litigants, submitted that Kotecha, who served the bank for 41 years with an “unblemished record’ and even earned “recommendations and prizes for his exemplary service” was dismissed from service on the basis of an inquiry report of October 1993, which came just ten days before he was due to retire that year. The bank had issued an order directing Kotecha to continue in service till the conclusion of the departmental proceedings against him. Kotecha had submitted his reply in October 1993 and he was dismissed in May 1994, under Regulation 4 of the Central Bank of India Officer Employees (Discipline and Appeal) Regulation, 1976.

As per the petition, Kotecha had joined the Central Bank of India as a clerk in 1952 and was promoted to the post of General Manager and working as Chief Internal Auditor at Ahmedabad in July 1993 when he received a memo to submit replies in connection with alleged procedural lapses committed by him between July 1986 and February 1990, while working as Chief Manager at the Jamnagar main office.

Submitting that “not a single memo was issued to him, much less charge-sheet or any adverse order during his entire career” previously, Tanna stated that out of the six charges proven against Kotecha, none of the charges resulted in any monetary loss for the respondent bank. Among the charges against Kotecha was “advancing of finance against inflated stock, failure to verify the correct value of stocks disclosed by the party in the stock statement, not keeping proper control over the accounts of the party as there were transfers from the EPC to CC account, not ensuring to get adjusted or reduced overdue outstanding balance of EPC account from the proceeds of the duty draw back and cash incentives, failure to exercise control over the account, which allowed the party to divert huge funds from EPC account through CC account in favour of their parent company and other accounts.

The Sixth Charge against the original petitioner was that of “failure to exercise control over the EPC account of the party and made advance against future contract without bothering to first liquidate the existing outstanding in the account”. Tanna also submitted that the bank “ought to have considered the fact” and that Kotecha “could not have been thrown out from the service of the bank on the date of his regular superannuation without any terminal benefits on the ground of having committed procedural lapses which did not result in any monetary loss to the respondent bank.”

In a judgment pronounced on Monday, the HC held that the penalty of dismissal against Kotecha was “disproportionate, stigmatic and not commensurate with the charges levelled” against Kotecha, the HC also stated that the dismissal was “an economic and social death of the petitioner who has rendered 41 years of unblemished service with the respondent bank”.

The judgment states, “…considering the charges levelled against the petitioner which are proved during the inquiry proceedings and confirmed during the appellate proceedings are concerned and the fact that there is no financial impact due to such misconduct which are proved during the course of inquiry proceedings,we are of the opinion that the dismissal from service is disproportionate to the charges levelled and the findings arrived at by the inquiry officer.”

Considering the submissions that the legal heirs of Kotecha were only seeking “removal of stigmatic penalty” of dismissal, the HC directed the bank to pass “appropriate consequential order of substitution of penalty” by reduction to a lower grade or post by reduction of basic pay by six increments for four stages in time scale as “all charges are interrelated to each other”. The judgment states, “… the penalty imposed upon the original petitioner of dismissal is hereby quashed and set aside and it is substituted by reduction of basic pay by six stages in time scale… The aforesaid substitution of punishment would not result in any financial implication as it is submitted… appellants that the appellants will not claim any monetary benefit due to substitution of the penalty and as the appellants are only interested in removal of stigmatic penalty of dismissal from service for the original petitioner.”

The court further stated that the bank would substitute the penalty “without any financial liability… to pay any monetary benefit arising out of such substitution of major penalty…”. The court also noted submissions that the appellants have forgone their right to claim any monetary benefit arising out of reduction of the substitution of the penalty.

Following the May 1994 order of dismissal, Kotecha had appealed before the appellate authority. In January 1995, the appellate authority confirmed the order of dismissal. Kotecha then moved the HC against the appellate authority in 1995. The said petition was disposed of by the HC in 2003 as Kotecha was permitted to withdraw the petition to make a representation to the appropriate authority. The representation was rejected by the chairman and managing director of the Bank in June 2003, following which Kotecha filed another Special Civil Application before the HC in 2004, which was admitted by an order in 2024. During the pendency of the petition, Kotecha died and his legal heirs continued the case.