Summary and Analysis of The General Manager P Canara Bank vs Ganganarasimhaiah SLP No 20343 of 2022

1. Heading of the Judgment

Case Name: The General Manager (P), Canara Bank vs Ganganarasimhaiah
Citation: 2025 INSC (REPORTABLE) [Civil Appeal No. of 2025, arising from SLP (C) No. 20343 of 2022]
Court: Supreme Court of India
Judges: Hon'ble Mr. Justice J.K. Maheshwari and Hon'ble Mr. Justice Vijay Bishnoi
Nature of Case: Civil Appeal challenging the decision of the High Court of Karnataka in a service matter concerning disciplinary proceedings.

2. Related Laws and Sections

The judgment primarily interprets the scope of judicial review in disciplinary proceedings, with reference to:

• The Canara Bank Service Code: The internal regulations governing the bank's employees, under which the disciplinary action was initiated.

• Section 11A of the Industrial Disputes Act, 1947: This section grants Labour Courts and Tribunals the power to interfere with the findings of a domestic enquiry and the punishment awarded, but this power is not absolute and must be exercised within well-defined legal limits.

3. Basic Judgment Details

• Appellant (Bank Management): The General Manager, Canara Bank

• Respondent (Employee): Ganganarasimhaiah (Sub-Staff)

• Subject of Dispute: The legality and justification of the punishment of "Compulsory Retirement" imposed on the employee for gross misconduct.

• Lower Authorities:
  Domestic Enquiry, Disciplinary & Appellate Authority (Bank): Found the employee guilty and imposed the punishment of compulsory retirement.
  Central Government Industrial Tribunal: Initially held the enquiry was fair, but in its final award, set aside the punishment and ordered reinstatement without back wages, citing lack of direct evidence and disproportionate penalty.
  High Court of Karnataka: Dismissed the bank's writ petition and upheld the Tribunal's award.

• Supreme Court's Decision: Allowed the bank's appeal, set aside the orders of the High Court and the Tribunal, and restored the punishment of compulsory retirement imposed by the bank.

4. Explanation of the Judgment

Core Legal Issue

The central question before the Supreme Court was whether the Industrial Tribunal and the High Court overstepped their jurisdiction in judicial review by reappreciating the evidence and substituting their own judgment for that of the Disciplinary Authority, which had found the employee guilty of serious misconduct.

Background Facts

The respondent employee was working as a Sub-Staff at the V.G. Doddi branch of Canara Bank. A investigation revealed serious irregularities, including:

• Unauthorized debits and tampering with the bank account of a customer, Shri Ramakrishnaiah, to cover up a transaction.

• Coercing the Branch Manager to sanction loans (TODs and others) to his wife and father without the mandatory concurrence from the controlling office.

• Making alterations in the bank's balancing book, control register, and subsidiary sheets to conceal the fraudulent transactions.

During a preliminary enquiry, the employee admitted to many of these acts. A formal chargesheet was issued, a domestic enquiry was held, and the Enquiry Officer found all charges proved. The Disciplinary Authority, after giving a personal hearing, imposed the penalty of compulsory retirement. The Appellate Authority of the bank upheld this decision.

The Supreme Court's Analysis and Reasoning

The Supreme Court's decision was based on a fundamental principle of service law: the limited scope of judicial review in disciplinary matters.

1. Settled Law on Judicial Review: The Court extensively referred to its past judgments, including B.C. Chaturvedi vs. Union of India, Standard Chartered Bank vs. R.C. Srivastava, and State of Rajasthan vs. Heem Singh. It reiterated that:
   Courts and Tribunals are not appellate authorities. They cannot re-weigh evidence or substitute their own view for that of the Disciplinary Authority.
   The role of judicial review is restricted to examining:
   (i) Whether the enquiry was conducted by a competent authority?
   (ii) Whether the rules of natural justice were followed?
   (iii) Whether the conclusions are based on "some evidence" or are perverse (i.e., a conclusion no reasonable person could arrive at).

2. Standard of Proof: The Court emphasized that disciplinary proceedings are not criminal trials. The standard of proof is not "beyond reasonable doubt" but based on the "preponderance of probabilities". The strict rules of evidence under the Indian Evidence Act do not apply.

3. Error by the Tribunal and High Court: The Supreme Court found that both the Tribunal and the High Court committed a fundamental error:
   They acted as appellate bodies, reassessing the evidence presented during the domestic enquiry.
   The Tribunal incorrectly demanded that the bank prove the employee was the "author of the entries" with direct evidence or a handwriting expert's opinion, applying a criminal standard of proof.
   Ironically, the Tribunal itself recorded a finding that it was "highly possible" the Manager committed the irregularities at the employee's insistence and that the employee was the direct beneficiary. Despite this, it interfered with the punishment.

4. The "Banker's Eye" Principle: The Court noted that the Enquiry Officer and Disciplinary Authority were bank officers experienced in verifying signatures and entries. They had concluded, by a naked eye comparison ("banker's eye"), that the disputed entries and alterations were in the employee's handwriting. The Court held that this was a valid finding of fact that the Tribunal should not have disturbed.

5. Seriousness of Misconduct in Banking: The Court underscored the supreme importance of integrity and trust in the banking sector. Citing Deputy General Manager vs. Ajai Kumar Srivastava, it held that an employee who tampers with records, makes unauthorized transactions, and coerces superiors for personal gain erodes public confidence in the bank. For such misconduct, the loss of confidence by the employer is a valid ground for severe punishment.

6. On Punishment being "Disproportionate": The Court rejected the Tribunal's view that the punishment was harsh. It clarified that "Compulsory Retirement" is a separate penalty from "Dismissal," and the employee would still be entitled to gratuity and pensionary benefits, contrary to the Tribunal's mistaken belief.

Supreme Court's Directions and Conclusion

The Supreme Court held that the orders of the Tribunal and the High Court were unsustainable in law as they exceeded their jurisdiction in judicial review.

Final Decision: The Supreme Court:

• Allowed the appeal filed by Canara Bank.

• Set aside the orders of the High Court and the Industrial Tribunal.

• Restored the order of the Disciplinary Authority imposing the punishment of compulsory retirement on the respondent.

• Clarified that the respondent would be entitled to receive gratuity and other pensionary benefits as per rules, as compulsory retirement does not forfeit these rights.