The Delhi High Court has set aside the dismissal of a Punjab National Bank officer who was removed from service on the very last day of his 37-year career, and has asked the bank to reconsider the punishment. The court questioned why he was alone, given the hardest penalty when other officials linked to the same credit transactions were allegedly dealt with more lightly.
According to The Indian Express report, Justice Sanjeev Narula, in an order dated March 25 did not disturb the findings of misconduct against officer PK Varun. Instead, the court stated that the punishment required fresh consideration and a reasoned explanation.
Why did the High Court step in?
The court said that it was not re-hearing the departmental inquiry like an appellate forum. It highlighted that judicial review in disciplinary matters is restricted to checking the legality and fairness of the decision-making process, not re-weighing evidence.
At the same time, the court mentioned that the disciplinary authority still had a duty to explain why. Within the same set of credit transactions, one officer was punished with whereas another was treated less severely. As quoted by The Indian Express, the court stated, “The requirement is not identical punishment, but of rational and reasoned differentiation. “
The court also observed that judicial interference is justified where a penalty is “so disproportionate to the misconduct proved that it shocks the conscience.”
What were the allegations against the officer?
Varun joined PNB in December 1980. From May 2012 to April 2015, he worked as an Assistant General Manager and incumbent-in-charge at a Mumbai branch. In July 2017, soon after retirement, he was issued a chargesheet for major penalty proceedings. PNB alleged that while sanctioning credit facilities to various borrowers, he failed to exercise due diligence and departed from internal guidelines. As per PBN, he also did not ensure pre-sanction approval. The bank also blamed him for failing to carry out effective post-sanction monitoring and follow-up, thereby putting bank’s interests at risk.
The alleged lapses covered five borrower accounts and, according to PNB, resulted to a bank exposure of around Rs 31.84 crore. A departmental inquiry was conducted, and the report was submitted in October 2017, which recorded a mix of “proved”, “partly proved” and “not proved” findings.
Why did the timing of dismissal matter?
On October 31, 2017, the last day of his service, Varun was dismissed. His departmental appeal was later rejected on March 28, 2018, the date of his superannuation. The court stated that this timing was crucial because it had a cascading effect on his retirement dues.
As per the report by The Indian Express, pension, gratuity, and leave encashment beyond the statutory ceiling were withheld after the dismissal. He was only given the gratuity due under the Payment of Gratuity Act. The court stated these severe consequences were important while judging that the punishment was excessive.
What has the court ordered now?
The High Court left the misconduct findings intact but sent the matter back for reconsideration of punishment alone. It has also directed the competent authority to pass a fresh order within six weeks, keeping in mind Varun’s role in comparison with other PNB officials in the same credit chain.
If the penalty changes, the officer’s retirement benefits will also need fresh determination under the applicable rules. The court also mentioned that if he remains unhappy with the fresh order, he will be free to pursue legal options available in law.