Bank official sacked on retirement day after 37 years of service; HC questions action

The Delhi High Court has set aside the dismissal of a Punjab National Bank (PNB) officer who was removed from service on the very day of his retirement, directing the bank to reconsider the penalty within six weeks.

Justice Sanjeev Narula was hearing a petition filed by P K Varun, a senior PNB officer who had served the bank for over 37 years after joining in December 1980. Varun had challenged his dismissal, which was imposed on October 31, 2017, his last working day, resulting in the withholding of key retirement benefits such as pension, leave encashment and gratuity beyond the statutory limit. 

The court did not interfere with the findings of misconduct against Varun but questioned the proportionality of the punishment, particularly compared to that of other officials involved in the same set of transactions.

Court questions disproportionate penalty

In its March 25 order, the court observed, "That does not absolve the disciplinary authority of the duty to explain why, within the same cluster of credit transactions, one officer is visited with the ultimate penalty of dismissal while another is dealt with far more lightly."

The case relates to alleged lapses in sanctioning credit facilities across five borrower accounts during Varun's tenure as Assistant General Manager in Mumbai between May 2012 and April 2015. The bank claimed these lapses exposed it to a potential risk of around ₹31.84 crore.

While disciplinary action was taken against multiple officials, Varun argued that he alone was handed the harshest punishment, while others received minor penalties such as censure.

What the court directed

The High Court said that while identical punishment is not required in disciplinary matters, there must be a rational basis for differentiating between employees. It added that judicial intervention is warranted when a penalty is so disproportionate that it "shocks the conscience."

Accordingly, the court directed the competent authority at PNB to re-evaluate the penalty and issue a fresh, reasoned order within six weeks. It also asked the bank to consider the timing of the dismissal on the officer's last day of service and its cascading impact on his retirement benefits.

If the penalty is modified, the court said, Varun's terminal dues, including pensionary benefits, will have to be reassessed as per applicable rules.