SUPREME COURT UPHOLDS DISMISSAL OF SBI OFFICER FOR BRIBE IN LOAN SANCTIONS; REAFFIRMS LIMITS OF WRIT JURISDICTION:

On August 20, the Supreme Court reaffirmed that writ courts can interfere with disciplinary inquiries only in cases involving procedural lapses or violations of natural justice. A bench comprising Justices Rajesh Bindal and Manmohan allowed an appeal filed by the State Bank of India (SBI), restoring the disciplinary authority’s order that had removed an employee for corrupt practices. The Court held that the Patna High Court had wrongly interfered in the matter, despite there being no procedural irregularity or breach of natural justice during the inquiry.

The case concerned Ramadhar Sao, who joined the State Bank of India as a Class IV employee and was later promoted to the post of Assistant. Between 2008 and 2010, allegations surfaced that he was acting as a middleman in loan sanctions, collecting bribes from applicants in exchange for facilitating approvals. He was also accused of remaining absent without authorization. An internal inquiry was conducted, during which several loan recipients testified that they had paid him money to secure loan sanctions despite deficiencies in their documents. The Inquiry Officer found the charges proven.

Based on the inquiry report, the Disciplinary Authority in 2011 dismissed Sao from service. On appeal, however, the penalty was modified to “removal with superannuation benefits” in December 2012. Dissatisfied, Sao approached the Patna High Court, which ordered his reinstatement with back wages. When SBI’s intra-court appeal was dismissed, the Bank approached the Supreme Court.

Setting aside the High Court’s decision, the Supreme Court observed that the High Court erred in interfering with disciplinary findings even when no violation of natural justice was demonstrated. The bench noted that due process had been followed during the inquiry and the evidence had been duly appreciated. The judgment authored by Justice Bindal recorded that five loan recipients had categorically deposed against the respondent, confirming that they had paid him bribes to secure loan sanctions. The Court held that such evidence clearly established his involvement in corrupt activities.

In support of its reasoning, the Court relied on its earlier ruling in State Bank of India v. Ajai Kumar Srivastava (2021). In that case, the Court clarified that the power of judicial review exercised under Articles 226, 32, or 136 of the Constitution in relation to disciplinary proceedings is limited. It can only be invoked to correct errors of law or procedural irregularities resulting in manifest injustice or violation of natural justice. It is not intended for courts to reassess evidence or function as appellate authorities deciding the case on merits.

The Court further observed that the absence of detailed reasons in an order imposing punishment by a disciplinary authority does not vitiate the proceedings if the order is based on the acceptance of the findings recorded by the Inquiry Officer. For this proposition, it referred to Boloram Bordoloi v. Lakhimi Gaolia Bank and Others (2021).

Concluding the matter, the bench held that the orders passed by the Patna High Court could not be legally sustained. It restored the order of the Appellate Authority dated December 7, 2012, which had imposed the punishment of removal from service with superannuation benefits.