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Allahabad Bank vs Avtar Bhushan Bhartiya

Special Leave Petition (Civil) · 2022 INSC 469Decided 22 Apr 2022
Special Leave Petition (Civil) No. 32554 of 2018
Indira Banerjee · V. Ramasubramanian

Background

A bank officer, first appointed as a clerk in 1974 and later promoted to Branch Manager, was dismissed in 1989 after a departmental inquiry found him guilty of misconduct relating to indiscriminate loan advances, but the bank never gave him a copy of the enquiry report, as required by its own service regulations. After years of litigation, the Allahabad High Court twice ruled in his favour, ultimately quashing the dismissal in 2018 (after he had already retired in 2013) and ordering reinstatement with all consequential and retirement benefits, but limiting back wages to only 50% given the roughly 24-year gap between dismissal and final relief. Both the Bank (opposing any back wages) and the employee (seeking full back wages) appealed to the Supreme Court.

Decision Breakdown

The Supreme Court held the Bank was squarely at fault. It had violated its own regulation requiring supply of the enquiry report, had failed to disclose this defect to the courts in the first round of litigation, and had later falsely claimed the report was untraceable. On the employee's side, the Court found he had never pleaded that he was unemployed after his dismissal (a threshold requirement for claiming full back wages under established precedent), and it distinguished his managerial post from ordinary workman cases where full back wages are the norm. Balancing these facts, and given the extraordinarily long 24-year gap involved, the Court held the High Court's award of only 50% back wages (with full retirement benefits) struck a fair balance, and dismissed both parties' appeals.

Lesson Learnt

An employer's failure to follow its own mandatory disciplinary procedures, like providing a copy of the enquiry report, can unravel even a substantively supported dismissal, but an employee seeking full back wages must specifically plead that he remained unemployed during the litigation, or a court may still limit the award.

Official source (sci.gov.in)View Judgment (PDF)

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