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Canara Bank and Another v. Lalit Popli (Dead) Through LRs.

Civil Appeal · 2017 INSC 1192Decided 6 Dec 2017
Civil Appeal No. 9666 of 2010
Justice Arun Mishra · Justice Mohan M. Shantanagoudar

Background

The respondent, a bank clerk, was dismissed in 1995 after a departmental enquiry found he had fraudulently withdrawn Rs. 1,07,000 from a customer's account by forging the customer's signature; three other bank officials were found only negligent in relation to the same incident and given lesser "censure" punishments with smaller recoveries. The respondent's challenge to his dismissal went through several rounds, ultimately being upheld by the Supreme Court itself in 2003. After that, the bank adjusted his gratuity and provident fund dues to recover the Rs. 1,07,000 loss, while refunding the lesser amounts already recovered from the three merely-negligent officials. The respondent's challenge to this adjustment succeeded before both the Single Judge and Division Bench of the Delhi High Court.

Decision Breakdown

The Supreme Court held that the respondent, having been found to have personally committed the forgery causing the loss, stood on a different footing from the other employees who were only negligent, so there was no "double recovery." Under Rule 12 of the Canara Bank Employees' Gratuity Fund Rules, Clause 19 of the Provident Fund Regulations, and Rule 3(4) of the General Conduct Rules, an employee dismissed for misconduct that causes financial loss to the bank is not entitled to gratuity or full provident fund contribution to the extent of that loss. The Court set aside both High Court orders, dismissed the respondent's writ petition, and upheld the bank's recovery.

Lesson Learnt

An employer governed by rules permitting it can withhold or adjust an employee's gratuity and provident fund to the extent of a financial loss the employee personally caused through misconduct: this is not unlawful "double recovery" merely because other, less culpable employees involved in the same incident were treated more leniently.

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

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