State Bank of India & Ors. v. C.K. Karunakaran

Civil Appeal · 2021 INSC 582Decided 30 Sept 2021
Civil Appeal No. 6821 of 2009
Justice Sanjay Kishan Kaul · Justice M.M. Sundresh

Background

The respondent, a bank officer, was recommended for promotion by an interview committee in late 1984, but around the same time the bank initiated disciplinary proceedings against him, so his promotion result was kept in a "sealed cover" pending the outcome. In 1987 he was awarded the minor penalty of censure. Under the bank's own circular, a sealed-cover promotion recommendation cannot be acted on if even a minor penalty is imposed, though the employee is entitled to be considered at the next promotion round after the proceedings conclude, which the respondent later was, and he was in fact promoted. He nonetheless sought the earlier, backdated promotion through the Kerala High Court, and both the Single Judge and Division Bench ruled in his favour.

Decision Breakdown

The Supreme Court held that under the bank's Circular No. 118 and its own precedents (State of M.P. v. I.A. Qureshi and Union of India v. A.N. Mohanan), once any penalty, even the minor penalty of censure, is imposed following disciplinary proceedings, the sealed-cover recommendation cannot be given effect to, and the employee's promotion is to be considered prospectively at the next opportunity. Since the respondent had already received that prospective promotion, the High Court's direction to treat him as promoted from the earlier sealed-cover date was legally unsustainable. The Court set aside the High Court's orders and allowed the bank's appeal.

Lesson Learnt

An employee facing disciplinary action is not automatically entitled to a backdated promotion that was held in "sealed cover," even if the ultimate penalty is minor (like censure); the correct remedy is prospective consideration at the next promotion cycle, not retrospective benefit from the earlier recommendation.

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