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UCO Bank and Others vs. M.B. Motwani (Dead) Thr. LRs. & Others

Civil Appeal · 2023 INSC 908Decided 12 Oct 2023
Civil Appeal No. 8516 of 2011
Hima Kohli · Rajesh Bindal · Vikram Nath

Background

A bank officer who joined UCO Bank as an apprentice in 1952 was due to retire on 31 July 1991 after attaining superannuation age. Just before his retirement, the bank served him a memo about alleged irregularities, then placed him under suspension and ordered that he not be treated as retired, later issuing a formal chargesheet on 7 December 1991, after his date of superannuation. He was eventually dismissed following a departmental inquiry, but the Bombay High Court set aside his dismissal, prompting the bank's appeal to the Supreme Court.

Decision Breakdown

The Supreme Court examined the bank's service regulations, which allow disciplinary proceedings to continue past retirement only if a chargesheet was already issued before the employee's superannuation date. Since the chargesheet here was issued after the employee's superannuation date, the Court held (relying on binding three-judge bench precedent) that no disciplinary proceeding was validly pending against him when he retired, making the subsequent suspension and dismissal invalid. The Court dismissed the bank's appeal with costs of Rs. 25,000, and since the employee had since died, directed the bank to pay all due service benefits with 7% annual interest to his legal heirs within three months.

Lesson Learnt

An employer cannot retroactively extend a departmental disciplinary proceeding beyond an employee's retirement date unless the chargesheet was actually issued before that date, timing of the formal chargesheet, not just when misconduct is suspected, determines whether the employer retains disciplinary jurisdiction over a retiring employee.

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

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