Delhi High Court: Bank employees owe larger concern, keep clients' Trust, fraud suspicion of certain sincerity, cause service sack

Delhi High Court: Bank employees owe larger concern, keep clients' Trust, fraud suspicion of certain sincerity, cause service sack

In a recent ruling, the Delhi High Court has perceived that bank employees and officials have a greater responsibility of maintaining the integrity of the banking system and ensuring the trust of the millions of customers who delegate their trust to them.

A banking system is the backbone of any nation's economy, and Justice Pratibha M Singh noted that once the banking system is loss of faith, that too by one of its officials, the standard on which that loss of faith is to be judged cannot be an extremely high one.

There are circumstances when a mistrust or doubt, with some reliability or some evidence, would be sufficient to accurately support the dismissal from service.

The court was dealing with the case of a bank's employee misused his status as a single-window operator for his personal benefit by getting deposits from customers into his own account, which he later returned with interest.

An employee filed a claim with the State Bank of India challenging orders passed by the Presiding Officer, CGIT on 14th March 2016 and the award on 28th December 2016 in a dispute.

The Respondent worked at the Bank as a single-window operator involved in the Senior Citizens Savings Scheme. In 2010, he was terminated from the Bank effective May 20th, 2010, for allegedly making entries of customers into his personal accounts.

In the first contested order dated 14th March 2016, the CGIT held that the departmental inquiry carried out by the Bank violated the principles of natural justice and was illegal.

With its second impugned award dated 28th December 2016, the CGIT held that the Bank had failed to adequately establish the respondent's misconduct and reinstated the employee with full back wages and allowed his claim petition.

"The question of whether or not the Bank suffered any loss because of the Respondent's actions would not be relevant for the defense in this matter. In any case, this Court believes that the incidents that have surfaced maybe just those which became known to the Bank officials. It will lead to the loss of trust and faith of local customers in any branch of a Bank since these incidents can spread through word of mouth," the court concluded.

The report added:

"Therefore, the loss is not only measured monetarily but also in terms of the customer's goodwill/ faith in the Bank, but also consequent loss of trust for a Bank. This on its own is sufficient. It is the clear inference of this Court that when there is a loss of confidence, reinstatement should be refused."

A statement made by the Respondent before the Enquiry Officer, in which he requested lenience and restoration, was also taken into consideration. As a result of the admission, the Court held that the Respondent admitted to his irregularities.

"In a situation like this, the Bank cannot be punished for not showing leniency. In this case, the Bank has held its employee to a higher standard of accountability, as should be expected of any financial institution," the Court stated.

In this case, after a detailed departmental investigation, the Court found that the Respondent had engaged in improper conduct, therefore, the dismissal of the Respondent did not constitute an illegal act or be deemed unfair.

The Court, therefore, threw out the two impugned orders and upheld the termination award received by the Respondent.

"Since the termination's validity was only upheld today, even if the stay had not been granted, the Respondent would have earned his monthly salary due to the CGIT's order, if he had worked during that time."In the facts and circumstances of this case, the Court is of the opinion that a lump sum payment of Rs. 20 lakhs ought to be released to the Respondent," the Court added.

A lump sum of Rs. 20 lakhs was directed to be paid by the Bank within the next four weeks.

It was ordered that the remaining amounts in the FDR, including the interest component, should be encashed by the Bank itself. Also, the respondent is to be released all his statutory dues like Provident Fund, gratuity and so on without deduction, till the termination date, if it has not already been released, within four weeks," the Court said.