The Andhra Pradesh High Court has ruled against UCO Bank’s unilateral decision to enhance disciplinary punishment against a former Assistant Manager, B. Asheervadam, without prior notice. A Single Judge Bench of Justice Harinath N set aside the bank’s revised order, calling it illegal and arbitrary. The court emphasized that disciplinary authorities cannot modify penalty orders arbitrarily to impose harsher punishments without giving the affected employee an opportunity to respond. It further held that compulsory retirement automatically entitles an employee to service benefits.
Background of the Case
B. Asheervadam began his career at UCO Bank as a clerk in 1985 and was promoted to Assistant Manager in 2007. He was posted at the Attili Branch, where he was responsible for loan disbursements. However, he later alleged workplace harassment by his Senior Manager and requested a reversion to the clerical cadre, a request that was denied.
Meanwhile, the bank conducted an inquiry into alleged irregularities in loan processing and subsequently suspended Asheervadam in 2009. In 2010, the disciplinary authority found him guilty of violating loan sanction norms and imposed a punishment of compulsory retirement with service benefits. However, within two weeks, the bank unilaterally revised its own order, removing the service benefits without issuing a fresh notice or giving Asheervadam a chance to respond.
Feeling aggrieved by this decision, Asheervadam filed a writ petition in the Andhra Pradesh High Court, challenging the modification of his punishment.
Court’s Observations and Ruling
The court made several key observations while ruling in favor of Asheervadam:
- Finality of Punishment Orders: The court held that once an order of punishment is communicated to an employee, it becomes final. Any subsequent change that worsens the punishment requires a fresh notice and an opportunity for the employee to be heard. The court found UCO Bank’s unilateral decision to withdraw service benefits unlawful.
- Illegal Modification of Order: The bank had argued that the revised order was merely a “corrigendum” and part of the same disciplinary process. However, the court rejected this claim, stating that the revision imposed an additional penalty, which could not be treated as a minor correction. It ruled that if the bank was dissatisfied with its initial decision, it should have followed the appeal process rather than arbitrarily modifying the order.
- Principles of Fair Play and Proportionality: The court relied on the precedent set in General Manager, Syndicate Bank v. B.S.N. Prasad (Civil Appeal No. 6327 of 2024), which mandates that disciplinary actions must follow principles of fairness and proportionality. The court found that UCO Bank’s actions violated these principles.
- Right to Service Benefits: Citing Kamalesh Kumar v. Union of India (W.P.(C) 6906 of 2016), the court reiterated that an employee who is compulsorily retired is entitled to service benefits unless specific rules bar them from receiving such benefits. It ruled that even if the regulations were silent on the issue, the entitlement to service benefits should be presumed.
- Judicial Review Limited to Procedural Violations: The court clarified that judicial review in disciplinary matters is generally restricted to cases where procedural illegality or disproportionate punishment is evident. While it upheld the punishment of compulsory retirement, it found the denial of service benefits unlawful.
Final Verdict
The court partially allowed Asheervadam’s petition, ruling that he was entitled to his service benefits. However, since he had already attained superannuation during the legal proceedings, the court did not consider reinstatement. It directed UCO Bank to release his pending benefits within six weeks.
