SBI Employee terminated for sanctioning illegal Loans, Court orders SBI to provide Retirement Benefits
The Madhya Pradesh High Court, with a Division Bench of Justice Sunita Yadav and Justice Milind Ramesh Phadke, has partially upheld a former bank employee’s appeal regarding his retirement benefits. The court found that while the employee’s termination could be challenged at the Industrial Tribunal, his entitlement to retirement benefits, as promised in the termination order, should not be withheld.
Case Background
The appellant, a former employee of the State Bank of Indore (now merged with the State Bank of India), had worked there since 1985, starting as a Clerk/Cashier and later becoming a Computer Operator. In 2008, after allegations surfaced that he had illegally granted loans, the bank suspended and subsequently removed him from service. However, the removal order specifically mentioned that he would receive retirement benefits, including his pension, provident fund, and gratuity, and it did not disqualify him from future employment.
After being removed, the appellant challenged his termination in the High Court. Initially, the court supported his claim and overturned the removal order, but a Division Bench later reversed that decision and instructed him to file an industrial dispute to challenge the termination itself. When the appellant requested his retirement benefits from the bank, he was allegedly asked to sign blank forms, which he refused, leading to the current legal dispute.
Key Arguments
The appellant’s counsel, Senior Advocate K.N. Gupta, argued that the termination order had already established his right to superannuation benefits, and this should not require any additional dispute at the Industrial Tribunal. He contended that only the termination itself was meant for review by the tribunal, not the retirement benefits. On the other hand, the bank’s counsel, Senior Advocate V.K. Bhardwaj, argued that the earlier court order required all disputes, including the benefits, to be taken to the Industrial Tribunal.
The bank also submitted a compliance report showing pension arrears of ₹18,13,560.48 due to the appellant, alongside an outstanding debt of ₹34,02,654.93 that he allegedly owed the bank. The bank used this as a basis to hold off on paying his benefits.
Court’s Analysis and Decision
1. Entitlement to Superannuation Benefits
The court emphasized that the appellant’s right to superannuation benefits was clearly stated in the termination order issued in 2008. This meant he was entitled to these benefits irrespective of the ongoing dispute about his removal from service. The court found that the benefits did not need further approval or intervention from the Industrial Tribunal.
2. Tribunal Reference Limited to Termination Dispute
The court reviewed the earlier Division Bench’s decision, clarifying that the reference to the tribunal was intended only for the termination challenge, not for the retirement benefits. Therefore, the Single Judge’s direction to take the benefits matter to the tribunal was unnecessary, as there was no dispute over the appellant’s entitlement to these benefits.
3. Recovery of Outstanding Loans
The court allowed the bank to pursue its claim of outstanding dues from the appellant, but emphasized that any recovery must follow legal guidelines. Referring to the Supreme Court cases High Court of Punjab and Haryana v. Jagdev Singh (2016) and State of Punjab v. Rafiq Masih (2015), the court stated that the bank must follow established procedures to deduct outstanding dues from retirement benefits.
4. Directive to Release Retirement Benefits
The court instructed the bank to release the appellant’s retirement benefits if not already done, in accordance with legal principles on recovery from retirement dues. This directive affirmed the appellant’s right to his benefits, subject to lawful deductions for outstanding debts, if any.
Outcome
In conclusion, the High Court partially allowed the appeal, affirming that the appellant’s entitlement to retirement benefits should not be delayed or subjected to the tribunal’s review. The court’s order ensures that while the appellant can challenge his termination at the Industrial Tribunal, his superannuation benefits, as explicitly stated in the termination order, should be granted.
