The Supreme Court of India has set aside a Karnataka High Court ruling that had reinstated a Canara Bank employee accused of tampering with accounts and coercing managers into irregular loan sanctions. The apex court held that the punishment of compulsory retirement was justified, stressing that public trust in banking institutions cannot be compromised.
Background
The case traces back to Ganganarasimhaiah, who joined Canara Bank as a daily wage worker in 1990 and later became part of the permanent staff. While posted at the V.G. Doddi branch, irregularities surfaced. Investigations revealed loans issued in the names of his wife and father without proper sanction, along with unauthorized entries in customer accounts. He was suspended in 2004 and later chargesheeted.
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The disciplinary authority found him guilty and imposed compulsory retirement in 2006. His appeal to the bank’s appellate authority was rejected. However, the Central Government Industrial Tribunal and subsequently the Karnataka High Court ordered his reinstatement without back wages, reasoning that the punishment was too harsh and evidence insufficient to directly link him to the fraudulent entries.
Court’s Observations
Justice Vijay Bishnoi, writing for the Supreme Court bench, disagreed with the Tribunal and High Court. The judgment noted that strict criminal evidence rules do not apply in departmental enquiries. Instead, the principle of “preponderance of probabilities” governs such cases.
“The bench observed, ‘The confidence of the public in the banking system rests on the integrity of its employees. Any compromise in honesty shakes the very foundation of such institutions.’”
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The Court found that the enquiry report, coupled with the respondent’s admissions, established his role in manipulating records. It criticized the Tribunal for reappreciating evidence despite earlier holding the enquiry as fair.
Decision
The Supreme Court concluded that the punishment of compulsory retirement was not excessive. It reinstated the disciplinary authority’s decision and dismissed the employee’s claims.
With this order, Ganganarasimhaiah will not return to service, bringing the two-decade-long dispute to a close.
Case Title: The General Manager (P), Canara Bank vs. Ganganarasimhaiah
Date: 2025
