- 1 - HC-KAR NC: 2025:KHC:43146-DB WP No. 1357 of 2021 C/W WP No. 34310 of 2017 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH DAY OF OCTOBER, 2025 PRESENT THE HON'BLE MR. JUSTICE D K SINGH AND THE HON'BLE MR. JUSTICE RAJESH RAI K WRIT PETITION NO. 1357 OF 2021 (L-TER) C/W WRIT PETITION NO. 34310 OF 2017 (L-PG) IN WP No. 1357/2021 BETWEEN: REGIONAL MANAGER (THE DEPUTY GENERAL MANAGER) STATE BANK OF INDIA DAVANGERE REGION REGIONAL OFFICE, DAVANGERE-577 001 …PETITIONER (BY SRI. T P MUTHANNA, ADVOCATE) AND: N.V. ARUNKUMAR N.H. 13 MALLAPURA ROAD, KANAKANAGARA 5TH CROSS, NEAR TARAMANDALA CHITRADURGA-577 501 …RESPONDENT (BY SRI. R. RAMACHANDRAIAH, ADVOCATE) THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR THE ENTIRE RECORDS LEADING TO PASSING OF THE AWARD DATED 19/06/2020 IN ID NO.40/2013 PASSED BY CGIT-CUM-LABOUR COURT, BENGALURU AND ETC. Digitally signed by PANKAJA S Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:43146-DB WP No. 1357 of 2021 C/W WP No. 34310 of 2017 IN WP NO. 34310/2017 BETWEEN: SRI ARUN KUMAR N.V AGED ABOUT 46 YEARS, S/O SRI.B.N.VARADARAJ, R/AT NO.NH-13, HOSPET ROAD, 5TH CROSS, KANAKANAGARA, CHITRADURGA-577 501 ...PETITIONER (BY SRI. NAIK V.S, ADVOCATE) AND: THE GENERAL MANAGER(HR) SBI ST. MARKS ROAD BENGALURU-560 001 (AMENDED AS PER COURT ORDER DATED 11.04.2018) ...RESPONDENT (BY SRI. J. PRADEEP KUMAR, ADVOCATE FOR SMT. K. SUBHA ANANTHI, ADVOCATE) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR THE ENTIRE RECORDS FROM THE RESPONDENT PERTAINING TO ANNEX-D AND H;QUASH (i) PENSION PAYMENT ORDER DATED 19.8.2014 AND (ii) THE REPLY RECEIVED FROM THE BANK BEARING REF. NO.PGP / PENSION DATED 17.1.2015 RECEIVED FROM THE RESPONDENT - BANK THE ORIGINALS AT ANENX-D AND H RESPECTIVELY. THESE PETITIONS, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE D K SINGH and HON'BLE MR. JUSTICE RAJESH RAI K - 3 - HC-KAR NC: 2025:KHC:43146-DB WP No. 1357 of 2021 C/W WP No. 34310 of 2017 ORAL ORDER (PER: HON'BLE MR. JUSTICE RAJESH RAI K) Both the employee and the employer-Bank have preferred these writ petitions. 2. The employee in WP.34310/2017 is seeking quashing of pension payment order dated 19.08.2014, and a direction to the Bank to re-fix the pension by reckoning the period of suspension as period spent on duty and full salary as on the date of cessation of employment from the Bank and to pay arrears of pension and commutation benefit along with interest at 12% p.a. 3. The employer - Bank in WP.1357/2021 is seeking quashing of award dated 19.06.2020 in ID.No.40/2013 passed by the Central Government Industrial Tribunal (CGIT). 4. The facts of the case are that the employee was appointed in the employer-Bank with effect from 06.02.1995. While he was working as a Special Assistant at Hosadurga Branch of e-State Bank of Mysore, now State Bank of India had committed certain serious misconduct and as such, he was placed under suspension on 10.06.2011 and was thereafter - 4 - HC-KAR NC: 2025:KHC:43146-DB WP No. 1357 of 2021 C/W WP No. 34310 of 2017 issued with charge sheet on 16.04.2012. After holding disciplinary proceedings, the employee was removed from services of the Bank with effect from 23.03.2013 with superannuation benefits in terms of Clause 6(b) of Bipartite Settlements dated 10.04.2002. Aggrieved by the same, the employee preferred an appeal before the Appellate Authority and the Appellate Authority, after consideration of material documents, has rejected the appeal. Against which, the employee raised an industrial dispute before the Assistant Labour Commissioner and on failure of conciliation, he submitted a report to the appropriate Government. Thereafter, the dispute was referred to the CGIT,. 5. In the meanwhile, even after removal from service, the employee was not paid gratuity as per his entitlement, however, he received a sum of Rs.2,58,200/- towards gratuity. As such the employee approached the Controlling Authority under the Payment of Gratuity Act claiming balance amount of gratuity along with interest. The said application was partly allowed vide order dated 24.06.2015 by the Assistant Labour Commissioner and Controlling Authority. The Bank was directed to pay the difference of gratuity amount of Rs.81,568/- along - 5 - HC-KAR NC: 2025:KHC:43146-DB WP No. 1357 of 2021 C/W WP No. 34310 of 2017 with interest at Rs.55,047/-. Against which, the Bank preferred an appeal before the Chief Labour Commissioner (Central) and Appellate Authority. The said appeal came to be dismissed vide order dated 30.09.2016 and the Bank was directed to pay Rs.72,737/- towards the difference of gratuity along with interest of Rs.54,156/-. Though the said order was complied by the Bank, it did not fix the pension and payment of commutation amount by reckoning the period of suspension as service on the date of cessation of the employment of the employee. Thereafter, the Bank has issued Pension Payment Order dated 19.08.2014 to the employee. Since the said payment order was incorrect, the employee submitted several representations and the Bank rejected the claim of the petitioner. Aggrieved by which, the employee is before this Court. 6. Subsequently, the CGIT passed an award dated 19.06.2020 setting aside the punishment of removal from service imposed on the employee dated 22.03.2013 and directed the Bank to reinstate the employee to his original post with continuity of service and 40% backwages, which is challenged by the Bank before this Court. - 6 - HC-KAR NC: 2025:KHC:43146-DB WP No. 1357 of 2021 C/W WP No. 34310 of 2017 7. We have heard Sri Naik V.S., learned counsel for the employee and Sri J.Pradeep Kumar, learned counsel for Smt.K.Subha Ananthi, learned counsel for the employer - Bank. 8. Learned counsel for the Bank contended that the misconduct committed by the respondent is prejudicial to the interest of the Bank, inasmuch as the current account and SB account of employee's wife disclosed several cash transactions which were disproportionate to known sources of his income, for which the employee had not satisfactorily explained and some of the transactions were more than Rs.50,000/-. In addition, the employee had caused financial loss to the Bank by crediting the commission amount to his wife's account instead of crediting to Bank's commission account. Apart from the same, in respect of corresponding transfer credit vouchers of documentation charges, the employee credited the same to his wife's accounts and additionally, the employee took gold loan in the name of third party and transferred - 7 - HC-KAR NC: 2025:KHC:43146-DB WP No. 1357 of 2021 C/W WP No. 34310 of 2017 the same to his wife's account and repayment of said loan was made through the account of employee's wife, which was a gross misconduct in terms of paragraph 5 (j) of the Memorandum of Settlement dated 10.04.2002. 9. It is also contended that though all the allegations were proved in the disciplinary proceedings, the CGIT has erred in holding that that there is no direct evidence that the employee got the benefit of loan transactions pertaining to third party and as such, he has made undue profit out of the same. The CGIT has also erred in holding that the irregularities committed by the employee do not come under the purview of misconduct, though the employee has committed misconduct prejudicial to the interest of the Bank by not adhering to the procedure and guidelines of the Bank by misusing the public money. Thus, the CGIT without considering the materials in right perspective, has ordered reinstatement of the employee with 40% backwages, which requires to be interfered with - 8 - HC-KAR NC: 2025:KHC:43146-DB WP No. 1357 of 2021 C/W WP No. 34310 of 2017 at the hands of this Court. With these submissions, he prays to allow the writ petition filed by the Bank. 10. On the other hand, since the petitioner in his petition is seeking quashing pension payment order, learned counsel appearing for the employee contended that the order passed by the Appellate Authority under Payment of Gratuity Act dated 13.09.2016 directing the Bank to pay Rs.72,737/- towards difference amount of gratuity and Rs.54,156/- towards interest i.e., totaling to Rs.1,26,893/- is totally incorrect and as such, the Bank is duty bound to re-fix the pension of the employee by recalling the period of suspension as period spent on duty with full salary as on date cessation of the employment of the employee with the Bank. 11. He further contended that admittedly, in the gratuity claim application filed by the employee, the period of suspension was ordered to be recalled for the purpose of gratuity since the said period was also treated as qualifying service. The order passed by the Controlling - 9 - HC-KAR NC: 2025:KHC:43146-DB WP No. 1357 of 2021 C/W WP No. 34310 of 2017 Authority in respect of difference of gratuity amount was confirmed in the statutory appeal filed by the Bank and the Bank thereafter complied the said order. In such circumstances, the Bank ought to have treated the period of suspension as period on duty. Accordingly, he prays to allow the petition of the employee. 12. It could be gathered from records that in respect of charge No.1 i.e., transactions in the current account/SB account of his wife were disproportionate to the known source of income of the employee, the CGIT has held that the said charge cannot be said to be prejudicial to the interest of Bank since the same was not proved to be misconduct as contemplated in para 5(j) of Bipartite Settlement. In respect of charge No.2 i.e., transactions of credit, debit vouchers from the account of loanees towards documentation charges were credited to the account of employee's wife, the CGIT has held the then Manager had ratified the same and even there was no complaint to the Bank from any loanees that documentation charges - 10 - HC-KAR NC: 2025:KHC:43146-DB WP No. 1357 of 2021 C/W WP No. 34310 of 2017 deducted was exorbitant and that there was no calculation as to how much amount the Bank had incurred towards said expenses. In respect of charge No.3 i.e., negligence of employee involved the Bank in serious loss, the CGIT has held that the amounts are credited to account of the employee's wife and as such, for any acts committed by his wife, the employee cannot be faulted. In respect of charge No.4 that the loan was granted to third party and the same was transferred to the account of employee's wife, the CGIT held that there was no direct evidence that the employee got the benefit of loans transaction thereby made undue profit out of it. 13. On careful perusal of charges, the findings of the CGIT and the evidence on record, it is clear that the employee had caused financial loss to the Bank by crediting the commission amount to his wife's account instead of Bank's commission account. Further, the transactions of credit, debit vouchers from the account of loanees towards documentation charges were credited to - 11 - HC-KAR NC: 2025:KHC:43146-DB WP No. 1357 of 2021 C/W WP No. 34310 of 2017 the account of employee's wife. The disciplinary enquiry depicts that the loan of Rs.2,00,000/- has been granted in the name of third party and the same was transferred to the account of employee's wife and that she was repaying the same through her account. As such, the act of employee has definitely caused severe repercussions on the Bank financial transactions. 14. The Bank employee is expected to maintain absolute integrity and honesty since the Bank is the custodian of public money and the public have utmost trust and faith on the Bank. 15. In view of the aforesaid, we are of the opinion that the CGIT has set aside the order of removal of service of the employee based on surmise and conjectures which requires interference at the hands of this Court. Thus, the order of the CGIT ordering reinstatement of the employee with backwages being a very lenient approach of the CGIT, is set aside. However, in view of the charges leveled against the employee, we are of the opinion that the - 12 - HC-KAR NC: 2025:KHC:43146-DB WP No. 1357 of 2021 C/W WP No. 34310 of 2017 matter requires reconsideration at the hands of the General Manager of State Bank of India, Regional Office, Davanagere, in respect of quantum of punishment, since the employee is 55 years old and is still having service. The General Manager is directed consider the plea of the employee afresh in respect of quantum of punishment, within a period of two months from the date of receipt of a copy of this order. Till such time, if the Bank is paying wages as per Section 17B of the Industrial Disputes Act to the employee, the same shall be continued. 16. Accordingly, the writ petition of the Bank is allowed in part. Consequently, the writ petition of the employee does not survive for consideration for the time being. SD/- (D K SINGH) JUDGE SD/- (RAJESH RAI K) JUDGE PKS/List No.: 1 Sl No.: 24