PAWAN KUMAR AGARWALA versus GENERAL MANAGER-II & APPOINTING AUTH. STATE  BANK OF INDIA & ORS.
[2015] 15 S.C.R. 555, Supreme Court of India, 2015
Outcome: Appeal(s) allowed (Granted)
Segment: Ratio
[2015) 15 S.C.R. 555 
PAWAN KUMARAGARWALA 
v. 
GENERAL MANAGER-II &APPOINTING AUTH. STATE 
BANK OF INDIA & ORS. 
A 
(Civil Appeal No. 13448 of2015) 
B 
NOVEMBER 17, 2015 
[V. GOPALA GOWDAAND AMITAVA_ ROY, JJ.] 
Service Law - Misconduct - Penalty - Allegation c 
against the appellant that he filled the loan application of a 
borrower and influenced the manager of another branch of 
the bank to sanction loan despite knowing that the borrower 
had earlier taken loan from his branch and thereby appellant 
failed to protect the interests of the bank - Meanwhile, in the 
disciplinary proceedings against the manager of the other D 
branch, authority awarded minor penalty of one stage lower 
in time scale for a period of one year - However in case of 
appellant, order of dismissal passed - Appellant filed writ 
petition - Single jutlge of High Court found that there was 
unfairness in the enquiry as the list of witnesses and the . E 
copies of the documents were not given to the appellant and 
granted reinstatement with all service benefits and back 
wages to the extent of 25% - On challenge by respondents, 
Division Bench modified the punishment by imposing penalty 
of reduction of one increment for one year and reinstatement F 
without back wages since he was already drawing pension-
On appeal, held: It was a case of denial of fair opportunity to 
the appellant in gross violation of the procedural 
requirements of the Service Rules. -
The finding of the 
enquiry officer on the
charges was vitiated on account of non-
G 
compliance of the statutory Rules and principles of natural 
justice -
In the absence of evidence, the order of 
reinstatement without full back wages was unjustified in law-
High Court should have made deduction of the amount of 
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SUPREME COURT REPORTS 
[2015] 15 S.C.R. 
A pension received by the appellant after awarding full back 
-wages for the period in question - Order of Division Bench 
set aside and order of single judge restored and modified 
with regard to award of reinstatement with full back wages. 
B 
c 
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E 
F 
State Bank of India and Ors. vs. K.P. Narayanan 
Kutty 2003 (1) SCR 391 : (2003) 2 sec 449; S. 
A. Venkataraman vs. U.0.1. andAnr. AIR 1954 SC 
375 : 1954 SCR 1150; Union of India vs. T.R. 
Varma AIR 1957 SC 882 : 1958 SCR 499; 
Punjab National Bank vs. Kunj 1998 (1) Suppl. 
SCR 22 : (1998) 7 SCC 84; William Vincent 
Vita re/Ii v. Fred A. Seaton, Secretary of the Interior, 
et al 359 U.S. 535 (1959); R.D. Shetty vs. 
International Airport Authority 1979 (3) 
SCR 1014 :1979 (3) SCC 489; Deepali Gundu 
Surwase 
vs. 
Kranti Junior Adhyapak 
Mahavidyalaya (D. ED.) & Ors. 2013 (9) SCR1 : 
(2013) 10 sec 324 - referred to. 
Case Law Reference 
2003 (1) SCR 391 
referred to 
Para 11 
AIR 1954 SC 375 
referred to 
Para 11 
1958 SCR 499 
referred to 
Para 12 
1998 (1) Suppl. SCR 22 
referred to 
Para 16 
(359 U.S. 535 (1959) 
referred to 
Para 17 
979 (3) SCR 1014 
referred to 
Para 18 
2013 (9) SCR 1 
referred to 
Para 19 
G 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 
H 
13448 of 2015. 
From the Judgment and Order dated 26.11.2014 of the 
High Court at Guahati Principal Seat at Guahati in W. A. No. 
192of2014.
PAWAN KUMARAGARWALA v. GENERAL MANAGER-II & 557 
APPOINTINGAUTH. STATE BANK OF INDIA & ORS. 
Vijay Hansaria, Sr. Adv., Shailesh Madiyal, Gautam A 
Prabhakar, Ms. Sneha K., Avnish Pandey, Advs. for the 
Appellant. 
Gaurav Agrawal, Adv., for the Respondents. 
The following Order of the Court was passed: 
B 
ORDER 
1. Leave granted. 
2. This appeal by special leave is filed by the appellant 
as he is aggrieved of the judgment and order dated 26.11.2014 C 
passed by the Division Bench of the Gauhati High Court at 
Guwahati in Writ Appeal No. 192 of 2014 holding that there 
was no negligence on the part of the respondent (appellant 
herein) in disbursing the loan and he had taken appropriate 
steps, however, the other Manager of that Branch, who has o 
been found guilty and levied with lesser penalty, therefore, the 
minor penalty would visit the respondent (appellant herein). 
Accordingly, the Division Bench of the High Court modified the 
penalty of dismissal to one of reduction of one increment for 
one year and further directed the appellant to be reinstated in 
E 
service with no back wages forthe reason that he had already 
been taking pension for the period and further clarified that 
the period of dismissal and the reinstatement shall be reckoned 
as a continuity of service for the purpose of pension and, 
accordingly, partly allowed the Writ Appeal preferred by the 
F 
Bank. 
3. Aggrieved of the aforesaid portion of the finding and 
the order of penalty imposed by the
Division Bench of the High 
Court by setting aside the order of reinstatement with 25% 
back wages awarded by the learned Single Judge of the High G 
Court in the Writ Petition filed by the appellant questioning the 
correctness of the impugned judgment and order, the present 
appeal is filed by the appellant, urging various legal contentions. 
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[2015] 15S.C.R. 
A 
4. Brief facts necessary to appreciate the rival legal 
contentions urged on behalf of the parties to the lis are that the 
disciplinary proceedings were initiated against the appellant 
by issuing chargesheet dated 28.10.2004 alleging that he had 
influenced the Branch Manager of Hallydayganj Branch, against 
B whom the disciplinary proceedings were initiated and upon 
finding him guilty, minor penalty of lesser punishment was 
imposed on him for being negligent in giving the loans. In the 
said proceedings, the appellant herein was Defence 
Representative of the said Manager Mr. Pradeep Kumar Das. 
C The brief allegation contained in the chargesheet was that he 
had influenced the Branch Manager of Hallydayganj Branch to 
sanction cash credit facility sans disclosing earlier loan of Abdul 
Kuddus Mondal and, therefore, he had failed to protect the 
interests of the Bank. The second charge was about illegal 
D grant of cash facility. The said charges were divided into six 
allegations, which were extracted in the chargesheet. The said 
charges were denied by the appellant herein, therefore, the 
enquiry officer was appointed by the disciplinary authority to 
enquire into the allegations made against him. 
E 
5. The enquiry officer found that allegation Nos. 1, 2, 4 
and 6 are proved, huwe', ,-:r, allegation No. 3 is partly proved 
and allegation No. 5 is not proved. He found that the loan 
application of the loanee was written
by the appellant herein 
despite the fact that it was within his knowledge that the 
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borrower had earlier taken loan from his Branch and even then 
the appellant has helped the borrower to borrow more money 
from the neighbouring branch without disclosing the earlier 
transaction with the appellant's Branch. 
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6. The discirlinary authority has taken the view that charge 
Nos. 3 and 5 also held to be proved from the material on record 
without giving an opportunity to the appellant herein to show 
cause as to why the finding on those charges should not be 
reversed. The disc!plinary authority forwarded to the appellant 
H herein the enquiry report after taking tt1e view that charge Nos.
PAWAN KUMARAGARWALAv. GENERAL MANAGER-II & 559 
APPOINTINGAUTH. STATE BANK OF INDIA& ORS. 
3 and 5 were proved for which the appellant submitted a reply A 
on 22.11.2005. 
7. In the meantime, in the disciplinary proceedings 
against Mr. Pradeep Kumar Das, Branch Manager of 
Hallydayganj Branch, where the borrower got filled up the 
application through the appellant and taken the loan without 
B 
disclosing the borrowing/loan from the appellant's Branch of 
the Bank, the disciplinary authority, after concluding the enquiry 
against Mr. Pradeep Kumar Das, awarded penalty of one stage 
lower in the time-scale for a period of one year without 
cumulative effect. The penalty was imposed holding that the C 
same will not adversely affect the pension of the said delinquent 
Manager Mr. Pradeep Kumar Das. 
8. On 05.01.2006, the disciplinary authority, not accepting 
the reply submitted by the appellant herein, imposed the penalty 0 
of reduction of basic pay for 3 years. The Chief Vigilance Officer 
("C.V.O.") was of the view that there was extreme mala fides 
on the part of the appellant as he had acted against the interests 
of the Bank, therefore, the stiff major penalty was directed to be 
imposed upon him vide Order dated 01.02.2006.Accordingly, 
E 
the Appointing Authority passed the Order dated 24.04.2006 
for removal of the appellant from service. Against the said order 
of removal, the appellant filed an appeal before the Appellate 
Authority, which came to be rejected vide
Order dated 
18.11.2006 sans examining the merits of the case and 
F 
considering the legal contentions urged in the memorandum 
of appeal. On 07.02.2007, the respondent- Bank sanctioned 
pension and the appellant is drawing pension since then. 
9.Aggrieved of the order of the dismissal which is 
affirmed by the Appellate Authority, the appellant herein filed a G 
writ petition before the Gauhati High Court in the month of 
March, 2009. The Bank filed its affidavit by way of reply in the 
said writ petition. After hearing both the parties, the learned 
Single Judge of the High Court by Order dated 04.03.2014 
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[2015] 15 S.C.R. 
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allowed the writ petition and granted reinstatement with all 
service benefits and payment of back wages to the extent of 
25%. The learned Single Judge while granting such relief 
adverted to the rival legal contentions has recorded a finding 
of fact holding that there was unfairness in the enquiry as the 
B list of witnesses and the copies of documents were not given 
to the appellant and the finding of the enquiry officer was held 
to be perverse. 
10. The correctness of the said judgment and order of 
the learned Single Judge of the High Court was challenged in 
C . the Writ Appeal filed by the respondents herein before the 
Gauhati High Court. The Division Bench of the High Court after 
considering the rival legal contentions substituted the order of 
the learned Single Judge by imposing penalty of reduction of 
one increment for one year and reinstatement without back 
D wages since he was already drawing pension. The said order 
passed by the Division Bench of the High Court modifying the 
order of the learned Single Judge is impugned in this civil 
appeal by the appellant, urging various legal contentions. 
E 
11. It is contended by Mr. Vijay Hansaria, learned senior 
counsel for the appellant, that the finding is recorded by the 
learned Single Judg~ in the order passed in writ petition after 
considering the rival legal contentions that the statutory 
requirements to conduct fair and reasonable enquiry, list of 
F
witnesses and copies of documents were not furnished to the 
appellant-officer, thereby conducting the enquiry proceedings 
are vitiated and the findings recorded against the appellant 
and the charges are perverse. The said finding is placed on 
undisputed fact of non furnishing of list of witnesses and copies 
of documents which are the statutory requirements for conduct 
G of disciplinary proceedings. The Division Bench of the High 
Court has erroneously set aside the same without there being 
any evidence on record that the appellant is negligentand other 
acts of misconduct in discharging his duties and reversed the 
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PAWAN KUMARAGARWALA v. GENERAL MANAGER-II & 561 
APPOINTINGAUTH. STATE BANK OF INDIA& ORS. 
finding of the learned Single Judge in holding that the conduct A 
of the enquiry is not fair and reasonable and there is non-
compliance of the principles of natural justice in conducting 
enquiry thereby grave prejudice has been caused to the 
appellant herein. The learned Single Judge has also referred 
to the judgment of this Court in the case of State Bank of India B 
and Ors. vs. K.P. Narayanan Kutty, (2003) 2 SCC 449, while 
recording such a finding holding that the finding of fact recorded 
by the enquiry officer that the charges are proved is perverse 
in law. Learned senior counsel further contended that the 
disciplinary authority has to follow the procedural safeguards c 
provided under the disciplinary Regulations. Not considering 
the reply to the chargesheet given to the appellant herein by 
the disciplinary authority, the action that would be taken upon 
such disciplinary proceedings by recording the finding by the 
enquiry officer holding that the charges are proved, on the basis D 
of evidence of the witnesses whose names were not notified 
to the appellant and copies of documents were not furnished 
to him which were relied upon by the enquiry officer, thereby 
the case of the appellant was prejudiced, therefore, the same 
will have serious civil consequences upon the Service E 
Conditions of the appellant, if the minor or major penalties are 
imposed, including the
order of removal that is passed by the 
disciplinary authority. Therefore, the learned senior counsel 
submitted that the Division Bench without application of mind 
and assigning valid and cogent reasons, not noticing the 
F 
undisputed facts that list of witnesses and copies of documents 
were not provided to the appellant in the enquiry proceeding, 
it has erroneously set aside the order passed by the learned 
Single Judge, who has assigned valid and cogent reasons in 
rendering the finding of fact holding that the enquiry was not G 
fair and the same is not in accordance with the statutory 
requirements of the Conduct and Disciplinary Regulations and 
in compliance with the principles of natural justice. The said 
conclusion arrived at by the learned Single Judge is supported 
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by the judgments of this Court rendered in a catena of cases, 
particularly in the case of S. A. Venkataraman vs. U.0.1. and 
Anr.,AIR 1954 SC 375, this Court observed as follows: 
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"14. As the law stands at present, the only purpose, 
for which an enquiry under Act 37 of 1850 could be 
made, is to help the Government to come to a 
definite conclusion regarding the misbehavior of a 
public servant and thus enable it to determine 
provisionally the punishment which should be 
imposed upon him prior to giving him a reasonable 
opportunity of showing cause, as is required under 
article 311 (2) of the Constitution. An enquiry under 
this Act is not at all compulsory and it is quite open 
to the Government to adopt any other method if it 
so chooses. It is a matter of convenience merely 
and nothing else. It is against this background that 
we will have to examine the material provisions of 
the Public Servants (Inquiries), Act of 1850 and see 
whether from the nature and result of the enquiry 
which the Act contemplates it is at all possible to 
say that the proceedings taken or concluded under 
the Act amount to prosecution and punishment for 
a criminal offence." 
12. In Union of India vs. T.R. Varma, AIR 1957 SC 882, 
F 
this Court observed that if a person whose services have been 
wrongfully terminated is entitled to institute an action to vindicate 
his' rights. 
"6. At the very outset, we have to observe that a
writ 
petition under Art. 226 is not the appropriate 
G 
proceeding for adjudication of disputes like the 
present. Under the law, a person whose services 
have been wrongfully terminated, is entitled to 
institute an action to vindicate his rights, and in such 
an action, the Court will be competent to award all 
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PAWAN KUMARAGARWALA v. GENERAL MANAGER-II & 563 
APPOINTINGAUTH. STATE BANK OF INDIA& ORS. 
the relief's to which he may be entitled, including 
some which would not be admissible in a writ 
petition. 
It is well-settled that when an alternative and equally 
efficacious remedy is open to a litigant, he should 
be required to pursue that remedy and not invoke 
the special jurisdiction of the High Court to issue a 
prerogative writ. It is true that the existence of 
another remedy does not affect the jurisdiction of 
the Court to issue a writ; but, as observed by this 
Court in Rashid Ahmed vs. Municipal Board, 
Kairana, [1950] S.C.R. 566 (AIR 1950 SC 163(A) 
"the existence of an adequate legal remedy is a 
thing to be taken into consideration in the matter of 
granting writs". Vide also K. S. Rashid and Son 
vs. The Income-tax Investigation Commission, 1954 
SCR 738 at p.747: (AIR 1954 SC 207 at p. 
210)(B). And where such remedy exists, it will be a 
sound exercise of discretion to refuse to interfere 
in a petition under Art. 226, unless there are good 
grounds therefor. None such appears in the present 
case. On the other hand, the point for determination 
in this petition whether the respondent was denied 
a reasonable opportunity to present his case, turns 
mainly on the question whether he was prevented 
from cross- examining the witnesses, who gave 
evidence in support of the charge. 
That is a question on which there is a serious 
dispute, which cannot be
satisfactorily decided 
without taking evidence. It is not the practice of 
Courts to decide questions of that character in a 
writ petition, and it would have been a proper 
exercise of discretion in the present case if the 
learned Judges had referred the respondent to a 
suit. 
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SUPREME COURT REPORTS 
[2015] 15 S.C.R. 
In this appeal, we should have ourselves adopted 
that course, and passed the order which the learned 
Judges should have passed. But we feel pressed 
by the fact that the order dismissing the respondent 
having been made on September 16, 1954, an 
action to set it aside would now be time-barred. As 
the High Court has gone into the matter on the 
merits, we propose to dispose of this appeal on a 
consideration of the merits. 
10. Now, it is no doubt true that the evidence of the 
respondent and his witnesses was not taken in the 
mode prescribed in the Evidence Act; but that Act 
has no application to enquiries conducted by 
tribunals, even though they may be judicial in 
character. The law requires that such tribunals 
should observe rules of natural justice in the conduct 
of the enquiry, and if they do so, their decision is 
not liable to be impeached on the ground that the 
procedure followed was not in accordance with that, 
which obtains in a Court of law. 
Stating it broadly and without intending it to 
be exhaustive, it may be observed that rules of 
natural justice require that a party should have the 
opportunity of adducing all relevant evidence on 
which he relies, that the evidence of the opponent 
should be taken in his presence, and that he should 
be given the opportunity of cross-examining the 
witnesses examined by that party, and that no 
materials should be relied on against him
without 
his being given an opportunity of explaining them. 
If these rules are satisfied, the enquiry is not 
open to attack on the ground that the procedure 
laid down in the Evidence Act for taking evidence 
was not strictly followed."
PAWAN KUMARAGARWALA v. GENERAL MANAGER-II & 565 
APPOINTINGAUTH. STATE BANK OF INDIA& ORS. 
13. Learned senior counsel forthe appellant vehemently A 
challenged that the appellant is also aggrieved of the non-grant 
of back wages by the Division Bench and setting aside the 
grant of 25% back wages awarded by the learned Single Judge 
and imposing penalty of reduction of one increment for one 
year. The said finding is recorded without there being any B 
evidence on record. He contended that because pension 
amount does not substitute the grant of back wages, particularly 
in the absence of any material with the respondent-Bank, 
whatsoever, to deny the back wages, as he was gainfully 
employed from the date of dismissal and till passing of the c 
impugned judgment and order by the learned Single Judge 
and the Division Bench. Further the learned Single Judge and 
the Division bench have not given any reason, whatsoever, in 
depriving the back wages and imposing the penalty of 
withholding increment without there being any evidence, D 
therefore, the same is contrary to the law laid down by this 
Court in a catena of cases. 
14. Per contra, Mr. Gaurav Agrawal, learned counsel 
appearing for the respondents, sought to justify the order 
passed by the Division Bench of the High Court and submitted 
E 
that the correctness of the impugned judgment and order of 
the Division Bench is challenged on various grounds by filing 
a Special Leave Petition and further, alternatively,
contended 
that, even assuming the Special Leave Petition cannot be 
entertained by this Court, even then the Division Bench of the 
F 
High Court in exercise of its extraordinary and supervisory 
jurisdiction has done justice to the parties in imposing minor 
penalty and not granting back wages while awarding 
reinstatement keeping in view that the appellant has been paid 
the pension since 07.02.2007, therefore, he prayed for dismissal G 
of the Civil Appeal filed by the appellant seeking for the reliefs, 
as stated above. 
15. We have given our thoughtful considerations to the 
rival contentions urged by the learned counsel for the parties 
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[2015] 15S.C.R. 
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to the lis and have carefully perused the materials on the record 
and examined the irr·r.:-ugried Orders passed by both the 
learned Single Judge and the Division Bench of the High Court. 
16. The chargesheet was issued on 28.10.2004 against 
the appellant making S allegations against him and it is 
B 
undisputed fact that list of witnesses and the copies of 
documents were not furnished to the appellant. Further, the 
disciplinary authority has reversed the findings on charge Nos. 
3 and 5 without giving an opportunity to the appellant to show 
cause in the matter and, thereafter, the order of removal was 
C 
passed by the Appointing Authority on the advice of the C.V.O. 
vide his opinion dated 01.02.2006 and further it is brought on 
record that similarly placed person, namely, Mr. Pradeep Kumar 
Das, the Manager of Hallydayganj Branch, who has loaned the 
loan to one Mr. Ta pan Kumar Sang ma, in his case they have 
D imposed lesser punishment of withholding one increment 
thereby making discrimination in differently treating with the 
appellant herein, which is violation of Article 14 of the 
Constitution of India. Further, it is brought to our notice by Mr. 
Vijay Hansaria, learned senior counsel for the appellant that 
E the loan amount lent by Mr. Pradeep Kumas Das, the Manager 
of Hallydayganj Branch, the same has been cleared by Mr. 
Tapan Kumar Sangma with interesfby paying Rs. 1,61,000/-. 
The overdraft is beyond the
permissible limit is held to be not 
proved. The finding of the learned Single Judge while 
F 
examining the entire enquiry report, on which strong reliance 
is placed by the respondent-Bank, the learned Single Judge 
in exercise of his extraordinary and Original Jurisdiction 
examined the case on merits and referred to Rule 68(1 )(IX)(a) 
of the State Bank of India Service Rules, wherein it mandates 
G the disciplinary authority to furnish the delinquent the list of 
documents through which the charges are proposed to be · 
proved. It is the case of the appellant that such a list of 
witnesses and copies of documents were not furnished either 
by the disciplinary authority or the enquiry officer which are vital 
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PAWAN KUMARAGARWALAv. GENERAL MANAGER-II & 567 
APPOINTINGAUTH. STATE BANK OF INDIA& ORS. 
3 ;pects of the case, based on which the finding is recorded 
A 
r,n the charges by the enquiry officer, referred to supra, holding 
that the same are proved against the appellant. Further, with 
regard to lending of loan in favour of Mr. Tapan Kumar Sangma, 
the learned Single Judge examined and recorded the finding 
of fact stating that a sum of Rs. 2, 13,595 was recovered from 
B 
\lie said loanee and it is stated that the Power of Attorney 
furnished by Abdul Kuddus Mondal was never utilized to 
recover the balance loan due of Rs. 15,450/-, which will not be 
the negligence on the part of the appellant, however, it will be 
negligence of those responsible for loan recovery, a small C 
unpaid amount had to be written off by the Bank. Further, with 
reference to the opinion/report Exhibit D-4 furnished in support 
of the disbursement of the loan clearly disclosed the previous 
loans of the borrowers from the Phulbari Branch but surprisingly 
neither the enquiry officer nor the disciplinary authority or the D 
C.V.O. had taken note of the said opinion/report, which 
establishes the bona fide of the appellant's action in rendering 
assistance to his neighbouring Branch Manager to meet the 
target for disbursal of contract finance by the Hallydayganj 
Branch Manager. Upon the contention urged on behalf of the 
E 
appellant that taking multiple loans is not prohibited in the S.B.I. 
and
contract finance were sanctioned for the 2 borrowers by 
the Hallydayganj Branch Manager with full knowledge of the 
previous loans taken by them from the Phulbari Branch, the 
learned Single Judge has referred to non-furnishing of the 
F 
control return file of the Branch as well as the Bank's Ledger 
sheets of the J.N. High School account and Mr. Tapan Kumar 
Sangma accounts to the appellant at the time of conducting 
enquiry on the charges to defend the case by the appellant 
effectively, the same was projected as cause for serious G 
prejudice to the case of the appellant as the said documents 
established that the borrowers had availed similar overdraft 
facility earlier and, in any case, this was within the permissible 
discretionary capacity of the Manager of the Phulbari Branch. 
The learned Single Judge on the basis of reliance placed by 
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[2015] 15S.C.R. 
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the appellants's counsel upon the decision of this Court in the 
case of State Bank of India & Ors. vs. K.P. Narayanan Kutty, 
(supra), wherein it has been held the the non compliance of 
the statutory requirements as per the aforesaid rules, the action 
of the disciplinary authority is inconsistent with the principles 
B of natural justice and the settled principles of service 
jurisprudence. In the said case, while concurring with the 
decision of this Court in the case of Punjab National Bank vs. 
Kunj, (1998) 7 sec 84, para 19 was quoted, which reads as 
follows: 
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"19. The result of the aforesaid discussion would 
be that the principles of natural justice have to be 
read into Regulation 7(2). As a result thereof, 
whenever the disciplinary authority disagrees with 
the enquiry authority on any article of charge, then 
before it records its own findings on such charge, it 
must record its. tentative reasons for such 
disagreement and give to the delinquent officer an 
opportunity to represent before it records its 
findings. The report of the enquiry officer containing 
its findings will have to be conveyed and the 
delinquent officer will have an opportunity to 
persuade the disciplinary authority to accept the 
favourable conclusion of the enquiry officer. The 
principles of natural justice, as we have already 
observed, require the authority which has to take a 
final decision and can impose a penalty,
to give an 
opportunity to the officer charged of misconduct to 
file a representation before the disciplinary authority 
records its findings on the charges framed against 
the officer." 
17. While dealing with the similar fact situation in William 
Vincent Vitarelli v. Fred A. Seaton, Secretary of the Interior, et 
al (359 U.S. 535 (1959), the learned Judge observed as 
follows:
PAWAN KUMARAGARWALA v. GENERAL MANAGER-II & 569 
APPOINTINGAUTH. STATE BANK OF INDIA& ORS. 
"An executive agency must be rigorously held to 
the standards by which it professes its action to be 
judged. See Securities & Exchange Commission 
v. Chenery Corp., 318 U.S. 80, 87-88, 63 S.Ct. 
454, 459, 87 L.Ed. 
626. Accordingly, if dismissal from employment is 
based on a defined procedure, even though 
generous beyond the requirements that bind such 
agency, that procedure must be scrupulously 
observed. See Service v. Dulles, 354 U.S. 363, 77 
S.Ct. 1152, 1L.Ed.2nd1403. 
This judicially evolved rule of administrative law is 
now firmly established and, if I may add, rightly so. 
He that takes the procedural sword shall perish with 
that sword." 
18. The said judgment in Vitarelli's case was referred to 
by this Court in R.D. Shetty vs. International Airport Authority, 
1979 (3) sec 489, the relevant extract of which is quoted 
herein under: 
"10 ...... lt is a well-settled rule of administrative law 
that an executive authority must be rigorously held 
to the standards by which it professes its actions 
to be judged and it must scrupulously observe those 
standards on pain of invalidation of an act in 
violation of them. This rule was enunciated by Mr. 
Justice Frankfurter in Viteralli v. Saton where the 
learned Judge said: 
'An executive agency must be rigorously held to the 
standards by which it professes its action to be 
judged. Accordingly, if dismissal from employment
is based on a defined procedure, even though 
generous beyond the requirements that bind such 
agency, that procedure must be scrupulously 
observed. This judicially evolved rule of 
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SUPREME COURT REPORTS 
[2015] 15 S.C.R. 
administrative law is now firmly established and, if 
I may add, rightly so. He that takes the procedural 
sword shall perish with the sword.' 
This Court accepted the rule as valid and applicable 
in India in A.S. Ahluwalia v. Punjab and in 
subsequent decision given in Sukhdev v. 
Bhagatram, Mathew, J., quoted the above-referred 
observations of Mr Justice Frankfurter with approval.· 
It may be noted that this rule, though supportable 
also as an emanation from Article 14, does not rest 
merely on that article. It has an independent 
existence apart from Article 14. It is a rule of 
administrative law which has been judicially evolved 
as a check against exercise of arbitrary power by 
the executive authority. If we turn to the judgment of 
Mr Justice Frankfurter and examine it, we find that 
he has not sought to draw support for the rule from 
the equality clause of the United States Constitution, 
but evolved it purely as a rule of administrative law. 
Even in England, the recenttrend in administrative 
law is in that direction as is evident from what is 
stated at pp. 540-41 in Prof Wade's "Administrative 
Law", 4th Edn. There is no reason why we should 
hesitate to adopt this rule as a part of our continually 
expanding administrative law. Today with 
tremendous expansion of welfare and social 
service functions, increasing control of material and 
economic resources and large scale assumption 
of
industrial and commercial activities by the State, 
the power of the executive Government to affect the 
lives of the people is steadily growing. The 
attainment of socio-economic justice being a 
conscious end of State policy, there is a vast and 
inevitable increase in the frequency with which 
ordinary citizens come into relationship of direct
PAWAN KUMARAGARWALA v. GENERAL MANAGER-II & 571 
APPOINTINGAUTH. STATE BANK OF INDIA& ORS. 
encounter with State power-holders. This renders 
A 
it necessary to structure and restrict the power of 
the executive Government so as to prevent its 
arbitrary application or exercise ..... " 
19. Further, the learned Single Judge has e~amined the 
opinion sought forfrom the C.V.O. by the disciplinary authority 8 
on the penalty to be imposed upon the appellant, the C.V.O. 
has suggested the major penalty of removal, the same is 
inconsistent with the norms applicable in the Bank's 
disciplinary proceedings. The learned Single Judge examined 
the action of the disciplinary authority in relation to the Branch C 
Manager Hallydayganj Branch that facilitating the second loan 
to the loanee, Mr. Tapan Kumar Sangma, closely known to the 
said Manager, the same allegation has been treated as a minor 
lapse, but in the context of the appellant they have imposed 
major penalty, which is a clear case of discrimination. The D 
appellant's admission with regard to writing the loan 
applications of Abdul Kuddus Mondal and Hasanuzzaman to 
enable them to avail contract finance from the Hallydayganj 
Branch, the contention urged on behalf of the appellant is 
examined and held that the said applicants had availed loans E 
to the extent of Rs. 10,000/-and Rs. 15,000/- respectively from 
the Phulbari Branch of the S.B.I., projecting that minimal loss 
and both the loans were cleared of, assuming
that the 
disciplinary proceedings were just and fair, learned senior 
counsel for the appellant argued that the minor punishment F 
proposed by the disciplinary authority of pay reduction should 
have been considered reasonable in the context of the charges. 
The learned Single Judge, after considering the opinion/report 
DEX-4, held that the enquiry officer did not base his conclusion 
on any incriminatory materials and in fact the report DEX-4 G 
was totally ignored which would have established the innocence 
of the delinquent and further held that the enquiry officer 
conducted the enquiry sans furnishing the copies of crucial 
documents and furnishing the list of witnesses. It appears to 
H
572 
SUPREME COURT REPORTS 
[2015] 15S.C.R. 
A 
be a case of denial of fair opportunity to the delinquent in gross 
violation of the procedural requirernents of the Service Rules. 
That finding is based on factual, undisputed. facts and in 
conformity with the law, therefore, in our opinion, the learned 
Single Judge has rightly held that the enquiry conducted against 
B the appellant was unfair and the findings recorded on the 
charges are perverse in law. While recording such a finding 
the learned Single Judge has also proceeded to hold that the 
enquiry was found to be vitiated for the reason that the then 
Branch Manager Mr. Pradeep Kumar Das of Hallydayganj 
c Branch was never examined in the enquiry and without his 
evidence, conclusion on culpability of the delinquent on the 
loans disbursed by the Branch Manager of Hallydayganj to the 
loanee could not have been reasonably reached by anyone, 
including the enquiry officer and imposing major penalty on the 
D basis of the C. V.O. without there being any legal evidence on 
record, the enquiry was not properly conducted due to non-
f urnishing the list of witnesses and copies of the documents, 
therefore, the exercise of power on the basis of the C.V.O.'s 
opinion for removal of the appellant from service entail serious 
E 
consequences. Therefore, placing reliance on K.P. Narayanan 
Kutty (supra), the learned Single Judge held that the action 
taken in accepting the C.V.O.'s view and passing order of 
removal is
arbitrary, unreasonable and gross violation of Article 
14 of the Constitution of India. Having said so, the learned 
F 
Single Judge has set aside the order of removal and granted 
reinstatement of the appellant with 25% back wages in the 
absence of any proof to show that he was gainfully employed 
from the date of order of removal till the date of the decision 
rendered by the learned Single Judge and the Division Bench 
G of the High Court, therefore, the same is contrary to the law 
laid down by this Court in the case of Deepali Gundu Surwase 
vs. Kranti Junior Adhyapak Mahavidyalaya (D. ED.) & Ors., 
(2013) 10 sec 324, para 38 is quoted herein under: 
"38. The propositions which can be culled out from 
H 
the aforementioned judgments are:
PAWAN KUMARAGARWALA v. GENERAL MANAGER-II & 573 
APPOINTINGAUTH. STATE BANK OF IND!A& ORS. 
i) In cases of wrongful termination of service, 
reinstatement with continuity of service and back · 
wages is the normal rule. 
ii) The aforesaid rule is subject to the rider that while 
deciding the issue of back wages, the adjudicating 
authority or the Court may take into consideration 
the length of service of the employee/workman, the 
nature of misconduct, if any, found proved against 
the employee/workman, the financial condition of 
the employer and similar ottierfactors. 
iii) Ordinarily, an employee or workman whose 
services are terminated and who is desirous of 
getting back wages is required to either plead or 
at least make a statement before the adjudicating 
authority or the Court of first instance that he/she 
was not gainfully employed or was employed on 
lesser wages. If the employer wants to avoid 
payment of full back wages, then it has to plead 
and also lead cogent evidence to prove.that the 
employee/workman was gainfully employed and 
was getting wages equal to the wages he/she was 
drawing prior to the termination of service. This is 
so because it ls settled law that the burden of proof 
of the existence of a particular fact lies on the 
person who makes a positive averments about its 
existence. It is always easier to prove a positive 
fact than to prove a negative fact. Therefore, once 
the employee shows that he was not employed, 
the onus lies on the
employer to specifically plead 
and prove that the employee was gainfully employed 
and was getting the same or substantially similar 
emoluments. 
iv) The cases in which the Labour Court/Industrial 
Tribunal exercises power under Section 11-A of the 
A 
B 
c 
D 
E 
F 
G 
H
574 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2015] 15S.C.R. 
Industrial DisputesAct, 1947 and finds tha_t even 
· though the enquiry held against the employee/ 
workman is consistent with the rules of natural 
justice and/or certified standing orders, if any, but 
holds that the punishment was disproportionate to 
the misconduct found proved, then it will have the 
discretion not to award full back wages. However, 
if the Labour Court/Industrial Tribunal finds that the 
employee or workman is not at all guilty of any 
misconduct or that the employer had foisted a false 
charge, then there will be ample justification for 
award of full back wages. 
v) The cases in which the competent· Court or 
Tribunal finds that the employer has acted in gross 
violation of the statutory provisions and/or the 
principles of natural justice or is guilty of victimizing 
the employee or workman, then the Court or Tribunal 
concerned will be fully justified in directing payment 
of full b.ack wages. In such cases, the superior 
Courts should not exercise power under Article 226 
or 136 of the Constitution and interfere with the 
award passed by the Labour Court, etc., merely 
because there is a possibility of forming a different 
opinion on the entitlement of the employee/ 
workman to get full back wages or the employer's 
obligation to pay the same. The Courts must keep 
in view that in the cases of wrongful/illegal 
termination of service, the wrongdoer is the 
employer and the
sufferer is the employee/workman 
and there is no justification to give a premium to 
the employer of his wrongdoings by relieving him 
of the burden to pay to the employee/workman his 
dues in the form of full back wages. 
vi) In a number of cases, the superior Courts have 
interfered with the award of the primary
PAWAN KUMARAGARWALA v. GENERAL MANAGER-II & 575 
APPOINTINGAUTH. STATE BANK OF INDIA& ORS. 
adjudicatory authority on the premise that 
A 
finalization of litigation has taken long time ignoring 
that in majority of cases the parties are not 
responsible for such 
delays. 
Lack 
of 
infrastructure and manpower is the principal cause 
for delay in the disposal of cases. For this the· 
B 
litigants cannot be blamed or penalised. It would 
amount to grave injustice to an employee or 
workman if he. is denied back wages simply 
because there is long lapse of time between the 
termination of his service and finality given to the 
C 
order of reinstatement. The Courts should bear in 
mind that in most of these cases, the employer is · 
in an advantageous position vis-a-vis the employee 
or workman. He can avail the services of best legal 
brain for prolonging the agony of the sufferer, i.e., 
o 
the employee or workman, who can ill afford the 
luxury of spending money on a lawyer with certain 
amount of fame. Therefore, in such cases it would 
be prudent to adopt the course suggested in. 
Hindustan Tin Works Private Limited vs. Employees 
E 
of Hindustan Tin Works Private Limited, (1979) 2 
sec so. 
vii) The observation made in J.K. Synthetics ltd, v. 
K.P. Agrawal, (2007) 2 SCC 433 that on 
reinstatement the employee/workman cannot claim 
F 
continuity of service as of right is contrary to the 
ratio of the judgments of three Judge Benches 
referred to hereinabove and cannot be
treated as 
good law. This part of the judgment is also against 
the very concept of reinstatement of an employee/ 
G 
workman." 
20. For the reasons stated supra, we have examined the 
case threadbare on the basis of the material placed on record 
and rival legal contentions urged on behalf of the parties, we H
576 
SUPREME COURT REPORTS 
[2015] 15 S.C.R. 
A 
hold that the finding of the enquiry officer on the charges is 
vitiated on account of non-compliance of the statutory Rules 
and the principles of natural justice. In the absence of evidence, 
the order of reinstatement sans full back wages is unjustified 
in law.At best, the High Court should have made deduction of 
B the amount of pension received by the appellant after awarding 
full back wages for the period in question. In not doing so, the 
orders of the learned Single Judge and the Division Bench of 
the High Court are liable to be set aside with regard to non-
grant of full back wages. Accordingly, we set aside the Orders 
C of the Divisioh Bench imposing the penalty of reduction of one 
increment to the appellant for one year and restore and modify 
the order of the learned Single Judge with regard to award of 
reinstatement with full back wages for the period from the date 
of removal till the date of the appellant attaining the age of 
o superannuation, on the basis of periodical revisions of salary 
to the appellant herein and deduct the pension amount from 
the back wages payable to the appellant. The .same shall be 
paid to the appellant within eight weeks from the date of receipt 
of the copy of this order. 
E 
21. The appeal is allowed in the aforesaid terms, 
directions and observations. 
Devika Gujral 
Appeal allowed. 
END OF 2015 
*****