HC orders PNB to pay ₹5L compensation to former employee

The Bombay high court recently pulled up the Punjab National Bank for conducting a “manipulated” inquiry against a former employee and directed it to pay a compensation of ₹5 lakh to the petitioner for the injustice meted out to him.

MUMBAI: The Bombay high court recently pulled up the Punjab National Bank for conducting a “manipulated” inquiry against a former employee and directed it to pay a compensation of ₹5 lakh to the petitioner for the injustice meted out to him.

The Bombay high court recently pulled up the Punjab National Bank for conducting a “manipulated” inquiry against a former employee and directed it to pay a compensation of ₹5 lakh to the petitioner for the injustice meted out to him. (Shutterstock)

The petitioner, Vinayak Balchandra Ghanekar, 63, had joined the bank on June 16, 1981, and was scheduled to superannuate on June 30, 2018. Alleging irregularities in a loan amount sanctioned to him, the bank dismissed him after a departmental enquiry on the day of his retirement.

Ghanekar in his petition invoked violation of natural justice, alleging that the enquiry was completed in one day without giving him time to study the documents. “It is settled that while conducting a departmental enquiry, a reasonable opportunity of defence has to be given to the charges-heeted employee (CSE). Also, the principles of natural justice have to be adhered to while conducting the departmental enquiry,” his petition stated.

Subsequently, he approached the appellate authority on November 30, 2018, which rejected his appeal.

Citing several Supreme Court precedents, Ghanekar’s counsel establish that a reasonable opportunity of hearing must be granted for tendering the reply to the second showcause notice. “If the procedural rights are violated, a departmental enquiry may not necessarily be vitiated. However, if substantive rights of the employee are violated, the departmental enquiry can be declared to be unfair and vitiated,” he added.

The counsel representing the bank stated that a copy of the report and a notice was supplied to Ghanekar. “He submitted his reply to the report and the order was passed on June 30, 2018,” he added. However, he failed to establish the claim when the court called upon him to justify the statement based on the record.

A division bench of justices Ravindra V. Ghuge and Ashwin D. Bhobhe strongly criticised the bank for failing to adhere to the correct procedure in conducting the departmental enquiry. “This could be one of the worst kinds of any departmental enquiry. No prudent employer would have conducted an enquiry in such a manner,” it stated.

It questioned the speed of the entire enquiry, highlighting that the 169-pages enquiry report was prepared overnight. The court found no analysis of the documentary evidence and, therefore, found no reasons to hold Ghanekar guilty.

Allowing Ghanekar’s writ petition, the court ruled that the bank needs to compensate him for the grave injustice caused to him and quashed the orders of the appellate authority and the reviewing authority. The court further directed the bank to hold a fresh enquiry, preferably by a practicing advocate, unconnected with the bank. It also suggested an alternative to resolve the issue amicably “if they desire a golden handshake and give a quietus to this matter”. Lastly, the bench directed the bank to pay a compensation of ₹5 lakh to Ghanekar within a period of 30 days.