Domestic Enquiry Which May Culminate In Employee's Dismissal Cannot Be Treated As Mere Formality: Kerala High Court
The Court set aside dismissal of a bank officer, holding that the disciplinary authority deciding the voluntariness of a confession allegedly extracted by him, and denial of defence witnesses and documents, vitiated the enquiry.
Justice Sathish Ninan, Justice P. Krishna Kumar, Kerala HC
The Kerala High Court has held that a domestic enquiry which may culminate in the dismissal of an employee cannot be treated as a mere formality. The Enquiry Officer, it said, must discharge his functions in a quasi-judicial manner, consistent with the principles of natural justice and procedural fairness.
Setting aside the dismissal of a bank officer, the Court found the enquiry vitiated because the disciplinary authority himself decided whether a confession allegedly extracted at his instance was voluntary, defence witnesses and documents were shut out, and no adequate opportunity was given to respond to the enquiry report. It directed the Bank to pay ₹45,28,140, equivalent to 60 months’ salary, with 6% interest from the date of suit. It also restrained the Bank from charging interest above the staff rate on her credit facilities and awarded proportionate costs. Reinstatement was ruled out as the employment was a contract of personal service.
A Division Bench of Justice Sathish Ninan and Justice P. Krishna Kumar observed, “A domestic enquiry which may culminate in the dismissal an employee cannot be treated as a mere formality or dealt with lightly. The Enquiry Officer is, therefore, required to discharge his functions in a quasi-judicial manner, consistent with the principles of natural justice and procedural fairness…”.
Advocates Philip T. Varghese appeared for the appellant and Advocate M. Gopikrishnan Nambiar appeared for the respondent.
The appellant, R. Nitya, a Scale IV officer of Dhanlaxmi Bank, was dismissed for allegedly sending a pseudonymous e-mail on May 07, 2013 to Reserve Bank of India officials and the Bank’s Company Secretary, making allegations against the then Managing Director. The finding of guilt rested on her letter dated February 07, 2014 admitting authorship. She said she wrote it under coercion by the disciplinary authority, who allegedly threatened that her sister would otherwise be arrested.
Her suit, was dismissed by the Additional Sub Court II, Thrissur on June 15, 2022, which found no violation of natural justice.
The Court reiterated that a civil court’s jurisdiction over a domestic enquiry is limited, but extends to breaches of natural justice, unfair procedure and shockingly disproportionate punishment. It held that by accepting the report, the disciplinary authority decided whether the confession was free from his own compulsion, a procedure that “strikes at the very root”.
“…As a matter of fair procedure, the Bank ought to have appointed an officer who has no connection with the subject matter in question, as the disciplinary authority, but it failed to do so, even though the plaintiff repeatedly raised the said issue. The confession is, indeed, the sole evidence relied upon to establish the charge. When the 3rd defendant accepted the enquiry report and imposed the punishment upon the plaintiff, he virtually decided the question whether the confession, either in its oral form as spoken to by the management witnesses or in its written form as evidenced by Ext.B5, had been made free from his own compulsion. Such a procedure, in our considered view, strikes at the very root of the requirement of fairness in disciplinary proceedings”, the Bench noted.
The Enquiry Officer, it said, ought to have acted proactively when defence witnesses employed by the Bank did not appear. He also erred in refusing 11 of 13 defence documents without reasons. The Court found that the Regulations do not bar alternative defences.
The Court referring to Managing Director, ECIL v. B. Karunakar, it held that she was denied adequate opportunity to respond to the enquiry report, as dismissal followed five days after the High Court dismissed her petition. The penalty was also “shockingly disproportionate”, as the RBI took no action and there was no evidence of harm to the Bank’s reputation.
Cause Title: R. Nitya v. Dhanlaxmi Bank Ltd. & Ors. (Neutral Citation: 2026:KER:77180)
Appearances:
Appellant: Advocates Philip T. Varghese, Thomas T. Varghese, Achu Subha Abraham, V.T. Litha and K.R. Monisha.
Respondent: Advocates M. Gopikrishnan Nambiar, K. John Mathai, Joson Manavalan, Kuryan Thomas, Paulose C. Abraham and Raja Kannan.