Introduction:
In a significant judgment concerning service jurisprudence and disciplinary proceedings in the banking sector, the High Court of Jammu & Kashmir and Ladakh has held that departmental enquiries initiated against an employee before retirement can validly continue even after the employee attains superannuation, provided the governing service regulations expressly permit such continuation. The Court further reiterated that judicial review in disciplinary matters is limited to examining the legality and fairness of the decision-making process and does not extend to reassessing evidence or substituting the findings of the disciplinary authority.
The ruling was delivered by a Division Bench comprising Justice Sanjeev Kumar and Justice Sanjay Parihar in the case titled Jammu and Kashmir Bank Ltd. & Ors. v. Naseer Ahmad Sheikh, reported as 2026 LiveLaw (JKL). The appeal arose from a challenge mounted by Jammu and Kashmir Bank against a judgment of a Single Judge which had quashed the dismissal of a former Branch Head and directed restoration of his service benefits.
The controversy originated from allegations of serious financial irregularities committed by the respondent employee during his tenure as Branch Head at the Barzulla and Rangreth branches of Jammu and Kashmir Bank. According to the bank, the officer had sanctioned temporary overdrafts beyond his delegated authority and in violation of established banking norms and internal regulations. These transactions allegedly exposed the bank to substantial financial risk and constituted grave misconduct warranting disciplinary action.
Before the employee attained the age of superannuation, the bank placed him under suspension on March 17, 2021 and initiated departmental proceedings. Separate charge sheets were issued detailing various acts of omission and commission relating to unauthorized sanctioning of temporary overdrafts. Independent enquiry officers were appointed to conduct disciplinary enquiries into the allegations.
Although the respondent retired on June 30, 2021 upon reaching the age of superannuation, the disciplinary proceedings continued after retirement in terms of the applicable service regulations. Upon conclusion of the enquiries, the enquiry officers found most of the charges proved. Thereafter, the disciplinary authority issued a composite show-cause notice, considered the employee’s reply and personal hearing, and ultimately passed an order dismissing him from service with effect from the date of retirement. The appellate authority affirmed the punishment.
The respondent then approached the writ court challenging the dismissal order. The Single Judge allowed the writ petition, holding that the charges were not sufficiently established and observing that the employee had acted under verbal directions of superior officers. The writ court also found procedural deficiencies in the enquiry process and accordingly set aside the dismissal.
Aggrieved by the interference with the disciplinary action, the bank preferred a Letters Patent Appeal before the Division Bench. The appeal raised important legal questions concerning the continuation of disciplinary proceedings after retirement, the interpretation of the bank’s service regulations, the obligations of officers handling public funds, and the permissible limits of judicial review in departmental enquiries.
The judgment assumes considerable significance because disciplinary proceedings in financial institutions frequently continue beyond the retirement of employees, particularly in cases involving allegations of financial impropriety. The decision also reinforces long-settled principles governing the limited role of constitutional courts in examining findings recorded in departmental enquiries.
Arguments of the Parties:
The appellants, Jammu and Kashmir Bank and its authorities, challenged the judgment of the Single Judge primarily on the ground that the writ court had exceeded the permissible limits of judicial review while interfering with the disciplinary proceedings. The bank contended that the departmental enquiries had been conducted strictly in accordance with the applicable service regulations and principles of natural justice. According to the appellants, the enquiry officers had carefully examined documentary evidence and recorded findings proving the misconduct committed by the respondent employee.
The bank argued that the respondent had admittedly sanctioned temporary overdrafts beyond his delegated authority during his tenure as Branch Head. These sanctions, according to the appellants, were made without obtaining prior authorization from competent authorities and were therefore in clear violation of banking norms and internal regulations. The appellants emphasized that bank officials entrusted with public funds are expected to exercise a high degree of responsibility, caution, and financial discipline.
The appellants further contended that the respondent’s defence that he acted under verbal instructions of superior officers was unsupported by any documentary material. Referring to Rule 337(C) of the Officers Service Manual, the bank argued that whenever an employee acts upon oral directions from superior authorities, it becomes mandatory to obtain written confirmation of such directions at the earliest possible opportunity. According to the appellants, the respondent failed to establish compliance with this requirement.
Another major contention advanced by the bank related to the legality of continuation of disciplinary proceedings after retirement. The appellants relied upon Rule 259 of the Officers Service Manual, 2000, which expressly permits continuation of disciplinary proceedings initiated before superannuation and authorizes imposition of penalties even after retirement. The bank argued that once proceedings had commenced during service, the respondent continued to remain subject to disciplinary jurisdiction for the limited purpose of conclusion of the enquiry.
The bank also relied upon judicial precedents, including the decision of the Supreme Court in Virinder Pal Singh v. Punjab and Sind Bank, to argue that continuation of disciplinary proceedings after retirement is legally permissible where the governing rules so provide. According to the appellants, the Single Judge failed to properly appreciate the binding legal position governing post-retirement disciplinary action.
The appellants strongly criticized the writ court for re-appreciating evidence and substituting its own conclusions in place of the findings recorded by the enquiry officers and disciplinary authority. It was argued that constitutional courts exercising writ jurisdiction cannot act as appellate forums over departmental enquiries. The bank contended that once there was some evidence supporting the findings of misconduct, the adequacy or sufficiency of such evidence could not be reassessed by the writ court.
The respondent employee, on the other hand, defended the judgment of the Single Judge and argued that the disciplinary proceedings suffered from procedural and substantive infirmities. The respondent contended that the temporary overdrafts had been sanctioned under instructions and guidance received from superior officers in the ordinary course of banking operations. According to him, such decisions were often taken to accommodate customers and maintain banking relationships, particularly in urgent situations.
The respondent further argued that he had acted bona fide and without any dishonest intention or personal gain. It was contended that the bank had not suffered any actual financial loss as a consequence of the overdrafts in question. According to the respondent, the absence of financial loss demonstrated that the alleged irregularities were technical or procedural in nature and did not warrant the extreme penalty of dismissal.
The respondent also questioned the fairness of the enquiry process. It was argued that he had not been afforded adequate opportunity to effectively defend himself during the proceedings. In particular, the respondent contended that he was denied the right to cross-examine a senior executive whose communication and observations were allegedly relied upon during the enquiry.
Another important aspect highlighted by the respondent concerned the interpretation of Rule 337(C). The employee argued that the requirement of obtaining written confirmation of oral instructions should not be interpreted rigidly in practical banking operations where urgent decisions are frequently communicated verbally. According to the respondent, the disciplinary authority failed to appreciate the practical realities under which branch officials function.
The respondent also supported the reasoning of the Single Judge that the evidence on record did not conclusively establish grave misconduct. It was argued that the disciplinary authority had mechanically accepted the enquiry reports without properly appreciating the explanations offered by the employee.
Additionally, the respondent questioned the propriety of imposing dismissal retrospectively from the date of retirement. According to him, once an employee retires upon attaining superannuation, dismissal from service becomes legally impermissible unless specifically authorized by statutory rules.
Court’s Judgment:
The Division Bench of the High Court allowed the appeal filed by Jammu and Kashmir Bank and restored the order dismissing the respondent employee from service. The Court categorically held that disciplinary proceedings initiated before retirement can lawfully continue after superannuation where the applicable service rules expressly permit such continuation.
At the outset, the Court examined Rule 259 of the Officers Service Manual, 2000. Upon interpretation of the provision, the Bench concluded that the service regulations clearly authorize continuation of disciplinary proceedings after retirement where such proceedings had already commenced during service. The Court observed that the rules also empower the bank to impose any prescribed penalty, including dismissal, after conclusion of the enquiry.
Relying upon the Supreme Court’s judgment in Virinder Pal Singh v. Punjab and Sind Bank, the Bench held that an employee against whom disciplinary proceedings are pending is deemed to continue in service for the limited purpose of conclusion of such proceedings. The Court observed that there is no legal impediment in continuing disciplinary action after retirement when the governing regulations expressly provide for such continuation.
The Division Bench then turned to the broader issue concerning the scope of judicial review in disciplinary matters. The Court reiterated the settled principle that constitutional courts exercising writ jurisdiction do not function as appellate authorities over departmental enquiries. Judicial review is confined to examining whether the enquiry was conducted in accordance with law, whether principles of natural justice were followed, and whether the findings are supported by some evidence.
The Bench emphasized that courts cannot re-appreciate evidence or substitute their own conclusions merely because another view may also be possible. Interference is permissible only where findings are perverse, based on no evidence, or where the proceedings suffer from procedural illegality or violation of natural justice.
Applying these principles to the present case, the Court found that the Single Judge had travelled beyond the permissible limits of judicial review by reassessing evidence and independently evaluating the merits of the charges. The Division Bench observed that the enquiry officers had examined documentary material and recorded detailed findings proving unauthorized sanctioning of temporary overdrafts beyond delegated powers.
The Court noted that the respondent had never denied granting temporary overdrafts beyond his authority. His primary defence was that he acted under oral instructions of superior officers and had sought post-facto approvals. However, the enquiry record revealed that no such post-facto approval requests had actually been received by the concerned zonal office.
The Bench carefully examined Rule 337(C) of the Officers Service Manual, which had significantly influenced the reasoning of the Single Judge. The Court held that the rule specifically requires an officer acting upon oral directions to obtain written confirmation at the earliest opportunity. The respondent failed to demonstrate compliance with this mandatory requirement. Consequently, the Division Bench rejected the respondent’s reliance on alleged verbal instructions.
The Court also dealt with the allegation that the respondent had been denied opportunity to cross-examine a senior executive. Rejecting this contention, the Bench clarified that the concerned official had never been examined as a witness during the enquiry proceedings. The official had merely responded to an administrative communication based on available records. Since no witness testimony had been recorded from the said official, the question of cross-examination did not arise.
Another important aspect emphasized by the Court was the special responsibility imposed upon bank officials handling public funds. Relying upon the Supreme Court’s decision in Disciplinary Authority-cum-Regional Manager v. Nikunja Bihari Patnaik, the Bench observed that bank employees are expected to maintain the highest standards of integrity and financial discipline. Unauthorized sanctioning of loans or overdrafts beyond delegated authority constitutes serious misconduct even where no actual financial loss is ultimately caused to the institution.
The Court observed that financial irregularities committed by bank officials expose financial institutions to serious risks and undermine public confidence in banking systems. Therefore, strict adherence to banking norms and delegated powers is essential.
After examining the enquiry records, the Division Bench concluded that the respondent had been granted full opportunity to defend himself. The proceedings were conducted in accordance with applicable regulations and principles of natural justice. The findings recorded by the enquiry officers were supported by ample documentary evidence and could not be characterized as perverse or arbitrary.
Accordingly, the High Court set aside the judgment of the Single Judge and restored the disciplinary action taken by the bank. The dismissal order passed against the respondent employee was upheld.
The judgment is a significant reaffirmation of two important principles in service law. First, it clarifies that disciplinary proceedings initiated during service can continue after retirement where service regulations expressly permit such continuation. Second, it reinforces the limited nature of judicial review in departmental enquiries, emphasizing that courts must not function as appellate authorities over disciplinary findings supported by evidence.