The Punjab & Haryana High Court held that disciplinary penalties imposed on government employees must bear a reasonable and proportionate nexus with the gravity of the misconduct proved against them, and that excessively harsh punishments may constitute a violation of the principle of equality under the Constitution. In a judgment delivered by Justice Harpreet Singh Brar, the court modified a severe post-retirement penalty imposed on a retired officer of a regional bank in Haryana who had been subjected to a drastic reduction in pay scale as a consequence of departmental proceedings initiated against him shortly before his retirement. The officer had joined service in 1979 and served for about 35 years, retiring in May 2013 after a long career in the bank. A few days before his retirement, he was issued a charge sheet alleging that while on deputation at a branch in 2011 he had improperly recommended 42 loan proposals, a significant number of which later became irregular or overdue. Some of these loans were said to have been granted in violation of lending norms, and the exposure of the bank in those accounts was alleged to be substantial. Following an inquiry, the disciplinary authority found him guilty on a subset of the charges and imposed a major penalty that reduced his pay scale by 21 stages — a reduction that had ongoing consequences even after his retirement and significantly impacted his retiral benefits. A statutory appeal against this punishment was dismissed, prompting him to challenge both the charge sheet and the penalty orders before the High Court.
In its examination of the case, the High Court reiterated settled legal principles governing interference with disciplinary actions, noting that judicial review under constitutional writ jurisdiction is limited but permissible where findings are arbitrary, penalties are disproportionate, procedures have been tainted by illegality, or there has been manifest prejudice. The court stressed the doctrine of proportionality, which requires that any penalty imposed in disciplinary proceedings must have a just and reasonable relationship to the proven misconduct. A punishment that is excessive or unwarranted not only fails the test of reasonableness but may also offend the fundamental right to equality. Applying this principle to the facts, the court observed that although there might have been some lapse on the part of the petitioner in recommending the loans, the respondents failed to demonstrate any conclusive or quantified financial loss to the bank directly attributable to his actions. Moreover, the petitioner was not the authority responsible for sanctioning the loans, and many of the accounts had since been regularised. His long and otherwise unblemished service record was also noted as a mitigating factor. The court further recognised that the penalty of reducing pay by 21 stages, imposed so close to his retirement, had lifelong financial implications for a retired employee that were grossly disproportionate to the nature of the misconduct established against him.
Accordingly, while declining to quash the entire disciplinary proceedings, the High Court modified the punishment imposed. Instead of the drastic reduction in pay scale, the court substituted a more proportionate penalty consisting of a deduction of five percent from the petitioner’s monthly pension for a period of five years. This modification was tailored to address the misconduct without unduly penalising the officer beyond what was just and reasonable, particularly in light of his long service and the lack of clear evidence of actual financial loss to the bank. The court’s decision reflects its insistence that disciplinary penalties, especially those that extend into the post-retirement period and affect pensionary benefits, must be calibrated to fit the misconduct and take into account all relevant factors, including the manner of service and absence of aggravating circumstances. The ruling reaffirms that while public authorities have the power to take disciplinary action, judicial oversight can intervene to ensure that punishments do not become disproportionate or punitive in a manner inconsistent with constitutional guarantees.
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