Stigmatic relieving letters – Whether, when once order of relieving from service of employee is proved to be illegal and arbitrary, then normal relief of reinstatement shall be available to employee.

In the present matter, the Petitioner was appointed as a Probationary Officer with the Respondent Bank on 27-9-2008. During his course of employment with the Respondent Bank, the Petitioner was selected for appointment on the post of Dy. Advisor (Banking and Foreign Trade) in the Central Bureau of Investigation. This appointment was to be on contract basis. The petitioner, therefore, on 3-5-2011, tendered his resignation from service to the respondent no. 1. The said request for resignation was, however, rejected by the Respondent on the ground that investigation in an ATM fraud case was pending against the Petitioner. Subsequently, the Respondent Bank held disciplinary proceedings against the Petitioner in which, the disciplinary authority held the Petitioner guilty of misconduct and imposed penalty of reduction of two stages in the time scale of his pay with immediate effect for a period of two years. The aforesaid penalty was implemented by the Respondent Bank and the Petitioner accepted the aforesaid punishment.

Thereafter, the Petitioner sought to be relieved from the services of the Respondent Bank on the ground that the disciplinary proceedings had been concluded and the punishment had been accepted by him. The letter issued to the Petitioner stated that a matter of loss/theft of ATM (Debit) cards was still pending for investigation by the local Police Authority and therefore, during the course of investigation, the presence of the Petitioner would be required by the Police Authorities for purpose of investigation/questioning. Further, the letter said that the Bank has reported the said fraud to Reserve Bank of India. In light of the above circumstances, the Competent Authority had accepted the resignation of the Petitioner without prejudice to the contentions mentioned above. Accordingly the Petitioner was relieved/discharged from the services of the Respondent Bank subject to the condition mentioned in the letter.

In the meantime the Petitioner was informed that his job offer of Dy. Advisor (Banking and Foreign Trade) in the Central Bureau of Investigation had been cancelled. Thereafter, upon seeking restoration of his services with the Respondent Bank, the Petitioner was informed that there was no question of he being again restored in service. Therefore, the Petitioner approached the Hon’ble Bombay High Court (Nagpur Branch) by way of Writ Petition challenging the order of relieving issued by the Respondent Bank and also sought reinstatement in service with back wages.

The Hon’ble Bombay High Court, in holding that the Petitioner was entitled to reinstatement, observed that, it was in view of the conditions imposed in the relieving letter that the CBI decided to cancel the Petitioner’s appointment. It was, therefore, clear that but for the conditions mentioned/observations made in the said letter, the Petitioner would have been employed with the CBI on contract basis as he had already been selected on the post of Dy. Advisor (Banking and Foreign Trade). It could, therefore, be safely said that if the Petitioner would have been simply relieved without referring to the accompanying letter, there would have been no occasion for the CBI to cancel the Petitioner’s appointment. The Hon’ble Court held that the Petitioner had been proceeded against in the departmental proceedings by the Respondent and had been punished for the misconduct. By imposing the punishment of reduction by two stages in the time scale of pay, the Petitioner was continued in the employment. It can, therefore, be assumed that the Respondent did not find the misconduct of the petitioner to be so grave so as to warrant his removal/dismissal from service. Further, the only reason for resigning from service was the Petitioner’s selection by CBI on the post of Dy. Advisor (Banking and Foreign Trade). It is obvious that if the Petitioner would not have been selected for appointment with the CBI, then there was no reason for him to tender his resignation.

Therefore, the Court finally held that the action of the Respondent Bank was totally uncalled for in the facts of the present case and the same has resulted in depriving the Petitioner of future employment. On said count, the Hon’ble Court declared the memorandum of relieving illegal and arbitrary, thereby entitling the Petitioner to be reinstated in service with the Bank.

The matter has great relevance in the context of IT employees and commercial establishments. Find out here about laws applicable to IT & ITES employees.