Ignorance of Banking Policy and Engaging Outsiders Amounts to Gross Misconduct: Orissa High Court Upholds UCO Bank Manager’s Dismissal

“A Manager Who Claims Unawareness of Basic Banking Policies Cannot Escape Disciplinary Action” —  In a significant judgment Orissa High Court upheld the dismissal of a bank manager accused of serious misconduct during his tenure at Jamsuli Branch. The Court ruled that the petitioner’s plea of ignorance of banking policy, engagement of outsiders, and sanctioning of loans beyond his powers were acts of gross negligence and misconduct, warranting dismissal.

Justice Murahari Sri Raman observed that “a bank officer who does not know his delegated powers, sanctions irregular loans, and permits strangers to handle sensitive records directly endangers the financial integrity of the bank,” and therefore, no leniency could be shown.

Sri Bidyadhar Mallick, the petitioner, served UCO Bank since 1984 and rose to the post of Manager. While working at Nilgiri Branch, disciplinary proceedings were initiated against him for several irregularities committed at Jamsuli Branch between 2003 to 2006. The petitioner was accused of extending loans beyond his powers, engaging unauthorized outsiders in the branch, and failing to safeguard the bank's interests.

A departmental enquiry was conducted where seventeen allegations were framed. The Enquiry Officer found both the principal charges proved — namely, violating Regulation 3(1) and 3(3) of the UCO Bank Officer Employees' Conduct Regulations, 1976.

Consequently, on 29.12.2010, the Disciplinary Authority passed an order of dismissal. The Appellate Authority affirmed the dismissal on 25.04.2011. Challenging these orders, the petitioner approached the High Court invoking Articles 226 and 227 of the Constitution.

The petitioner assailed the dismissal primarily on three counts: (i) violation of Regulation 6(13) and 6(17) concerning enquiry procedure, (ii) limitation under Paragraph 22 of the Vigilance Management Guidelines of the CVC, and (iii) disproportionate punishment.

The Court rejected each ground, holding that the entire enquiry was conducted strictly in line with the prescribed procedure. The Court noted, “The petitioner was given full opportunity to participate, to examine witnesses, to lead evidence, and to submit his defence. There is no whisper of procedural unfairness.”

Answering the limitation plea, the Court held, “The vigilance guideline prescribing limitation is inapplicable when allegations pertain to fraud,” finding that one of the allegations explicitly recorded, “You had connived with Sri Purna Chandra Jena in committing a fraud and gave undue financial advantage at the cost of the bank.”

The Court severely criticized the petitioner’s explanation stating, “The delinquent officer admitted that he had no knowledge of loan policy, was unaware of his delegated powers, and engaged outsiders based on alleged verbal instructions without documentary proof.” The Court remarked that such ignorance was inexcusable for a managerial officer entrusted with public funds.

Rejecting the petitioner’s argument of procedural violation under Regulation 6(13) and 6(17), the Court held, “The Enquiry Proceedings Register reveals that the petitioner was cross-examined on each charge, examined himself during the enquiry, and had the assistance of a Defence Representative.”

The Court found that the petitioner was unable to dislodge the specific allegation relating to fraud. “The preponderance of probability clearly establishes that Mr. Mallick in connivance with Sri Purna Chandra Jena created a fraudulent transaction in the books of the Bank without any tangible collateral,” the Disciplinary Authority had recorded.

On the issue of limitation, the Court ruled, “The plea of limitation raised by the petitioner, without statutory backing, is untenable. The alleged limitation under Vigilance Guidelines cannot override a duly framed service regulation nor can it shield fraudulent acts.”

Further, while considering the quantum of punishment, the Court refused to intervene, observing, “Ignorance of banking policy, failure to ascertain delegated powers, and allowing strangers to handle official records strike at the very foundation of banking discipline.”

The Court also reinforced the principle that the judiciary does not sit in appeal over punishment imposed by disciplinary authorities. Citing precedent, it reiterated, “The High Court, while exercising power of judicial review, is not to act as an appellate authority to reassess facts or substitute the punishment.”

Justice Murahari Sri Raman remarked, “The petitioner failed to establish that the orders suffer from perversity or procedural irregularity. Rather, the petitioner’s own admissions demonstrate sheer recklessness and negligence in handling financial affairs.”

In its closing observations, the Court underscored, “For a Bank Officer, to act beyond one’s authority is by itself a breach of discipline. Such conduct is incapable of being condoned on the specious plea of ignorance.”

Refusing to exercise its extraordinary jurisdiction under Articles 226/227, the Court concluded, “The writ petition is devoid of merit and stands dismissed.”

Date of Decision: 02 April, 2025