Refunding Embezzled Funds Doesn’t Erase Misconduct: Punjab & Haryana High Court Backs Dismissal of Bank Employee for ₹500 Embezzlement

“Judicial Review Is Not an Appeal Against Domestic Enquiry”:  In a strongly worded judgment reinforcing judicial discipline in service jurisprudence, the Punjab and Haryana High Court dismissed the writ petition of a bank employee who challenged his dismissal for embezzling ₹500. Justice Harsimran Singh Sethi held that the Labour Court had rightly refused to interfere with the employer’s decision and that the Court under Article 226 of the Constitution of India could not re-evaluate evidence or reassess the punishment unless it was “shockingly disproportionate”.

Upholding the Labour Court's Award dated April 1, 2019, the Court reaffirmed that “once embezzlement is proven, refunding the amount does not nullify the misconduct.” The High Court also emphasized that judicial review is supervisory—not appellate—in nature, and cannot be used to conduct a re-trial on factual disputes already determined through a fair departmental process.

"Allegations Were Proven—Reassessment of Evidence Not the Court’s Role Under Article 226"

The petitioner, Amrik Dass Bhatti, had been dismissed from service on January 7, 2003, for allegedly misappropriating ₹500 from a customer’s bank account. He challenged his dismissal first before the Central Government Industrial Tribunal-cum-Labour Court-II, Chandigarh, which upheld the disciplinary action. In his writ petition before the High Court, the petitioner contended that the evidence was insufficient and that dismissal was a disproportionate penalty for a refunded amount.

Rejecting both claims, the Court made it clear that it was not its role to second-guess disciplinary findings unless they were wholly unsupported by evidence. Quoting from the Supreme Court’s recent decision in The State of Rajasthan & Ors. v. Bhupendra Singh, the High Court observed:

“The High Court is not a court of appeal under Article 226 over the decision of the authorities holding a departmental enquiry against a public servant.”

Further, Justice Sethi noted: “Where there is some evidence… which may reasonably support the conclusion that the delinquent officer is guilty of the charge, it is not the function of the High Court to review the evidence and to arrive at an independent finding.”

The Court held that the Labour Court had correctly refrained from stepping into the domain of factual appreciation and had acted within the legally permissible bounds.

"Returning the Money Does Not Undo the Act of Embezzlement" – Dismissal Justified

A central plank of the petitioner’s case was that since the ₹500 had been returned to the same account, the misconduct should be considered condoned or less serious. The Court rejected this outright, holding that embezzlement, once established, remains misconduct regardless of restitution.

Citing Union of India v. Const. Sunil Kumar, Civil Appeal No. 219 of 2023, the Court reiterated:

“In exercise of powers of judicial review… the punishment should not be merely disproportionate but should be strikingly disproportionate.”

Justice Sethi reasoned that even though the amount in question was modest, the nature of the charge—breach of trust and financial dishonesty in a banking institution—was inherently serious.

“The embezzlement of an amount of a customer in the Bank is a serious allegation and… once the charge is proved, the punishment of dismissal imposed is not shockingly disproportionate.”

The Court concluded that merely returning the amount was not a mitigating factor that warranted interference, especially when the employer had followed due process and the Labour Court had found no procedural or evidentiary flaws.

Delivering a judgment rooted in precedent and clarity, the Punjab & Haryana High Court refused to dilute the employer’s disciplinary autonomy in cases of proven misconduct. Justice Sethi reiterated that judicial review is not an appellate mechanism and cannot be invoked to weigh the sufficiency of evidence or substitute judicial discretion for the employer’s.

The Court concluded: “Learned counsel for the petitioner has not been able to prove that the findings recorded by the Labour Court are perverse… or contrary to the settled principle of law so as to invite any interference by this Court.”

Accordingly, the writ petition was dismissed, and the Labour Court’s decision stood affirmed.

This judgment serves as a clear message that disciplinary integrity in financial institutions must be preserved, and that the law does not turn a blind eye to “small” acts of dishonesty, especially when trust is at stake.

Date of Decision: July 3, 2025