SC: High Courts Cannot Act as Appellate Bodies in Disciplinary Matters

The Supreme Court of India in State Bank of India & Others v. Ramadhar Sao (2025 INSC 1010) has reiterated the boundaries of judicial review in disciplinary proceedings, holding that the High Court erred in reinstating a bank employee who was found guilty of acting as a middleman in loan sanctioning.

The respondent, a Class IV employee, faced allegations of taking illegal gratification while coordinating agricultural loans. Multiple borrowers testified against him, and the inquiry established that he had demanded and received money in exchange for facilitating loans.

The Disciplinary Authority, treating the misconduct as grave corruption, ordered dismissal from service. On appeal, a compassionate view was taken reducing the penalty to removal with superannuation benefits.

Yet, the High Court stepped in, reasoning that he was a low-level employee without sanctioning powers and may have been made a scapegoat. It directed reinstatement with back wages.

This sweeping intervention, however, was curtailed by the Supreme Court.

Justice Rajesh Bindal, writing for the Bench, clarified that judicial review under Articles 226 and 136 is confined to procedural irregularities or manifest injustice, not to a re-appreciation of evidence.

The inquiry, it held, was fair, witnesses were cross-examined, and the respondent even sought forgiveness an implicit admission of guilt.

The Bank had also punished other officers, contrary to the High Court’s assumption that he was singled out.

Reaffirming precedents like SBI v. Ajai Kumar Srivastava and Boloram Bordoloi v. Lakhimi Gaolia Bank, the Court stressed that when disciplinary authorities accept the inquiry officer’s findings, they need not give elaborate reasons. Interference on conjectures that the employee was a scapegoat is beyond the High Court’s writ jurisdiction.

Accordingly, the Supreme Court restored the Appellate Authority’s penalty of removal with superannuation benefits.

The ruling underscores that corruption, even at the lowest rungs of public service, cannot be brushed aside and that courts must resist stepping into the role of appellate bodies in departmental matters.