SRINAGAR: In a significant judgment favouring employee rights and due process, the High Court of Jammu and Kashmir and Ladakh today quashed the retrospective dismissal of a senior Jammu and Kashmir Bank official, Naseer Ahmad Sheikh, ruling the bank’s disciplinary proceedings as flawed, arbitrary, and violative of natural justice. The court directed the bank to release all withheld pensionary benefits to Sheikh within eight weeks, failing which interest at 8 per cent per annum would accrue until payment.
Justice Javed Iqbal Wani, delivering the 47-page verdict at Srinagar, held that the disciplinary inquiry that led to Sheikh’s dismissal was vitiated by procedural lapses, denial of fair hearing, and disproportionate punishment. Sheikh, who retired on June 30, 2021, after more than 34 years of service, was dismissed retrospectively on April 1, 2022, following departmental inquiries into alleged irregularities during his tenure as Branch Head at Barzulla and Rangreth.
The court found that the inquiry reports failed to adhere to the principles of natural justice. Notably, Sheikh was denied the opportunity to cross-examine witnesses and present key documents in his defence. The judge noted that one of the central allegations — that Sheikh had sanctioned several temporary overdrafts (TODs) in violation of bank norms — lacked substantiation, especially since Sheikh had claimed to act under verbal instructions from his superiors, which were neither denied nor investigated during the inquiry.
“The failure of the Enquiry Officer to summon or examine the said superior officer, despite a specific defence raised, amounts to denial of reasonable opportunity and offends the principle of audi alteram partem,” the court observed. It further held that the inquiry process appeared “ritualistic” and “prejudged,” particularly in ignoring Sheikh’s record of recoveries, post-facto sanction submissions, and absence of any evidence of personal gain or fraudulent intent.
The disciplinary action was triggered by two charge sheets issued in May and June 2021, accusing Sheikh of allowing TODs and a housing loan in contravention of bank norms. The bank alleged that his actions led to the classification of several accounts as Non-Performing Assets (NPAs), with a claimed financial loss of over Rs 4 crore. However, Sheikh maintained that the TODs were granted in line with past practice and often under superior direction, and that proposals for post-facto approvals were submitted but left unattended.
He also cited recoveries of over Rs 72 lakh from the disputed accounts and submitted emails and dispatch records to support his version, which the bank’s inquiry brushed aside without examining relevant officials or documents.
Justice Wani also questioned the bank’s reliance on certain service manual provisions while conveniently rejecting others, such as Rule 337(c) of the Office Service Manual, which provides for deemed approval when no decision is taken within a stipulated time. The court noted that the bank had, in its own vigilance manual, adopted Central Vigilance Commission (CVC) guidelines, including deemed approval norms, which it later denied applying.
“Discipline must be tempered with fairness,” the court observed, emphasising that Sheikh’s service record showed no prior blemish and that no allegations of dishonesty or corruption were ever substantiated. The extreme penalty of dismissal, particularly with retrospective effect, was found to be “excessive, inequitable, and legally unsustainable.”
The bank had earlier argued that Sheikh’s dismissal was warranted and proportionate, citing financial impact, and defended the inquiry as fair and compliant with procedure. It contended that pensionary benefits were not due upon dismissal and that TODs were issued recklessly and beyond delegated authority. The bank also claimed in its supplementary affidavit that further irregularities by Sheikh were unearthed post-dismissal.
The court, however, found the overall handling of the disciplinary proceedings “procedurally flawed” and noted that Sheikh was “singled out” despite the institutional nature of the TOD practice. It also criticised the denial of documents to Sheikh when he sought to file his appeal.
Justice Wani concluded that the punishment stemmed from an enquiry that was legally infirm, and the dismissal order — backdated to a period when Sheikh was no longer in service — had deprived him of his earned pension without legal basis. The court accordingly quashed the April 1, 2022, dismissal order and its subsequent affirmation by the bank on November 9, 2022, directing the release of all pensionary dues.
The case has stirred renewed debate about procedural fairness in internal disciplinary actions within the banking sector and the treatment of retired employees facing retrospective penalties.
