Allahabad HC Division Bench Upholds Single Judge's Reinstatement Order Against RBI, Directs Retiral Benefits for Dismissed Employee

The Allahabad High Court dismissed RBI's special appeal against a single judge's order reinstating a dismissed Class-III employee, finding the departmental enquiry procedurally defective and the charge of submitting a forged affidavit unproved on the evidence led.

A Division Bench of the High Court of Judicature at Allahabad, comprising Justice Saumitra Dayal Singh and Justice Swarupama Chaturvedi (who authored the judgment), dismissed the Reserve Bank of India's Special Appeal No. 246 of 2021 on 5 August 2026, affirming the single judge's order dated 22 January 2020. That order had set aside the dismissal of Vijayanand Rai, an Assistant Word Processor at the RBI's Kanpur office, and directed his reinstatement with consequential benefits. Since Rai crossed the age of superannuation in January 2022 during the pendency of the appeal, the Division Bench declined to issue a fresh reinstatement direction and instead directed the RBI to determine arrears of salary from dismissal to superannuation, and retiral benefits, within three months. The judgment addresses three recurring tensions in departmental law: what conduct at the workplace qualifies as misconduct under service regulations, how seriously the burden of proving a forgery charge must be discharged in a disciplinary forum, and when a High Court is entitled to interfere with the findings of a disciplinary authority.

The Incident and the Two Chargesheets

On 13 May 2003, a woman named Ms. Munni Rai alias Meenu visited the Rajbhasha room of the RBI's Kanpur office at around 3.30 pm, obtaining a visitor's pass from the counter after identifying herself as Rai's wife. According to the RBI's case, Rai slapped her, forced her out of the room, and then left the workplace during office hours without informing or obtaining permission from his superior officers.

The RBI issued a memo on 19 June 2003 asking for an explanation. Rai sought time but provided none, citing a family medical emergency. A show cause notice followed on 12 February 2005, to which he replied on 21 February 2005. The first chargesheet was issued on 26 April 2005, alleging violation of Regulations 32, 34 and 47(1) of the Reserve Bank of India (Staff) Regulations, 1948.

A second incident generated a separate strand of proceedings. Ms. Munni Rai complained that on 16 May 2005, Rai visited her residence and assaulted and abused her. The RBI issued a further show cause notice on 30 May 2005. Rai denied the allegations and, along with his reply dated 2 June 2005, filed a notarised affidavit dated 27 June 2005 purportedly executed by Ms. Munni Rai, stating that her complaints had been false and that the parties had amicably settled their disputes.

Ms. Munni Rai then submitted a separate notarised affidavit dated 30 May 2005 to the RBI, denying that she had signed or executed the earlier affidavit. She stated she had not entered into any compromise and that the document produced in her name was forged. On this basis, the RBI issued a second chargesheet dated 8 July 2005 alleging that Rai had submitted a forged affidavit to mislead the disciplinary proceedings, in violation of Regulations 34 and 47(1). The second chargesheet also referred to a prior disciplinary penalty imposed on Rai in 1997 for incorrectly furnishing family particulars and misusing bank facilities.

A common departmental enquiry was conducted by Enquiry Officer Ashok Kumar Gour across twenty-two sittings. He examined Ms. Munni Rai as RBI Witness No. 1 and Shri Gopal Singh, Manager (Rajbhasha), as RBI Witness No. 2. Rai consistently sought representation through a legal practitioner or retired employee, which the RBI declined as impermissible under the applicable service rules. The Enquiry Officer's report dated 6 November 2006 held both charges proved. The Disciplinary Authority, General Manager (Banking), ordered dismissal on 11 May 2007 under Regulation 47(1)(e). The Appellate Authority rejected Rai's statutory appeal on 6 November 2007.

What the Single Judge Found, and Why RBI Appealed

Rai filed Civil Misc. Writ Petition No. 11659 of 2008 before the single judge. By judgment dated 22 January 2020, the single judge found that the alleged conduct did not constitute misconduct within the meaning of Regulations 32, 34 and 47(1), that the enquiry was vitiated by violation of principles of natural justice, and that the enquiry report was not a reasoned or speaking order. The dismissal order and appellate order were set aside, reinstatement with all consequential benefits was directed, and costs of Rs. 2,500 were awarded.

RBI filed the present Special Appeal in 2020. The delay in filing was condoned by order dated 22 September 2021, which also stayed the single judge's judgment and directed RBI to file an affidavit enclosing the minutes of the departmental enquiry. The stay was extended periodically. After completion of pleadings, the matter was taken up for final hearing on 6 July 2026 and reserved.

For RBI, Senior Advocate Anurag Khanna argued that the single judge had erred in treating the 13 May 2003 incident as a purely personal dispute when it had occurred inside the RBI premises during office hours, directly affecting the discipline and dignity of a statutory institution. He submitted that Rai had deliberately chosen not to cross-examine Ms. Munni Rai despite being given the opportunity, and that departmental proceedings operate on preponderance of probabilities, not the criminal standard. He contended that the enquiry report, prepared after twenty-two sittings with full consideration of oral and documentary evidence, satisfied the requirement of a speaking order, and that reinstatement was legally unsustainable given the gravity of the proved misconduct.

For Rai, Senior Advocate Sanjeev Singh argued that the charges arose from a personal dispute with no nexus to the RBI's official business or interests. He pointed out that the alleged assault on 16 May 2005 occurred outside RBI premises and beyond office hours. On the forgery charge, he submitted that neither the Notary before whom Ms. Munni Rai claimed to have appeared was examined, nor was any handwriting expert called. The RBI's case rested entirely on the complainant's denial, which was coloured by her personal dispute with Rai. He also noted that the Family Court had subsequently declined to award Ms. Munni Rai maintenance, recording that she was not the legally wedded wife of Rai, which he argued bore on the credibility of her complaints.

The Division Bench's Analysis

Whether the workplace conduct constituted misconduct

The Division Bench reproduced Regulations 32, 34 and 47(1) of the RBI Regulations, 1948. Regulation 34 requires every employee to serve the Bank honestly, use utmost endeavours to promote its interests, and show courtesy in transactions with customers and Government officers. Regulation 47(1) makes an employee liable to penalty where the employee commits a breach of regulations, displays negligence or indolence, knowingly does anything detrimental to the Bank's interests, commits a breach of discipline, or is guilty of misconduct.

The court held that for conduct to attract Regulation 34, there must be some nexus between the act and the employment, and that every alleged personal act of an employee cannot be treated as misconduct unless it has a real and substantial connection with the employment or affects the discipline, functioning or reputation of the employer. The court relied on the Supreme Court's analysis in Glaxo Laboratories (I) Ltd. v. Presiding Officer, (1984) 1 SCC 1, where it was held that the causal connection between an alleged act of misconduct and employment must be immediate and proximate, not remote or tenuous.

Applying that principle, the court recorded that Ms. Munni Rai was neither a bank employee nor a visitor who had come for any official business with the RBI. She had obtained a visitor's pass by identifying herself as Rai's personal relation. The dispute between Rai and Ms. Munni Rai had later reached the Family Court. In those circumstances, the allegation regarding Rai's behaviour towards her did not fall within the scope of Regulation 34. Neither the Disciplinary Authority nor the Appellate Authority had examined how the conduct constituted misconduct under the applicable regulations.

On the act of leaving office without permission, the court accepted that this could amount to misconduct under Regulation 47. But it added that the act was a solitary occurrence at 4 pm, following a personal confrontation at the workplace, and dismissal for that alone would be grossly disproportionate.

Whether the forgery charge was established

The Division Bench treated the second charge as the more serious of the two and examined it at length. The court noted that the entire finding of forgery rested on Ms. Munni Rai's oral denial before the Enquiry Officer. The RBI took no independent step to verify the signature on the disputed affidavit: the Notary before whom the affidavit was executed was not called, and no handwriting expert's opinion was sought. Rai had, from the start, maintained that Ms. Munni Rai had herself appeared before the Notary and signed the affidavit, and that her denial was motivated by their personal dispute.

The court applied the principle from the Supreme Court's recent judgment in Jai Prakash Saini v. Managing Director, U.P. Cooperative Federation Ltd., 2026 SCC OnLine SC 505, that in a departmental enquiry the burden to prove the charge lies on the employer unless the charge is admitted, and that an evasive reply to a chargesheet is not an admission. It held that the RBI could not shift the initial burden of proof to Rai merely because he did not cross-examine Ms. Munni Rai or produce defence witnesses, when he had consistently maintained that the affidavit bore her genuine signature.

The Enquiry Officer recorded no prima facie finding that the signature on the disputed affidavit was not that of Ms. Munni Rai. The court held that in these circumstances, the procedure adopted to reach the conclusion that the affidavit was forged was not fair. It endorsed the single judge's finding that the forgery charge was not satisfactorily established.

Procedural infirmities in the enquiry

The Division Bench reproduced the single judge's factual account of the procedural failures. Oral proceedings had commenced on 2 September 2005. On 3 September 2005, Rai made a representation seeking a change of Enquiry Officer on grounds of bias. The enquiry proceeded without any decision on that application. The application was eventually rejected on 9 November 2005 without any cogent reason being recorded. Documentary evidence was produced by the Presenting Officer only on 20 January 2006, with copies supplied to Rai on the same day. On 28 June 2006, Ms. Munni Rai was examined as RBI Witness No. 1. A date of 1 August 2006 was fixed for the next witness, but Rai was not present. The Enquiry Officer then fixed 2 August 2006 without informing Rai and recorded the statement of the bank officer on that date. Rai accordingly had no opportunity to cross-examine RBI Witness No. 2.

The court found that these facts established a denial of adequate opportunity of defence. It relied on the Supreme Court's observations in State of U.P. v. Saroj Kumar Sinha, (2010) 2 SCC 772, that an Enquiry Officer in a quasi-judicial capacity is an independent adjudicator and must ensure that the evidence is properly examined and that the employee is given a reasonable opportunity to be heard. It also relied on Allahabad Bank v. Krishna Narayan Tewari, (2017) 2 SCC 308, where the Supreme Court held that non-application of mind and non-recording of reasons are grounds justifying interference, and that where the appellate authority merely reproduces the findings of the disciplinary authority without independently appreciating the material, that too amounts to a failure of duty.

Proportionality of dismissal

The Division Bench held that even if some element of misconduct could be identified in Rai's acts, dismissal was a disproportionate response given the absence of any proved allegation involving corruption, moral turpitude, financial misappropriation, or loss to the RBI. The court quoted from the Supreme Court's recent judgment in Surekha Domaji Bele v. Executive Engineer, Testing Division, MSEDCL, 2026 INSC 639, which described dismissal as the severest form of penalty that leaves a permanent stigma on service records, and held that dismissal must remain reserved for cases involving misconduct of the most serious nature. Where the misconduct does not involve corruption or proved loss to the employer and the employee does not have a long history of blemish, the authority must consider whether a lesser punishment would meet the ends of justice.

The court noted that Regulation 47 itself provides a graduated range of penalties, including reprimand, delay in increment, degradation, and recovery of loss, before dismissal. The RBI had applied the maximum penalty without examining whether any of these lesser sanctions would have been adequate.

Why the Division Bench Declined to Remand

The court acknowledged the ordinary practice of remitting defective disciplinary proceedings for fresh consideration. It declined to do so here on three grounds. First, the matter had already been remanded once before Rai filed the writ petition, yet the Disciplinary Authority repeated similar errors. Second, Rai had crossed the age of superannuation in January 2022, making reinstatement impossible. Third, Ms. Munni Rai had lost her case before the Family Court. A remand at this stage, the court observed, would only reopen disputes that may have healed over time.

The court applied the principle articulated by the Supreme Court in Mahendra Prasad Agarwal v. Arvind Kumar Singh, (2026) SCC OnLine SC 302, that where a claim is legal and justified, relief must follow and that the practice of remanding matters to avoid granting relief is counterproductive. Where the relevant material is already on record and leads to a clear conclusion, the court should finally adjudicate the matter.

Order

The Division Bench dismissed Special Appeal No. 246 of 2021 and affirmed the single judge's judgment dated 22 January 2020. Since Vijayanand Rai has crossed the age of superannuation, no direction for reinstatement was issued. The competent authority of the RBI was directed to determine Rai's claim for arrears of salary from the date of dismissal to the date of superannuation within three months from 5 August 2026. Consequential retiral benefits were directed to be considered by the competent authority in accordance with law within the three months thereafter.