J&K Bank Cannot Dismiss Employee for Anti-National Activities Without Formal Investigation, Rules Srinagar High Court

J&K High Court quashes J&K Bank’s no-inquiry dismissal order, holding that Clause 12.29 of the Officers Service Manual mandates a formal investigation by a State, UT, or Central investigating agency before an employee can be terminated on national security grounds.

The High Court of Jammu & Kashmir and Ladakh has quashed the dismissal of a senior J&K Bank officer who was terminated without inquiry on the ground of alleged involvement in terrorist and anti-national activities. Justice Sanjay Dhar, sitting singly at Srinagar, held that the Managing Director and CEO of J&K Bank could not invoke Clause 12.29 of the Officers Service Manual (OSM) without first satisfying each of its express preconditions — chiefly, a formal investigation by a recognised investigating agency and a consequent advice from a competent Government authority of prescribed rank. The Court found that what the bank had acted upon was a discreet intelligence-gathering exercise by the CID, not an investigation within the meaning of the clause. The impugned dismissal order dated 15 July 2024 was accordingly set aside.

A Three-Decade Career Ended Without a Hearing

Saadut Hussain Pampori joined J&K Bank on 16 June 1995 as a Computer Engineer on probation. His services were confirmed on 23 October 1997. Over the following decades he rose through several positions: In-charge of the Technology Training Centre from 2003 to 2006, Head of IT Operations from 2006 to 2010, Senior Executive Manager Technology from 2010 to 2015, Officer on Special Duty to the Chief Minister of J&K from 2016 to 2018, Assistant Vice President (Technology) from 2018 to 2022, and Deputy General Manager from 2022 onwards.

On 15 April 2024, the bank placed him under suspension pending investigation into misconduct. No grounds were communicated. No departmental inquiry was initiated. Then, on 15 July 2024, the bank's competent authority issued an order dismissing him from service with immediate effect by invoking Clause 12.29 of the OSM. The dismissal order described him as involved in terrorist and anti-national activities. It was passed solely on the basis of an advice tendered by respondent No. 5 — a government authority — without any departmental or disciplinary proceedings and without any notice.

What Clause 12.29 of the OSM Actually Requires

Clause 12.29 of the Officers Service Manual is a special provision that allows the Managing Director and CEO of J&K Bank to dismiss an employee without holding any departmental inquiry. It operates as an exception to the general service rules, which require a regular inquiry before dismissal. The clause is titled “Dismissal/Removal of employee found involved in terrorist/anti-national activities.”

Justice Dhar identified four cumulative conditions that must be met before the clause can be invoked:

• An investigation must have been conducted by a State, UT, or Central investigating agency.
• On the basis of that investigation, the employee must be found to be involved, directly or indirectly, in terrorist or anti-national activities, or found to be posing a threat to the territorial sovereignty, security and integrity of the country.
• The investigation must be followed by an advice for removal or dismissal from a competent Government authority not below the rank of Principal Secretary or Director General of Police (or equivalent).
• Only after those three conditions are met can the MD & CEO dismiss the employee forthwith, without departmental proceedings, notice, or pay in lieu of notice.

The Court emphasised that these preconditions are conspicuously absent from Article 311(2)(c) of the Constitution of India, which vests a wider power in the President or Governor to dispense with inquiry where the interest of State security so requires, without any requirement of prior investigation or external advice. That difference, the Court held, is deliberate.

Why the Bank’s Article 311(2)(c) Analogy Failed

J&K Bank and the Government respondents argued that Clause 12.29 of the OSM is in pari materia with Article 311(2)(c) and that the power exercised by the MD & CEO is therefore akin to the President’s or Governor’s constitutional power. They relied on the Supreme Court’s articulation of the limited scope of judicial review in Union of India v. Balbir Singh, (1998) 5 SCC 216, where the Court held that satisfaction under Article 311(2)(c) can only be challenged on grounds of mala fides or wholly extraneous considerations, not on the correctness or adequacy of the underlying material.

Justice Dhar rejected this reasoning squarely. The two provisions are not equivalent. Under Article 311(2)(c), the President or Governor need not conduct any prior investigation, need not find the employee involved in any particular activity on the basis of such investigation, and need not receive any advice from any authority. All that is required is the constitutional functionary’s satisfaction that holding an inquiry would not be expedient in the interest of State security. That satisfaction, coming from the highest constitutional offices, attracts the limited judicial review described in Balbir Singh.

Clause 12.29, by contrast, vests power in the Managing Director and CEO of a bank — an officer of a very different constitutional standing. The Court observed that the same level of unconditional trust that the Constitution reposes in the President and Governor cannot be extended to a bank official. It is precisely for that reason that the OSM drafters built in explicit preconditions. Those preconditions govern the exercise of the power and their fulfilment is a threshold requirement, not a procedural formality.

The consequence, the Court held, is that the restricted judicial review standard applicable under Article 311(2)(c) does not automatically transpose to Clause 12.29. A court examining an order under Clause 12.29 can and must verify whether the preconditions were actually fulfilled.

Discreet Sourcing Is Not Investigation

The respondents, while conceding that investigation by a State, UT, or Central investigating agency is a prerequisite under Clause 12.29, maintained that the impugned order satisfied this requirement because it was based on a discreet investigation conducted by the J&K Police. They also argued that “investigation” in this clause is not restricted to post-FIR investigation as defined under Section 2(j) of the BNSS and that registration of an FIR is not a precondition.

Justice Dhar accepted the proposition that investigation under Clause 12.29 need not be FIR-based. Referring to the Supreme Court’s exposition in H.N. Rishbud v. State of Delhi, AIR 1955 SC 196, and the Oxford English Dictionary definition, the Court described investigation as an official or systematic examination of facts — a process involving the ascertainment of facts, collection of evidence, and examination of persons acquainted with the facts of the case. Registration of an FIR is not the only trigger for such a process.

However, the Court drew a firm line between that broad conception of investigation and what had actually taken place here. Having perused the confidential report of the Special DG, CID, J&K, the Court found that the report was based on information received from sensitive and credible sources and from discreet inquiries. The material annexed to it consisted of posts allegedly made on the hashtag campaign #TortureKashmir. There was no recording of witness statements. There was no collection of material evidence through a structured inquiry process set up for that purpose.

The Court held that information gathered from sources or through discreet inquiries does not qualify as investigation within the meaning of Clause 12.29. Such information is largely based on general reputation, not on tangible material or evidence. The discreet verification described in the Special DG’s report, in the Court’s view, cannot substitute the requirement of holding an investigation which, at minimum, must involve recording of statements of witnesses and collection of material before the competent authority tenders its advice.

Directions Issued by the Court

Justice Dhar quashed the dismissal order dated 15 July 2024. The petitioner was directed to be restored to the status he held immediately before the impugned order was passed.

The Court simultaneously made clear that quashing the dismissal does not foreclose further action. Two routes remain available to the respondents. First, they may follow the procedure prescribed under Clause 12.29 of the OSM afresh — that is, cause a proper investigation to be conducted by the appropriate agency, obtain a finding of involvement, and then secure advice from a competent authority of the prescribed rank. Second, in the alternative, the bank may proceed with a regular departmental inquiry against the petitioner pursuant to the suspension order dated 15 April 2024, which the petitioner had not challenged and which the Court noted would stand revived once the dismissal order is set aside.

Order

WP(C) No. 2269/2024 was disposed of on 29 August 2026. The impugned order dated 15 July 2024 dismissing Saadut Hussain Pampori from service was quashed. The petitioner was reinstated to his pre-dismissal status. Respondents were granted liberty to proceed afresh either under Clause 12.29 of the OSM after fulfilling its requirements, or by way of a regular departmental inquiry under the suspension order dated 15 April 2024. The confidential record was directed to be returned to counsel for the respondents. The judgment was marked as speaking and reportable.