Probationer Cannot Be Removed for Misconduct Dressed Up as Poor Performance, Supreme Court Holds
A Division Bench led by Justice J.K. Maheshwari upholds quashing of a bank officer's termination, finding the employer bypassed disciplinary proceedings by invoking unsatisfactory performance.
The Supreme Court has dismissed a civil appeal by Bank of Baroda, affirming concurrent High Court orders that quashed the termination of a probationary Assistant General Manager. The Court found that the bank had suspended the officer for alleged misconduct, abandoned the disciplinary process it had itself set in motion, and then terminated him under Regulation 16(3)(a) of the Vijaya Bank (Officers') Regulations, 1982 on the ground of unsatisfactory performance. Examining each piece of adverse material the bank relied upon, the Court found it either contradicted by government records, attributable to a third party's technical failure, or never communicated to the officer at all. The judgment, decided on 29 May 2026 by Justices J.K. Maheshwari and Atul S. Chandurkar, awards the officer 50 per cent backwages from termination to superannuation, with all consequential benefits to be settled within three months.
How the Dispute Reached the Court
Ashok Kumar Singh was appointed as Assistant General Manager (Networking) with Vijaya Bank on probation from 5 January 2004, with confirmation subject to satisfactory performance and conduct. After one year, he was not confirmed. On 15 January 2005, the bank placed him under suspension, alleging he had attempted to remove four boxes of highly confidential tender documents from his office cabin through his driver.
His probation was extended by six months from 5 January 2005 on the ground that his performance during the initial year was unsatisfactory. The bank sought his reply to the suspension allegations in March 2005 and then, by order dated 12 April 2005, revoked the suspension “without prejudice to the Bank's right to initiate disciplinary proceedings.” Singh rejoined on 13 April 2005 and was transferred to the Regional Office at Kolkata.
On 4 July 2005, the bank extended his probation for a further six months, again citing unsatisfactory performance. On 5 November 2005, his services were terminated under Regulation 16(3)(a) of the 1982 Regulations read with Clause 3 of his appointment letter, on the ground that his performance throughout the probation period was not satisfactory.
Singh challenged the termination in the Calcutta High Court. The Single Bench allowed the writ petition on 18 October 2012, holding the termination was based on irrelevant considerations and a failure to consider relevant factors. The Division Bench dismissed the bank's appeal on 16 October 2015, granting liberty to proceed against Singh in accordance with law if it so desired. The bank — by then amalgamated into Bank of Baroda by Gazette Notification dated 2 January 2019 — pursued the matter to the Supreme Court in Civil Appeal No. 4814 of 2017.
The Bank's Case and the Officer's Response
Additional Solicitor General Vikramjit Banerjee, appearing for the bank, argued that an employer is entitled to terminate a probationer's services without assigning reasons, and that misconduct may be the motive but not the foundation of such a termination. He contended there was sufficient material — confidential reports and three memos dated 23 July 2005, 14 September 2005, and 31 October 2005 — on which the competent authority had formed a genuine opinion of unsatisfactory performance. He further submitted that Singh had failed to establish malice against his superior officers, a finding that had attained finality.
Senior counsel P.S. Patwalia, for Singh, countered that the three memos were the bank's entire evidentiary foundation and that each was fatally flawed. He argued the bank had victimised Singh by extending his probation to fabricate adverse material, and that the internal noting of 5 November 2005 revealed the real reason for termination was the alleged misconduct, not performance.
The Court's Analysis of Each Memo
The Court examined the three memos in detail.
Memo dated 23 July 2005 related to a branch visit report by the Regional Manager highlighting irregularities in the implementation of the Online Tax Accounting System (OLTAS) and reconciliation of outstanding entries, most of which predated Singh's transfer to Kolkata. The Court placed this memo alongside a letter dated 15 July 2005 from the Central Board of Direct Taxes, Ministry of Finance, which described Vijaya Bank's implementation of OLTAS as “praiseworthy” and directed other banks in the zone to contact Singh for assistance. The Court found the inconsistency between the government's commendation and the bank's internal criticism to be irreconcilable, and concluded the memo appeared to have been issued on extraneous considerations.
Memo dated 14 September 2005 alleged that Singh had caused a one-day delay in the credit of a telegraphic transfer of Rs. 66 crores from the Itanagar Branch to Kolkata via State Bank of India. The Court noted that Singh had escalated the matter to SBI by letter dated 16 September 2005, and that SBI by letter dated 5 October 2005 admitted a technical problem on its part that prevented the remittance from being sent through RTGS mode. Singh had also written to SBI seeking interest for the one-day delay. The Court held that no adverse inference as to his performance could be drawn from a delay caused by a third party's technical failure, which Singh had actively followed up.
Memo dated 31 October 2005 contained multiple allegations including discourteous conduct towards a field engineer, unauthorised use of internet connectivity, and failure to observe security measures. The Court found that the bank had failed to demonstrate this memo was ever communicated to Singh. It held that reliance on an uncommunicated memo would amount to a violation of the principles of natural justice, and that the memo consequently carried no evidentiary value.
The Governing Legal Principles
The Court set out the framework governing termination of probationers in public employment. It held that even where a regulation appears to vest the competent authority with wide discretion to terminate a probationer, that discretion is not absolute. The subjective satisfaction of the authority must be rooted in objective facts such as performance appraisals or specific assessments of work. It must not suffer from arbitrariness.
The Court drew a distinction between a routine non-stigmatic termination for unsuitability and a disguised punitive termination. Where the employer's decision is founded on allegations of misconduct or severe deficiency, the termination is stigmatic and cannot stand without compliance with due process. A probationer who can demonstrate that termination was driven by personal bias, vindictiveness, or an ulterior motive rather than a genuine assessment of work is entitled to have such an order set aside.
The Court also emphasised the purpose of probation: it is not a mere formality but a structured period to assess performance, conduct, and suitability. Withholding constructive or adverse feedback during this period deprives the officer of a meaningful opportunity for improvement and undermines the fairness of the evaluation process. Adverse remarks akin to lack of integrity or misconduct must be communicated to the probationer.
The Court drew on its earlier decision in Dipti Prakash Banerjee v. Satyendra Nath Bose National Centre for Basic Sciences, Calcutta (1999) 3 SCC 60, which distinguished between misconduct as the foundation of a termination order and misconduct as merely the motive. Where findings are arrived at behind the back of the officer or without a regular departmental enquiry, the termination is treated as founded on the allegations and is bad in law. The Court also referred to Sarita Choudhary v. High Court of M.P. (2025) 9 SCC 297 and Mathew P. Thomas v. Kerala State Civil Supply Corporation Ltd. (2003) 2 SCC 263 for the proposition that courts must look to the substance of the matter, not merely its form, when assessing whether a termination is punitive.
Why the Termination Was Legally Unsustainable
Applying these principles, the Court found the sequence of events in Singh's case to be telling. He was suspended on 15 January 2005 for alleged misconduct. The suspension was revoked without prejudice to the bank's right to initiate disciplinary proceedings. No such proceedings were ever initiated. Instead, the bank extended his probation twice, transferred him, and issued three performance memos before terminating him.
The Court's examination of the bank's internal office note dated 5 November 2005 was significant. That note disclosed that the matter had been referred to the Central Vigilance Commission, which had advised initiating major penalty proceedings against Singh. The bank, however, concluded that since Singh was still on probation and his performance remained unsatisfactory, a formal departmental enquiry was unnecessary. It then sought the Commission's advice on terminating him under Regulation 16(3)(a) instead.
The Court held that this sequence demonstrated a calculated intent to retain Singh in order to gather adverse material and then effect a pretextual termination. The bank had initially sought to remove him for misconduct but, finding that process onerous, chose to terminate him under the performance regulation. The Court stated that what cannot be done directly cannot be done indirectly. By suspending Singh for misconduct — an action that necessitates a formal departmental enquiry — and then consciously foregoing that enquiry and terminating him on unsubstantiated grounds of poor performance, the bank rendered its termination order legally unsustainable.
Order
The Supreme Court found no ground to interfere with the orders of the Single Bench and the Division Bench of the Calcutta High Court. The appeal was disposed of with the direction that Singh shall be entitled to 50 per cent backwages from the date of his termination up to the date of his superannuation, along with all consequential benefits calculated notionally. The bank was directed to settle all benefits within three months.
Since Vijaya Bank stands amalgamated with Bank of Baroda, the Court directed that these obligations shall be discharged by the substituted appellant, Bank of Baroda. There was no order as to costs.