The Delhi High Court has said that bank employees have the larger responsibility of ensuring the banking system's integrity as well as maintaining the trust of customers and therefore their reinstatement ought not be permitted when there is a loss of confidence due to misconduct.
Justice Prathiba M Singh, while setting aside an industrial tribunal's order rejecting the termination of a bank employee who allegedly transferred funds to his personal accounts, stated that customers repose their faith in bank officials who enjoy a fiduciary relationship with them and even a suspicion of misconduct based on some evidence is sufficient to uphold their dismissal from service.
"Once there is a loss of confidence, that too by a bank qua one of its officials, the standard on which such loss of faith/confidence is to be tested cannot be a very high standard. Even a suspicion or doubt, with some credibility or some evidence, would be sufficient to objectively uphold the dismissal from service.
"The Court cannot lose sight of the reality that customers who visit banks do develop friendly relationships with officials, however, such officials then have a larger duty and responsibility to safeguard their customers, as well as the interests of the bank, rather than to misuse their trust and faith in the banking system," the court stated in its order dated December 17.
"The banking system is the backbone of any country's economy. Employees and officials working in banks clearly have a larger responsibility of ensuring the integrity of the banking system and maintaining the trust of the millions of customers, who repose faith in them," it added.
In the present case, the respondent employee - a single-window operator dealing with the Senior Citizens Saving Scheme - was terminated by the State Bank of India in 2010 for allegedly making entries of customers in his personal accounts.
The industrial tribunal had set aside the termination on the ground that the bank had failed to discharge its burden to prove misconduct by the respondent through its required evidence and the State Bank of India moved the high court to challenge the decision.
The court observed that the present case belonged to a time when the use of computers at banks and facilities of online banking was at a nascent stage and it was quite usual for customers and depositors to visit banks on a day-to-day basis for depositing and withdrawing amounts.
It noted that there were incidents to show that the respondent misused his status for his own personal benefit and a substantial sum of over Rs 5,00,000 was deposited in the respondent's account though it was returned later with interest.
"There can be no explanation as to how such amounts belonging to the customers of the bank could even be deposited, and that too while the said amounts were reflected in the passbooks of the said customers," the court stated.
"Such incidents in any branch of a bank would lead to a loss of trust and faith in the bank, especially in the case of local customers as they can spread such incidents through word of mouth. Thus, the loss is not to be adjudged only monetarily but also in terms of the goodwill / faith of the customers in the bank, and the consequent loss of trust for a bank. This by itself is sufficient. It is the clear conclusion of this Court that when there is loss of confidence, reinstatement ought not to be permitted," it added.
Upholding the termination, the court directed the bank to release a lump sum amount of Rs 20 lakh in favour of the respondent along with all statutory dues, such as provident fund and gratuity, without making any deductions, until the date of termination, in case the same has not already been released.
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