2026 INSC 589 1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4814 OF 2017

GENERAL MANAGER,

BANK OF BARODA AND OTHERS …..APPELLANTS

VERSUS

ASHOK KUMAR SINGH AND OTHERS …..RESPONDENTS

J U D G M E N T

J.K. Maheshwari J.

1. The present appeal is directed against the impugned final

judgment dated 16.10.2015 of the High Court of Calcutta passed

in APO No. 30 of 2013, dismissing the appeal preferred by the

Appellant – Bank of Baroda (hereinafter referred to as ‘Bank’)

against the order dated 18.10.2012 passed by Single Bench in W.P.

No. 2177 of 2005 preferred by Respondent No. 1 – employee. The

Single Bench had allowed the writ petition and quashed the order

2

of termination of the employee noting that it was vitiated on the

account of irrelevant considerations.

FACTS

2. Bereft of unnecessary details, the facts are that the

Respondent No. 1 was appointed to the post of Assistant General

Manager (AGM), Networking on probation for a period of one year

from the date of joining of Bank, which was extendable by a

maximum period of one year. The confirmation of the Respondent

No. 1 in the service was subject to satisfactory performance and

conduct.

3. The Respondent No. 1 joined the Bank on 05.01.2004 and

after expiry of one year of service, he was not confirmed. Vide office

order dated 15.01.2005, the Respondent No. 1 was placed under

suspension with immediate effect on the allegation of making an

attempt to take away four boxes of files containing highly

confidential tender documents relating to ‘Manageable Switch

Tender’ from his office cabin at DIT, HO, unauthorizedly through

his driver. He was further directed not to enter the premises of

Bank without the written permission of the concerned authority

except for the purpose of receiving monthly allowances. His

probation was extended for another six months on 16.02.20 05

3

w.e.f. 05.01.2005 on the premise that his work was not found

satisfactory during the initial year of probation.

4. On 03.03.2005, the Bank sought reply from Respondent No.

1, which was furnished on 09.03.2005. Later, upon review, by

order dated 12.04.2005, the Bank revoked the suspension of the

Respondent No. 1 without prejudice to its right to initiate

disciplinary enquiry. The Respondent No. 1 re-joined the duty on

13.04.2005, however he was transferred to Regional Office of the

Bank at Kolkata. On 04.07.2005, probation of Respondent No. 1

was further extended for a period of 6 months citing unsatisfactory

performance.

5. On 05.11.2005, services of Respondent No. 1 were terminated

by the Bank under Regulation 16(3)(a) of Vijaya Bank (Officers’)

Regulations, 1982 (for short “1982 Regulations”) read with Clause

3 of Offer of Appointment dated 17.12.2003 on the ground that his

services during the entire period of probation were not satisfactory.

6. Aggrieved, Respondent No. 1 filed writ petition bearing W.P.

No. 2177 of 2005 before the High Court of Calcutta challenging the

termination order dated 05.11.2005. The learned Single Judge

allowed the writ petition vide order dated 18.10.2012 and held that

the order of termination was based on irrelevant considerations

4

and non-consideration of relevant factors, assigning the reasons:

(1) the Respondent No. 1 was placed under suspension during

suspension followed by a show-cause notice. The said suspension

was revoked without prejudice of the bank to initiate disciplinary

proceedings. In absence of initiation of disciplinary proceedings,

the suspension and show -cause notice, has no bearing on

confirmation of service; (2) Commensurate to his assignment of

work of core banking solution, appreciation of such work was not

taken into consideration in the matter of confirmation; (3) On his

transfer to Kolkata and after assignment of the duties of

implementation of the core banking solution in the branches of

Kolkata regions and ensuring smooth conduct of training

programs, he was later posted to service branch office having no

scope to discharge functions for which he was appointed and

posted; (4) The communications dated 23.07.2005, 14.09.2005

and 31.10.2005 (not served) were taken into consideration to form

an opinion for his non-confirmation, though the letter dated

23.07.2005 has no nexus with the core-banking solution network

work and letter dated 14.09.2005 related to transfer of Itanagar to

Kolkata Branch. Therefore, the basis of the decision -making

5

process was arbitrary. Hence, the order of termination was

quashed.

7. Dissatisfied, the Bank assailed the order of the learned Single

Judge before the Division Bench. Vide impugned order, the

Division Bench dismissed the appeal granting liberty to the Bank

to proceed against the Respondent No. 1, in case they desire, in

accordance with the provisions with law. Hence, the present

appeal.

8. This Court in the proceedings vide order dated 16.12.2015

issued notice and granted stay on operation of the impugned order

passed by the Division Bench of the High Court.

9. On 08.05.2026, I.A. No. 145733 of 2026

1 was filed seeking

the substitution of Bank of Baroda as the Appellant, in view of the

amalgamation of the original Appellant (Vijaya Bank) with Bank of

Baroda vide Gazette Notification dated 02.01.2019

2. The I.A. was

allowed and Bank of Baroda was substituted as the Appellant.

ARGUMENTS ADVANCED

1

Application seeking substitution on behalf of Vijaya Bank.

2

Issued by Ministry of Finance, Department of Financial Services, Government of India.

6

10. Mr. Vikramjit Banerjee, learned Additional Solicitor General,

appearing on behalf the Appellant -Bank submits that the

employer, at any time, is entitled to terminate the services of the

employee simpliciter during probation, without assigning any

reason. The purpose of keeping an employee on probation is to

ascertain his suitability or otherwise his conduct and performance.

He further submits that, the misconduct, if any, committed by the

employee during his probation, can be the ‘motive’ for termination

but cannot be the ‘foundation’ of the termination. He further

submitted that Clause 2 and Clause 3 of the appointment letter in

clear terms stipulates that confirmation in service would be

considered subject to satisfactory performance and conduct

during probation. Further, it states that the Respondent No. 1 can

be terminated giving one months’ notice or payment in lieu thereof.

It vested the discretion with the Bank to either confirm the

probationer or extended his probation twice prior to the

termination. The Respondent No. 1 was given maximum

opportunities to improve his work and as such, the High Court

erred in setting aside the termination order on the ground of being

vitiated and based on irrelevant considerations and non-

consideration of relevant factors.

7

11. Insofar as communication of the memo dated 31.10.2005 is

concerned, it is urged that, the person serving on the probation

does not have any right to hold the post on which he was appointed

and hence, cannot claim a right to be heard before termination.

The mandate to communicate the adverse material is only qua

permanent employees and hence, the procedure adopted does not

suffer from any irregularity per se.

12. As to whether the termination order is punitive , it is

contended that there was never a full-scale enquiry into the

allegations of misconduct culminating into findings of guilt. As

such, the termination of Respondent No. 1 is punitive. Moreover,

the learned Single Judge has held that the suspension or the

show-cause notice has no bearing on the issue of confirmation of

the service of the Respondent No. 1, and the same has attained

finality.

13. The allegations of malice against superior officers being

Respondent Nos. 2 and 3 herein, were turned down by the learned

Single Judge and were not challenged by the Respondent No. 1.

Therefore, they cannot now be re-agitated. Even otherwise, those

allegations have been denied on record by way of counter-affidavit

by Respondent Nos. 2 and 3. It is further urged that it was never

8

the case of the Respondent No. 1 against the Bank of malice in

invoking Regulation 16(3)(a) of 1982 Regulations. The allegations

were against the senior officers on the basis of personal bias and

conspiracy, which has not been found to be proved by the learned

Single Judge. Those findings have attained finality in absence of

any challenge by the Respondent No. 1.

14. Additionally, the allegations do not stand a ground when

looked in terms of the affidavit dated 28.11.2025 filed by the Bank

in compliance of the order passed by this Court on 07.08.2025.

The affidavit clearly states that the Respondent No. 1 was a party

to the various official notes placed before the Competent Authority

for selection of Wipro as Vendor based on tender floated by Bank.

He had also signed notes placed before the Competent Authority

for raising payments to Wipro against supply of goods without any

protest and demur. At Kolkata, he had waived the condition of pre-

inspection of delivery of material at the Branch Office. The

allegations raised in the writ petition against the officers of the

Bank were mere an after-thought.

15. In relation to the disciplinary proceedings, Mr. Banerjee,

learned ASG submits that the Respondent No. 1 vide letter dated

24.11.2005 was informed that the proceedings have been kept in

9

abeyance in view of the termination order. Lastly, it is submitted

that there was sufficient material on record including confidential

reports, contemporaneous records and communication regarding

deficiencies in discharge of duties on the basis of which competent

authority formed an opinion that Respondent No. 1 was unfit for

confirmation in service. Hence, Regulation 16(3)(a) of 1982

Regulations was rightly invoked and the present appeal deserves

to be allowed. To buttress the submissions, Mr. Banerjee, learned

ASG has placed reliance on Parshotam Lal Dhingra vs. Union of

India

3, Dipti Prakash Banerjee vs. Satyendra Nath Bose

National Centre for Basis Sciences, Calcutta and Others

4,

Pavanendra Narayan Verma vs. Sanjay Gandhi PGI of Medical

Sciences & Anr.

5, Mathew P. Thomas vs. Kerala State Civil

Supply Corporation Ltd. & Ors.

6, State of Punjab & Ors. vs.

Jaswant Singh

7.

16. Per contra, learned senior counsel Mr. P.S. Patwalia

appearing on behalf of Respondent No. 1 submits that there is

absolutely no material on the basis of which Respondent No. 1

3

AIR 1958 SC 36

4

(1999) 3 SCC 60

5

(2002) 1 SCC 520

6

(2003) 2 SCC 263

7

(2023) 9 SCC 150

10

could have been terminated by Bank during his probation. The

Bank has primarily relied on three memos dated 23.07.2005,

14.09.2005 and 31.10.2005 for demonstrating the shortcomings

in the performance of Respondent No. 1 during the probation

period. He submits that memo dated 23.07.2005 relates to a report

prepared during routine branch inspection which was neither

specifically aimed at Respondent No. 1 nor did it point out any

shortcoming in his conduct. The said memo criticized the working

of Online Tax Accounting System (for short “OLTAS”) which was

wholly unjustified, as a week prior to the inspection, the

performance of the Bank in implementation of the said system

under the supervision of Respondent No. 1 was appreciated as

“praiseworthy” by the Government of India.

17. Regarding memo dated 14.09.2005, it is urged that the said

memo pertains to delay in transfer of amount of Rs. 66 Crores from

Itanagar Branch to Kolkata Branch through State Bank of India,

which was delayed by a day due to technical fault on part of State

Bank of India and was transferred on 13.09.2005 by way of

cheque. The Respondent No. 1 vide letter 16.09.2005 clarified that

the RBI cheque corresponding to the aforesaid payment was sent

on 12.09.2005 itself, but still the money was transferred on

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13.09.2005. The Respondent No. 1 had thereafter written to SBI

seeking interest of 1 day delay, which reflects due diligence on his

part.

18. With respect to memo dated 31.10.2005, it is at the very

outset submitted that this memo was never communicated or

served upon Respondent No. 1. It is further submitted by the

learned senior counsel that the internal/confidential noting

forming part of the assessment of services of Respondent No. 1

leading to his termination are counter-blast to the incident dated

15.01.2005. Drawing attention to office note dated 03.01.2005, it

is contended that this document never saw the doors of the High

Court and has been placed for the first time before this Court. This

document is dated 03.01.2005 and is indicative of the fact that the

Respondent No. 1 was suspected to be taking photocopies of

sensitive documents and carrying them home. However, the actual

incident as contested, occurred only on 13.01.2005 whereafter the

Respondent No. 1 was placed immediately under suspension on

15.01.2005. Viewed in this sequence, it creates a serious doubt as

to the veracity and authenticity of the document dated 03.01.2005

which appears to have been created as an after-thought to record

the incident of 13.01.2005. In view of the same, it is urged that the

12

no interference is warranted in the concurrent findings of the High

Court.

ANALYSIS

19. Heard the learned counsels for the parties at length and

perused the material on record. The discord between parties is over

the termination of services of Respondent No. 1 during his

probation period citing unsatisfactory performance, in exercise of

power under Regulation 16(3)(a) of 1982 Regulations. Before we

advert to the rival contentions of the parties, it is imperative to deal

with the Regulation 16(3)(a) of 1982 Regulations, which is

reproduced below as thus:

“16. Confirmation –

(1) An officer shall be confirmed in the service of the

Bank, if in the opinion of the Competent Authority, the officer

has satisfactorily completed the training in any institution

to which the officer may have been deputed for training and

the in-service training in the Bank;

Provided that an officer directly recruited to the Junior

Management Grade may be required also to pass a test in

a language other than his mother tongue.

(2) If in the opinion of the Competent Authority an

officer has not satisfactorily completed either or both the

trainings referred to in sub-regulation (1) or of the officer has

not passed the test referred to therein, the Officer’s

probation may be extended by a further period not

exceeding one year.

(3) Where during the period of probation including the

period of extension, if any, the Competent Authority is of the

opinion that the officer is not fit for confirmation –

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(a) In the case of a direct appointee, his services may

be terminated by one month’s notice or payment of one

month’s emoluments in lieu thereof; and

(b) In the case of a promotee from the Bank’s services,

he may be reverted to the grade or cadre from which he was

promoted.”

On a bare perusal of the Clause 16(3)(a), it is clear that the

Competent Authority retains the discretion to assess a direct

appointee’s suitability for confirmation at any time during the

initial or extended probation period. If the Authority is of the

opinion that the officer is not fit for confirmation, it may dispense

the services of the probationer either by serving one-month notice,

or by tendering one month’s salary in lieu of such notice. However,

the question that arises is, whether such discretion is absolute and

unqualified? The clear and unambiguous answer is no.

20. In the realm of service law, particularly if the employer is the

State, regardless of how sweeping or absolute the contractual

language appears, such discretion is not unchecked or

unscreened. The discretion should be based on some material, and

the Authority cannot form an opinion based on whims and fancies.

The subjective satisfaction of the Authority must be rooted in

objective facts, such as performance appraisals, caveat, or specific

14

assessments of the probationer’s work. It shall not suffer from the

vice of arbitrariness.

21. A distinction is required to be drawn between a routine non-

stigmatic termination for unsuitability and a disguised punitive

termination. If the employer’s decision is founded on allegations of

misconduct or severe deficiency, the termination is stigmatic. It

cannot stand in absence of compliance of due process, and the

probationer should be afforded an opportunity of hearing or to

defend his case. Furthermore, such discretion should not contain

a whisper of arbitrary exercise of power or mala-fide. If a

discharged probationer can demonstrate that the termination was

driven by personal bias, vindictiveness, or an ulterior motive of a

superior rather than a genuine assessment of their work, such

termination, even during probation, is liable to be set-aside. In

other words, while the Regulation appears to vest the Competent

Authority with the discretion to terminate a probationer based on

its satisfaction, it remains strictly bound by the established

principles of administrative law.

22. We say so because, withholding constructive or adverse

feedback deprives the concerned officer of a meaningful

opportunity for improvement. The very object of placing an

15

employee on probation is to ensure that before he attains the

status of a confirmed regular employee, his performance, conduct,

and suitability are tested adequately. Probation is not a mere

formality but a structured period during which the authorities are

enabled to assess whether the officer satisfactorily discharges the

duties and responsibilities attached to the post. In other words,

the scheme of probation is designed to judge the ability, efficiency,

and overall fitness of the probationer, so that the employer may

pass appropriate orders either confirming the appointment or

otherwise, based on a fair appraisal of the probationer’s service.

The probationary period is designed to be a time of learning and

alignment. When critical feedback is withheld during such time, it

not only sets the probationer for a potential failure, but also

undermines the fairness of the evaluation process. More so, the

reasons behind the termination of a probationer can prejudice his

future employment prospects in case his termination is stigmatic.

Adverse remarks akin to ‘lack of integrity’, ‘misconduct’ etc.,

should necessarily be communicated to him. A probationer’s entire

service record assumes relevancy for deciding his suitability.

23. Termination does not merely sever the immediate

employment relationship; it often casts a long shadow over the

16

employee’s career prospects, reputation, and future livelihood. Any

decision of termination may impair the individual’s ability to

secure subsequent opportunities and thereby affect the trajectory

of their professional life. Therefore, when the action of the employer

carries such long‑term effects, it becomes even more imperative to

not only act with fairness and transparency but also to afford the

person whose life will be impacted a meaningful opportunity.

24. In this context, reference is drawn to the judgment of this

Court in Sarita Choudhary v. High Court of M.P.

8, wherein this

Court in a challenge to the termination of female judicial officers

serving their probation in the Madhya Pradesh State Judicial

Service based on adverse Annual Confidential Reports (ACRs) and

alleged unsatisfactory performance, observed as thus:

“51. …Thus, the test is, whether, in a given case the

termination is simpliciter or by way of punishment. When

termination is by way of punishment, the concept of stigma

would arise. If a punishment casts a stigma on the

competence of an employee, it can affect his future career.

However, the dilemma is, even when the probationer, who

has no right to hold the post in the first instance, could argue

that a cessation of service owing to non -suitability,

inefficiency or any other similar reason was stigmatic.

52. As noted, if a termination from service is not visited with

any stigma and neither are there any civil consequences

and nor is founded on misconduct, then, it would be a case

of termination simpliciter. On the other hand, an

8

(2025) 9 SCC 297

17

assessment of remarks pertaining to the discharge of

duties during the probationary period even without a

finding of misconduct and termination on the basis of

such remarks or assessment will be by way of

punishment because such remarks or assessment

would be stigmatic. According to the dictionary meaning,

stigma is indicative of a blemish, disgrace indicating a

deviation from a norm. Stigma might be inferred from the

references quoted in the termination order although the

order itself might not contain anything offensive. Where

there is a discharge from service after prescribed probation

period was completed and the discharge order contained

allegations against a probationer and surrounding

circumstances also showed that discharge was not based

solely on the assessment of the employee's work and

conduct during probation, the termination was held to be

stigmatic and punitive vide Jaswantsingh Pratapsingh

Jadeja v. Rajkot Municipal Corpn. [Jaswantsingh

Pratapsingh Jadeja v. Rajkot Municipal Corpn., (2007) 10

SCC 71]

53. Even though a probationer has no right to hold a

post, it would not imply that the mandate of Articles

14 and 16 of the Constitution could be violated

inasmuch as there cannot be any arbitrary or

discriminatory discharge or an absence of

application of mind in the matter of assessment of

performance and consideration of relevant materials.

Thus, in deciding whether, in a given case, a

termination was by way of punishment or not, the

courts have to look into the substance of the matter

and not the form.

54. …..However, all that is stated above would ultimately

boil down to the question, whether, the termination

would prejudicially affect the future employment of

the employee. It is this delicate line which has to be

discerned in every case where a challenge to a termination

is made by a probationer. In other words, if the termination

is simply owing to unsuitability having regard to the nature

of the job and such other factors, it is not stigmatic. Before

any probationer is considered for confirmation, the

satisfactory nature of the work and suitability of the

probationer have to be considered for which some inquiry

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would have to be made and if it is found that he is

unsuitable for the job then, he could be discharged and the

same would be non-stigmatic and this would also not call

for opportunity for hearing being given to a probationer.”

25. Reverting to the facts of the present case, the case put forth

by the Bank is that the Respondent No. 1 was not holding a

permanent post but was on probation and his services were

terminated under Regulation 16(3)(a) of 1982 Regulations

assessing his performance being unsatisfactory. He is not entitled

to any protection under Article 311

9 of the Constitution of India.

His termination was non stigmatic and once the learned Single

Judge has held that order of suspension or show-cause notice has

no bearing on the issue of confirmation of Respondent No. 1, and

the finding having attained finality, the present appeal deserves to

be allowed. There were deficiencies in the work of Respondent No.

1, for which his probation was extended twice. Nonetheless, his

performance did not improve and based on the subjective

satisfaction, his services were terminated. Moreover, the

Respondent No. 1 has failed to establish the malice against his

superior officers.

9

Dismissal, removal or reduction in rank of persons employed in civil capacities under the

Union or a State.

19

26. Refuting the case of the Bank, it is contended by the

Respondent No. 1 that except three memos dated 23.07.2005,

14.09.2005 and 31.10.2005, the Bank has placed nothing on

record to demonstrate any deficiency on his part during his

probation. In addition to the arguments noted above, it is stated

that, the Bank’s administration victimized him by extending his

probation with intent to fabricate evidence against him and to

terminate his services.

27. Upon consideration of rival contentions and perusal of

records, it is seen that the Respondent No. 1 joined the services of

the Bank on 05.01.2004 on probation, whereafter, he was put

under suspension vide notice dated 15.01.2005 on the allegations

of taking away four boxes of highly confidential tender documents.

Be that as it may, his probation was extended for another six

months on 16.02.2005 citing that ‘your performance as

Probationary Assistant General Manager (Networking) during the

period of your probation upto 04.01.2005 has not been found

satisfactory’. He was asked to submit a reply on the issue and in

the meanwhile, his suspension was revoked by the Bank on

12.04.2005 noting that ‘your suspension is revoked without

prejudice to the Bank’s right to initiate disciplinary proceedings

20

against you as deemed fit, for the acts of misconduct allegedly

committed by you.’

28. Notably, although the Bank took cognizance of the alleged

misconduct by Respondent No. 1, it revoked the suspension

without prejudice to its right to initiate a disciplinary enquiry.

Though no such enquiry was ever initiated, however it appears to

be the foundational reason against Respondent No. 1.

29. The Respondent No. 1 re-joined on 13.04.2005 and was

transferred to Regional Office, Kolkata, where his probation was

again extended for another six months on 04.07.2005 with a

noting that ‘your performance as Prob Asst General Manager

(Networking) during the period of probation upto 04.07.2005 has not

been found satisfactory, your period of probation stands extended

for a further period of six months…’.

30. Mr. Banerjee, learned ASG drew our attention to the

confidential reports and three memos dated 23.07.2005,

14.09.2005 and 31.10.2005, to substantiate that the performance

of Respondent No. 1 was unsatisfactory. The argument of the

learned ASG seems to be attractive at the first blush, but not

effective to conclusion.

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31. We shall first look into the memo dated 23.07.2005. The said

memo relates to a branch visit report by Regional Manager

highlighting certain irregularities pertaining to punctuality of

employees, implementation of OLTAS system, sensitive accounts

and maintenance of premises and records. Insofar as satisfactory

work of Respondent No. 1 is concerned, the criticism in the report

regarding implementation of OLTAS assumes relevance. The

relevant part of the report is reproduced below for ready reference:

“…..

OLTAS

As per the branch record, the OLTAS account has been

reconciled upto 30.06.2005 except 21 challans of Brabourne

Road and Burrabazar branches, which are still pending for

the period from 01.06.2004 to 31.03.2005 inspite of various

instructions and guidelines issues by Head Office, these

long outstanding entries are not reconciled by the branch

and it seems that the branch has failed to collect the

required data from the nearby branches (Brabourne Road is

situated in the same floor of your branch)

During the current financial year, as regards the OLTAS

data for the period from April 2005 to June 2005, the CBDT

has furnished the list of missing date as follows:

April 2005 – 93 entries for 32.03 lakhs

May 2005 – 235 entries for 32.62 lakhs

June 2005 – full list not received

It is also observed that many of the newly opened branches

in Kolkata city have not yet started collection of Direct Tax

and some of the branches have not even reads the software

in their system”

32. It is to be noted that the report majorly highlights the

irregularities in reconciliation of outstanding entries for the period

22

between 01.06.2004 to 31.03.2005, i.e., prior to the transfer of

Respondent No. 1 to Kolkata. However, this report stands in

contradistinction to the letter dated 15.07.2005 from the Central

Board of Direct Taxes, Ministry of Finance, Government of India,

which commended the Bank for efficiently and accurately

implementing the OLTAS system within a short timeframe. It

further advised the other banks in the zone to contact the

Assistant General Manager (Respondent No. 1 herein) of the

Appellant-Bank, Service Branch in case they face any difficulty in

implementation. The said letter is relevant and hence reproduced

below for ready reference:

“TO WHOM IT MAY CONCERN

Performance of all the Banks was evaluated at the special

meeting regarding procedural irregularities in

implementation of OLTAS held at Kolkata on 14.07.2005

and performance of the Vijaya Bank is praiseworthy .

Vijaya Bank adopted the OLTAS work very correctly

and efficiently within a very short period of time. All

the bank of this zone are advised to contact the Assistant

General Manager, Vijaya Bank Service Branch, Kolkata for

any difficulty that arises during implementation of OLTAS.”

It is manifestly clear that the letter of appreciation dated

15.07.2005 and memo dated 23.07.2005 are at complete variance

and the inconsistency between both is writ large. It is highly

contradictory that while the Kolkata Branch received appraisal

23

from Government for effective implementation of OLTAS, yet the

Bank pulled up the same branch for infirmities citing internal

reconciliation issues. What is more difficult to comprehend is that

while the Bank was not satisfied with the performance of the

Kolkata Branch, the Government had categorically advised other

banks to approach Respondent No. 1 in case they face any

difficulty in implementation of OLTAS. Therefore, in our considered

opinion, it seems that the memo dated 23.07.2005 was issued on

ground of extraneous considerations which cannot be read

adversely against Respondent No. 1.

33. Subsequently, the second memo dated 14.09.2005, noted the

delayed credit of a Telegraphic Transfer (TT) for Rs. 66 crores

attributing fault on part of Respondent No. 1. Initiated by the

Itanagar Branch on 10.09.2005 via SBI, the funds were not

credited to the Bank’s Kolkata Branch account on 12.09.2005. The

memo alleged specific procedural lapses, primarily, the failure to

utilize Real-Time Gross Settlement (RTGS) despite its availability.

Furthermore, it questioned why an RBI cheque was not requested

as an alternative, noting that these oversights caused a delay

resulting in a financial loss to the Bank.

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34. A holistic perusal of the records in juxtaposition to the memo

dated 14.09.2005 shows that no liability can be attributed to

Respondent No. 1 for the delayed credit of the funds in question.

The issue of delayed credit was escalated by Respondent No. 1 vide

letter dated 16.09.2005 to the SBI. Following this inquiry, SBI by

letter 05.10.2005 admitted technical problem on their part due to

which, the remittance got delayed as it could not be made through

RTGS mode. In the said context, contents of letter dated

05.10.2005 assume significance and hence the relevant contents

are reproduced below as thus:

“….

(b)……..The issues were discussed with you in detail when

you called on us on 14.09.2005. You are aware that as per

your request we had approached the RBI Local Office, to

give effect of the value of credit as 12.09.2005. In this

connection, please refer to the endorsement on our letter No.

342 dated 14.09.2005 addressed to RBI (Copy enclosed for

your ready reference)

(c) There was some technical problem due to which the

above remittance could not be sent through RTGS .

However, the remittance was passed on to your Bank

through Bankers cheque on the same date.

…. …. ….”

In addition, pertinently, Respondent No. 1 wrote a letter to the SBI

seeking interest for the one-day delay caused in realizing the

payment. Given the said circumstances, where the remittance was

delayed due to a technical error, which was not on part of

25

Respondent No. 1, coupled with the fact that Respondent No. 1

had followed up with SBI and sought interest for the loss caused,

for which, in our view, adverse inference as to his performance

cannot be drawn.

35. Insofar as third memo dated 31.10.2005 is concerned, it

deals with the multiple allegations against Respondent No. 1:

enquiring about identification of Field Engineer as to whether he

belongs to Wipro; making him wait for one hour and then giving

him access to the system for merely three minutes; tearing off

‘Field Engineer’s Service Report’ upon submission; threatening

field engineer with his job; displaying lack of courtesy and good

behaviour; found to be using BSNL/VSNL dial -up subscriber

without specific approval of competent authority; accessing

internet connectivity from computer system by connecting through

external modem when the system is connected to the Corporate

WAN through Closed User Group Network exposing it to virus;

failure to observe adequate security measures despite being a

technical member, etc. The Respondent No. 1 was called upon to

submit an explanation within three days as to why necessary

action should not be taken against him in view of the misdemeanor

as stated above.

26

36. Now, admittedly, the Bank has failed to demonstrate that

aforesaid memo was ever communicated to Respondent No. 1,

effectively depriving him of an opportunity to put his defense.

Therefore, any reliance placed on this uncommunicated memo

would amount to violation of the principles of natural justice. It is

a well-settled that uncommunicated adverse remarks or charges

should not be read to the prejudice of an employee. Consequently,

the memo dated 31.10.2005 also contains no value in the eyes of

law.

37. At this juncture, we can profitably refer to the judgment of

this Court in Dipti Prakash Banerjee (supra), wherein this Court

dealt with the following points:

“18. On the basis of the above contentions, the following

points arise for consideration:

(1) In what circumstances, the termination of a

probationer's services can be said to be founded on

misconduct and in what circumstances could it be said that

the allegations were only the motive?

(2) When can an order of termination of a probationer

be said to contain an express stigma?

(3) Can the stigma be gathered by referring back to

proceedings referred to in the order of termination?

… … …

Point 1

21. If findings were arrived at in an enquiry as to

misconduct, behind the back of the officer or without a

regular departmental enquiry, the simple order of

termination is to be treated as “founded” on the allegations

and will be bad. But if the enquiry was not held, no findings

27

were arrived at and the employer was not inclined to

conduct an enquiry but, at the same time, he did not want

to continue the employee against whom there were

complaints, it would only be a case of motive and the order

would not be bad. Similar is the position if the employer did

not want to enquire into the truth of the allegations because

of delay in regular departmental proceedings or he was

doubtful about securing adequate evidence. In such a

circumstance, the allegations would be a motive and not the

foundation and the simple order of termination would be

valid.

Point 2

26. There is, however, considerable difficulty in finding

out whether in a given case where the order of termination

is not a simple order of termination, the words used in the

order can be said to contain a “stigma”. The other issue in

the case before us is whether even if the words used in the

order of termination are innocuous, the court can go into the

words used or language employed in other orders or

proceedings referred to by the employer in the order of

termination.

27. As to what amounts to stigma has been considered

in Kamal Kishore Lakshman v. Pan American World

Airways Inc. [(1987) 1 SCC 146] This Court explained the

meaning of “stigma” as follows: (SCC p. 150, para 8)

“8. According to Webster's New World Dictionary,

it (stigma) is something that detracts from the

character or reputation of a person, a mark, sign

etc. indicating that something is not considered

normal or standard. The Legal Thesaurus by

Burton gives the meaning of the word to be

blemish, defect, disgrace, disrepute, imputation,

mark of disgrace or shame. The Webster's Third

New International Dictionary gives the meaning

as a mark or label indicating a deviation from a

norm. According to yet another dictionary ‘stigma’

is a matter for moral reproach.”

Point 3

35. The above decision is, in our view, a clear authority

for the proposition that the material which amounts to

stigma need not be contained in the order of termination of

the probationer but might be contained in any document

28

referred to in the termination order or in its annexures.

Obviously, such a document could be asked for or called for

by any future employer of the probationer. In such a case,

the order of termination would stand vitiated on the ground

that no regular enquiry was conducted. We shall presently

consider whether, on the facts of the case before us, the

documents referred to in the impugned order contain any

stigma.”

38. In the present case, Respondent No. 1 was initially

suspended on allegations of the unauthorized removal of four

boxes of highly confidential tender papers from the DIT Head

Office, with the assistance of his driver. The Bank termed this act

as ‘misconduct’ and intended to initiate a disciplinary enquiry.

Although the suspension was subsequently revoked , the Bank

reserved its right to initiate disciplinary enquiry and permitted

Respondent No. 1 to rejoin the Bank. Pertinently, the disciplinary

proceedings were never initiated.

39. On a query put as to why the proceedings were abandoned,

the Bank drew our attention to an office note dated 05.11.2005,

wherein it has been indicated that the matter had been referred to

the Central Vigilance Commission, which had advised initiating

major penalty proceedings against Respondent No. 1. However,

since Respondent No. 1 was still on probation, and his overall

performance and conduct remained unsatisfactory despite two

extensions, the Bank ultimately concluded that holding a formal

29

departmental enquiry was unnecessary. Therefore, the matter was

remitted to Commission seeking advice on termination of

Respondent No. 1 under Regulation 16(3)(a) of 1982 Regulations.

The relevant portion of the office note dated 05.11.2005 is

reproduced below as thus:

“……

(6) As regards the alleged irregularities observed on

the part of Shri A.K. Singh in attempting to take away the

confidential files from his office, the matter was referred to

the Chief Vigilance Officer, Vigilance Department, H.O.

seeking first stage advice. After referring the case to Central

Vigilance Commission, New Delhi, the CVO, Vigilance

Department, H.O. vide letter No.VD:BGL:1879:2005 dated

8.9.2005 had advised to initiate/disciplinary proceedings

against Shri A.K. Singh under Major Penalty Proceedings.

(7) Shri A.K. Singh is still under probation and is yet

to be confirmed in the services of the Bank. Since his

performance and conduct was not satisfactory, his

probationary period has been extended twice. We

understand that during his previous employment at Indian

Petrochemicals Corporation Ltd., Vadodara, he was placed

under suspension from the services during the period

between 18.12.1996 and 30.04.1999 and subsequently the

said period was treated as on duty and this fact was

suppressed by him from the knowledge of the Bank at the

time of reporting for duty even though the service certificate

issued by the employer did not contain the said information.

Having regard to the above, it was felt that it may not be

necessary to hold the departmental enquiry to comply with

Central Vigilance Commission’s advice, because the official

is not a confirmed employee of the Dank (sic) as he is still

under probation. Hence, the matter was once again referred

to the CVD, Vigilance Department, H.O. seeking advice with

regard to invoking Regulation 16(3) of Chapter IV of Vijaya

Bank (Officers) Service Regulations 1982 to terminate his

services on the ground of unsatisfactory performance of

duties.

30

Present Note:

Based on the observations/recommendation made by the

Department, the CVO, Vigilance Department, H.O. had

referred the matter to the Central Vigilance Commission,

New Delhi. The CVO, Vigilance Department, H.O. vide letter

dated 31.10.2005 has now informed t hat the CVC has

conveyed vide Office Memorandum No.

0529/BNK/dt.31.10.05 that invoking Regulation 16(3) of

Vijaya Bank (Officers’) Service Regulations 1982 on Sri A.K.

Singh, AGM is an administrative action contemplated by the

Bank. While noting position, the Commission advised that if

the services of the officer is terminated by invoking the

conduct rules, initiating major penalty proceeding against

him may be kept in abeyance.

In view of the above, we propose that Shri A.K. Singh

[20416], Probationary Asst General Manager [Networking]

may be terminated from the services of the Bank with

immediate effect by invoking Regulation 16(3) of Vijaya

Bank (Officers’) Service Regulations 1982 since he has not

made any improvement in his entrusted duties.”

A plain reading of paragraph 6 makes it clear that the Bank, acting

on the advice of the Central Vigilance Commission, initially

intended to initiate disciplinary proceedings against Respondent

No. 1 for the alleged unauthorized removal of four boxes of

confidential files. However, noting that Respondent No. 1 was still

on probation, the Bank changed its course and sought advice from

the Commission for resorting to Regulation 16(3)(a) of 1982

Regulations to terminate the services on the ground of

unsatisfactory performance.

31

40. Nevertheless, following the advice, the Respondent No. 1 was

terminated from the service on the very same date, i.e. 05.11.2005

under Regulation 16(3)(a) of 1982 Regulations. The termination

order is relevant and hence reproduced below as thus:

“You were appointed as Probationary Asst. General

Manager (Networking) in accordance with the terms and

conditions contained in the offer of appointment dated

17.12.2003. Accepting the terms and conditions contained

in the said offer of appointment, you have reported for work

on 05.01.2004 whereupon you were assigned to work as

AGM (Net Working), Department of Information Technology,

H.O. Bangalore. Accordingly, you were initially placed on

probation for a period one year from 05.01.2004. Since your

performance during the period of probation was not found

satisfactory, the said period of probation was extended for

a further period of six months effective from 05.01.2005 In

terms of Clause 3 read with Clause 2 and 8 (c) of the Offer

of Appointment dated 17.12 .2003. Once again your

performance was reviewed as at the end of extended period

of probation and as it was not found satisfactory the period

of probation was further extended for a period of six months

effective from 05.07.2005 vide order dated 04.07.2005.

I have carefully reviewed your performance during the

entire period of probation/and is of the opinion that it is not

satisfactory. Hence, in terms of Regulation 16(3)(a) of the

Vijaya Bank (Officers’) Regulations, 1982, read with Clause

3 of the Offer of Appointment dated 17.12.2003, your

services are hereby terminated with immediate effect. In

lieu of the period of notice contemplated under Regulation

16(3)(a), please find enclosed a cheque No. 884001 dated

05.11.2005 for Rs. 30,925.47 (Rupees Thirty Thousand

Nine Hundred Twenty Five and Paise Forty Seven Only) (sic)

representing one month’s emoluments.

Sd/-[M.S. KAPUR]

CHAIRMAN & MANAGING DIRECTOR ”

32

41. On perusal of the records, it is clear that the termination

order was primarily predicated upon the ‘misconduct’ alleged

against the Respondent No. 1. It cannot be said that Respondent

No. 1 was terminated from services because his work was found to

be simply unsuitable. Upon consideration of the material placed

on record, it is evident that the alleged misconduct was for all

intent and purposes, the motive as well as foundation for the

termination, even though the formal order ostensibly cites

unsatisfactory performance.

42. This Court, relying on Dipti Prakash Banerjee (supra), in

Mathew P. Thomas v. Kerala State Civil Supply Corpn. Ltd. &

Others

10, further observed as thus:

“11. An order of termination simpliciter passed during

the period of probation has been generating undying

debate. The recent two decisions of this Court in Dipti

Prakash Banerjee v. Satyendra Nath Bose National Centre

for Basic Sciences, Calcutta [(1999) 3 SCC 60]

and Pavanendra Narayan Verma v. Sanjay Gandhi PGI of

Medical Sciences [(2002) 1 SCC 520] after survey of most of

the earlier decisions touching the question observed as to

when an order of termination can be treated as simpliciter

and when it can be treated as punitive and when a stigma

is said to be attached to an employee discharged during the

period of probation.

…..

From a long line of decisions it appears to us that whether

an order of termination is simpliciter or punitive has

10

(2003) 3 SCC 263

33

ultimately to be decided having due regard to the

facts and circumstances of each case . Many a times

the distinction between the foundation and motive in

relation to an order of termination either is thin or

overlapping. It may be difficult either to categorize or

classify strictly orders of termination simpliciter falling in

one or the other category, based on misconduct as

foundation for passing the order of termination simpliciter

or on motive on the ground of unsuitability to continue in

service. If the form and language of the so-called order of

termination simpliciter of a probationer clearly indicate that

it is punitive in nature or/and it is stigmatic there may not

be any need to go into the details of the background and

surrounding circumstances in testing whether the order of

termination is simpliciter or punitive. In cases where the

services of a probationer are terminated by an order

of termination simpliciter and the language and form

of it do not show that either it is punitive or stigmatic

on the face of it but in some cases there may be a

background and attending circumstances to show

that misconduct was the real basis and design to

terminate the services of a probationer. In other

words, the facade of the termination order may be

simpliciter, but the real face behind it is to get rid of

the services of a probationer on the basis of

misconduct. In such cases it becomes necessary to

travel beyond the order of termination simpliciter to

find out what in reality is the background and what

weighed with the employer to terminate the services

of a probationer. In that process it also becomes

necessary to find out whether efforts were made to

find out the suitability of the person to continue in

service or he is in reality removed from service on the

foundation of his misconduct.”

43. In the sequel of events, the Respondent No. 1 in the present

case was put under suspension on 15.01.2005 on the allegation of

removing confidential documents on 13.01.2005 from the Bank

premises. The Bank revoked his suspension ‘without prejudice’

34

and rather than initiating a formal inquiry, extended his probation

twice, transferred him, and issued three performance memos

before terminating him. This sequence clearly demonstrates a

calculated intent on part of the Bank to retain Respondent No. 1

to gather adverse material and orchestrate a pretextual

termination.

44. In light of the factual conspectus, it is unequivocally clear

that the Bank discharged the services of Respondent No. 1 under

the guise of a termination simpliciter. However, as borne from

records, the Bank had initially sought advice to remove the

Respondent No. 1 on the grounds of misconduct, but having found

that process onerous, it chose instead to terminate him under

Regulation 16(3)(a) of the 1982 Regulations. The Bank has

primarily made an attempt to justify the termination relying upon

on three memos dated 23.07.2005, 14.09.2005, and 31.10.2005.

45. As discussed in the analysis above, these memos lack the

requisite evidentiary value to establish that Respondent No. 1’s

performance was genuinely unsatisfactory. Furthermore, the

Bank’s office note dated 05.11.2005 reveals that the alleged

misconduct was the primary issue of variance and basis of removal

at the first instance. While an employer undoubtedly retains the

35

right to terminate services for genuine inefficiency, the law does

not permit the use of ‘unsatisfactory performance’ as a disguise to

bypass formal disciplinary proceeding. It is a settled proposition of

law that what cannot be directly cannot be done indirectly. In the

present case, the Bank suspended Respondent No. 1 for

misconduct, an action that necessitates a formal departmental

enquiry. By consciously choosing to forego this enquiry and

instead terminating Respondent No. 1 on unsubstantiated

grounds of poor performance, the Bank rendered its termination

order legally unsustainable for reasons recorded above.

46. In view of the above, we find no ground to interfere with the

orders passed by the Single Bench and the Division Bench of the

High Court. However, holding that the termination order is bad in

law and having regard to the peculiar facts and circumstances of

the case, we direct that Respondent No. 1 shall be entitled to 50%

backwages from the date of his termination up to the date of his

superannuation including all consequential benefits notionally.

Accordingly, all benefits as directed, be settled within a period of

three months.

47. We make it clear that since the Vijaya Bank stands

amalgamated with the Bank of Baroda as indicated in paragraph

36

9, these directions shall be complied by the substituted Appellant-

Bank of Baroda.

48. Accordingly, the present appeal stands disposed-of in above

terms. There shall be no order as to costs.

49. Pending application(s), if any, shall stand disposed-of.

…..…….…………….………… J.

(J.K. MAHESHWARI)

……….……………………….. J.

(ATUL S. CHANDURKAR )

New Delhi;

May 29, 2026.