The Supreme Court of India in State Bank of India & Others v. Ramadhar Sao (Arising out of SLP(C) No. 6722 of 2023) delivered on 20 August 2025, examined critical issues concerning judicial interference in departmental inquiries, the scope of natural justice in disciplinary proceedings, and the proportionality of punishments in service jurisprudence.
The case arose out of disciplinary action taken by the State Bank of India (SBI) against a Class IV employee accused of acting as a conduit in loan sanction irregularities and accepting illegal gratification. The dispute traversed multiple forums—disciplinary authority, appellate authority, High Court (Single Judge and Division Bench), and finally, the Supreme Court.
The judgment reiterates established principles that constitutional courts, while exercising powers under Article 226/32/136, cannot act as appellate bodies to re-appreciate evidence in departmental inquiries. The Court restored the punishment of “removal from service with superannuation benefits” imposed by the Appellate Authority, thereby overturning the High Court’s interference.
Case Title: State Bank of India & Others v. Ramadhar Sao
Court: Supreme Court of India
Citation: 2025 INSC 1010
Coram: Justice Rajesh Bindal and Justice Manmohan
Date of Judgment: 20 August 2025
Factual Background
Employment History
- Respondent, Ramadhar Sao, joined SBI as a messenger in 1997.
- By 2010, he was working in the Agricultural Development Branch, Ramnagar.
Allegations
- In April 2008, complaints surfaced against him for demanding bribes in loan sanction cases.
- On 15 November 2008, SBI issued a show cause notice for two reasons:
(a) Unauthorized absence between 20.04.2008–25.04.2008.
(b) Executing loan documents at his residence and branch.
Formal Disciplinary Action
- Charge Sheet (05.01.2010): Alleged that respondent acted as a middleman for loan sanctions and accepted bribes.
- Six loan accounts were cited where irregularities occurred.
- He was also charged with unauthorized absence during investigation.
Departmental Inquiry
- Inquiry Officer appointed on 10.03.2010.
- Multiple witnesses, including borrowers, testified.
- Borrowers alleged that they had paid ₹5000 or more to the respondent to secure loans despite deficient documents.
- Respondent denied charges but pleaded for leniency citing family hardships.
Findings and Punishment
- Inquiry Officer (04.10.2010): Found him guilty of gross misconduct.
- Disciplinary Authority (08.01.2011): Imposed penalty of dismissal from service.
- Appellate Authority (07.12.2012): Took a compassionate view and reduced punishment to removal from service with superannuation benefits.
High Court Proceedings
Single Judge (16.05.2018): Set aside punishment, ordered reinstatement with back wages, and liberty to conduct fresh inquiry.
Division Bench (14.12.2022): Dismissed SBI’s intra-court appeal (LPA), upholding Single Judge’s order.
Supreme Court Appeal
SBI challenged the High Court’s judgment, contending limited scope of judicial review in disciplinary matters.
Arguments
Appellant (State Bank of India)
- Judicial Overreach: High Court erred by acting as an appellate authority, reappreciating facts.
- Procedural Fairness: Respondent was given full opportunity—defence counsel engaged, cross-examination allowed, inquiry report supplied.
- Established Misconduct: Borrowers testified to having paid bribes; respondent indirectly admitted guilt by seeking forgiveness.
- Consistency: Other officers (Branch Manager, Field Officer) were also punished with removal.
- Compassion Already Shown: Appellate Authority reduced penalty from dismissal to removal with benefits.
- Precedents: Relied on SBI v. Ajai Kumar Srivastava (2021) 2 SCC 612 and Boloram Bordoloi v. Lakhimi Gaolia Bank (2021) 3 SCC 806—judicial review is limited to procedural illegality or violation of natural justice, not merits.
Respondent (Ramadhar Sao)
- Victimisation: Made a scapegoat; being a Class IV employee, he lacked authority to sanction loans.
- Contradictory Conduct: Despite allegations, he was promoted to Assistant in 2010, reflecting good service record.
- Unequal Treatment: Senior officers who processed and sanctioned loans were more culpable.
- Delay & Liberty: Bank was free to initiate fresh inquiry post-2018 HC order but chose litigation instead.
- Equity: Given long passage of time and hardships (son handicapped, daughter of marriageable age), relief should be moulded.
Issues Before the Court
- Whether the High Court erred in interfering with the findings of the Disciplinary Authority and Appellate Authority?
- What is the scope of judicial review in disciplinary proceedings?
- Whether the punishment of removal from service was disproportionate or arbitrary given the respondent’s status as a Class IV employee?
Supreme Court’s Analysis
On Show Cause Notice v. Charge Sheet
- The High Court wrongly relied on the initial show cause notice rather than the formal charge sheet.
- The charge sheet contained detailed allegations supported by evidence of multiple borrowers.
On Evidence and Natural Justice
- Inquiry process was fair: respondent cross-examined witnesses, had defence counsel, and received inquiry report.
- No violation of natural justice was alleged.
On Admission of Guilt
Respondent’s plea before Disciplinary Authority—“knowingly or unknowingly whatever mistake I have made, please forgive me”—was interpreted as an indirect admission.
On Judicial Review
Reiterated that writ courts cannot sit in appeal over disciplinary findings.
Courts may interfere only where:
- there is violation of natural justice,
- procedural irregularity, or
- findings are perverse.
Cited SBI v. Ajai Kumar Srivastava and Boloram Bordoloi to emphasise that acceptance of the Inquiry Officer’s findings requires no elaborate reasons.
On Proportionality of Punishment
- The Appellate Authority already displayed leniency by converting dismissal into removal with benefits.
- Given charges of corruption, dismissal was justified; removal with benefits was in fact a light punishment.
On High Court’s Approach
- Single Judge erred by assuming respondent was singled out; record showed other officers too were punished.
- Division Bench did not engage with merits and instead focused on procedural objections.
- Both orders unsustainable.
Decision
- High Court’s Orders (Single & Division Bench): Set aside.
- Appellate Authority’s Order (07.12.2012): Restored (removal from service with superannuation benefits).
- Appeal by SBI: Allowed.
- Costs: No order as to costs.
Legal Principles Reaffirmed
Limited Scope of Judicial Review
- Courts cannot re-appreciate evidence in departmental inquiries.
- Judicial review is confined to legality, not the correctness of findings.
Acceptance of Inquiry Reports
- Disciplinary authority need not record detailed reasons if the Inquiry Officer’s findings are accepted.
- Corruption as Gross Misconduct
- Even a low-ranking employee involved in bribery undermines institutional integrity.
- Status of employee (Class IV or otherwise) does not dilute gravity of offence.
Proportionality and Compassion
- Appellate authority’s reduction of penalty reflects consideration of mitigating factors.
- Further interference by courts unjustified unless punishment shocks conscience.
Critical Analysis
Strengths of the Judgment
- Consistency with Precedent: Aligns with prior rulings on judicial restraint in service matters.
- Institutional Integrity: Upholds a strict stance against corruption in financial institutions.
- Balanced Approach: Recognises compassionate reduction by the appellate authority while preventing excessive leniency.
Weaknesses / Critiques
- Rigid View on Admission: Respondent’s plea for mercy was treated as an admission of guilt—arguably harsh, as pleas for leniency may be tactical rather than confessional.
- Limited Consideration of Promotion: The fact of the respondent’s promotion post-incident could have been weighed more carefully as a mitigating circumstance.
- Delay in Closure: Litigation spanned over 17 years (2008–2025), causing hardship; the Court could have moulded relief on humanitarian grounds, e.g., partial back wages.
Implications
For Banking Institutions
- Reinforces accountability mechanisms within banks.
- Validates strict disciplinary action for corruption, even against junior staff.
For Employees
- Demonstrates that even low-level employees can face severe consequences for misconduct.
- Shows that pleas for leniency cannot override proven charges of corruption.
For Judiciary
- Clarifies boundaries of Article 226/136 jurisdiction in disciplinary matters.
- Prevents High Courts from functioning as appellate forums in service cases.
Conclusion
The Supreme Court’s judgment in State Bank of India & Others v. Ramadhar Sao stands as a reaffirmation of the principle that judicial review in disciplinary matters is limited to legality, not merits. By restoring the punishment of removal with benefits, the Court struck a balance between institutional integrity and compassion already exercised by the Appellate Authority.
The case underscores the judiciary’s intolerance towards corruption in public sector banks while cautioning High Courts against unwarranted interference in departmental findings.
Important Link
Law Library: Notes and Study Material for LLB, LLM, Judiciary, and Entrance Exams