Fresh inquiry against retired employees impermissible unless service rules permit, Karnataka High Court

The high court has said that a de novo enquiry (fresh inquiry) against a retired employee is impermissible in law unless the service rules permit.

Justice M Nagaprasanna said this while allowing the petition filed by a retired Chief Executive Officer of a co-operative bank.

The petitioner Bahubali, a resident of Yellapur, Uttara Kannada district, was appointed as Chief Executive Officer of the Vikas Urban Co-operative Bank Ltd in 1997.

In 2018, after rendering about 21 years of service, his services were terminated by the bank’s board owing to certain omissions and commissions.

The allegations included insubordination, disclosing the secrecy of customers, quarrelling and causing disturbance to others during working hours and violation of banking rules.

Bahubali challenged this before the Joint Registrar of Co-operative Societies which upheld the termination. Bahubali filed an appeal and in 2023, the Karnataka Appellate Tribunal set aside the dismissal order on the grounds that there had been gross violation of principles of natural justice.

However, the Tribunal while setting aside the order, directed that the bank is at liberty to conduct enquiry in accordance with law and the service rules.

Challenging this portion of the order of the tribunal, permitting a de novo enquiry, the petitioner argued that he had retired from service in May 2020 on attaining the age of superannuation. He contended that the regulations or even law does not permit holding of a de novo enquiry against an employee after his retirement.

Justice Nagaprasanna cited the Apex Court order in the Anant R Kulkarni case and said the top court held that a de novo enquiry against a retired employee is impermissible in law unless the service rules so permit.

The court said that the ban’s service rules nowhere indicate the right of the employer to continue the enquiry or hold a de novo enquiry against an employee who has retired on attaining the age of superannuation.

“The Service Rules as noted hereinabove, on its perusal, does not indicate any liberty reserved to the employer to hold a de novo enquiry or any kind of enquiry against a retired employee. If no enquiry can be held against a retired employee, the Tribunal ought not to have reserved liberty to the respondent No.3 (bank) to hold a de novo enquiry. That portion of the order admittedly is contrary to law,” the court said.