SBI employee penalised for misbehavior: Bank’s disciplinary action of cutting two salary increments upheld by high court

The chief justice of Chhattisgarh High Court on May 2, 2025, rejected a State Bank of India (SBI) employee’s appeal about strong disciplinary action taken by the bank against him after the bank found him guilty of sexual harassment of a customer and the bank’s employees. SBI’s disciplinary committee and appellate authority found him guilty under POSH Act, 2013. However, he always maintained the position that he is innocent and did not sexually harass the lady customer of the bank, who filed the original complaint, and others.

SBI took the disciplinary action against this employee by stopping two salary increments from his present pay scale with cumulative effect. Though he was not fired from the job, there were six counts of legal charges against him and only 3 of them were fully proved and the other 3 were partially proved. The matter gradually reached the High Court after he filed an appeal against this disciplinary action order of SBI.

The employee said in High Court that SBI did not conduct the inquiry about this sexual assault in accordance with law and sufficient opportunity was not afforded to him. His lawyer also quoted six Supreme Court judgements which have already set a precedent in cases similar to his.

The Chief Justice of Chhattisgarh High Court rejected all the arguments presented by the employee. The chief justice said that the findings by SBI’s disciplinary authority and SBI’s appellate authority are concurrent and the allegations of sexual misconduct (namely POSH) by this SBI officer with both customers and staff has been proved. The chief justice also said that no principles of natural justice were violated, and everything was done by following the law of the land.

Read below to know why the chief justice upheld SBI’s disciplinary committee’s findings and which legal reasoning(s) established that this SBI employee sexually harassed the branch employees and its customers both.

How did this case start?

According to the order of the Chhattisgarh High Court dated May 2, 2025, here is a timeline of events:

• April 17, 2015: This lady customer made a complaint that a bank officer misbehaved with her during her visit to the bank’s branch for depositing cash. The regional office of SBI immediately appointed an investigating officer.
• May 26, 2015: The investigating officer submitted his report and considered the following allegations against the employee, such as misbehavior with the customer; sexual harassment of women employees/valued customers; acts done to attribute delay in customer service, passing of derogatory remarks on lady customers and staff and creating a negative atmosphere in the branch affecting business/customer service….
• May 2015: The report was handed over to the Sexual Harassment Committee. The Chairperson of the Internal Complaints Committee on Sexual Harassment submitted its report and recommended disciplinary action against the appellant/writ petitioner.
• June 23, 2015: The Disciplinary Authority called for an explanation on the basis of the report submitted by the Internal Complaints Committee.
• July 20, 2015: He submitted his reply about the internal complaints committee report.
• October 26, 2015: The Disciplinary Authority not being satisfied with the reply, issued an Article of Charge.
• November 18, 2015: The SBI employee submitted a reply to the Article of Charge on, wherein he denied all allegations.
• December 31, 2016: In terms of bipartite settlement, a departmental inquiry was initiated against him, and the inquiry report was submitted before the Disciplinary Authority. The Inquiry Officer found 03 charges proved and 03 charges partially proved of sexual harassment.
• September 6 to September 25 of 2017: The Disciplinary Authority issued a first show cause notice on September 6, 2017, and the second show cause notice on September 20, 2017. The SBI employee against whom these sexual harassment charges were filled, submitted a reply to the show cause notices on September 14 and 25 of 2017.
• October 9, 2017: The Disciplinary Authority taking a sympathetic view altered the proposed punishment. The punishment was: lowering two increments from his present pay scale with cumulative effect till retirement and further penalty was inflicted to the effect that he would not be eligible for increment for a period of 2 years.
• April 6, 2018: He filed a departmental appeal before DGM (B & O), Raipur Module. The Appellate Authority revised the punishment and inflicted the penalty of stoppage of two increments with cumulative effect. He filed an appeal against this order in the High Court.

What did the State Bank of India’s lawyers say in the High Court?

According to the order of Chhattisgarh High Court dated May 2, 2025, here are the details of what SBI’s lawyers said:

• There were serious allegations against the appellant (employee) and out of 6 charges, 3 were found proved and 3 were found partially proved.
• Further it’s submitted that there were allegations of sexual harassment, therefore, the matter was referred to the Chairperson of the Internal Complaints Committee on sexual harassment and according to its report, the allegations were found proved.
• It has been contended that the appellant (employee) was afforded sufficient opportunity, and the Article of Charge was issued along with the relevant documents and a list of witnesses.
• During the course of the departmental inquiry, no objection was raised by the appellant (employee) and thereafter, a notice was issued to him and the Disciplinary Authority took a lenient view…
• The Appellate Authority considered his appeal and took a sympathetic view, modified the punishment and only imposed a stoppage of two increments with cumulative effect.
• There were serious allegations with regard to sexual harassment of women at the workplace and misbehavior with valued customers and staff and all the allegations were found proved.

What did the employee say in the High Court?

The employee against whom this sexual harassment allegation charge was pressed said:

• It submitted that the impugned order (SBI disciplinary action) is illegal and bad in the eyes of law.
• The allegations made are false. The statements of victims were not recorded and were not allowed to cross-examine those witnesses. It has been further contended that the inquiry was not conducted strictly in accordance with law and sufficient opportunity was not afforded.

Chhattisgarh High Court final judgement

The Chhattisgarh High Court dismissed the appeal of the employee against whom this sexual harassment charge was pressed and said:

• From the records, it has been further reflected that the disciplinary enquiry has been conducted by the Competent Authority and there is no allegation with regard to competence of the authority. Initially, the punishment of penalty of lowering two increments from his present pay scale with cumulative effect till retirement was imposed which was modified by the Appellate Authority to stoppage of two increments with cumulative effect, thus, the penalty inflicted is neither shocking nor disproportionate.
• It has been reflected that the Disciplinary Authority as well as the Appellate Authority have recorded a concurrent findings and found the allegations of misbehavior with customers and staff and sexual harassment of women employees and valued customers proved against the appellant (employee).
• It has been further reflected that the allegations made by the complainant with regard to sexual harassment were found partly proved as the witnesses were supported the case of the prosecution.
• Thereafter, the appellant (employee) was afforded opportunity, the principles of natural justice were complied with and show cause notices from time to time were issued and the appellant (employee) filed a reply to those notices, but the appellant (employee) had nowhere stated in the writ petition that he was not permitted to cross-examine the witnesses or relevant documents were not provided.

Suma R V, Partner, Kochhar & Co, says: "An employee can be punished for an act of sexual harassment of a woman at the workplace only after holding an inquiry against him, based on the complaint received, by the internal committee under the POSH Act. Once the internal committee submits the report to the employer, the employer can inflict punishment on the delinquent employee after following the due process laid down for the disciplinary inquiry under the service rules of the organization and by following the principles of natural justice. Adherence to the principles of natural justice is the key to any POSH inquiries and disciplinary proceedings. The principles require that the employee should be made aware of the charges levelled against him, he should be heard and given a reasonable opportunity to defend the case against him, and the inquiry against him should be unbiased and impartial."

Suma adds: "In the present case, the allegations of sexual harassment were partly proved as witnesses supported the case of the prosecution. The employee was heard in compliance with the principles of natural justice, show cause notices from time to time were issued to him to allow him to submit his explanation against the allegations and inquiries, and he submitted his replies to the notices. It was observed by the high court that in his replies he never contended that he was not permitted to cross-examine the witnesses or relevant documents were not provided to him during the process. The court observed that a disciplinary inquiry was conducted by the competent authority following the POSH inquiry, and the penalty finally imposed on the employee was neither shocking nor disproportionate."

Alay Razvi, Managing Partner, Accord Juris, a law firm, says: “The allegations, including delay in service and derogatory behavior, were proven through a departmental inquiry and an Internal Complaints Committee (ICC) investigation under the POSH Act. Wherein it was suggested for stoppage of two increments with cumulative effect, which was upheld by both the disciplinary and appellate authorities. The High Court found no procedural lapses or denial of natural justice and held that the penalty was proportionate. The judgment reinforces judicial deference to internal disciplinary processes and upholds accountability in workplace misconduct.”

Razvi says: “The Court emphasized that it would not interfere with departmental decisions unless there was a clear violation of principles of natural justice or procedural irregularity, which was absent in this case. The decision reiterates that Article 226 writ jurisdiction is not an appellate forum for re-evaluating factual disputes from internal inquiries, unless there’s mala fide, bias, or violation of natural justice.”

Aslam Ahmed, Partner, Singhania & Co. says: "The judgement is a step in the process of cracking down on workplace harassment and shows how the POSH act (Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013) can be implemented in cases. Internal Complaints Committee (ICC) findings under the POSH act were implemented in this case and were central to the evidence as the findings proved the allegations against the employee of harassment and misconduct. The judgement reinforces the principal and even explicitly states so that Constitutional Courts while exercising their jurisdiction of judicial review under Article 226 or Article 136 of the Constitution would not interfere with the findings of fact arrived at in the departmental enquiry proceedings (except in a case of malafides or perversity)."

Ahmed adds: "The court placed a strong emphasis on principles of natural justice being followed, with a transparent investigation process and proportionate punishment. This sets a standard for due process applied in cases. The judgement sends a clear message that banks have a duty to behave politely and professionally with customers, as some of the allegations faced by the employee also included misbehaviour with customers, which were taken up and investigated, influencing the final punishment. The judgement also highlights that ICC investigations and departmental inquiries can be synergistic and help aid proceedings rather than impede matters."

Mohit Mansharamani, Senior Associate, SKV Law Offices, says: "The appellant, an employee of the State Bank of India, faced six distinct charges including misbehaviour with customers and colleagues, use of derogatory language, habitual indiscipline and most significantly, sexual harassment of women employees and customers. These allegations were duly inquired into by the Internal Complaints Committee (“ICC”) constituted under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The ICC found three charges to be fully proved and the remaining to be partially substantiated."

Mansharamani adds: "The ICC, being the competent authority, followed due procedure and provided appropriate opportunities to respond to the article of charges. The Disciplinary Authority, having considered the findings, initially imposed a penalty of lowering two increments with cumulative effect, which was subsequently modified by the Appellate Authority to stoppage of two increments with cumulative effect, reflecting a lenient view. The High Court of Chhattisgarh, in the intra-court appeal, observed that the departmental proceedings were not vitiated by any procedural irregularity or violation of natural justice. There was no allegation of mala fides, nor was any perversity in the findings established. The Court held that the conclusions drawn by the departmental and appellate authorities were supported by evidence and warranted no interference under its jurisdiction of judicial review. In fact, the penalty of the stoppage of two increments was seen to be mild and sympathetic considering the gravity of the charges. The penalty had also been upheld by the Appellate authorities. There was very little scope for judicial review. There was neither perversity nor mala fide intent that was made out against the conduct of the ICC."

Aastha Sharma, Senior Associate, Senior Associate, PSL Advocates & Solicitors, says: "The significance of this judgment lies in the High Court’s observation that courts will not interfere with findings of disciplinary authorities unless there is evidence of procedural irregularity, principles of natural justice have not been complied and/or the conclusion of the proceedings is unsupported by cogent and justifiable reasons. It thus reinforces the autonomy of disciplinary bodies and limits the scope of judicial review in service-related misconduct cases if the inquiry has been conducted properly."

Shivani Bhushan, Associate Partner, TAS Law, says: "Whilst passing the judgment, the Hon’ble High Court relied on the judgment passed by the judgment passed by the Supreme Court in the matter of Deputy General Manager (Appellate Authority) v. Ajai Kumar Srivastava, AIR OnLine 2021 SC 38, wherein the Hon’ble Apex Court has laid down the guidelines with respect to the disciplinary enquiry, which are:

• whether the enquiry was held by the competent authority;
• whether rules and natural justice are complied with; and
• whether the findings or conclusions are based on some evidence and authority has the power and jurisdiction to reach findings of fact or conclusions.

The High Court applying the principles laid down by the Hon’ble Supreme Court, rendered the judgment, being in conformity with the same. Hence, due to the reasons cited by the High Court, the Appellant i.e., the employee of the SBI lost the matter and the High Court rendered the findings laid down by the Single Judge as correct.

The significance of the judgment is that the Hon’ble Courts whilst dealing with the matters pertaining to the disciplinary enquiry give due weightage to the fact that whether the disciplinary enquiry was conducted by the competent authority or not; secondly, since the disciplinary enquiry affects the fundamental rights of the persons involved as well, therefore, whether both the sides are heard or not (i.e., the principles of natural justice to be followed), so that person against whom the enquiry has been conducted is also heard and is not harassed by the authorities. These judgments are a reflection of the judiciary that whilst passing such judgments, the observations and precedents laid down are duly followed, and then only such judgments are rendered by the Courts of competent jurisdiction."