Chhattisgarh HC quashes bank staff terminations, says even contractual employees must be heard

RAIPUR: The Chhattisgarh high court has quashed the termination orders of several employees of Zila Sahakari Kendriya Bank Maryadit, Bilaspur, citing a violation of the principles of natural justice.
The court emphasised the severe consequences of such terminations, extending beyond the employee to their families, highlighting the moral obligation to adhere to natural justice. The court ordered the reinstatement of the petitioners but without back wages.
In a common order for multiple writ petitions, the Single Bench of Justice Amitendra Kishore Prasad heard a case where employees challenged their termination by the bank's Chief Executive Officer and Board of Directors. The petitioners argued they were removed without a proper hearing, despite serving for 9 to 11 months.
The court noted that any order based on allegations must allow the employee an opportunity to defend themselves, a principle that was not followed in this case. “Even a contractual employee cannot be terminated without being heard,” the court stated.
The court also raised questions about the authority of the Commissioner (Revenue) to conduct inquiries into the matter. It was observed that the employees of the Cooperative Bank are governed by the Act of 1960 and the Rules of 1982, and the Commissioner (Revenue) does not have the jurisdiction to investigate employee recruitment irregularities. According to the court, the competent authority would be the Registrar or a subordinate officer, or the bank’s Staff Sub-Committee.
The court found that the termination process was flawed from the beginning, as it was based on an inquiry report submitted by an unauthorized entity.
Furthermore, the court pointed out the absence of a proper hearing for the petitioners. While the bank cited irregularities in the recruitment process, the court insisted on the necessity of providing employees a fair chance to respond to the allegations, especially after they had been appointed through due process.
The court reviewed the relevant provisions of Section 55 and Section 57-B (7) of the Act, 1960, to underline the importance of adherence to proper procedure.
The petitioners, appointed as Clerk-cum-Computer Operators, Society Managers, Supervisors, and Assistant Accountants, had completed 9 to 11 months of service. Their counsel argued that the termination orders were issued without proper adherence to Rule 60, 61, and 62 of the Rules, 1982, and without granting the petitioners an opportunity to be heard.
Senior counsel Fouzia Mirza, assisted by Mateen Siddiqui and others, representing the petitioners contended that the inquiry was conducted without giving the petitioners a chance to present their case, and that the allegations of corruption were unsubstantiated.
However, senior counsel Prafull N. Bharat, representing the respondent Bank, argued that the appointments were tainted by irregularities, and the Staff Sub-Committee was not properly constituted. He claimed that the bank had the right to cancel the appointments due to the illegalities in the selection process.
The court, however, ruled in favour of the petitioners, setting aside the termination orders and directing their reinstatement, emphasizing the necessity of following due process and the principles of natural justice. The respondents are at liberty to initiate fresh proceedings against the petitioners, provided they adhere to the correct procedure and give the petitioners a proper opportunity to be heard.