Holding

Judicial review of disciplinary punishments is limited to illegality, procedural impropriety or irrationality, and absent such infirmities the High Court's direction to modify the removal order was unwarranted.

Summary

The employee, Munna Lal Jain, while temporarily acting as branch manager of Damoh Panna Sagar Rural Regional Bank, withdrew Rs.25,000 without authority and later repaid it with 24% interest. The disciplinary authority dismissed him, and the High Court directed the Board to reconsider the punishment, ordering that dismissal, removal or termination not be imposed. On appeal, the Supreme Court examined whether the High Court's direction was justified, emphasizing that judicial review of disciplinary punishments is confined to checking illegality, procedural impropriety or irrationality (Wednesbury test) and not the merits of the penalty. The Court found no evidence that the punishment was shockingly disproportionate or that the High Court had recorded reasons for such a finding. Consequently, the Supreme Court set aside the High Court's order, upheld the removal, and allowed the appeal.

Issues considered

The validity of the High Court's direction to the Board to alter the punishment and avoid dismissal, removal or termination.
Whether the disciplinary punishment of removal was illegal, procedurally improper, or irrational under the Wednesbury test.
Whether the principle of proportionality applies to service disciplinary cases.
Whether the High Court provided sufficient reasons to deem the punishment shockingly disproportionate.

Subjects

service lawdisciplinary actionremovaljudicial reviewWednesbury testproportionalityadministrative lawbank officer misconductreasons for punishment

Judgment

DAMOH PANNA SAGAR RURAL REGIONAL BANK AND ANR. A
v.
MUNNA LAL JAIN

DECEMBER 16, 2004

[ARJJIT PASAYAT AND S.H. KAPADIA, JJ.] B

Service Law :

Removal/termination of service-Quantum ofpunishment-Interference
with-By High Court-Bank manager unauthorisedly withdrew a certain
sum for personal use-Disciplinary authority terminated the services of the c
said bank manager-On appeal, the High Court directed appellate authority
to reconsider the matter and pass any punishment other than dismissal,
removal or termination-Correctness of-Held : The Court should not
interfere with the administrator's decision unless it was illogical or suffers
from procedural impropriety or was shocking to the conscience of the D
Court-The scope of judicial review is limited to the deficiency in the
decision-making process and not the decision-High Court has not recorded
a definite finding that the punishment imposed suffers from any infirmity-
Hence, High Court's judgment set aside.

Administrative Law : E
Recording of reasons-Importance and necessity of-Explained.

The respondent while functioning temporarily as the Branch
Manager of the appellant-Bank withdrew a certain sum unauthorisedly
for his personal use. The Disciplinary authority terminated the services F
of the respondent.

On appeal, High Court directed the appellate authority to recon-
sider the matter and pass any punishment other than dismissal, removal
or termination of the services of the respondent. Hence the appeal.
G
Allowing the appeal, the Court

HELD: 1. The Court should not interfere with the administrator's
...,
decision unless it was illogical or suffers from procedural impropriety
or was shocking to the conscience of the Court, in the sense that it was H
1031
1032 SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.

A in defiance of logic or moral standards. The Court would not go into
the correctness of the choice made by the administrator open to him and
the Court should not substitute its decision to that of the administrator.
The scope of judicial review is limited to the deficiency in the decision-
making process and not the decision. [1043-G-H]
B Om Kumar v. Union of India, (2001] 2 SCC 386; B.C. Chaturvedi v.
Union of India, (1995] 6 SCC 749 and Union of India v. G. Ganayutham,
(1997] 7 sec 463, relied to.

In Re : Wednesbury, (1948) 1 KB 223 and Council for Civil Services
c Union v. Minister of Civil Services, (1983] 1 AC 768, referred to.

2.1. To shorten the litigations Court/Tribunal may, in exceptional
and rare cases, impose appropriate punishment by recording cogent
reasons in support thereof. In a normal course if the punishment im-
D posed were shockingly disproportionate it would be appropriate to
direct the Disciplinary Authority or the Appellate Authority to recon-
sider the penalty imposed. (1044-A-B]

2.2. In the case at hand, the High Court did not record any reason
as to how and why it found the punishment shockingly disproportionate.
E Even there is no discussion on this aspect. (1044-C)

3. A Bank officer is required to exercise higher standards of hon-
esty and integrity. He deals with the money of the depositors and the
customers. Every officer/employee of the Bank is required to take all
F possible steps to protect the interests of the Bank and to discharge his
duties with utmost integrity, honesty, devotion and diligence and to do
nothing which is unbecoming of a Bank officer. Good conduct and,
discipline are inseparable from the functioning of every officer/em-
ployee of the Bank. [1044-D]

G 4. It is no defence to say that there was no loss or profit result<!d
in a case when the officer/employee acted without authority. The very
discipline of an organization more particularly a Bank is dependent
upon each of its officers and officers acting and operating within their
allotted sphere. Acting beyond one's authority is by itself a breach of
H discipline and is a misconduct. The charges against the employee were
DAMOH PANNA SAGAR RURAL REGIONAL BANK v. M.L. JAIN 1033

not causal in nature and were serious. These aspects do not appear to A
have been kept in view by the High Court. [1044-E·F)

Disciplinary Authority-cum-Regional Manager v. Nikunja Bihari
Patnaik, [1996] 9 SCC 69, relied on.
B
5.1. When a Court feels that the punishment is shockingly dispro-
portionate, it must record reasons for coming to such a conclusion. Mere
expression that the punishment is shockingly disproportionate would
not meet the requirement of law. [1044-G]

Breen v.Amalgamated Engineering Union, (1971) 1 All ER 1148 and C
Alexander machinery (Dudley) Ltd. v. Crabtree, (1974) LCR 120, referred
to;

5.2. Reasons substitute subjectivity by objectivity. The emphasis on
recording reasons is that if the decision, reveals the "inscrutable face D
of the sphinx" it can, by its silence, render it virtually impossible for the
courts to perform their appellate function of exercise the power• of
judicial review in adjudging the validity of the decision. Right to reason
is an indispensable part of a sound judicial system. Another rationale
is that the affected party can know why the decision has gone against
him. One of the salutary requirements of natural justice is spelling out E
reasons for the order made. [1045-A-B-C]

Chairman and Managing Director, United Commercial Bank v. P.C.
Kakkar, [2003] 4 SCC 364, relied on.
F
5.3. In the case at hand, the High Court's judgment is full of ifs
and buts. There is no definite finding recorded that the punishment is
suffering from any infirmity. No basis has been indicated to direct
reconsideration of the quantum of punishment. The respondent had
miserably failed to prove his bonafides. (1045-D)
G
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 8258 of
2004.

From the Judgment and Order dated 16.4.2004 of the Madhya Pradesh
High Court in L.P.A. No. 116 of 200L H
1034 SUPREME COURT REPORTS [2004) SUPP. 6 S.C.R.

A Prakash Shrivastava for the Appellants.

Ms. Hema Sahu and C.L. Sahu for the Respondent.

The Judgment of the Court was delivered by

B ARIJIT PASA YAT, J. : Leave granted.

Damoh Panna Sagar, Rural Regional Bank - the appellant no. 1 (here-
inafter referred to as the 'employer') calls in question legality of the judg-
ment rendered by a Division Bench of the Madhya Pradesh High Court at
c Jabalpur directing the Board of Directors of the employer Bank (in short the
'Board') to reconsider the matter and pass any punishment other than .
dismissal, removal or termination of the respondent - Munna Lal Jain
(hereinafter referred to as the 'employee').

Background facts in a nutshell are as follows :
D
On the allegation that while temporarily functioning as the Branch
manager of Kabra Branch, the respondent-employee withdrew a sum of
Rs.25,000 unauthorisedly and such act amounted to misconduct warranting
serious penalty. Because of such unauthorized withdrawal, charges were
E framed against him by charge sheet dated 14.10.1992 alleging that he had
withdrawn a sum of Rs.25,000 on 6.5.1992 for his personal use. The
respondent-employee filed his explanation. Though not disputing the factum
of withdrawal, plea was taken by him that during the relevant period
condition of his wife had deteriorated and required immediate surgical
interference. He had informed about withdrawal to the Head Office at
F Damoh. The explanation was not accepted, an (.;Oquiry officer was appointed
who submitted his report on 20. 7 .1993 holding that the employee was guilty
of the charges. The disciplinary authority concurred with the findings of the
Enquiry Officer and after following the formalities i.e. issuance of show-
cause notice, passed the order of removal. In appeal the said order of
G removal was maintained. Against the aforesaid order the employee preferred
Writ Petition No. 2719 of 1995. Learned Single Judge held that the charges
levelled have been duly brought home, but remitted the matter to the
appellate authority for re-consideration with regard to the quantum of
punishment. Pursuant to the direction, the matter was again considered by
H the Board and it was held that the order of removal did not require recon-
DAMOH PANNA SAGAR RURAL REGIONAL BANK v. M.L. JAIN [PASA YAT, l] 1035

sideration. Employee filed a Writ Petition (W.P. No. 4812of1998). Learned A
Single Judge, who heard the matter, held that the Board had not considered
the matter from all angles keeping in view the observations made in the

" earlier order dated 13 .5 .1998. Direction was given to the Board to re-
consider the penalty of removal. The matter was again re-considered and
the Board refused to interfere with the quantum of punishment. The said B
order was assailed in Writ Petition No. 5236 of 2000. Learned Single judge
declined to interfere on the ground that the charges had been proved and
the Board had passed a detailed order. Learned Single Judge further held
that the factum of illness of the wife had not been proved as no documents
had been filed.
c
The matter was carried in a Letters Patent Appeal before the Division
Bench. It was stand of the employee before the Division Bench that the
money was withdrawn because of an emergency and he had some of money
in his Provident Fund account. In any event, the money had been deposited
in the bank with 24% interest which was much higher than the rate of interest D
that is payable on loan availed without security i.e. overdraft.

In response, it was submitted by tht: learned counsel appearing for the
employer, that there was no scope for interference with the quantum of
punishment.
E
The High Court observed that orclinarily the High Court should not
interfere with the order of learned Single Judge. It, however, noticed that
the amount has been repaid with 24% interest. It was observed that though
adequate material was not placed to establish the wife's illness that could
not be a ground to uphold the punishment of removal, particularly when he F
had paid back the amount with 24% interest. There was no allegation that
earlier he had committed any kind of delinquency. It was noted that ante-
cedents do not play positive role in all cases, but in certain cases they cannot
be totally ignored. Re:!'erence was made to decision of this Court in Kai/ash
Nath Gupta v. Enquiry Officer (R.K. Rai) Allahabad Bank and Others, AIR
(2003) SC 1377. It was also observed that in the said case this Court has G
taken note of the fact that a sum of Rs.46,000 has already been repaid and
no loss was caused to the bank. Though factual matrix was noticed to be
different, yet it was held that the Branch Manager in a difficult situation had
··~

withdrawn the money and repaid with 24% interest. There was no loss
caused. Again the High Court observed that it hastened to add that it was H
1036 SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.

A not its view that unless there is any loss there cannot be any misconduct.
Ultimately it was concluded that this was a fit case where the Board should
be compassionate and gracious enough to reconsider employee's case to
pass any other punishment other than dismissal, removal or termination. It
was held that there was irregularity but not such an irregularity as to attract
B the punishment of removal. It was also indicated that even if lesser punish-
ment is awarded the employee would not be entitled to any kind of back
wages.

In support of the appeal, learned counsel for the appellant submitted
that the High Court's judgment is full of contradictions. Having accepted
c that there was practically no scope of interference with the quantum of
punishment, yet on irrelevant considerations High Court directed that pun-
ishment of removal, termination or dismissal should not be passed. The
scope for interference with quantum of punishment has been highlighted by
this Court in many cases and this is a case where no interference was called
D for. It has been found as a fact that the defence taken by the employee was
false. Though he claimed that the amount was withdrawn on 9.5.1992, in
fact it was withdrawn on 6.5.1992. There was no evidence adduced regard-
ing the wife's ailment.

In response, learned counsel for the respondent-employee submitted
E that the appeal was not maintainable and the appeal was really unnecessary
one. Ordinarily this Court should not interfere in service matters by appre-
ciating evidence. The respondent-employee had intimated the head office
about the withdrawal which is bonafide and he had repaid the amount with
24% interest.
F
The scope of interference with quantum oi punishment has been the
subject-matter of various decisions of this Court. Such interference cannot
be a routine matter.

Lord Greene said in 1948 in the famous Wednesbury case (1948 (1)
G KB 223) that when a statute gave discretion to an administrator to take a
decision, the scope of judicial review would remain limited. He said that
interference was not permissible unless one or the other of the following
conditions was satisfied, namely the order was contrary to law, or relevant
factors were not considered, or irrelevant factors were considered; or the
H decision was one which no reasonable person could have taken. These
DAMOH PANNA SAGAR RURAL REGIONAL BANK v. M.L JAIN [PASAYAT,J) 1037

principles were consistently followed in the UK and in India to judge the A
validity of administrative action. It is equally well known that in 1983, Lord
Dip lock in Council for Civil Services Union v. Minister of Civil Service,
[1983] l AC 768 (called the CCSU case) summarized the principles of
judicial review of administrative action as based upon one or other of the
following viz., illegality, procedural irregularity and irrationality. He, how- B
ever, opined that "proportionality" was a "future possibility".

In Om Kumar and Ors. v. Union ofIndia, [200 l] 2 SCC 3 86, this Court
observed, inter alia, as follows:

"The principle originated in Prussia in the nineteenth century C
and has since been adopted in Germany, France and other European
countries. The European Court of Justice at Luxembourg and the
European Court of Human Rights at Strasbourg have applied the
principle while judging the validity of administrative action. But
even long before that, the Indian Supreme Court has applied .the D
principle of "proportionality" to legislative action since 1950, as
stated in detail below.

By "proportionality'', we mean the question whether, while
regulating exercise of fundamental rights, the appropriate or least-
restrictive choice of measures has been made by the legislature or E
the administrator so as to achieve the object of the legislation or
the purpose of the administrative order, as the case may be. Under
the principle, the court will see that the legislature and the admin-
istrative authority "maintain a proper balance between the adverse
effects which the legislation or the administrative order may have F
on the rights, liberties or interests of persons keeping in mind the
purpose which they were intended to serve". The legislature and
the administrative authority are, however, given an area of discre-
tion or a range of choices but as to whether the choice made
infringes the rights excessively or not is for the court. That is what
is meant by proportionality. G

xxx xxx xxx xxx xxx

The development of the principle of "strict scrutiny" or "pro-
portionality" in administrative law in England is, however, recent. H
1038 SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.

A Administrative action was traditionally being tested on Wednesbury
grounds. But in the last few years, administrative action affecting
the freedom of expression or liberty has been declared invalid in
several cases applying the principle of "strict scrutiny". In the case
of these freedoms, Wednesbury principles are no longer applied.
The courts in England could not expressly apply proportionality in
B
the absence of the convention but tried to safeguard the rights
zealously by treating the said rights as basic to the common law
and the courts then applied the strict scrutiny test. In the Spycatcher
case Attorney General v. Guardian Newspapers Ltd. (No. 2), [1990]
I AC 109 (at pp. 283-284), Lord Goff stated that there was no
c inconsistency between the convention and the common law. In
Derbyshire County Council v. Times Newspapers Ltd., [1993] AC
534, Lord Keith treated freedom of expression as part of common
law. Recently, in R. v. Secy. OfState for Home Deptt., exp. Simms,
[1999] 3 All ER 400 (HL), the right of a prisoner to grant an
D interview to a journalist was upheld treating the right as part of the
common law. Lord Hobhouse held that the policy of the adminis-
trator was disproportionate. The need for a more intense and anx-
ious judicial scrutiny in administrative decisions which engage
fundamental human rights was re-emphasised in in R. v. Lord
Saville exp, [1999] 4 All ER 860 (CA), at pp. 870, 872. In all these
E cases, the English Courts applied the "strict scrutiny" test rather
than describe the test as one of"proportionality". But, in any event,
in respect of these rights "Wednesbury" rule has ceased to apply.

However, the principle of "strict scrutiny" or "proportional-
F ity" and primary review came to be explained in R. v. Secy. ofState
for the Home Deptt. exp Brind, [199 I] I AC 696. That case related
to directions given by the Home Secretary under the Broadcasting
Act, 198 I requiring BBC and IBA to refrain from broadcasting
certain matters through persons who represented organizations which
were proscribed under legislation concerning the prevention of
G terrorism. The extent of prohibition was linked with the direct
statement made by the members of the organizations. It did not
however, for example, preclude the broadcasting by such persons
through the medium of a film, provided there was a "voice-over"
account, paraphrasing what they said. The applicant's claim was
H based directly on the European Convention of Human Rights. Lord
DAMOH PANNA SAGAR RURAL REGIONAL BANK v. M.L. JAIN [PASA YAT, J] 1Q39

Bridge noticed that the Convention rights were not still expres~ly A
engrafted into English law but stated that freedom of expression
was basic to the Common law and that, even in the absence of the
Convention, English Courts could go into the question (seep. 748-
49).
B
" ..... whether the Secretary of State, in the exercise of his
discretion, could reasonably impose the restriction he has
imposed on the broadcasting organisations"

and that the courts were
c
"not perfectly entitled to start from the premise that any
restriction of the right to freedom of expression requires to be
justified and nothing less than an important public interest will
be sufficient to justify it".
D
Lord Templeman also said in the above case that the courts could
go into the question whether a reasonable minister could reasonably
have concluded that the interference with this freedom was justi-
fiable. He said that "in terms of the Convention" any such inter-
ference must be both necessary and proportionate (ibid
pp. 750-51). E

In the famous passage, the seeds of the principle of primary
and secondary review by courts were planted in the administrative
law by Lord Bridge in the Brind case [1991] l AC 696. Where
Convention rights were in question the courts could exercise a right F
of primary review. However, the courts would exercise a right of
secondary review based only on Wednesbury principles in cases
not affecting the rights under the Convention. Adverting to cases
where fundamental freedoms were not invoked and where admin-
istrative action was questioned, it was said that the courts were then
confined only to a secondary review while the primary decision G
would be with the administrator. Lord Bridge explained the primary
and secondary review as follows:

"The primary judgment as to whether the particular compet-
ing public interest justifying the particular restriction imposed H
1040 SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.

A falls to be made by the Secretary of State to whom Parliament
has entrusted the discretion. But, we are entitled to exercise
a secondary judgment by asking whether a reasonable Secre-
tary of State, on the material before him, could reasonably
make the primary judgment."
B
But where an administrative action is challenged as "arbi-
trary" under Article 14 on the basis of Royappa ( 197 4) 4 SCC 3
(as in cases where punishments in disciplinary cases are chal-
lenged), the question will be whether the administrative order is
"rational" or "reasonable" and the test then is the Wednesbury test.
c The courts would then be confined only to a secondary role and will
only have to see whether the administrator has done well in his
primary role, whether he has acted illegally or has omitted relevant
factors from consideration or has taken irrelevant factors into
consideration or whether his view is one which no reasonable
D person could have taken. If his action does not satisfy these rules,
it is to be treated as arbitrary. In G.B. Mahajan v. Jalgaon Munici-
pal Council, [ 1991] 3 SCC 91 at p. 111 Venkatachaliah, J. (as he
then was) pointed out that "reasonableness" of the administrator
under Article 14 in the context of administrative law has. to be
judged from the stand point of Wednesbury rules. In Tata Cellular
E v. Union of India, [ 1994] 6 SCC 651 at pp. 679-80, Indian Express
Newspapers Bombay (P) Ltd. v. Union of India, [1985] 1 SCC 641
at p. 691, Supreme Court Employees' Welfare Assn. v. Union of
India, [1989] 4 SCC 187 at p. 241 and U.P. Financial Corpn. v.
Gem Cap(India) (P) Ltd., [1993] 2 SCC 299 at p. 307 while judging
F _whether the administrative action is "arbitrary" under Article 14
(i.e. otherwise then being discriminatory), this Court has confined
itself to a Wednesbury review always.

The principles explained in the last preceding paragraph in
respect of Article 14 are now to be applied here where the question
G of "arbitrariness" of the order of punishment is questioned under
Article 14.

xxx xxx xxx xxx xxx

H Thus, from the above principles and decided cases, it must be
DAMOH PANNA SAGAR RURAL REGIONAL BANK v. ML JAIN [PASAY AT, J.] 1041

held that where an administrative decision relating to punishment A
in disciplinary cases is questioned as "arbitrary" under Article 14,
the court is confined to Wednesbury principles as a secondary
reviewing authority. The court will not apply proportionality as a
primary reviewing court because no issue of fundamental freedoms
nor of discrimination under Article 14 applies in such a context.
B
The court while reviewing punishment and if it is satisfied that
Wednesbury principles are violated, it has normally to remit the
matter to the administrator for a fresh decision as to the quantµm
of punishment. Only in rare cases where there has been long delay
in the time taken by the disciplinary proceedings and in the time
taken in the courts, and such extreme or rare cases can the court c
substitute its own view as to the quantum of punishment."

In B.C. Chaturvedi v. Union of India and Ors., [1995] 6 SCC 749 it
was observed:

"A review of the above legal position would establish that the D
disciplinary authority, and on appeal the appellate authority,
being fact-finding authorities have exclusive power to con-
sider the evidence with a view to maintain discipline. They are
invested with the discretion to impose appropriate punishmeI)t
keeping in view the magnitude or gravity of the misconduct. E
The High Court/Tribunal, while exercising the power of ju-
dicial review, cannot normally substitute its own conclusioh
on penalty and impose some other penalty. If the punishment
imposed by the disciplinary authority or the appellate author-
ity shocks the conscience of the High Court/Tribcnal, it would
appropriately mould the relief, either directing the discipli- F
nary/appellate authority to reconsider the penalty imposed, or
to shorten the litigation, it may itself, in exceptional and ran~
cases, impose appropriate punishment with cogent reasons in
support thereof."

-- In Union of India and Anr. v. G. Ganayutham, (1997) 7 SCC 463, thi5
G
Court summed up the position relating to proportionality in paragraphs 31
and 32, which read as follows:
. ··~

"The current position of proportionality in administrative law
in England and India can be summarized as follows: H
1042 SUPREME COURT REPORTS (2004] SUPP. 6 S.C.R.
....,
A (I) To judge the validity of any administrative order or
statutory discretion, normally the Wednesbury test is to be
applied to find out ifthe decision was illegal or suffered from
procedural improprieties or was one which no sensible deci-
sion-maker could, on the material before him and within the
framework of the law, have arrived at. The court would con-
B
sider whether relevant matters had not been taken into account
or whether irrelevant matters had been taken into account or
whether the action was not bona fide. The court would also
consider whether the decision was absurd or perverse. The
court would not however go into the correctness of the choice
c made by the administrator amongst the various alternatives
open to him. Nor could the court substitute its decision to that
of the administrator. This is the Wednesbury (1948) I KB 223
test.

(2) The court would not interfere with the administra-
D tor's decision unless it was illegal or suffered from procedural
impropriety or was irrational - in ·the sense that it was in
outrageous defiance of logic or moral standards. The possi-
bility of other tests, including proportionality being brought
into English administrative law in future is not ruled out.
E These are the CCSU [I 985] Ac 374 principles.

(3)(a) As per Bugdaycay (1987] AC 514, Brind (1991]
AC 696 and Smith [ 1996] I All ER 25 as long as the
Convention is not incorporated into English law, the English
courts merely exercise a secondary judgment to find out if the
F decision-maker could have, on the material before him, ar-
rived at the primary judgment in the manner he has done.

(3)(b) If the Convention is incorporated in England
making available the principle of proportionality, then the
English courts will render primary judgment on the validity
G
of the administrative action and find out if the restriction is
disproportionate or excessive or is not based upon a fair
balancing of the fundamental freedom and the need for the
restriction thereupon. ·--
H (4)(a) The position in our country, in administrative
DAMOH PANNA SAGAR RURAL REGIONAL BANK v. M.L. JAIN (PASA Y AT, J.) 1043

law, where no fundamental freedoms as aforesaid are in- A
volved, is that the courts/tribunals will only play a secondary
role while the primary judgment as to reasonableness will
remain with the executive or administrative authority. The
secondary judgment of the court is to be based on Wednesbury
and CCSU _principles as stated by Lord Greene and Lord B
Dip lock respectively to find if the executive or administrati.ve
authority has reasonably arrived at his decision as the primary
authority.

(4 )(b) Whether in the case of administrative or execu-
tive action affecting fundamental freedoms, the courts in our c
country will apply the principle of "proportionality" and as-
sume a primary role, is left open, to be decided in an appro-
priate case where such action is alleged to offend fundamental
freedoms. It will be then necessary to decide whether the
courts will have a primary role only if the freedoms under D
Articles 19, 21 etc. are involved and not for Article 14.

Finally, we come to the present case. It is not contended before
us that any fundamental freedom is affected. We need not therefore
go into the question of "proportionality". There is no contention
that the punishment imposed is illegal or vitiated by procedural E
impropriety. As to "irrationality'', there is no finding by the Tribu-
nal that the decision is one which no sensible person who weighed
the pros and cons could have arrived at nor is there a finding, based
on material, that the punishment is in "outrageous" defiance of
logic. Neither Wednesbury nor CCSU tests are satisfied. We have F
still to explain "Ranjit Thakur [1987] 4 SCC 611".

The common thread running through in all these decisions is that the
Court should not interfere with the administrator's decision unless it was
illogical or suffers from procedural impropriety or was shocking to the
; conscience of the Court, in the sense that it was in defiance oflogic or moral G
standards. In view of what has been stated in the Wednesbury's case (supra)
the Court would not go into the correctness of the choice made by the
administrator open to him and the Court should not substitute its decision
to that of the administrator. The scope of judicial review is limited to the
deficiency in decision-making process anci not the decision. H
1044 SUPREME COURT REPORTS [2004].SUPP. 6 S.C.R.

A To put differently unless the punishment imposed by the Disciplinary
Authority or the Appellate Authority shocks the conscience of the Court/
Tribunal, there is no scope for interference. Further to shorten litig~tions it
may, in exceptional and rare cases, impose appropriate punishment by
recording cogent reasons in support thereof. In a normal course if the
B punishment imposed is shockingly disproportionate it would be appropriate
to direct the Disciplinary Authority or the Appellate Authority to reconsider
the penalty imposed.

In the case at hand the High Court did not record any reason as to how
and why it found the punishment shockingly disproportionate. Even there
c is no discussion on this aspect.

A Bank officer is required to exercise higher standards of honesty and
integrity. He deals with money of the depositors and the customers. Every
officer/employee of the Bank is required to take all possible steps to protect
D the interests of the Bank and to discharge his duties with utmost integrity,
honesty, devotion and diligence and to do nothing which is unbecoming of
a Bank officer. Good conduct and discipline are inseparable from the
functioning of every officer/employee of the Bank. As was observed by this
Court in Disciplinary Authority-cum-Regional Manager v. Nikunja Bihari
Patnaik, [1996] 9 SCC 69, it is no defence available to say that there was
E no loss or profit resulted in case, when the officer/employee a.cted without
authority. The very discipline of an organization more particularly a Bank
is dependent upon each of its officers and officers acting and operating
within their allotted sphere. Acting beyond one's authority is by itself a
breach of discipline and is a misconduct. The charges against the employee
F were riot casual in nature and were serious. These aspects do not appear to
have been kept in view by the High Court.

It needs no emphasis that when a Court feels that the punishment is
shockingly disproportionate, it must record reasons for coming to such a
conclusion. Mere expression that the punishment is shockingly dispropor-
G tionate would not meet the requirement of law. Even in respect of admin- .
istrative orders Lord Denning M.R. in Breen v. Amalgamated Engineering
Union, [1971] l All E.R. 1148 observed "The giving 6freasons is one of
the fundamentals of good administration". In Alexander Machinery (Dudley)
Ltd. v. Crabtree, (1974) LCR 120 it was observed: "Failure to give re<'sons
H amounts to denial of justice". Reasons are live links between the mind of
DAMOH PANNA SAGAR RURAL REGIONAL BANK v. M.L. JAIN [PASAYAT, J.] 1045

the decision taker to the controversy in question and the decision or con- A
clusion arrived at". Reasons substitute subjectivity by objectivity. The
emphasis on recording reasons is that ifthe decision reveals the "inscrutable
face of the sphinx", it can, by its silence, render it virtually impossible for
the Courts to perform their appellate function or exercise the power of
judicial review in adjudging the validity of the decision. Right to reason is B
an indispensable part of a sound judicial system. Another rationale is that
the affected party can know why the decision has gone against him. One
of the salutary requirements of natural justice is spelling out reasons for the
order made, in other words, a speaking out. The "inscrutable face of a
sphinx" is ordinarily incongruous with a judicial or quasi-judicial perform-
ance. c
These aspects were highlighted in Chairman and Managing Director,
United Commercial Bank and Others v. P.C. Kakkar, [2003] 4 SCC 364.

In the case at hand, the High Court's judgment is full of ifs and buts. D
There is no definite finding recorded that the punishment is suffering from
any infirmity. No basis has been indicated to direct re-consideration of the
quantum of punishment. It is to be noted that the respondent had miserably
failed to prove bonafides. Though he took the stand that. he had informed
the head office about the withdrawal, no material was placed before any of
the authorities to prove it. It is to be noted that on the basis of material on E
record, it was concluded that the withdrawal was on 6.5.1992 and not on
9.5.1992 as was claimed. The respondent-employee has withdrawn a sum
of Rs. 20,000 from the account of bank with the State Bank of India on
6.5 .1992 and had withdrawn a further sum of Rs. 5,000 from the cash.
F
Above being the position the impugned judgment of the High Court
cannot be maintained and the same is set aside. The Writ Petition filed by
the respondent-employee, stands dismissed.

The appeal is allowed. No costs.
G
v.s.s. Appeal allowed.