The High Court of Himachal Pradesh set aside the termination of a probationary bank employee, holding that dismissal on the basis of FIRs lodged during probation, without a proper inquiry, amounts to a stigmatic order and violates the principles of natural justice and Article 311 of the Constitution.
Background & Facts
The Dispute
The petitioner, Gagandeep Singh, was appointed as a Junior Associate (CS & S) in the clerical cadre of State Bank of India on 23.07.2025. His appointment was subject to a six-month probation, completion of mandatory e-lessons, and satisfactory character and antecedent verification by police authorities.
Key Facts
- Appointment Letter: Annexure P-2 dated 23.07.2025, salary range Rs. 24,050 - 64,480, governed by the Sastry and Desai Awards.
- Probation Clause: Clause (c) required successful completion of e-lessons; clause (d) allowed extension or termination for unsatisfactory performance; clause (f) permitted termination with one month’s notice or pay in lieu.
- FIRs Lodged:
- FIR No. 329/2025 dated 05.12.2025 under Sections 21 and 29 of the NDPS Act.
- FIR No. 331/2025 dated 06.12.2025 under Section 21 of the NDPS Act.
- Arrests and Bail:
- Arrested and released on bail on 20.01.2026 (Special Judge, Hamirpur) for FIR 331/2025.
- Arrested and released on bail on 23.01.2026 for FIR 329/2025.
- Termination Order: Annexure P-4 dated 22.01.2026 terminated the petitioner’s services, citing unsatisfactory character verification report and the two FIRs.
- Relief Sought: Quash the termination order dated 22.01.2026 and annexure dated 10.03.2026, reinstate the petitioner with back wages, and prevent the bank from instituting fresh proceedings.
Procedural History
- 12.08.2026: Petition filed as CWP No. 3515 of 2026; reserved on this date.
- 31.08.2026: Judgment delivered by Justice Ajay Mohan Goel.
- 22.01.2026: Termination order issued by the bank.
- 10.03.2026: Annexure P-6 (related document) dated.
- Prior to termination: Two FIRs lodged and bail granted as above.
The Parties' Positions
- Petitioner: Argues that the termination is stigmatic because it is based solely on the FIRs, without any inquiry into misconduct, violating natural justice and Article 311.
- Respondent (Bank): Contends that termination is permissible under clause (l) of the appointment letter, that the FIRs justify termination, and that no inquiry is required for unsatisfactory character verification.
Relief Sought
- Quash the termination order dated 22.01.2026 and annexure dated 10.03.2026.
- Reinstate the petitioner with back wages till reinstatement.
- Direct that the bank may not initiate fresh proceedings against the petitioner.
The Legal Issue
Whether the termination of a probationary employee on the ground of FIRs lodged during the probation period, without conducting an inquiry, constitutes a stigmatic dismissal that violates the principles of natural justice and Article 311 of the Constitution.
Arguments Presented
For the Petitioner
- The termination is stigmatic because it is predicated on criminal allegations rather than on an assessment of work performance.
- Supreme Court precedents (Sarita Chaudhary v. High Court of Madhya Pradesh, Parshotam Lal Dhingra, Jaswantsingh Pratapsingh Jadeja v. Rajkot Municipal Corporation) distinguish between termination simpliciter and stigmatic dismissal.
- No inquiry was held; therefore, the petitioner was denied the opportunity to defend himself, contravening Article 311(2).
- The FIRs were lodged after the petitioner had joined service; hence, the bank could not rely on undisclosed antecedents at the time of appointment.
For the Respondent
- Clause (l) of the appointment letter expressly empowers the bank to terminate services during probation without notice if suitability criteria are not met.
- The character and antecedent verification report was unsatisfactory, justifying termination.
- The termination is non-stigmatic because it is based on the bank’s contractual right, not on punitive misconduct.
- Citing Kamal Nayan Mishra v. State of Madhya Pradesh and Ram Ratan Yadav to support termination without inquiry when false information is concealed.
The Court's Analysis
The Court first identified the statutory framework governing probationary service, notably the appointment letter clauses (c), (d), (f) and (l). It noted that termination during probation may be effected either simpliciter (unsatisfactory performance) or as a punitive measure (stigmatic). The distinction hinges on whether the dismissal is founded on misconduct that carries a stigma affecting future employability.
"Thus, in the light of above discussion, this writ petition is allowed and Annexure P-4 and Annexure P-6, dated 22.01.2026 and 10.03.2026 are ordered to be quashed and set aside with consequences to ensue, but with the observation that the setting aside of the impugned order shall not come in the way of the respondent-Bank to proceed against the petitioner in the matter afresh, in accordance with law."
The Court examined the Supreme Court’s ratio in Sarita Chaudhary, which holds that termination based on misconduct during probation is stigmatic and triggers Article 311. It further relied on Parshotam Lal Dhingra and Jaswantsingh Pratapsingh Jadeja to underscore that the substance, not the form, of the order determines stigma.
Applying these principles, the Court observed that the bank’s termination order expressly linked the dismissal to the two FIRs, without any reference to the petitioner’s work performance. The FIRs were lodged after the petitioner had joined service, negating any claim of undisclosed antecedents at the time of appointment. Moreover, no inquiry was conducted to ascertain whether the FIRs amounted to misconduct warranting punitive dismissal.
Consequently, the Court concluded that the termination was stigmatic, violated natural justice, and fell within the protective ambit of Article 311(2). The contractual right under clause (l) could not be invoked to bypass the requirement of a fair inquiry when the dismissal is based on alleged misconduct.
The Verdict
The petition is allowed. The termination order dated 22.01.2026 and annexure dated 10.03.2026 are quashed and set aside. The petitioner is reinstated with back wages payable from the date of termination until reinstatement. The bank is directed not to initiate fresh proceedings against the petitioner, subject to compliance with law.
What This Means For Similar Cases
Stigma Determines Need for Inquiry
- When dismissal is predicated on criminal allegations, courts will treat it as stigmatic and require a departmental inquiry before termination.
- Employers cannot rely solely on contractual clauses to bypass procedural safeguards if the dismissal carries a stigma.
Termination During Probation Is Not Automatic
- Unsatisfactory performance alone permits termination simpliciter without an inquiry.
- However, if the ground for dismissal is misconduct or criminal antecedents, an inquiry is mandatory to satisfy Article 311.
Employer Must Distinguish Unsuitability From Misconduct
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Employers should document performance-related reasons separately from criminal allegations.
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Any termination order that mixes the two without clear factual basis is likely to be struck down as stigmatic.
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Practical Takeaways:
- Conduct a formal inquiry before terminating a probationer on misconduct grounds.
- Keep termination orders free of language that could be interpreted as punitive.
- Preserve records of performance assessments to substantiate termination simpliciter.
