Holding

Termination of a probationer on the basis of alleged misconduct is punitive and must be preceded by a proper inquiry and opportunity of hearing; otherwise, the termination is void.

Summary

The case concerned two probationary officers of State Bank of India who were terminated after being alleged to have used unfair means in a confirmation test. The bank, relying on a report from the Institute of Banking Personnel Selection (IBPS) and seating‑arrangement evidence, extended their probation and then dismissed them under Rule 16(3) of the SBI Officers' Service Rules without conducting an inquiry or giving them a chance to be heard. The petitioners challenged the termination as arbitrary and violative of natural‑justice principles. The Supreme Court held that while termination of a probationer for general unsuitability is permissible, termination based on misconduct requires a fair inquiry; otherwise, it is punitive and void. Consequently, the Court ordered reinstatement with full benefits but allowed the bank to take a fresh confirmation decision after a proper hearing.

Issues considered

Whether termination of probationary officers on the ground of alleged use of unfair means constitutes a punitive action requiring compliance with natural‑justice rules.
Whether the bank was required to conduct an inquiry and afford a hearing before terminating the officers under Rule 16(3).
Whether the actions of the competent authority can be treated as punitive despite the absence of explicit stigma in the termination order.

Legislation cited

Constitution of Indias. Article 311
State Bank of India (Officers' Service) Rules, 1992s. Rule 15(1), s. Rule 16(2), s. Rule 16(3)

Subjects

probationary officertermination of servicenatural justicemisconductunfair meansservice lawArticle 311Rule 16confirmation testIBPS

Judgment

•

[2012] 12 S.C.R. 628

A STATE BANK OF INDIA AND OTHERS
v.
PALAK MODI AND ANOTHER
(Civil Appeal Nos. 7841-7842 of 2012)
DECEMBER 03, 2012
B
[G.S. SINGHVI AND SUDHANSU JYOTI
MUKHOPADHAYA, JJ.]

Service Law - Termination - Of Bank Probationary
C Officers (private respondents) - Challenge to - Held: If the
competent authority holds an inquiry for judging the suitability
of the probationer or for his further continuance in service or
for confirmation and such inquiry is the basis for taking
decision to terminate his service, then the action of the
D competent authority cannot be castigated as punitive -
However, if an allegation of misconduct constitutes the
foundation of the action taken, the ultimate decision taken by
the competent authority can be nullified on the ground of
violation of the rules of natural justice - On facts, the decision
E to dispense with the services of the private respondents was
taken solely on the ground that they were guilty of using unfair
means in the confirmation test which constituted a misconduct
- However, this exercise was not preceded by an inquiry
involving the private respondents and no opportunity was
F given to them to defend themselves against the charge of use
of unfair means - They were condemned unheard which was
legally impermissible - Appellants to reinstate the private
respondents and give them all consequential benefits -
However, competent authority not precluded from taking fresh
decision in the matter of confirmation of the private
G respondents after giving them effective opportunity of hearing
against the allegation of use of unfair means in the
confirmation test - State Bank of India (Officers' Service)
Rules, 1992 - rr.15(1) and 16.
H 628
STATE BANK OF INDIA v. PALAK MODI 629

The private respondents were appointed as A
Probationary Officers in the appellant-bank in the year
2006. In 2010, they were informed that they are due for
confirmation and, were therefore, required to appear in a
confirmation test. The private respondents appeared in
the test, and subsequently the result thereof was B
declared. The names of the private respondents did not
figure in the result apparently because the Institute of
Banking Personnel Selection ('IBPS'}, an independent
expert body engaged in conducting recruitment for
various services, which was entrusted with the task of c
preparing the examination papers and evaluating the
answer sheets sent a report to the Bank that some
candidates including the private respondents were
suspected to have used unfair means.

The probation of the private respondents was D
extended for three months by invoking Rule 16(2) of the
State Bank of India (Officers' Service) Rules, 1992.
However, prior to expiry of the extended period of
probation, the services of the private respondents was
terminated under Rule 16(3) of the State Bank of India E
(Officers' Service) Rules, 1992. The private respondents
challenged the termination of their services by filing writ
petitions mainly on the grounds that the action taken by
the concerned authorities of the Bank was arbitrary and
violative of the rules of natural justice. They pleaded that F
,during the period of probation, no one had informe,d them
about any shortcoming, deficiency or defect in their work
and yet their services were terminated without giving
them notice and opportunity of hearing. The private
respondents further pleaded that even though they had G
requested the concerned officers of the Bank to disclose
the reasons for extension of probation and termination
of their services but no response was received from
them.
H
630 SUPREME COURT REPORTS [2012] 12 S.C.R.

A The High Court did not directly deal with the question
whether the action taken by the General Manager was
arbitrary, unfair and unjustified and whether in the garb
of termination simpliciter, the concerned authority had
penalized the private respondents on the charge of their
B having indulged in malpractices in the confirmation test
but held that the action taken by the appellants was
contrary to the guidelines framed by the IBPS for
detecting cases of use of unfair means. The High Court
referred to paragraph 4 of the guidelines framed by the
c IBPS and opined that after considering the report
suggesting 'that the private respondents were suspected
to have used unfair means in the examination, the Bank
should have scrutinized their cases on the basis of their
performance in the descriptive papers and then taken a
final decision. The High Court held that the Bank could
0
not have discharged the private respondents from service
by assuming that they had used unfair means in the
objective type papers.

Whether the alleged use of unfair means by the
E private respondents in the confirmation test held by
appellant-Bank constituted the foundation of the
decision taken to terminate their services under Rule
16(3) of the State Bank of India (Officers' Service) Rules,
1992 is the question which arose for consideration in the
F instant appeals. ·

Dismissing the appeals, the Court
HELD: 1.1. A probationer has no right to hold the
post and his service can be terminated at any time during
G or at the end of the period of probation on account of
general unsuitability for the post held by him. If the
competent authority holds an inquiry for judging the
suitability of the probationer or for his further continuance
in service or for confirmation and such inquiry is the
H
STATE BANK OF INDIA v. PALAK MODI 631

basis for taking decision to terminate his service, then the A
· action of the competent authority cannot be castigated
as punitive. However, if the allegation of misconduct
constitutes the foundation of the action taken, the
ultimate decision taken by the competent authority can
be nullified on the ground of violation of the rules of. B
natural justice. [Para 20] [656-A-C]

1.2. A combined reading of Rules 15(1) and 16 of the
State Bank of India (Officers' Service) Rules, 1992 and
paragraph 5 of the conditions of appointment makes it C
clear that a person appointed as a Probationary Officer
remains on probation for a minimum period of two years
at the end of which he is entitled to be confirmed if the
competent authority is of the opinion that he has
satisfactorily completed the training in any institution to
which he may have been deputed and the in-service D
·. training in the Bank. The Probationary Officer can also be
subjected to screening for judging his merit and
suitability. If the Probationary Officer fails to satisfactorily
complete the training(s) or fails to pass the screening test
or his service is not satisfactory, then the Bank can E
extend the period of probation by a further period of
which the outer limit is one year. In a given case, the
competent authority can, if it is of the opinion that the
Probationary Officer is not fit for confirmation, terminate
his service by one month's notice or payment of one F
month's emoluments. It is thus evident that satisfactory
performance during the period of probation, successful
completion of training{s) and passing of the test
conducted by the Bank for judging his suitability for the
post constitute the touchstone for his confirmation. G
[Paras 22, 23] [669-G-H; 670-A-D]

1.3. The primary object of the confirmation test held
on 27 .2.2011, which could also be termed as evaluation
test within the meaning of paragraph 5(c) of the H
632 SUPREME COURT REPORTS (2012] 12 S.C.R.

A appointment letter was to decide whether the officer has
made use of the opportunities made available to him by
the Bank to prove his worth for the job for which he was
recruited and whether he has acquired sufficient
knowledge about the functional requirements of the
B .Bank. The test also gave an opportunity to the
Probationary Officer to demonstrate that he was
meritorious enough to be placed in the higher grade.
[Para 25] [670-G-H; 671-A-B]

1.4. There is a marked distinction between the
C concepts of satisfactory completion of probation and
successful passing of the training/test held during or at
the end of the period of probation, which are sine qua
non for confirmation of a probationer and the Bank's right
to punish a probationer for any defined misconduct,
D misbehaviour or misdemeanor. In a given case, the
competent authority may, while deciding the issue of
suitability of probationer to be confirmed, ignore the .
act(s) of misconduct and terminate his service without
casting any aspersion or stigma which may adversely
E affect his future prospects but, if the misconduct/
misdemeanor constitutes the basis of the final decision
taken by the competent authority to dispense with the
service of the probationer albeit by a non stigmatic order,
the Court can lift the veil and declare that in the garb of
F termination simpliciter, the employer has punished the
empll;>yee for an act of misconduct. [Para 26] [671-B·E]
1.5. The use of unfair means in the evaluation test/
confirmation test held by the Bank certainly constitutes
G a misconduct. The Bank itself had treated such an act to
be a misconduct (paragraph 10 of advertisement dated
1.7.2008). The services of the private respondents were
not terminated on the ground that there was any
deficiency or shortcoming in their work or performance
during probation or that they had failed to satisfactorily
H
STATE BANK OF INDIA v. PALAK MODI 633

·· complete the training or had failed to secure the qualifying A
marks in the test held on 27.2.2011. The note prepared by
the Deputy General Manager, which was approved by the
General Manager makes it crystal clear that the decision
to dispense with the services of the private respondents
was taken solely on the ground that they were guilty of B
using unfair means in the test held on 27.2.2011. The
foundation of the action taken by the General Manager
was the accusation that while appearing in the objective
test, the private respondents had resorted to copying.
IBPS had relied upon the analysis made by the computer c
and sent report to the Bank that 18 candidates were
suspected to have used unfair means. The concerned
authority then sent for the chart of seating arrangement
and treated the same as a piece of evidence for coming
to the conclusion that the private respondents had
0
indeed used unfair means in the examination. This
exercise was not preceded by an inquiry involving the
private respondents and no opportunity was given to
them to defend themselves against the charge of use of
unfair means. In other words, they were condemned
unheard which was legally impermissible. [Para 27] [671- E
F-H; 672-A-D]

Ajit Singh v. State of Punjab (1983) 2 SCC 217: 1983
(2) SCR 517; Krishnadevaraya Education Trust v. L.A.
Balakrishna (2001) 9 SCC 319: 2001 (1) SCR 387; F
Pavanendra Narayan Verma v. Sanjay Gandhi PG/ of Medical
Sciences (2002) 1 SCC 520: 2001 (5) Suppl. SCR 41;
Progressive Education Society v. Rajendra (2008) 3 SCC
310: 2008 (2) SCR 1005 and Rajesh Kumar Srivastava v.
State of Jharkhand (2011) 4 SCC 447: 2011 (3) SCR 823 - G
held inapplicable.
Parshotam Lal Dhingra v. Union of India 1958 SCR 828;
State· of Punjab and Another v. Sukh Raj Bahadur (1968) 3
SCR 234; State of Bihar v. Shiva Bhikshuk Mishra (1970) 2 H
634 SUPREME COURT REPORTS [2012] 12 S.C.R.

A SCC 871: 1971 (2) SCR 191; Union of India v. R.S. Dhaba,
Income Tax Officer, Hoshiarpur, 1969 (3) SCC 603; Samsher
Singh v. State of Punjab (1975) 1 SCR 814; Gujarat Steel
Tubes Ltd. v. Gujarat Steel Tubes Mazdoor Sabha (1980) 2
SCC 593: 1980 (2) SCR 146; Anoop Jaiswa/ v. Government
B of India (1984) 2 SCC 369: 1984 (2) SCR 453; R.S. Sia/ v.
State of U.P. (1974) 3 SCR 754; State of U.P. v. Ram Chandra
Trivedi (1976) 4 SCC 52: 1977 (1) SCR 462; l.N. Saksena
v. State of M.P. (1967) 2 SCR 496; Dipti Prakash Banerjee
v. Satyendra Nath Bose National Centre for Basic Sciences
C (1999) 3 SCC 60: 1999 (1) SCR 532; Chandra Prakash
Shahi v. State of U.P. (2000) 5 sec 152: 2000 (3) SCR 529
and Union of India v. Mahaveer C. Singhvi (2010) 8 SCC
220: 2010 (9) SCR 246 - referred to.

2. The appellants shall reinstate the private
D respondents and give them all consequential benefits like
pay, allowances, etc. However, this judgment shall not
preclude the competent authority from taking fresh
decision in the matter of confirmation of the private
respondents after giving them effective opportunity of
E hearing against the allegation of use of unfair means in
the test held on 27 .2.2011. [Para 34] [681-B-D]
Case Law Reference:
1983 (2) SCR 517 held inapplicable Para 8
F
2001 (1) SCR 387 held inapplicable Para 8
2001 (5) Suppl. SCR 41 held inapplicable Para 8
2008 (2) SCR 1005 held inapplicable Para 8
G 2011 (3) SCR 823 held inapplicable Para 8
1958 SCR 828 referred to Paras 11, 16
(1968) 3 SCR 234 referred to Paras 12, 13,
16
H
STATE BANK OF INDIA v. PALAK MODI 635

1971 (2) SCR 191 referred to Paras 13, 16 A

1969 (3) sec 603 referred to Paras 13, 16
(1975) 1 SCR 814 referred to Paras 14, 16

1980 (2) SCR 146 referred to Para 15
B
1984 (2) SCR 453 referred to Para 16

(1974) 3 SCR 754 referred to Para 16

1977 (1) SCR 462 referred to Para 16
c
(1967) 2 SCR 496 referred to Para 16
1999 (1) SCR 532 referred to Para 17

2000 (3) SCR 529 referred to Para 18
2010 (9) SCR 246 referred to Para 19 D

CIVIL APPEl,.LATE JURISDICTION : Civil Appeal Nos ..
7841-7842 of 2012.

From the Judgment & Order dated 17 .11.2011 of the High E
Court of Judicature at Allahabad, Lucknow Bench in WP No.
1298 of 2011 and WP No. 1512 of 2011.

WITH

C.A. No.7843 of 2012. F
U.U. Lalit, Harish N. Salve, Pallav Shishodia, Vikas Singh,
Shobha Dixit, Sanjay Kapur, Deven Khanna, Tara V. Ganju,
Praveena, Gautam, Preeti Gupta, Ashmi Mohan, Arti Singh,
Pradeep Misra, Daleep Dhyani, Suraj Singh and Yatish Mohan, G
R.K. Bachchan for the appearing parties.

The Judgment of the Court was delivered by

G.S. SINGHVI, J. 1. Whether the alleged use of unfair
means by Palak Modi and Prabhat Dixit (hereinafter described H
636 SUPREME COURT REPORTS [2012] 12 S.C.R.

A as 'the private respondents') in the test held by appellant No.1
- State Bank of India (for short, 'the Bank') constituted the
foundation of the decision taken by General Manager (NW-I),
State Bank of India, Human Resource Department (respondent
No.3) to terminate their services under Rule 16(3) of the State
B Bank of India (Officers' Service) Rules, 1992 (for short, 'the
Rules') is the pivotal question which arises for consideration
in these appeals filed against order dated 17.11.2011 passed
by the Allahabad High Court in Writ Petition Nos.1298/2011
and 1512/2011.
c 2. In response to an advertisement issued by appellant
No.1, which was published on 1. 7 .2008, the private
respondents applied for appointment as Probationary Officers.
They appeared in the two-tier examination held by the Bank,
which was followed by group discussion and interview. On
D being declared successful, the private respondents were
appointed as Probationary Officers vide letters dated 5.5.2006,
paragraph 5 of which reads as under:

"5. You will be on probation for a period of two years from
E
•
the date of appointment. Your confirmation in the Bank shall
be subject to:
(a) Satisfactory reports from our own sources as well as
from District Authorities regarding your character and
antecedents.
F
(b) Satisfactory completion of the in-service training during
probation.
(c) Satisfactory performance in the evaluation tests to be
G
conducted by the Bank during the probation period. Your
failure in evaluation tests twice will make you unfit for
continuing in Bank's service and in that eventuality, your
appointment will be cancelled and your services terminated
by the Bank."
H 3. Vide letter dated 22.12.2010 of Deputy Managing
STATE BANK OF INDIA v. PALAK MODI 637
[GS. SINGHVI, J.]
Director and Corporate Development Officer of the Bank, the A
Probationary Officers of 2009-10 batch were informed that they
are due for confirmation on 15.5.2011 and, therefore, they may
appear in the test proposed to be conducted on 27 .2.2011.
Paragraph 2 of that letter which has bearing on the decision of
these appeals reads as under: B

"2. The relative extract from the extant policy for
confirmation of probationary officers is reproduced below:-

(i) The confirmation test shall be held after 21 months
0

from the date of appointment of the probationary c
officers (during the probation period)

(ii) Candidates scoring a minimum of 75% marks in the
written test would qualify for the further process that
will include group discussion and interview. D
Candidates scoring minimum 75% marks in-group
discussion/interview also shall be confirmed and
placed in the grade of MMGS-11. Those scoring less
than 75% marks but minimum 50% (45% for SCI
ST/PWD) marks in the written test shall be
E
confirmed in the grade of JMGS-1. Candidates
scoring less than 50% (45% for SC/ST/PWD)
marks will be given two options as under:

OPTION-I
F
Candidate will be required to appear in another
confirmation test on or before completion of 24th
month of his/her probation and in the event of not
qualifying in the re-test his/her services will be
terminated with immediate effect and he/she will be G
paid one month's emoluments in lieu of one month's
notice in terms of Rule 16(3)(a) of SBI Officer's
Service Rule read with the present policy of
confirmation of Probationary officers as application
hitherto. H
638 SUPREME COURT REPORTS [2012] 12 S.C.R.

A OPTION-II

Candidate's probation will be extended by a further ·
period of maximum one year in terms of two
periods of six months each (extending the total
probation period to a maximum of 36 months) with
B
the provision to appear in 02 more confirmation
tests at 06 monthly intervals i.e. 02nd test in 27th
month & 03rd test in 33rd month of his/her
probation respectively with the following
conditions:-
c
In the event of:

Passing the proposed 02nd test after 27th month
of probation candidate will be confirmed as JMGS-
D 1on completion of 30th month of probation including
extended period of probation of 06 months. The
extended period of probation of six months will,
however, not to be counted for service seniority.

Failing in the 02nd test put passing the proposed
E 03rd test after 33rd month of his/her probation he/
she will be confirmed as JMGS-1 on completion of
36th month of probation including the extended
period of probation of one year. The extended
period of probation of one-year will, however, not
F be counted for serv!ce seniority.

Failing in the proposed 03rd test administered in
33rd month of his/her probation, 04 increments in
basic salary given to him/her on appointment, as
Probationary Officer will be withdrawn and he/she
G
will be absorbed as Officer JMGS-1 on completion
of 36th month of probation period including the
extended period of probation of one year. The
extended period of probation of one year will not
H
STATE BANK OF INDIA v. PALAK MODI 639
[G.S. SINGHVI, J.]
be counted for service seniority. In all the above A
cases, as mentioned in Option 11, where probation
period is extended, the annual increment date will
be shifted by skipping the extended probation
period of six or twelve months, as the case may be.
B
"Further, the service rendered by him/her
during extended probation period of six or
twelve months will also not be counted as
eligible service for seniority as well as for next
promotion."
c
The committed for the Group Discussion /Interview will
comprise of a Chief General Manager, a General Manager
and a Deputy General Manager besides one SC/ST
representative who should at least be of SMGS IV
incumbency." D
4. The private respondents appeared in the test held on
27.2.2011, the result whereof was declared on 10.5.2011. Their
names did not figure in the result apparently because Institute
of Banking Personnel Selection (for short, 'IBPS'), an E
independent expert body engaged in conducting recruitment for
various services, which was entrusted with the task of preparing .
the examination papers and evaluating the answer sheets sent
a report to the Bank that some candidates including the private
respondents are suspected to have used unfair means. After
four days, respondent No.3 issued letters dated 14.5.2011 and F
extended the probation of the private respondents for three
months by invoking Rule 16(2) of the Rules. However, without
waiting for expiry of the extended period of probation,
respondent No.3 terminated their services vide letters dated
27.6.2011 by indicating that this was being done under Rule G
16(3) of the Rules.
5. The private respondents challenged the termination of
their services by filing writ petitions mainly on the grounds that
the action taken by the concerned authorities of the Bank was H
640 SUPREME COURT REPORTS [2012] 12 S.C.R.

A arbitrary and violative of the rules of natural justice. They
pleaded that during the period of probation, no one had
informed them about any shortcoming, deficiency or defect in
their work and yet their services were terminated without giving
them notice and opportunity of hearing. The private respondents
B further pleaded that even though they had requested the
concerned officers of the Bank to disclose the reasons for
extension of probation and termination of their services but no
response was received from them.

6. In the counter affidavits filed on behalf of the appellants,
C it was pleaded that the decision to extend the probation of the
private respondents and to terminate their services was taken
after considering the report sent by IBPS about suspected use
of unfair means by the candidates. It was further pleaded that
on checking the record of seating arrangement, it was revealed
D that the private respondents and other candidates were seating
in close proximity with each other and that was considered as
a corroborative evidence of their having used unfair means,
namely, copying answers from one another. According to the
appellants, action was taken against the private respondents
E strictly in accordance with the conditions of appointment without
holding any formal inquiry into the allegation involving
misconduct.

7. The Division Bench of the High Court did not directly
F deal with the question whether the action taken by the General
Manager was arbitrary, unfair and unjustified and whether in the
garb of termination simpliciter, the concerned authority had
penalized the private respondents on the charge of their having
indulged in malpractices in the confirmation test but held that
G the action taken by the appellants was contrary to the guidelines
framed by the IBPS for detecting cases of use of unfair means.
The Division Bench referred to paragraph 4 of the guidelines
framed by the IBPS and opined that after considering the report
suggesting that the private respondents were suspected to
have used unfair means in the examination, the Bank should
H
STATE BANK OF INDIA v. PALAK MODI 641
[G.S. SINGHVI, J.]
have scrutinized their cases on the basis of their performance A
in the descriptive papers and then taken a final decision. The
Division Bench took cognizance of the statement of the senior
counsel appearing for the Bank that performance of the private
respondents in the descriptive papers was not evaluated and
held that the Bank could not have discharged them from service B
by assuming that they had used unfair means in the objective
type papers.

8. Shri U. U. Lalit, learned senior counsel appearing for the
appellants argued that the impugned order is liable to be set C
aside because the view taken by the High Court on the legality
and propriety of the decision taken by respondent No.3 in
consonance with the terms of appointment of the private
respondents and Rule 16(3) of the Rules is ex facie erroneous
and is contrary to the terms and conditions of their appointment.
Shri Lalit emphasized that officers and employees of D
unquestionable integrity are required by the Bank because their
work involves high degree of responsibility and any compromise
in that regard would be detrimental to larger public interest.
Learned senior counsel then argued that the assessment made
by the appointing authority on the issue of suitability of the E
private respondents for confirmation was based on an objective
consideration of the report received from IBPS and in the
absence of any express stigma in the order of termination/
discharge, the respondents were not entitled to complain of
violation of the rules of natural justice. Shri Lalit submitted that F
holding of regular inquiry is not sine qua non for discharging a
probationer and the High Court committed grave error by
nullifying the decision taken by respondent No.3 on the ground
of violation of the guidelines/policy framed by IBPS for
evaluation of the answer sheets. Shri Lalit produced before the G
Court xerox copy of the proceedings which culminated in the
issue of letters dated 27 .6.2011 to show that respondent No.3
approved the note prepared by Deputy General Manager,
Central Recruitment and Promotion Department, who had
examined the report sent ·by !BPS and checked the record H
642 SUPREME COURT REPORTS (2012] 12 S.C.R.

A relating to seating arrangement which conclusively established
that the private respondents had used unfair means in the
confirmation test. Shri Lalit finally argued that discharge of a
probationer on the ground of unsuitability cannot be termed as
punitive and respondent No.3 was not required to give notice
s and opportunity of hearing to the private respondents. In support
of this argument, Shri Lalit relied upon the judgments of this
Court in Ajit Singh v. State of Punjab (1983) 2 SCC 217,
Krishnadevaraya Education Trust v. L.A. Balakrishna (2001)
9 SCC 319, Pavanendra Narayan Verma v. Sanjay Gandhi
C PG/ of Medical Sciences (2002) 1 SCC 520, Progressive
Education Society v. Rajendra (2008) 3 SCC 310 and Rajesh
Kumar Srivastava v. State of Jharkhand (2011) 4 SCC_ 447.
9. Shri Vikas Singh, learned senior counsel appearing for
IBPS submitted that the institute is an expert body which has
D been conducting examinations for the officers and employees
of various organizations and financial institutions. Shri Singh
submitted that IBPS has developed a software of its own for
identifying the cases of use of unfair means and the software
generates report of all pairs of cases which have identical
E responses. The report of the software is then reviewed by a
group of experts and then and then only a conclusion is reached
about suspected use of unfair means. Learned senior counsel
then argued that the interpretation placed by the High Court on
para 4(8) of the guidelines framed by IBPS is wholly erroneous
F and the word 'may' used in that paragraph cannot be construed
as 'shall' so as to make evaluation of the descriptive papers
as mandatory even in the cases of suspected use of unfair
means. He submitted that IBPS had sent report regarding
suspected use of unfair means because the candidates had
G given 11 identical wrong answers and 44 identical correct
answers, which was highly improbable and the appellant did
not commit any error by relying upon that report. Learned senior
counsel referred to the revised guidelines issued by IBPS for
detecting the cases of use of unfair means and submitted that
H the report sent to the Bank was based on evaluation of the
STATE BANK OF INDIA v. PALAK MODI 643
[G.S. SINGHVI, J.]
papers of objective test in consonance with the revised A
· guidelines and the concerned officers of the Bank took decision
after fully satisfying themselves that the private respondents had
used unfair means in the examination. Shri Vikas Singh
emphasized that the action taken against the private
respondents had salutary and sobering effects on other B
candidates and not a single case of unfair means was detected
by IBPS in the tests held between 17.7.2011 and 24.6.2012
for various batches of new recruits.

10. Shri Pallav Shishodia, Mrs. Shobha Dixit, Senior C
Advocates and other learned counsel appearing for the·
respondents argued that even though the High Court did not
specifically dealt with the question whether the action taken by
respondent No.3 was vitiated due to violation of the rules of
natural justice, the material produced before the High Court and
· this Court unmistakably shows that the decision contained in D
letters dated 27.6.2011 was founded on the conclusion reached
by the officers of the Bank that the private respondents were
guilty of using unfair means in the confirmation test and this
could not have been done without giving them action oriented
notice and fair opportunity of hearing. Shri Shishodia pointed E
out that the report prepared by IBPS was based on computer
scanning of the answer sheets of the objective papers and the
appellants could not have relied upon such report for
jeopardizing the career of the private respondents without
holding an inquiry and without giving them opportunity to F
controvert the allegation of use of unfair means. Learned senior
counsel submitted that there was no deficiency or defect or
shortcoming in the work or performance of the private
respondents as Probationary Officers and in the guise of
discharging their services under Rule 16(3), the Bank had G
penalized them on the specific allegation of using unfair means
in the confirmation test without complying with the basics of the
natural justice.

11. The question whether termination of the service of a H
644 SUPREME COURT REPORTS [2012] 12 S.C.R.

A temporary employee or a probationer can be treated as punitive
even though the order passed by the competent authority does
not contain any stigma has been considered in a series of
judgments. In Parshotam Lal Dhingta v. Union of India, 1958
SCR 828, which can be considered as an important milestone
B in the development of one facet of service jurisprudence in the
country, the Constitution Bench was called upon to decide
whether the order of reversion of an official holding a higher
post in an officiating capacity could be treated as punitive. After
elaborate consideration of the relevant provisions of the
c Constitution and judicial decisions on the subject, the
Constitution Bench observed:

"... In short, if the termination of service is founded on the
right flowing from contract or the service rules then, prima ,
facie, the termination is not a punishment and carries with
D it no evil consequences and so Article 311 is not attracted.
But even if the Government has, by contract or under the
rules, the right to terminate the employment without going
through the procedure prescribed for inflicting the
punishment of dismissal or removal or reduction in rank,
E the Government may, nevertheless, choose to punish the
servant and if the termination of service is sought to be
founded on misconduct, negligence, inefficiency or other
disqualification, then it is a punishment and the
requirements of Article 311 must be complied with ... ."
F
12. In State of Punjab and Another v. Sukh Raj Bahadur
(1968) 3 SCR 234, Mitter, J. considered several precedents
and culled out the following propositions:

"1. The services of a temporary servant or a probationer
G can be terminated under the rules of his employment and
such termination without anything more would not attract
the operation of Article 311 of the Constitution.

2. The circumstances preceding or attendant on the order
H of termination have to be examined in each case, the
. STATE BANK OF INDIA v. PALAK MODI 645
(G.S. SfNGHVI, J.]
motive behind it being immaterial. A

3. If the order visits the public servant with any evil
consequences or casts an aspersion against his character
or integrity, it must be considered to be one by way of
punishment, no matter whether he was a mere probationer
B
or a temporary servant.

4. An order of termination of service in unexceptionable
form preceded by an enquiry launched by the superior
authorities only to ascertain whether the public servant
should be retained in service does not attract the operation c
of Article 311 of the Constitution.

5. lf there be a full-scale departmental enquiry envisaged
, by Article 311 i.e. an Enquiry Officer is appointed, a
I
charge-sheet submitted, explanation called for and D
considered, any -order of termination of service made
thereafter wilt attract the operation of the said article."

13. In State of Bihar v. Shiva Bhikshuk Mishra (1970) 2
SCC 871, the three Judge Bench considered the question
whether the respondent's reversion from the post of Subedar- E
Major to that of Sergeant in the backdrop of an inquiry made
into the allegation of assault on his subordinate was punitive.
On behalf of the appellant, reliance was also placed on the
judgments in State of Punjab v. Sukh Raj Bahadur {supra) and
Union of India v. R. S. Dhaba, Income-tax Officer, Hoshiarpur, F
1969 (3) sec 603 and it was argued that the order of reversion
cannot be treated as punitive because it did not contain any
word of stigma and the High Court committed an error by
relying upon the inquiry conducted by the Commandant for
coming to the conclusion that the order of reversion was G
punitive. While rejecting the contention, this Court observed:

"We are unable to accede to the contention of the
appellant that the ratio of the above decision is that so long
as there are no express words of stigma attributed to the
H

·,· ' '
646 SUPREME COURT REPORTS [2012] 12 S.C.R.

A conduct of a Government Officer in the impugned order it
cannot be held to have been made by way of punishment.
The test as previously laid and which was relied on was
whether the misconduct or negligence was a mere motive
for the order of reversion or whether it was the very
B foundation of that order. In Dhaba case, it was not found
that the order of reversion was based on misconduct or
negligence of the officer. So far as we are aware no such
rigid principle has ever been laid down by this court that
one has only to look to the order and if it does not contain
c any imputation of misconduct or words attaching a stigma
to the character or reputation of a Government Officer it
must be held to have been made in the ordinary course of
administrative routine and the court is debarred from
looking at all the attendant circumstances to discover
whether the order had been made by way of punishment.
D
The form of the order is not conclusive of its true nature
and it might merely be a cloak or camouflage for an order
founded on misconduct. It may be that an order which is
innocuous on the face and does not contain any imputation
of misconduct is a circumstance or a piece of evidence
E for finding whether it was made by way of punishment or
administrative routine. But the entirety of circumstances
preceding or attendant on the impugned order must be
examined and the overriding test will always be whether
the misconduct is a mere motive or is the very foundation
F of the order." '
(emphasis supplied)
14. In Samsher Singh v. State of Punjab (1975) 1 SCR
G 814, a seven-Judge Bench considered the legality of the
discharge of two judicial officers of the Punjab Judicial Service,
who were serving as probationers. A. N. Ray, CJ, who wrote
opinion for himself and five other Judges made the following
observations:
H "No abstract proposition can be laid down that where the
STATE BANK OF INDIA v. PALAK MODI 647
[G.S. SINGHVI, J.]
services of a probationer are terminated without saying A
anything more in the order of termination than that the
services are terminated it can never amount to a
punishment in the facts and circumstances of the case. If
a probationer is discharged on the ground of misconduct,
or inefficiency or for similar reason without a proper B
enquiry and without his getting a reasonable opportunity
of showing cause against his discharge it may in a given
case amount to removal from service within the meaning
of Article 311 (2) of the Constitution.

The form of the order is not decisive as to whether the order
c
is by way of punishment. Even an innocuously worded
order terminating the service may, in the facts and
circumstances of the case establish that an enquiry into
allegations of serious and grave character of misconduct
involving stigma has been made in infraction of the 0
provision of Article 311. In such a case, the simplicity of
the form of the order will not give any sanctity. That is
exactly what has happened in the case of lshwar Chand
Agarwal. The order of termination is illegal and must be
~~~- E
Krishna Iyer, J, who agreed with the learned Chief Justice,
made the following concluding observations:

"Again, could it be that if you summarily pack off a F
probationer, the order is judicially unscrutable and
immune? If you conscientiously seek to satisfy yourself
about allegations by some sort of enquiry you get caught
in the coils of law, however harmlessly the order may be
phrased? And so, this sphinx-complex has had to give way G
in later cases. In some cases the rule of guidance has been
stated to be 'the substance of the matter' and the
'foundation' of the order. When does 'motive' trespass into
'foundation'? When do we lift the veil of 'form' to touch the
'substance'? When the Court says so. These 'Freudian'
H
648 SUPREME COURT REPORTS [2012] 12 S.C.R.

A frontiers obviously fail in the work-a-day world and Dr
Tripathi's observations in this context are not without force."

15. In Gujarat Steel Tubes Ltd. v. Gujarat Steel Tubes
Mazdoor Sabha (1980) 2 SCC 593, Krishna Iyer, J. considered
as to when the termination simpliciter can be termed as punitive
8
and observed:

•A termination effected because the master is satisfied of
the misconduct and of the consequent desirability of
terminating the service of the delinquent servant, is a
c dismissal, even if he had the right in law to terminate with
an innocent order under the standing order or otherwise.
Whether, in such a case, the grounds are recorded in
different proceedings from the formal order, does not
detract from its nature. Nor the fact that, after being
.D satisfied of the guilt, the master abandons the enquiry and
proceeds to terminate. Given an alleged misconduct and
a live nexus between it and the termination of service, the
conclusion is dismissal, even if full benefits as on simple
termination, are given and non-injurious terminology is
E used.

On the contrary, even if there is suspicion of misconduct,
the master may say that he does not wish to bother about
it and may not go into his guilt but may feel like not
keeping a man he is not happy with. He may not like to
F investigate nor take the risk of continuing a dubious
servant. Then it is not dismissal but termination simpliciter,
if no injurious record of reasons or punitive cut-back on his
full terminal benefits is found. For, in fact, misconduct is
not then the moving factor in the discharge."
G
16. In Anoop Jaiswal v. Government of India (1984) 2
SCC 369, this Court considered the question whether
termination of the appellant's service, who was appointed to
Indian Police Service and was on probation, by invoking Rule
H 12(b) of the Indian Police Service (Probation) Rules, 1954 was
STATE BANK OF INDIA v. PALAK MODI 649
[G.S. SINGHVI, J.]
punitive in nature. The facts found by the Court were that while A
undergoing training at National Police Academy, Hyderabad,
the Probationary Officers had delayed attending the
ceremonial drill practice. The Director of the Academy called
explanation from all the probationers. The appellant was
accused of having instigated others not to join ceremonial drill B
practice on time. He denied the allegation. Thereafter, his
service was terminated by a non-stigmatic order. The appellant
challenged the termination of his service on the ground of
violation of Articles 14 and 311(2) of the Constitution. The writ
petition filed by him was summarily dismissed by the Delhi High c
Court. This Court referred to the averments contained in the
pleadings of the parties, the judgments in Parshotam Lal
Dhingra v. Union of India (supra), Samsher Singh v. State of
Punjab (supra) State of Punjab v. Shri Sukh Raj Bahadur
(supra), Union of India v. R.S. Dhaba (supra), State of Bihar D
v. Shiva Bhikshuk Mishra (supra), R.S. Sia/ v. State of U.P.
(1974) 3 SCR 754, State of U.P. v. Ram Chandra Trivedi
(1976) 4 SCC 52 and /.N. Saksena v. State of M.P. (1967) 2
SCR 496 and held:
"It is, therefore, now well settled that where the form of the E
order is merely a camouflage for an order of dismissal for
misconduct it is always open to the court before which the
order is challenged to go behind the form and ascertain
the true character of the order. If the court holds that the
order though in the form is merely a determination of F
employment is in reality a cloak for an order of punishment,
the court would not be debarred, merely because of the
form of the order, in giving effect to the rights conferred
by law upon the employee.
G
In the instant case, the period of probation had no.t yet
been over. The impugned order of discharge was passed
in the middle of the probationary period. An explanation
was called for from the appellant regarding the alleged act
of indiscipline, namely, arriving late at the gymnasium and
H
650 SUPREME COURT REPORTS [2012] 12 S.C.R.

A acting as one of the ringleaders on the occasion and his
explanation was obtained. Similar explanations were called
for from other probationers and enquiries were made
behind the back of the appellant. Only the case of the
appellant was dealt with severely in the end. The cases of
B other probationers who were also considered to be
ringleaders were not seriously taken note of. Even though
the order of discharge may be non-committal. it cannot
stand alone. Though the noting in the file of the Government
may be irrelevant. the cause for the order cannot be
c ignored. The recommendation of the Director which is the
basis or foundation for the order should be read along with
the order for the purpose of determining its true character.
If on reading the two together the Court reaches the
conclusion that the alleged act of misconduct was the
cause of the order and that but for that incident it would
D
not have been passed then it is inevitable that the order
of discharge should fall to the ground as the appellant has
not been afforded a reasonable opportunity to defend
himself as provided in Article 311(2) of the Constitution."

E (emphasis supplied)

17. In Oipti Prakash Banerjee v. Satyendra Nath Bose
National Centre for Basic Sciences (1999) 3 SCC 60, the two
Judge Bench considered the appellant's challenge to the
F termination of his service after adverting to the various
communications sent by the Head of the Organization to the
appellant and formulated the following points:

"(1) In what circumstances, the termination of a
probationer's services can be said to be founded on
G misconduct and in what circumstances could it be said that
the allegations were only the motive?

(2) When can an order of termination of a probationer be
said to contain an express stigma?
H
STATE BANK OF INDIA v. PALAK MODI 651
[G.S. SINGHVI, J.]
(3) Can the stigma be gathered by referring back to A
proceedings referred to in the order of termination?
(4) To what relief?"

While dealing with the first point, the Court referred to
various earlier judgments and observed: B

"As to in what circumstances an order of termination of a
probationer can be said to be punitive or not depends upon
whether certain allegations which are the cause of the
termination are the motive or foundation. In this area, as c
pointed out by Shah, J. (as he then was) in Madan Gopal
v. State of Punjab there is no difference between cases
where services of a temporary employee are terminated
and where a probationer is discharged. This very question
was gone into recently in Radhey Shyam Gupta v. U.P. D
State Agro Industries Corpn. Ltd. and reference was made
to the development of the law from time to time starting
from Parshotam Lal Dhingra v. Union of India to the
concept of "purpose of enquiry" introduced by Shah, J. (as
he then was) in State of Orissa v. Ram Narayan Das and E
to the seven-Judge Bench decision in Samsher Singh v.
State of Punjab and to post-Sam sher Singh case-law. This
Court had occasion to make a detailed examination of
what is the "motive· and what is the "foundation" on which
the innocuous order is based.
F
If findings were arrived at in an enguirv as to misconduct.
behind the back of the officer or without a regular
departmental enquiry, the simple order of termination is to
be treated as "founded" on the allegations and will be bad.
But if the enquiry was not held, no findings were arrived at G
and the employer was not inclined to conduct an enquiry
but, at the same time, he did not want to continue the
employee against whom there were complaints, it would
only be a case of motive and the order would not be bad.
Similar is the position if the employer did not want to H
652 SUPREME COURT REPORTS [2012) 12 S.C.R.

A enquire into the truth of the allegations because of delay
in regular departmental proceedings or he was doubtful
about securing adequate evidence. In such a circumstance,
the allegations would be a motive and not the foundation
and the simple order of termination would be valid."
B
(emphasis supplied)

18. In Chandra Prakash Shahi v. State of U.P. (2000) 5
SCC 152, the Court considered the correctness of the order
passed by the High Court wni¢11 had allowed the writ petition
C filed by the State and set aside the order passed by U. P.
Public Service.s Tribunal for reinstatement of the appellant. The
competent authority had terminated the appellant's service in
terms of Rule 3 of the U. P. Temporary Government Servants
(Termination of Service) Rules, 1975. It was argued on behalf
D of the appellant that the order by which his service was
terminated, though inndcuous, was, in fact, punitive in nature
because it was founded on the allegation that he had fought
with other colleagues and used filthy and unparliamentary
language. In the counter affidavit filed on behalf of the
E respondents, it was admitted that there was no adverse material
against the appellant except the incident in question. The
original record produced before the Tribunal revealed that the
appellant's service was terminated on account of his alleged
involvement in the quarrel between the constables. After noticing
F various precedents, this Court observed:

"The whole case-law is thus based on the peculiar facts
of each individual case and it is wrong to say that
decisions have been swinging like a pendulum; right, the
order is valid; left, the order is punitive. It was urged before
G this Court, more than once including in Ram Chandra
Trivedi case that there was a conflict of decisions on the
question of an order being a simple termination order or
a punitive order, but every time the Court rejected the
contention and held that the apparent conflict was on
H account of different facts of different cases requiring the
STATE BANK OF INDIA v. PALAK MOQI 653
[G.S. SINGHVI, J.]
principles already laid down by this Court in various A
decisions to be applied to a different situation. But the
concept of "motive" and "foundation" was always kept in
view.

The important principles which are deducible on the B
concept of "motive" and "foundation", concerning a
probationer, are that a probationer has no right to hold the
post and his services can be terminated at any time during
or at the end of the period of p·robation on account of
general unsuitability for the post in question. If for the
determination of suitability of the probationer for the post C
in question or for his further retention in service or for
confirmation, an inquiry is held and it is on the basis of that
inquiry that a decision is taken to terminate his service, the
order will not be punitive in nature. But, if there are
allegations of misconduct and an inquiry is held to find out D
the truth of that misconduct and an order terminating the
service is passed on the basis of that inquiry, the order
would be punitive in nature as the inquiry was held not for
assessing the general suitability of the employee for the
post in question, but to find out the truth of allegations of E
misconduct against that employee. In this situation, the
order would be founded on misconduct and it will not be a
mere matter of "motive".

"Motive· is the moving power which impels action for a F
definite result, or to put it differently, "motive" is that which
incites or stimulates a person to do an act. An order
terminating the services of an employee is an act done by
the employer. What is that factor which impelled the
employer to take this action? If it was the factor of general G
unsuitability of the employee for the post held by him. the
action would be upheld in law. If. however. there were
allegations of serious misconduct against the employee
and a preliminary inquiry is held behind his back to
ascertain the truth of those allegations and a termination H
654 SUPREME COURT REPORTS [2012] 12 S.C.R.

A order is passed thereafter. the order. having regard to
other circumstances. would be founded on the allegations
of misconduct which were found to be true in the
preliminary inguirv.

Applying these principles to the facts of the present case,
B
it will be noticed that the appellant, who was recruited as
a Constable in the 34th Battalion, Pradeshik Armed
Constabulary, U.P., had successfully completed his training
and had also completed two years of probationary period
without any blemish. Even after the completion of the
c period of probation under para 541 of the U.P. Police
Regulations, he continued in service in that capacity. The
incident in question, namely, the quarrel was between two
other Constables in which the appellant, to begin with, was
not involved. When the quarrel was joined by few more
D Constables on either side, then an inquiry was held to find
out the involvement of the Constables in that quarrel in
, which filthy language was also used. It was through this
inquiry that the appellant's involvement was found
established. The termination was founded on the report of
E the preliminary inquiry as the employer had not held the
preliminary inquiry to find out whether the appellant was
suitable for further retention in service or for confirmation
as he had already completed the period of probation quite
a few years ago but was held to find out his involvement.
F In this situation, particularly when it is admitted by the
respondent that the performance of the appellant
throughout was unblemished, the order was definitely
punitive in character as it was founded on the allegations
of misconduct."
G
(emphasis supplied)
19. In Union of India v. Mahaveer C. Singhvi (2010) 8
SCC 220, the three-Judge Bench considered the question
whether termination of the respondent's service who was
H serving as I. F.S. probationer by way of discharge in
STATE BANK OF INDIA v. PALAK MODI 655
[G.S. SINGHVI, J.]
accordance with the terms of employment was punitive. The A
Court noted that the respondent's service was terminated
because he had sought extension to join the Mission at Madrid
in Spain because of sudden deterioration in the health condition
of his parents and also requested for providing medical
facilities and diplomatic passports to them. The Court also B
noted that the Ministry of External Affairs had taken cognizance
of the complaint made by one Mrs. Narinder Kaur Chadha that
the respondent had been threatening her entire family and in
particular her daughter which was followed by some enquiries
conducted into his conduct or character by Joint Secretary, c
Foreign Service Institute and a memorandum was issued to the
respondent alleging his unauthorized absence. The Joint
Secretary found that the complaint was wholly unfounded. The
Court then referred to the principles laid down in earlier
judgments and approved the view taken by the High Court that D
even though the order of discharge did not contain any stigma,
the same was not conclusive and the High Court had rightly
termed the same as punitive. Some of the observations made
in the judgrrie~t-i:lre extracted below:
''The materials on record reveal that the complaint made E
by Mrs Narinder Kaur Chadha to the Minister of External
Affairs had been referred to the Joint Secretary and the
Director (Vigilance) on 8-2-2002 with a direction that the
matter be looked into at the earliest. Although, nothing
adverse was found against the respondent, on 19-2-2002, F
the Joint Secretary (Vigilance) held further discussions with
the Joint Secretary (Admn.) in this regard. What is,
however, most damning is that a decision was ultimately
taken by the Director, Vigilance Division, on 23-4-2002,
to terminate the services of the respondent, stating that the G
proposal had the approval of the Minister of External
Affairs. This case, in our view, is not covered by the
decision of this Court in Dipti Prakash Banerjee case."

20. The ratio of the above noted judgments is that a H
656 SUPREME COURT REPORTS [2012) 12 S.C.R.

A probationer has no right to hold the post and his service can
be terminated at any time during or at the end of the period of
probation on account of general unsuitability for the post held
by him. If the competent authority holds an inquiry for judging
the suitability of the probationer or for his further continuance
B in service or for confirmation and such inquiry is the basis for
taking decision to terminate his service, then the action of the
competent authority cannot be castigated as punitive. However,
if the allegation of misconduct constitutes the foundation of the
action taken, the ultimate decision taken by the competent
C authority can be nullified on the ground of violation of the rules
of natural justice.

21. We shall now consider whether termination of the
services of the private respondents is vitiated due to violation
of the rules of natural justice. It will be useful to notice Rules 15
D and 16 of the Rules which regulate probation and confirmation
of the officers of Bank, paragraphs 7(part) and 10 of the
advertisement issued by the Bank for recruitment of
Probationary Officers, the extracts of note prepared by Deputy
· General Manager, Central Recruitment and Promotion
E Department, which was approved by respondent No.3, letters
dated 12.5.2011 and 3.6.2011 of Assistant General Manager
(HR), which were duly initialed by the General Manager. The
same read as under:

F RULES

"15 (1) A person appointed as a Probationary Officer or
a Trainee Officer shall be on probation for a
period of two years.

G 15(2) Any other employee promoted as an officer to the
Junior Management Grade shall be on probation
for a period of one year.

15(3) Any other person appointed to any grade including
the Junior Management Grade shall be on
H
STATE BANK OF INDIA v. PALAK MODI 657
[G.S. SINGHVI, J.]
probation for such period as may be decided by A
the competent authority.

Provided that the competent authority may, in the
case of any officer, reduce or dispense with the
period of probation under this rule. B
.. ~IA\.
10\ IJ
A- -U.-.- ....-&- ....-..J ,__ ;_ - · · - "'C -1.--11 '-- ---.t:---.J
/"Ill Ulll""'I ltm:mt::u lU 111 IUlt:: I;) :Slli:lll ire Wllllllllt::U

in the service of the Bank, if in the opinion of the
competent authority, the officer has satisfactorily
completed the training in any institution to which
the officer may have been deputed for training, c
and the in-service training in the Bank.

Provided, that Bank may at its discretion subject
to the merit and suitability of a Probationary
Officer/Trainee Officer for future leadership role, D
being determined through a screening process to
be prescribed by the Central Human Resources
Committee may confirm and give placement
(fitment) to such officers in MMGS II.

Provided that an officer directly recruited in any E
grade may be required ·1a1so to pass a test in a
language other .than his mother tongue or a
professional course.

16(2) If, in the opinion of the competent authority, an F
officer has not satisfactorily completed either or
both the trainings referred to in sub-rule ("1) or if
the officer has not passed the test referred to
therein or an officer's service is not satisfactory,
the officer's probation may be extended by a G
further period not exceeding one year.

16(3) Where during the period of probation, including
the period of extension, if any, the competent
authority is of the opinion that the officer is not fit
H
658 SUPREME COURT REPORTS [2012] 12 S.C.R.

A for confirmation:-

(a) in the case of a direct appointee, his
services may be terminated by one month's
notice or payment of one month's
B emoluments in lieu thereof, and

(b) in the case of a promotee from the Bank's
service, he may be reverted to the grade or
cadre from which he was promoted."

C ADVERTISEMENT
"7. )()( )()( )()(

CAREER PATH
D
The Bank may at its discretion, subject to merit and
suitability after probation period of a probationary officer
for future leadership role, to be determined through a
screening process, confirm and give placement (Fitment)
E to selected officers in next higher grade i.e. Officers Middle
Management Grade Scale II.

The Probationary Officers will be on probation of two years
during which they will be given intensive training and
towards end of their probation/training period they wiH be
F subjected to a screening process. While those
probationary officers who achieve the pre-determined
standards may be confirmed and given placement in the
next higher grade i.e. Officer Middle Management Grade
Scale II . Others who qualify the test by fail to achieve the
G standards set for placement in Middle Management Grade
Scale II, will be confirmed as Officer Junior Management
Grade I. The services of those Probationary officers who
fail to qualify this process may be terminated.

H 10. ACTION AGAINST CANDIDATES FOUND GUILTY
STATE BANK OF INDIA v. PALAK MODI 659
[G.S. SINGHVI, J.]
OF MISCONDUCT: A
Candidates are warned that they should not furnish any
particulars that are false, tampered/fabricated or should
not suppress any material information while filing up the
application form. B

At the time of written examination/interview, if a candidate
is (or has been) found guilty of:

(i) Using unfair means during the examination or (ii)
impersonating by any person or (iii) misbehaving in the c
examination hall or taking away the question booklet (or
any part thereof)/ answer sheet from the examination hall
or (iv) resorting to any irregular or improper means in
connection with his/her candidature for selection or (v)
obtaining support for his/her candidature by any unfair D
means, such a candidate may, in addition to rendering
himself/herself liable to criminal prosecution, be liable;

a), To be disqualified from the examination for which he/
she is a candidate.
E
b) To be debarred either permanently or for a specified
period, from any examination or recruitment conducted by
SBI.

c) For termination of service, if he/she has already joined F
the Bank."

NOTE PREPARED BY THE DEPUTY GENERAL
MANAGER

STAFF SUPERVISING: G

PROBATIONARY OFFICERS 2009-10 BATCH

WRITIEN EXAMINATION FOR CONFIRMATION

HELD ON 27-02-2011. H
660 SUPREME COURT REPORTS [2012) 12 S.C.R.

A Placed alongside are: -

ECCB Memorandum dated the 04th December
2003 vide which policy for confirmation of PO!TO
as JMGS-1 / MMGS-11 was formed and was made
effective for the batches of the PO!TO who were
B
due for confirmation as from a date after the date
of the approval of the policy i.e. 04th December
2003{Flag "A").

Letter No. P&HRD: CM: 5:SPL: 815 dated the 29th
c September 2004 & P&HRD/CM/5/3982 dated the
28th October 2005 regarding pattern for the
screening process for considering PO/TO for
confirmation as JMGS-1 I MMGS-11 and also for
extension of probation period by 06 months fQr
D those who will fail to secure minimum qualifying
marks in the written test of functional knowledge
{Flag "B").

Cadre Management Department Memo No. HR/
CM/8/691 dated .17-01-2008 regarding
E
modification in screening process for confirmation
of POs in JMGS-1 I MMGS-11 consequent upon
revision in recruitment procedure I criteria approved
by the ECCB in its meeting held on 28th December
2007{Flag "C").
F
Cadre Management Department Memo No. HR/
CM/6/SPL/517 dated 20-09-2010 forwarding
therewith copy of note no. HR/CM/6/111/2010-11
dated the 09th September 2010 with
G supplementary note dated the 13th September 2010
put up before CHRC in its meeting held on 13th
September 2010 advising modification to be
effected in the policy for confirmation of
Probationary Officers (POs) and Trainee Officers
H (TOs) {Flag "D").
STATE BANK OF INDIA v. PALAK MODI 661
[G.S. SINGHVI, J.]
A copy of our approved note No. CRPD/SNP/PO- A
09-10/269 dated 08-12-201 O(Flag "E") finalizing
date of confirmation of written test for probationary
officers 2009-10 batch.

3. Accordingly, written test was conducted for confirmation B
of probationary officers 2009-1 O batch on 27-02-2011,
wherein 2185 candidates appeared in the test against
2204 candidates called for the examination.

4. As per the approved testing pattern, the minimum
qualifying marks in the written test for confirmation in JMGS -C
I is 50% i.e. 100 out of 200 (for SC/ST/PWD 45% i.e. 90
out of 200) and 75% (150 out of 200) for qualifying them
for Group Discussion I Interview for their confirmation in
MMGS II direct.
D
5. The policy for confirmation of PO/TO has been modified
after announcing the date of the written test but before
processing the result thereof. The process of declaring the
results as also advising the candidates the effects of their
securing less than the minimum passing marks at 50% E
(45% for SC/ST/PWD candidates) in the written test held
on 27-02-2011 have been modified as detailed in the
Annexure-11.

6. The evaluation of all the answer papers (Objective type
and Descriptive type) in respect of 2185 candidates has F
since been completed. We are in receipt of the merit list
drawn on the basis of aggregate marks secured in
Objective & Descriptive Papers from IBPS. The descriptive
papers of all candidates who secured marks between 48%
and 50% GEN/OBC. (43% and 45% in respect of SC/ST/ G
PWD candidates) as also those securing marks between
74% and 75% in the aggregate were subjected to 100%
moderation.

7. We have also received report on "Use of Unfair Means" H
'
662 SUPREME COURT REPORTS [2012] 12' S.C.R.

A i.e. copying based on analysis done by IBPS. Mumbai. A
brief write yp in "Detection of use of unfair means in
objective tests by the candidates" is enclosed as
Annexure-111. Th~y nave found 11 such pairs involving 20
candidates CAnnexure-IVl as per undemoted table
B
Copying Cases in Written Test held on 27-02-2011 for
Confirmation of Probationary Officers 2009-10 Batch
SR. CENTRE NO. NO.OF CATEGORY
NO. OF CANDI-
c PAIRS DATES
01 Ahmedabad 02 04 Use of Unfair Means is
suspected.

D 02 Guwahati 01 02 Use of Unfair Means is
suspected.

03 Patna 07 12 Use of Unfair Means is
suspected.
E 04 Lucknow 01 02 Use of Unfair Means is
suspected.

TOTAL 11 20

F We have analysed the report given by IBPS. which is
based on correct answers. identical wrong answers CIWW)
and other mismatches given by pairs. which have indulged
in copying. IBPS has made analysis after excluding right
answers and most popular wrong answers. Thus the
G chances of having large identical wrong answers are
practically not possible.
Subsequently. we have called the seating arrangement of
the candidates involved in copying (Annexure-Vl. In the
' seating arrangement. one pair of candidates from Patna
H
STATE BANK OF INDIA v. PALAK MODI 663
[G.S. SINGHVI, J.]
Circle are seated in different rooms and have Identical A
Wrong Answers. which are at the lower end of suspected
category. In this case the data evaluated by the IBPS they
also observed 4 mismatches in the answers (in non
identical wrong answers). Considering all relevant factors.
we propose to give benefit of doubt to candidates forming B
this pair and exclude them from candidates who used
untair means. Giner inan this pair, each of the paira of
candidates are seated next to each other. in addition to
their being in the same room. This further strengthens the
view that these candidates used unfair means namely c
copying answers from one another.

8. Excluding the pair mentioned above. the statistical
and corroborative evidences are against the remaining 18
.candidates. we propose to
D
(i) Cancel their candidature for the confirmation test.
(ii) Extend their probation for a period of 3 months.

(iii) All these officers in terms of their appointment are
on probation for 2 years from their date of joining E
and provisions of SBIOSR 1992 are applicable to
them. Provisions of Rule 16 (1. 2 and 3) (Annexure-
VI) of SBIOSR enable the Appointing Authority to
terminate the services of involved officers during the
probation period in such cases without going F
through disciplinarv proceedings. Legal opinion
obtained in this regard in similar cases in an earlier
examination is enclosed (Annexure-Vlll.

(iv) Circles will be asked to initiate investigations G
against the invigilators manning the rooms where
such candidates were seated followed by
disciplinarv proceedings as per Service Conditions
applicable for such cases.

9. On perusal I analysis of the Annexure-1, we submit H
664 SUPREME COURT REPORTS [2012) 12 S.C.R.

A the summary as under:-
(i) )()( )()( )()(
(ii) )()( )()( )()(

B (iii) 59 candidates (60-1 candidate involved in copying)
h""" 1.,,a .. A tn .,.,r.ure 50% i.e. 100 out of ?00 lfnr
1 UolW'W IQllCi'\A L'"' y - - - · . . - . --- ,,_.,

SC/ST/PWD 45% i.e. 90 out of 200) as such these
59 candidates are not suitable for their
confirmation.
c 10. Accordingly, we recommend:
(i) )()( )()( )()(

(ii) )()( )()( )()(

(iii) Probation Qeriod of 59 candidates {60-1 candidate
D involved in coQying), who have failed to secure 50%
i.e. 100 out of 200 {for SC/ST/PWD 45% i.e. 90 out
of 200), be extended by 6 months. They will be
subjected to confirmation re-test within the extended
Qeriod of Qrobation in terms of the extant 11olicy
E {Annexure-1).
(iv) 19 candidates {Annexure-1) were absent in the
confirmation written test, are not suitable for their
confirmation as JMGS-1. Circles have advised the
reasons for their absence in the test. Subject to
F verification by the Circles, the 11robation 11eriod of
eligible candidates is to be extended by a further
11eriod of 6 months and they will be subjected to
confirmation re-test within the extended 12eriod of
12robation.
G (v) There are 18 candidates against whom statistical
and corroborative evidences {IBPS reQor!, seating
12lan) are available showing their involvement in use
of unfair means i.e. coQying in the written test. We
11r0Qose to cancel their candidature for the.
H confirmation test and Circles will be asked to
STATE BANK OF INDIA v. PALAK MODI 665
[G.S. SINGHVI, J.]
initiate action as suggested in Para "8". A

(emphasis supplied)
LETTER DATED 12.5.2011.

"GENERAL MANAGER NW-I. B
CIRCLE DEVELOPMENT OFFICER

STAFF: SUPERVISING PROBATIONARY OFFICERS -
2009-10 BATCH RESULT OF WRITTEN EXAMINATION
HELD ON 27.02.2011 C

A written examination for determining the suitability of the
Probationary Officers 2009-10 batch for confirmation as
officer JMGS-1/ direct placement as officer MMGS-11 was
conducted on 27.02.2011 in which out of 140 eligible POs, D
139 appeared in the above test from our Circle. One PO
had tendered resignation from Bank's services just before /
the above test.
2. In this connection, we have been advised by Corporate E
Center, vide their letter No. CRPD/SNP/P02009 10/
CONF/74-A dated 10.05.2011 (placed alongside) that out
of 139 POs from our Circle, 39 POs, as per Annexure "A",
have secured qualifying marks of 150 or more out of 200
(i.e. 75% or more) to become eligible for Group
Discussion/ Interview for considering their confirmation as F
officer MMGS-11 in terms of Rule 16 (1) of State Bank of
India officers service rules. In case any of these 39
candidates do not secure qualifying marks i.e. 75% or
more in GD/Interview, he/she will be considered suitable
for confirmation in JMGS-1 w.e.f. 15.05.2011 or upon G
completion of two years probation from the date of their
joining the Bank.
3. 96 candidates, as per Annexure "B", have secured
minimum qualifying marks of 50% or more but less than H
666 SUPREME COURT REPORTS [2012] 12 S.C.R.

A 75% (45% or more for SC/ST/PWD) and have thus
become eligible for being considered suitable for
confirmation as officer JMGS-1 w.e.f. 15.05.2011 or upon
completion of two years probation from the date of their
joining the Bank in terms of Rule 16(1) of State Bank of
B India Officers Service Rules.
4. 2 candidates, as per Annexure "C", who scored less
than 50% (less than 45% for SC/ST/PWD) marks, are not
eligible for confirmation at this stage and their probation
will be extended for a period of 6 months. They will have
c to appear for confirmation re-test, which will be scheduled
during the extended period of probation. In the event of any
candidate failing in the re-test, his/her services will be
terminated in terms of offer of appointment letter.

D 5. In terms of the Corporate Centre letter under reference,
mentors (SMGS-IVN) have to be identified for the 2
candidates (Annexure "C"), who could not qualify the
confirmation test, for proper guidance and counselling to
upgrade their knowledge I skills in the Bank. In order to
E enable them to imbibe more learning during their extended
probation period, we also propose to change their
branches. The mentors and branches identified for them
are as under:

F SI. Name Present Proposed Mentors
Branch Branch/Office identified
1. Ms. Smriti Indira RASMECCC, Mrs. Shubha
Anand Nagar, Bareilly AGM (Trg.),
Bareilly Doorwar,
G SBLC, Bareilly
2. Shri Abhishek Kamachha, RASMECCC, Shri
Debnath Varanasi Varanasi S.K.Srivastava,
CM (Trg.),
SBLC, Varanasi
H
STATE BANK OF INDIA v. PALAK MODI 667
[G.S. SINGHVI, J.]
6. Further, 2 candidates, as per Annexure "D", have been A
found suspected to have indulged in copying and as such
their probation will be extended by 3 months in terms of
Corporate Centre letter No. CRPD/SNP/P02009-10/
CONFns dated 10.os.2011.
B
7. Accordingly, in respect of 2 candidates of the above
batch of Probationary Officers (2009-10 batch), who could
not qualify in the confirmation test conducted on 27-02-
. 2011, and 2 candidates who have been found suspected
to have indulged in copying will have to be served letters C
on the lines of draft letters (Annexure-E & F) and their
acknowledgement will have to be obtained. We, therefore,
propose to deliver letters (placed below for your signature)
to these 4 candidates. Further, we also propose to confirm
96 candidates (Annexure "B" ) as officer JMGS-1 w.e.f.
15.05.2011 or upon completion of two years probation D
from the date of their joining the Bank in terms of Rule
16(1) of State Bank of India Officers Service Rules.

Submitted for approval, please.
E
ASSISTANT GENERAL MANAGER (HR)"
'
Annexure-"D"
"Central Recruitment Promotion Department. Corporate
Centre. Mumbai Confirmation of Probationary Officers F
(2009-10) Batch Written Examination Held On Sunday. 27-
02-2011 COPYING CASES

CSRNO CIR ROLLNO TITLE NAME DOB PFINDEX
G
1 LUC 2263701061 MS PALAK 19-06-85 5910633
MODI
'
2 LUC 2263701067 SHRI PRABHAT 22-11-83 5908930
DIXlT
H
668 SUPREME COURT REPORTS [2012] 12 S.C.R.

A · LETTER DATO 3.6.2011.

"General Manager NW-I (Appointing Authority)

Circle Development Officer

B Staff : Supervising

Probationary officers : 2009 Batch

Result of Confirmation Test Held on 27.02.2011

c Copying Case : Extension of Probation Period by Three
Months

139 Probationary Officers of 2009 batch appeared in the
screening test for confirmation in JMGS-1 and MMGS-11 on
27.02.2011 from our Circle. Corporate Centre vide their
D e-mail letter no. CRPD/SNP/P0-2009-10/CONF/75 dated
10.05.2011 (Flag-'A') has forwarded a list of 02
candidates viz Ms. Palak Modi, PF index no. 5910633 and
Shri Prabhat Dixit, PF index no. 5908930 where the use
of unfair means (copying) is suspected as per report
E furnished by IBPS which is further supported by the
corroborative evidence of sitting next to one-another J in
different rows in the same room, as indicated by the sitting
plan in the above mentioned test.

F 2. Corporate Centre also advised that as approved by the
Appropriate Authority, the probation period of these
candidates is to be extended by 03 months in terms of Rule
16(2) of SBIOSR and appropriate process to be
completed within extended probation period. Further, as
G the statistical and additional corroborative evidences are
against these candidates, as an examination conducting
body, Corporate Centre has cancelled their candidature
for the confirmation test.

3. A note was placed to the appointing authority i.e.
H
STATE BANK OF INDIA v. PALAK MODI 669
[G.S. SINGHVI, J.]
General Manager (NW-I) and upon his approval (Flag-'B') A
the probation period of these 02 candidates has been
extended by 03 months. We propose to initiate appropriate
action against the above mentioned 02 Probationary
Officers in the matter at the earliest within the extended
probation period. B

· 4. Corporate Centre has advised that keeping in view the
unsatisfactory conduct of these 02 officers during the
written examination held on 27.02.2011, these candidates
cannot be deemed to be fit for confirmation and are,
therefore, liable for action in terms of Rule 16(3) of C
SBIOSR by the Appropriate Authority. In this connection,
we have also discussed the matter with AGM (Law) at
Corporate Centre.

5. We, therefore, propose subject to your approval, to o
initiate necessary action against these 02 Probationary '
Officers for termination of their services at the earliest.
Upon approval we will draft a letter for termination of their
services and forward the same to Corporate Centre for
vetting. Upon receipt of advices from Corporate Centre, E
we will put up the termination letter, to be served to these
02 POs, for your signature. The appropriate authority in the
matter is Appointing Authority, i.e., senior most General
Manager of the Circle.

Submitted for approval. F

Asstt. General Manager (HR)"

22. A combined reading of Rules 15(1) and 16 and
paragraph 5 of the conditions of appointment makes it clear G
that a person appointed as a Probationary Officer remains on
probation for a minimum period of two years at the end of which
he is entitled to be confirmed if the competent authority is of
the opinion that he has satisfactorily completed the training in
· any institution to which he may have been deputed and the in- H
670 SUPREME COURT REPORTS (2012] 12 S.C.R.

A service training in the Bank. The Probationary Officer can also
be subjected to screening for judging his merit and suitability.
If the Probationary Officer fails to satisfactorily complete the
training(s) or fails to pass the screening test or his service is
not satisfactory, then the Bank can extend the period of
B probation by a further period of which the outer limit is one year.
In a given case, the competent authority can, if it is of the
opinion that the Probationary Officer is not fit for confirmation,
terminate his service by one month's notice or payment of one
month's emoluments.

C 23. It is thus evident that satisfactory performance during
the period of probation, successful completion of training(s) and
passing of the test conducted by the Bank for judging his
suitability for the post constitute the touchstone for his
confirmation.
D

24. The policy of confirmation, which was circulated vide
letter dated 20.9.2010 envisaged placement of the
Probationary Officers scoring 75% or more marks in the written
E test, group discussion and interview in MMGS-11. Those scoring
less than 75% but minimum 50% (general category) and 45%
(SC/ST/PWD) could be confirmed in JMGS-1. Those scoring
less than 50% or 45%, as the case may be, are eligible to again
appear in the confirmation test and qualify the same before
F completion of two years' probation. If he fails to qualify the test
second time, his service is liable to be terminated in terms of
Rule 16(3) of the Rules. An alternative available to the Bank is
to extend the period of probation of the candidate for maximum
one year with two opportunities to appear in the confirmation
tests at six-monthly interval.
G
25. The primary object of the confirmation test held on
27.2.2011, which could also be termed as evaluation test within
the meaning of paragraph 5(c) of the appointment letter was
to decide whether the officer has made use of the opportunities
H
STATE BANK OF INDIA v. PALAK MODI 671
[G.S. SINGHVI, J.]
. made available to him by the Bank to prove his worth for the A
job for which he was recruited and whether he has acquired
sufficient knowledge about the functional requirements of the
Bank. The test also gave an opportunity to the Probationary
Officer to demonstrate that he was meritorious enough to be
placed in the higher grade. B

26. There is a marked distinction between the concepts
of satisfactory completion of probation and successful passing
of the training/test held during or at the end of the period of
probation, which are sine qua non for confirmation of a
probationer and the Bank's right to punish a probationer for any C
defined misconduct, misbehaviour or misdemeanor. In a given
case, the competent authority may, while deciding the issue of
suitability of probationer to be confirmed, ignore the act(s) of
misconduct and terminate his service without casting any
aspersion or stigma which may adversely affect his future D
prospects but, if the misconduct/misdemeanor constitutes the .
basis of the final decision taken by the competent authority to
dispense with the service of the probationer albeit by a non
stigmatic order, the Court can lift the veil and declare that in
the garb of termination simpliciter, the employer has punished E
the employee for an act of misconduct.

27. The use of unfair means in the evaluation test/
confirmation test held by the Bank certainly constitutes a
misconduct. The Bank itself had treated such an act to be a F
misconduct (paragraph 10 of advertisement dated 1.7.2008).
It is not in dispute that the services of the private respondents
were not terminated on the ground that there was any deficiency
or shortcoming in their work or performance during probation
or that they had failed to satisfactorily complete the training or G
had failed to secure the qualifying marks in the test held on
27.2.2011. As a matter of fact, the note prepared by the Deputy
General Manager, which was approved by the General
Manager makes it crystal clear that the decision to dispense
with the services of the private respondents was taken solely H
672 SUPREME COURT REPORTS [2012] 12 S.C.R.

A on the ground that they were guilty of using unfair means in the
test held on 27.2.2011. To put it differently, the foundation of
the action taken by the General Manager was the accusation
that while appearing in the objective test, the private
respondents had resorted to copying. IBPS had relied upon the
B analysis made by the computer and sent report to the Bank that
18 candidates were suspected to have used unfair means. The
concerned authority then sent for the chart of seating
arrangement and treated the same as a piece of evidence for
coming to the conclusion that the private respondents had
c indeed used unfair means in the examination. This exercise
was not preceded by an inquiry involving the private
respondents and no opportunity was given to them to defend
themselves against the charge of use of unfair means. In other
words, they were condemned unheard which, in our considered
view, was legally impermissible.
0
. 28. Before concluding, we may notice the judgments relied
upon by the learned senior counsel for the appellants. In Ajit
Singh v. State of Punjab (supra), this Court considered the
question whether the decision of the State Government to
E terminate the services of the appellants, who were appointed
as Executive Officers on probation of one year, could be
nullified on the ground of violation of Articles 14 ad 16 of the
Constitution. The facts of the case show that the Punjab Town
Improvement Act, 1922 was enacted to make provision for the
F improvement and expansion of towns in Punjab. The Act
envisages the creation and constitution of Trusts and the Trust
so created will have a corporate personality with perpetual
succession and a common seal. The duties and functions of
the Trust inter alia include preparing of schemes under the Act
G for various purposes. Section 17 conferred power on the State
Government to constitute certain services in the m<1nner therein
prescribed. One such service contemplated by the section was
Punjab Service of Trust Executive Officers. Sub-section (2) of
Section 17 conferred power on the State Government to make
H rules for regulating the recruitment and the conditions of service
STATE BANK OF INDIA v. PALAK MODI 673
[GS. SINGHVI, J.]
of members of the Trust services constituted by the State A
Government. Armed with this power, the State Government
constituted Punjab Service of Trust Executive Officers. In
exercise of the power conferred by Section 73 read with
Section 17(2) of the Act, the State Government framed rules
styled as Punjab Trust Services (Recruitment and Conditions B
of Service) Rules, 1978 ("1978 Rules" for short). Rule 5(2)(i)
inter alia provided that 50 per cent of the vacancies in the cadre
of Executive Officers shall be filled by direct recruitment and
for this purpose Rule 5(4) envisaged the setting up of a
Selection Committee called Punjab Trust Services Selection c
Committee. In 1978, Directorate of Local Government, Punjab
issued Advertisement No. 1078 inviting applications for the
posts in Class I, II and Ill of Trust Executive Officers. Pursuant
to this advertisement, large number of persons applied for
various posts. The Punjab Trust Services Selection Committee 0
interviewed various candidates and ultimately recommended
11 persons for the post of Trust Executive Officers. Ajit Singh
and Rajinder Singh were recommended for Class I post; S.
Sarup Singh and R.L. Bhagat were recommended for Class II
post of Trust Executive Officers and the remaining seven
petitioners in this group of petitions were recommended for E
Class 111 post of Trust Executive Officers. These
recommendations were accepted and appointment orders
were issued by Punjab Government on May 28, 1979. After
each appointee completed one year of service, an increment
was released in his favour. After one year, the State F
Government terminated their services vide orders dated
25.9.1980.
One of the several grounds on which the appellants
challenged the termination of their services was that the action G
of the employer was wholly arbitrary, discriminatory, and
violative of equality clause contained in the Constitution. While
quashing orders dated 25.9.1980, this Court observed:

"When the master-servant relation was governed by the
H
674 SUPREME COURT REPORTS [2012] 12 S.C.R.

,A archaic law of hire and fire, the concept of probation in
service jurisprudence was practically absent. With the
advent of security in public service when termination or
removal became more and more difficult and order of
termination or removal from service became a subject-
B matter of judicial review, the concept of probation came to
acquire a certain connotation. If a servant could not be
removed by way of punishment from service unless he is
given an opportunity to meet the allegations if any against
him which necessitates his removal from service, rules of
c natural justice postulate an enquiry into the allegations and
proof thereof. This developing master-servant relationship
put the master on guard. In order that an incompetent or
inefficient servant is not foisted upon him because the
charge of incompetence or inefficiency is easy to make but
difficult to prove, concept of probation was devised. To
D
guard against errors of human judgment in selecting
suitable personnel for service, the new recruit was put on
test for a period before he is absorbed in service or gets
a right to the post. Period of probation gave a sort of locus
pententiae to the employer to observe the work, ability,
E efficiency, sincerity and competence of the servant and if
he is found not suitable for the post, the master reserved
a right to dispense with his service without anything more
during or at the end of the prescribed period which is styled
as period of probation. Viewed from this aspect, the courts
F held that termination of service of a probationer during or
at the end of a period of probation will not ordinarily and
by itself be a punishment because the servant so
appointed has no right to continue to hold such a post any
more than a servant employed on probation by a private
G employer is entitled to (see Parshotam Lal Dhingra v. Union
of India). The period of probation therefore furnishes a
valuable opportunity to the master to closely observe the
work of the probationer and by the time the period of ·
probation expires to make up his mind whether to retain
H
STATE BANK OF INDIA v. PALAK MODI 675
[GS. SINGHVI, J.)
the servant by absorbing him in regular service or dispense A
with his service. Period of probation may vary from post
to post or master to master. And it is not obligatory on the
master to prescribe a period of probation. It is always open
to the employer to employ a person without putting him on
probation. Power to put the employee on probation for B
watching his performance and the period during which the
performance is to be observed is the prerogative of the
employer."

The Court then took cognizance of the fact that on C
completion of one year's probation an increment was released
in favour of the appellants and proceeded to observe:

"It is implicit in release of increment that the petitioners had
satisfactorily discharged their duty during the probation
period, and at any rate the work and conduct was not D
shown to be unsatisfactory, which permitted an increment
to be earned. Assuming, as contended for on behalf of the
respondents that period of probation was two years, the
fact that on the expiry of one year of service an increment
was released, would imply that during the period of one E
year the work and conduct has not been unsatisfactory. If
it was otherwise the release of increment could have been
interdicted on the ground that neither the work nor the
conduct was satisfactory. The fact that the increment was
released would at least permit an inference that there was F
satisfactory completion of the probation period and that
during the probationary period, the work and conduct of
each of the petitioners was satisfactory. If up to the end of
June, 1980 the work and conduct of each of the petitioners
was satisfactory and if the service of each of them was, G
simultaneously on the same day September 25, 1980
dispensed with on the ground mentioned in Rule 9(2)(a)
in that in the opinion of the appointing authority, the work
and conduct of each of the petitioners was not satisfactory,
then between June 1980 and September 1980 something H
676 SUPREME COURT REPORTS (2012] 12 S.C.R.

A was simultaneously done by each of the petitioners to
permit the appointing authority - the State - to reach an
affirmative conclusion that the work and conduct, became
wholly unsatisfactory and the degree of dissatisfaction with
the service was so high that the service of all the 11
8 petitioners recruited on the same day was required to be
dispensed with on identical ground. This is too fortuitous
to carry conviction."

29. In Krishnadevaraya Education Trust v. L.A.
Ba/akrishna (supra), the Court noted that the services of the
C respondent, who was appointed as Assistant Professor on
probation were terminated on the ground of unsuitability and
observed:

"There can be no manner of doubt that the employer is
D entitled to engage the services of a person on probation.
During the period of probation, the suitability of the recruiV
appointee has to be seen. If his services are not
satisfactory which means that he is not suitable for the job,
then the employer has a right to terminate the services as
E a reason thereof. If the termination during probationary
period is without any reason, perhaps such an order would
be sought to be challenged on the ground of being
arbitrary. TherefoF&, naturally services of an employee on
probation would be terminated, when he is found not to be
F suitable for the job for which he was engaged, without
assigning any reason. If the order on the face of it states
that his services are being terminated because his
performance is not satisfactory, the employer runs the risk
of the allegation being made that the order itself casts a
stigma. We do not say that such a contention will succeed.
G
Normally, therefore, it is preferred that the order itself does
not mention the reason why the services are being
terminated.
If such an order is challenged, the employer will have to
H indicate the grounds on which the services of a probationer
STATE BANK OF INDIA v. PALAK MODI 677
[G.S. SINGHVI, J.]
were terminated. Mere fact that in response to the A
challenge the employer states that the services were not
satisfactory would not ipso facto mean that the services
of the probationer were being terminated by way of
punishment. The probationer is on test and if the services
are found not to be satisfactory, the employer has, in terms B
of the letter of appointment, the right to terminate the
services.

In the instant case, the second order which was passed
terminating the services of the respondent was
innocuously worded. Even if we take into consideration the C
first order which was passed which mentioned that a
Committee which had been constituted came to the
conclusion that the job proficiency of the respondent was
not up to the mark, that would be a valid reason for
terminating the services of the respondent. That reason D
cannot be cited and relied upon by contending that the
termination was by way of punishment."
30. In Pavanendra Narayan Verma v. Sanjay Gandhi PG/
of Medical Sciences (supra), this Court again considered the E
question whether termination of the service of probationer can
be termed as punitive merely because it is preceded by an
inquiry for the purpose of judging his suitability and answered
the same in negative. The two-Judge Bench referred to a large
number of precedents and observed: F
"29 .... Generally speaking when a probationer's
appointment is terminated it means that the probationer
is unfit for the job, whether by reason of misconduct or
ineptitude, whatever the language used in the termination
order may be. Although strictly speaking, the stigma is G
implicit in the termination, a simple termination is not
stigmatic. A termination order which explicitly states what
is implicit in every order of termination of a probationer's
appointment, is also not stigmatic. The decisions cited by
H
678 SUPREME COURT REPORTS [2012) 12 S.C.R.

A the parties and noted by us earlier, also do not hold so. In
order to amount to a stigma, the order must be in a
language which imputes something over and above mere
unsuitability for the job."
31. In Progressive Education Society v. Rajendra (supra),
8
this Court examined correctness of the order passed by the
School Tribunal constituted under Section 9 of the Maharashtra
Employees of Private Schools (Conditions of Service)
Regulation Act, 1977, which was approved by the High Court,
C quashing the termination of the service of respondent No.1 on
the ground of unsatisfactory performance during the period of
probation. This Court referred to the relevant provisions of the
Maharashtra Employees of Private Schools (Conditions of
Service) Rules, 1981 and observed:

D "The law with regard to termination of the services of a
probationer is well established and it has been repeatedly
held that such a power lies with the appointing authority
which is at liberty to tenninate the services of a probationer
if it finds the performance of the probationer to be
E unsatisfactory during the period of probation. The
assessment has to be made by the appointing authority
itself and the satisfaction is that of the appointing authority
as well. Unless a stigma is attached to the termination or
the probationer is called upon to show cause for any
F shortcoming which may subsequently be the cause for
termination of the probationer's service, the management
or the appointing authority is not required to give any
explanation or reason for tenninating the services except
informing him that his services have been found to be
unsatisfactory.
G
The facts of this case are a little different from the normal
cases relating to probation and the termination of the
services of a probationer in that the satisfaction required
to be arrived at under sub-section (3) of Section 5 of the
H
STATE BANK OF INDIA v. PALAK MODI 679
[G.S. SINGHVI, J.]
MEPS Act has to be read along with Rule 15 of the MEPS A
Rules, 1981 with particular reference to sub-rule (6) which
provides that the performance of an employee appointed
on probation is to be objectively assessed by the Head
during the period of his probation and a record of such
assessment is to be maintained. If the two provisions are B
read together, it would mean that before taking recourse
to the powers vested under sub-section (3) of Section 5
of the MEPS Act, the performance of an employee
appointed on probation would have to be taken into
consideration by the school management before c
terminating his services.

Accordingly, while Rules 14 and 15 of the MEPS Rules,
1981 cannot override the provisions of sub-section (3) of
Section 5 of the MEPS Act, it has to be said that the
requirements of sub-rule (6) of Rule 15 would be a factor D
which the school management has to take into
consideration while exercising the powers which it
undoubtedly has and is recognised under sub-section (3)
of Section 5 of the Act.
E
This brings us to the next question regarding the sufficiency
of the materials before the school management while
purporting to pass the order of termination on 1-8-1994.
As has been discussed, both by the School Tribunal and
the High Court, the confidential report which has been F
produced on behalf of the school management does not
inspire confidence on account of the different dates which
appear both in Part I and Part II of the said report. Part I
of the self-assessment form gives the particulars of the
teacher concerned and the remarks of the reporting G
authority, namely, the Head Mistress of the school. The
date in the said part is shown as 4-7-1994, whereas the
date at the end of Part II, which is the form of the
confidential report giving details of the teacher's
performance is dated 24-6-1994, which appears to be in H
'
680 SUPREME COURT REPORTS [2012] 12 S.C.R.

A line with the date given of the forwarding letter written by
the Head Mistress to the Secretary of the Society. To add
to the confusion created by the different dates on the form,
there is a third date which appears on Part I of the self-
assessment form which shows that the documents were
B presumably forwarded to the management of the school
on 6-8-1994, which is a date which is prior to the date of
termination of the services of Respondent 1, namely, 1-8-
1994.

This merely goes to show that the said documents are not
c above suspicion and that the requirements of Rule 15(6)
and Rule 14 had not been complied with prior to invocation
by the school management of the powers under sub-
section (3) of Section 5 of the MEPS Act."

D 32. In Rajesh Kumar Srivastava v. State of Jharkhand
(supra), the two-Judge Bench examined challenge to the
termination of the appellant's service, who was a Probationer
Munsif. After examining the record placed before it, the Bench
held that the competent authority had terminated the service of
E the appellant because his work was not satisfactory and such
decision cannot be termed as stigmatic or punitive.

33. The proposition laid down in none of the five judgments
relied upon by the learned counsel for the appellants is of any
assistance to their cause, which were decided on their own
F facts. We may also add that the abstract proposition laid down
in paragraph 29 of the judgment in Pavanendra Narayan
Verma v. Sanjay Gandhi PG/ of Medical Sciences (supra) is
not only contrary to the Constitution Bench judgment in
Samsher Singh v. State of Punjab (supra), but large number
G of other judgments - State of Bihar v. Shiva Bhikshuk Mishra
(supra), Gujarat Steel Tubes Ltd. v. Gujarat Steel Tubes
Mazdoor Sabha (supra) and Anoop Jaiswa/ v. Government of
India (supra) to which reference has been made by us and to
which attention of the two-Judge Bench does not appear to
H have been drawn. Therefore, the said proposition must be read
STATE BANK OF INDIA v. PALAK MODI 681

as confined to the facts of that case and cannot be relied upon A
for takin,g the view that a simple order of termination of service
can never be declared as punitive even though it may be
founded on serious allegation of misconduct or misdemeanor
on the part of the employee.
B
34. In the result, the appeals are dismissed. The appellants
shall reinstate the private respondents within 15 days of the
production of copy of this judgment before respondent No.3 and
give them all consequential benefits like pay, allowances, etc.
within next one month. However, it is made clear that this
judgment shall not preclude the competent authority from taking C
fresh decision in the matter of confirmation of the private
respondents after giving them effective opportunity of hearing
against the allegation of use of unfair means in the test held
on 27.2.2011.
.. D
ORDER

1. This appeal is directed against order dated 13.1.2012
passed by the Division Bench of the Allahabad High Court in
Writ Petition (Civil) No. 37121 of 2011. The operative portion E
of the High Court's order reads as under:

"In: the result, the petition succeeds and is allowed. The
order relating to discharge of the petitioner from service
passed by the General Manager (NW-II), State Bank of
India, Human Resources Department, 13 Floor, Local F
Head Office 11, Sansad Marg, New Delhi on 13.05.2011
(Annexure No.9 to the writ petition) is hereby quashed. A
direction is issued to the respondent-bank to examine and
evaluate the descriptive paper of the written examination
of the petitioner and to scrutinize the case of the petitioner G
for confirmation on the basis of her performance in the said
descriptive paper and interview, if any. Tiii a fresh decision
is taken in this regard, the petitioner shall be allowed to
continue in service with continuity, on the post of
H
682 SUPREME COURT REPORTS [2012] 12 S.C.R.

A Probationary Officer and be paid emoluments, as would
have been payable to her, had her services not been
discharged. As far as back wages are concerned, the
petitioner would be entitled to 50% of the back wages,
which shall be paid to her within one month of the
B production of certified copy of this order."

2. By a separate judgment pronounced today in Civil
Appeal Nos. 7841-7842 of 2012 - State Bank of India and
others v. Palak Modi and Another, we have upheld an almost
C identical order passed by the High Court in Writ Petition (Civil)
Nos. 1298 of 2011 and 1512 of 2011.

3. For the detailed reasons recorded in the aforesaid
judgment which shall be read as part of this order, the appeal
is dismissed.
D
4. The appellants are directed to reinstate respondent No.1
within 15 days of the production of copy of this order before
respondent No.3 and give her all consequential benefits like
pay, allowances, etc. within next one month. However, it is made
E clear that this order shall not preclude the competent authority
from taking fresh decision in the matter of confirmation of
respondent No.1 after giving her effective opportunity of hearing
against the allegation of use of unfair means in the test held
on 27.2.2011.

F B.B.B. Appeals dismissed.