Supreme Court of India· 29 May 2026
Can a probationer be terminated for unsatisfactory performance where the alleged misconduct was the real foundation of the decision?
GENERAL MANAGER, BANK OF BARODA AND OTHERS v. ASHOK KUMAR SINGH AND OTHERS
2026 INSC 589 · CIVIL APPEAL NO. 4814 OF 2017
Coram: Atul S. Chandurkar; J.K. Maheshwari
Answer
No. A distinction is required to be drawn between a routine non-stigmatic termination for unsuitability and a disguised punitive termination. Where the alleged misconduct was for all intent and purposes the motive as well as the foundation for the termination, even though the formal order ostensibly cites unsatisfactory performance, the law does not permit the use of unsatisfactory performance as a disguise to bypass formal disciplinary proceeding. If the employer's decision is founded on allegations of misconduct, the termination is stigmatic and cannot stand in absence of compliance of due process.
Headnote
Vijaya Bank (Officers') Regulations, 1982 — reg.16(3)(a) — Probation — Termination simpliciter — Stigmatic and disguised punitive termination — Motive and foundation — Uncommunicated adverse remarks — Principles of natural justice —
Vijaya Bank (Officers') Regulations, 1982 — reg.16(3)(a) — Discretion to terminate a probationer — Limits —
Held: The discretion of the Competent Authority to terminate a probationer is not absolute and unqualified. Where the employer is the State, however sweeping the contractual language, the discretion must be based on some material and rooted in objective facts, and shall not suffer from the vice of arbitrariness. (¶19, 20)
Service law — Termination simpliciter — Disguised punitive termination —
Held further: A distinction must be drawn between a routine non-stigmatic termination for unsuitability and a disguised punitive termination. Where the alleged misconduct is the motive as well as the foundation, the order cannot stand merely because it ostensibly cites unsatisfactory performance. (¶21, 41)
Service law — Uncommunicated adverse remarks — Principles of natural justice —
Held further: Reliance on a memo never communicated to the probationer violates the principles of natural justice; uncommunicated adverse remarks should not be read to his prejudice. Withholding adverse feedback denies a meaningful opportunity for improvement. (¶22, 36)
Service law — Bypassing a formal disciplinary proceeding — Relief —
Held further: Unsatisfactory performance may not be used as a disguise to bypass formal disciplinary proceeding. Fifty per cent backwages from termination to superannuation, with consequential benefits notionally. Appeal disposed of. (¶45, 46)
In the Court's own words
Paragraph 21A distinction is required to be drawn between a routine non-stigmatic termination for unsuitability and a disguised punitive termination. If the employer’s decision is founded on allegations of misconduct or severe deficiency, the termination is stigmatic. It cannot stand in absence of compliance of due process, and the probationer should be afforded an opportunity of hearing or to defend his case. Furthermore, such discretion should not contain a whisper of arbitrary exercise of power or mala-fide. If a discharged probationer can demonstrate that the termination was driven by personal bias, vindictiveness, or an ulterior motive of a superior rather than a genuine assessment of their work, such termination, even during probation, is liable to be set-aside. In other words, while the Regulation appears to vest the Competent Authority with the discretion to terminate a probationer based on its satisfaction, it remains strictly bound by the established principles of administrative law.
Paragraph 41On perusal of the records, it is clear that the termination order was primarily predicated upon the ‘misconduct’ alleged against the Respondent No. 1. It cannot be said that Respondent No. 1 was terminated from services because his work was found to be simply unsuitable. Upon consideration of the material placed on record, it is evident that the alleged misconduct was for all intent and purposes, the motive as well as foundation for the termination, even though the formal order ostensibly cites unsatisfactory performance.
Paragraph 45As discussed in the analysis above, these memos lack the requisite evidentiary value to establish that Respondent No. 1’s performance was genuinely unsatisfactory. Furthermore, the Bank’s office note dated 05.11.2005 reveals that the alleged misconduct was the primary issue of variance and basis of removal at the first instance. While an employer undoubtedly retains the right to terminate services for genuine inefficiency, the law does not permit the use of ‘unsatisfactory performance’ as a disguise to bypass formal disciplinary proceeding. It is a settled proposition of law that what cannot be directly cannot be done indirectly. In the present case, the Bank suspended Respondent No. 1 for misconduct, an action that necessitates a formal departmental enquiry. By consciously choosing to forego this enquiry and instead terminating Respondent No. 1 on unsubstantiated grounds of poor performance, the Bank rendered its termination order legally unsustainable for reasons recorded above.
Acts & Sections
reg.16(3)(a) Vijaya Bank (Officers') Regulations, 1982reg.16 Vijaya Bank (Officers') Regulations, 1982One judgment a day. That's the whole habit.
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