Telangana HC Quashes Banker’s Compulsory Retirement Over Credit Card Dues

Hyderabad: The Telangana High Court set aside the compulsory retirement of a former Union Bank employee who had defaulted on personal credit card dues, holding that delayed repayment of a personal loan cannot by itself constitute service misconduct under service regulations.

Justice Juvvadi Sridevi faulted the bank and allowed a writ petition filed by M. Prakash Babu, a former officer of the erstwhile Andhra Bank (now Union Bank of India). The Court quashed the charge‑sheet, disciplinary enquiry and the 2009 order imposing compulsory retirement, directing the bank to treat him as in service until superannuation and extend all consequential benefits within eight weeks after adjusting amounts already paid.

The petitioner had challenged disciplinary proceedings initiated after he failed to clear outstanding dues on a personal Gold Credit Card. He argued that the card was obtained in his personal capacity, that repayment was delayed due to financial hardship, and that the bank suffered no loss as dues were ultimately recovered.

The bank defended its action, citing prolonged default, breach of credit limits and the need for officers to maintain financial discipline. It also referred to his alleged adverse service record.

The Judge noted that the credit card facility was a commercial product, not a condition of employment, making the relationship one of creditor and borrower rather than employer and employee. The charge‑sheet alleged only delayed repayment and did not accuse the petitioner of fraud, misappropriation or abuse of official position.

Even assuming misconduct, the Court held the punishment “wholly disproportionate,” observing that the petitioner had served nearly three decades, recovery had been made, dues were cleared and the bank suffered no irreversible loss. Compulsory retirement, with loss of service and reduced benefits, was ruled excessive and violative of proportionality.