AJIT PRAKASH SHAH, CJ: 1. This appeal is preferred by the State Bank of India against the judgment of the learned single Judge dated August 26, 2003 in CWP No.3265/1989. By that judgment the learned single Judge quashed the order dismissing the respondent from service and substituted the same with compulsory retirement. 2. The brief facts of the case are as follows: The respondent joined as a Clerk in the erstwhile Imperial Bank of India and after establishment of the State Bank of India, services of the respondent were transferred to the appellant bank with effect from July 1, 1955 and in the course of time he was promoted as Grade II officer and then as Grade I officer and finally as Branch Manager. A charge sheet dated September 17, 1985 containing four charges was issued to the respondent for misconduct and irregularities committed by him in the Punjabi Bagh Branch and Janak Puri Branch of the appellant bank during his tenure as Branch Manager from 1982 to 1983. However, the appellant bank subsequently deleted the charge I(i), (ii) and (v) from the said charge sheet. A domestic inquiry was held by appointing an Inquiry Officer, who held that charges were proved except that the firm concerned with charge I(iv) was not a fictitious one. The charges that were proved against the respondent were that he had allowed unauthorised accommodation to a firm M/s Sunny Enterprises by allowing immediate credit of the purchase of the third party drafts / cheques endorsed in favour of the firm and realised the same through clearing after a lapse of 5 to 15 days and he also charged lesser exchange of 20 paisa percent instead of 40 paisa percent and even did not report these transactions to his controlling authority. The respondent further extended undue favours to this very firm by purchasing instruments drawn on local banks and crediting the proceeds of Rs.66.30 lacs to the firm s account without charging any exchange on this. The respondent further extended undue favours to this very firm by purchasing instruments drawn on local banks and crediting the proceeds of Rs.66.30 lacs to the firm s account without charging any exchange on this. The respondent also allowed opening of a current account in the name of Mr.Ram Lal without any introductory reference on April 21, 1982 and accommodated the party by allowing clean over drafts at frequent intervals from April, 1982 and subsequently purchased large number of third party instruments aggregating Rs.17.03 lacs within a period of 23 days at a concessional rate of exchange of 20 paisa percent as against the normal rate of 40 paisa percent. He also allowed opening of a current account in the name of M/s Ajantha Plastics on October 23, 1982 with the introductory reference of Mr.Ram Lal whose own account was not introduced. The respondent also allowed a term loan of Rs.1.70 lacs to one S. Raja Singh for purchase of a truck without proper security documents. In short the respondent was found guilty of not obeying the bank rules and regulations and unauthorisedly accommodating the parties and thus acting prejudicially to the interest of the bank. 3. The report of the Inquiry Officer was accepted and the respondent was dismissed from service for the proved misconduct by the appointing authority, the Deputy Managing Director by order dated September 17, 1986 in terms of Rule 49(h) read with Rule 50(3)(iii) of the State Bank of India (Staff Supervising) Service Rules. Appeal of the respondent was dismissed by the Appellate Authority, the Managing Director, vide his order dated September 8, 1987. Thereafter the review petition was also dismissed by the Reviewing Authority by order dated February 4, 1989. The above orders were questioned in CWP No.3265/1989. The learned single Judge upheld the inquiry report and found no illegality or infirmity in it. The learned single Judge also rejected the argument that the Disciplinary Authority ought to have been the Executive Board and held that the Appointing Authority was Deputy Managing Director and the Disciplinary Authority was Chief General Manager and the Appellate Authority was Managing Director and the order passed by the Deputy Managing Director cannot be faulted with. The learned single Judge also rejected the argument that the Disciplinary Authority ought to have been the Executive Board and held that the Appointing Authority was Deputy Managing Director and the Disciplinary Authority was Chief General Manager and the Appellate Authority was Managing Director and the order passed by the Deputy Managing Director cannot be faulted with. The learned single Judge then addressed the question as to whether the penalty of dismissal was appropriate and came to the conclusion that having regard to the fact that there was no financial loss caused to the bank, the penalty of dismissal was inappropriate and substituted the penalty of dismissal by compulsory retirement . 4. Mr.Ravinder Sethi, learned senior counsel appearing for the bank, submitted that the judgment and order of the learned single Judge is contrary to the law and the norms as consistently laid down by the Supreme Court in a large number of decisions on the scope and ambit of the power of the High Courts under Article 226 of the Constitution of India for interference in the quantum of punishment in service / labour matters and, therefore, suffers with a jurisdictional error. Learned counsel submitted that the respondent, Branch Manager of the bank, was required to exercise higher standards of honesty and integrity when he deals with the money of the depositors and the customers and, therefore, he is required to take all possible steps to protect the interests of the bank and to discharge his duties with utmost devotion, diligence, integrity and honesty and to do nothing which is unbecoming of a bank officer. According to the learned counsel good conduct and discipline are inseparable from the functioning of every manager / employee of the bank, who deals with public money and there is no defence available to say that there was no loss or profit which resulted in the case, when the manager acted without authority and contrary to the rules and regulations of the bank. He submitted that acting beyond one s authority is by itself a breach of discipline and constitutes misconduct and no further proof of loss is necessary and the punishment imposed on the respondent cannot be said to be in excess or disproportionate to the nature of the charges. He submitted that acting beyond one s authority is by itself a breach of discipline and constitutes misconduct and no further proof of loss is necessary and the punishment imposed on the respondent cannot be said to be in excess or disproportionate to the nature of the charges. 5.On the other hand, learned counsel appearing for the respondent submitted that it is an admitted position that the appellant bank has not suffered loss of a single penny on account of the so-called misconduct charges leveled against the respondent. He pointed out the observation of the Appellate Authority as well as the Reviewing Authority to the effect that the bank has not suffered monetary loss on account of the alleged misdeeds and, therefore, according to him the charges framed against the respondent did not constitute a case for imposition of a major penalty. He submitted that the order of the Disciplinary Authority shows complete non-application of mind and the penalty of dismissal is wholly disproportionate to the charges proved against the respondent. 6. The scope of interference with the punishment awarded in disciplinary proceedings has been dealt with by the Supreme Court in several cases. A reference to few of the cases will suffice. In B.C. Chaturvedi v. Union of India and others (1995) 6 SCC 749 , a three Judge Bench held as follows: 18. A review of the above legal position would establish that the disciplinary authority, and on appeal the appellate authority, being fact- finding authorities have exclusive power to consider the evidence with a view to maintain discipline. They are invested with the discretion to impose appropriate punishment keeping in view the magnitude or gravity of the misconduct. The High Court/Tribunal, while exercising the power of judicial review, cannot normally substitute its own conclusion on penalty and impose some other penalty. If the punishment imposed by the disciplinary authority or the appellate authority shocks the conscience of the High Court/Tribunal, it would appropriately mould the relief, either directing the disciplinary/appellate authority to reconsider the penalty imposed, or to shorten the litigation, it may itself, in exceptional and rare cases, impose appropriate punishment with cogent reasons in support thereof. 7. Similar view was taken in Om Kumar v. Union of India (2001) 2 SCC 386 , wherein the Court observed as follows: 71. 7. Similar view was taken in Om Kumar v. Union of India (2001) 2 SCC 386 , wherein the Court observed as follows: 71. Thus, from the above principles and decided cases, it must be held that where an administrative decision relating to punishment in disciplinary cases is questioned as arbitrary under Article 14, the court is confined to Wednesbury principles as a secondary reviewing authority. The court will not apply proportionality as a primary reviewing court because no issue of fundamental freedoms nor of discrimination under Article 14 applies in such a context. The court while reviewing punishment and if it is satisfied that Wednesbury principles are violated, it has normally to remit the matter to the administrator for a fresh decision as to the quantum of punishment. Only in rare cases where there has been long delay in the time taken by the disciplinary proceedings and in the time taken in the courts, and such extreme or rare cases can the court substitute its own view as to the quantum of punishment. 8. Similar is also the view taken in Indian Oil Corpn. Ltd. v. Ashok Kumar Arora (1997) 3 SCC 72 and Regional Manager, U.P.SRTC, Etawah and others v. Hoti Lal and another (2003) 3 SCC 605 that the Court will not interfere unless the punishment is wholly disproportionate. In Regional Manager, U.P.SRTC, Etawah and others v. Hoti Lal and another (supra), the Supreme Court held as under: 10. It needs to be emphasized that the court or tribunal while dealing with the quantum of punishment has to record reasons as to why it is felt that the punishment was not commensurate with the proved charges. As has been highlighted in several cases to which reference has been made above, the scope for interference is very limited and restricted to exceptional cases in the indicated circumstances. Unfortunately, in the present case as the quoted extracts of the High Court s order would go to show, no reasons whatsoever have been indicated as to why the punishment was considered disproportionate. Reasons are live links between the mind of the decision taken to the controversy in question and the decision or conclusion arrived at. Failure to give reasons amounts to denial of justice. [See Alexander Machinery (Dudley) Ltd. v. Crabtree 1974 LCR 120 (NIRC)]. A mere statement that it is disproportionate would not suffice. Reasons are live links between the mind of the decision taken to the controversy in question and the decision or conclusion arrived at. Failure to give reasons amounts to denial of justice. [See Alexander Machinery (Dudley) Ltd. v. Crabtree 1974 LCR 120 (NIRC)]. A mere statement that it is disproportionate would not suffice. A party appearing before a court, as to what it is that the court is addressing its mind. It is not only the amount involved but the mental set-up, the type of duty performed and similar relevant circumstances which go into the decision-making process while considering whether the punishment is proportionate or disproportionate. If the charged employee holds a position of trust where honesty and integrity are inbuilt requirements of functioning, it would not be proper to deal with the matter leniently. Misconduct in such cases has to be dealt with iron hands. Where the person deals with public money or is engaged in financial transactions or acts in a fiduciary capacity, the highest degree of integrity and trustworthiness is a must and unexceptionable. 9. In the present case the learned single Judge, as seen from the following observations, has interfered with the order of dismissal solely on the ground that no loss had been caused to the bank: In view of the law laid down in Ranjit Thakur Vs. Union of India (1987) 4 SCC 611 and 1988 SCC (LandS) 1, normally this Court would not substitute a punishment awarded by the Disciplinary Authority. However, in this case from the perusal of the order of Appellate Authority while coming to a conclusion that no loss has been caused to the bank still Appellate Authority has not stated that why dismissal be not substituted. 30 years of services rendered by the petitioner from 1955 to 1985 when show cause notice was issued has been washed away. Said order shows complete non application of mind whereby denying the terminal benefits to the petitioner The penalty of dismissal is disproportionate to the charges proved against the petitioner .. .10. We are unable to agree with the view taken by the learned single Judge. Said order shows complete non application of mind whereby denying the terminal benefits to the petitioner The penalty of dismissal is disproportionate to the charges proved against the petitioner .. .10. We are unable to agree with the view taken by the learned single Judge. The fact that no loss has been caused to the appellant bank is hardly a consideration for reducing the quantum of punishment as has been explained by the Supreme Court in Disciplinary Authority-cum-Regional Manager and others v. Nikunja Bihari Patnaik (1996) 9 SCC 69 as under: . In the case of a bank for that matter, in the case of any other organisation every officer/employee is supposed to act within the limits of his authority. If each officer/employee is allowed to act beyond his authority, the discipline of the organisation/bank will disappear; the functioning of the bank would become chaotic and .unmanageable. Each officer of the bank cannot be allowed to carve out his own little empire wherein he dispenses favours and largesse. No organisation, more particularly, a bank can function properly and effectively if its officers and employees do not observe the prescribed norms and discipline. Such indiscipline cannot be condoned on the specious ground that it was not actuated by ulterior motives or by extraneous considerations. The very act of acting beyond authority that too a course of conduct spread over a sufficiently long period and involving innumerable instances is by itself a misconduct. Such acts, if permitted, may bring in profit in some cases but they may also lead to huge losses. . As mentioned hereinbefore, the very discipline of an organisation and more particularly, a bank is dependent upon each of its employees and officers acting and operating within their allotted sphere. Acting beyond one s authority is by itself a breach of discipline and a breach of Regulation 3. It constitutes misconduct within the meaning of Regulation 24. No further proof of loss is really necessary though as a matter of fact, in this case there are findings that several advances and overdrawals allowed by the respondent beyond his authority have become sticky and irrecoverable. Just because, similar acts have fetched some profit huge profit, as the High Court characterises it they are no less blameworthy. It is wrong to characterise them as errors of judgment. 11. Just because, similar acts have fetched some profit huge profit, as the High Court characterises it they are no less blameworthy. It is wrong to characterise them as errors of judgment. 11. To the similar effect are the observations by the Supreme Court in State Bank of India and others v. T.J. Paul (1999) 4 SCC 759 , which are reproduced hereunder: 14. On the other hand, learned Senior Counsel for the respondent, Shri P.P. Rao contended that the enquiry officer did not give any finding of serious financial loss. 15. Taking up the definition of gross misconduct in para 22(iv), it is obvious that clause (h) does not apply because the charge is not one of insubordination or disobedience of specific orders of any superior officer. Coming to clause (l) of para 22(iv), the doing of any act prejudicial to the interests of the Bank, or gross negligence or negligence involving or likely to involve the Bank in serious loss is gross misconduct. In other words likelihood of serious loss coupled with negligence is sufficient to bring the case within gross misconduct. The enquiry officer s finding of gross misconduct on the ground of not obtaining adequate security is, therefore, correct and cannot be said to be based on no evidence as held by the High Court. This can be contrasted with para 22(vi)(c) under minor misconduct which deals with neglect of work and negligence in performing of duties . In our view, the contention of the learned Senior Counsel for the appellants, Shri T.R. Andhyarujina is, therefore, entitled to be accepted. 16. The contention of the learned Senior Counsel for the respondent ignores the fact that gross negligence or negligence likely to involve the Bank in serious loss would come under major misconduct within para 22(iv)(l). As stated above, even assuming that there is no gross negligence, simple negligence will come under major misconduct if accompanied by likelihood of serious loss and this is clear from para 22(iv)(l). Hence the finding of the enquiry officer regarding gross misconduct is correct and could not have been set aside by the High Court. The findings of the enquiry officer clearly bring the case under major misconduct . As held in Disciplinary Authority-cum-Regional Manager v. Nikunja Bihari Patnaik (1996) 9 SCC 69 proof of loss is not necessary. .12. Hence the finding of the enquiry officer regarding gross misconduct is correct and could not have been set aside by the High Court. The findings of the enquiry officer clearly bring the case under major misconduct . As held in Disciplinary Authority-cum-Regional Manager v. Nikunja Bihari Patnaik (1996) 9 SCC 69 proof of loss is not necessary. .12. Recently, in State Bank of India and another v. Bela Bagchi and others (2005) 7 SCC 435 , the Supreme Court observed as under: A bank officer is required to exercise .higher standards of honesty and integrity. He deals with money of the depositors and the customers. Every officer/employee of the bank is required to take all possible steps to protect the interests of the bank and to discharge his duties with utmost integrity, honesty, devotion and diligence and to do nothing which is unbecoming of a bank officer. Good conduct and discipline are inseparable from the functioning of every officer/employee of the bank. As was observed by this Court in Disciplinary Authority-cum-Regional Manager v. Nikunja Bihari Patnaik (1996) 9 SCC 69 , it is no defence available to say that there was no loss or profit which resulted in the case, when the officer/employee acted without authority. The very discipline of an organisation more particularly a bank is dependent upon each of its officers and officers acting and operating within their allotted sphere. Acting beyond one s authority is by itself a breach of discipline and is a misconduct. The charges against the employee were not casual in nature and were serious. That being so, the plea about absence of loss is also sans substance. 13. The bank manager / officer has to act and discharge his functions in accordance with the Rules and Regulations. Acting beyond one s authority is by itself a breach of discipline and a misconduct. In the instant case the charges proved against the respondent are serious and grave in nature. He has been found guilty of sanctioning loans in violation of the rules of the bank and granting unauthorised accommodation to them. He has also been found guilty of serious lapses like opening a current account without any or proper introductory references and sanctioning loans without adequate security. The fact that the bank has not suffered any actual financial loss is of no consequence. He has also been found guilty of serious lapses like opening a current account without any or proper introductory references and sanctioning loans without adequate security. The fact that the bank has not suffered any actual financial loss is of no consequence. In our opinion, the punishment of dismissal awarded by the Disciplinary Authority cannot be said to be excessive or harsh in the facts and circumstances of this case. 14. In the result, the appeal is allowed. The impugned judgment and order is set aside.