The Madras High Court has upheld the cancellation of a candidate’s appointment by the State Bank of India (SBI) for the post of Circle Based Officer (CBO) on the ground of poor CIBIL credit history. Justice N. Mala delivered the judgment in W.P. No. 11122 of 2021, dismissing the writ petition filed by the aggrieved candidate, P. Karthikeyan.
Background
The petitioner had applied for the position of Circle Based Officer pursuant to SBI’s advertisement dated 27.07.2020. Having cleared all stages of the recruitment process, including the written examination, interview, and medical test, the petitioner was issued an appointment letter on 12.03.2021. However, shortly thereafter, on 09.04.2021, his appointment was cancelled citing adverse findings in his CIBIL credit report.
The petitioner challenged the cancellation through the present writ petition, seeking a writ of certiorarified mandamus to quash the cancellation order and direct the bank to allow him to join duty.
Petitioner’s Argument
The petitioner argued that at the time of notification, he had cleared all his loans and there were no outstanding dues, nor was he declared a defaulter by CIBIL or any external agency. He contended that the cancellation based on Clause 1(E) of the eligibility criteria was erroneous, as the clause should be read to apply only when there were active defaults as on the date of notification.
He also raised a ground of discrimination, pointing out that other similarly situated candidates with adverse CIBIL remarks had been allowed to join service.
Respondents’ Stand
The State Bank of India, through its counsel, maintained that the recruitment notification explicitly disqualified candidates with any record of default in repayment of loans or adverse CIBIL reports. It relied on Clause 1(E), which states:
“Candidates with record of default in repayment of loans/credit card dues and/or against whose name adverse report of CIBIL or other external agencies are available are not eligible for appointment.”
SBI submitted that the petitioner’s CIBIL report, dated 12.03.2021, showed serious instances of financial indiscipline, including multiple overdue personal loans, written-off credit card dues, and over 50 credit inquiries ranging from ₹1,000 to ₹30,00,000 between 2016 and 2021.
The bank argued that such history disqualified the petitioner under the eligibility criteria and that the cancellation was fully justified.
Court’s Analysis
Justice N. Mala held that the interpretation of Clause 1(E) by the petitioner was untenable. The clause unambiguously required candidates to maintain a clean credit history, not just to have repaid loans by a particular date. The Court noted:
“It is crystal clear that what is required is not the repayment of the loans as on the date of notification but maintaining a clear record of repayment of loans, without any default and/or not having an adverse CIBIL report.”
The Court further observed that the petitioner admitted to having defaulted on loans and explained the situation in his reply, attributing it to his brother’s accident. However, the Court held that such explanation could not override the bank’s eligibility criteria.
Relying on the Supreme Court’s decision in Chief Manager, Punjab National Bank v. Anik Kumar Das [(2021) 12 SCC 80], the Court emphasized that once a candidate participates in a recruitment process without challenging the eligibility criteria, they cannot later seek to reinterpret them.
On Discrimination Allegation
The Court rejected the petitioner’s argument of discrimination, noting that only candidates who satisfied the conditions laid out in SBI’s internal circular dated 20.03.2021—such as having only minor and regularised defaults—were allowed to join. The petitioner, having defaulted in multiple EMIs and loans, did not fall within the permissible category.
Conclusion
Justice N. Mala concluded that the writ petition lacked merit and dismissed it, observing that financial discipline is critical for employees in the banking sector who handle public money.
“Obviously a person with poor or no financial discipline cannot be trusted with public money,” the Court remarked, affirming the validity of SBI’s recruitment policy.
Case Details:
- Case Title: P. Karthikeyan vs The General Manager and Others
- Bench: Justice N. Mala
- Case No.: W.P. No. 11122 of 2021
- Advocates: Mr. V. Sidharth for the petitioner; Mr. C. Mohan and Ms. A. Rexy Josephine Mary for the respondents.
