Bombay High Court Quashes POSH Penalty Where Reinvestigation Was Ordered by an Unauthorised Appellate Authority

Case Name: Ashok Upadhyay v. Union Bank of India

Factual Background

The Bombay High Court examined the legality of an appellate authority constituted by an employer for dealing with an appeal arising from proceedings under the POSH Act. The petitioner, an officer of a public sector bank, faced a complaint alleging sexual harassment at the workplace. The complaint was referred to the ICC, which conducted an inquiry and, by its report dated 20 April 2023, exonerated the petitioner.

The complainant subsequently filed an appeal before an appellate authority constituted by the Bank. According to the petitioner, he was neither served with notice of the appeal nor given an opportunity of being heard. The purported appellate authority nevertheless directed a fresh inquiry through a newly constituted ICC. The second ICC conducted a re-investigation and found the petitioner guilty of sexual harassment.

The petitioner challenged the subsequent proceedings and the major penalty imposed upon him. His principal contention was that the appellate authority constituted by the Bank had no jurisdiction under Section 18 of the POSH Act read with Rule 11 of the POSH Rules, 2013.

Court’s Analysis

The Court examined Section 18 of the POSH Act, which provides a right of appeal against specified recommendations of the ICC, and Rule 11 of the POSH Rules, which identifies the appellate authority in cases where no applicable service rules prescribe the forum.

The Court held that a cumulative reading of Section 18 and Rule 11 does not confer any power upon an employer to create or constitute an appellate authority of its own choice. Rule 11 specifically refers to the appellate authority notified under the Industrial Employment (Standing Orders) Act, 1946. The Bank was unable to identify any service rule or statutory provision empowering it to constitute its own appellate authority.

Accordingly, the Court held that the internal appellate authority constituted by the Bank lacked jurisdiction. Its direction for a fresh inquiry was therefore legally unsustainable.

The Court further found that the manner in which the petitioner was subjected to the second inquiry violated basic procedural safeguards. The earlier ICC had exonerated him, but the matter was reopened by an authority that itself lacked jurisdiction, without notice to or participation of the petitioner. The Court characterised the appellate authority’s order as non-est and held that the subsequent proceedings founded upon it were vitiated.

The Court clarified that while an employer may impose disciplinary punishment on the basis of a lawful POSH inquiry, the statutory procedure must itself possess legal sanctity. Neither the complainant nor the person against whom the complaint is made can be prejudiced by an unlawful procedure.

Order of the Court

The Court quashed and set aside the disciplinary penalty imposed on the petitioner and the subsequent departmental appellate order. It also left open the complainant’s right to pursue an appropriate statutory remedy against the original ICC recommendation, permitting her to approach the appropriate appellate forum within six weeks without the proceedings being rejected on limitation.

Key Takeaway

The judgment establishes an important compliance requirement for employers under the POSH Act: an employer cannot create its own appellate authority for POSH appeals unless such authority is legally recognised under Section 18 and Rule 11. Any re-investigation or disciplinary action founded upon an order of an improperly constituted appellate authority may be rendered invalid. Employers must therefore ensure that the legally designated appellate mechanism is clearly identified and followed, while preserving procedural fairness to both the complainant and the respondent.

Written by Adv. K. Sri Hamsa