Adverse CIBIL Report Valid Ground to Cancel Bank Appointment, Holds Madras High Court

The Madras High Court held that an adverse CIBIL report and a poor history of loan repayment constitute valid grounds for cancellation of a candidate’s appointment to a bank post.

The Madras High Court Single-Judge Bench of Justice N. Mala, while adjudicating a set of two writ petitions, held that a candidate with a history of loan defaults and an adverse CIBIL report is ineligible for appointment under Clause 1(E) of the recruitment notification, irrespective of whether the dues were cleared prior to the notification date. The Court further observed that participation in the recruitment process without challenging the eligibility clause bars any subsequent reinterpretation or plea of discrimination.

The petitioner challenged the impugned order dated 09.04.2021, issued by the third respondent, cancelling his appointment to the post of Circle Based Officer (CBO) in the State Bank of India. The petitioner had successfully participated in the recruitment process initiated through a notification dated 27.07.2020 and was issued an appointment order dated 12.03.2021. Upon verification of the petitioner’s CIBIL report, which showed past irregularities in repayment of personal loans and credit card dues, the respondent bank cancelled his appointment, citing ineligibility under Clause 1(E) of the eligibility criteria mentioned in the recruitment notification.

The petitioner contended that he had cleared all his outstanding loans and dues prior to the issuance of the notification and that there was no subsisting default or adverse CIBIL report at the relevant time. He further argued that other similarly placed candidates were allowed to join the bank after regularising their defaults and, therefore, the cancellation of his appointment was discriminatory. The respondent bank refuted these claims, relying on the petitioner’s own CIBIL report dated 12.03.2021, which indicated multiple instances of delayed repayments, write-offs, loan suits, and over 50 credit enquiries over a five-year period. The bank asserted that the petitioner had a demonstrable history of financial indiscipline, disqualifying him from appointment under the explicit terms of Clause 1(E).

The High Court observed that Clause 1(E) unambiguously excluded candidates with a record of loan defaults or adverse CIBIL or agency reports from being appointed. It rejected the petitioner’s argument that the clause should be interpreted to require only a clean repayment record as of the date of notification. Citing the Supreme Court's judgment in Chief Manager, Punjab National Bank and Another v. Anit Kumar Das, REEDLAW 2020 SC 11001, the Court held that the petitioner, having participated in the recruitment process without challenging the eligibility clause, could not later seek its reinterpretation. The Court also noted that the petitioner had admitted to defaults in loan repayments, explaining them as arising from personal circumstances, which nonetheless did not negate the implications of Clause 1(E).

Further, the Court held that the bank’s decision to enforce the eligibility criteria uniformly and to exclude candidates with more than one EMI default was reasonable and within the purview of its recruitment policy. The circular relied on by the petitioner to claim parity with other candidates was found to pertain to a different recruitment cycle and was held inapplicable. The High Court concluded that there was no discrimination or procedural irregularity in the bank’s decision and that judicial review in such matters was limited.

Accordingly, the writ petition was dismissed as devoid of merit, and the impugned order cancelling the petitioner’s appointment was upheld. The Court also dismissed the associated miscellaneous petition, with no order as to costs.

Mr. V. Sidharth, Advocate, represented the Appellant.

Mr. C. Mohan, Ms. A. Rexy Josephine Mary, Advocates for M/s. King and Patridge appeared for the Respondents.

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REEDLAW 2025 Mad 06011