Wed Mar 05 18:19:36 UTC 2025: **Karnataka High Court Rules Against Applying DPE Guidelines to Public Sector Banks**
Bengaluru, March 5, 2025 – The Karnataka High Court ruled that guidelines issued by the Department of Public Enterprises (DPE) regarding employee policies and indemnity bonds do not apply to public sector banks. The court overturned a single judge’s order that directed Bank of Baroda (formerly Vijaya Bank) to refund ₹3 lakh to a former employee who left before completing a three-year service agreement.
The division bench, comprising Chief Justice N.V. Anjaria and Justice K.V. Aravind, clarified that public sector banks fall under the purview of the Department of Economic Affairs (Banking Division), Ministry of Finance, and are not bound by the DPE guidelines intended for public sector enterprises with different service conditions.
The single judge had reasoned that the DPE guidelines permitted the continuation of minimum service periods in new public sector enterprises, thus entitling the employee, Abhimanyu Kumar, to a refund. However, the High Court disagreed, stating that the single judge misinterpreted the applicability of the DPE guidelines to the bank. The court emphasized that the bank is not a government department or public sector enterprise in the context of the DPE guidelines. The ₹3 lakh, collected as part of an indemnity bond, will therefore not be refunded.
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