2025 (1) TMI 1028 - SC - Indian Laws

Violation of principles of natural justice - challenge to disciplinary inquiry against the respondent (Bank Branch Manager) - abuse of position by making fictitious debits to crop insurance account narrating the credit to various Syndicate Kisan Credit Cards (SKCC) accounts - fair inquiry conducted or not - no documentary evidence to arrive at a correct decision - Penalty of dismissal. HELD THAT - It is well settled that an acquittal in a criminal case is no ground to exonerate a delinquent in disciplinary proceedings as the standard of proof differs in these proceedings. It is well settled that the adequacy of the evidence adduced during disciplinary inquiry cannot be gone into in writ jurisdiction. In the case of BC. CHATURVEDI VERSUS UNION OF INDIA AND OTHERS 1995 (11) TMI 379 - SUPREME COURT this court held The disciplinary authority is the sole judge of facts. Where appeal is presented the appellate authority has coextensive power to reappreciate the evidence or the nature of punishment. In a disciplinary inquiry the strict proof of legal evidence and findings on that evidence are not relevant. Adequacy of evidence or reliability of evidence cannot be permitted to be canvassed before the Court/Tribunal. It is well settled that the Bank officers are expected to maintain a higher standard of honesty integrity and conduct. In view of the respondent s admissions and the fact that documentary evidence was on record it cannot be said that it was a case of no evidence. The principles of natural justice were followed during the disciplinary inquiry. The respondent thoroughly cross-examined the officer examined as a witness. The respondent did not apply for leading any evidence. Therefore the finding that the disciplinary inquiry was not fair or was in breach of the principles of natural justice cannot be accepted as correct. The entire premise on which the High Court had interfered is without basis - It is well settled that the exercise of powers by the disciplinary authority is always subject to principles of proportionality and fair play. In the facts of the case the financial loss caused to the appellant was reimbursed. The respondent at every stage fairly accepted his mistakes. Penalty of dismissal - HELD THAT - The penalty of dismissal was disproportionate to the misconduct established against the respondent and his unblemished career for a long time. However fact remains that the misconduct alleged and proved against the respondent was of a serious nature considering the fact that a very high standard of conduct is expected from a branch manager of a Bank. Considering the facts of the case we are of the view that a minor penalty as provided in Regulation 4(e) of the Disciplinary Regulations would be appropriate. The penalty will be of reducing the respondent to a lower stage in the time scale of pay for a period of one year without cumulative effect and not adversely affecting his pension. Conclusion - i) The disciplinary inquiry was fair. ii) The findings of misconduct were supported by evidence. iii) The penalty was modified to a minor one. iv) The criminal acquittal was irrelevant to the disciplinary proceedings. Appeal allowed in part.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the disciplinary inquiry against the respondent was conducted in accordance with the principles of natural justice.
Whether the findings of misconduct against the respondent were supported by evidence.
Whether the penalty of dismissal imposed on the respondent was proportionate to the misconduct established.
The relevance of the respondent's acquittal in criminal proceedings to the disciplinary inquiry.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Principles of Natural Justice

Legal Framework and Precedents: The principles of natural justice require a fair hearing and an unbiased inquiry. Judicial review in disciplinary matters is limited to ensuring compliance with these principles, as established in B.C. Chaturvedi v. Union of India.
Court's Interpretation and Reasoning: The court found that the disciplinary inquiry was conducted fairly, with the respondent given opportunities to cross-examine witnesses and present his case.
Key Evidence and Findings: The respondent had admitted to the allegations during the inquiry, and the process followed was consistent with procedural fairness.
Application of Law to Facts: The court concluded that the inquiry adhered to the principles of natural justice, rejecting the High Court's view that the inquiry was unfair.
Treatment of Competing Arguments: The court dismissed the argument that the inquiry was unfair due to the absence of certain witnesses, as the respondent had admitted to the charges.
Conclusions: The inquiry was conducted fairly, and the principles of natural justice were upheld.

Issue 2: Evidence Supporting Misconduct

Legal Framework and Precedents: The adequacy of evidence in disciplinary proceedings is not for the court to assess, as long as there is some evidence supporting the findings.
Court's Interpretation and Reasoning: The court noted that the respondent's admissions and the documentary evidence were sufficient to support the findings of misconduct.
Key Evidence and Findings: The respondent admitted to making excess payments and misappropriations, which were later rectified.
Application of Law to Facts: The court found that the evidence, including the respondent's admissions, supported the findings of misconduct.
Treatment of Competing Arguments: The court rejected the argument of "no evidence" presented by the respondent, emphasizing the admissions and documentary evidence.
Conclusions: The findings of misconduct were based on adequate evidence.

Issue 3: Proportionality of Penalty

Legal Framework and Precedents: Penalties in disciplinary proceedings must be proportionate to the misconduct, considering the employee's record and the nature of the misconduct.
Court's Interpretation and Reasoning: The court deemed the penalty of dismissal disproportionate given the respondent's long unblemished service and the rectification of financial losses.
Key Evidence and Findings: The respondent had a clean record for over 21 years, and the financial losses were reimbursed.
Application of Law to Facts: The court modified the penalty to a minor one, reducing the respondent's pay scale for one year without affecting his pension.
Treatment of Competing Arguments: The court balanced the seriousness of the misconduct with the respondent's service record and rectification efforts.
Conclusions: The penalty was modified to be proportionate to the misconduct.

Issue 4: Acquittal in Criminal Proceedings

Legal Framework and Precedents: Acquittal in criminal proceedings does not automatically exonerate an employee in disciplinary proceedings due to differing standards of proof.
Court's Interpretation and Reasoning: The court reiterated that the acquittal was irrelevant to the disciplinary proceedings.
Key Evidence and Findings: The disciplinary proceedings were based on admissions and documentary evidence, independent of the criminal case.
Application of Law to Facts: The court maintained that the disciplinary findings were valid despite the criminal acquittal.
Treatment of Competing Arguments: The court dismissed the reliance on criminal acquittal as a basis for challenging the disciplinary findings.
Conclusions: The acquittal in criminal proceedings was not relevant to the disciplinary inquiry.

3. SIGNIFICANT HOLDINGS

Verbatim Quotes: "Judicial review is not an appeal from a decision but a review of the manner in which the decision is made." - B.C. Chaturvedi v. Union of India
Core Principles Established: The principles of natural justice must be adhered to in disciplinary inquiries; the adequacy of evidence is not for judicial review; penalties must be proportionate.
Final Determinations on Each Issue: The disciplinary inquiry was fair; findings of misconduct were supported by evidence; the penalty was modified to a minor one; the criminal acquittal was irrelevant to the disciplinary proceedings.