1. Employee dismissed following disciplinary proceedings for financial irregularities despite pending criminal trials — Challenge based on bipartite agreement regarding stay of departmental proceedings. (Para 4 )
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2023 Supreme(SC) 1002
SUPREME COURT OF INDIA
HRISHIKESH ROY, SANJAY KAROL, JJ.
State Bank of India and Others – Appellants
Versus
P. Zadenga – Respondent
Civil Appeal No. 2518 of 2012
Decided On : 03-10-2023
Important Points
IMPORTANT POINTS
(1) Departmental Proceeding – Nature of proceedings being wholly separate and distinct, acquittal in criminal proceedings does not entitle delinquent employee for any benefit in latter or automatic discharge in departmental proceedings.
(2) Departmental proceeding pending criminal trial would not warrant an automatic stay unless a complicated question of law is involved – Also, acquittal in a criminal case ipso facto would not be tantamount to closure or culmination of proceedings in favour of a delinquent employee.
(1) Departmental Proceeding – Nature of proceedings being wholly separate and distinct, acquittal in criminal proceedings does not entitle delinquent employee for any benefit in latter or automatic discharge in departmental proceedings.
(2) Departmental proceeding pending criminal trial would not warrant an automatic stay unless a complicated question of law is involved – Also, acquittal in a criminal case ipso facto would not be tantamount to closure or culmination of proceedings in favour of a delinquent employee.
Subject
Disciplinary Proceedings - Stay of Proceedings
Act Referred
PC Act
Headnote
Service Law – Departmental Proceeding – Acquittal in criminal case – Nature of proceedings being wholly separate and distinct, acquittal in criminal proceedings does not entitle delinquent employee for any benefit in latter or automatic discharge in departmental proceedings – Stay of latter is desirable, but same is to be affected only for a reasonable period of time – No bar exits on both proceedings continuing simultaneously, though in an appropriate, separate forum – It may be desirable or, in certain circumstances, advisable for disciplinary proceedings to be stayed when criminal proceedings are ongoing; however, stay is not a matter of course and is only to be given after consideration of all factors, for and against – Departmental proceeding pending criminal trial would not warrant an automatic stay unless a complicated question of law is involved – Also, acquittal in a criminal case ipso facto would not be tantamount to closure or culmination of proceedings in favour of a delinquent employee. (Paras 14.2, 15, 21, 29.1 and 29.2)
Facts of the case:
Instant lis presents two questions for consideration: –
a) Does clause 4 of Memorandum of Settlement dated 10th April 2002 create a bar on departmental proceedings continuing when the person subjected thereto is being tried before a criminal court for offences of the same origin?
b) Does acquittal in some of connected proceedings entail a benefit in the surviving proceedings? Further, inuring a right upon delinquent employee of automatic discharge in disciplinary proceedings?
Findings of Court:
Clause 4 of MoS dated 10th April 2002 does not envisage a complete standstill of departmental proceedings as a result of pendency of criminal proceedings.
Result : Questions answered.
Legal Category Hierarchy
Advocates appeared:
For the Appellant(s) : Mr. Sanjay Kapur, AOR Ms. Megha Karnwal, Adv. Mr. Devesh Dubey, Adv. Mr. Arjun Bhatia, Adv. Mr. Surya Prakash, Adv.
For the Respondent(s): Mr. Jitender Bharti, Adv. Mr. Deepak Goel, AOR Ms. Alka Goyal, Adv. Mr. Mithilesh Jaiswal, Adv.
For the Appellant(s) : Mr. Sanjay Kapur, AOR Ms. Megha Karnwal, Adv. Mr. Devesh Dubey, Adv. Mr. Arjun Bhatia, Adv. Mr. Surya Prakash, Adv.
For the Respondent(s): Mr. Jitender Bharti, Adv. Mr. Deepak Goel, AOR Ms. Alka Goyal, Adv. Mr. Mithilesh Jaiswal, Adv.
Table of Contents
2. Whether bipartite agreement mandates stay of disciplinary proceedings during criminal trials and whether acquittal in criminal proceedings necessitates discharge from departmental proceedings. (Para 10 , 11 )
3. Simultaneous criminal and departmental proceedings are permissible; stay is discretionary based on complexity and not automatic; criminal acquittal does not preclude departmental punishment due to differing standards of proof. (Para 13 , 15 , 16 , 20 , 21 , 26 )
4. Pendency of criminal trials does not automatically bar departmental proceedings, and acquittal in criminal cases does not entail automatic discharge in disciplinary proceedings. (Para 21 )
5. Appeal allowed — High Court judgments set aside — Dismissal from service restored. (Para 28 , 30 )
6. Does the pendency of criminal proceedings automatically stay departmental proceedings?
No. There is no legal bar to both proceedings continuing simultaneously. While a stay may be desirable in certain circumstances, such as when complex questions of law are involved, it is not a matter of course and depends on the facts and circumstances of each case. (Para 15 , 21 )
7. Does an acquittal in a criminal trial result in automatic discharge from disciplinary proceedings?
No. Criminal and departmental proceedings operate in different fields with different objectives and standards of proof. An order of acquittal in a criminal case does not conclude the departmental proceeding or debar an employer from exercising power to conduct disciplinary action. (Para 21 , 26 )
8. How should a clause in a bipartite agreement requiring a stay of proceedings pending trial be interpreted?
Such clauses are generally enabling provisions rather than absolute prohibitions. The requirement for completion of trial must be construed as completion within a reasonable time-frame and cannot be used by an employee to benefit from the prolongation of a trial. (Para 13 , 16 , 20 )
JUDGMENT :
SANJAY KAROL, J.
1. The instant lis presents two questions for consideration by this Court. They are:
(a) Does clause 4 of the Memorandum of Settlement dated 10th April 2002 create a bar on departmental proceedings continuing when the person subjected thereto is being tried before a criminal court for offences of the same origin?
(b) Does acquittal in some of the connected proceedings entail a benefit in the surviving proceedings? Further, inuring a right upon the delinquent employee of automatic discharge in disciplinary proceedings?
2. This appeal, by way of special leave, is directed against the final judgment and order dated 7th January 2009 passed in Writ Appeal No. 03/2006 by which the order passed in Writ Petition (Civil) No. 12 of 2005 dated 25th July 2005 allowing the appeal of the Respondent herein against the order of dismissal from bank services dated 28th March 2003 and the rejection of the departmental appeal vide order 16th August 2004, was allowed and the order of the Learned Single Judge confirmed.
Background
3. The facts of the instant dispute as they emanate from the record are:
3.1 The respondent namely P. Zadenga1 [hereinafter referred to as “the delinquent employee”] was employed in the State Bank of India2 [hereinafter, the “Appellant Bank”] as Assistant (CAT) at the Dawrpui Branch, Aizawl. Three government retailers lodged a complaint with the Aizawl Police Station that their challan- deposits with the said Branch had not been entered into the cash receipt scroll. The District Civil Supply Officer, Aizawl West, also lodged a complaint that a certain retailer had taken the delivery of particular food stuff using a fake challan.
3.2 Pursuant thereto, disciplinary proceedings were initiated against the respondent with the issuance of a Memorandum dated 8th December 1999, wherein it was alleged that he had received Rs. 61,908 for a deposit on 19th April, 1996 in respect of which a challan was issued, but the amount never deposited in the respective account. Two other similar occurrences dated 21st February 1995 regarding Rs. 24,640 and Rs. 27,412 were also alleged.
3.3 Three different FIRs stood registered against him, under which he was arrested but later released on bail. In his written show cause to this Memorandum, the Delinquent employee contended that the disciplinary proceedings should be either dropped or closed since criminal cases were pending him, arising from the same set of transactions.
3.4 The appellant-bank proceeded to appoint an inquiry officer who, in his report, submitted that three out of four charges stood established. The Delinquent Employee, again denying the charges, filed a response to that but was eventually dismissed from the services at the bank, vide the order of dismissal dated 28th March 2003. The departmental appeal filed by him, after due opportunity of hearing, was dismissed on 16th August 2004.
4. Aggrieved by the dismissal of the departmental appeal, the delinquent employee filed Writ Petition (Civil) No. 12 of 2005 before the Gauhati High Court. The question before the said Court was: whether, in view of the Memorandum of Settlement dated 10th April 20023 [hereinafter referred to as “MoS” between the Management of 52 ‘A’ Class Banks as represented by the Indian Banks’ Association and their workmen as represented by the All India Bank Employees’ Association, National Confederation of Bank Employees, Indian National Bank Employees’ Federation] the disciplinary proceedings against the delinquent employee (respondent) herein ought to have been stayed or not.
5. Having recorded that post signing of the said MoS, the Shastri Award as confirmed by the Desai Award “ceased to exist for all intents and purposes” the Court observed that clause 4 of the said document was clear and unambiguous and, therefore, it was not correct for the bank to have subjected him to disciplinary proceeding during the pendency of criminal proceedings.
6. However, it would be open for the disciplina
