[ Court Doc ]   Civil Appeals >> Civil & Consumer Law   |   Disciplinary Proceedings >> Workplace/ Professional Related  

In a significant ruling, the Supreme Court of India recently quashed disciplinary proceedings, including a chargesheet, against a Union Bank of India officer who was due to retire. The Court found the bank's actions to be "mala fide and arbitrary," particularly highlighting the issuance of a chargesheet without awaiting the Central Vigilance Commission (CVC)'s first-stage advice, despite the bank having acknowledged its necessity.

Case Background:

The appellant, who had served Union Bank of India for 34 years and was promoted to Deputy General Manager in 2016, was due to superannuate on June 30, 2019. Less than a year before his retirement, on August 21, 2018, he was suspended. The bank alleged that, in his previous role as Regional Head, Meerut, he had adopted a "casual approach" in sanctioning credit proposals for 16 accounts from the Mid-corporate Ghaziabad Branch, extending huge limits to newly incorporated firms without proper due diligence.

Following his suspension, the appellant received two show-cause notices in January and March 2019, prompting him to challenge his prolonged suspension before the Allahabad High Court.

The Crucial Contradiction: CVC Advice

During the High Court proceedings, both the General Manager and the Executive Director of Union Bank of India filed affidavits affirming that the matter had a "vigilance angle" and had been referred to the CVC for "first-stage advice" as per Regulation 19 of the Union of India Officer Employees’ (Discipline & Appeal) Regulations, 1976. They explicitly stated that a chargesheet would be issued only after receiving the CVC's advice.

However, on June 18, 2019 – just days after the Executive Director's affidavit and without receiving the CVC's advice – an antedated chargesheet (dated June 10, 2019) was served on the appellant. The High Court, in an earlier order, had quashed his suspension as arbitrary but granted the bank liberty to initiate further proceedings. Subsequently, the High Court dismissed the appellant's petition to quash the chargesheet, ruling that CVC advice was not necessary before its issuance.

Supreme Court's Scrutiny and Rationale:

The Supreme Court critically examined Regulation 19, which mandates that the bank "shall consult the Central Vigilance Commission wherever necessary, in respect of all disciplinary cases having a vigilance angle." The Court noted that while the provision offers some discretion ("wherever necessary"), in this specific case, the bank itself had repeatedly acknowledged the necessity of CVC consultation by seeking its advice and stating under oath that it would await the advice before issuing the chargesheet.

The bench found the bank's actions to be a clear contradiction of its own sworn statements and the established procedure for CVC consultation, as outlined in various CVC circulars that mandate first-stage advice before the issuance of a chargesheet. The Court observed:

• The CVC advice was sought a full nine months after the suspension and just weeks before the appellant's superannuation.
• The chargesheet was served without receiving or considering this crucial first-stage advice.
• The High Court erred by deeming CVC advice non-mandatory when the bank itself had conceded its necessity in this case.

The Supreme Court concluded that the bank's conduct was "mala fide and arbitrary" and amounted to "victimisation at the fag end of his unblemished career of 34 years."

Outcome and Directives:

Considering that almost six years had passed since the appellant's superannuation, the Supreme Court deemed it unjust to allow disciplinary proceedings to continue.

Accordingly, the Supreme Court:

• Quashed and set aside the disciplinary proceedings, including the chargesheet dated June 10, 2019.
• Directed the Union Bank of India to release all retirement benefits admissible to the appellant, based on his superannuation as of June 30, 2019.
• Clarified that the appellant would not be entitled to back wages and allowances.
• Mandated that the retirement benefits be paid within three months from the date of the judgment.

This judgment underscores the importance of adherence to internal regulations and principles of natural justice, especially when discretionary powers are exercised, and warns against arbitrary actions that can victimize employees at the culmination of their service.