Acquittal in Criminal Proceedings Does Not Preclude Disciplinary Action; Supreme Court Upholds Dismissal for Bank Fraud
- REEDLAW
- Feb 7
- 3 min read
The Supreme Court held that an acquittal in criminal proceedings does not preclude disciplinary action and upheld the respondent’s dismissal for bank fraud.
The Supreme Court Bench of Justice Abhay S. Oka and Justice Augustine George Masih held that an acquittal in criminal proceedings does not preclude disciplinary action and reaffirmed that judicial review under Article 226 is limited to assessing procedural fairness, without re-evaluating factual findings unless they are perverse or unsupported by evidence.
The respondent had been employed with the appellant, Syndicate Bank, as a clerk and was later promoted to the position of branch manager. He served as the branch manager of the Mudigubba branch between June 11, 2007, and November 3, 2008. Allegations of misconduct led to an investigation, and the Investigating Officer submitted a report against the respondent on December 2, 2010. Following this, Syndicate Bank issued a chargesheet on October 17, 2011, alleging that the respondent had abused his position by making fictitious debits and misappropriating funds through Syndicate Kisan Credit Cards (SKCC) without borrowers’ knowledge. It was also alleged that he fraudulently siphoned off amounts and misappropriated funds under the debt waiver scheme. The disciplinary inquiry found the charges proven, and by an order dated May 3, 2012, the Disciplinary Authority dismissed the respondent from service. The Appellate Authority upheld the dismissal on March 30, 2013.
Subsequently, after being acquitted in criminal proceedings, the respondent made representations in 2013 and 2014 requesting the Bank to set aside the penalty, which was not entertained. He then filed a writ petition challenging the dismissal order. On June 15, 2022, the learned Single Judge set aside the dismissal, citing a violation of natural justice and directed reinstatement. As the respondent had since superannuated, the court held that he was entitled to all consequential benefits. The appellant’s writ appeal was dismissed by the Division Bench, which found that the disciplinary inquiry lacked evidence against the respondent.
The appellant’s counsel argued that the respondent had admitted to the transactions during the vigilance investigation and the disciplinary inquiry. It was contended that sufficient documentary evidence supported the allegations, and judicial review under Article 226 of the Constitution did not extend to reassessing the adequacy of such evidence. Reliance was placed on precedents, including B.C. Chaturvedi v. Union of India and Others, (1995) 6 SCC 749, to support the argument that the High Court should not have interfered in the disciplinary authority’s decision. The appellant emphasized that branch managers were expected to maintain high ethical standards and that an acquittal in criminal proceedings did not affect the disciplinary process, citing Manager, Reserve Bank of India, Bangalore v. S. Mani and Others, (2005) 5 SCC 100.
The respondent’s counsel countered that the disciplinary proceedings were flawed and unsupported by evidence. He highlighted that the monetary loss had been fully recovered and that a prior communication from the Deputy General Manager had merely cautioned the respondent without initiating disciplinary action. It was argued that the inquiry officer had relied on no substantive evidence, and the findings were unsustainable. Reliance was placed on Indian Airlines Limited v. Prabha D. Kanan, (2006) 11 SCC 67 and Roop Singh Negi v. Punjab National Bank and Others, (2009) 2 SCC 570, asserting that disciplinary action must be grounded in cogent proof.
The Supreme Court examined the findings of the learned Single Judge and the Division Bench, noting that the High Court’s conclusions were based on procedural lapses and the lack of documentary evidence. The Court reaffirmed that an acquittal in criminal proceedings did not preclude disciplinary action and reiterated the principle that judicial review was limited to assessing whether the inquiry adhered to principles of natural justice. Referring to B.C. Chaturvedi, the Court underscored that the disciplinary authority was the sole judge of facts, and writ courts should not interfere unless findings were perverse or unsupported by evidence. Consequently, the Court upheld the disciplinary action against the respondent, setting aside the High Court’s order and reaffirming the principle that judicial intervention in such matters must be exercised within well-defined parameters.
Mr. Hetu Arora Sethi, Advocate represented the Appellants.
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