Chidambaram Al. vs Indian Overseas Bank, Madras

By consent of both parties the main writ petition itself is taken up for final disposal. The petitioner has approached this Court to issue a writ of

mandamus directing the respondent not to proceed with the departmental enquiry against him pending trial before the Special court, Madurai, in

C.C. No. 33 of 1996 and 34 of 1996 on various grounds.

The case of the petitioner is briefly stated hereunder :- The petitioner is an Officer working in the Indian Overseas Bank under the control of

Nagapattinam Regional Office. While he was functioning as Assistant Manager/Officer in charge of Arabic College Extension Counter, on the

allegation that he has misappropriated a sum of Rs. 3,70,000/-, Delhi Special Police Establishment Madras Branch registered a case for the

alleged offences under Secs. 420, 467 read with Secs. 471, 477-A of Indian Penal Code and Sec. 13(2) read with Sec. 13(1)(d) of Prevention of

Corruption Act, 1988. The petitioner was suspended under Rule 12(1)(a) of the I.O.B. Employees (Discipline and Appeal) Regulations, 1976 on

November 12, 1994. It is further contended that the respondent on May 19, 1995 issued a notice of show-cause why discplinary action should

not be taken against him. The petitioner gave a reply standing that since the matter has already been taken by the C.B.I., Madras and the matter is

pending in the Criminal Court, it is not fair on his part to give any explanation. For the hearing dated January 21, 1997 the petitioner sent

representation requesting the respondent not to proceed with the departmental enquiry, as the matter is pending in the Criminal Court for the same

charges. It is also contended that if the departmental enquiry j precedes the trial before the Special Court, he will be greatly prejudiced. On the

other hand, according to him, if the trial proceeds and if necessary the respondent decides to take any departmental proceedings subsequently the

respondent will not be prejudiced. Inspite of the representations made to stay the departmental enqury till criminal trial is over, the respondent has

not given any reply but he is proceeding to conduct the departmental enquiry at his choice and already two hearings are over and he has fixed the

third hearing on January 21, 1997. In those circumstances, he has approached this Court for necessary direction as stated above. On January 20,

1997 this Court has entertained the writ petition and stayed the departmental proceedings.

The respondent has filed W.M.P. No. 14571 of 1993 for vacation of the interim stay granted on January 20, 1997. The case of the respondent

as seen from the counter affidavit is briefly stated hereunder :- At the outset the writ petition is not maintainable and the petitioner has no right to

seek a prayer for issue of a writ of mandamus directing the respondent Bank not to proceed with the departmental enquiry until conclusion of the

criminal case pending against him, since he has no legal right or corresponding legal obligation in the respondent Bank. It is further contended that

the petitioner forged bank documents and raised loans on fake deposit receipts. He also made fictitious entries in the books of the bank and

caused wrongful loss to the bank to the extent of Rs. 4.32 lakhs. He was therefore, suspended from bank service on November 12, 1994. Central

Bureau of Investigation registered a criminal case against him and the charge sheet framed by them against the petitioner was filed in the Sessions

Court, Trichy. The case is still pending in Court. The petitioner is being prosecuted for having committed various offences under Indian Penal Code

and Prevention of Corruption Act, whereas the charge sheet dated May 19, 1995 issued to the petitioner by the disciplinary authority is in respect

of various misconducts committed by him which are punishable under the Indian Overseas Bank Officer Employees'' (Discipline and Appeal)

Regulations, 1976. Further, the disciplinary proceedings cannot be delayed unduly and the delinquent cannot as a matter of course seek stay of the

same on the ground of pendency of criminal proceedings. Moreover, the petitioner has voluntarily admitted his guilt in his letters dated October 24,

1994 and November 11, 1994 to the Regional Manager of the respondent Bank, Nagapattinam and also gave a confession letter in writing on

October 27, 1994 before the Investigating Officer of the Bank and also repaid Rs. 85,000/- in five instalments being a portion of the

misappropriated amount. The petitioner also assured in writing to repay the balance of the misappropriated amount to the Bank. Inasmuch as there

is an admission of the guilt and voluntary repayment of the misappropriated amount, no prejudice will be caused to the petitioner if the

departmental proceedings are continued. In those circumstances, they prayed for vacation of the interim order as well as dismissal of the main writ

petition.

In the light of the above pleadings, I have heard. Mr. B. S. Gnanadesikan, learned counsel for the petitioner and Mr. N. G. R. Prasad, learned

counsel for the respondent.

The only contention of the learned counsel for the petitioner is that till the criminal trial is over, the domestic enquiry against the petitioner has to

be stayed, since the charges both in the domestic enquiry and before the Criminal Court are one and the same. In order to substantiate the above

contention, Mr. Gnanadesikan relied on the following decisions :

(i) The Delhi Cloth and General Mills Ltd. Vs. Kushal Bhan, ;

(ii) Tata Oil Mills Co. Ltd. Vs. Its Workmen, ;

(iii) Kusheshwar Dubey Vs. Bharat Coking Coal Ltd. and Others, .

On the other'' hand, Mr. N. G. R. Prasad, learned counsel for the respondent, after taking me through the charges before the criminal court and

in the departmental enquiry, submitted that both are not different and in the interest of the Respondent-Bank and of the fact that the petitioner has

committed misappropriation to the tune of Rs. Four lakhs, there is no need to stay the departmental enquiry. Further, the petitioner has already

admitted the guilt and repaid a part of the misappropriated amount. In those circumstances, according to him, there is no need to stay the domestic

enquiry till the disposal of the criminal case. In order to strengthen his case, he has very much relied on the following two decisions of the Supreme

Court :

(i) State of Rajasthan Vs. B.K. Meena and others, ;

(ii) Depot Manager, Andhra Pradesh State Road Transport Corporation Vs. Mohd. Yousuf Miya, etc., .

I have carefully considered the rival submissions in detail.

The petitioner while functioning as Assistant Manager/Officer in charge of Arabic College Extension Counter, Central Bureau of Investigation

filed a case against him on the allegation that he has misappropriated a sum of Rs. 3,70,000/-. Now the said criminal case is pending before the

Madurai Special Court in is C.C. No. 33/1996 and 34/1996. After issuance of show-cause notice, the respondents have initiated disciplinary

action under Indian Overseas Bank Officer Employees'' (Discipline and Appeal) Regulations, 1976. In order to appreciate the rival contentions as

well as the legal position cited by both the learned counsel, it is to he noted that the petitioner is being prosecuted under the Indian Penal Code and

Prevention of Corruption Act for various criminal offences such as cheating the Bank (Sec. 420, I.P.C.), forging valuable securities (Fixed Deposit

Receipts), forging the signatures of depositors in the deposit receipts, forging the signature of cashier in the voucher (Secs. 467, 468, IPC), causing

disappearance of evidence (Sec. 201, IPC), Criminal breach of trust (Sec. 409, IPC), falsification of accounts (Sec. 477-A, IPC), obtaining

pecuniary advantage by corrupt means and misappropriation (Sec. 13(1)(d) of Prevention of Corruption Act). The petitioner is being charged in

the departmental enquiry with serious misconduct in having removed blank deposit receipts from the Respondent Bank, preparing fake deposit

receipts, forging the signatures of the depositors and cashier, misappropriation of clients money, manipulating bank accounts. The learned counsel

for the respondent brought to my notice that Charge No. 7 in the departmental enquiry is not the subject matter in the criminal case.

Now, in this back ground, I shall consider the three decisions cited by Mr. B. S. Gnanadesikan in support of his contention. In The Delhi Cloth

and General Mills Ltd. Vs. Kushal Bhan, , the observation of the two Judges Bench is relevant for the present case and the same is extracted

hereunder (para 3) :-

It is true that very often employers stay enquiries pending the decision of the criminal trial courts and that is fair; but we cannot say that principles

of natural justice require that an employer must wait for the decision at least of the criminal trial Court before taking action against an employee. In

Shri Bimal Kanta Mukherjee v. Messrs Newsman''s Printing Works 1956 LAC 188, this was the view taken by the Labour Appellate Tribunal.

We may, however, add that if the case is of a grave nature or involves questions of fact or law, which are not simple, it would be advisable for the

employer to await the decision of the trial Court, so that the defence of the employee in the criminal case may not be prejudiced.

Relying on the above passage, Mr. Gnanadesikan submitted that in view of the grave nature and of the fact that the charges involved are serious in

nature, as pointed out, by their Lordships, the departmental enquiry has to be stayed. In the said decision, their Lordships after holding that the

case before them is a case very simple in nature and found that employer cannot be blamed for the course adopted by him.

The other decision relied on by the learned counsel for the petitioner is Tata Oil Mills Co. Ltd. Vs. Its Workmen, . It is a 3 Judges Bench

decision wherein their Lordships have referred the earlier decision in The Delhi Cloth and General Mills Ltd. Vs. Kushal Bhan, . The relevant,

passage in para 9 is extracted hereunder :-

There is yet another point which remains to be considered. The Industrial Tribunal appears to have taken the view, that since criminal proceedings

had been started against Raghavan, the domestic enquiry should have been stayed pending the final disposal of the said criminal proceedings. As

this Court has held in the Delhi Cloth and General Mills Ltd. v. Kushal Bhan, (supra), it is desirable that if the incident giving rise to a charge

framed against a workman in a domestic enquiry is being trial in a criminal court, the employer should stay the domestic enquiry pending the final

disposal of the criminal case. It would be particularly appropriate to adopt such a course where the charge against the workman is of a grave

character, because in such a case, it would be unfair to compel the workman to disclose the defence which he may take before the criminal Court.

The other decision referred to by the learned counsel for the petitioner is Kusheshwar Dubey Vs. Bharat Coking Coal Ltd. and Others, . It is a

2 Judges Division Bench judgment. The observation referred to by their Lordships in the said judgment is in the following manner (para 7) :

The view expressed in the three cases of this Court seems to support the position that while there could be no legal bar for simultaneous

proceedings being taken, yet there may be cases where it would be appropriate to defer disciplinary proceedings awaiting disposal of the criminal

case. In the latter class of cases it would be open to the delinquent employee to seek such an order of stay or injunction from the Court. Whether

in the facts and circumstances of a particular case there should or should not be such simultaneity of the proceedings would then conceive judicial

consideration and the Court will decide in the given circumstances of a particular case as to whether the disciplinary proceedings should be

interdicted, pending criminal trial. As we have already stated that it is neither possible nor advisable to evolve a hard and fast straight-jacket

formula valid for all cases and of general application without regard to the particularities of the individual situation. For the disposal of the present

case, we do not think it necessary to say anything more particularly when we do not intend to lay down any general guideline.

In the instant case, the criminal action and the disciplinary proceedings are grounded; upon the same set of facts. We are of the view that the

disciplinary proceedings should have been stayed and the High Court was not right in interfering with the trial Court''s order of injunction which had

been affirmed in appeal.

An analysis of the above three decisions no doubt, Prima facie shows that if the criminal action and the disciplinary proceedings are grounded upon

the same set of facts, the disciplinary proceedings should have been stayed. As a matter of fact, their Lordships in the three Judges decision,

namely Tata Oil Mills Co. Ltd. Vs. Its Workmen, have observed that,

to say that domestic enquiries may be stayed pending criminal trial is very different from saying that if an employer proceeds with the domestic

enquiry in spite of the fact that the criminal trial is pending, the enquiry for that reason alone is vitiated and the conclusion reached in such an

enquiry is either bad in law or mala fide.

Likewise, in the third decision, namely Kusheshwar Dubey Vs. Bharat Coking Coal Ltd. and Others, their Lordships have also observed that

(para 7) :

Whether in the facts and circumstances of a particular case there should or should not be such simultaneity of the proceedings would then receive

judicial consideration and the Court will decide in the given circumstances of a particular case as to whether the disciplinary proceedings should be

interdicted, pending criminal trial.

In the very same judgment their Lordships have also observed that,

it is neither possible nor advisable to evolve a hard and fast, straight-jacket formula valid for all cases and of general application without regard to

the particularities of the individual situation.

In the light of the factual position as stated earlier, in our case, I am unable to countenance the argument of the learned counsel for the petitioner

that the departmental enquiry has to be stayed till the trial of the criminal case filed against him.

Now I shall refer the decisions referred to by the learned counsel for the respondent. In State of Rajasthan Vs. B.K. Meena and others, , Their

Lordships after considering the earlier decisions of the Apex Court, viz. The Delhi Cloth and General Mills Ltd. Vs. Kushal Bhan, , Tata Oil Mills

Co. Ltd. Vs. Its Workmen, have held thus (para 14/15) of State of Rajasthan Vs. B.K. Meena and others, :

it would be evident from the above decisions that each of them starts with the indisputable proposition that there is no legal bar for both

proceedings to go on simultaneously and then say that in certain situation, it may not be ''desirable'', ''advisable'' or ''appropriate'' to proceed with

the disciplinary enquiry when a criminal case is pending on identical charges. The staying of disciplinary proceedings, it is emphasised, is a matter to

be determined having regard to the facts and circumstances of a given case and that no hard, and fast rule can be enunciated in that behalf. The

only ground suggested in the above decisions as constituting valid ground for staying the disciplinary proceedings is that ""the defence of the

employee in the criminal case may not be prejudiced"". This ground has, however, been hedged in by providing further that this may be done in

cases of grave nature involving questions of fact and law. In our respectful opinion, it means that not only the charges must be grave but that the

case must involve complicated questions of law and fact. Moreover, ''advisability'', ''desirability'', or ''propriety'', as the case may be, has to be

determined in each case taking into consideration all the facts and circumstances of the case. The ground indicated in D.C.M. (supra) and Tata Oil

Mills (supra) is also not an invariable rule. It is only a factor which will go into the scales while judging the advisability or desirability of staying the

disciplinary enquiry cannot be - and should not be - delayed unduly. So far as criminal cases are concerned, it is well known that they drag on

endlessly where high officials or persons holding high public offices are involved. They get bogged down on one or the other ground. They hardly

ever reach a prompt conclusion. That is the reality in spite of repeated advice and admonitions from this Court and the High Courts. If a criminal

case is unduly delayed that may itself be a good ground for going ahead with the disciplinary enquiry even where the disciplinary proceedings are

held over in an earlier stage. The interests of administration and good Government demand that these proceedings are concluded expeditiously. It

must be remembered that interests of administration demand that undesirable elements are thrown out and any charge of misdemeanour is enquired

into promptly. The disciplinary proceedings are meant not really to punish the guilty but to keep the administrative machinery unsullied by getting rid

of bad elements. The interest of the delinquent officer also lies in a prompt conclusion of the disciplinary proceedings. If he is not guilty of the

charges, his honour should be vindicated at the earliest possible moment and if he is guilty, he should be dealt with promptly according to law. It is

not also in the interest of administration that persons accused of serious misdemeanour should be continued in office indefinitely, i.e., for long

periods awaiting the result of criminal proceedings. It is not in the interest of administration. It only serves the interest of the guilty and dishonest.

While it is not possible to enumerate the various factors, for and against the stay of disciplinary proceedings, we found it necessary to emphasise

some of the important considerations in view of the fact that very often the disciplinary proceedings are being stayed for long periods pending

criminal proceedings. Stay of disciplinary proceedings cannot be, and should not be, a matter of course. All the relevant factors, for and against,

should be weighed and a decision taken keeping in view the various principles laid down in the decisions referred to above.

Their Lordships have also observed thus (Para 17 of State of Rajasthan Vs. B.K. Meena and others, :

There is yet another reason. The approach and the objective in the criminal proceedings and the disciplinary proceedings is altogether distinct and

different. In the disciplinary proceedings, the question is whether the respondent is guilty of such conduct as would merit his removal from service

or a lesser punishment, as the case may be, whereas in the criminal proceedings, the question is whether the offences registered against him under

the Prevention of Corruption Act (and the Indian Penal Code, if any) are established and, if established, what sentence should be imposed upon

him. The standard of proof, the mode of enquiry and the rules governing the enquiry and trial in both the cases are entirely distinct and different.

Staying of disciplinary proceedings pending criminal proceedings, to repeat, should not be a matter of course but a considered decision. Even if

stayed at one stage, the decision may require reconsideration if the criminal case gets unduly delayed.

In the said case, a Memo of charges against the delinquent officer was served and he submitted detailed reply running into 90 pages controverting

the allegations levelled against him. Criminal case against him was also filed on May 15, 1993. The delinquent officer promptly went to the Tribunal

and got the disciplinary proceedings stayed. More than six years have passed in that case. The charges were served on the delinquent 4 years

back. He has already disclosed his defence in his elaborate and detailed statement filed on February 9, 1993. In such circumstance, after

formulating the principles as stated above, Their Lordships have held thus (Para 16 State of Rajasthan Vs. B.K. Meena and others, :

There is no question of his being compelled to disclose his defence in the disciplinary proceedings which would prejudice him in a criminal case.

The charges against the respondent are very serious. They pertain to misappropriation of public funds to the tune of more than rupee one crore.

In our case also as seen from the counter affidavit, the petitioner has made a confession statement admitting his guilt and, as a matter of fact, he has

repaid a major portion of the amount alleged to have been misappropriated by him. I am of the view that the decision of the Apex Court referred

to above is directly on this point and the same is applicable to our case. Considering the facts the cases, I do not find any justification in staying the

departmental proceedings till the criminal trial.

The other decision cited by the learned counsel for the respondent is Depot Manager, Andhra Pradesh State Road Transport Corporation Vs.

Mohd. Yousuf Miya, etc., . In this latest 3 Judges decision, Their Lordships have considered all the earlier decisions including The Delhi Cloth and

General Mills Ltd. Vs. Kushal Bhan, and Tata Oil Mills Co. Ltd. Vs. Its Workmen, after extracting the law laid down by Their Lordship in

Meena''s case (supra). Their Lordships have concluded thus :

We are in respectful agreement with the above view. The purpose of departmental enquiry and of prosecution are two different and distinct

aspects. The criminal prosecution is launched for an offence for violation of a duty, the offender owes to the society or for breach of which law has

provided that the offender shall make satisfaction to the public. So crime is an act of commission in violation of law or of omission of public duty.

The departmental enquiry is to maintain discipline in the service and efficiency of public service. It would, therefore, be expedient that the

disciplinary proceedings are conducted and completed as expeditiously as possible. It is not, therefore, desirable to lay down any guideline as

inflexible rules in which the departmental proceedings may or may not be stayed pending trial in criminal case against the delinquent officer. Each

case requires to be considered in the backdrop of its own facts and circumstances. There would be no bar to proceed simultaneously with

departmental enquiry and trial of a criminal case unless the charge in the criminal trial is of grave nature involving complicated questions of fact and

law. Offence generally implies infringement of public (sic. duty), as distinguished from mere private rights punishable under criminal law. When trial

for criminal offence is conducted it should be in accordance with proof of the offence as per the evidence defined under the provisions of the

Evidence Act. Converse is the case of departmental enquiry. The enquiry in a departmental proceeding relates to conduct or breach to duty of the

delinquent officer to punish him for his misconduct defined under the relevant statutory rules or law. That the strict standard of proof or applicability

of the Evidence Act stands excluded is a settled legal position. The enquiry in the departmental proceedings relates to the conduct of the delinquent

officer and proof in that behalf is not as high as in an offence in criminal charge. It is seen that invariably the departmental enquiry has to be

conducted expeditiously so as to effectuate efficiency in public administration and the criminal trial will take its own course. The nature of evidence

in criminal trial is entirely different from the departmental proceedings. In the former, prosecution is to prove its case beyond reasonable doubt on

the touchstone of human conduct. The standard of proof in the departmental proceedings is not the same as of the criminal trial. The evidence also

is different from the stand point of the Evidence Act. The evidence required in the departmental enquiry is not regulated by the Evidence Act.

Under these circumstances, what is required to be seen is whether the departmental enquiry would seriously prejudice the delinquent in his defence

at the trial in a criminal case. It is always a question of fact to be considered in each case depending @5 on its own facts and circumstances.

The law laid down by the Apex Court in the above referred two decisions clearly shows that there is no need to stay the departmental

proceedings till the disposal of the criminal case. No doubt, Mr. Gnanadesikan while pointing out a passage from the decision Depot Manager,

Andhra Pradesh State Road Transport Corporation Vs. Mohd. Yousuf Miya, etc., submitted that in spite of the law laid down by Their Lordships

each case has to be considered depending on its own facts and circumstances. It is true that Their Lordships have observed that ""it is always a

question of fact to be considered in each case depending on its own facts and circumstances."" I have already mentioned that in the last 2 decisions

Their Lordships have considered the three decisions referred to by Mr. Gnanadesikan. As a matter of fact, the facts in the decision State of

Rajasthan Vs. B.K. Meena and others, are identical and similar to our case. There also it is a case of misapprostances and in spite of holding that

the charges are grave, Their Lordships in the said decision, allowed the departmental enquiry to proceed further in spite of the fact that criminal trial

is pending on that date. I have already extracted charges before the criminal case as well as in departmental proceedings. Apart from this, in the

counter affidavit, it is specifically stated that the petitioner has voluntarily admitted his letter dated October 24, 1994 and November 11, 1994 to

the Regional Manager of Respondent Bank, Nagapattinam and also gave confession letter in writing on October 27, 1994 before the Investigating

Officer of the Bank. The petitioner has also repaid Rs. 85,000/- in 5 instalments and assured to repay the balance of the amount. In those

circumstance, I am unable to countenance the arguments of the learned counsel for the petitioner.

Under these circumstance, I do not find any merit in the write petition and the same is accordingly dismissed. No Costs. I make it clear that I

have not cast and I should not be understood to have cast any reflection on the merits of either party''s case. What I have said is confined to the

question at issue viz., desirability or advisability of staying the disciplinary proceedings against the petitioner pending the criminal proceeding against

him.