Disciplinary Proceedings Cannot Survive Breach Of Mandatory Safeguards | Supreme Court Reaffirms Natural Justice As Integral To Article 14 And Strikes Down Bank’s Dismissal Order
Kiran Raj
The Supreme Court of India Division Bench of Justice Dipankar Datta and Justice Prashant Kumar Mishra quashed a bank disciplinary dismissal, set aside the High Court’s order, and directed limited monetary relief. The Court held that the inquiry was vitiated because the Inquiry Officer did not “generally question” the charged officer as mandated by Regulation 6(17) of the 1981 Regulations and because a Central Vigilance Commission recommendation—considered while deciding punishment—was not furnished to the employee. The Bench ordered that the dismissal “shall stand quashed,” allowed payment of a lump-sum equivalent to gratuity to be released within eight weeks without interest unless delayed, and clarified that any criminal proceedings may proceed in accordance with law.
The appeal arose from disciplinary action initiated under Regulation 6 of the Vijaya Bank Officer Employees’ (Discipline and Appeal) Regulations, 1981. The appellant joined Vijaya Bank in 1959, was promoted several times, and served as Zonal Head of the Delhi Zonal Office. On January 4, 1999, the disciplinary authority issued a notice alleging irregularities and lapses in approving temporary overdrafts (TOD) for various accounts, including an instruction to grant a TOD of ₹15,00,000 to Kunal Travels Pvt. Ltd. by telephone; a second notice dated January 22, 1999 followed with similar allegations. The appellant replied by letters dated February 1, 1999 and February 24, 1999.
On January 30, 2001, a charge-sheet was issued to commence proceedings under Regulation 6; the appellant responded on February 17, 2001 denying the charges. A General Manager was appointed as Inquiry Officer. On November 28, 2001, the Inquiry Officer submitted a report holding the charges proved.
By order dated May 17, 2002, the disciplinary authority directed that despite the appellant’s impending superannuation on June 30, 2002, the disciplinary proceedings would continue and that retirement benefits would remain withheld until final orders. On July 4, 2002, the penalty of dismissal from service was imposed. The appeal to the appellate authority was dismissed on March 27, 2003. The appellant then moved the High Court; by judgment dated February 24, 2009, a Single Judge quashed the dismissal and held the appellant entitled to “consequential benefits on his having attained the age of superannuation, to which he would have been entitled in the usual course and in law.”
Vijaya Bank, later merged with Bank of Baroda in 2019, appealed. A Division Bench allowed the writ appeal on December 14, 2021, set aside the Single Judge’s order, and thereby restored the dismissal. The Division Bench framed two issues: (i) whether denial of the preliminary investigation report caused prejudice and vitiated the proceedings; and (ii) whether the requirement of “generally questioning the charged officer” on circumstances appearing against him under Regulation 6(17) was mandatory. It held that the preliminary report need not be furnished and that Regulation 6(17) was directory with substantial compliance achieved because the officer was asked to make submissions.
Before the Supreme Court, the appellant’s grounds included: reliance on decisions such as ECIL v. Karunakar and UCO Bank v. Rajinder Lal Capoor; alleged misinterpretation of precedent; non-furnishing of the preliminary inquiry report causing prejudice; improper reliance on Sunil Kumar Banerjee without noticing Tara Singh; the Inquiry Officer’s failure to put any questions as required by Regulation 6(17); the illegality of treating the appellant as “deemed to be in service” post-superannuation absent any enabling regulation; and the contention that oral TOD sanctions were routine and in good faith.
The respondent’s contentions included: non-furnishing of the preliminary inquiry report caused no prejudice since it only informed the decision to initiate proceedings and its author testified and was cross-examined; Regulation 6(17) was not mandatory and only required substantial compliance, which occurred when the employee was invited to make submissions; the appellant never raised a Regulation 6(17) grievance during the inquiry, in the representation against the inquiry report, or in the appeal; Tara Singh (criminal jurisdiction) was inapplicable while Sunil Kumar Banerjee controlled; and continuation of proceedings post-superannuation was permissible because the appellant was continued in service until the dismissal order.
A significant factual feature concerned punishment: the disciplinary authority initially proposed compulsory retirement, with the Chief Vigilance Officer concurring. The matter was then placed before the Central Vigilance Commission (CVC), which recommended “dismissal.” The appellant asserted that the disciplinary authority acted on the CVC’s recommendation without supplying a copy of that recommendation, and the appellate authority defended non-disclosure by claiming privilege and characterising the recommendation as an “internal document.”
On the Supreme Court’s ultimate course, the Bench noted the merger of Vijaya Bank with the respondent bank, the distance of time since the proceedings, and that the proceedings were continued beyond superannuation, stating that because of the order proposed, it would not decide the third question (continuation beyond superannuation), leaving it open.
The Bench composition and date recorded on the judgment’s last page show the signatures of Justice Dipankar Datta and Justice Prashant Kumar Mishra, with the date August 19, 2025; the neutral citation is 2025 INSC 997 and the case number is Civil Appeal No. 6599 of 2025 (arising out of SLP (Civil) No. 6358 of 2022).
The Court presented its reasoning by first recalling binding principles on natural justice and prejudice: “In our view the principles of natural justice know of no exclusionary rule dependent on whether it would have made any difference if natural justice had been observed. The non-observance of natural justice is itself prejudice to any man…”
It also recorded the Constitution Bench position in Tulsiram Patel: “The principles of natural justice have thus come to be recognized as being a part of the guarantee contained in Article 14… violation of a rule of natural justice results in arbitrariness which is the same as discrimination; … therefore, a violation of a principle of natural justice by a State action is a violation of Article 14.”
Referring to A.R. Antulay, the Bench stated: “No prejudice need be proved for enforcing the fundamental rights. Violation of a fundamental right itself renders the impugned action void. So also the violation of the principles of natural justice renders the act a nullity. …”
Turning to Regulation 6(17), the Court recorded: “We, therefore, unhesitatingly hold that the Inquiry Officer by not generally questioning the appellant on the circumstances available in the evidence, which were unfavourable or adverse to such officer, failed to perform a mandatory duty. Any such circumstance, which was unfavourable or adverse to the appellant, should have been excluded from the Inquiry Officer’s consideration.”
On the High Court’s view that an opportunity to make submissions sufficed, the judgment stated: “However, such an opportunity does not really match the nature of duty cast on the Inquiry Officer under Regulation 6(17). … The duty cast and the opportunity extended are not equivalent.”
Explaining the Inquiry Officer’s role, the Court added: “The inquiry under Regulation 6 being quasi-judicial in nature, Regulation 6(17) places an onerous duty on the Inquiry Officer (who is generally untrained in law) to seriously apply his mind to the evidence on record and to indicate to the charged officer … that circumstances exist which could weigh in his mind while arriving at the final findings… to offer an opportunity to have his say recorded without indication of the circumstances existing does not and would not amount to substantial compliance of Regulation 6(17).”
Addressing when a failure to object might affect relief, the Court recorded: “There being a failure of the Inquiry Officer to question the charged officer, the appellant ought to have raised the same before the disciplinary authority … and … before the appellate authority… If such an objection is not raised at any of the two tiers … the court may infer that the charged officer was not seriously affected by non-adherence to Regulation 6(17) and it would be open to it to pass an appropriate order based on the inference drawn.”
On the CVC recommendation and punishment, the Court stated: “We are certain that the CVC recommendation weighed heavily enough upon the disciplinary authority so as to convince him to alter the proposed punishment of compulsory retirement to dismissal… Receipt of the CVC recommendation behind the back of the appellant and no opportunity having been provided to him to plead for a lesser punishment, the inquiry stood vitiated.”
The judgment then clarified the governing principle: “What we are insisting upon is compliance with the principles of natural justice … a charged officer cannot be denied any material that the disciplinary authority looks into for imposing punishment. Such officer is entitled to access any document that was either used to determine his blameworthy conduct … or considered while imposing punishment.”
On the appellate authority’s claim of privilege, the Court drew guidance from Sodhi Sukhdev Singh: “A valid claim for privilege made under Section 123 proceeds on the basis of the theory that the production of the document in question would cause injury to public interest… Care has, however, to be taken to see that interests other than that of the public do not masquerade in the garb of public interest and take undue advantage of the provisions of Section [123].”
It further recorded that in the present case: “Whether or not such a recommendation did exist was the question, not whether the appellant could have premised his challenge on such recommendation being an internal document.”
Reaffirming D.C. Aggarwal, the Court observed: “We are ad idem with the view expressed in D.C. Aggarwal … that the proposed punishment of compulsory retirement could not have been altered to dismissal from service based on the CVC recommendation without furnishing the same to the appellant. To this extent, the appellate order is legally flawed and cannot be sustained.”
On remedial course, the Bench recorded: “In normal circumstances, the obvious direction … is a remand … However, there are circumstances that impede an order for remand. The foremost being the lack of accessibility to the records because of the merger of Vijaya Bank with the respondent and the distance of time since the disciplinary proceedings came to a close.”
It also noted: “It is also to be noted that the disciplinary proceedings were continued beyond the date on which the appellant attained the age of superannuation. Because of the ultimate order we propose to make, we have not dealt with the third question … and such question is kept open.”
The Court directed that “the order of dismissal, in the circumstances, shall stand quashed.” It then “set aside” the impugned High Court order, disposed of the appeal on the stated terms, and left costs to lie.
It ordered that “the appellant shall not be entitled to any terminal benefits except to the extent indicated hereafter.” This delimitation of relief was issued having regard to the appellant’s age and the pendency of other disciplinary proceedings that had not concluded due to the dismissal.
The Court specified that the appellant “shall only be entitled to a lump-sum amount equal to the quantum of gratuity which would have been payable to him had he not been fastened with the order of dismissal.” The Bench thereby confined monetary relief to a gratuity-equivalent lump sum.
It further directed that “such lump-sum amount may be released in favour of the appellant within a period of eight weeks from date.” This time-bound requirement framed the mode of compliance.
On interest, the judgment recorded that “no amount on account of interest shall be payable to the appellant on the said amount; however, interest @ 9% p.a. shall be payable on such amount if not released within the period stipulated above.”
The Judgement concluded: “It is ordered accordingly. … In the above result, the impugned order of the High Court is also set aside. The appeal is disposed of on the above terms, without any order as to costs. Criminal proceedings, if any, pending against the appellant may be taken to its logical conclusion in accordance with law.”
Advocates Representing the Parties
For the Appellant(s): Mr. Anand Sanjay M. Nuli, Senior Advocate; Mr. Dharm Singh, Advocate; Mr. Suraj Kaushik, Advocate; Ms. Akhila Wali, Advocate; M/s. Nuli & Nuli, AOR
For the Respondent(s): Ms. Basava Prabhu Patil, Senior Advocate; Ms. Praveena Gautam, AOR; Ms. Tissy Annie Thomas, Advocate; Mr. Pawan Shukla, Advocate; Mr. Arijeet Shukla, Advocate; Mr. Rohan Bansla, Advocate
Case Title: K. Prabhakar Hegde v. Bank of Baroda
Neutral Citation: 2025 INSC 997
Case Number: Civil Appeal No. 6599 of 2025 [Arising out of SLP (Civil) No. 6358 of 2022]
Bench:Justice Dipankar Datta , Justice Prashant Kumar Mishra
