The Supreme Court of India has reiterated the distinction between disciplinary proceedings and criminal trials, ruling that acquittal in a criminal case does not automatically exonerate an employee in disciplinary proceedings. This observation was made in its judgment in General Manager (Personnel), Syndicate Bank & Ors v. B.S.N. Prasad (Civil Appeal No. 6327 of 2024), delivered by a bench comprising Justice Abhay S. Oka and Justice Augustine George Masih.
The case centered around allegations of misconduct by B.S.N. Prasad, a former branch manager of Syndicate Bank, who was dismissed from service following a disciplinary inquiry. The Court addressed key issues concerning evidence standards, procedural fairness, and proportionality of penalties in disciplinary matters.
Background of the Case
B.S.N. Prasad served as a branch manager of Syndicate Bank’s Mudigubba branch from June 2007 to November 2008. Allegations of misconduct arose after an internal investigation revealed irregularities, including fictitious debits to crop insurance accounts and unauthorized withdrawals under Syndicate Kisan Credit Card (SKCC) accounts. He was accused of fraudulently siphoning funds, sanctioning loans in violation of guidelines, and misappropriating amounts under the debt waiver scheme.
Despite being acquitted in parallel criminal proceedings, a disciplinary inquiry found Prasad guilty of misconduct. He was dismissed from service in May 2012, a decision later overturned by the Karnataka High Court, which cited procedural lapses and ruled in favor of reinstating Prasad with full benefits. The bank appealed this decision to the Supreme Court.
Key Legal Issues
1. Standard of Evidence in Disciplinary Proceedings
The Court emphasized that the standard of proof in disciplinary proceedings is lower than that in criminal trials. While criminal cases require proof beyond a reasonable doubt, disciplinary inquiries rely on a preponderance of probabilities. The Court stated, “An acquittal in a criminal case is no ground to exonerate a delinquent in disciplinary proceedings as the standard of proof differs in these proceedings.”
2. Fairness of Disciplinary Inquiry
The respondent argued that the inquiry violated principles of natural justice, as key witnesses were not examined. However, the Court noted that documentary evidence and admissions by Prasad were sufficient to establish misconduct. The bench remarked that “adequacy of evidence or reliability of evidence cannot be reappreciated in writ jurisdiction.”
3. Proportionality of Punishment
While upholding the findings of misconduct, the Court found the penalty of dismissal disproportionate, given Prasad’s long tenure and unblemished service record prior to the misconduct. The Court invoked the principle of proportionality, modifying the punishment to a minor penalty under Regulation 4(e) of the Syndicate Bank Officer Employees (Discipline and Appeal) Regulations, 1976.
Supreme Court’s Decision
The Supreme Court set aside the Karnataka High Court’s judgment but modified the penalty imposed by the bank. It ordered Prasad’s demotion to a lower pay scale for one year without cumulative effect or impact on his pension. The bench directed the bank to process his retiral benefits within four months.
In its judgment, the Court observed: “A bank officer is required to exercise higher standards of honesty and integrity. Good conduct and discipline are inseparable from the functioning of a bank officer.”
