The Supreme Court of India has clarified a crucial aspect of procedural fairness in disciplinary proceedings, holding that a preliminary inquiry report must be furnished to a charged employee if the inquiry officer relies on it to arrive at their findings.
While laying down this principle, a bench of Justice Dipankar Datta and Justice Prashant Kumar Mishra, in the instant case, quashed the dismissal of a former Zonal Head of Vijaya Bank on other grounds of procedural impropriety, including the breach of a mandatory inquiry regulation and reliance on an undisclosed Central Vigilance Commission (CVC) recommendation.
Case Background
The case involves K. Prabhakar Hegde, who joined Vijaya Bank (now merged with Bank of Baroda) in 1959 and rose to the position of Zonal Head. In 2001, disciplinary proceedings were initiated against him under the Vijaya Bank Officer Employees’ (Discipline and Appeal) Regulations, 1981, concerning alleged irregularities in approving temporary overdrafts.
Following an inquiry, the inquiry officer found the charges proved. The disciplinary authority, vide an order dated July 4, 2002, imposed the punishment of ‘dismissal from service’, which was subsequently upheld by the appellate authority on March 27, 2003. Hegde’s challenge was allowed by a Single Judge of the Karnataka High Court but later overturned by a Division Bench, leading to the present appeal before the Supreme Court.
Arguments Before the Supreme Court
Mr. Hegde, the appellant, argued that the inquiry was flawed on several grounds, including the non-furnishing of the preliminary inquiry report, which he contended caused him prejudice. He also argued that the inquiry officer failed to comply with the mandatory requirement of Regulation 6(17) to question him on adverse evidence and challenged the legality of his dismissal post-superannuation.
Bank of Baroda, the respondent, argued that the preliminary inquiry report was not a foundational document and its denial caused no prejudice. The bank further contended that Regulation 6(17) was merely directory and had been substantially complied with.
Supreme Court’s Analysis and Findings
The Supreme Court framed three main issues, with the primary legal question revolving around the supply of the preliminary inquiry report.
On the Preliminary Inquiry Report: The Court undertook an extensive review of the jurisprudence on preliminary inquiries. It affirmed that the purpose of such an inquiry is to determine if a prima facie case for a formal departmental proceeding exists.
The judgment summarized the legal position, stating that if a preliminary inquiry report is sought to be relied upon in the final inquiry report, then it must be provided to the delinquent employee. The Court held, “If findings are recorded against the government servant placing reliance on a document which may not have been disclosed to him or the copy whereof may not have been supplied to him during the enquiry when demanded, that would contravene principles of natural justice.”
However, applying this principle to the facts of the present case, the Court noted that the inquiry officer had placed no reliance on the preliminary report. The Court concluded, “Once a chargesheet is drawn up and has been provided to the charged officer detailing the charges, the preliminary inquiry report is of no consequence and need not be provided to him.” Therefore, on this specific issue, the appellant’s contention was not accepted as a ground for vitiating the inquiry.
On the Mandatory Nature of Regulation 6(17): While the non-supply of the preliminary report did not vitiate the inquiry in this case, the Court found a fatal flaw in the subsequent procedure. Regulation 6(17) states that an inquiry officer shall generally question a charged officer on adverse circumstances if he has not examined himself as a witness. The Court held this provision to be mandatory.
The judgment states, “The use of ‘may’ and ‘shall’ in the same provision does imply that Regulation 6(17) means what it says… while the first part of Regulation 6(17) is directory, the second part thereof is mandatory.” The Court concluded that the inquiry officer’s failure to do so was a breach of a mandatory duty and a violation of natural justice, which in itself constitutes prejudice.
On the Undisclosed CVC Recommendation: The Court also found that the disciplinary authority had initially proposed the penalty of compulsory retirement but enhanced it to dismissal based on a CVC recommendation that was never shared with the appellant. The Court held this to be a clear violation of natural justice, stating, “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 authority’s claim that the document was “privileged” was dismissed as “utterly misconceived.”
Final Decision and Directions
Given that the inquiry was vitiated on the grounds of breach of Regulation 6(17) and non-disclosure of the CVC report, the Court decided against remanding the matter for a fresh inquiry, citing the long passage of time and the appellant’s advanced age.
In the interest of justice, the Supreme Court set aside the High Court’s order and quashed the dismissal. However, it moulded the relief and directed that:
- The appellant shall not be entitled to any terminal benefits, except for a lump-sum amount equal to the gratuity that would have been payable to him.
- This amount is to be released within eight weeks, failing which it will carry an interest of 9% per annum.
