State Bank of India & Ors
Vs. R.B. Sharma  Insc 441 (10 August 2004)
Arijit Pasayat & C.K.
Thakker (Arising out of Slp (Civil.) No. 3866/2004) Arijit Pasayat, J Leave
By the impugned judgment a learned Single Judge of the Delhi High Court directed
stay of departmental proceedings till conclusion of the criminal case pending
against the respondent (hereinafter referred to as the 'employee').
The order came to be passed in the following circumstances:
The employee was placed under suspension on 11.5.1994 for alleged omissions
and commissions amounting to gross irregularities. He was, at the relevant
time, working as officiating manager at the Green Park Extension branch of the
bank. According to the employer-Bank (appellant herein) he along with one Y.K.
Sharma, another employee of the bank, met Director (Finance) of M/s Bharat
Dynamics Ltd. at his Hyderabad office and requested him to invest funds in the
Green Park Extension branch and offered interest @ 14.5% on the invested funds.
A cheque of Rs.60 crores was issued and handed over to the employee for
issuance of necessary deposit certificates in the name of aforementioned
concern. According to the employer, instead of issuing the deposit certificates
the employee got the amount deposited in the current account of one of M/s
Jaydees International and the deposit receipt of Rs.20 crores was in the name
of the said concern. On the basis of the deposit receipt, a demand loan of
Rs.15 crore was sanctioned to it. A complaint was lodged with the Crime Branch,
Delhi Police on 12.5.1994 for alleged commission of offences punishable under
Sections 406, 409, 420, 467 and 120-B of the Indian Penal Code, 1860 (in short
the 'IPC'). The FIR was registered in respect of the employee and the other
persons for their involvement in committing fraud and commission of other
offences. Charge was framed on 19.6.1996 wherein it was noted that the employee
along with one Shri John Daniel and Sri V.S. Murthy Director (Finance) of
Bharat Dynamics Ltd. and others entered into a criminal conspiracy with the
object to make available to aforesaid John Daniel Rs.100 crores out of the
surplus funds of Bharat Dynamics Ltd. A petition challenging the framing of
charges is pending disposal before the Delhi High Court. On 25.2.1995 a
show-cause notice was issued to the respondent-employee alleging that
irregularities were committed while working at the concerned branch which
facilitated an attempt to defraud the bank to the tune of Rs. 60 crores. It was
alleged that he failed to discharge his duties with utmost devotion and
diligence and acted in a manner unbecoming of a bank official and highly
prejudicial to the bank's interest in violation of applicable Rule and such
acts clearly amounted to misconduct.
Instead of submitting any explanation, the employee filed a reply by letter
dated 31.3.1995 stating that the same shall be submitted at the appropriate
stage. Charge-sheet in terms of Rules 67 and 68 of the State Bank of India
Officers Service Rules (in short the 'Service Rules') was issued on 19.6.1996
relating to the alleged irregularities committed by the employee while working
as Deputy Manager at the concerned branch. On 27.7.1996 employee refused to
reply to the charge-sheet taking the ground that the matter was still pending
in the Criminal Court and submission of reply shall amount to disclosure of
defence during the departmental proceedings. On 16.11.1996 Inquiry Officer
wrote a letter to the employee requiring the employee to appear at the inquiry.
A suit was filed by the employee (Suit No.801/1996) before the Civil Judge, Delhi
along with an application under Order XXXIX, Rules 1 and 2 of the Code of Civil
Procedure, 1908 (for short 'the Code') with prayer to restrain the appellant-
bank from proceeding further with the departmental proceedings. The suit is
still pending. An interim order of restraint was passed by learned Civil Judge
on the application under Order XXXIX, Rules 1 and 2 of the Code which was
challenged by the bank in appeal before the Senior Civil Judge, Delhi, which
was numbered as Appeal No.85/97. By order dated 2.11.2002, learned Senior Civil
Judge allowed the appeal and set aside the order dated 20.1.1997 passed by
learned Civil Judge. The employee filed CM (M) No.
294/2003 before the Delhi High Court to set aside the order dated 2.11.2002
passed by the First Appellate Court. By the impugned order the High Court has
allowed the application by reversing the order of learned Senior Civil Judge
and restoring the order of stay passed by learned Civil Judge.
In support of the appeal, Mr. Gopal Subramanium, learned senior counsel
submitted that the High Court has not kept in view the correct principles of
law relating to a situation where both the departmental proceedings and
criminal case are pending. The basic issue which was necessary to be decided by
the High Court was whether criminal case and departmental proceedings can
proceed simultaneously and whether the departmental proceedings ought to be
continued. Strong reliance has been placed on several decisions of this Court
to which reference shall be made infra. The respondent-employee appeared
in-person and submitted that there has been hardly any progress in the criminal
case and with a view to harass him, the authorities are trying to finalise the
According to him both the criminal case and the departmental proceedings are
outcome of mala fides. Since the subject matter of the criminal proceedings and
departmental inquiry is substantially the same, the High Court has rightly directed
stay of the departmental proceedings. It is to be noted that both the parties
relied on the decision of this Court in Capt. M.
Paul Anthony v. Bharat Gold Mines Ltd. and another (1999 (3) SCC 679).
It is fairly well-settled position in law that on basic principles
proceedings in criminal case and departmental proceedings can go on
simultaneously, except where departmental proceedings and criminal case are
based on the same set of facts and the evidence in both the proceedings is
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 guidelines 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 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 Indian Evidence Act 1872 (in short the 'Evidence
Act'). Converse is the case of departmental enquiry. The enquiry in a
departmental proceedings relates to conduct or breach of 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. Under these
circumstances, what is required to be seen is whether the department 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 on its own facts and circumstances.
A three-judge Bench of this Court in Depot Manager, A.P. State Road
Transport Corporation v. Mohd. Yousuf Miya and Ors. (1997 (2) SCC 699) analysed
the legal position in great detail on the above lines.
The aforesaid position was also noted in State of Rajasthan v. B.K.
Meena (1996 (6) SCC 417).
There can be no straight jacket formula as to in which case the departmental
proceedings are to be stayed. There may be cases where the trial of the case
gets prolonged by the dilatory method adopted by delinquent official. He cannot
be permitted to, on one hand, prolong criminal case and at the same time
contend that the departmental proceedings should be stayed on the ground that
the criminal case is pending.
In Capt. M. Paul Anthony's case (supra) this Court indicated some of the
fact situations which would govern the question whether departmental
proceedings should be kept in abeyance during pendency of a criminal case.
In paragraph 22 conclusions which are deducible from various decisions were
summarised. They are as follows:
(i) Departmental proceedings and proceedings in a criminal case can proceed
simultaneously as there is no bar in their being conducted simultaneously,
(ii) If the departmental proceedings and the criminal case are based on
identical and similar set of facts and the charge in the criminal case against
the delinquent employee is of a grave nature which involves complicated
questions of law and fact, it would be desirable to stay the departmental
proceedings till the conclusion of the criminal case.
(iii) Whether the nature of a charge in a criminal case is grave and whether
complicated questions of fact and law are involved in that case, will depend
upon the nature of offence, the nature of the case launched against the
employee on the basis of evidence and material collected against him during
investigation or as reflected in the charge-sheet.
(iv) The factors mentioned at (ii) and (iii) above cannot be considered in
isolation to stay the departmental proceedings but due regard has to be given
to the fact that the departmental proceedings cannot be unduly delayed.
(v) If the criminal case does not proceed or its disposal is being unduly
delayed, the departmental proceedings, even if they were stayed on account of
the pendency of the criminal case, can be resumed and proceeded with so as to
conclude them at an early date, so that if the employee is found not guilty his
honour may be vindicated and in case he is found guilty, the administration may
get rid of him at the earliest.
A bare perusal of the impugned order of the High Court shows that after
noticing the rival submissions, learned Single Judge came to an abrupt
conclusion that the petitioner in the case before it (the employee) has been
able to show substantially that the entire matter in the departmental
proceedings and before criminal court is the same. No details have been
indicated to justify this conclusion. Though elaborate reasoning may not be
necessary to be indicted, certainly, the skeletal description of how there is
substantial similarity has to be indicated. That has not been done. The
employee who appeared in-person submitted that several materials are available
which would go to show that the matter is substantially the same.
On the contrary, learned senior counsel appearing for the employer-bank
submitted that they are founded on different premises and, therefore,
unreasoned conclusion of learned Single Judge cannot be maintained. He
additionally pointed out that the respondent-employee is responsible for
delaying the criminal case and he cannot be permitted to take advantage of the
long pendency of the criminal case.
Since learned Single Judge has not indicated even skeleton basis for his
conclusion that matter is substantially the same, it would be appropriate for
the High Court to re-hear the matter. Accordingly, the impugned order of the
High Court is set aside and the matter is remitted back to the High Court for
The High Court shall dispose of the matter afresh in accordance with law and
pass a reasoned order for its conclusions to be arrived at on consideration of
the rival stands. We make it clear that we have not expressed any opinion on
the merits of the case. The appeal is allowed to the extent indicated with no
order as to costs.