Supreme Court of India
STATE BANK OF INDIA & ORS.versusNEELAM NAG
- Citation
- 2016 INSC 878
- Decided
- 16 September 2016
- Disposal
- Case Partly allowed
- Bench
- T S THAKUR
Holding
Disciplinary and criminal proceedings may proceed simultaneously, but a stay of disciplinary action cannot be indefinite; the criminal trial must be concluded within a year, after which the disciplinary inquiry should resume.
Summary
The respondent, a senior assistant of State Bank of India, was alleged to have caused a loss of over Rs.44 lakh by facilitating fraudulent credit and misplacing clearing instruments in May 2006. A criminal case under Sections 409 and 34 of the IPC was filed in 2007, but the trial progressed slowly, with only three of eighteen prosecution witnesses examined over ten years. Simultaneously, the bank initiated disciplinary proceedings, which the High Court stayed until the criminal trial concluded, invoking Clause 4 of a 2002 Memorandum of Settlement. The Supreme Court held that there is no legal bar to concurrent disciplinary and criminal proceedings, but a stay cannot be indefinite; the criminal trial must be completed within one year, after which the disciplinary inquiry should resume. Accordingly, the Court partially allowed the appeal, directing the criminal trial to be concluded within a year and the disciplinary proceedings to resume thereafter.
Issues considered
- The legality of staying disciplinary proceedings pending the conclusion of a criminal trial on the same facts.
- Whether Clause 4 of the 2002 Memorandum of Settlement bars continuation of disciplinary action during criminal prosecution.
- The appropriate balance between the employee's right to a fair criminal trial and the employer's interest in timely disciplinary action.
Legislation cited
- Code of Criminal Procedure, 1973s. 173
- Indian Penal Code, 1860s. 34, s. 409
- Industrial Disputes Act, 1947s. 18(1), s. 2(p)
Subjects
disciplinary proceedingscriminal trialsimultaneous proceedingspublic sector bankembezzlementIPC 409IPC 34Industrial Disputes ActMemorandum of Settlementstay of proceedingsjudicial discretion
Judgment
[2016] S S.C.R. 278
A STATE BANK OF INDIA & ORS.
v.
NEELAMNAG
(Civil Appeal No. 471Sof2011)
B SEPTEMBER 16, 2016
[T.S. THAKUR, CJI. AND A.M. KHANWILKAR, J.)
Service Law - Conduct of disciplinary proceedings and
criminal trial simultaneously, based on same facts - No straightjacket
for111ula - Court to keep in 111ind the broad approach to be adopted
c in such matters on case to case basis - Respondent, a Public Sector
Bank employee committed embezzlement way back in May 2006 -
Cri111inal complaint - Charge-sheet filed in 2007 - Trial of the
criminal case, however, did not progress effectively over the years
- Simultaneously appellant-Bank initiated departmental proceedings
D against the respondent - Division Bench of High Court stayed
disciplinary proceedings against the respondent until the closure
of recording of prosecution evidence in criminal case - Held:
Pendency of criminal trial for around 10 years cannot be the sole
basis to suspend disciplinary proceedings against the respondent
for an indefinite period - However, arrangement 111ade by High
E
Court cannot be vacated straightaway - In the interest of justice,
direction issued that criminal case pending against the respondent
be decided within one year - Disciplinary proceedings to resume
after expiry of one year.
Partly allowing the appeal, the Court
F
HELD: 1. It is well-settled that there is no legal bar to the
conduct of the disciplinary proceedings and criminal trial
simultaneously. However, no straightjacket formula can be spelt
out and the Court has to keep in mind the broad approach to be
adopted in such matters on case to case basis. [Para 8) [291-E-F]
G
2.1. The alleged .misconduct has been committed as far back
as May 2006. FIR was registered on s•b December, 2006 and the
charge-sheet was filed in the said criminal case on 61h February,
2007. The contents of the charge-sheet are indicative of
involvement of the respondent in the alleged offence. Resultantly,
H
278
STATE BANK OF INDIA & ORS. v. NEELAM NAG 279
the criminal Court has framed charges against the respondent as A
far back as 12'h June, 2007. The trial of that case, however, has
not made any effective progress. Only 3 witnesses have been
examined by the prosecution, out of 18 witnesses cited in the
charge-sheet filed before the criminal Court. Indeed, listing of
criminal case on 133 different dates after framing of charges is
B
not solely attributable to the respondent. [Para 11) [294-B-C]
2.2. Pendency of the criminal case against the respondent
cannot be the sole basis to suspend the disciplinary proceedings
initiated against the respondent for an indefinite period. [Para
12) [294-G]
c
3.1. The next question is: whether Clause 4 of the
Memorandum of Settlement dated lO'h April 2002 would denude
the appellants from continuing with the disciplinary proceedings
pending against the respondent. The last sentence of Clause 4,
applies to a case where the criminal case has in fact proceeded,
as in this case, for trial. The term "completion of the trial" D
thereat, must be construed as completion of the trial within a
reasonable time frame. This clause cannot come to the aid of the
delinquent employee who has been named as an accused in a
criminal case and more so is party to prolongation of the trial.
Pendency of criminal trial for around 10 years, by no means, can E
be said to be a reasonable time frame to withhold the disciplinary
proceedings. This view is fortified by first part of the said clause
4 of the Settlement which envisages that if the Authority which
has to start the prosecution refuses (read fails) to do so within
one year from the commission of the offence, the departmental
proceedings can be proceeded under Clause 11 and 12 of the F
Settlement. [Paras 13, 16 and 17) [294-H; 296-B, E-F)
3.2. In the °fact situation of the present case, it is the first
part of Clause 4 which is attracted. In that, respondent has been
put on trial in connection with the alleged offence, by framing of
charges after one year from the commission of the offence. [Para G
18) [296-G)
3.3. Be that as it may, disciplinary proceedings instituted
against the respondent cannot brook any further delay which is
already pending for more than 10 years. Further, it is not
considered fit to vacate the arrangement made by the High Court H
280 SUPREME COURT REPORTS [2016) 5 S.C.R.
A straightaway. Interests of justice would be sufficiently served by
directing the criminal case pending against the respondent to be
decided expeditiously but not later than one year from the date
of this order. If the trial is not completed within one year from
the date of this order, the disciplinary proceedings against the
respondent shall be resumed by the enquiry officer concerned
B
and the protection given to the respondent of keeping the
disciplinary proceedings in abeyance shall stand vacated forthwith
upon expiring of the period of one year. [Paras 21 and 23) [296-
H; 297-A, C, E]
Stanzen Toyotetsu India Private Limited vs. Girish V. &
c Ors. (2014) 3 SCC 636: 2014 (1) SCR 758; Karnataka
SRTC vs. M G Vittal Rao (2012) 1 SCC 442: 2011 (14)
SCR 1089 - relied on.
Case Law Reference
2014 (1) SCR 758 relied on Paras 9, 10, 12 and 19
D
2011 (14) SCR 1089 relied on Para 8
From the Judgment and Order dated 28.06.2010 in WA 80/10
passed by the High Court of Judicature Bilaspur, Chattisgarh.
K. V. Vishwanatha, Sr. Adv., Sanjay Kapur, Anmol Chandan, Ms.
E Priyanka Das, Ms. Shubhra Kapur, Advs.for the appearing parties.
Atul Jha, Sandeep Jha, Dharmendra Kumar Sinha, R. B. Sharma,
Akshat Shrivastava, Ms. Manjeet Kirpal, Advs. for the Respondents.
The Judgment of the Court was delivered by
F A. M. KHANWILKAR, J. l. The short question involved in
this appeal is: whether the High Court was justified in directing stay of
the disciplinary proceedings initiated by the appellant-Bank against the
respondent until the closure of recording of prosecution evidence in the
criminal case instituted against the respondent, based on the same facts?
2. The respondent was appointed in the clerical cadre of the
G
appellant-Bank. At the relevant time, she was working as an Assistant
(Clearing). Allegedly, some time on 291h May 2006, the respondent by
her acts of commission and omission caused loss to the Bank in the sum
of Rs. 44,40,819/- by granting credit to one Laxman Parsad Ratre (who
was an employee ofBhilai Steel Plant). The respondent herselfintroduced
H La"xman Parsad Ratre to open an account in the appellant Bank. On 7'h
STATE BANK OF INDIA & ORS. v. NEELAM NAG 281
[A.M. KHANWILKAR, J.]
November 2006, the respondent was placed under suspension for indulging A
in gross irregularities and misconduct including of misplacing the clearing
instruments relating to various customers. The respondent vide letter
dated 8'h November 2006, not only admitted her misdeeds but assured
the Chief Manager ofretuming the amount commensurate to the financial
loss caused to the Bank because of her lapses at the earliest, failing
B
which suitable action can proceed against her. The said communication
reads thus:
"To,
Chief Manager
State Bank of India
Main Branch, Durg (Ch.G.)
c
Sir,
Context :-Your memo number- Serial number/branch/2006- 07I D
196
dated 30. l 0.2006.
In context of your aforesaid memo I am sorry for the wrong
ways adopted by me. I admit that I have done a wrong deed E
and I am suffering from the feeling of guilt.
I. Whatever amount comes in this context that I will try to pay as
early as possible after obtaining the amount from the known
sources. At present I am able to arrange Rs. 60,000/- and I F
am depositing the same.
2. By mortgaging the family movable and immovable property,
arrangement for obtaining the amount, thought and efforts are
continued for making such arrangement as early as possible.
Because this works take time, I should be given proper time to
go further in effort and to finish the work of mortgage. G
3. Our relatives staying nearby and far away and in other states,
with them my contact is continued and arrangement for the
amount is continued. This work is also taking time. Therefore
to continue my effort proper time to be given to me.
H
282 SUPREME COURT REPORTS [2016] 5 S.C.R.
A 4. Amount of my C.P.F and salary is to be used for compensating
this amount. I will keep on informing you regarding my every
effort and will deposit the money received in bank account.
I have done this work in mental stress and due to pressure of
situation for which my heart is feeling sorry that I have used
B all wrong ways and means. I have two small children, wife
and old and ill mother and father, considering all this give me
an opportunity to deposit the amount received from my
aforesaid efforts for which I will be grateful to you for my
whole life. I have not taken such a wrong step in fourteen
years of my bank service but this step I have taken due to
c mental stress and situation. By giving me apology, proper time
to accomplish my efforts.
I assure you tMt I will not commit this kind of mistake in future.
lfl fail in the above efforts, you are independent for initiating
o proceedings on me.
Thanking you
Dated :- 8.11.06
Sd/-
(Neelam Nag)
Senior Assistant"
E
3. Nevertheless, a FIR was lodged in connection with the said
irregularities and misdeeds committed by the respondent bearing FIR
No. I 043/2006, for offences punishable under Sections 409, 34 of the
IPC by appellant-Bank. Laxman Parsad Ratre has also been named as
an accused in the said FIR. It is alleged in the FIR that Laxman Parsad
F Ratre who had account in State Bank of India issued two cheques in
favour ofTanishk Securities both valued Rs.6,50,000/-, knowing that he
did not have balance in his account. Those cheques were deposited by
Tanishk Securities in their U.T.I. Branch Bhilai for clearance. U.T.l.
Branch dispatched those cheques to State Bank oflndia at Durg, Bhilai.
G The respondent was posted in that Branch at the relevant time, who _in
connivance with the co-accused dispatched those cheques to State Bank
oflndia, Malviya Nagar Branch even though Laxman Parsad Ratre did
not have account in that Branch. The cheques were returned by that
Branch. The respondent intentionally did not immediately return those
cheques to U.T.l. Branch at Bhilai. Resultantly, U.T.I. Branch at Bhilai
H as per the settled practice assumed that the cheques have been cleared
STATE BANK OF INDIA & ORS. v. NEELAM NAG 283
[A.M. KHANWILKAR, J.]
and released the payment to Tanishk Securities, by endorsing payment A
in the name of State Bank of India. Thereby causing a loss of Rs. 13
lakhs to State Bank of India. That was revealed only oq 28. l 0.2006
during reconciliation of accounts ofthe two Banks. Further, the respondent
herself had introduced Laxman Parsad Ratre for opening an account in
the appellant-Bank. She has admitted her lapse in the communication
B
sent by her to the Chief Manager of the appellant-Bank dated 81h
November, 2006. In a written admission given on 61hNovember, 2006
Laxman Parsad Ratre mentioned that he was involved in a criminal
activity in connivance with the respondent. The FIR has been registered
for offence of possible loss of Rs. 29,53,262/-.
4. After registration of the FIR, the local police proceeded with c
the investigation and tiled charge-sheet No. 63/2007, under Section 173
of the Criminal Procedure Code, on 61h February, 2007, before the
Magistrate. Criminal Complaint No. I 043/2006 was registered for
offences punishable under Sections 409, 34 oflPC. The competent Court
then proceeded to frame charges against the respondent on I 21h June D
2007. Thereafter, on 7'h April, 2008, the appellants, through appellant
No.2, called upon the respondent to offer an explanation about the alleged
irregularities and misdeeds committed by her. The respondent vide
communication dated f Sth April, 2008 simply denied all the allegations.
The Competent Authority, therefore, decided to initiate departmental
enquiry against the respondent, for which, charge-sheet dated l 91h E
September, 2008 was issued to the respondent, which reads thus:
"Shri Neelam Nag, '
Senior Assistant
(Suspended)
Indian State bank F
Bhilai Steel Plant Area Branch
Bhilai
Sr. No. Ankara/Area 3/ Anushansha I 820 J9•h Sep, 2008
Charge sheet
I in the capacity of disciplinary authority charge following G
charges upon you
You have committed following mistake during working in
Durg Branch.
1. You have given identification to Lachhman Parsad Ratre
for opening the account thereafter through this account H
284 SUPREME COURT REPORTS [2016] 5 S.C.R.
A through accounts you have manage the operation of the
Fund of other administrative accounts.
11. Through saving account no. 01119-0021348 two cheques
bearing no. 463553 and 4635554 which is amounting to Rs.
6,50,00.00 each in favourofTanishk Securities on 29.5.2006
B which was due Durg Branch. Which was submitted by
U.T.I. Bank for adjustment, due to not insufficient amount
in Durg Branch instead of returning to Bhilai Branch
intentionally for making the balance of adjustment has
transfer to Malviya Nagar Durg Branch with responding.
iii. Two cheque bearing no. 4635553 and 463554 each
c amounting to Rs. 65,0000/-which were due to Durg Branch,
Malviya Nagar Branch had returned with T.R. on 31.5.2006,
which should have return by you to Head Branch Bililai
without any proceeding, but you intentionally keep it with
you.
D iv. The above incident detail (information come in light) on
28.10.2006 held branch clearing of the general account in
clearing it make clear that in Udhavi schedule 07 Rupees
13,00,000 entries which was originate by Malviya Nagar
Durg Branch, it was not responded by Durg Branch.
E v. You had attached with Tanishk Securities commodity trading
and you by misusing the amount of Chattisgarh State
Electricity division got deposit in the account of Shri
Lachhman Parsad Ratre. You have removed the original
slip of deposit of the account of chattisgarh State Electricity
division and in place ofit install the slip ofShri Rate saving
F bank account therefore the dealing and clearing of the
saving bank account which has committed by you, the
complete detail is clear and enclosed in Annexure - 2.
vi. Therefore you with the intention of cheating you have divert
the total amount of Rs. 48,0000of16 challan of State Govt.
G on 4.5.2006 (Annexure 2(11 )).
vii. The Head Branch Bhilai through clearing house has closed
to submit due cheque in Durg Branch, there after the cheque
of various bank situ11ted at Bhilai which has deposited in
Durg Branch should presented for collection, you changing
H the deposit slip of Chattisgarh State Electricity Division
STATE BANK OF INDIA & ORS. v. NEELAM NAG 285
[A.M. KHANWILKAR, J.]
current account preparing the deposit slip of Lachhman A
Ratre has changed. Therefore the FDR of current of
Chattisgarh State Electricity division has misused (Annexure
2 (12)).
VIII. On 91h August, 2006 Chattisgarh State Electricity divisions
has deposited two cheque total amounting to Rs. 125916/- B
..,,.. of other banks for deposit in their current account you by
changing the sUp. Due to reference on the same day cheque
no. 463549 amounting to Rs. 125916 I.D.B.I. Branch Bhilai
has submitted these cheque in Durg Branch which was in
the saving bank account of Shri Ratre, due to not having
insufficient fund in the account of Shri Ratre returned but c
the above cheque through clearing by not returning but by
you in the deposit of clearing scroll and transfer both side
with cunning make balance. Therefore you by not returning
the cheque intentionally with cheating has tampered the
current account cheque of Chattisgarh State Electricity D
division.
ix. Therefore with well plan manner the amounting to Rs.
4440891 has deposit in the fake of account of Shri Rate
and misuse the above amount and fix in commodity market.
It clea( detail is enclosed in Annexure I & 2 in which the
current account ofChattisgarh ~tate Electricity division and E
the amount of Govt. challan with cheating deposit in the
!ICcount of Shri Ratre and misuse by you. Therefore the
current amount of Chattisgarh State Electricity Division
amounting to Rs. 1653262 which has not cleared until now,
in the same manner branch clearing general account F
amounting to Rs. 1300000 which is still unclear pending in
Malviya Nagar Durg Branch. Therefore a huge amount
loss has suffered by bank, for which you are completely
liable. Your above conduct against the bank interest and
second party compromise dt. 6.8.2002 para Sardi/P&HRD/
57 page 7 para 5(a) and J comes under gross misconduct G
and punishable.
(2) In this regard you are hereby directed in regard to charge
sheet submit yourwritten reply within 7 days of the receipt
of this letter, in case during this period you did not give your
reply then I should admitthat in regard to this letter you did H
286 SUPREME COURT REPORTS [2016] 5 S.C.R.
A not want to say nothing and in this regard bank shall fee to
take action.
· (3) ·In the second copy of this letter by making complete
signature and date given the acknowledgement.
Sd/-
B - Disciplinary Officer and
Assistant Chief Managing Director Administration)
Sd/-
Enclosure: above.
57/dpc/s~ff
c Signature 20.9.2008"
5. The appellant No.2 then instituted disciplinary proceedings
against the respondent on 23n1October2008, which fact was notified to
the respondent on 31" October 2008, by the appellant No. 3 calling upon
her to attend the same. The respondent did not cooperate and instead
D protested the initiation of such disciplinary proceedings against her. She
was then advised to file a writ petition bearing Writ Petition No.4629/
2009 before the High Court of Chhatisgarh at Bilaspur. The learned
Single Judge found merits in the stand taken by the respondent - that the
facts involved in the criminal case registered against the respondent and
E initiation of disciplinary proceedings, was based on the same facts. The
learned Single Judge also adverted to Clause 4 of the Memorandum of
Settlement dated 1om April, 2002 which grants protection to the employees
of the appeqant-Bank from facing departmental proceedings until the
completion of the trial of the criminal case. On that reasoning, the learned
Single Judge allowed the Writ Petition and directed the appellants to
F forbear from proceeding with the disciplinary proceedings until completion
of the trial. This decision was challenged by the appellants by way of
Writ Appeal No.80/2010 before the Division Bench. The Division Bench
affirmed the view taken by the learned Single Judge and negatived the
stand taken by the appellant in her favour. The Division Bench held that
G the respondent may suffer disadvantage and prejudice if she was
compelled to disclose her defence in the departmental proceedings, which
Is likely to be used in the criminal case pending against her. The Division
Bench, however, modified the operative order passed by the learned
Single Judge by passing following directions:
H "Therefore, we dispose of this appeal by upholding the order of
STATE BANK OF INDIA & ORS. v. NEELAM NAG 287
[A.M. KHANWILKAR, J.]
the learned Single Judge with the following directions: A
(i) The A.C.J.M. Durg is directed to conclude the trial which is
pending since 2006 on day to day basis, in which we have
been informed that one witness has already been examined,
(ii) The writ appellants would be free to proceed further in the
disciplinary proceedings as soon as the case from the B
prosecution side is closed."
(emphasis supplied)
. 6. The appellants relying on a recent decision of this Court in the
case of Stanzen Toyotetsu India Private Limited vs. Girish V. & c
Ors. 1 contend that the departmental proceedings cannot be suspended
indefinitely or delayed unduly. It is contended that inspite of the direction
given by the Division Bench to the concerned criminal Court to take up
the case pending since 2006 on day-to-day basis, the trial is still pending
and only 3 witnesses out of total 18 prosecution witnesses cited in the
charge-sheet have been examined. There is no hope of an early D
completion of the trial nor of completion of prosecution evidence. The
delay is attributable to the accused in the said criminal case, including
the respondent herein. In the backdrop of this grievance vide order dated
1" July 2016, the State of Chhattisgarh was directed by this Court to file
_ a status report regarding the criminal proceedings launched against the E
respondent, giving details of the total number of prosecution witnesses
cited in the charge-sheet; number of witnesses examined so far; and the
cause for delay in the completion of trial. The State ofChhattisgarh has
filed an affidavit of the Additional Superintendent of Police dated 1"
August 2016. From this affidavit, it is noticed that the criminal trial
No. I 043/2006 before framing of charge on 121h June 2007, was listed on F
13 dates. After framing of charge, the matter has proceeded before the
Sessions Court on 133 dates. In paragraph 9 to 11 of the affidavit, the
break up has been given as under.
"9. It is further respectfully submitted that the perusal of
Court proceedings of 133 dates reveal that the delay in completion G
of trial was due to multiple reasons. It is submitted that on some
dates, the case was adjourned due to absence of accused persons.
On some dates, the case was adjourned as the prosecutor was
absent. The case was also adjourned due to non-availability of
1
(2014) 3 sec 636 H
288 SUPREME COURT REPORTS · [2016] 5 S.C.R.
A files· as it was sent to the Sessions .Court for deciding the Bail
Application u/s 439 CrPC. The case was also adjourned on the
application made by the accused persons to make available some
documents. The case was also adjourned due to Ld. Presiding
Officer on leave, the transfer of Presiding Officer, the change of
Court. The case was also adjourned due to strike by the Lawyers
B
or due to Court holiday. In the gist of dates on which the case
was listed before the Ld. Trial Court, are as follows:
S.No. Particulars (Reason for Dela_y) Dates
c I. Accused La.xman Ratre not oresent 06
2. Accused Neelam Na11 not oresent 14
3. Prosecution witnesses not nresent IO
4. Accused nersons not 11rcsent 05
5. ADPO not nrcscnt 23
6. Documents 07
D 7. Anmments 05
8. · Annlication for bail 07
9. Receiving of demand letter 06
10. Case Diarv sent to the Magistrate 05
11. Receiving of Diarv 04
I 2. Court holiday 03
E 13. Strike of Advocates 02
14. Service of conv of the case 01
15. Change of charges 01
16. .
Time sought by the Advocates of 01
accused nersons
I 7. Presiding Officer on leave 05
F I 8. Transfer of Presidio!!: Officer 03
19. Reply 04
20: Keeping current status 04
21. Evidence 10
22. Case sent to copying deoartment 03
23. Issuance of instruction regarding case 01
G hand-over
24. Receivin!! of case on transfer 01
25. Framing of charges 01
-26. Order 01
TOTAL= 133DAYS
H
STATE BANK OF INDIA & ORS. v. NEELAM NAG 289
[A.M. KHANWILKAR, J.]
I 0. It is further submitted that the perusal of the Court proceedings A
reveal the dates on which, the prosecution witness were present
and the outcome on that date :
30.06.2007 Prosecution witnesses Joy C. Aryakara and
Pushpk'ala present in Court, however, since the
matter was fixed for 02.07.2007, they were asked B
to come again on that date.
02.07.2007 The above 2 prosecution witnesses were present,
however, they could not examined due to non-
availability of case diary and seized documents.
18.07.2008 prosecution witness Pushpkala present in Court c
however, she could not be examined since the
Ld. Presiding Officer was on leave.
09.03.2009 . Prosecution witness Pushpkala present in Court
however, she could not be examined.
D
08.10.2010 Prosecution witnesses Joy C. Aryakara and Ms.
Pushpkala present in Court, however, they couid
not be examined since co-accused Laxman Ratre
was not present nor any advocate appeared on
his behalf.
E
22.07.2011 Prosecution witness Pushpkala was examined
Prosecution witness Joy C. Aryakara also present
in Court however, the defence refused to
cross-examine on the ground of non-
availability of certain bank documents. This
prosecution witness was therefore could not F
be cross-examined.
15.09.2011 prosecution witness K.G. Goswami present in
Court however, the examination could not take
place due to absence of accused /respondent
No.1 Neelam Nag. G
24.09.2011 Prosecution witnesses KG. Goswami and N.
Chandrashekhar present. in Court. The CO"
accused Laxman R>atre is absent. Witness N.
Chandrashekhar ~ould not be examined due to
non-availabilityof some documents. H
290 SUPREME COURT REPORTS [2016] 5 S.C.R.
A 04.11.2011 Witness N. Chandrashekhar present. The
examination could not take place due to non-
availability of certain documents.
01.09.2012 Prosecution witness A.S. Jitendra present in
Court. The accused I Respondent No.1
B Neelam Nag was absent, however, at the
request of his Counsel, the examination ·of
prosecution witness was deferred.
03.09.2015 Prosecution witness Ramesh Kumar present in
Court. The accused Neelam Nag was absent.
c Examination of witness did not take place.
02.11.2015 Prosecution witness Ramesh Kumar Present.
The accused Neelam Nag was absent.
Examination of witness did not take place.
11. It is submitted that 3 prosecution witnesses have been
D examined. The delay in completion of trial is due to reasons
mentio~ed in the above paras."
Relying on these facts, the appellants contend that no further indulgence
can be shown to the respondent and the protection given to the respondent
by the High Court should be vacated keeping in mind the exposition in
E the above mentioned reported decision. As regards the argument of the
respondent that the disciplinary proceedings must be suspended in view
of Clause 4 of the Memorandum of Settlement dated I om April 2002,
arrived at by the Management of 52 'A' Class Banks as represented by
the Indian Banks' Association and their workmen under Section 2(p)
and Section 18( I) of the Industrial Disputes Act, that cannot be considered
F
as a legal bar atleast in the fact situation of the present case. The
interpretation of Clause 4 of the said settlement, as put forth by the
appellant, would further the cause ofjustice and in particular larger public
interest, 9onsidering the fact that thte misconduct is in relation to
embezzlement of substantial amount by an employee of the public sector
G bank- which has caused financial loss not only to the bank but resultantly
to the public exchequer. It is in the interest of all concerned that the
action, as permissible in law, must be taken forward in connection with
the gross misconduct and the provision in the Memorandum of Settlement
such as Clause 4 can,not be treated as an impediment thereto. Any other
interpretation of Clause 4 of the Settlement would be against public policy
H
STATE BANK OF INDIA & ORS. v. NEELAM NAG 291
[A.M. KHANWILKAR, J.]
--
and also encouraging unscrupulous employees of the bank to stall the
disciplinary proceedings by taking advantage ofthi;; pending criminal
A
case, which is an independent action in law. The respondent being named
as an accused in the criminal case; and also responsible for prolonging
the trial of the criminal case, cannot be permitted to take advantage_of
her own wrong.
B
7. The respondent, on the other hand, supported the view taken
by the High Court and contends that, in view of Clause 4 of the
Memorandum of Settlement and the settled legal position, the disciplinary
proceedings must be put on hold atleast until the recording and closure
of evidence of prosecution witnesses in the criminal case, as directed by
the Division Bench. That is essential because the charge framed against c
the respondent in the criminal case and the charge-sheet issued by the
disciplinary authority against the respondent is based on the same set of
facts. The defence of the respondent in disciplinary proceedings may
cause serious prejudice to the respondent in the criminal case. According
to the respondent, in view of the complexity of the facts and the evidence D
necessary to substantiate the same, it is advisable and essential to protect
the respondent from being exposed to disclosure of her defence which
may be identical to one to be taken in the criminal case or (or that matter
compel her to depose against herself on those facts ... ___ _
8. We have heard the learned counsel for. the parties at some E
length. The only question.that arises for consideration, is no more res-
integra. lt is well-settled that there is no legal bar to the conduct of the
disciplinary proceedings and criminal trial simultaneously. However, no
straightjacket formula can be spelt out and the Court has to keep in mind
the broad approach to be adopted in such matters on case to case basis.
The contour of the approach to be adopted by the Court has been F
delineated in series of decisions. This Court in Karnatakii SRTC vs.
M.GVittal Rao 2 has sm~med up the same in the following words:
"(i) There is no legal bar for both the proceedings to go on ·
simultaneously.
(ii) The only valid ground for claiming that the. disciplinary · G
proceedings may be stated woulii be to ensure that the defence ·
of the employee in the criminal case may not be prejudiced. But
even such grounds would be available only in cases involving
complex questions of facts or law.
2
(2012) 1 sec 442 H
292 SUPREME COURT REPORTS [2016) 5 S.C.R.
A (iii) Such defence ought not to be pennitted to unnecessarily delay
the departmental proceedings. The interest of the delinquent officer
as well as the employer clearly lies in a prompt conclusion of the
disciplinru:y proceedings.
(iv) Departmental proceedings can go on simultaneously to the
B criminal trial, except where both the proceedings are based on
the same set of facts and the evidence in both the proceedings is
common."
(emphasis supplied)
9. The recent decision relied by the appellant in the case ofStanzen
c (supra), has adverted to the relevant decisions 3 including the case of
M.GVittal Rao (supra). After adverting to those decisions, in paragraph
16, this Court opined as under:
"16. Suffice it to say that while there is no legal bar to the holding
of the disciplinary proceedings and the criminal trial simultaneously,
stay of disciplinary proceedings may be an advisable course in
D
cases where the criminal charge against the employee is grave
and continuance ofthe disciplinary proceedings is likely to prejudice
their defence before the criminal Court. Gravity of the charge is,
however, not by itself enough to determine the question unless the
charge involves complicated question oflaw and fact. The Court
E examining the question must also keep in mind that criminal trials
get prolonged indefinitely especially where the number of accused
arraigned for trial is large as is the case at hand and so are the
number of witnesses cited by the prosecution. The Court,
therefore, has to draw a balance between the need for a fair trial
to the accused on the one hand and the competing demand for an
F
expeditious conclusion of the ongoing disciplinary proceedings on
the other. An early conclusion of the disciplinary proceedings has
itself been seen by this Court to be in the interest ofthe employees."
(emphasis supplied)
10. The Court then went on to examine the facts of that case and
G
observed in para 18 as follows:
' (2005) 10 SCC 471 Hindustan Petroleum Corpn. Ltd. V. Sarvesh Berry
( 1999) 3 SCC 679 Capt. M. Paul Antony v. Bharat Gold Mines Ltd.
( 1997) 2 SCC 699 A.P. SRTC v. Mohd. Yousuf Miya
(1996) 6 SCC 417 State ofRajasthan v. B.K. Meena
H
STATE BANK OF INDIA & ORS. v. NEELAM NAG 293
[A.M. KHANWILKAR, J.)
"18. . ......... The charge-sheet, it is evident from the record, A
was filed on 20.8.2011. The Charges were framed on 20-12-
2011. The trial Court has ever since then examined only three
witnesses so far out of a total of23 witnesses cited in the charge-
sheet. Going by the pace at which the trial Court is examining the
witnesses, it would take another five years before the trial may
B
be concluded. The High Court has in the judgment under appeal
given five months to the trial Court to conclude the trial. More
than fifteen months has rolled by ever since that order, without
the trial going anywhere near completion. The disciplinary
proceedings cannot remain stayed for an indefinitely long period.
Such inordinate delay is neither in the interest of the appellant c
Company nor the respondents who are under suspension and
surviving on subsistence allowance ......... "
(emphasis supplied)
In paragraph 19, the Court proceeded to conclude thus:
"19. In the circumstances and taking into consideration al I aspects D
mentioned above as also keeping in view the fact that all the three
Courts below have exercised their discretion in favour of staying
the ongoing disciplinary proceedings, we do not consider it fit to
vacate the said order straightaway. Interests of justice would, in
our opinion, be sufficiently served if we direct the Court dealing E
with the criminal charges against the respondents to conclude the
proceedings as expeditiously as possible but in any case within a
period of one year from the date of this order. We hope and trust
that the trial Court wiir take effective steps to ensure that the
witnesses are served, appear and are examined. The Court may
for that purpose adjourn the case for no more than a fortnight F
every time an adjournment is necessary. We also expect the
accused in the criminal case to cooperate with the trial Court for
an early completion of the proceedings. We say so because
experience has shown that the trials often linger on for a long
time on account ofnon-availability of the defence lawyers to cross- G
examine the witnesses or on account of adjournments sought by
them on the flimsiest of the grounds. All that needs to be avoided.
In case, however, the trial is not completed within the period of
one year from the date of this order, despite the steps which the
trial Court has been directed to take the disciplinary proceedings
H
294 SUPREME COURT REPORTS [2016] 5 S.C.R.
A initiated against the respondents shall be resumed and concluded
by the inquiry officer concerned. The impugned orders shall in
that case stand vacated upon expiry of the period of one year
from the date of the order."
11 . Reverting to the facts of the present case, indisputably, the
B alleged misconduct has been committed as far back as May 2006. The
FIR was registered on s•h December, 2006 and the charge-sheet was
filed in the said criminal case on 61h February, 2007. The contents of the
charge-sheet are indicative of involvement of the respondent in the
alleged offence. Resultantly, the criminal Court has framed charges
against the respondent as far back as J2th June, 2007. The trial of that
c case, however, has not made any effective progress. Only 3 witnesses
have been examined by the prosecution, out of 18 witnesses cited in the
charge-sheet filed before the criminal Court. Indeed, listing of criminal
case on 133 different dates after framing of charges is not solely
attributable to the respondent. From the information made available by
D the Additional Superintendent of Police on affidavit, it does indicate that
atleast 26 adjournments are directly attributable to the accused in the
criminal case. That is not an insignificant fact. This is inspite of the
direction given by the Division Bench on 28th June, 2010, to the concerned
criminal Court to proceed with the trial on day-to-day basis. The progress .
of the criminal case since then, by no means, can be said to be
E satisfactory. The fact that the prosecution has named 18 witnesses does
not mean that all the witnesses are material witness for substantiating
the factum of involvement of the respondent in introducing the co-accused
for opening a new bank account, to misplace the clearing instruments
relating to various customers or for the payment released to the
F undeserving customer causing huge financial loss to the bank. The charge
in the criminal case is for offences under Section 409, 34 ofIPC, one of
criminal breach of trust by a public servant.
12. In the peculiar facts of the present case, therefore, we acced.e
to the contention of the appellants that the pendency of the criminal case
G against the respondent cannot be the sole basis to suspend the disciplinary
proceedings initiated against the respondent for an indefinite period; and
in larger public interest, the order as passed in Stanzen 's case be followed
even in the fact situation of the present case, to balance the equities.
13. The next question is: whether Clause 4 of the Settlement would
denude the appellants from continuing with the disciplinary proceedings
H
STATE BANK OF INDIA & ORS. v. NEELAM NAG 295
[A.M. KHANWILKAR, J.]
pending against the respondent. Clause 4 of the Settlement ~ads thus: A
"4. If after steps have been taken to prosecute an employee or to
get him prosecuted, for an offence, he is not put on trial within a
year of the commission of the offence, the management may then
deal with him as ifhe had committed an act of"gross misconduct"
or of"minor misconduct'', as defined below; provided that ifthe B
authority which was to start prosecution proceedings refuses to
do so or comes to the conclusion that there is no case for
prosecution it shall be open to the management to proceed against
the employee under the,provisions set out below in Clauses 11
and 12 infra relating to discharge, but he shall out below in Clauses
11 and 12 infra relating to discharge, but he shall be deemed to c
have been on duty during the period of suspension, if any, and
shall be entitled to the full wages and allowances and to all other
privileges for such period. In the event of the management
deciding, after enquiry, nono continue him in service, he shall be
liable only for termination with three months' pay and allowances D
in lieu of notice as provided in Clause 3 above. If within the
pendency of the proceedings thus instituted is put on trial such
proceedings shall be stayed pending the completion of the trial,
after which the provisions mentioned in Clause 3 above shall apply."
(emphasis supplied)
E
14. Ordinarily, the scope of Clause 4 of the Memorandum of
Settlement pressed into service would be a matter of an Industrial Dispute,
to be adjudicated by the competent Forum, if the respondent can be
termed as a workman. The respondent herein was appointed in a clerical
cadre of the appellant-bank; but when the alleged misconduct was
committed on 29'h May2006, she was working as Assistant (Clearing). F
Neither before the learned Single Judge, the Division Bench nor before
us any argument has been canvassed on the factum of whether the
respondent can be treated as a workman within the rneaning of the
Industrial Disputes Act, 1947. Both sides, however, have relied on the
said Clause and invited us to spell out its purport. G
1S. On the plain language of Clause 4, in our opinion, it is not a
stipulation to prohibit the institution and continuation of disciplinary
proceedings, much less indefinitely merely because of the pendency of
criminal case against the delinquent employee. On the other hand, it is
an enabling provision permitting the institution or continuation of H
296 SUPREME COURT REPORTS [2016] 5 S.C.R.
A disciplinary proceedings, if the employee is not put on trial by the
prosecution within one year from the commission of the offence or the
prosecution fails to proceed against him for want of any material.
16. As can be culled out from the last sentence of Clause 4, which
applies to a case where the criminal case has in fact proceeded, as in
B this case, for trial. The term "completion of the trial" thereat, must be
construed as completion of the trial within a reasonable time frame. This
clause cannot come to the aid of the delinquent employee - who has
been named as an accused in a criminal case and more so is party to
prolongation of the trial.
c 17. Notably, in the present case inspite ofa peremptory direction
of the Division Bench given on 28th June 2010 to the concerned criminal
Court to proceed with the trial on day-to-day basis, as noted above, no
effective progress has been made in that trial (except recording of
evidence of three prosecution witnesses out of eighteen witnesses) so
far. In the last six years, evidence of only two additional prosecution
D witnesses has been recorded. The respondent has not pointed out any
material on record to even remotely suggest that she had tried her best
to dissuade the criminal Court from adjourning the trial, in breach of
direction given by the Division Bench of the High Court to proceed on
day-to-day basis and to conclude the trial within one year from 28th
E June, 2010. Pendency ofcriminal trial for around 10 years, by no means,
can be said to be a reasonable time frame to withhold the disciplinary
proceedings. We are fortified in taking this view on the principle
underlying the former part of the same clause, which envisages that if
the Authority which has to start the prosecution refuses (read fails) to
do so within one year from the commission of the offence, the
F department.al action can proceed under the provisions as set out in Clauses
11 and 12 of the Settlement.
18. In the fact situation of the present case, it is possible to take
the view that the first part of Clause is attracted. In that, respondent has
been put on trial in connection with the alleged offence, by framing of
G charges on 12 1h June 2007. That has happened after one year from the
commission of the offence.
19. Be that as it may, the remedy of writ being an equitable
jurisdiction and keeping in mind the larger public interests (atleast in
cases of involvement of the employees of the Public Sector Banks in
H offence of breach of trust and embezzlement), the arrangement
STATE BANK OF INDIA & ORS. v. NEELAM NAG 297
[A.M. KHANWILKAR, J.]
predicated in the case ofStanzen (supra) would meet the ends ofjustice. A
For, the disciplinary proceedings instituted against the respondent cannot
brook any further delay which is already pending for more than I 0 years.
20. We make it clear that we may not be understood to have
expressed any final view on the scope of Clause 4 of the Settlement.
21. Accordingly, we exercise discretion in favour of the respondent B
of staying the ongoing disciplinary proceedings until the closure of
recording of evidence of prosecution witnesses cited in the criminal
trial, as directed by the Division Bench of the High Court and do not
consider it fit to vacate that arrangement straightway. Instead, in our
opinion, interests ofjustice would be sufficiently served by directing the c
criminal case pending against the respondent to be decided expeditiously
but not later than one year from the date of this order. The Trial Court
shall take effective steps to ensure that the witnesses are served, appear
and are examined on day-to-day basis. In case any adjournment becomes
inevitable, it should not be for more than a fortnight when necessary.
D
22. We also directthat the respondent shall extend full cooperation
to the Trial Court for an early disposal of the trial, which includes
cooperation by the Advocate appointed by her.
23. If the trial is not completed within one year from the date of
this order; despite the steps which the Trial Court has been directed to E
take the disciplinary proceedings against the respondent shall be resumed
by the enquiry officer concerned. The protection given to the respondent
of keeping the disciplinary proceedings in abeyance shall then stand
vacated forthwith upon expiring of the period of one year from the date
of th is order.
F
24. In the result, we partly allow this appeal to the extent indicated
above. The parties are left to bear their own costs.
25. A copy of this order be forwarded to the concerned Sessions
Court for information and necessary action for ensuring compliance of
the direction.
G
Divya Pandey Appeal partly allowed.
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