STATE BANK OF INDIAversusR.B. SHARMA

,,' ' .
                                              STATE BANK OF INDIA           A
                                                      V.
                   Ii_ ( ·;1 i ""                 R.B. SHARMA

                                                AUGUST 10, 2004

                    .. ., [ARIJIT PASAYAT AND C.K. THAKKER, JJ.]            B
.< "1"~,   !   I          .   '   •   ~II'.



           ,-.i.,i,Service Law:,

   · " Dep~rtmen;al proceedings and criminal pro~eedings-Stay of de-
'' p~rtmental pro_ceedings till conclusion of criminal proceedings-Permis- C
    sibility of-Held : Both the proceedings can go on simultaneously unless
    the charge in the criminal trial is of grave nature involving complicated
    questions offact and law-Criteria for granting stay is to see whether the
    departmental proceedings would seriously prejudice the delinquent in his
    defence at the trial in criminal case-Granting stay would depend on facts D
    and circumstances of each case-Matter remitted back for reconsidera-
    tion-Penal Code, 1860-Sections 406, 409, 420, 467 and l 20B-Code of
    Civil Procedure, 1908-0rder XXXIX Rules 1 and 2-State Bank of India
    Officers Service Rules-Rules 67 and 68.

           "Criminal Prosecution" and "Departmental Enquiry "-Distinction E
      between.

          Departmental proceedings were initiated against the respondent-
     employee for alleged commission of offences under IPC. Criminal
     proceedings were also initiated by the appellant-Bank for the alleged F
     offences. Respondent filed a suit alongwith an application under Order
     XXXIX, Rules 1 and 2 CPC with prayer to stay the departmental
     proceedings. Trial Court stayed the departmental proceedings. First
     Appellate Court set aside the order of trial Court. High Court setting
     aside the order of First Appellate Court, directed stay of departmental
     proceedings, till the conclusion of the criminal case holding that G
     employee had been able to show that the matter in both the proceedings
     was the same. Hence the present appeal.

         Partly allowing the appeal and remitting the matter back to High
     Court, the Court                                                     H
                                                      417
    418                 SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.

A       HELD : 1.1. 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. The purpose of departmental enquiry and
  of prosecution are two different and distinct aspects. Crime is an act
B of commission in violation of law or of omission of public duty. 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. The departmental enquiry is to
  maintain discipline in the service and efficiency of public service. Strict
C standard of proof or applicability of the Evidence Act stands excluded.
  It would, therefore, be expedient that the disciplinary proceedings are
  conducted and completed as expeditiously as possible. 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
D facts and circumstances. 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. [421-E-G; 422-C-D; 421-G-H)

E       Depot Manager, A.I'. State Road Transport Corporation v. Mohd.
    Yousuf Miya and Ors., [1997] 2 SCC 699; State of Rajasthan v. B.K.
    Meena, [1996] 6 SCC 417 and Capt. M Paul Anthony v. Bharat Gold
    Mines Ltd. and Anr., [1999] 3 SCC 679, relied on.

            2. High Court came to an abrupt conclusion that the petitioner in
F 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.
    Since High Court has not indicated even skeleton basis for his conclusion
    that matter is substantially the same, it would be appropriate for the
G   High Court to re-hear the matter. [423-G-H; 424-C)

            CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5121 of
    2004.

          From the Judgment and Order dated 21. I 0.2003 of the Delhi High
H Court in C.M.(M). No. 294 of 2003.
                 S.B.I. v. R.B. SHARMA [PASAYAT, J.]                    419

      Gopal Subramanium, Raj iv Kapur, Sanjay Kapur and Sanjeev Kumar A
for the Appellants.

     Respondent-in-person.

     The Judgment of the Court was delivered by
                                                                               B
     ARIJIT PASA YAT, J, : Leave granted.

     By the impugned judgment a learned Single Judge of the Delhi High
Com1 directed stay of departmental proceedings till conclusion of the
criminal case pending against the respondent (hereinafter referred to as the   C
'employee').

     The order came to be passed in the following circumstances :

     The employee was placed under suspension on 11.5.1994 for alleged D
omissions and commissions amounting to gross irregularities. He was, at
the relevant time, working as officiating manager at the Green Park
Extension bench 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 Mis. Bharat Dynamics Ltd. at his Hyderabad office E
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 F
aforementioned concern. According to the employer, instead of issuing the
deposit certificates the employee got the amount deposited in the current
account of one ofM/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 G
commission of offences punishable under Sections 406, 409, 420, 467 and
120-B of the Indian Penal Code, 1860 (in short the '!PC'). 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 H
    420                SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.
A along 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 finds of Bharat Dynamics Ltd. A petition challenging the
  framing of charges is pending disposal before the Delhi High Court. On
B 25.2.1995 a show-cause notice was issued to the respondent-employee
  alleging that ifl'egularities 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
C 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
D 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
E 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
F 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, Rule I 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 2.11.2002,
G 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
H Senior Civil Judge and restoring the order of stay passed by learned Civil
                 S.B.I. v. R.B. SHARMA [PASAYAT, J.]                   421

Judge.                                                                       A

      In support of the appeal, Mr. Gopal Subramainum, learned senior
counsel submitted that the High Court has kept in view the correct principle
of law relating to a situation where both the departmental proceedings and
criminal case are pending. The basic issue which was necessary to be B
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 view to harass him, the C
authorities are trying to finalise the departmental proceedings. According
to him both the criminal case and the departmental proceedings are
outcome of malafides. 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 D
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· lhsic principles
proceedings in criminal case and departmentar-proceedings can go on E
simultaneously, except where departmental proceedings and criminal case
are based on the same set of facts and the evidence in both the proceedings
is common.

      The purpose of departmental enquiry and of prosecution are two F
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 G
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 H
    422                 SUPREME COURT REPORTS (2004] SUPP. 3 S.C.R.

A 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 distin-
  guished from mere private rights punishable under criminal law. When trial
B for criminal offence is conducted it should be in accordance with proof of
  the offen,ce 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
C 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
D 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   sec 699 analysed the legal position in great detail on the above
E lines.

        The aforesaid position was also noted in State of Rajasthan v. B.K.
    Meena, [1996) 6 SCC 417.

F         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 proceed-
    ings should be stayed on the ground that the criminal case is pending.
G
          Jn Capt. M Paul Anthony's case (supra) this Court indicated some
    of the fact situations which would govern the question whether departmen-
    tal proceedings should be kept in abeyance during pendency of a criminal
    case. In paragraph 22 conclusions which are deducible from various
H   decisions were summarised. They are as follows :
                    S.B.l. v. R.B. SHARMA [PASAYAT, J.]                    423

             (i) Departmental proceedings and proceedings in a criminal A
             case can proceed simultaneously as there is no bar in their being
             conducted simultaneously, though separately.

             (ii) If the department proceedings and the criminal case are
             based on identical and similar set of facts and the charge in the B
             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 C
             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 collecte~ against him during investigation or as
             reflected in the charge-sheet.                                     D

             (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.                            E

             (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        F
             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 G
    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 H
    424                SUPREME COURT REPORTS (2004] SUPP. 3 S.C.R.

A 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,
B   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
C 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 fresh consideration.

D        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.
E                                                             Appeal allowed.
    K.K.T.




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