CASE DETAILS v. P. ZADENGA

From the Judgment and Order dated 07.01.2009 of the High Court of Gauhati in WA No. 3 of 2006. 742 SUPREME COURT REPORTS [2023] 12 S.C.R. Appearances: Vikas Singh, Sr. Adv., Sanjay Kapur, Surya Prakash, Arjun Bhatia, Ms. Deepeika Kalia, Keshav Khandelwal, Advs. for the Appellants. Jitendra Bharti, Deepak Goel, Mithilesh Kumar Jaishwal, Ms. Alka Goyal, Advs. for the Respondent. JUDGMENT / ORDER OF THE SUPREME COURT JUDGMENT SANJAY KAROL, J. The instant lis presents two questions for consideration by this Court. They are- (a) Does clause 4 of the Memorandum of Settlement dated 10th April 2002 create a bar on departmental proceedings continuing when the person subjected thereto is being tried before a criminal court for off ences of the same origin? (b) Does acquittal in some of the connected proceedings entail a benefi t in the surviving proceedings? Further, inuring a right upon the delinquent employee of automatic discharge in disciplinary proceedings? This appeal, by way of special leave, is directed against the fi nal judgement and order dated 7th January 2009 passed in Writ Appeal No.03/2006 by which the order passed in Writ Petition (Civil) No.12 of 2005 dated 25th July 2005 allowing the appeal of the Respondent herein against the order of dismissal from bank services dated 28th March 2003 and the rejection of the departmental appeal vide order 16th August 2004, was allowed and the order of the Learned Single Judge confi rmed. Background

The facts of the instant dispute as they emanate from the record are:-

3.1 The respondent namely P. Zadenga1 was employed in the State Bank 1 Hereinafter referred to as “the delinquent employee” STATE BANK OF INDIA v. P. ZADENGA [SANJAY KAROL, J.] 743 of India2 as Assistant (CAT) at the Dawrpui Branch, Aizawl. Three government retailers lodged a complaint with the Aizawl Police Station that their challan-deposits with the said Branch had not been entered into the cash receipt scroll. The District Civil Supply Offi cer, Aizawl West, also lodged a complaint that a certain retailer had taken the delivery of particular food stuff using a fake challan.

3.2 Pursuant thereto, disciplinary proceedings were initiated against the respondent with the issuance of a Memorandum dated 8th December 1999, wherein it was alleged that he had received Rs.61,908 for a deposit on 19th April,1996 in respect of which a challan was issued, but the amount never deposited in the respective account. Two other similar occurrences dated 21st February 1995 regarding Rs.24,640 and Rs.27,412 were also alleged.

3.3 Three different FIRs stood registered against him, under which he was arrested but later released on bail. In his written show cause to this Memorandum, the Delinquent employee contended that the disciplinary proceedings should be either dropped or closed since criminal cases were pending him, arising from the same set of transactions.

3.4 The appellant-bank proceeded to appoint an inquiry officer who, in his report, submitted that three out of four charges stood established. The Delinquent Employee, again denying the charges, filed a response to that but was eventually dismissed from the services at the bank, vide the order of dismissal dated 28th March 2003. The departmental appeal filed by him, after due opportunity of hearing, was dismissed on 16th August 2004.

Aggrieved by the dismissal of the departmental appeal, the delinquent employee filed Writ Petition (Civil) No.12 of 2005 before the Gauhati High Court. The question before the said Court was: whether, in view of the Memorandum of Settlement dated 10th April 2 Hereinafter, the “Appellant Bank” 744 SUPREME COURT REPORTS [2023] 12 S.C.R. 20023, the disciplinary proceedings against the delinquent employee (respondent) herein ought to have been stayed or not.

Having recorded that post signing of the said MoS, the Shastri Award as confi rmed by the Desai Award “ceased to exist for all intents and purposes” the Court observed that clause 4 of the said document was clear and unambiguous and, therefore, it was not correct for the bank to have subjected him to disciplinary proceeding during the pendency of criminal proceedings.

However, it would be open for the disciplinary authority to act under the clauses of the MoS after the criminal cases against the delinquent employee having reached a conclusion, one way or the other.

Dissatisfi ed by the order of the learned Single Judge, a Writ Appeal was fi led bearing No.03 of 2006. Having discussed the background of the case, the Division Bench discussed the contention on behalf of the bank regarding the applicability of the Shastri Award and observed that the continuation of the disciplinary proceedings during the pendency of criminal cases would be an infraction, given para 521(3) thereof.

In conclusion, the Division Bench upheld the order of the learned Single Judge and confi rmed the setting aside of the disciplinary proceedings. The Present Appeal

We have heard Mr. Vikas Singh, learned senior counsel for the appellant bank and Mr. Jitendra Bharti for the delinquent employee.

Inviting attention to several decisions rendered by this Court, it is argued on behalf of the appellant-bank that (i) initiation of departmental proceedings binding criminal trial would not amount to an automatic stay unless, of course, a complicated question of law is involved in the matter; (ii) acquittal in a criminal trial in relation to the very same impugned action would not preclude the employer to initiate departmental proceedings; 3 Hereinafter referred to as “MoS”: between the Management of 52 ‘A’ Class Banks as represented by the Indian Banks’ Association and their workmen as represented by the All India Bank Employees’ Association, National Confederation of Bank Employees, Indian National Bank Employees’ Federation. STATE BANK OF INDIA v. P. ZADENGA [SANJAY KAROL, J.] 745 and (iii) mere non-compliance of the provisions of bipartite agreement, in attending facts, would not result in the disciplinary action to be void ab initio.

On the other hand, it is argued on behalf of the delinquent employee that the disciplinary proceedings, the subject matter of the instant lis, were in gross violation of the bipartite agreement, which has been held to have the force of law. In any case, Respondent stand acquitted in two out of three criminal trials. Also, the action initiated by the employer was belated and an afterthought only to harass the delinquent employee.

Before proceeding to the merits of the issue at hand, it would be appropriate to reproduce clause 4 of the MoS dated 10th April 2002, which is the bone of contention in this dispute, for the delinquent employee contends an apparent embargo on proceedings with disciplinary enquiry when criminal cases arising from the same transactions are pending, and the appellant-bank submitting to the contrary of there being no such restriction. Clause 4 reads as under: - “If after steps have been taken to prosecute an employee or get him prosecuted, for an off ence, he is not put on trial within a year of the commission of the offi ce, the management may then deal with him as if he had committed an act of “gross misconduct” or of “minor misconduct”, as defi ned below; provided that if the 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 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, not to continue him in service, he shall be liable only for termination with three months’ pay and allowances 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) 746 SUPREME COURT REPORTS [2023] 12 S.C.R.

In respect of the interpretation of clause 4, we fi nd this Court to have observed in State Bank of India & Ors. v. Neelam Nag4 as follows:- “21. In 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 indefi nitely, merely because of the pendency of a criminal case against the delinquent employee. On the other hand, it is an enabling provision permitting the institution or continuation of disciplinary proceedings, if the employee is not put on trial by the prosecution within one year from the commission of the off ence or the prosecution fails to proceed against him for want of any material.

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 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.”

Against this backdrop, it is also imperative that we look into the position of law regarding two proceedings of similar origin continuing simultaneously.

14.1 This Court in State of Rajasthan v. B.K. Meena and Ors.5 referred to some decisions on the aspect of stay on disciplinary proceedings and observed :- “14. It would be evident from the above decisions that each of them starts with the indisputable proposition that there is no legal bar for both proceedings to go on simultaneously and then say that in certain situations, it may not be ‘desirable’, ‘advisable’ or ‘appropriate’ to proceed with the disciplinary enquiry when a criminal case is pending on identical charges. The staying of disciplinary proceedings, it is emphasised, is a matter to be determined having regard to the facts and circumstances of a given case and that no hard and fast rules can 4 5