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2025 (5) TMI 1444 - SCH - Indian LawsLegality of delay in issuing the charge sheet - mandatory requirement to seek the CVC s advice in all complaints involving allegations of corruption before issuance of a charge sheet to an employee - Regulation 19 of the Union of India Officer Employees (Discipline Appeal) Regulations 1976 ( 1976 Regulations ) - Seeking to initiate unilateral disciplinary proceedings against the appellant without obtaining the CVC s first-stage advice - HELD THAT - Regulation 19 of the 1976 Regulations stipulates that the Bank shall consult the CVC wherever necessary in respect of disciplinary cases having a vigilance angle. A reading of the regulation makes it clear that in cases where the Respondent Bank deems that the consultation is necessary due to the case having a vigilance angle the Respondent Bank is required to seek the advice of the CVC. Therefore while the learned counsel has argued the question of whether consultation with the CVC is mandatory or discretionary in the facts of this case it is not necessary for us to delve into the said question. The reason is that the Respondent Bank has itself acknowledged that the case had a vigilance angle and consultation with the CVC is necessary and therefore the Respondent Bank had sought the opinion of the CVC. As can be seen from the affidavit dated 23rd May 2019 filed by the General Manager of the Bank the first stage advice of the CVC has been sought. The affidavit dated 13th June 2019 filed by the Executive Director also clearly states that on the receipt of the advice of the CVC the Bank shall issue a charge sheet to the appellant. As stated earlier within five days of filing the said affidavit the charge sheet dated 10th June 2019 was served upon the appellant. This was done without receiving the first stage advice from the CVC. In this case the Respondent Bank itself accepted the necessity of seeking first-stage advice from the CVC. Therefore it was not open for the Bank to serve the charge sheet without receiving and considering the first stage advice by the CVC. As stated earlier only ten months before the date of superannuation an order of suspension was served upon the appellant. This was done after 34 years of unblemished service. Although it was necessary to take the first stage advice of the CVC the advice was sought only as late as on 17th May 2019. Twelve days before reaching the age of superannuation a charge sheet was served upon the appellant without receiving and considering the CVC s advice. This was despite the specific statement made by the Executive Director in the earlier petition on oath which stated that the charge sheet would only be served upon receipt of advice from the CVC. Once the first stage advice of the CVC was called it was the duty of the respondent-Bank to consider the advice and then take a decision to serve the chargesheet. Thus the actions of the respondent-Bank are mala fide and arbitrary. The appellant was sought to be victimised at the fag end of his unblemished career of 34 years. The High Court committed a gross error by holding that Regulation 19 of the 1976 Regulations was not mandatory. This issue was irrelevant as the Bank had itself acknowledged that in the facts of the case it was necessary to seek first-stage advice from the CVC. It is also pertinent to note that no record was placed in the High Court to indicate that the CVC report had been received. Accordingly the disciplinary proceedings including the charge sheet dated 10th June 2019 are hereby quashed and set aside. Although the appellant shall not be entitled to back wages and allowances the Respondent Bank shall release all retirement benefits admissible on the basis that the appellant has superannuated as of 30th June 2019. The amount of retirement benefits due to the appellant in accordance with the law shall be paid to the appellant within three months from today. The appeal is allowed on the above terms.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court were: (a) Whether Regulation 19 of the Union Bank of India Officers Employees' (Discipline & Appeal) Regulations, 1976 ("1976 Regulations"), which mandates consultation with the Central Vigilance Commission ("CVC") in disciplinary cases having a vigilance angle, imposes a mandatory or directory obligation on the Respondent Bank; (b) Whether the Respondent Bank was justified in issuing and serving a charge sheet without obtaining the first-stage advice of the CVC, despite acknowledging the vigilance angle in the case; (c) Whether the delay in issuing the charge sheet and continuing suspension without initiating disciplinary proceedings for almost a year, particularly at the fag end of the appellant's career, was arbitrary and illegal; (d) Whether the disciplinary proceedings initiated and continued post-superannuation without proper adherence to procedural requirements were valid; (e) Whether the appellant was entitled to any relief in terms of pension, back wages or other retiral benefits. 2. ISSUE-WISE DETAILED ANALYSIS Issue (a) and (b): Mandatory nature of Regulation 19 and necessity of CVC consultation before issuing charge sheet The relevant legal framework included Regulation 19 of the 1976 Regulations, which states: "The Bank shall consult the Central Vigilance Commission wherever necessary, in respect of all disciplinary cases having a vigilance angle." The use of the word "shall" indicates a mandatory obligation, but the phrase "wherever necessary" introduces an element of discretion. The Court noted that in the present case, the Respondent Bank itself admitted the vigilance angle and accepted the necessity of consultation with the CVC. The Court examined various CVC circulars-dated 28th September 2000, 15th April 2004, and 27th April 2015-which clarified the consultation process. These circulars established that the CVC is to be consulted at two stages: first-stage advice before issuance of the charge sheet, and second-stage advice after receipt of reply or inquiry report. The 2015 circular further clarified that first-stage advice is to be sought after obtaining tentative views of the Disciplinary Authorities on preliminary inquiry reports involving allegations of corruption or vigilance angle. The appellant's counsel relied on these circulars to argue that consultation with the CVC before issuing a charge sheet is a mandatory precondition. The affidavits filed by the Respondent Bank's General Manager and Executive Director before the High Court acknowledged the vigilance angle and confirmed that the charge sheet would be issued only after receipt of CVC's advice. The Respondent Bank's counsel contended that issuing a charge sheet is not a "final decision" but merely the initiation of disciplinary proceedings, and hence, CVC's advice is not a mandatory precondition for issuance of the charge sheet. They also argued that the disciplinary process should not be stalled due to delay or inaction by the CVC, and that pendency of vigilance proceedings does not bar internal disciplinary action. The Court rejected the Respondent Bank's contention, emphasizing that since the Bank itself admitted the necessity of consultation due to the vigilance angle, it was bound to await the first-stage advice before issuing the charge sheet. Issuing the charge sheet without such advice was contrary to the Bank's own undertaking and the procedural safeguards envisaged under the 1976 Regulations and CVC circulars. The Court further noted that the charge sheet was prepared on 10th June 2019 and served on 18th June 2019, despite the CVC's advice being awaited and despite the Executive Director's affidavit dated 13th June 2019 stating that charge sheet issuance would follow receipt of CVC's advice. This demonstrated mala fide and arbitrary conduct by the Respondent Bank. Issue (c): Legality of delay in issuing charge sheet and continuing suspension The appellant was suspended on 21st August 2018, but charge sheets were not issued until June 2019, nearly ten months later. The High Court had earlier quashed the suspension order on the ground that continuing suspension without initiating disciplinary proceedings for such a prolonged period, especially at the end of the appellant's career, was arbitrary and illegal. The Court agreed with this view and observed that the delay in seeking CVC advice and issuing charge sheet was unjustified, particularly given the appellant's unblemished 34-year service record. The Court found that the Respondent Bank's conduct in suspending the appellant and delaying the charge sheet issuance was disproportionate and violated principles of natural justice, especially since the suspension was prolonged without substantive disciplinary action. Issue (d): Validity of disciplinary proceedings post-superannuation The appellant retired on 30th June 2019. The charge sheet was served just twelve days before superannuation, and disciplinary proceedings continued post-retirement. The Court considered whether such proceedings were permissible and found that since the charge sheet was issued without complying with mandatory procedural requirements, the entire disciplinary process was flawed and could not be sustained. Moreover, the Court noted the significant delay and the fact that almost six years had passed since the appellant's superannuation at the time of the judgment, rendering continuation of proceedings unjust and oppressive. The Court held that it would be unjust to allow the Bank to resume disciplinary proceedings at such a late stage. Issue (e): Entitlement to pension, back wages, and retiral benefits The appellant sought directions for payment of pension and retiral benefits. The Court held that while the disciplinary proceedings were quashed and set aside, the appellant was entitled to all retirement benefits as per law, considering his superannuation date of 30th June 2019. However, the appellant was not entitled to back wages or allowances for the period of suspension or post-charge sheet issuance, given the circumstances. 3. SIGNIFICANT HOLDINGS "The Respondent Bank itself accepted the necessity of seeking first-stage advice from the CVC. Therefore, it was not open for the Bank to serve the charge sheet without receiving and considering the first stage advice by the CVC." "Once, the first stage advice of the CVC was called, it was the duty of the respondent-Bank to consider the advice and then take a decision to serve the charge sheet. Thus, the actions of the respondent-Bank are mala fide and arbitrary." "Continuing the suspension of the appellant since 21st August 2018 without even initiating or serving charge sheet for almost a year and that too at the fag end of the career of the appellant is wholly arbitrary and illegal." "Though the appellant will be entitled to all retiral benefits, he shall not be entitled to any back wages." Core principles established include:
The Court allowed the appeal, quashed and set aside the charge sheet dated 10th June 2019 and all disciplinary proceedings against the appellant, ordered release of all retirement benefits within three months, and denied any claim for back wages or allowances.
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