1. By the present Petition under Article 226 of the Constitution of India, the Petitioner challenges the communication dated 20th July 2015 (“the impugned communication”), whereby the Respondent rejected the Petitioner’s application under Regulation 46(4) of the Reserve Bank of India (Staff) Regulations, 1948 (“the Regulations”) seeking reinstatement in service together with arrears of salary and consequential benefits.
2. The Petitioner was initially appointed as a part-time Machine Operator in the National Clearing Cell of the Respondent on 23rd April 1987 and was subsequently appointed as a full-time employee on 21st December 1992. During the course of his employment, allegations arose that the Petitioner, in collusion with certain other employees, had entered into a criminal conspiracy to tamper with cheques presented through the National Clearing Cell and thereby defraud various banks.
3. Consequent upon the discovery of the alleged fraud, the Respondent lodged a complaint with the Central Bureau of Investigation (“CBI”), pursuant to which an FIR also came to be registered for offences punishable under Sections 120-B, 420 and 409 of the Indian Penal Code, 1860 and Section 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988. Upon completion of the investigation, the CBI filed a chargesheet before the Special Judge, CBI, Bombay, whereupon Special Case No. 78 of 1995 came to be registered.
4. Independently of the criminal proceedings, the Respondent initiated disciplinary proceedings against the Petitioner. Pending the inquiry, the Petitioner was placed under suspension on 30th July 1994. Upon conclusion of the departmental inquiry, the Regional Director, in exercise of powers under Regulation 47(1)(e) of the Regulations, dismissed the Petitioner from service by order dated 30th August 2001 (“the dismissal order”).
5. The Petitioner’s departmental appeal preferred before the Governor of the Respondent on 18th February 2002 came to be dismissed by order dated 31st May 2002, thereby affirming the dismissal order.
6. Subsequently, by judgment dated 10th March 2015, the Special Judge, CBI, Bombay acquitted the Petitioner of the criminal charges.
7. Following his acquittal, the Petitioner submitted an application under Regulation 46(4) of the Regulations seeking reinstatement in service together with arrears of salary and consequential benefits.
8. The said application was rejected by the impugned communication dated 20th July 2015. According to the Petitioner, the impugned communication was issued without assigning reasons and without affording him an opportunity of being heard.
9. Mr. Sachin Chandan, learned counsel appearing for the Petitioner, submits that the impugned communication is unsustainable in law, being a non-speaking order passed in breach of the principles of natural justice. He submits that the Petitioner’s application under Regulation 46(4) ought to have been considered after granting him an opportunity of hearing and prays that the impugned communication be set aside.
10. Per contra, Mr. S. U. Kamdar, learned senior advocate appearing for the Respondent, submits that the petition proceeds on an erroneous understanding of Regulation 46(4). According to him, the said provision has no application to the facts of the present case.
11. Elaborating his submissions, Mr. Kamdar invited our attention to Regulations 46(3), 46(4) and 47 of the Regulations. He submitted that Regulation 46(3) enables the Respondent to dismiss an employee upon conviction for specified offences without following the disciplinary procedure contemplated under Regulation 47. Regulation 46(4), according to him, is attracted only where an employee has been dismissed under Regulation 46(3) and the conviction forming the basis of such dismissal is subsequently set aside by a superior court resulting in an honourable acquittal.
12. Mr. Kamdar submits that the Petitioner’s dismissal did not arise out of his conviction in the criminal case but pursuant to a departmental inquiry culminating in the dismissal order dated 30th August 2001 passed under Regulation 47(1)(e). The subsequent acquittal in the criminal proceedings, therefore, does not confer any right upon the Petitioner to seek reinstatement under Regulation 46(4). He further points out that the dismissal order itself expressly records that the penalty was imposed under Regulation 47(1)(e).
13. In support of his submissions, Mr. Kamdar placed reliance upon the decisions of the Hon’ble Supreme Court in State of Karnataka & Anr. v. Umesh((2022) 6 SCC 563), Karnataka Power Transmission Corporation Ltd. v. C. Nagaraju & Anr.( (2019) 10 SCC 367), and Ajit Kumar Nag v. General Manager (PJ), Indian Oil Corporation Ltd., Haldia & Ors.( (2005) 7 SCC 764) to contend that acquittal in criminal proceedings does not ipso facto invalidate disciplinary action founded upon an independent departmental inquiry.
14. As regards the Petitioner’s grievance founded on the principles of natural justice, Mr. Kamdar submits that Regulation 46(4) does not contemplate the grant of a personal hearing before deciding an application thereunder and in any event, no prejudice has been demonstrated by the Petitioner.
15. On these grounds, Mr. Kamdar submits that the petition is devoid of merit and deserves to be dismissed.
16. We have considered the rival submissions and perused the pleadings and the material placed on record. Since the controversy centres upon the scope and applicability of Regulations 46(3), 46(4) and 47(1) of the Regulations, it would be apposite to reproduce the relevant provisions.
“46 Employees arrested for debt or on criminal charge
…
…
(3) An employee shall be liable to dismissal or to any of the other penalties referred to in Regulation 47 if he/she is committed to prison for debt or is convicted of an offence which, in the opinion of the Competent Authority, either involves gross moral turpitude or has a bearing on any of the affairs of the Bank or on the discharge by the employee of his/her duties in the Bank; the opinion in this respect of the Competent Authority shall be conclusive and binding on the employee. Such dismissal or other penalty may be imposed as from the date of his/her committal to prison or conviction and nothing in Regulation 47 shall apply to such imposition.
(4) Where an employee has been dismissed in pursuance of sub Regulation (3) and the relative conviction is set aside by a higher court and the employee is honourably acquitted, he will be reinstated in service.”
“47. Penalties
(1) Without prejudice to the provisions of other Regulations, an employee who commits a breach of the Regulations of the Bank, or who displays negligence, inefficiency or indolence, or who knowingly does anything detrimental to the interests of the Bank or in conflict with its instructions, or who commits a breach of discipline or is guilty of any other act of misconduct, shall be liable to the following penalties: -
(a) reprimand;
(b) delay or stoppage of increment or promotion;
(c) degradation to a lower post or grade or to a lower stage in his incremental scale;
d) recovery from pay of the whole or part of any pecuniary loss caused to the Bank by the employee;
(e) dismissal.”
17. A plain reading of the aforesaid provisions supports the stand of the Respondent. It is undisputed that the Petitioner was dismissed from service pursuant to a departmental inquiry and that the penalty of dismissal was imposed under Regulation 47(1)(e). The dismissal order expressly records the source of power under which the penalty was imposed.
18. Notwithstanding the aforesaid position, the Petitioner seeks reinstatement under Regulation 46(4) solely on the basis of his subsequent acquittal in the criminal proceedings. The record, however, demonstrates that the dismissal was not founded upon the registration of the FIR, the filing of the chargesheet or the pendency of the criminal prosecution. On the contrary, the Respondent conducted a full-fledged disciplinary inquiry commencing in 1994, in which written charges were served upon the Petitioner, evidence was adduced, witnesses were examined and cross-examined, and the Petitioner actively participated throughout the proceedings extending over several years.
19. The material events emerging from the departmental proceedings may be summarized thus:
(a) On 15th October 1994, a chargesheet was served upon the Petitioner.
(b) On 12th December 1994, the Petitioner submitted his reply admitting the charges and expressing remorse.
(c) Between May 1995 and April 1996, several sittings of the inquiry were conducted in which the Petitioner and his defence representative participated and cross-examined the management witnesses.
(d) At the hearing held on 13th April 1996, the Petitioner once again admitted the charges, whereupon his statement was recorded by the Inquiry Officer.
(e) On 10th January 1997, the Presenting Officer submitted his findings holding the charges proved.
(f) On 30th June 1998, the Inquiry Officer submitted his report holding the charges established on the basis of the evidence adduced during the inquiry.
(g) On 27th July 1998, the Petitioner submitted his representation against the inquiry report, wherein he reiterated his admission and sought leniency.
(h) On 27th March 2001, a show cause notice proposing the penalty of dismissal was issued.
(i) By replies dated 16th and 25th April 2001, the Petitioner once again expressed repentance and requested that a lesser punishment be imposed.
(j) Thereafter, by order dated 30th August 2001, the Competent Authority imposed the penalty of dismissal.
(k) The departmental appeal preferred by the Petitioner was dismissed on 31st May 2002.
20. The record thus discloses that throughout the disciplinary proceedings the Petitioner repeatedly acknowledged the misconduct alleged against him and sought leniency. The admissions made by the Petitioner formed part of the material considered by the disciplinary authority, in addition to the evidence recorded during the inquiry. The penalty of dismissal was therefore, founded upon the findings returned in the departmental proceedings and not upon the criminal prosecution.
21. In these circumstances, the dismissal order cannot be regarded as one passed under Regulation 46(3). The essential pre-condition for invoking Regulation Page 8 of 9 46(4), namely, that the employee should have been dismissed pursuant to Regulation 46(3), is absent. The Petitioner’s application seeking reinstatement under Regulation 46(4) was therefore, rightly held to be not maintainable.
22. Apart from the above, the legal position is well settled that acquittal in a criminal case does not, by itself, render invalid a penalty imposed pursuant to an independent departmental inquiry. As held by the Supreme Court in State of Karnataka (supra), Karnataka Power Transmission Corporation Ltd. (supra) and Ajit Kumar Nag (supra), criminal proceedings and disciplinary proceedings operate in distinct fields and are governed by different standards of proof. Consequently, an order of acquittal does not automatically entitle an employee to reinstatement where the disciplinary action is founded upon evidence independently adduced in the departmental proceedings.
23. In view of the aforesaid discussion, we find no infirmity in the impugned communication rejecting the Petitioner’s application under Regulation 46(4) of the Regulations. The challenge raised in the present Petition is devoid of merit and is accordingly rejected.
24. The Writ Petition is dismissed. There shall, however, be no order as to costs.
