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Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4715 of 2011

State Bank of India & Ors. …..Appellants

Vs.

Neelam Nag       ……Respondent

J U D G M E N T

A.M.KHANWILKAR, J.

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

appellant-Bank.   At  the  relevant  time,  she  was  working  as  an

Assistant (Clearing).  Allegedly, some time on 29th May 2006, the

respondent by her acts of commission and omission caused loss to

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the Bank in the sum of Rs. 44,40,819/- by granting credit to one

Laxman Parsad Ratre (who was an employee of Bhilai Steel Plant).

The respondent herself introduced Laxman Parsad Ratre to open an

account  in  the  appellant  Bank.   On  7th November  2006,  the

respondent  was  placed  under  suspension  for  indulging  in  gross

irregularities and misconduct including of misplacing the clearing

instruments  relating  to  various  customers.  The  respondent  vide

letter dated 8th November 2006, not only admitted her misdeeds but

assured the Chief Manager of returning the amount commensurate

to the financial loss caused to the Bank because of her lapses at the

earliest, failing which suitable action can proceed against her. The

said communication reads thus:

“To, Chief Manager  State Bank of India Main Branch, Durg (Ch.G.)

Sir,

Context :- Your  memo  number  –  Serial number/branch/2006 – 07/196  

dated 30.10.2006.

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 and I am suffering from the feeling of guilt.

1. Whatever amount comes in this context that I will try to pay as early as possible after obtaining the amount

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from the  known sources.   At  present  I  am able  to arrange Rs. 60,000/- and I 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.

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.

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 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  mental  stress  and  situation.   By  giving  me apology, proper time to accomplish my efforts.  

I assure you that I will not commit this kind of mistake in future.  

If I fail in the above efforts, you are independent for initiating proceedings on me.  

Thanking you  Dated :- 8.11.06

Sd/- (Neelam Nag)

Senior Assistant “

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3. Nevertheless,  a  FIR was lodged in connection with the said

irregularities and misdeeds committed by the respondent bearing

FIR No.1043/2006, 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  Ratre  who  had  account  in  State  Bank  of  India

issued  two  cheques  in  favour  of  Tanishk  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.I. Branch dispatched

those  cheques  to  State  Bank  of  India  at  Durg,  Bhilai.  The

respondent was posted in that Branch at the relevant time, who in

connivance with the co-accused dispatched those cheques to State

Bank of India, 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.I.  Branch  at  Bhilai.

Resultantly,  U.T.I.  Branch  at  Bhilai  as  per  the  settled  practice

assumed  that  the  cheques  have  been  cleared  and  released  the

payment to Tanishk Securities, by endorsing payment in the name

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of State Bank of India. Thereby causing a loss of Rs. 13 lakhs to

State Bank of India. That was revealed only on 28.10.2006 during

reconciliation  of  accounts  of  the  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 sent by her to the Chief Manager of the

appellant-Bank dated 8th November, 2006.  In a written admission

given on 6th November, 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

the investigation and filed charge-sheet No. 63/2007, under Section

173 of the Criminal Procedure Code, on 6th February, 2007, before

the Magistrate. Criminal Complaint No. 1043/2006 was registered

for  offences  punishable  under  Sections  409,  34  of  IPC.  The

competent  Court  then  proceeded  to  frame  charges  against  the

respondent on 12th June 2007. Thereafter, on 7th April, 2008, the

appellants, through appellant No.2, called upon the respondent to

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offer an explanation about the alleged irregularities and misdeeds

committed by her. The respondent vide communication dated 15th

April,  2008  simply  denied  all  the  allegations.  The  Competent

Authority,  therefore,  decided  to  initiate  departmental  enquiry

against  the  respondent,  for  which,  charge-sheet  dated  19th

September, 2008 was issued to the respondent, which reads thus:

“Shri Neelam Nag, Senior Assistant (Suspended) Indian State bank Bhilai Steel Plant Area Branch Bhilai Sr. No. Ankara/Area 3/ Anushansha / 820 19th Sep, 2008

Charge sheet

I in the capacity of disciplinary authority charge following charges upon you

You  have  committed  following  mistake  during working in Durg Branch.

i. You have given identification to Lachhman Parsad Ratre for opening the account thereafter through this account through accounts you have manage the operation of the Fund of other administrative accounts.

ii. Through saving account no. 01119-0021348 two cheques bearing no. 463553 and 4635554 which is amounting to Rs. 6,50,00.00 each in favour of Tanishk Securities on 29.5.2006 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.

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iii. Two  cheque  bearing  no.  4635553  and  463554 each 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.  

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.  

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 of it  install  the slip of Shri  Rate saving 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. 48,0000 of 16 challan  of  State  Govt.  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 situated at Bhilai  which  has  deposited  in  Durg  Branch should presented for collection, you changing the deposit  slip  of  Chattisgarh  State  Electricity Division  current  account  preparing  the  deposit slip of  Lachhman Ratre has changed.  Therefore the  FDR  of  current  of  Chattisgarh  State Electricity  division  has  misused  (Annexure  2 (12)).  

viii. On 9th August, 2006 Chattisgarh State Electricity divisions  has  deposited  two  cheque  total amounting  to  Rs.  125916/-  of  other  banks  for deposit in their current account you by changing the  slip.   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

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returned but 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 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  clear  detail  is enclosed in Annexure 1 & 2 in which the current account of Chattisgarh State Electricity division and the amount of  Govt.  challan with cheating deposit in the account 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 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 and punishable.

(2) In this regard you are hereby directed in regard to charge sheet submit your written reply within 7 days of the receipt of this letter, in case during this  period  you  did  not  give  your  reply  then  I should admit that in regard to this letter you did 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/- Disciplinary Officer and Assistant Chief Managing Director Administration)  

Sd/- Enclosure : above. 57/dpc/staff

Signature 20.9.2008”

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5. The  appellant  No.2  then  instituted  disciplinary  proceedings

against  the  respondent  on  23rd October  2008,  which  fact  was

notified to the respondent on 31st October 2008, by the appellant

No. 3 calling upon her to attend the same. The respondent did not

cooperate and instead 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 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 10th April,  2002 which grants protection to the

employees  of  the  appellant-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 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

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the view taken by the learned Single Judge and negatived the stand

taken by the appellant in her favour. The Division Bench held that

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:

“Therefore, we dispose of this appeal by upholding the order  of  the  learned  Single  Judge  with  the  following directions:

(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 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. &

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-

1

 (2014) 3 SCC 636

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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 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 1st July 2016, the

State of  Chhattisgarh was directed by this Court to file a status

report  regarding  the  criminal  proceedings  launched  against  the

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

of  Chhattisgarh  has  filed  an  affidavit  of  the  Additional

Superintendent of Police dated 1st August 2016. From this affidavit,

it is noticed that the criminal trial No.1043/2006 before framing of

charge on 12th June 2007, was listed on 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 of  trial  was due to  multiple

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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 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 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 Delay) Dates

1. Accused Laxman Ratre not present 06 2. Accused Neelam Nag not present 14 3. Prosecution witnesses not present 10 4. Accused persons not present 05 5. ADPO not present 23 6. Documents 07 7. Arguments 05 8. Application for bail 07 9. Receiving of demand letter 06 10. Case Diary sent to the Magistrate 05 11. Receiving of Diary 04 12. Court holiday 03 13. Strike of Advocates 02 14. Service of copy of the case 01 15. Change of charges 01 16. Time sought by the Advocates of

accused persons 01

17. Presiding Officer on leave 05 18. Transfer of Presiding Officer 03 19. Reply 04 20. Keeping current status 04 21. Evidence 10 22. Case sent to copying department 03 23. Issuance of instruction regarding  

case hand-over 01

24. Receiving of case on transfer 01 25. Framing of charges 01 26. Order 01

                                                           TOTAL= 133 DAYS

10. It is further submitted that the perusal of the Court  proceedings  reveal  the  dates  on  which,  the

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prosecution witness were present and the outcome on that date :  

30.06.2007 Prosecution  witnesses  Joy  C.  Aryakara and  Pushpkala  present  in  Court, however,  since the matter was fixed for 02.07.2007,  they  were  asked  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  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.

08.10.2010 Prosecution  witnesses  Joy  C.  Aryakara and  Ms.  Pushpkala  present  in  Court, however,  they  could  not  be  examined since co-accused Laxman Ratre was not present  nor  any  advocate  appeared  on his behalf.

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 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.

24.09.2011 Prosecution witnesses KG. Goswami and N.  Chandrashekhar  present  in  Court. The co-accused Laxman Ratre is absent. Witness N. Chandrashekhar could not be examined due to non-availability of some documents.

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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  / Respondent  No.1  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.   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 examined.  The delay in completion of trial is due to reasons mentioned 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 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 10th April 2002, arrived at by

the Management of 52 ‘A’ Class Banks as represented by the Indian

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Banks’  Association  and  their  workmen  under  Section  2(p)  and

Section  18(1)  of  the  Industrial  Disputes  Act,  that  cannot  be

considered 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 of  justice and in

particular  larger  public  interest,  considering  the  fact  that  the

misconduct is in relation to embezzlement of substantial amount by

an employee of the public sector 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 cannot be treated as an impediment thereto. Any

other interpretation of Clause 4 of the Settlement would be against

public policy and also encouraging unscrupulous employees of the

bank to stall the disciplinary proceedings by taking advantage of

the pending criminal 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.

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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 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 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  for  that  matter  compel  her  to  depose  against

herself on those facts.

8. We have heard the learned counsel  for  the parties  at  some

length. The only question that arises for consideration, is no more

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res-integra.   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.  The contour of the

approach to be adopted by the Court has been delineated in series

of decisions.  This Court in Karnataka SRTC vs. M.G.Vittal Rao2

has summed 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 proceedings may be stated would 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.

(iii)     Such defence ought not to be permitted 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 disciplinary proceedings.

(iv)    Departmental proceedings can go on simultaneously to the 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)

2  (2012) 1 SCC 442

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9. The  recent  decision  relied  by  the  appellant  in  the  case  of

Stanzen (supra), has adverted to the relevant decisions3 including

the  case  of  M.G.Vittal  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 cases where the criminal charge against the  employee  is  grave  and  continuance  of  the  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 of law and fact.  The Court 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  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 of the employees.”

                                                                (emphasis supplied)

10. The Court then went on to examine the facts of that case and

observed in para 18 as follows:

3    (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 of Rajasthan v. B.K. Meena   

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“18.   ……….The charge-sheet, it is evident from the record, 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 of 23 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 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  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 all aspects 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  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  will  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 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 of non-availability of the defence  lawyers  to  cross-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,

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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 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

alleged misconduct has been committed as far back as May 2006.

The FIR was registered on 5th December, 2006 and the charge-sheet

was  filed  in  the  said  criminal  case  on 6th 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  12 th

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 not solely attributable to

the  respondent.  From  the  information  made  available  by  the

Additional  Superintendent  of  Police  on  affidavit,  it  does  indicate

that  atleast  26  adjournments  are  directly  attributable  to  the

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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  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

undeserving customer causing huge financial loss to the bank. The

charge in the criminal case is for offences under Section 409, 34 of

IPC, one of criminal breach of trust by a public servant.   

12. In the peculiar facts of the present case, therefore, we accede

to  the  contention  of  the  appellants  that  the  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; and in larger public interest,

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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  pending  against  the  respondent.  Clause  4  of  the

Settlement reads thus:

“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 if he had committed an act of “gross misconduct” or of “minor misconduct”,  as defined 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)

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

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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 29th May 2006, she was

working as Assistant (Clearing). 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 meaning of the Industrial Disputes Act,

1947.  Both  sides,  however,  have  relied  on  the  said  Clause  and

invited us to spell out its purport.  

15. 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 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.

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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 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.  

17. Notably, in the present case inspite of a 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  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 June,

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2010.  Pendency of criminal 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  departmental  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  charges  on  12th 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 offence of breach of trust and embezzlement), the arrangement

predicated  in the case of Stanzen (supra) would meet the ends of

justice.   For,  the  disciplinary  proceedings  instituted  against  the

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respondent  cannot  brook  any  further  delay  which  is  already

pending for more than 10 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

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 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. 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.

22. We  also  direct  that  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.

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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 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 this order.

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.  

…………………………..CJI (T.S.Thakur)

…………………………….J. (A.M.Khanwilkar)

New Delhi, 16th September, 2016