SUPREME COURT SLAMS UNION BANK FOR ISSUING CHARGE SHEET WITHOUT CVC ADVICE

The Judgment in the Case of “A.M. Kulshrestha v. Union Bank of India and Ors.CIVIL APPEAL NO.7039 OF 2025 (arising out of Special Leave Petition (C) No.26933 of 2019)was delivered by a Division Bench of the Supreme Court of India, comprising Hon’ble Justice Abhay S. Oka and Justice Augustine George Masihon 20^th May 2025. This case mainly addresses whether the issuance of a charge sheet without first obtaining the mandatory advice of the Central Vigilance Commission (CVC) violates Regulation 19 of the Union Bank of India Officers’ (Discipline and Appeal) Regulations1976.

Facts of the Case

The Appellant, A.M. Kulshrestha, served the Union Bank of India for 34 years and was promoted to the post of Deputy General Manager in 2016. He was set to retire on 30th June 2019. However, on 21st August 2018, he was suspended for allegedly adopting a casual approach in sanctioning credit proposals during his tenure as Regional Head at the Meerut branch, especially regarding large credit limits granted to newly incorporated firms. Show cause notices were issued on 18th January 2019 and 27th March 2019, but his repeated requests to revoke the suspension went unanswered. Consequently, he filed a Writ Petition in the Allahabad High Court challenging the suspension. The Bank justified the delay in initiating disciplinary proceedings by stating that the matter had been referred to the CVC for first-stage advice as per Regulation 19. The Executive Director affirmed this stance in a separate affidavit. However, without receiving the CVC’s advice, the Bank served an ante-dated charge sheet on 18th June 2019. The High Court quashed the suspension but allowed the Bank to proceed with disciplinary action. Subsequently, the Appellant challenged the charge sheet itself, alleging that it was issued in violation of Regulation 19. The High Court, in both Single Judge and Division Bench decisions, upheld the charge sheet. The matter then came before the Supreme Court.

Main Issues

• Whether consultation with the Central Vigilance Commission under Regulation 19 of the 1976 Regulations is mandatory before issuing a charge sheet in a disciplinary proceeding involving vigilance issues
• Whether the charge sheet served without obtaining the CVC’s advice was valid
• Whether the actions of the Respondent Bank amounted to mala fide and arbitrary conduct, especially at the end of the Appellant’s service

Contentions by Both Parties

Appellant’s Contentions

The Appellant argued that Regulation 19 mandates prior consultation with the CVC in cases involving a vigilance angle. The Bank itself had admitted that the case involved vigilance issues and had sought the CVC’s advice. Circulars issued by the CVC and provisions of the CVC Act and Vigilance Manual were cited to support the argument that seeking CVC advice is mandatory before issuing a charge sheet. Furthermore, the Appellant emphasized the mala fide nature of the Bank’s action, noting that the charge sheet was served just days before retirement after 34 years of unblemished service, and in contradiction to the Bank’s own sworn affidavits.

Respondent’s Contentions

The Respondent Bank, on the other hand, argued that issuance of a charge sheet does not amount to a final decision and that the advice from the CVC is only one stage in the process. It claimed that the advice was sought on 17th May 2019 and received on 21st June 2019, implying that there was no deliberate attempt to bypass procedure. The Bank also claimed that internal disciplinary processes should not be halted merely due to pending advice from the CVC and that no prejudice was caused to the Appellant by serving the charge sheet earlier.

Supreme Court

The Supreme Court noted that the Respondent Bank had clearly acknowledged the vigilance angle in the case and had already sought first-stage advice from the CVC, which had not been received by the time the charge sheet dated 10th June 2019 was served on 18th June 2019. The Court held that once the Bank had invoked Regulation 19 and approached the CVC, it was bound to wait for the advice before proceeding. Issuing a charge sheet without waiting for the advice, 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 is in the violation of the Appellant’s rights. The Supreme Court further observed that disciplinary action initiated ten months before retirement after decades of spotless service showed signs of vindictiveness and unfairness.

Given the passage of almost six years since the Appellant’s retirement, the Court ruled that it would now be unjust to allow the Bank to continue with disciplinary proceedings. Accordingly, it quashed the charge sheet dated 10th June 2019 and set aside all related disciplinary actions. However, the Appellant was denied back wages but granted full retirement benefits as if he had retired on 30th June 2019. The Bank was directed to disburse these benefits within three months.

 

19. CONSULTATION WITH CENTRAL VIGILANCE COMMISSION:

The Bank shall consult the Central Vigilance Commission wherever necessary, in respect of all disciplinary cases having a vigilance angle.

 

 

Parichaya Reddy

Associate

The Indian Lawyer & Allied Services

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