SUPREME COURT HOLDS THAT EVEN IF MISAPPROPRIATED FUNDS HAVE BEEN RETURNED DISCIPLINARY ACTION CAN CONTINUE
The Judgment in the Case of The General Manager Personnel Syndicate Bank & Ors Vs. B S N Prasad (Civil Appeal No. 6327 Of 2024) was delivered by a Division Bench of the Supreme Court of India, comprising Hon’ble Justice Abhay S. Oka and Justice Augustine George Masih, on January 21, 2025. This case examines the adequacy of evidence and fairness in disciplinary action against an employee accused of misappropriation. The Supreme Court emphasized the difference in standards of proof between criminal and disciplinary proceedings, ensuring decisions are based on sufficient evidence and adhere to natural justice Principles.
Brief Facts of the Case
The Respondent (B S N Prasad) was employed by Syndicate Bank from 2007 to 2008, initially as a clerk and later as a branch manager. He was accused of financial misappropriation, including making fictitious debits, withdrawing money fraudulently from Syndicate Kisan Credit Cards (SKCC), and sanctioning vehicle loans in violation of regulations. A disciplinary inquiry found him guilty, and he was dismissed from service in May 2012. Despite being acquitted in criminal proceedings, the Respondent challenged the dismissal through a Writ Petition, which was allowed.
Issues Raised
- Whether the charge against the Respondent was substantiated by adequate evidence.
- Whether the disciplinary inquiry was conducted fairly and in compliance with natural justice principles.
Contentions by Both Parties
Appellant’s Arguments (Syndicate Bank)
According to the Appellant, the Respondent admitted to the transactions, and the evidence, including customer statements and documentary proof, was sufficient. They also contended that the writ courts should not interfere with evidence in disciplinary inquiries and emphasized the high standards of conduct expected from bank officers, citing relevant case law.
Respondent’s Arguments
The Respondent argued that they had compensated the amount of money that was misappropriated and were cautioned earlier by the bank in 2010, indicating that no disciplinary action should have been initiated. They also asserted that the monetary loss to the bank was recovered, which should have been considered when deciding on the disciplinary action.
Supreme Court
The Supreme Court examined the adequacy of the evidence and the principles of natural justice in the disciplinary proceedings. It emphasized that an acquittal in criminal proceedings does not automatically absolve the Respondent in a disciplinary context, as the burden of proof differs. The Court noted that judicial review in such matters ensures the inquiry adheres to the rules of natural justice and that decisions are based on evidence. The Court ruled that the findings in the lower courts were erroneous, allowing the appeal and highlighting the importance of fairness and proper evidence in disciplinary actions.
Conclusion
The Court upheld the principle that disciplinary actions should be based on evidence, ensuring that fairness and natural justice are followed. It was found that the disciplinary authority’s findings lacked proper evidence and were not supported by the record, thus allowing the appeal.
Arjav Jain
Associate
The Indian Lawyer & Allied Services
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