This case, K. Prabhakar Hegde vs. Bank of Baroda, originated from disciplinary proceedings against K. Prabhakar Hegde, who was an employee of Vijaya Bank, which later merged with Bank of Baroda.
On January 4, 1999, he was served a notice by disciplinary authority, alleging serious irregularities and lapses. These included approving temporary overdrafts (TOD) for M/s Kunal Travels Pvt. Ltd. and a lack of proper notice regarding a separate incident.
A charge sheet was issued on January 30, 2001, for “disciplinary and appeal” regulations. An Inquiry Officer was appointed, whose report, dated November 28, 2001, found the charges proved. On May 17, 2002, the Disciplinary Authority ordered that Hegde would be deemed to have retired on superannuation on June 30, 2002, but his dismissal from service was ordered effective March 27, 2003, after his appeal was dismissed.
Hegde’s writ petition against the dismissal was initially allowed by a Single Judge of the High Court in February 2009, but a Division Bench later set aside this order and dismissed the writ petition. This led to the civil appeal before the Supreme Court.
Natural Justice and Procedural Safeguards: The Law at Hand: The case heavily revolves around the principles of natural justice, particularly the “right to be heard” and the concept of “prejudice”.
Core Principles:
Natural justice requires a fair and impartial hearing before condemnation. The question often arises whether failure to observe natural justice matters if facts are admitted or indisputable, or if observance would have made no difference (the “no prejudice” rule).
Key Precedents: The judgment frequently references landmark decisions of the Supreme Court, including:
S.L. Kapoor v. Jagmohan: A landmark decision on natural justice, especially the right to be heard before condemnation.
Olga Tellis v. Bombay Municipal Corporation and Union of India v. Tulsiram Patel: These cases confirmed that violation of natural justice principles can lead to arbitrary outcomes, especially if they deny the right to make representation.
Sunil Kumar Banerjee v. State of West Bengal & Ors.: A three-Judge Bench decision that considered decisions in Union of India v. Alok Kumar, Vijay Kumar Nigam v. State of MP, and Syndicate Bank & Ors. v. Venkatesh Gururao Kurati.
K.C. Mathew (and related cases like Bibhuti Bhusan Das Gupta and Tara Singh): These cases deal with the examination of the accused under Section 342 of the 1898 Code of Criminal Procedure (akin to Section 313 of the 1973 Code and Section 123 of the Evidence Act) and whether the omission to do so causes prejudice in disciplinary or criminal proceedings.
Relevant Regulations:
Regulation 6(17) of the 1981 Regulations (Discipline and Appeal Rules): This regulation specifies the procedure for furnishing documents and evidence to the charged officer.
Regulation 8(19) of the 1969 Rules: Also mentioned in the context of procedural safeguards.
Central Vigilance Commission Recommendations: The role and binding nature of CVC recommendations in disciplinary matters were also discussed.
The Court’s Deliberation: Procedural Fairness and Prejudice
The Supreme Court examined several contentions raised by the appellant, particularly focusing on whether the High Court erred in its judgment and if the principles of natural justice were violated.
Preliminary Inquiry Report: The appellant contended that the High Court did not consider the decision rendered by the Single Judge regarding the preliminary inquiry. The High Court had upheld the view that the preliminary inquiry report was not necessary to take disciplinary action and that its non-furnishing did not form any foundation for passing the order. The Court clarified that non-furnishing of a preliminary inquiry report does not automatically lead to prejudice. The purpose of such a report is to decide whether disciplinary proceedings should be initiated, not to establish guilt. If the findings of the inquiry officer are based on oral and documentary evidence presented during the inquiry where the charged employee had an opportunity to cross-examine, the preliminary report’s non-furnishing is inconsequential.
Examination of the Accused (Section 342 CrPC Analogy): The appellant argued that the omission to examine him during the inquiry caused prejudice. The Court extensively reviewed precedents concerning Section 342 of the Criminal Procedure Code (1898) and its equivalent (Section 313 of the 1973 Code and Section 123 of the Evidence Act). It was reiterated that every error or omission in examining the accused does not vitiate the inquiry unless it has led to actual prejudice. In this case, the Court found no evidence that the appellant was denied an opportunity to explain circumstances or defend himself. He had responded to notices and submitted facts.
CVC Recommendation: The appellant argued that the CVC recommendation to continue the disciplinary proceedings was flawed and violated his rights. The Court clarified that CVC recommendations are advisory, not mandatory, and should not lead to arbitrary outcomes or denial of natural justice. If following a CVC recommendation infringes upon a person’s rights or is against the principles of natural justice, it should not be blindly followed. In this case, the CVC’s recommendation regarding compulsory retirement/dismissal was challenged.
Continuation of Proceedings Post-Superannuation: The appellant argued that the disciplinary authority had proposed to impose a penalty of compulsory retirement, and the Chief Vigilance Officer had then proposed dismissal. The Court noted that disciplinary proceedings can continue even after an employee has attained superannuation if they began before retirement.
Interpretation of Regulation 6(17): The Court delved into the words ‘may’ and ‘shall’ in Regulation 6(17) regarding the furnishing of documents. It concluded that while the inquiry officer ‘may’ allow inspection of documents not relied upon, there is no absolute obligation to supply every document if it does not lead to actual prejudice.
The Supreme Court ultimately reasoned that the High Court’s decision to dismiss the writ petition was flawed because it overlooked significant procedural irregularities that caused actual prejudice to the appellant, such as the denial of his right to respond to the inquiry officer’s report and the failure to consider the impact of continuing proceedings after superannuation.
Justice Served: A Quashed Dismissal
The Supreme Court, after reviewing the facts and legal arguments, reached the following conclusion:
The appeal was disposed of, setting aside the impugned order of the High Court. The appellant shall not be entitled to any retirement benefits except to the extent indicated hereafter. He shall be entitled to a lump-sum amount equal to the quantum of gratuity which would have been payable to him had he not been fastened with the order of dismissal. Such lump-sum amount should be released in favour of the appellant within a period of eight weeks from the date of the order.
Any criminal proceedings, if any, pending against the appellant may be taken to its logical conclusion in accordance with law, and the current judgment does not affect them.
In essence, the dismissal was quashed, and the appellant was granted a modified retirement benefit, acknowledging procedural issues but not necessarily full exoneration or all benefits. The High Court’s decision to remand the matter to the disciplinary authority for re-start of inquiry was overruled.
K. PRABHAKAR HEGDE V. BANK OF BARODA
Supreme Court: 2025 INSC 997 (19-08-2025)
