2016 (9) TMI 1630 - SC - Indian Laws

Supreme Court directs stay of disciplinary proceedings pending criminal trial, sets one-year deadline for trial completion.

State Bank of India and Ors. Versus Neelam Nag

The Supreme Court partly allowed the appeal, directing the stay of disciplinary proceedings until the closure of prosecution evidence in the criminal ... Misconduct - gross irregularities and misconduct including of misplacing the clearing instruments relating to various customers - 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? HELD THAT:- 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 THE DIVISIONAL CONTROLLER, KSRTC VERSUS MG VITTAL RAO [2011 (11) TMI 419 - SUPREME COURT] has summed up the same and held that 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. 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 12th 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 at least 26 adjournments are directly attributable to the accused in the criminal case. That is not an insignificant fact. Whether Clause 4 of the Settlement would denude the Appellants from continuing with the disciplinary proceedings pending against the Respondent? - HELD THAT:- On the plain language of Clause 4, 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. 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. 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 - Appeal allowed in part. Issues Involved:1. Justification of the High Court's stay on disciplinary proceedings until the closure of prosecution evidence in the criminal case.2. The impact of Clause 4 of the Memorandum of Settlement dated 10th April 2002 on disciplinary proceedings.3. Whether simultaneous disciplinary proceedings and criminal trial can be conducted.4. The balance between the need for a fair trial and the timely conclusion of disciplinary proceedings.Detailed Analysis:1. Justification of the High Court's Stay on Disciplinary Proceedings:The primary issue was whether the High Court was justified in directing the stay of disciplinary proceedings initiated by the Appellant-Bank against the Respondent until the closure of recording of prosecution evidence in the criminal case. The High Court found merit in the Respondent's argument that the disciplinary proceedings and the criminal case were based on the same facts and that the Respondent might suffer prejudice if compelled to disclose her defense in the disciplinary proceedings. The Division Bench affirmed this view, stating that the Respondent might face disadvantage and prejudice if forced to disclose her defense in the disciplinary proceedings, which could be used against her in the criminal case. However, the Supreme Court noted that the criminal trial had not made effective progress and that the disciplinary proceedings could not be suspended indefinitely.2. Impact of Clause 4 of the Memorandum of Settlement:Clause 4 of the Memorandum of Settlement dated 10th April 2002 was discussed in detail. The clause allows for the continuation of disciplinary proceedings if the employee is not put on trial within a year of the commission of the offense or if the prosecution fails to proceed against the employee. The Supreme Court interpreted this clause as an enabling provision permitting the continuation of disciplinary proceedings within a reasonable time frame, rather than indefinitely suspending them due to the pendency of a criminal case. The Court emphasized that the clause should not be used to indefinitely stall disciplinary proceedings, especially in cases involving public sector bank employees and financial misconduct.3. Simultaneous Disciplinary Proceedings and Criminal Trial:The Supreme Court reiterated that there is no legal bar to conducting disciplinary proceedings and a criminal trial simultaneously. It referred to previous judgments, including Karnataka SRTC v. M.G. Vittal Rao and Stanzen Toyotetsu India Private Limited v. Girish V., which established that disciplinary proceedings can proceed alongside a criminal trial unless the criminal charges are grave and involve complex questions of law and fact. The Court noted that the disciplinary proceedings should not be unduly delayed and that the interest of both the employee and the employer lies in the prompt conclusion of such proceedings.4. Balance Between Fair Trial and Timely Conclusion of Disciplinary Proceedings:The Court emphasized the need to balance the requirement for a fair trial with the necessity of timely concluding disciplinary proceedings. It highlighted that the disciplinary proceedings had already been pending for over ten years and that further delay would not be in the interest of justice. The Court directed that the criminal trial should be expedited and concluded within one year from the date of the order. If the trial is not completed within this period, the disciplinary proceedings should be resumed and concluded by the inquiry officer concerned.Conclusion:The Supreme Court partly allowed the appeal, directing that the disciplinary proceedings be stayed until the closure of recording of prosecution evidence in the criminal trial. However, it mandated that the criminal trial be concluded within one year, failing which the disciplinary proceedings should resume. The Court balanced the need for a fair trial with the necessity of timely concluding disciplinary proceedings, ensuring that the Respondent could not indefinitely delay the process.