Case Name: A.M. Kulshrestha v. Union Bank of India and Ors.
Case Number: Civil Appeal No. 7039 OF 2025 (Arising out of Special Leave Petition (C) No.26933 of 2019)
Date of Judgment: 20 May 2025
Quorum: Justices Abhay S. Oka and Augustine George Masih
FACTUAL BACKGROUND
Appellant served with Union Bank of India for 34 years, was appointed as Deputy General Manager in 2016, and was to retire in June 2019. He was placed under suspension in August 2018 for having committed lapses in sanctioning credit proposals while serving as Regional Head, Meerut. Show cause notices were given in January 2019. The Bank took time to issue a charge sheet on the grounds that they would need advice from the Central Vigilance Commission (CVC) under Regulation 19. But a charge sheet dated 10th June 2019 was handed over prior to receiving such advice. The High Court quashed the suspension in June 2019 as arbitrary but permitted disciplinary proceedings to go on without salary and allowances. The appellant objected to the validity of the charge sheet for not having CVC advice, but both the Single Judge and Division Bench dismissed this contention, holding CVC advice was not required prior to issuing the charge sheet.
ISSUES FOR DETERMINATION
- Whether it is obligatory under Regulation 19 of the Union Bank of India Officer Employees’ (Discipline & Appeal) Regulations, 1976 to consult the Central Vigilance Commission (CVC) before issuing a charge sheet in vigilance cases?
- Whether the issue of charge sheet without seeking prior advice of CVC makes the disciplinary proceedings illegal or void?
- Whether the High Court was wrong in refusing to quash the charge sheet even on the admitted procedural oversight by the Bank?
LEGAL PROVISIONS
Regulation 19 of the Union Bank of India Officer Employees Regulations, 1976. Section 8(1)(h) of the Central Vigilance Commission Act, 2003. Clause 7.9.1 of the CVC’s Manual.
APPELLANT’S CONTENTIONS
The appellant argued that Regulation 19 of the 1976 Regulations requires the Respondent Bank to consult the Central Vigilance Commission (CVC) prior to taking disciplinary action in cases of vigilance.”Shall consult” is an obligatory requirement.The appellant relied on CVC Circulars of 2000, 2004, and 2015, requiring CVC advice prior to charge sheets.They also relied on Section 8(1)(h) of the Central Vigilance Commission Act, 2003, delegating monitoring of public bodies to the CVC, and Clause 7.9.1 of the 2017 Vigilance Manual, highlighting pre-consultation in corruption cases. Further, 2019 affidavits of senior bank officers corroborated the vigilance dimension and CVC consultation. Thus, the Respondents are required to consult the CVC on identification of the vigilance nature.
RESPONDENT’S CONTENTIONS
The Respondents argued that under Clause 7.9.1 of the CVC Vigilance Manual, CVC advice is needed before the final decision, but issuing a charge sheet is only the start of disciplinary action, not the final decision. Therefore, lack of prior CVC advice before the charge sheet does not invalidate the process.They stated the Bank sought CVC advice on 17th May 2019 and received it on 21st June 2019 as a precaution. The advice noted that suspending proceedings until CVC input would delay the process and allow CVC inaction to stall discipline.Vigilance proceedings don’t bar internal disciplinary steps. The Respondents denied inconsistent positions in earlier cases and argued the charge sheet was served lawfully and in good faith. They also claimed the appellant was not prejudiced by the charge sheet or ongoing disciplinary actions.
ANALYSIS
In the current case, the chronology of facts assumes importance. The appellant who joined Union Bank of India in 1984 and rose to the post of Deputy General Manager in 2016 was supposed to retire on 30th June 2019. His service remained blemish-free till his suspension on 21st August 2018. The suspension had been recommended on grounds of casualness in approving high credit limits to newly incorporated companies during his tenure as Regional Head at Meerut. Show cause notices were issued by the Bank on 18th January and 27th March 2019, and even after representations made by the appellant, no charge sheet was issued for almost a year, so he approached the Allahabad High Court challenging the suspension. To the writ petition, the Bank averred on affidavit that action for disciplining would only be taken after receipt of the Central Vigilance Commission’s (CVC) first-stage opinion. The High Court, by its 20th June 2019 order, quashed the long suspension as being arbitrary, although it allowed further proceedings. Yet, prior to receipt of the CVC’s opinion, on 10th June 2019 a charge sheet dated 10th June 2019 was served upon the appellant on 18th June 2019—twelve days prior to his superannuation. Consultation with the CVC is required in a case where there is a vigilance angle, as conceded by the Bank itself, under Regulation 19 of the 1976 Regulations. The record indicated that despite the first-stage advice being requested on 17th May 2019, it had not been received or taken into consideration when the charge sheet was delivered. The Bank had openly committed itself, by means of affidavits, to wait for the CVC’s advice before taking further steps. The release of the charge sheet was hence in violation of the commitment and made the action arbitrary and mala fide. The tardy recourse to CVC guidance—months subsequent to suspension and days prior to retirement—works further against the Bank’s case. The High Court was wrong to concentrate on whether Regulation 19 was obligatory, as the Bank had already acquiesced in its relevance. No material was brought before the High Court to evidence that the CVC guidance had been received. Almost six years have now lapsed after the retirement of the appellant, and at this point in time, reinstating disciplinary proceedings would be unfair. Although the appellant is eligible for all retiral benefits, the Court ruled that the appellant would not be entitled to back wages.
JUDGEMENT
The Supreme Court held that prior consultation with the CVC under Regulation 19 is mandatory in vigilance matters. Since the Union Bank issued the charge sheet without awaiting the CVC’s advice, the disciplinary proceedings were invalid. The Court quashed the charge sheet and set aside the High Court’s judgment. No costs were awarded.
CONCLUSION
Consequently, the disciplinary proceedings commenced against the appellant, including the 10th June 2019 charge sheet, are set aside and quashed. Although the appellant will not be eligible for any back wages or allowances of the intervening period, the Respondent Bank is hereby ordered to disburse all retiral benefits to which the appellant is legally entitled in terms of his having superannuated on 30th June 2019. The said retirement benefits should be paid into his account within three months from today’s date. The appeal is therefore granted on these conditions.
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WRITTEN BY ADI MEHTA
