Supreme Court Upholds Disciplinary Proceedings Despite Pending Criminal Case: Eastern Coalfields Ltd. vs. Rabindra Kumar Bharti (2022)

Introduction

Date of the Judgment: April 7, 2022

Citation: (2022) INSC 399

Judges: K.M. Joseph, J., and Hrishikesh Roy, J.

Should a departmental inquiry against an employee be halted simply because a criminal case on similar charges is ongoing? The Supreme Court of India recently tackled this question in a case involving Eastern Coalfields Limited and one of its employees. The core issue was whether the High Court was right in staying the dismissal of an employee pending the outcome of a criminal trial, especially when the departmental inquiry had already been allowed to proceed. The Supreme Court, in this judgment, clarified the circumstances under which disciplinary proceedings can continue despite a parallel criminal case.

Case Background

Rabindra Kumar Bharti, a clerk at Eastern Coalfields Limited, was accused of demanding bribes to clear retirement formalities. On August 31, 2015, he was arrested by the Central Bureau of Investigation (CBI). A case was registered against him under the Prevention of Corruption Act, 1988. Following his arrest, Eastern Coalfields Limited initially suspended Bharti on August 3, 2015, but revoked the suspension on September 15, 2015. A departmental enquiry notice was served to Bharti on March 20, 2017. This led Bharti to file a writ petition before the High Court.

Timeline

Course of Proceedings

Initially, the High Court, on June 29, 2017, allowed the departmental inquiry to proceed but restricted the final order without the Court’s permission. After the inquiry, Eastern Coalfields Limited sought leave to pass final orders, which was granted by a Single Judge of the High Court on February 10, 2021. Subsequently, the company dismissed Bharti on March 2, 2021. Bharti then appealed to the Division Bench of the High Court, which stayed the dismissal order until the conclusion of the criminal case. The Division Bench also stated that the dismissal order would only become effective if the criminal case resulted in a conviction. This decision was then challenged by Eastern Coalfields Limited before the Supreme Court.

Legal Framework

The case primarily revolves around the interplay between disciplinary proceedings and criminal trials, specifically concerning the principle that an employee should not be compelled to disclose their defense prematurely in a disciplinary proceeding if a criminal trial is also pending on similar charges. The Prevention of Corruption Act, 1988, under which the criminal case was filed against the respondent, is also relevant to the context of the case. The Supreme Court also considered various precedents, including:

• Capt. M. Paul Anthony v. Bharat Gold Mines Ltd. [(1999) 3 SCC 679]: This case discussed the circumstances under which departmental proceedings can be stayed due to a pending criminal case. It held that the charges in the criminal case must be of a grave and serious nature involving complicated questions of fact and law.

• Depot Manager, A.P. SRTC v. Mohd. Yousuf Miya [(1997) 2 SCC 699]: This case held that there is no bar to simultaneously proceed with departmental inquiry and criminal trial unless the charge in the criminal case is of a grave nature involving complicated questions of fact and law.

• State of Rajasthan v. B.K. Meena and Ors [(1996) 6 SCC 417]: This case stated that the only ground for setting aside disciplinary proceedings is that the findings of the trial court in the criminal case may not be prejudiced.

• Pandiyan Roadways Corpn. Ltd. v. N. Balakrishnan [(2007) 9 SCC 755]: This case discussed two streams of judicial views on how an acquittal in a criminal case may impact disciplinary proceedings.

• Karnataka Power Transmission Corpn. Ltd. v. C. Nagaraju and Another [(2019) 10 SCC 367]: This case reiterated that acquittal by a criminal court does not bar an employer from conducting departmental proceedings.

Arguments

Appellant’s Arguments (Eastern Coalfields Limited):

• The Division Bench of the High Court erred in delaying the departmental proceedings because of the pending criminal case.

• The principle of delaying departmental proceedings to prevent an employee from disclosing their defense is not applicable here because the High Court had already permitted the inquiry to continue on June 29, 2017.

• The respondent participated in the inquiry, and the dismissal order was passed after the Single Judge’s order on February 10, 2021.

• The dismissal order was not challenged before the Division Bench.

• An acquittal in the criminal trial would not affect the disciplinary proceedings, as both have different purposes and standards of proof.

Respondent’s Arguments (Rabindra Kumar Bharti):

• The impugned order of the High Court does not require any interference.

• The disciplinary proceedings were not conducted properly.

• The charges, witnesses, and evidence in both the criminal case and the departmental proceedings are the same.

• Relied on the case of Capt. M. Paul Anthony v. Bharat Gold Mines Ltd. [(1999) 3 SCC 679], arguing that departmental proceedings should be stayed when the criminal charges are grave and involve complicated questions of fact and law.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the main issue that the court addressed was:

1. Whether the Division Bench of the High Court was correct in staying the dismissal of the respondent pending the outcome of the criminal trial, especially when the departmental inquiry was allowed to proceed by an earlier order of the High Court.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• Capt. M. Paul Anthony v. Bharat Gold Mines Ltd. [(1999) 3 SCC 679]: The Court discussed this case but distinguished it, stating that the principle of staying departmental proceedings is not applicable when the employee has already participated in the inquiry.
• Depot Manager, A.P. SRTC v. Mohd. Yousuf Miya [(1997) 2 SCC 699]: The Court noted this case, which held that departmental inquiries and criminal trials can proceed simultaneously unless the criminal charge is grave and involves complex issues.
• State of Rajasthan v. B.K. Meena and Ors [(1996) 6 SCC 417]: The Court reiterated the principle that disciplinary proceedings should not be prejudiced by the findings of a criminal court.
• Pandiyan Roadways Corpn. Ltd. v. N. Balakrishnan [(2007) 9 SCC 755]: The Court acknowledged the two streams of judicial views regarding the impact of a criminal acquittal on disciplinary proceedings.
• Karnataka Power Transmission Corpn. Ltd. v. C. Nagaraju and Another [(2019) 10 SCC 367]: The Court relied on this case to reiterate that an acquittal in a criminal case does not bar an employer from conducting departmental proceedings.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the fact that the High Court had already allowed the departmental inquiry to proceed, and the respondent had participated in it. This participation, according to the Court, negated the principle of preventing an employee from disclosing their defense prematurely. The Court also emphasized the distinct nature of disciplinary proceedings and criminal trials, stating that an acquittal in a criminal case does not automatically invalidate disciplinary actions.

Fact:Law Ratio

The Court’s reasoning was based more on the factual circumstances of the case, particularly the prior order of the High Court and the respondent’s participation in the inquiry, than on purely legal considerations.

The Supreme Court considered the alternative interpretation that the High Court had the power to stay the order of dismissal under Order 41 Rule 33 of the Civil Procedure Code. However, it rejected this interpretation, stating that this provision should not be applied across the board in all appeals and that the dismissal order was not the subject matter of challenge in the appeal.

The Court’s decision was that the High Court’s order staying the dismissal was not justified, and the dismissal order should stand.

The reasons for the decision are:

• The High Court had already permitted the departmental inquiry to continue.
• The respondent had participated in the inquiry, thus negating the principle of preventing premature disclosure of defense.
• The dismissal order was not specifically challenged in the appeal.
• The High Court’s reliance on Order 41 Rule 33 of the Civil Procedure Code was not justified in the facts of this case.

The Supreme Court quoted the following from the judgment:

“The principle that it is desirable to delay the departmental proceeding when a criminal trial is also pending, is owing to the fact that the employee would be compelled to disclose his defence before the departmental proceedings.”

“In the appeal, the order of the disciplinary authority dismissing the respondent was not the subject matter of challenge by way of an amendment in the writ petition.”

“We do not think that the High Court was justified in passing such an order in the facts of this case.”

There were no majority or minority opinions in this case.

Key Takeaways

• Departmental proceedings can continue even if a criminal case is pending, especially if the employee has already participated in the inquiry.
• An acquittal in a criminal case does not automatically nullify disciplinary actions.
• The principle of not compelling an employee to disclose their defense prematurely is not applicable if the employee has already participated in the inquiry.
• Appellate courts should not use their extraordinary powers under Order 41 Rule 33 of the Civil Procedure Code to pass orders that were not specifically challenged in the appeal.
• The judgment clarifies the circumstances under which disciplinary proceedings can continue despite a parallel criminal case, providing guidance for employers and employees alike.

Directions

The Supreme Court set aside the impugned judgment of the High Court. However, the Court made it clear that this was without prejudice to the rights of the respondent to challenge the disciplinary proceeding in any competent forum. It left open all remedies and contentions of the respondent in this regard.

Specific Amendments Analysis

There is no discussion on any specific amendment in the judgment.

Development of Law

The ratio decidendi of this case is that when a departmental inquiry has been allowed to proceed by a court and the employee has participated in it, the principle of staying disciplinary proceedings due to a pending criminal case does not apply. The Supreme Court clarified that disciplinary proceedings and criminal trials are distinct and that an acquittal in a criminal case does not automatically invalidate disciplinary actions. The judgment reinforces the principle that disciplinary proceedings can continue even if a criminal case is pending, especially if the employee has already participated in the inquiry. This case does not introduce any new legal principles but reinforces the existing legal position.

Conclusion

In the case of Eastern Coalfields Limited vs. Rabindra Kumar Bharti, the Supreme Court held that the High Court was not justified in staying the dismissal of an employee pending the outcome of a criminal trial. The Court emphasized that when a departmental inquiry has been allowed to proceed and the employee has participated in it, the principle of preventing premature disclosure of defense does not apply. The judgment reinforces the distinct nature of disciplinary proceedings and criminal trials, clarifying that an acquittal in a criminal case does not automatically invalidate disciplinary actions. The Supreme Court allowed the appeal, setting aside the High Court’s judgment, while keeping open the right of the respondent to challenge the disciplinary proceedings in a competent forum.

Category

• Service Law
  • Disciplinary Proceedings
  • Suspension
  • Dismissal
• Prevention of Corruption Act, 1988
  • Section 7, Prevention of Corruption Act, 1988
  • Section 13, Prevention of Corruption Act, 1988
• Civil Procedure Code
  • Order 41 Rule 33, Civil Procedure Code

FAQ

Q: Can my employer conduct a departmental inquiry against me if a criminal case is also pending?

A: Yes, your employer can conduct a departmental inquiry even if a criminal case is pending, especially if you have already participated in the inquiry.

Q: Will an acquittal in the criminal case automatically invalidate the disciplinary action taken against me?

A: No, an acquittal in a criminal case does not automatically nullify disciplinary actions. Both proceedings operate in different fields.

Q: What if the charges and evidence are the same in both the disciplinary and criminal proceedings?

A: Even if the charges and evidence are the same, the disciplinary proceedings can continue, especially if you have already participated in the inquiry.

Q: What is the significance of the High Court’s order allowing the departmental inquiry to continue?

A: If the High Court has allowed the departmental inquiry to continue, it means the principle of not compelling an employee to disclose their defense prematurely may not apply.

Q: What is Order 41 Rule 33 of the Civil Procedure Code?

A: Order 41 Rule 33 of the Civil Procedure Code gives appellate courts extraordinary powers to pass orders. However, the Supreme Court held that this provision should not be applied across the board in all appeals.