Supreme Court Upholds Dismissal Despite Acquittal in Corruption Case: Karnataka Power Transmission Corporation Ltd. vs. Sri C. Nagaraju (2019)

Date of the Judgment: 16 September 2019

Citation: 2019 INSC 929

Judges: L. Nageswara Rao, J., Hemant Gupta, J.

Can an employee be dismissed from service based on a departmental inquiry, even if a criminal court has acquitted them on the same charges? The Supreme Court of India recently addressed this question in a case involving a Junior Engineer accused of bribery. The court clarified that a departmental inquiry can proceed independently of a criminal trial, especially when the evidence presented in each is different. This judgment underscores the distinct nature of these proceedings and their different standards of proof. The bench comprised of Justice L. Nageswara Rao and Justice Hemant Gupta.

Case Background

In 1974, Sri C. Nagaraju was appointed as a Meter Reader-cum-Clerk in the Karnataka Power Transmission Corporation Limited (KPTCL). He was promoted to Junior Engineer in 1997. In 1998, while working as a Junior Engineer, he was accused of demanding a bribe of Rs. 1,250 from an electrical contractor, Mr. K. Chandrasekhar, for providing an electrical connection to one of his clients, Mrs. Savithramma. Mr. Chandrasekhar alleged that he had paid an advance of Rs. 750. Unwilling to pay the full amount, Mr. Chandrasekhar lodged a complaint with the Lokayukta Police. A trap was laid, and Mr. Nagaraju was caught accepting the bribe. Subsequently, a charge was framed against Mr. Nagaraju by the Karnataka Lokayukta on 21 June 2003. This charge alleged that he had failed to maintain absolute integrity and devotion to duty, violating the K.E.B. Employees Service (Conduct) Regulation Rules, 1988.

Timeline

Course of Proceedings

Following the complaint, a departmental inquiry was initiated against Mr. Nagaraju. The Inquiry Officer, Additional Registrar of Enquiries-I, Karnataka Lokayukta, found him guilty of the charges. The Lokayukta approved the findings and imposed a penalty of dismissal. KPTCL issued a final notice to Mr. Nagaraju, seeking an explanation as to why the inquiry report should not be accepted. After considering his reply, KPTCL dismissed him from service on 23 March 2007, which was affirmed by the Appellant Authority on 24 June 2008. Subsequently, Mr. Nagaraju was also tried in the Court of Special Judge, Mysore, for offences under Sections 7, 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988. However, he was acquitted as the prosecution witnesses turned hostile. Aggrieved by the dismissal, Mr. Nagaraju filed a writ petition in the High Court of Karnataka, which was allowed by a single judge, and the decision was upheld by a Division Bench. The High Court relied on previous Supreme Court judgments, stating that Mr. Nagaraju should not have been dismissed after being acquitted by the Criminal Court. KPTCL then appealed to the Supreme Court.

Legal Framework

The case primarily revolves around the interpretation and application of the following legal provisions:

• Rule 3(1)(i) & (iii) of K.E.B. Employees Service (Conduct) Regulation Rules, 1988: This rule pertains to the conduct expected of a government servant, requiring them to maintain absolute integrity and devotion to duty. The charge against Mr. Nagaraju stated that he violated this rule by demanding and accepting a bribe, which was considered an act unbecoming of a government servant.
• Clause VIII of Regulation No. 9 of Karnataka Electricity Board Employees (Classification, Discipline, Control and Appeal) Regulations, 1987: This regulation outlines the penalties that can be imposed on employees for misconduct, including dismissal from service. The Lokayukta imposed this penalty on Mr. Nagaraju after finding him guilty in the departmental inquiry.
• Sections 7, 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988: These sections deal with offences related to public servants taking illegal gratification. Mr. Nagaraju was tried under these sections in the criminal court but was acquitted due to lack of credible evidence.

Arguments

Appellant (Karnataka Power Transmission Corporation Limited) Arguments:

• The charges framed against Mr. Nagaraju in the criminal court and the departmental inquiry were different.
• The complainant turned hostile in the criminal court, leading to acquittal, but the evidence in the departmental inquiry was different and sufficient to prove the charge.
• An acquittal by a Criminal Court does not bar a departmental proceeding.
• The standard of proof in a criminal trial is different from that in a departmental proceeding. Criminal trials require strict rules of evidence, whereas departmental inquiries consider the preponderance of probabilities.
• Relied on the judgments of the Supreme Court in Depot Manager, A.P. State Road Transport Corporation v. Mohd. Yousuf Miya and Ajit Kumar Nag v. General Manager (PJ), Indian Oil Corpn. Ltd., Haldia to support their arguments.

Respondent (Sri C. Nagaraju) Arguments:

• The essence of the charge in the criminal trial and the departmental inquiry was the same.
• The Departmental Authorities were bound by the judgment of the Criminal Court.
• The order of dismissal could not be passed after his honorable acquittal by the Criminal Court.
• There was no truth in the allegation of demand and acceptance of illegal gratification.
• The evidence adduced in the departmental inquiry was not sufficient to warrant the penalty of dismissal.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. Whether the High Court was correct in setting aside the order of dismissal of Respondent No.1 from service after he was acquitted by the Criminal Court.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

Judgment

How each authority was viewed by the Court?

• Captain M. Paul Anthony v. Bharat Gold Mines Ltd. [1999] 3 SCC 679: The Court distinguished this case, stating that it was not applicable because the departmental inquiry in that case was ex parte and the evidence was the same in both proceedings, unlike in the present case.
• G.M. Tank v. State of Gujarat [2006] 5 SCC 446: The Court distinguished this case as well, noting that the evidence in the departmental inquiry and criminal trial was the same in that case, whereas it was different in the present case.
• Depot Manager, A.P. State Road Transport Corporation v. Mohd. Yousuf Miya [1997] 2 SCC 699: The Court relied on this judgment to emphasize that an acquittal by a criminal court does not bar departmental proceedings.
• Ajit Kumar Nag v. General Manager (PJ), Indian Oil Corpn. Ltd., Haldia [2005] 7 SCC 764: The Court relied on this judgment to highlight the different standards of proof and objectives of criminal and departmental proceedings.
• State of Rajasthan v. B.K. Meena [1996] 6 SCC 417: The Court relied on this judgment to highlight the different standards of proof and objectives of criminal and departmental proceedings.
• Krishnakali Tea Estate v. Akhil Bhartiya Chah Mazdoor Sangh [2004] 8 SCC 200: The Court relied on this case, stating that acquittal due to lack of evidence in criminal court does not rescue the delinquent when sufficient evidence is available in departmental proceedings.

What weighed in the mind of the Court?

The Supreme Court emphasized the distinct nature of departmental and criminal proceedings. The Court noted that the purpose of a departmental inquiry is to determine whether an employee is guilty of misconduct under the conduct rules, while a criminal trial determines whether a person has committed an offense under the law. The standard of proof is also different, with departmental inquiries relying on the preponderance of probabilities, while criminal trials require proof beyond a reasonable doubt. The Court was influenced by the fact that the evidence in the departmental inquiry was different from that in the criminal trial. The complainant and other witnesses testified against Mr. Nagaraju in the departmental inquiry, while they turned hostile in the criminal trial. This difference in evidence was crucial in the Court’s decision to uphold the dismissal order.

Logical Reasoning:

The Court considered alternative interpretations, such as the argument that the departmental authorities were bound by the criminal court’s acquittal. However, this was rejected because the evidence presented in the two proceedings was different. The Court also rejected the argument that the departmental inquiry was not sufficient to warrant the penalty of dismissal, as the evidence was considered credible and sufficient. The final decision was reached by emphasizing the independent nature of the two proceedings and the different standards of proof.

The Court stated, “Acquittal by a criminal court would not debar an employer from exercising the power to conduct departmental proceedings in accordance with the rules and regulations.” The Court further clarified that “The two proceedings, criminal and departmental, are entirely different. They operate in different fields and have different objectives.” Additionally, the Court noted, “The standard of proof in a Departmental Inquiry is not strictly based on the rules of evidence.”

Key Takeaways

• Departmental proceedings and criminal trials are distinct and independent of each other.
• An acquittal in a criminal court does not automatically bar or invalidate departmental proceedings.
• The standard of proof in departmental inquiries is based on the preponderance of probabilities, which is different from the strict rules of evidence in criminal trials.
• Employers can proceed with disciplinary actions based on departmental inquiries, even if the employee has been acquitted in a criminal court, provided the evidence is different and sufficient.

This judgment clarifies that employers are not bound by the outcome of criminal trials when conducting departmental inquiries. It reinforces the principle that the objectives, procedures, and standards of proof are different in the two proceedings. This has significant implications for employers and employees in cases involving misconduct allegations.

Directions

No specific directions were given by the Supreme Court in this case.

Development of Law

The ratio decidendi of this case is that departmental proceedings can continue independently of criminal proceedings, and an acquittal in a criminal trial does not bar a departmental inquiry. This judgment reinforces the existing legal position that the standard of proof and the objectives of departmental and criminal proceedings are different. There is no change in the previous position of law but it clarifies the circumstances under which the departmental proceedings can continue even after acquittal by criminal court.

Conclusion

The Supreme Court allowed the appeal, setting aside the High Court’s decision. The court held that the dismissal of Sri C. Nagaraju by KPTCL was valid, despite his acquittal in the criminal trial. This judgment underscores the independence of departmental proceedings and criminal trials, highlighting that different standards of proof and objectives apply in each.

Category

Parent Category: Service Law

Child Categories:

• Disciplinary Proceedings
• Departmental Inquiry
• Acquittal
• Prevention of Corruption Act, 1988
• Rule 3(1)(i) & (iii) of K.E.B. Employees Service (Conduct) Regulation Rules, 1988
• Clause VIII of Regulation No. 9 of Karnataka Electricity Board Employees (Classification, Discipline, Control and Appeal) Regulations, 1987
• Sections 7, 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988

FAQ

Q: Can an employee be dismissed from service even if a criminal court has acquitted them on the same charges?

A: Yes, an employee can be dismissed from service based on a departmental inquiry even if a criminal court has acquitted them, provided the evidence in the departmental inquiry is different and sufficient to prove misconduct. The Supreme Court clarified that departmental and criminal proceedings are distinct, with different standards of proof and objectives.

Q: What is the difference between a departmental inquiry and a criminal trial?

A: A departmental inquiry is conducted by the employer to determine if an employee has violated conduct rules, while a criminal trial is conducted by the state to determine if a person has committed an offense under the law. The standard of proof is different: departmental inquiries rely on the preponderance of probabilities, while criminal trials require proof beyond a reasonable doubt.

Q: What does “preponderance of probabilities” mean in the context of a departmental inquiry?

A: “Preponderance of probabilities” means that the evidence presented in a departmental inquiry must be more likely than not to support the charges against the employee. This is a lower standard of proof than “beyond a reasonable doubt,” which is required in criminal trials.

Q: If a witness turns hostile in a criminal trial, can their testimony still be used in a departmental inquiry?

A: Yes, if a witness turns hostile in a criminal trial, their testimony can still be considered in a departmental inquiry if it is credible and supported by other evidence. The Supreme Court noted that the evidence in the departmental inquiry was different from that in the criminal trial, and this difference was crucial in their decision.

Q: What should an employee do if they are facing both a criminal trial and a departmental inquiry?

A: An employee facing both a criminal trial and a departmental inquiry should seek legal counsel to understand their rights and obligations. It is important to cooperate with both proceedings while ensuring that their defense is adequately presented in each.

Q: Does this judgment mean that employers can always dismiss employees even after an acquittal in a criminal trial?

A: No, this judgment does not mean that employers can always dismiss employees after an acquittal. The judgment clarifies that departmental proceedings can continue independently if the evidence is different and sufficient. However, if the evidence is the same and the employee is acquitted, the departmental proceedings may not be valid.