Inquiry Officer Must “Generally Question” Charged Officer; CVC Recommendation Cannot Be Relied On Without Disclosure

A bench of Justices Dipankar Datta and Prashant Kumar Mishra heard an appeal by K. Prabhakar Hegde against a Division Bench judgment of the Karnataka High Court that had set aside an earlier Single Judge order quashing his dismissal from bank service. The Court examined whether non‑furnishing of a preliminary inquiry report vitiated the disciplinary proceedings, whether Regulation 6(17) of the Vijaya Bank (Discipline & Appeal) Regulations, 1981 required the inquiry officer to “generally question” the charged officer, and whether disciplinary action taken after superannuation and on the basis of a Central Vigilance Commission (CVC) recommendation without disclosure was lawful.

The Supreme Court allowed the appeal in part and quashed the order of dismissal, while imposing limited monetary relief. It held that a preliminary inquiry report need not be furnished where the inquiry officer did not rely upon it in the formal inquiry, but an inquiry officer’s statutory duty under Regulation 6(17) to generally question a charged officer on circumstances appearing in the evidence was mandatory in the second limb and not merely directory. The Court emphasised that reliance on a behind‑the‑back CVC recommendation to alter proposed punishment required disclosure to the charged officer. The Court, in its reasoning, observed: The Court therefore held that circumstances adverse to the charged officer which were not put to him had to be excluded from consideration, and that the CVC recommendation could not be acted upon without furnishing it to the officer.

Background The appellant joined Vijaya Bank in 1959 and rose to be Zonal Head, Delhi. In January 1999 he faced disciplinary notices alleging irregular approvals of temporary overdrafts (TODs). A chargesheet issued in January 2001, an inquiry was conducted and the inquiry officer reported the charges proved. The disciplinary authority withheld retirement benefits, continued proceedings beyond the appellant’s superannuation date, and on 4 July 2002 imposed punishment of dismissal; an internal appeal was dismissed on 27 March 2003. A Single Judge of the Karnataka High Court quashed the dismissal on 24 February 2009 and granted consequential benefits; a Division Bench allowed the bank’s writ appeal and restored the dismissal by impugned order dated 14 December 2021.

On appeal to the Supreme Court, the bench reviewed precedents on preliminary inquiry reports, Section 342/313 jurisprudence analogies and the development of natural‑justice law since S.L. Kapoor, Olga Tellis, Tulsiram Patel and A.R. Antulay. The Court reiterated the principle that “the non‑observance of natural justice is itself prejudice” and analysed authorities holding that a preliminary inquiry was for internal satisfaction and need not be supplied if not relied upon. Applying those principles, the Court found (i) non‑furnishing of the preliminary inquiry report did not vitiate the inquiry where it was not relied upon and the appellant had full opportunity to cross‑examine the witness; (ii) the inquiry officer’s failure to generally question the appellant on adverse circumstances, as required by the mandatory limb of Regulation 6(17), was a breach of procedure; and (iii) the disciplinary authority’s reliance on a CVC recommendation behind the appellant’s back to convert a proposed compulsory retirement into dismissal required disclosure and, absent disclosure, vitiated the order. The Court quashed the dismissal but, considering delay, merger of Vijaya Bank with Bank of Baroda and the appellant’s advanced age, granted limited relief: quashing of dismissal, entitlement to a lump‑sum equal to gratuity payable had he not been dismissed, payment within eight weeks, no interest if paid within that period but interest at 9% p.a. if delayed, and no other terminal benefits. Criminal proceedings, if any, were left open.

Case No.: CIVIL APPEAL NO. 6599 OF 2025 (ARISING OUT OF SLP (CIVIL) NO. 6358 OF 2022) Case Title: K. PRABHAKAR HEGDE … APPELLANT VS. BANK OF BARODA … RESPONDENT Appearances: For the Petitioner(s): Mr. Nuli (Senior Counsel); Ms. Akhila Wali (Counsel) For the Respondent(s): Mr. Patil (Senior Counsel)