Preliminary Inquiry Report Must Be Provided To Delinquent Employee If It Is Sought To Be Relied Upon In Inquiry Report: Supreme Court

The Supreme Court held that if a preliminary inquiry report is sought to be relied upon in the inquiry report, then such preliminary inquiry report must be provided to the delinquent employee.

The Court held thus in a Civil Appeal preferred against the Judgment of the High Court, which allowed the Writ Appeal of Bank of Baroda.

The two-Judge Bench of Justice Dipankar Datta and Justice Prashant Kumar Mishra observed, “If a preliminary inquiry report or the findings therein are sought to be relied on, the witnesses whose evidence was relied on in preparing the same ought to be brought before the inquiry officer and the charged officer afforded an opportunity to cross-examine them. … If a preliminary inquiry report is sought to be relied upon in the inquiry report, then such preliminary inquiry report must be provided to the delinquent employee.”

The Bench said that once a chargesheet is drawn up and has been provided to the charged officer detailing the charges, the preliminary inquiry report is of no consequence and need not be provided to him.

Senior Advocate Anand Sanjay M. Nuli and Advocate Akhil Wali appeared for the Appellant while Senior Advocate Basava Prabhu Patil appeared for the Respondent.

Facts of the Case

In 1959, the Appellant joined Vijaya Bank (which merged with the Respondent-Bank of Baroda in 2019), as a clerk. He was promoted several times and at the relevant time, he was the Zonal Head of the Delhi zonal office. In 1999, he was served with a notice issued by his disciplinary authority alleging that he was responsible for certain irregularities and lapses committed in approving temporary overdrafts (TOD) on the accounts of various parties involving substantial amounts. The notice also alleged that he had instructed the Assistant General Manager at the Barakhamba Branch to grant a TOD of Rs. 15,00,000/- to one company via telephone. Another notice was sent in respect of a separate incident containing more or less similar allegations.

In 2001, disciplinary proceedings were drawn up and in 2002, the disciplinary authority held that though the Appellant was due to retire upon superannuation in June 2002, the disciplinary proceedings initiated against him would continue. It was further ordered that he shall not be entitled to any retirement benefits till final orders are passed in the disciplinary proceedings. Appellant superannuated from service in January 2006 and the disciplinary authority imposed the punishment of dismissal from service. The Appellant approached the Appellate Authority but his Appeal was dismissed. This was challenged before the High Court and the Single Judge allowed his Writ Petition. The Bank filed an Appeal against this and the Division Bench confirmed the dismissal order. Being aggrieved, the Appellant was before the Apex Court.

Reasoning

The Supreme Court after hearing the arguments from both sides, took note of the following important points –

i. A preliminary inquiry is conducted for the purposes of determining whether regular disciplinary proceedings are called for or not.

ii. A preliminary inquiry report is an internal document.

iii. A preliminary inquiry report or the findings therein cannot be used to come to conclusions recorded in the report of inquiry if such preliminary inquiry report/findings are based on oral and/or documentary evidence which are obtained behind the back of the charged employee and such oral/documentary evidence are not presented in the inquiry in the presence of such employee.

The Court said that in this case, a perusal of the inquiry report reveals that no reliance upon the preliminary inquiry report has been placed by the inquiry officer, and therefore, non-furnishing of the inquiry report to the Appellant is inconsequential.

“We, therefore, find no violation of the principles of natural justice; also, no prejudice has been caused to the charged officer for non-furnishing of the preliminary inquiry report. … This conclusion, is however, premised on the caveat that no rule, statutory or otherwise, mandates the furnishing of the preliminary inquiry report in this particular case”, it added.

The Court reiterated that violation of a mandatory provision of law relating to fair hearing is in itself prejudice to the person proceeded against and no need to demonstrate prejudice would arise.

“It is of particular importance when His Lordship frowned that “it ill comes from a person who has denied justice that the person who has been denied justice is not prejudiced.” (emphasis ours). It is indeed paradoxical for someone who has denied justice to a person to claim that that person, who was denied justice, is not prejudiced”, it remarked.

The Court further held that the Inquiry Officer by not generally questioning the Appellant on the circumstances available in the evidence, which were unfavourable or adverse to such officer, failed to perform a mandatory duty.

“Any such circumstance, which was unfavourable or adverse to the appellant, should have been excluded from the Inquiry Officer’s consideration. It would not commend acceptance that though the Inquiry Officer acted in derogation of the 1981 Regulations, nevertheless, his action must to be upheld on the specious ground that the appellant has failed to demonstrate prejudice”, it further noted.

The Court also observed that the overriding interest must be of a public nature and only in such cases can the claim of privilege be sustained.

“The claim of privilege cannot be invoked as a matter of reflexive recourse but must be limited to instances wherein an actual concern to public interest is envisaged. Each instance must be evaluated on a case-by-case basis and the State must be wholly convinced that the disclosure of the documents would cause grave harm and injury to public interest”, it said.

Conclusion

The Court was of the view that the proposed punishment of compulsory retirement could not have been altered to dismissal from service based on the CVC recommendation without furnishing the same to the Appellant and to this extent, the Appellate Order is legally flawed and cannot be sustained.

“… the disciplinary proceedings were continued beyond the date on which the appellant attained the age of superannuation. Because of the ultimate order we propose to make, we have not dealt with the third question noted in paragraph 16 (supra) and such question is kept open. No useful purpose, therefore, would be served in ordering a remand”, it concluded.

Directions

Moreover, the Court issued the following directions –

(i) the Appellant shall not be entitled to any terminal benefits except to the extent indicated hereafter;

(ii) he shall only be entitled to a lump-sum amount equal to the quantum of gratuity which would have been payable to him had he not been fastened with the order of dismissal;

(iii) such lump-sum amount may be released in favour of the Appellant within a period of eight weeks from date;

(iv) no amount on account of interest shall be payable to the Appellant on the said amount;

(v) however, interest @ 9% p.a. shall be payable on such amount if not released within the period stipulated above; and

(vi) the order of dismissal, in the circumstances, shall stand quashed.

Accordingly, the Apex Court disposed of the Appeal, set aside the High Court’s Judgment, and quashed the dismissal order.

Cause Title- K. Prabhakar Hegde v. Bank of Baroda (Neutral Citation: 2025 INSC 997)

Appearance:

Appellant: Senior Advocate Anand Sanjay M. Nuli and Advocate Akhil Wali.

Respondent: Senior Advocate Basava Prabhu Patil, AOR Praveena Gautam, Advocates Pawan Shukla, Tissy Annie Thomas, Rohan Bansla, and Arijeet Shukla.

Click here to read/download the Judgment