Consult-First, Charge-Later: Supreme Court makes pre-charge-sheet CVC consultation binding once vigilance angle is admitted
Commentary on A.M. Kulshrestha v. Union Bank of India, 2025 INSC 744

1. Introduction

The Supreme Court’s decision in A.M. Kulshrestha v. Union Bank of India (2025 INSC 744) settles an important procedural question in the field of public-sector disciplinary law: When a disciplinary authority itself characterises a matter as having a “vigilance angle” and invokes Regulation 19 of the 1976 Discipline & Appeal Regulations, it cannot issue a charge-sheet until the Central Vigilance Commission’s (CVC) first-stage advice is actually received and considered.

The ruling voids the charge-sheet served on a senior bank officer just days before his retirement and underscores the Court’s intolerance for ad-hoc, last-minute disciplinary action that disregards both statutory regulations and prior commitments made on affidavit. Beyond the litigating parties—Mr. A.M. Kulshrestha, a Deputy General Manager, and Union Bank of India—the judgment has system-wide repercussions for all public sector banks, public sector enterprises, and central government departments where CVC consultation is contemplated.

2. Summary of the Judgment

• The Bank suspended the appellant in August 2018 for alleged irregularities in sanctioning loans.
• Regulation 19 demands CVC consultation “wherever necessary” in vigilance cases. The Bank itself sought CVC advice in May 2019 and so informed the High Court on oath.
• Nevertheless, an ante-dated charge-sheet (10 June 2019) was served on 18 June 2019—twelve days before the appellant’s retirement and without receiving CVC advice.
• The High Court upheld the charge-sheet; the Supreme Court reversed, holding:
  1. Once the Bank chooses to seek CVC advice, issuing the charge-sheet without waiting for that advice is arbitrary and violates Regulation 19;
  2. Disciplinary proceedings and the charge-sheet are quashed; however, the appellant will not receive back-wages but will get all retirement benefits within three months.

3. Detailed Analysis

3.1 Precedents Cited and their Influence

Although the reported text does not recite a litany of prior cases, the Court’s reasoning is anchored in three jurisprudential streams:

1. Mandatory vs. Directory Provisions
   Earlier cases such as S. Krishnan v. State of Madras and State of U.P. v. Manbodhan Lal Srivastava differentiate “shall” (mandatory) from “may” (directory). The Court extends this line by holding that, even if Regulation 19 is generally directory, it becomes mandatory once the employer itself decides consultation is “necessary”.
2. Doctrine of Legitimate Expectation and Promissory Estoppel in Administrative Law
   The affidavits filed by the Bank created a legitimate expectation that the charge-sheet would issue only after CVC advice. This echoes N.G. Project Limited v. Vinod Kumar Jain (2022) and Union of India v. Hindustan Development Corporation (1993). The Court uses the doctrine to estop the Bank from resiling.
3. Fairness in Disciplinary Proceedings near Superannuation
   Decisions such as Coal India v. Saroj Kumar Mishra (2007) and Ajay Kumar Choudhary v. Union of India (2015) stress that prolonged suspension and delayed charge-sheets violate natural justice. The present ruling amplifies that concern by terming the Bank’s timing “mala fide and arbitrary.”

3.2 The Court’s Legal Reasoning

1. Textual Interpretation of Regulation 19 — The clause uses two operative elements: “shall consult” (imperative) and “wherever necessary” (discretionary). The discretion ends once the authority determines that a vigilance angle exists. At that point, the obligation to wait for CVC advice solidifies.
2. Conduct of the Respondent Bank — The Bank had: (a) affirmed on affidavit that the case was of vigilance nature; (b) sought CVC advice; and (c) promised not to charge-sheet until receipt of advice. Departing from this sequence violated administrative fairness, inviting judicial correction.
3. Proportionality & Equity — Given the appellant’s 34 years of unblemished service and imminent retirement, issuing a charge-sheet without procedural compliance amounted to victimisation. The Court balanced equities by quashing the proceedings but denying back-wages, thereby protecting public interest while relieving individual hardship.

3.3 Impact on Future Cases and Legal Landscape

• Operational Protocol for all PSBs and CPSEs
  Once an entity flags a case as vigilance-oriented and pursues CVC consultation, any step that prejudices the employee—especially service of charge-sheet—must await the advice. Non-compliance will render proceedings void ab initio.
• Administrative Discipline vs. Vigilance Discipline
  The judgment clarifies that the “administrative lapses” carve-out in the CVC’s 2015 Circular cannot be invoked retrospectively to justify skipping consultation when the employer has itself treated the matter as vigilance-laden.
• Faster, Not Slower, Vigilance Mechanism
  Far from encouraging delay, the decision nudges organisations to seek CVC advice promptly to avoid procedural fatality. Expect pro-active reference to CVC within weeks—not months—of detecting alleged misconduct.
• Template for Judicial Relief
  Employees who face ante-dated or procedurally flawed charge-sheets close to retirement now have a clear path for quashing proceedings and securing retiral dues.

4. Complex Concepts Simplified

Vigilance Angle

Situations involving corruption, bribery, abuse of official position or lack of integrity requiring oversight by the CVC.

First-Stage vs. Second-Stage Advice

First-stage advice is sought before issuance of charge-sheet; second-stage advice is taken after the employee’s reply or the enquiry report.

Ante-Dated Charge-sheet

A charge-sheet whose printed date predates its actual service, often viewed with suspicion as it may veil procedural shortcuts.

Regulation 19 (Union Bank of India Officers’ Regulations, 1976)

Mandates consultation with the CVC “wherever necessary” in vigilance matters. The phrase confers initial discretion but, once exercised, converts into a binding obligation.

Promissory Estoppel in Administrative Law

Precludes a public authority from acting contrary to a representation made to a citizen, especially when the representation has been relied upon or recorded in court pleadings.

5. Conclusion

A.M. Kulshrestha is less about the semantic debate of “shall” vs. “may” and more about administrative integrity: once a public employer tells a court, an employee, and the CVC that consultation is warranted, it must honour that commitment. The Supreme Court’s message is two-fold:

1. Self-invoked consultative requirements become mandatory; bypassing them vitiates the entire disciplinary exercise.
2. Courts will protect employees from procedurally irregular action, yet temper relief (e.g., by denying back-wages) to balance public interest.

For vigilance administration across the public sector, the precedent supplies a bright-line rule: Consult first, charge later. Failure to do so risks annulment of proceedings and possible liability for mala fide action. Organisations would therefore be well-advised to streamline their liaison with the CVC, maintain diligent timelines, and avoid precipitate action—especially at the twilight of an employee’s career.