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Allahabad Bank And Another v. Deepak Kumar Bhola .
Factual and Procedural Background
The respondent, a Clerk-cum-Typist with Allahabad Bank’s Alambagh Branch in Lucknow during 1984-85, was investigated by the Delhi Special Police Establishment (CBI/SPE). On 18-9-1987 the CBI sought sanction to prosecute him and another employee for alleged criminal conspiracy, forgery, cheating and related offences. The Bank, invoking clause 19.3(a) of the First Bipartite Settlement, 1966, suspended the respondent on 23-9-1987. A charge-sheet dated 29-9-1987 was subsequently filed, and criminal proceedings commenced on 26-11-1987. The respondent challenged the suspension in the Allahabad High Court, which on 23-4-1991 quashed the order and directed payment of full salary and allowances. The Bank appealed to the Supreme Court of India.
Legal Issues Presented
- Whether the allegations against the respondent constituted an “offence involving moral turpitude” under clauses 19.2 and 19.3 of the First Bipartite Settlement, thereby empowering the Bank to suspend him pending prosecution.
- Whether the Bank had objectively applied its mind before issuing the suspension order, as required for valid exercise of its power.
- Whether the lapse of nearly ten years from the filing of the charge-sheet should bar the Supreme Court from interfering with the High Court’s order.
Arguments of the Parties
Appellant (Allahabad Bank)
- The acts alleged—including conspiracy, forgery, cheating and misappropriation of public money—clearly amount to offences involving moral turpitude.
- Clause 19.3(a) expressly enables suspension once the Bank forms an opinion that such an offence has been committed and prosecution is contemplated.
- Allowing an employee facing serious criminal charges to remain on duty in a sensitive post is contrary to the Bank’s fiduciary duty and public interest.
Respondent
- Almost ten years have elapsed since initiation of criminal proceedings; equity demands that the suspension not continue.
- The Bank did not apply its mind or consider relevant material objectively before passing the suspension order; hence the order is vitiated.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Pawan Kumar v. State of Haryana (1996) 4 SCC 17 | Defines “moral turpitude” as conduct that is inherently base, vile or depraved. | Relied upon to hold that forgery and misappropriation by a bank employee, if proved, squarely involve moral turpitude. |
| Baleshwar Singh v. District Magistrate and Collector, AIR 1959 All 71 | Elaborates that moral turpitude involves conduct contrary to justice, honesty or good morals, implying depravity and wickedness. | Used to reinforce that the respondent’s alleged acts disclose vileness and therefore satisfy the threshold of moral turpitude. |
Court's Reasoning and Analysis
The Supreme Court examined clauses 19.2 and 19.3 of the First Bipartite Settlement. Clause 19.3 permits suspension when, in the Bank’s opinion, an employee has committed an offence involving moral turpitude; clause 19.2 defines such offence. The Court noted the detailed CBI charge-sheet alleging conspiracy, forgery, impersonation and wrongful withdrawal of ₹56,103.77 from depositors’ accounts—acts directly impugning integrity in a banking environment.
Using the definitions articulated in Pawan Kumar and Baleshwar Singh, the Court held that the alleged offences plainly involve moral turpitude. Consequently, the Bank possessed jurisdiction to suspend the respondent. The Court rejected the High Court’s view that mere conspiracy did not implicate moral turpitude, terming it “surprising.”
The contention that there was no application of mind was dismissed: the Bank had before it the CBI report and charge-sheet, both sufficient grounds to form an objective opinion. Further, keeping an employee facing grave charges in service would expose the Bank to additional risk and undermine public confidence.
Finally, the Court found the passage of ten years irrelevant to the legality of the original suspension, particularly as the criminal trial had not yet resulted in exoneration.
Holding and Implications
APPEAL ALLOWED; High Court judgment set aside; Writ Petition No. 6118 of 1988 dismissed.
Direct Effect: The respondent’s suspension is restored, and the Bank is not required to pay the salary and allowances ordered by the High Court. The Court made no order as to costs.
Broader Implications: The decision affirms that banks may suspend employees pending prosecution for offences involving moral turpitude, especially where public funds are at stake. It underscores that serious charges such as forgery and corruption within a financial institution inherently meet the moral-turpitude standard, and that delay in proceedings does not invalidate a properly issued suspension.
B.N Kirpal, J.— This is an appeal from the judgment of the Allahabad High Court which had allowed the writ petition filed by the respondent and quashed an order of suspension which had been passed pending prosecution launched against him. Briefly stated the facts are that during the year 1984-85, the respondent was working as Clerk-cum-Typist in Allahabad Bank with one of its branches at Lucknow. An investigation was conducted by the Delhi Special Police Establishment and a case was registered on 29-8-1986. The CBI/SPE, Lucknow, after investigation, submitted a report whereupon the Superintendent of Police wrote a letter dated 18-9-1987 to the appellant-Bank for according sanction for prosecution of the respondent and one other person namely Ajay Bhatia inter alia for criminal misconduct and cheating.
2. On the receipt of the aforesaid letter the appellant took steps to accord sanction to prosecute the respondent. It also decided to take action under clause 19.3(a) of the First Bipartite Settlement, 1966 between the management and the Union and to suspend the respondent. Accordingly, the suspension order dated 23-9-1987 was passed which reads as under:
“Since it is revealed that you while functioning as Clerk-cum-Typist in Allahabad Bank, Alambagh, Lucknow during the year 1984-85 entered into a criminal conspiracy with Shri Ajay Bhatia, Clerk-cum-Cashier under suspension, Shri H.R Gurnani, Advocate, Lucknow and some unknown persons with the common object to commit the offences of criminal misconduct and cheating by adopting corrupt and illegal means or otherwise abusing your position by obtaining undue pecuniary gain for yourself and/or others and since steps to get you prosecuted have been taken, you are hereby placed under suspension with immediate effect under clause 19.3(a) of the First Bipartite Settlement dated 19-10-1966 pending prosecution proceedings against you.
During suspension period you will be paid subsistence allowance as per rules. You will also not leave station without prior permission of the competent authority during suspension period.
You are also required to submit in writing your local postal address where you want to be communicated hereafter.”
3. Pursuant to the sanction of the prosecution, a charge-sheet dated 29-9-1987 was filed in the court against the respondent. Thereupon, the court issued summons on 26-11-1987 to the respondent. After a few months, the respondent filed a writ petition in the Allahabad High Court challenging the aforesaid order of suspension. By the impugned judgment dated 23-4-1991 the High Court came to the conclusion that by the mere fact that a person had entered into the criminal conspiracy, it could not be regarded that an offence involving “moral turpitude” had been committed and, therefore, the appellant had no jurisdiction to pass the order of suspension. The High Court, accordingly, quashed the suspension order and directed the payment of full salary and allowances to the respondent. This appeal arises as a consequence of special leave having been granted to the appellant.
4. It has been contended by the learned counsel for the appellant that the respondent had committed an offence involving moral turpitude and, therefore, the appellant had the jurisdiction to suspend the respondent. The submission of Mr R.K Jain, learned Senior Counsel on behalf of the respondent, however was that on the facts and circumstances of the case when nearly 10 years have elapsed, this Court should not interfere. It was further submitted that there had been no application of mind by the Bank to the passing of the suspension order and the High Court was, consequently, right in quashing the order of suspension.
5. The charge-sheet, which was filed, specifies the acts of commission and omission which were alleged to have been committed by the respondent and others. The acts as specified by the charge-sheet are as follows:
“Shri Ajay Bhatia, while functioning as Clerk-cum-Cashier, Allahabad Bank, Alambagh Branch, Lucknow during the year 1984-85 had shown the issue of cheque books bearing Sl. No. 7771 to 7780 against Account No. 2618 in the name of Shri Gajraj Sharma, and he made the endorsement in the cheque issue register against this entry. Shri Deepak Kumar Bhola signed as Rajendra for having received the said cheque book on behalf of A/c holder, the ledgers of SB A/c No. 2284 belonging to Shri Lekha Ram, SB A/c No. 1103 belonging to Shri Shanti Prakash and Smt Prem Lata, show that the cheque book containing Cheques Nos. 7631, 7640, 7581 to 7590 and 7551-7560 respectively were issued to these A/c holders when actually none of these account-holders had ever applied for any cheque book nor actually cheque book was issued to any of these persons and fictitious entries were made in the ledger account.
The Cheque No. 7631 amounting to Rs 9560.62 paise and Cheque No. 7632 for Rs 7532.00 was purported to have been issued by genuine account-holder Lekha Ram of Account-Holder of A/c No. 2484. Another Cheque No. 7551 amounting to Rs 1400.00, Cheque No. 7552 amounting to Rs 14,800.00 purportedly have been issued by Shri Shanti Prakash A/c holder of Account No. 1103 and Cheque No. 07775 for Rs 12,800.51 purported to have been issued by Shri Gajraj Sharma account-holder of A/c No. 2618 were presented in the Corporation Bank, Quaiserbagh, Lucknow by Shri Deepak Kumar Bhola aforesaid who was working as Clerk-cum-Typist in Allahabad Bank, Alambagh Branch, Lucknow in the name of Rajendra Rathore. Shri H.R Gurnani, Advocate, Lucknow had introduced Shri D.K Bhola as Rajendra Rathore at the time of opening of account and Shri H.R Gurnani, Advocate had his own Account No. 87 in the said Corporation Bank. Shri Deepak Bhola, aforesaid submitted five pay-in-slips for depositing the Cheques Nos. 7551 for Rs 11,400.60, 7552 for Rs 14,800.00, 7632 for Rs 7532, 7631 for Rs 9560 and 7775 for Rs 12,800.51 (sic) through five Cheques Nos. 021781 dated 24-4-1984 for Rs 11,000.00, 021762 dated 1-9-1984 for Rs 1500.00, 021763 dated 15-8-1984 for Rs 17,000.00, 021765 dated 25-9-1984 for Rs 11,000.00, 021762 dated 1-9-1984 for Rs 1500.00, 021763 dated 15-8-1984 for Rs 17,000.00, 021765 dated 25-9-1984 for Rs 21,900.00 and 021767 dated 25-9-1984 for Rs 203.73 paise. The said Deepak Kumar Bhola impersonating himself as Rajendra Rathore operated SB A/c No. 3206 in Corporation Bank, Quaiserbagh, Lucknow and withdrew the entire amount. Whereas, the aforesaid account-holders Shri Lekha Ram having A/c No. 2484 Shri Shanti Prakash and Srimati Prem Lata A/c No. 1103 and Shri Gajraj Sharma A/c No. 2618 never issued these cheques and never availed the cheque facility in operating their respective accounts.
Total sum of Rs 56,103.77 was withdrawn from the said fake Account No. 3206 by Shri Deepak Kumar Bhola by issuing five cheques by signing as Rajendra Rathore.”
On the basis of the aforesaid allegations, the respondent was charged for offences punishable under Sections 120(B)/419/420/467/468/471 IPC and 5(2) read with Section 5(1)(d) of Prevention of Corruption Act, 1947.
6. It will be appropriate to refer clauses 19.2 and 19.3 of the First Bipartite Settlement under which orders were passed suspending the respondent. These clauses read as follows:
“19.2 By the expression ‘offence’ shall be meant any offence involving moral turpitude for which an employee is liable to conviction and sentence under any provision of law.
19.3 (a) When in the opinion of the management an employee has committed an offence, unless he be otherwise prosecuted, the Bank may take steps to prosecute him or get him prosecuted, and in such a case he may also be suspended.
(b) If he is convicted, he may be dismissed with effect from the date of his conviction or be given any lesser form of punishment as mentioned in clause 19.6 below.”
7. It is evident from the bare perusal of the aforesaid clauses that if in the opinion of the management, an employee has committed an offence, then the Bank may take steps to prosecute him and in such a case, he may also be suspended. The word “offence” occurring in clause 19.3(a) has been defined in clause 19.2 to mean any offence involving “moral turpitude” for which an employee is liable to conviction and sentence under any provision of law.
8. What is an offence involving “moral turpitude” must depend upon the facts of each case. But whatever may be the meaning which may be given to the term “moral turpitude” it appears to us that one of the most serious offences involving “moral turpitude” would be where a person employed in a banking company dealing with money of the general public, commits forgery and wrongfully withdraws money which he is not entitled to withdraw.
9. This Court in Pawan Kumar v. State of Haryana (1996) 4 SCC 17 (SCC at p. 21) dealt with the question as to what is the meaning of the expression “moral turpitude” and it was observed as follows:
“ ‘Moral turpitude’ is an expression which is used in legal as also societal parlance to describe conduct which is inherently base, vile, depraved or having any connection showing depravity.”
This expression has been more elaborately explained in Baleshwar Singh v. Distt. Magistrate and Collector AIR 1959 All 71 where it was observed as follows:
“The expression ‘moral turpitude’ is not defined anywhere. But it means anything done contrary to justice, honesty, modesty or good morals. It implies depravity and wickedness of character or disposition of the person charged with the particular conduct. Every false statement made by a person may not be moral turpitude, but it would be so if it discloses vileness or depravity in the doing of any private and social duty which a person owes to his fellowmen or to the society in general. If therefore the individual charged with a certain conduct owes a duty, either to another individual or to the society in general, to act in a specific manner or not to so act and he still acts contrary to it and does so knowingly, his conduct must be held to be due to vileness and depravity. It will be contrary to accepted customary rule and duty between man and man.”
10. In our opinion the aforesaid observations correctly spell out the true meaning of the expression “moral turpitude”. Applying the aforesaid test, if the allegations made against the respondent are proved, it will clearly show that he had committed an offence involving moral turpitude and, therefore, the appellant had the jurisdiction to suspend him under the aforesaid clause 19.3 The High Court observed that there was nothing on record to suggest that the management had formed an opinion objectively on the consideration of all relevant material available against the petitioner that in the circumstances of the case the criminal acts attributed to the petitioner implied depravity and vileness of character and are such as would involve moral turpitude. It did not regard entering into a criminal conspiracy to commit the aforesaid offences as being an offence involving moral turpitude. We are, to say the least, surprised at the conclusion which has been arrived at by the Allahabad High Court. There was material on record before the appellant, in the form of the report of the CBI/SPE, which clearly indicated the acts of commission and omission, amounting to “moral turpitude” alleged to have been committed by the respondent. Furthermore the respondent has been charged with various offences allegedly committed while he was working in the Bank and punishment for which could extend up to ten years' imprisonment (in case the respondent is convicted under Section 467 IPC).
11. We are unable to agree with the contention of the learned counsel for the respondent that there has been no application of mind or the objective consideration of the facts by the appellant before it passed the orders of suspension. As already observed, the very fact that the investigation was conducted by the CBI which resulted in the filing of a charge-sheet, alleging various offences having been committed by the respondent, was sufficient for the appellant to conclude that pending prosecution the respondent should be suspended. It would be indeed inconceivable that a bank should allow an employee to continue to remain on duty when he is facing serious charges of corruption and misappropriation of money. Allowing such an employee to remain in the seat would result in giving him further opportunity to indulge in the acts for which he was being prosecuted. Under the circumstances, it was the bounden duty of the appellant to have taken recourse to the provisions of clause 19.3 of the First Bipartite Settlement, 1966. The mere fact that nearly 10 years have elapsed since the charge-sheet was filed, can also be no ground for allowing the respondent to come back to duty on a sensitive post in the Bank, unless he is exonerated of the charge.
12. In our opinion, the High Court was not justified in quashing the orders of suspension. We, accordingly, allow this appeal, set aside the impugned judgment of the Allahabad High Court and dismiss the Writ Petition No. 6118 of 1988 which had been filed by the respondent. There will, however, be no order as to costs.
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