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Jasbir Singh v. Punjab & Sind Bank And Others
Factual and Procedural Background
The appellant was appointed as a peon in the respondent Bank on 4 April 1984 and was later confirmed in service. Alleging that on 11 April 1989 he forged the signature of one Rattan Singh and fraudulently withdrew Rs 25,000, the Bank (i) launched a criminal prosecution under Sections 409/201 IPC and (ii) initiated departmental proceedings.
The Chief Judicial Magistrate acquitted the appellant, finding that (a) the relevant account had insufficient funds, (b) the appellant’s alleged confession was coerced, (c) Rattan Singh never complained, and (d) other bank officers were neither examined nor proceeded against.
Notwithstanding the acquittal, the Bank carried on with the departmental inquiry. Conducted ex parte on 24 May 1996, the Enquiry Officer concluded that the appellant had forged documents, withdrawn the money, and tampered with records.
Parallelly, the Bank sued the appellant for recovery of Rs 25,000. While the trial court decreed the claim, the Additional District Judge, Faridkot, reversed the decree on 3 March 2001, holding that the Bank had “miserably failed” to prove embezzlement. The Bank did not challenge that decree, allowing it to attain finality.
The appellant’s writ petition challenging dismissal failed before the High Court, which relied on clause 19.3(c) of the Bipartite Settlement to uphold the departmental action. The present appeal is against that High Court judgment.
Legal Issues Presented
- Whether the respondent Bank could sustain disciplinary action and dismissal when both the criminal court and a competent civil court had found no proof of embezzlement against the appellant.
- Whether the High Court erred in ignoring the binding effect of the civil court’s final decree while upholding the departmental findings.
- Whether the appellant, if reinstated, was entitled to back wages and consequential benefits.
Arguments of the Parties
Respondent Bank's Arguments
- The ruling in Capt. M. Paul Anthony v. Bharat Gold Mines Ltd. was inapplicable because the departmental inquiry could proceed independently of the criminal prosecution.
- Even if reinstatement were ordered, back wages should be denied, reliance being placed on U.P State Brassware Corpn. Ltd. v. Uday Narain Pandey.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Capt. M. Paul Anthony v. Bharat Gold Mines Ltd. (1999) 3 SCC 679 | If criminal and departmental proceedings rest on identical facts and the employee is acquitted, the dismissal may be set aside. | Referred to illustrate the general principle; Court noted it need not rely exclusively on this case because the binding civil decree alone justified relief. |
| Narinder Mohan Arya v. United India Insurance Co. Ltd. (2006) 4 SCC 713 | Civil courts may interfere where crucial findings such as forgery rest on evidence that is non-existent in law. | Quoted to underscore that the civil decree displacing a finding of forgery must be respected. |
| Pratibha Rani v. Suraj Kumar (1985) 2 SCC 370 | Civil and criminal remedies can proceed concurrently. | High Court relied on this proposition, but Supreme Court held it did not justify ignoring the civil court’s conclusive findings. |
| U.P State Brassware Corpn. Ltd. v. Uday Narain Pandey (2006) 1 SCC 479 | Factors governing award of back wages under labour jurisprudence. | Respondent cited to resist back wages; Supreme Court distinguished it, noting the egregious unfairness shown to the appellant. |
Court's Reasoning and Analysis
1. Finality of Civil Decree: The Additional District Judge’s decision, unchallenged by the Bank, conclusively determined that no embezzlement occurred. Consequently, the Bank was bound by that finding.
2. Identical Core Charge: The sole substantive allegation in every forum—criminal, civil, and departmental—was embezzlement of Rs 25,000 through forgery and record tampering. Having failed to establish this charge in both criminal and civil courts, the Bank could not rely on an ex parte departmental report to sustain dismissal.
3. Error of the High Court: The High Court’s reliance on clause 19.3(c) of the Bipartite Settlement, without evaluating the effect of the civil decree or the evidentiary record, amounted to non-application of mind. Its judgment therefore lacked legal sustainability.
4. Relevance of Precedent: While the respondent argued that Capt. M. Paul Anthony was inapplicable, the Supreme Court noted that even apart from that authority, the binding civil decree and principles from Narinder Mohan Arya mandated intervention.
5. Equitable Considerations: The Court observed that the appellant had been subjected to criminal prosecution, civil litigation, and an ex parte inquiry, all of which failed to prove wrongdoing. The extraction of a coerced confession underscored the unfairness of the Bank’s conduct.
6. Back Wages: Distinguishing U.P. State Brassware, the Court held this was not a case for denying back wages because the appellant had been exonerated in every competent forum and was treated “very unfairly and unreasonably.”
Holding and Implications
APPEAL ALLOWED; DISMISSAL SET ASIDE. The Supreme Court directed reinstatement of the appellant with full back wages, continuity of service, all consequential benefits, and costs of Rs 10,000 payable by the respondent Bank.
Implications: The decision reinforces that when a civil court has finally adjudicated an allegation central to disciplinary proceedings, that finding binds the employer. It also signals that unfair persistence in parallel proceedings may attract not only reinstatement but full monetary relief. No new legal doctrine was created, but existing principles on the primacy of final civil adjudications and fairness in disciplinary action were emphatically applied.
S.B Sinha, J.— The appellant herein was appointed as peon and has been working in the said capacity in the respondent Bank with effect from 4-4-1984. He was confirmed in his services. On an allegation made that he had forged the signature of a depositor Rattan Singh and fraudulently withdrawn a sum of Rs 25,000 on 11-4-1989, a departmental proceeding was initiated against him. A criminal case was also initiated under Sections 409/201 of the Indian Penal Code. He was acquitted in the criminal case. A purported confession which he had allegedly made was found to have been done under undue coercion. The learned Chief Judicial Magistrate noticed that even Rattan Singh did not make any complaint. The other officers who were said to be involved were not proceeded against.
2. It was held:
(i) A sum of Rs 25,000 was not standing to the credit of so-called Rattan Singh on 11-4-1989.
(ii) The appellant was found to have been threatened by the officers.
(iii) His complaints soon after his release from the hands of the bank officials had not been taken note of.
(iv) An adverse inference should be drawn against the prosecution witness Mukhtiar Singh in regard to encashment of the withdrawal form without observing due formalities.
(v) Above all, Rattan Singh was not examined.
3. It was also held:
“Sixthly, the amount in question is alleged to have been misappropriated on 11-4-1989, whereas this defalcation was detected on 29-5-1989 obviously after a long spell. Extra-judicial confession can be taken note of only in a case of its having been made shortly after the perpetration of crime. Seventhly, the evidence adduced by the prosecution is so incompatible, inconsistent and weak that no conviction can be passed thereon. Eighthly, there is no direct evidence worth the name of the record connecting the accused in any manner with his offence.”
4. However, despite acquittal, the departmental proceedings continued. The said departmental proceedings ended in an ex parte report submitted on 24-5-1996 holding that the charges against the appellant had been proved stating:
“In the circumstances and facts stated above, I am of the considered opinion that the CSE has absented himself intentionally in spite of sufficient opportunity provided to him. In the absence of any defence documents/witnesses, I have no second choice except to rely on the documents and witnesses produced by the PO. The management witnesses and the documents are a sufficient proof to agree with the arguments pleaded by PO that Shri Jasbir Singh, CSE has fraudulently withdrawn Rs 25,000 on 11-4-1989 through a withdrawal form by forging the signature of a depositor Shri Rattan Singh of SB A/c No. 7069. He received the payment himself from the cashier and to hide this fraudulent transaction, he tampered with the record, torn off the relevant portion of SB log book, removed the ledger sheet of SB A/c No. 7069 and destroyed the withdrawal form dated 11-4-1989 of Rs 25,000 bearing SB A/c No. 7069.”
5. Interestingly, the respondent Bank also filed a suit against the appellant for recovery of a sum of Rs 25,000. The suit was decreed. On an appeal preferred thereagainst, the Addl. District Judge, Faridkot by a judgment and decree dated 3-3-2001, on analysis of the evidences brought on records, held that the respondent Bank miserably failed to prove that the appellant has withdrawn the said sum of Rs 25,000 and the allegation against him that he had embezzled an amount of Rs 25,000 was not proved and, thus, it was not entitled to recover the said amount.
6. The correctness of the said judgment was not questioned by the Bank. It, thus, attained finality.
7. The respondent Bank, therefore, invited findings of a competent civil court on the issue as to whether the appellant has committed any embezzlement or not. It is not in dispute that embezzlement of fund was the principal charge against the appellant in all the proceedings. He is also said to have forged the signature of the account-holder and tampered with the records. The respondent Bank failed to prove any of these charges before any court of law.
8. In Capt. M. Paul Anthony v. Bharat Gold Mines Ltd. (1999) 3 SCC 679 this Court held that if departmental proceedings and criminal case are based on identical set of facts, evidence in both the proceedings are common and employee is acquitted in the criminal case, an order of dismissal already passed may also be set aside.
9. The learned counsel for the respondent contended that the decision of this Court has no application. He may be right. But, it is not necessary for us to delve deep into the matter as we are of the opinion that the judgment in civil matter having attained finality, the same was binding on the respondent Bank.
10. In Narinder Mohan Arya v. United India Insurance Co. Ltd. (2006) 4 SCC 713, JT (2006) 4 SC 404 it was opined:
“20. It is, however, beyond any controversy that when a crucial finding like forgery is arrived at on an evidence which is non est in the eye of the law, the civil court would have jurisdiction to interfere in the matter.”
11. It was further observed:
“29. It is also of some interest to note that the first respondent itself, in the civil suit filed by the firm relied upon a copy of the report of the enquiry officer. The first respondent, therefore, itself invited comments as regards the existence of sufficiency of evidence/acceptability thereof and, thus, it may not now be open to them to contend that the report of the enquiry officer was sacrosanct.
30. We have referred to the fact of the matter in some detail as also the scope of judicial review only for the purpose of pointing out that neither the learned Single Judge nor the Division Bench of the High Court considered the question on merit at all. They referred to certain principles of law but failed to explain as to how they apply in the instant case in the light of the contentions raised before them. Other contentions raised in the writ petition also were not considered by the High Court.”
12. In a case of this nature, therefore, the High Court should have applied its mind to the fact of the matter with reference to the materials brought on records. It failed to do so.
13. The High Court relied upon a decision of this Court in Pratibha Rani v. Suraj Kumar (1985) 2 SCC 370, AIR 1985 SC 628 where a statement of law was made that criminal law and civil law can be allowed to operate side by side. There is no quarrel with the said proposition.
14. The High Court, however, failed to take note of the decision of the civil court. It could not have refused to look into the materials on record solely relying on or on the basis of clause 19.3(c) of the Bipartite Settlement to hold that the departmental proceedings could have been initiated even after the judgment of acquittal is passed in criminal case. We, therefore, are of the opinion that impugned judgments cannot be sustained.
15. It was, however, urged that no back wages should be directed to be paid. Reliance in this behalf has been placed on U.P State Brassware Corpn. Ltd. v. Uday Narain Pandey (2006) 1 SCC 479. In that case, this Court was dealing with a power of the Industrial Courts under Section 11-A of the Industrial Disputes Act. Therein, as the establishment was closed, the question of reinstatement of the workman did not arise. Still then, 25% back wages were directed to be paid as also the compensation payable in terms of Section 6-N of the U.P Industrial Disputes Act.
16. The judgments of both the civil court and the criminal court established that the appellant was treated very unfairly and unreasonably. For all intent and purport, a criminal case was foisted upon him. A confession, according to learned Chief Judicial Magistrate, was extracted from him by the bank officers in a very cruel manner. It is, therefore, not a case where back wages should be denied. The respondent Bank has tried to proceed against the appellant both in civil proceedings as well as in criminal proceedings and at both the independent forums, it failed.
17. We, therefore, are of the view that the impugned orders and judgments cannot be sustained. They are set aside accordingly. The appeal is allowed. The appellant is directed to be reinstated with back wages, continuity of service and other consequential benefits. The respondent shall also pay and bear the costs of the appellant which is quantified at Rs 10,000.
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