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A.M. Kulshrestha v. Union Bank of India and Ors.

Civil Appeal · 2025 INSC 744Decided 20 May 2025
Civil Appeal No. 7039 of 2025 (arising out of SLP(C) No. 26933 of 2019)
Justice Abhay S. Oka · Justice Augustine George Masih

Background

The appellant, a Deputy General Manager who had served Union Bank of India for about 34 years with an unblemished record, was suspended in August 2018 shortly before his scheduled retirement in June 2019, over allegations of lax due diligence while sanctioning credit to certain firms. The Bank itself, in sworn affidavits before the Allahabad High Court, stated that the matter had a "vigilance angle" and had been referred to the CVC for its mandatory first-stage advice, and that a chargesheet would issue only after receiving that advice. Despite this, the Bank served the chargesheet on the appellant just twelve days before his superannuation date, without waiting for the CVC's advice.

Decision Breakdown

The Supreme Court held that once the Bank itself acknowledged that Regulation 19 of the applicable 1976 Regulations required consultation with the CVC because the case had a vigilance angle, it was bound to actually wait for and consider that advice before serving a chargesheet. It could not backtrack. The Court did not need to decide the broader legal question of whether CVC consultation is always mandatory, because the Bank's own conduct and affidavits had already conceded its necessity in this case. Given that the chargesheet was rushed out just before retirement, contradicting the Executive Director's own earlier sworn statement, the Court found the Bank's actions arbitrary and mala fide. It quashed the entire disciplinary proceeding and chargesheet, directed release of the appellant's full retirement benefits, but denied back wages since nearly six years had passed since his superannuation.

Lesson Learnt

When an employer commits, especially in a sworn court affidavit, to following a particular procedural safeguard (like seeking a regulator's advice) before taking disciplinary action, it cannot unilaterally abandon that commitment; doing so, particularly against a long-serving employee just before retirement, will be treated by courts as arbitrary and can void the entire disciplinary action.

Official source (sci.gov.in)View Judgment (PDF)

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