The Supreme Court ruled that violating mandatory procedural safeguards in disciplinary inquiries, like failing to question an employee on adverse evidence, inherently constitutes prejudice. Relying on undisclosed material, such as a vigilance report, to enhance punishment also violates natural justice. No independent proof of prejudice is required for such fundamental breaches.
Facts Of The Case:
The appellant, K. Prabhakar Hegde, was a senior officer and Zonal Head of Vijaya Bank (which later merged with Bank of Baroda). In 1999, he was served with notices alleging irregularities in sanctioning temporary overdrafts to various parties. Formal disciplinary proceedings were initiated against him in 2001. An inquiry officer was appointed, who submitted a report holding the charges proved. Notably, the disciplinary authority initially proposed the penalty of compulsory retirement, a recommendation concurred with by the Chief Vigilance Officer (CVO). However, the Central Vigilance Commission (CVC) rejected this and recommended the harsher punishment of dismissal, which the disciplinary authority then imposed in 2002. The appellant superannuated in 2006, and his appeal against the dismissal order was rejected in 2003. He challenged this in the Karnataka High Court. A Single Judge quashed the dismissal, but a Division Bench reversed this, upholding the penalty. The Division Bench held that non-furnishing of the preliminary inquiry report caused no prejudice and that the inquiry officer’s failure to question the appellant on adverse evidence was a mere procedural irregularity, not mandating vitiation of the inquiry. The appellant then appealed to the Supreme Court.
Procedural History:
The procedural history of this case began with the disciplinary authority of Vijaya Bank imposing an order of dismissal upon the appellant in July 2002. Aggrieved by this punishment, the appellant filed an appeal before the designated appellate authority, which was dismissed in March 2003. The appellant then challenged this appellate order by filing a writ petition (WP No. 27936/2003) before the Karnataka High Court. A Single Judge of the High Court allowed the writ petition in February 2009, quashing the dismissal order and directing the grant of all consequential retirement benefits. The respondent Bank, Vijaya Bank, then filed a writ appeal (Writ Appeal No. 975 of 2009) before a Division Bench of the same High Court. The Division Bench allowed the Bank’s appeal in December 2021, setting aside the Single Judge’s order and consequently dismissing the appellant’s writ petition, thereby reinstating the order of dismissal. The appellant then sought special leave to appeal from the Supreme Court, which granted leave and led to the filing of the present civil appeal, culminating in the final judgment.
READ ALSO:Mens Rea is Must: Supreme Court Rules Accused Must Intend to Drive Victim to Suicide for Abetment Charge
Court Observation:
The Court made several critical observations. It firmly rejected the notion that a delinquent employee must demonstrate actual prejudice from a violation of natural justice, holding that the denial of a fair hearing itself constitutes prejudice. It ruled that the Inquiry Officer’s failure to generally question the appellant on adverse evidence, as mandatorily required by Regulation 6(17), was a fatal flaw that vitiated the entire inquiry. Furthermore, the Court held that the disciplinary authority’s reliance on an undisclosed Central Vigilance Commission (CVC) report to enhance the punishment from compulsory retirement to dismissal was a serious violation of natural justice, as the appellant was denied a chance to rebut its contents. The Court also clarified that a claim of privilege cannot be used to withhold such a report from the employee, as it does not pertain to affairs of state.
Final Decision & Judgement:
Case Details:
Case Title: K. Prabhakar Hegde vs. Bank of Baroda Citation: 2025 INSC 997 Appeal Number: Civil Appeal No. 6599 of 2025 Date of Judgement:Â August 19, 2025 Judges/Justice Name: Justice Dipankar Datta and Justice Prashant Kumar Mishra
Download The Judgement Here