'Bank Had To Consider CVC Advice Once It Was Called' : Supreme Court Quashes Disciplinary Action Against Ex-Union Bank Officer

The Supreme Court recently quashed the disciplinary proceedings against an ex-bank employee because the bank (Union Bank of India) initiated the proceedings and issued the charge sheet, bypassing its own regulations, which mandated the need for CVC's advice before taking disciplinary actions in vigilance-related cases.

A bench of Justices Abhay S. Oka and A.G. Masih heard the case involving an ex-bank employee who was suspended following disciplinary proceedings initiated by Union Bank of India just a few days before his retirement. The Bank itself acknowledged that the case had a vigilance angle and sought the CVC's first-stage advice (as per its Regulation 19 and CVC circulars). However, the Bank proceeded to issue the charge sheet without waiting for the CVC's input.

Challenging the Allahabad High Court's dismissal of his writ petition against his suspension, the appellant approached the Supreme Court, arguing that since the Bank itself acknowledged the need to obtain the CVC's first-stage advice, it could not lawfully issue the charge sheet without first receiving and considering that advice.

Overruling the High Court's ruling, the judgment authored by Justice Oka held that the bank's failure to obtain CVC advice before issuing the charge sheet in a vigilance matter was arbitrary and violated its own acknowledged procedural obligations.

“Once, the first stage advice of the CVC was called, it was the duty of the respondent-Bank to consider the advice and then take a decision to serve the chargesheet. Thus, the actions of the respondent-Bank are mala fide and arbitrary. The appellant was sought to be victimised at the fag end of his unblemished career of 34 years.”, the court observed.

The Court noted that when the Bank had itself acknowledged that it was necessary to seek first-stage advice from the CVC as per its Regulation 19, then failure to await the CVC's advisory report before issuing the charge sheet was a clear breach of procedural fairness, especially since the Bank had assured the High Court (via affidavits) that the charge sheet would be issued only after receiving CVC advice.

In terms of the aforesaid, the Court allowed the appeal, and quashed the charge sheet & disciplinary proceedings. It further directed the Respondent Bank to release full retirement benefits (but no back wages), holding that the proceedings were vitiated by malafide & procedural unfairness.

Case Title: A.M. Kulshrestha v. Union Bank of India and Ors.

Citation : 2025 LiveLaw (SC) 640

Click here to read/download the judgment

Appearance:

For Petitioner(s) Mr. Gopal Sankaranarayanan, Sr. Adv. Mr. Purushottam Sharma Tripathi, AOR Mr. Akshat Kulshrestha, Adv. Mr. Tushar Srivastava, Adv. Ms. Shrya Nair, Adv. Mr. Ravi Chandra Prakash, Adv. Mr. Prakhar Singh, Adv.

For Respondent(s) Mr. O. P. Gaggar, AOR Mr. Sachindra Karn, Adv.