Summary and Analysis of Prabhakar Hegde vs Bank of Baroda
1. Heading of the Judgment
Case Name: K. Prabhakar Hegde vs Bank of Baroda
Citation: 2025 INSC 997
Court: Supreme Court of India
Judges: Hon'ble Mr. Justice Dipankar Datta and Hon'ble Mr. Justice Prashant Kumar Mishra
Date of Judgment: August 19, 2025
2. Related Laws and Sections
This judgment is a significant ruling on the principles of natural justice in departmental inquiries. It primarily interprets and applies the following legal provisions and principles:
Regulation 6(17) of the Vijaya Bank Officer Employees’ (Discipline and Appeal) Regulations, 1981: This regulation mandates that an Inquiry Officer must question a charged employee on the circumstances appearing against them in the evidence, especially if the employee has not examined themselves as a witness.
Articles 14 of the Constitution of India: Guarantees equality before the law and equal protection of the laws. The Court held that violating mandatory procedural safeguards in an inquiry is a form of arbitrariness that violates this fundamental right.
Principles of Natural Justice: The judgment heavily relies on the core principles of Audi Alteram Partem (hear the other side) and the right to a fair hearing. It cites landmark Constitution Bench decisions like:
S.L. Kapoor v. Jagmohan (1980)
Olga Tellis v. Bombay Municipal Corporation (1985)
Union of India v. Tulsiram Patel (1985)
A.R. Antulay v. R.S. Nayak (1988)
ECIL v. B. Karunakar (1993)Precedent on CVC Recommendations: The judgment applies the principle from SBI v. D.C. Aggarwal (1993) that if a disciplinary authority changes a proposed punishment based on a recommendation from the Central Vigilance Commission (CVC), that recommendation must be shared with the employee to give them a chance to defend themselves.
3. Basic Judgment Details
Appellant: K. Prabhakar Hegde, a senior officer (Zonal Head) of Vijaya Bank.
Respondent: Bank of Baroda (Vijaya Bank merged with it in 2019).
Origin: The appellant was dismissed from service in 2002 after a departmental inquiry into allegations of financial irregularities. His appeal was dismissed by the bank's appellate authority. The Karnataka High Court initially quashed the dismissal but a Division Bench later upheld it. The appellant then appealed to the Supreme Court.
Final Outcome: The Supreme Court allowed the appeal. It held the inquiry and dismissal order were illegal due to violations of natural justice. However, considering the appellant's advanced age (over 80) and the passage of time, it did not order a fresh inquiry but directed the bank to pay him a lump sum amount equal to his gratuity.
4. Explanation of the Judgment
The Supreme Court's decision was based on two major violations of natural justice during the disciplinary process.
Core Issue 1: Violation of Mandatory Procedure by the Inquiry Officer
The most critical legal issue was the Inquiry Officer's failure to comply with Regulation 6(17) of the bank's regulations. This regulation has two parts:
Discretionary Part (
may): If the charged employee examines themselves as a defence witness, the Inquiry Officer may question them.Mandatory Part (
shall): If the charged employee does not examine themselves, the Inquiry Officer must (shall) question them generally on the circumstances appearing in the evidence against them.
The Court's Reasoning:
The appellant had not examined himself as a witness. Therefore, the mandatory part of the regulation was triggered.
The Inquiry Officer completely failed to put any questions to the appellant about the adverse evidence. He merely asked if the appellant wanted to make a submission.
The Court held that this was not a mere technicality. The purpose of this rule is to provide a crucial safeguard: to directly bring any incriminating circumstances to the employee's attention and give them a final chance to explain themselves. This is a core component of a fair hearing.
The High Court had relied on an older precedent (Sunil Kumar Banerjee) which stated that such a violation required the employee to prove actual prejudice. The Supreme Court overruled this approach. It held that based on the Constitution Bench decisions in Olga Tellis, Tulsiram Patel, and A.R. Antulay, a violation of a mandatory rule of natural justice is prejudice in itself. The person who denied justice cannot then argue that no harm was done.
The Court concluded that the failure to follow Regulation 6(17) was a fatal flaw that vitiated the entire inquiry.
Core Issue 2: Reliance on a Secret CVC Report
The second major violation was how the punishment was decided.
The Disciplinary Authority initially proposed the punishment of "compulsory retirement."
The Chief Vigilance Officer (CVO) agreed.
However, the Central Vigilance Commission (CVC) reviewed the case and recommended the harsher punishment of "dismissal."
The Disciplinary Authority then changed its decision and imposed dismissal.
The CVC's recommendation was never shown to the appellant.
The Court's Reasoning:
Relying on the precedent set in SBI v. D.C. Aggarwal, the Court held that the CVC's note was a material document that influenced the mind of the Disciplinary Authority.
Denying the appellant a chance to see this note and argue against the enhanced punishment was a serious violation of natural justice. He had a right to plead for a lesser penalty.
The bank's claim that the CVC note was a "privileged document" was rejected. The Court clarified that privilege under the Evidence Act is meant for documents affecting national security or high state policy, not for internal vigilance reports in departmental matters.
Conclusion and Unique Outcome
In summary, the Supreme Court found the dismissal order illegal because:
The inquiry itself was flawed due to the non-compliance with the mandatory questioning procedure under Regulation 6(17).
The punishment was decided based on a secret document (the CVC note) that the employee never got to see or challenge.
Ordinarily, the Court would have ordered a fresh inquiry from the stage of the violation. However, considering the appellant was over 80 years old and the incident happened more than 23 years ago, the Court decided that a remand would serve no purpose and would only prolong his agony.
Therefore, as a unique and equitable solution, the Court:
Quashed the order of dismissal.
Did not order full reinstatement with back wages.
Directed the bank to pay the appellant a lump sum amount equal to the gratuity he would have been entitled to had he retired normally.
This balanced the need to rectify a legal wrong with the practical realities of the case, ensuring the appellant received a measure of justice without forcing a futile re-opening of old proceedings.