Dismissal Based on Vitiated Inquiry and Non-Supply of Relied-Upon Evidence Violates Principles of Natural Justice

The petitioner, a Special Assistant at Canara Bank, was suspended on 22.11.1996 and faced an FIR dated 28.12.1996

On 24.11.2005, the petitioner was acquitted in the criminal trial (Case No. 66 of 2004)

Despite the acquittal, the Bank continued the suspension and initiated departmental proceedings via a charge sheet on 18.05.2006

The petitioner requested copies of evidence, which were not provided despite directions from the Central Information Commission

Out of 14 witnesses (account holders), only one was produced during the inquiry

The disciplinary authority dismissed the petitioner on 18.03.2008

An appeal against this order was rejected on 24.12.2008

1. Whether the departmental inquiry was vitiated by a violation of the principles of natural justice due to non-supply of evidence and lack of cross-examination

2. Whether the punishment of dismissal was legal and within jurisdiction under Regulation 21(B) of the Canara Bank Service Code following the petitioner's acquittal

3. Whether the failure to issue a second show-cause notice along with the inquiry report invalidated the proceedings

Regulation 21(B) of the Canara Bank Service Code, which mandates that if an employee is acquitted, the maximum penalty after a departmental inquiry is termination with three months' notice pay, rather than dismissal

Principles of natural justice, specifically the right to receive relied-upon documents and the right to cross-examine witnesses

Eknath Shankar Kamble v. Chief Executive Officer, Zilla Parishad, Sangli, which establishes that a "clean acquittal" based on a full consideration of evidence—even if the term "benefit of doubt" is used—requires the employer to treat the employee in accordance with acquittal-specific regulations

The court found that the inquiry was conducted in "clear breach of fair procedure" because the Bank failed to provide the petitioner with copies of the documentary evidence and the statements of the 14 account holders relied upon in the charges

Since only one witness was produced for cross-examination, the inquiry was deemed arbitrary

The court reasoned that the petitioner could not provide a meaningful reply to the charge sheet without these documents

The court noted that the petitioner’s acquittal was a "clean acquittal" following a full trial. Therefore, under Regulation 21(B) of the Service Code, the Bank had no jurisdiction to impose the "extreme penalty of dismissal"; the rules only permitted termination with notice pay

The failure to provide the inquiry report or a hearing at the final stage violated the requirement of a fair hearing, regardless of whether the rules explicitly mandated a second show-cause notice

The court allowed the writ petition and quashed the dismissal order dated 18.03.2008 and the appellate order dated 24.12.2008, directing reinstatement with all consequential benefits, while granting liberty for a fresh inquiry in accordance with law