Bombay High Court refuses to reinstate ex-RBI employee acquitted in fraud case

The man, who was working as was working as machine operator in the National Clearing Cell of RBI, challenged the RBI’s July 20, 2015 communication rejecting his application for reinstatement along with arrears of salary and consequential benefits.

Joined in 1987, dismissed in 2001

It was claimed that the man was initially appointed as a part-time machine operator in the National Clearing Cell of RBI on April 23, 1987 and was subsequently appointed as a full-time employee on December 21, 1992. During the course of his employment, allegations arose that the man, in collusion with certain other employees, had entered into a criminal conspiracy to tamper with cheques presented through the National Clearing Cell and defraud various banks. 

Following the alleged fraud, the RBI lodged a complaint with the CBI, leading to registration of an FIR. Separately, the RBI initiated disciplinary proceedings against him. He was suspended on July 30, 1994, and was dismissed from service on August 30, 2001, after completion of the departmental inquiry. 

Subsequently, a special judge, by its March 2015 order, acquitted the man of the criminal charges and following his acquittal, he submitted an application seeking reinstatement in service together with arrears of salary and consequential benefits. However, the said application was rejected by the communication dated July 20, 2015. 

‘Penalty imposed as per regulations’

The high court noted that the man was dismissed from service following a departmental inquiry and that the penalty of dismissal was imposed under the relevant regulation.

The court found that the dismissal was not founded on the registration of the FIR, filing of the chargesheet or pendency of the criminal prosecution. Instead, the RBI had conducted a “full-fledged disciplinary inquiry”, beginning in 1994, in which written charges were served, evidence was led, witnesses were examined and cross-examined, and the employee “actively participated” in the proceedings over several years.

It was found by the court that throughout the disciplinary proceedings the man repeatedly acknowledged the misconduct alleged against him and sought leniency. “The admissions made by the petitioner formed part of the material considered by the disciplinary authority, in addition to the evidence recorded during the inquiry,” it noted.

Justices R I Chagla and Farhan P Dubash were hearing the former employee who challenged the RBI’s July 20, 2015 communication rejecting his application for reinstatement.

Accordingly, the court held that the penalty of dismissal was founded upon the findings returned in the departmental proceedings and not upon the criminal prosecution and rejcted the man’s plea seeking reinstatement. 

Arguments 

The man was represented by advocate Sachin Chandan, who argued that the said communication is unsustainable in law, being a non-speaking order passed in breach of the principles of natural justice. He submitted that the petitioner’s application should have been considered after granting him an opportunity of hearing and requested that the said communication be set aside. 

On the other hand, Senior Advocate S U Kamdar, representing the RBI, submitted that the petitioner’s dismissal did not arise out of his conviction in the criminal case but following the departmental inquiry culminating in the dismissal order of August 30, 2001. It was added that the subsequent acquittal in the criminal proceedings does not confer any right upon him to seek reinstatement. He lastly submitted that the petition is devoid of merit and deserves to be dismissed.