Ishvinder Singh Ranyal vs Jammu And Kashmir Bank Limited & Ors.

The petitioner was serving as an Assistant Manager with the J&K Bank at its Pouni Branch, District Reasi. During his tenure, he was accused of forging the signatures of customers and perpetrating fraudulent transactions with a view to securing wrongful gain for himself and causing corresponding loss to the customers as well as the Bank. It is alleged that, during the period from September 2022 to October 2023, the petitioner defrauded the customers of an amount of Rs. 1,26,34,318/-, which was subsequently classified as fraud. Accordingly, the respondent-Bank reported the matter to the Reserve Bank of India. A further amount of Rs. 30,32,678/- is stated to have been recovered from the accounts of the petitioner and his relatives.

The respondent-Bank also set the criminal law in motion by lodging an FIR against the petitioner for the commission of offences punishable under Sections 409, 420, 467, 468, 471, 477-A and 201 of the Indian Penal Code. Upon completion of the investigation, a charge-sheet came to be presented against the petitioner for the aforesaid offences. The petitioner was taken into custody on 28.03.2024 and was subsequently admitted to bail.

Simultaneously, the respondent-Bank initiated departmental proceedings against the petitioner. A show-cause notice was initially served upon him, followed by issuance of formal articles of charge. Broadly stated, the allegations in the departmental proceedings are that the petitioner committed acts prejudicial to the interests of the Bank; misused his official position and committed embezzlement for securing personal gains; manipulated entries in the records of the Bank with a view to concealing the true state of affairs and covering up the irregularities committed by him; and acted with dishonest intention. Such conduct, according to the respondent-Bank, was unbecoming of an officer of the Bank and had brought disrepute to the institution.

Through the medium of the present petition, the petitioner seeks, inter alia, issuance of a writ in the nature of mandamus commanding the respondent-Bank not to proceed with the departmental enquiry until conclusion of the criminal proceedings arising out of the charge-sheet titled “UT of J&K v. Ishvinder Singh Ranyal”, stated to be pending before the Court of learned Chief Judicial Magistrate, Reasi.

The case set up by the petitioner is that the departmental proceedings and the criminal prosecution arise out of the same set of facts and are founded substantially upon the same allegations. It is specifically pleaded that the accusations forming the subject matter of the criminal trial are grave and serious in nature and involve complicated questions of fact and law. According to the petitioner, permitting the disciplinary proceedings to continue during the pendency of the criminal trial would cause serious prejudice to his defence, inasmuch as participation in the departmental enquiry would compel him to disclose his defence prematurely, which may thereafter be used to his prejudice in the pending criminal proceedings.

The principal contention urged on behalf of the petitioner is that where departmental proceedings and criminal prosecution are founded upon the same set of facts and substantially identical allegations, the disciplinary proceedings ought to be deferred until the criminal proceedings are finally concluded, particularly where the criminal charges are grave and involve complicated questions of fact and law.

Learned counsel for the petitioner, in support of the aforesaid contention, has placed reliance upon a judgment of the Madhya Pradesh High Court as also upon the decision of the Hon’ble Supreme Court in M. Paul Anthony v. Bharat Gold Mines Ltd. and another, (1999) 3 SCC 679.It is pertinent to notice that this Court, vide order dated 12.03.2025, had directed stay of the departmental enquiry initiated against the petitioner. Thereafter, the respondents repeatedly moved applications seeking vacation of the interim order and early consideration of the matter. It is in these circumstances that the petition has been taken up for final consideration and heard on merits.

The respondents have opposed the writ petition. Their preliminary contention is that the issues raised by the petitioner involve disputed questions of fact which would require appreciation and sifting of evidence, an exercise which, according to them, ought not ordinarily to be undertaken by this Court in exercise of its writ jurisdiction. On merits, it is contended that criminal prosecution and departmental proceedings operate in distinct fields and the mere fact that the respondent-Bank itself lodged the FIR does not preclude it from simultaneously pursuing disciplinary proceedings against the petitioner. According to the respondents, the reliance placed by the petitioner upon the judgments cited at the Bar is misconceived and does not advance his case.

It is also the specific stand of the respondent-Bank that the articles of charge framed in the departmental proceedings are not identical to the charges forming the subject matter of the criminal prosecution. The Bank claims to have conducted an independent examination of the matter, on the basis whereof it found that the petitioner had misused his official position and committed acts amounting to misconduct under the applicable service regulations. It was on the basis of such material that the disciplinary proceedings were initiated and are presently underway. The pendency of the criminal trial, therefore, does not, according to the respondents, create any legal embargo upon continuation of the departmental enquiry.

Heard the counsel for the parties and perused the record. The principal issue that arises for consideration in the present petition is whether, during the pendency of the criminal proceedings in which the petitioner is facing trial for offences arising out of the same transaction which has also led to initiation of departmental proceedings against him, the disciplinary enquiry is required to be kept in abeyance until conclusion of the criminal trial. The ancillary question that arises is whether, having regard to the nature, scope and object of the two proceedings, as also the time ordinarily consumed in conclusion of a criminal trial, the petitioner can, as a matter of right, seek stay of the departmental proceedings merely on account of pendency of the criminal prosecution.

Before embarking upon the rival arguments, it is necessary to keep in mind the relevant precedents on the subject in “Depot Manager, Andhra Pradesh State Road Transport Corporation Vs. Mohd. Yousuf Miya and Ors., AIR 1997 SC 2232, wherein the appellant had initiated disciplinary proceedings against the respondent on the allegation that, while driving the Corporation’s double-decker vehicle, due to lack of anticipation, he had caused an accident in which a cyclist died. Consequently, action was initiated for misconduct and an enquiry was ordered. In addition, the prosecution had also launched a criminal trial against him for an offence under Section 304, Part II, IPC. Thereafter, the respondent filed a writ petition before the High Court seeking a stay of the departmental proceedings. The learned single Judge stayed the proceedings, which order was confirmed by the Division Bench. In that way, the matter reached before the Apex Court. Allowing the appeal, the Apex Court while relying upon “State of Rajasthan Vs. B. K. Meena and Ors.” held in Para 8 as under: -

In “Ajit Kumar Nag Vs. General Manager (P.J.), Indian Oil Corporation Ltd., Haldia and Ors.” AIR 2005 SC 4217, the appellant was serving in Indian Oil Corporation Ltd. as a Senior Officer and was accused of offence under Sections 147, 149, 341, 323 and 506 of the IPC. Side by side, he was also proceeded with departmental enquiry. However, the Corporation was yet to take action against him. He filed a writ petition in which ex-parte ad-interim relief was granted, which order was assailed before the Division Bench and was set aside. During the currency of the departmental proceedings as well as the proceedings before the High Court in the criminal case, the appellant was acquitted. Thereafter, the writ petition filed regarding departmental proceedings was ultimately dismissed.The appellant preferred an appeal before the Division Bench, which too came to be dismissed. Thereafter, he approached the Apex Court. Dismissing the appeal, the Apex Court held in para 44 as under:-

In “M. Paul Anthony Vs. Bharat Gold Mines Ltd. and another” (1999) 3 SCC 679, in this case the appellant was a Security Officer, was found in unauthorised possession of mining sponge gold ball that led to the registration of a criminal case against him. Side by side, there was a departmental enquiry as well. He filed a writ petition before the High Court seeking restraint against the respondent from proceeding with the disciplinary enquiry till the conclusion of the criminal case.The writ petition was disposed of with a direction that the respondent shall consider and dispose of the appellant’s appeal filed against the suspension order.

During the currency of the departmental proceedings, the appellant was acquitted in the criminal case on 03.02.1987 with a categorical finding that the prosecution had failed to establish its case beyond reasonable doubt. He brought the judgment of the criminal Court to the notice of the Inquiry Officer with a request that he may be reinstated, which was rejected and he was dismissed from services. He filed a writ petition, which was allowed by the learned single Judge. However, the said judgment was set aside by the Division Bench, permitting the appellant to file a petition before the Supreme Court. The Apex Court held in paragraph 34 as under: -

In “G. M. Tank Vs. State of Gujarat and Ors.” AIR 2006 SC 2129”, the appellant had joined as an Overseer, who regularly submitted property returns. Later, the Anti Corruption Bureau carried out an investigation and found that he was in possession of properties beyond his known of income. The Anti Corruption Bureau carried out an investigation and submitted a report and charge-sheet on 20.02.1979 alleging that he had acquired wealth in excess of his income by way of gratification. The appellant denied the allegations. Side by side, a departmental enquiry was ordered, wherein he was found guilty of the charges and was dismissed from service. He filed a writ petition against the dismissal order. The learned Single Judge found that there was sufficient evidence against the appellant and dismissed the petition. Against said order, an LPA was preferred before the Division Bench, which too confirmed the said order. Thereafter, the matter came up before the Apex Court. Considering the law on the subject, the Apex Court set aside the dismissal of the petitioner by holding in paragraphs 15 and 16 as under:-

A single Bench of this Court in “Akhand Prakash Shahi Vs. Union of India & Anr.”, in [WP(C) No. 1876/2025 c/w WP(C) No. 3128/2023; D.O.D. 14.11.2025] held as under:

Having noticed the aforesaid legal position, this Court now proceed to examine the case of the petitioner on its own facts. As per the charge-sheet presented before the trial Court, the petitioner is accused of having, while functioning as Hall In-charge, dishonestly misappropriated amounts lying in various dormant, inactive or rarely operated accounts, with the intention of appropriating the illegally withdrawn amounts to his own use. Upon conclusion of the investigation, the investigating agency found material warranting prosecution of the petitioner for the commission of offences punishable under Sections 409, 420, 467, 468, 471, 477-A and 201 IPC.

The material placed on record further reveals that the alleged fraud came to the notice of the respondent-Bank in November 2023 during the course of an internal audit. It is alleged that, after the irregularities began to surface, the petitioner started depositing amounts towards the money allegedly misappropriated by him, including through his loan accounts and with funds arranged from his friends. By the time the alleged fraud came to be fully detected, an amount of Rs. 29,75,000/- had reportedly been recovered. During investigation, it was further found that the petitioner had allegedly prepared forged vouchers and used the same for effecting unauthorised withdrawals and misappropriation of funds. The questioned vouchers were subjected to forensic examination by comparison with the admitted specimen writings/signatures, and the forensic opinion is stated to have attributed the preparation and execution of the questioned documents to the petitioner.

The petitioner, thus, stands charge-sheeted before the competent criminal Court and, simultaneously, is also facing departmental proceedings. As per the criminal charge-sheet, as many as 185 allegedly unauthorised transactions have been attributed to the petitioner, out of which 123 transactions are stated to involve misappropriation of funds. It is alleged that the petitioner illegally transferred the amounts in question, thereby securing wrongful gain for himself and causing corresponding wrongful loss to the account holders and/or their nominees.

Simultaneously, articles of charge have been served upon the petitioner in the departmental proceedings. The substance of the allegation is that the petitioner forged the signatures of deceased customers and prepared fraudulent vouchers for securing wrongful gain to himself, thereby indulging in acts amounting to breach of trust and misappropriation. On the basis of these allegations, the petitioner has been charged with the following acts of misconduct:

There is no serious dispute that the transactions which constitute the substratum of the criminal prosecution also form the factual foundation of the departmental proceedings. That, however, does not mean that the charges in the two proceedings are identical in their nature or legal character. In the criminal trial, the petitioner is being prosecuted for specific offences relating, inter alia, to criminal breach of trust, cheating, forgery, use of forged documents and falsification of accounts. The departmental proceedings, on the other hand, are concerned with whether, by his acts and omissions, the petitioner acted prejudicially to the interests of the Bank, misused his official position for personal gain, manipulated the Bank's records and otherwise conducted himself in a manner unbecoming of an officer.

The principal plea of the petitioner is that since the criminal prosecution and the departmental proceedings arise substantially out of the same set of facts, continuation of the departmental enquiry during the pendency of the criminal trial is impermissible. The contention, in the considered view of this Court, proceeds on an erroneous understanding of the settled legal position. The law does not lay down any absolute rule that whenever a criminal prosecution and departmental proceedings arise out of the same transaction, one must necessarily await the conclusion of the other. On the contrary, the settled position is that both proceedings may ordinarily continue simultaneously, unless the facts of a particular case disclose circumstances warranting deferment of the disciplinary proceedings.

Learned counsel for the petitioner has sought to bring the case within the exception by contending that participation in the departmental enquiry would compel the petitioner to disclose his defence, thereby causing prejudice to him in the pending criminal trial. Reliance in this regard has principally been placed upon M. Paul Anthony v. Bharat Gold Mines Ltd. and another (supra). The factual setting in M. Paul Anthony, however, deserves to be noticed. In that case, the departmental proceedings and the criminal prosecution rested upon a raid and the consequential recovery of certain incriminating articles. The criminal Court, upon appreciation of the evidence, disbelieved the very raid and recovery forming the foundation of the prosecution. In those peculiar circumstances, the result of the criminal proceedings had a direct bearing upon the sustainability of the disciplinary action founded upon the same evidence. The principle enunciated therein cannot, therefore, be understood as laying down an inflexible rule requiring stay of disciplinary proceedings whenever a criminal prosecution arising from the same factual background is pending.

A Coordinate Bench of this Court, while dealing with a similar contention that continuation of departmental proceedings would prejudice the defence of the delinquent employee in the pending criminal trial, declined to accept such a proposition as an absolute rule. In that case, the allegation against the petitioner therein was that he had induced the complainant to enter into a physical relationship on the basis of a false promise of marriage. The Coordinate Bench found that determination of the veracity of the allegations, whether in the departmental proceedings or in the criminal trial, did not involve such complicated questions of fact or law as would justify keeping the departmental proceedings in abeyance. The contention that the delinquent employee would be compelled to disclose his defence was also found to be without substance, particularly as his defence had already been disclosed in the bail proceedings as well as in the pleadings before the Court. The plea of prejudice was, accordingly, rejected. The judgment of the learned Single Judge was subsequently upheld by the Division Bench of this Court in LPA No. 275/2025, decided on 11.12.2025.

Applying the aforesaid principles to the case at hand, there can be no dispute that the nature, object and standard of proof governing the two proceedings are distinct. The criminal case against the petitioner revolves around allegations of fraudulent entries in the account books, preparation and use of forged vouchers, unauthorised withdrawals from dormant or inactive accounts and alleged dishonest appropriation of the amounts so withdrawn. These acts are alleged to constitute criminal offences for which the petitioner is facing trial. The same transactions may also furnish the factual foundation for the departmental proceedings, but the enquiry therein is essentially directed towards determining whether the petitioner's conduct constitutes misconduct under the applicable service regulations. Mere commonality of the underlying facts, therefore, cannot by itself constitute sufficient ground for staying the departmental enquiry.

Significantly, there is no specific foundation laid in the petition to demonstrate that continuation of the departmental proceedings would result in any real or demonstrable prejudice to the petitioner's defence in the criminal trial. Nor is it the petitioner's pleaded case that the disciplinary proceedings have been initiated in violation of the prescribed procedure or are otherwise vitiated by any jurisdictional infirmity. The expression “complicated questions of fact and law” cannot be invoked as a mere incantation. The delinquent employee seeking deferment of disciplinary proceedings must demonstrate, with reference to the nature of the criminal charge, the evidence likely to be led and the defence required to be disclosed, as to how continuation of the departmental proceedings would materially prejudice the criminal trial. No such foundation has been laid in the present case.

Whether continuation of disciplinary proceedings is likely to seriously prejudice the defence of an accused in a pending criminal trial is, ultimately, a question that must be determined on the facts and circumstances of each case. In Depot Manager, Andhra Pradesh State Road Transport Corporation v. Mohd. Yousuf Miya and others (supra) the delinquent employee was facing criminal prosecution for offences under Sections 304-A and 338 IPC and was simultaneously subjected to departmental proceedings. The contention that continuation of the disciplinary proceedings would prejudice his defence in the criminal case was not accepted, and the stay granted by the High Court against the departmental proceedings was vacated.

The principle enunciated therein applies with considerable force to the present case. On the other hand, the reliance placed by the petitioner upon M. Paul Anthony (supra) is misplaced, the said decision having been rendered in its own peculiar factual setting. The apprehension expressed by the petitioner that disclosure of his defence in the departmental proceedings would prejudice the criminal trial remains, in the absence of any specific factual foundation, merely speculative.

There is yet another important distinction which cannot be overlooked. In departmental proceedings, the charge of misconduct is required to be established on the touchstone of preponderance of probabilities, whereas in a criminal trial the prosecution carries the substantially higher burden of proving the charge beyond reasonable doubt. The rules of evidence applicable to a criminal trial also do not apply with the same rigour to disciplinary proceedings. An outcome in one proceeding, therefore, does not necessarily dictate the outcome in the other.

The distinction between the two proceedings has also been reiterated by the Hon'ble Supreme Court in State of Karnataka and others v. Umesh, 2022 SCC Online SC

In that case, the employee had been prosecuted for offences under the Prevention of Corruption Act, 1988 and was acquitted upon being extended the benefit of doubt. The Supreme Court reiterated that while the object of a criminal trial is to determine criminal culpability and, upon conviction, impose punishment prescribed by law, disciplinary proceedings are intended to determine whether the conduct of an employee amounts to misconduct warranting imposition of a penalty under the applicable service rules. The two proceedings, therefore, serve distinct purposes and are governed by different standards.

Viewed in the light of the aforesaid principles, the apprehension expressed by the petitioner that disclosure of his defence in the departmental proceedings would prejudice him in the criminal trial is unsupported by any tangible material. The petitioner has failed to demonstrate that the criminal case involves such complicated questions of fact and law, or that the nature of his proposed defence is such, that continuation of the departmental enquiry would cause serious and irretrievable prejudice to him in the criminal trial.

No doubt, the factual matrix underlying both proceedings substantially overlaps. That circumstance alone, however, is insufficient to interdict the disciplinary proceedings. The criminal Court would be concerned with determining whether the acts attributed to the petitioner satisfy the ingredients of the penal offences alleged against him and whether the prosecution has established those offences beyond reasonable doubt. The disciplinary authority, on the other hand, is concerned with determining whether the petitioner's conduct, viewed in the context of his duties and obligations as an officer of the Bank, constitutes misconduct under the applicable service regulations. The two proceedings thus operate in distinct spheres notwithstanding that some of the evidence and underlying transactions may overlap.

In view of the foregoing discussion, this Court is unable to find any exceptional circumstance warranting interference with the departmental proceedings or requiring the respondent-Bank to keep the same in abeyance until conclusion of the criminal trial. The petitioner has failed to establish any real or demonstrable prejudice which would be occasioned to his defence in the criminal proceedings by continuation of the departmental enquiry. The writ petition, being devoid of merit, is accordingly dismissed. The interim direction(s), if any, operating in the matter shall stand vacated.