Supreme Court Permits Criminal Trial to Proceed Despite Departmental Exoneration, Distinguishes Adjudication Authorities

A bench of Justices Ahsanuddin Amanullah and K. Vinod Chandran heard an appeal by the Karnataka Lokayukta challenging a High Court order that had quashed criminal proceedings against a government executive engineer on the ground of exoneration in departmental proceedings. The question was whether an exoneration in a disciplinary enquiry, concluded on the standard of preponderance of probabilities, would automatically preclude a separate criminal prosecution which requires proof beyond reasonable doubt.

The Court allowed the Lokayukta’s appeal and held that exoneration in a departmental enquiry did not per se entitle the delinquent employee to quash criminal proceedings where the departmental finding was not an exoneration on merits. The bench emphasised that adjudication and prosecution may be independent and that the critical inquiry was whether the exoneration was on merits and whether both proceedings concerned identical allegations and findings. The Court, in its reasoning, observed: "In our opinion, therefore, the yardstick would be to judge as to whether the allegation in the adjudication proceedings as well as the proceeding for prosecution is identical and the exoneration of the person concerned in the adjudication proceedings is on merits. In case it is found on merit that there is no contravention of the provisions of the Act in the adjudication proceedings, the trial of the person concerned shall be an abuse of the process of the court." The Court further noted that "the enquiry report in disciplinary proceedings is not conclusive of the guilt or otherwise of the delinquent employee," and that disciplinary authorities and prosecuting agencies operate under different rules and may receive different evidence.

Background

The dispute arose after an Executive Engineer (Electrical) employed with HESCOM, Bagalkot, was accused of demanding and accepting a bribe of Rs. 2,000 for clearing each of five bills (total Rs. 10,000). The contractor complainant approached the Anti-Corruption Bureau (ACB), which organised a trap using marked, powdered notes. The trap team recovered the packet from the engineer’s pocket and observed the taint on his hands when dipped in the prepared solution. Departmental disciplinary proceedings were initiated by the employer, and criminal prosecution was pursued by the Karnataka Lokayukta/ACB.

The departmental enquiry report recorded exoneration on two principal grounds: the Inspector of the ACB who conducted the trap was not examined, and two independent witnesses deposed they were standing outside the office when the alleged handover occurred. Relying on the three-judge decision in Radheshyam Kejriwal v. State of W.B., the High Court treated the departmental exoneration as a basis to quash the criminal prosecution. The Lokayukta appealed.

The Supreme Court reviewed precedents, distinguishing Radheshyam Kejriwal — where adjudication and prosecution were both by the same Enforcement Directorate under FERA and the adjudication found the transaction itself never occurred — from cases where departmental proceedings and criminal prosecution are carried out by different entities. The Court followed the reasoning in State (NCT of Delhi) v. Ajay Kumar Tyagi and held that an enquiry report does not automatically govern the criminal trial, particularly where the disciplinary exoneration resulted from lack of diligence (such as non-examination of the trap officer) rather than an on-merit finding that the alleged transaction never occurred.

On the facts, the Supreme Court found that the complainant and two independent witnesses had given consistent accounts of the trap and recovery of the marked notes, and that the departmental exoneration was not an exoneration on merits but arose from procedural lacunae in the enquiry. The bench therefore concluded that quashing the criminal prosecution would be inappropriate and that continuation of the trial would not constitute an abuse of process. The Court allowed the appeal, permitted the criminal proceedings to continue, and clarified that because the disciplinary authority had accepted the enquiry report, it could not be reopened; however, any conviction in the criminal trial would attract service consequences as reserved in the disciplinary order.

Case Details: Case No.: Reportable 2026 INSC 31 (@SLP (Crl.) No. 13057 of 2025) Case Title: The Karnataka Lokayuktha, Bagalkote District, Bagalkot v. Chandrashekar & Anr. Appearances: For the Petitioner(s): Not indicated in the judgment For the Respondent(s): Not indicated in the judgment