The Karnataka Lokayuktha Bagalkote District, Bagalkot vs Chandrashekar and Another

Reportable 2026 INSC 31 IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. of 2026 (@Special Leave Petition (Crl.) No. 13057 of 2025)

The Karnataka Lokayuktha Bagalkote District, Bagalkot ...Appellant Versus Chandrashekar & Anr. ...Respondents

JUDGMENT

K. VINOD CHANDRAN, J.

Leave granted.

2. Despite this Court having consistently held that

disciplinary proceedings and criminal prosecution, even on

an identical allegation, are parallel proceedings, the

relevance of the conclusion in one is often contended to be

binding on the other. Trite is the principle that in a

disciplinary proceeding, the proof is of preponderance of

probabilities while in a criminal proceeding, it has the

higher standard of proof beyond reasonable doubt. Often it Signature Not Verified Digitally signed by is argued that the acquittal in the criminal proceedings Deepak Guglani Date: 2026.01.06 18:07:19 IST

should inure to the benefit of the accused/delinquent Reason:

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Crl. Appeal @SLP Crl. No. 13057 of 2025 employee in a disciplinary proceeding too. In the present

case, we have a contrary contention of the disciplinary

proceedings having exonerated the delinquent employee,

who seeks absolution from the criminal prosecution. The

contention is that when the allegations could not be proved

in a disciplinary proceeding where the requirement is only

of preponderance of probabilities, surely it cannot be

proved beyond reasonable doubt.

3. The appellant is the Lokayukta of the State of

Karnataka, an independent body tasked also to conduct

enquiries on complaints of corruption and initiate and

continue prosecution; such powers having been statutorily

conferred under the Karnataka Lokayukta Act, 1984. On

facts, suffice it to notice that the respondent, an Executive

Engineer (Electrical) with the Works and Maintenance

Division, HESCOM, Bagalkot regulated by the Karnataka

Electricity Transmission Corporation Limited Regulations,

was alleged to have demanded a bribe from an electrical

contractor to clear five bills, at the rate of Rupees two

thousand each. The contractor complained to the Anti-

Page 2 of 21 Crl. Appeal @SLP Crl. No. 13057 of 2025 Corruption Bureau1 who prepared a trap, with identifiable,

powdered notes kept in a packet entrusted with the

complainant, to be handed over to the Executive Engineer.

The trap was successful, and the notes were recovered from

the pocket of the Executive Engineer whose hands turned

pink on dipping in the prepared solution, which proved the

taint of corruption.

4. Disciplinary proceedings were initiated and so was

criminal prosecution launched, the former by the

department itself and the latter by the Lokayukta who is the

appellant herein. On the claim that the departmental

proceedings ended in exoneration, the delinquent

employee approached the High Court, for quashing the

criminal proceedings. The High Court by the impugned

judgment relied on Radheshyam Kejriwal v. State of W.B.2,

a three-Judge Bench decision to hold that if there is an

exoneration on merits where the allegation is found to be

not sustainable at all and the person held innocent, then

criminal proceedings on the same set of facts and

circumstances cannot be allowed to continue especially

1 for short, the ACB 2 (2011) 3 SCC 581 Page 3 of 21 Crl. Appeal @SLP Crl. No. 13057 of 2025 based on the principle of higher standard of proof in

criminal cases. The learned Single Judge also refused to

follow a later judgment of this Court in State (NCT of Delhi)

v. Ajay Kumar Tyagi3; finding the later judgment to be per

incuriam, having been passed in ignorance of the earlier

one.

5. There can be no doubt regarding the principle that if

the later Bench holds contrary to the earlier Bench decision

of coequal strength, on the same point, the contrary dictum

expressed by the later Bench would be per incuriam as held

by a Constitution Bench in National Insurance Company

Limited v. Pranay Sethi4. But the question arising herein is

as to whether there was a conflict with the earlier and later

judgments.

6. In Radheshyam Kejriwal2, the raid on the premises of

the appellant therein, by the Enforcement Directorate gave

rise to proceedings under the Foreign Exchange Regulation

Act, 19735. Initially, a show-cause notice was issued by the

Director of the Enforcement Directorate proposing

3 (2012) 9 SCC 685 4 (2017) 16 SCC 680 5 for short, the FERA Page 4 of 21 Crl. Appeal @SLP Crl. No. 13057 of 2025 adjudication proceedings under Section 51 of the FERA,

which, after explanation received was concluded with a

decision taken by the Adjudicating Officer that the

contravention of the provisions alleged cannot be sustained

since the transaction itself is not proved. The said order

became final for reason of the Enforcement Directorate

having not challenged it. Later, on the same set of facts, as

enabled under Section 56 of the FERA criminal proceedings

were initiated, which even as per the enactment could be

continued without any prejudice to any award of penalty by

the Adjudicating Officer under Section 51 of the FERA. It is

in this context that the three-Judge Bench, by a majority,

held inter alia that though the adjudication and criminal

proceedings are independent of each other, if in the former

the offender is exonerated on merits then the criminal

prosecution also comes to an inevitable end. It was also

categorically found that if the exoneration in the

adjudication proceeding is on a technical ground and not on

merits, the prosecution could continue.

7. In Radheshyam Kejriwal2 the adjudication

proceedings and the criminal proceedings were under the

Page 5 of 21 Crl. Appeal @SLP Crl. No. 13057 of 2025 FERA, one for penalty; to recoup the economic loss caused

by the transaction contravening the provisions of the statute

and the other, prosecution; to provide penal consequences

as a deterrent measure. The subject matter of the offence

alleged in both proceedings was the contravention of the

provisions of the statute through the transaction detected.

When the adjudication proceedings found the transaction

alleged to have not taken place, then it cuts at the root of the

prosecution too. Other decisions under the FERA, where the

two proceedings of adjudication and prosecution were

found to be independent; the decision in one having no

bearing on the other, were noticed. So were the decisions

under the Income Tax Act, 19616 noticed, wherein, when the

penalty imposed on a presumed violation of the provisions

of the I.T. Act was set aside by the Tribunal; the last fact-

finding authority under the scheme of the I.T. Act, for that

reason alone the prosecution was found redundant and

quashed. Radheshyam Kejriwal2 culled out the principles

in the following manner:

6

For brevity ‘the I.T. Act’ Page 6 of 21 Crl. Appeal @SLP Crl. No. 13057 of 2025

38. The ratio which can be culled out from these decisions can broadly be stated as follows:

(i) Adjudication proceedings and criminal prosecution can be launched simultaneously;

(ii) Decision in adjudication proceedings is not necessary before initiating criminal prosecution;

(iii) Adjudication proceedings and criminal proceedings are independent in nature to each other;

(iv) The finding against the person facing prosecution in the adjudication proceedings is not binding on the proceeding for criminal prosecution;

(v) Adjudication proceedings by the Enforcement Directorate is not prosecution by a competent court of law to attract the provisions of Article 20(2) of the Constitution or Section 300 of the Code of Criminal Procedure;

(vi) The finding in the adjudication proceedings in favour of the person facing trial for identical violation will depend upon the nature of finding. If the exoneration in adjudication proceedings is on technical ground and not on merit, prosecution may continue; and

(vii) In case of exoneration, however, on merits where the allegation is found to be not sustainable at all and the person held innocent, criminal prosecution on the same set of facts and circumstances cannot be allowed to continue, the underlying principle being the higher standard of proof in criminal cases.

Page 7 of 21 Crl. Appeal @SLP Crl. No. 13057 of 2025

39. 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.

[underlining by us for emphasis]

8. In Radheshyam Kejriwal2 the very substratum of the

allegation of violation of the provisions of FERA was found to

be non-existent, an adjudication on merits that the

transaction alleged had not occurred. In the instant case the

Enquiry Report found that for reason of the Officer in charge

of the trap having not been examined, the department was

unable to establish the charge, not at all an exoneration on

merits, but more a discharge for lack of diligence. The ratio

decidendi of that case cannot be extended to every situation

where a statute provides for a civil liability and a criminal

liability, in which event Courts would be presuming what

logically follows from the finding, without any application on

the facts.

Page 8 of 21 Crl. Appeal @SLP Crl. No. 13057 of 2025

9. In a disciplinary enquiry the employer satisfies itself

as to whether the misconduct alleged is proved and if

proved, decides on the proportionate punishment that

should be imposed; both of which are in the exclusive

domain of the employer, to be determined on the standard

of preponderance of probabilities. In a criminal prosecution

launched what assumes significance is the criminality of the

act complained of or detected which has to be proved

beyond reasonable doubt. Both are independent of each

other not only for reason of the nature of the proceedings

and the standard of proof, but also for reason of the

adjudication being carried on by two different entities,

regulated by a different set of rules and more importantly

decided on the basis of the evidence led in the independent

proceedings. If evidence is not led properly in one case, it

cannot govern the decision in the other case where

evidence is led separately and independently.

10. No doubt, the principles in Radheshyam Kejriwal2

are applicable in a disciplinary inquiry, which was the

specific question considered in Ajay Kumar Tyagi3;

interestingly by the very same Hon’ble Judge who authored

Page 9 of 21 Crl. Appeal @SLP Crl. No. 13057 of 2025 the majority judgment in Radheshyam Kejriwal2. True, the

earlier decision was not noticed in the latter decision;

according to us with just cause since there were distinctions

on facts.

11. Ajay Kumar Tyagi3 was a case in which a successful

trap was laid and there was exoneration in the enquiry

conducted without a final order by the Disciplinary

Authority. Therein the Disciplinary Authority had not passed

an order, in deference to the pending criminal prosecution,

which action of deferment was unsuccessfully challenged in

a writ petition by the delinquent. Then a further writ petition

was filed challenging the continuance of the criminal

prosecution on the ground of exoneration in the Enquiry

Report, which stood allowed. The Disciplinary Authority

then passed an order exonerating the delinquent, subject to

a challenge to the quashing of the criminal proceedings. In

the SLP filed against the order of quashing there was a

reference to a larger Bench noting the divergence of

opinion with regard to the quashing of a prosecution based

on exoneration in a disciplinary proceeding. Even before

answering the reference the larger Bench found the

Page 10 of 21 Crl. Appeal @SLP Crl. No. 13057 of 2025 quashing to be wrong insofar as the Disciplinary Authority

having power to differ from the findings in the report of

enquiry and the High Court, in that case having upheld the

action of the Disciplinary Authority, keeping in abeyance

the final order. We pause here to notice that herein the

Disciplinary Authority passed an order concurring with the

findings in the Enquiry Report on 08.07.2024, produced as

Annexure R-1, with a rider that the order is subject to the

proceedings in the criminal case, the consequences of

which would necessarily follow.

12. The reference too was answered in Ajay Kumar

Tyagi3. A two-Judge Bench decision of this Court in P.S.

Rajya v. State of Bihar7 was referred to wherein the criminal

prosecution was quashed when the departmental

proceedings concluded in exoneration. In P.S. Rajya7, the

allegation was of possession of assets disproportionate to

the source of income. The Central Vigilance Commission

dealt with the charge and in its elaborate report concluded

that the valuation report on which CBI placed reliance is of

doubtful nature. The Court on facts found that the value

7 (1996) 9 SCC 1 Page 11 of 21 Crl. Appeal @SLP Crl. No. 13057 of 2025 given as a base for the chargesheet was not the value given

in the reports subsequently given by the valuers. The

decision in P.S. Rajya7 relying on State of Haryana v.

Bhajan Lal8; the water shed decision in invocation of the

inherent powers under Section 482 of the Code of Criminal

Procedure, 1973 for quashing criminal prosecution, held

that the prosecution in that case should be quashed for more

than one reason as laid down in Bhajan Lal8. Ajay Kumar

Tyagi3 categorically held that the quashing of criminal

proceedings in P.S. Rajya7 was not merely on account of the

exoneration in the disciplinary proceedings. Referring to a

number of decisions, it was held so in paragraphs 24 & 25

which are extracted hereunder:

“24. Therefore, in our opinion, the High Court quashed the prosecution on total misreading of the judgment in P.S. Rajya case (1996) 9 SCC 1. In fact, there are precedents, to which we have referred to above, that speak eloquently a contrary view i.e. exoneration in departmental proceeding ipso facto would not lead to exoneration or acquittal in a criminal case. On principle also, this view commends us. It is well settled that the standard of proof in a

8 1992 Supp (1) SCC 335 Page 12 of 21 Crl. Appeal @SLP Crl. No. 13057 of 2025 department proceeding is lower than that of criminal prosecution. It is equally well settled that the departmental proceeding or for that matter criminal cases have to be decided only on the basis of evidence adduced therein. Truthfulness of the evidence in the criminal case can be judged only after the evidence is adduced therein and the criminal case cannot be rejected on the basis of the evidence in the departmental proceeding or the report of the inquiry officer based on those evidence.

25. We are, therefore, of the opinion that the exoneration in the departmental proceeding ipso facto would not result in the quashing of the criminal prosecution. We hasten to add, however, that if the prosecution against an accused is solely based on a finding in a proceeding and that finding is set aside by the superior authority in the hierarchy, the very foundation goes and the prosecution may be quashed. But that principle will not apply in the case of the departmental proceeding as the criminal trial and the departmental proceeding are held by two different entities. Further, they are not in the same hierarchy.”

13. We are of the opinion that in the present case the

distinction as brought out in Ajay Kumar Tyagi3 squarely

applies and the ratio decidendi therein is not regulated by Page 13 of 21 Crl. Appeal @SLP Crl. No. 13057 of 2025 the ratio of the earlier judgment in Radheshyam Kejriwal2.

In Radheshyam Kejriwal2, the adjudication proceedings

and the prosecution were both by the very same entity, the

Enforcement Directorate under the FERA. In Ajay Kumar

Tyagi3, the allegation was of a demand and acceptance of

bribe in which a trap was laid, and the prosecution was

commenced and continued by the ACB while the

departmental proceedings were by the Delhi Jal Board

under which the delinquent employee worked. Identical is

the fact in this case where the ACB laid the trap, commenced

and continued the criminal proceedings, at the behest of the

appellant, while the department carried on with the

enquiry. The findings in the enquiry report also do not

persuade us to quash the criminal proceedings as we would

presently notice.

14. At the outset, we cannot but reiterate that the enquiry

report in disciplinary proceedings is not conclusive of the

guilt or otherwise of the delinquent employee, which

finding is in the exclusive domain of the disciplinary

authority. The enquiry officer is appointed only as a

convenient measure to bring on record the allegations

Page 14 of 21 Crl. Appeal @SLP Crl. No. 13057 of 2025 against the delinquent employee and the proof thereof and

to ensure an opportunity to the delinquent employee to

contest and defend the same by cross-examination of the

witnesses proffered by the department and even

production of further evidence, in defense. The enquiry

officer, strictly speaking, merely records the evidence and

the finding entered on the basis of the evidence led at the

enquiry does not have any bearing on the final decision of

the disciplinary authority. The disciplinary authority takes

the ultimate call as to whether to concur with the findings of

the enquiry authority or to differ therefrom. On a decision

being taken to differ from the findings in the enquiry report

as to the guilt of the delinquent employee, if it is in favour of

the delinquent employee nothing more needs to be done

since the enquiry stands closed exonerating the employee

of the charges levelled. If the decision is to concur with the

finding of guilt by the Enquiry Officer, then a show-cause is

issued with the copy of the Enquiry Report. However, while

differing from the finding of exoneration in the enquiry

report, necessarily the disciplinary authority will not only

have to issue a show-cause against the delinquent

Page 15 of 21 Crl. Appeal @SLP Crl. No. 13057 of 2025 employee, with a copy of the Enquiry Report, but the show-

cause notice also has to specifically bring to attention of the

delinquent, the aspects on which the disciplinary authority

proposes to differ, based on the facts discovered in the

enquiry so as to afford the delinquent employee an

opportunity to proffer his defense to the same.

15. Having thus stated the law regulating the final decision

in a departmental enquiry, we cannot but notice that in the

present case, there is a final order produced as passed by

the Disciplinary Authority. The learned Counsel for the

respondent vehemently argued that a retired District Judge

was the Enquiry Officer, which according to us gives the

enquiry no higher sanctity than that would be conferred on

any enquiry report in any disciplinary proceeding carried

out by a person not trained in law. The Enquiry Officer often

is appointed as an independent person who would have no

connection with the management to ensure against any

allegation of bias. A retired judicial officer being appointed

as an enquiry officer does not confer the enquiry report any

higher value or greater sanctity than that is normally

available to such reports. We cannot but observe that in this

Page 16 of 21 Crl. Appeal @SLP Crl. No. 13057 of 2025 case the Enquiry Officer fell into an error by requiring proof

at a higher level than that necessary under preponderance

of probabilities and so did the Disciplinary Authority, in

concurring with the same.

16. We also notice the specific findings in the enquiry

report. The exoneration was on the basis of two aspects,

one, the Inspector of the ACB who carried out the trap

having not been examined and the other, two independent

witnesses accompanying the trap team having stated that

they were standing outside the office room wherein the

handing over of the bribe took place. The first ground of the

Inspector not having been examined, according to us,

based on the preponderance of probabilities, is not

imperative, especially when the two independent witnesses

were examined. More so, insofar as the department not

being at fault since three summons were taken out and a

further request was made again for summoning the witness,

which was declined by the Enquiry Officer. We cannot but

notice that there would be no consequence in not

responding to a summons in departmental proceedings,

while a like failure in criminal proceedings would be more

Page 17 of 21 Crl. Appeal @SLP Crl. No. 13057 of 2025 drastic. The criminal court has ample powers to ensure the

presence of a witness in a criminal proceeding, which the

Enquiry Officer does not possess. In this context, the fact

that the prosecuting agency and the one carrying on the

departmental enquiry being two entities assumes

significance. Further, here the trap was laid by the ACB, and

the prosecution was conducted at the behest of the

Lokayukta, and we cannot presume or anticipate any laxity

on the prosecuting agency of not bringing the Inspector to

the box, before the criminal court. More pertinently we

cannot, on such anticipated laxity put an end to the

prosecution.

17. We looked at the evidence laid at the enquiry, not to

regulate the order in the departmental proceedings which

is not challenged before us, but to satisfy ourselves and to

understand whether there is total exoneration on merits,

which we find to be absent. In the present case, the

witnesses proffered by the department where, (i) the

complainant; the contractor who complained of the demand

of bribe and (ii) two independent witnesses, government

officers in two different departments who accompanied the

Page 18 of 21 Crl. Appeal @SLP Crl. No. 13057 of 2025 trap team. PW-1, the complainant categorically stated that a

bribe was demanded from him of Rupees ten thousand to

clear five bills at the rate of Rupees two thousand each. He

complained to the ACB whose Inspector marked the notes,

powdered them and put them in a packet, after noting down

the numbers to later identify them. The trap team along with

the complainant and two witnesses went to the office of the

delinquent employee. The complainant went inside the

office room wherein he handed over the packet containing

the money to the delinquent employee, who counted and

put it in his pant’s pocket, clearly spoken of by the

complainant at the enquiry. The complainant gave the signal

as agreed upon, a missed call on the mobile, when the trap

team went in, checked the pockets of the delinquent

employee, recovered the packet with the money and when

the hands of the delinquent employee were dipped in the

solution earlier prepared, the colour changed bringing

forth the taint.

18. PW-2 and PW-3 were the independent witnesses who

were standing outside the office room when the complainant

went in. They deposed that on the signal being given, the

Page 19 of 21 Crl. Appeal @SLP Crl. No. 13057 of 2025 officers went inside the room and the witnesses followed.

They witnessed the money being taken out from the pocket

of the delinquent and the delinquent’s hands being dipped

in a solution which displayed the tainted colour. Even

without the examination of the Inspector who laid the trap

we are of the opinion that there was sufficient proof on the

standard of preponderance of probabilities to find the

delinquent guilty of the charge of demand and acceptance

of bribe. The complainant and the independent witnesses

have spoken about the incident of the successful trap laid.

19. On the principles of law as stated hereinabove and

also on the peculiar facts coming out from the above case,

we are not convinced that this is a fit case where the criminal

proceedings can be quashed on the exoneration of the

delinquent employee in a departmental enquiry. We find

the decision in Ajay Kumar Tyagi3 to be squarely

applicable. The appeal stands allowed permitting the

continuation of criminal proceedings. We make it clear that

since the disciplinary authority has accepted the enquiry

report, there cannot be reopening of the same based on the

findings hereinabove; but a conviction in the criminal case

Page 20 of 21 Crl. Appeal @SLP Crl. No. 13057 of 2025 would bring in consequences as mandated by rules

regulating the service, specifically reserved in the order of

the disciplinary authority, Annexure R-1.

20. The Appeal stands allowed.

21. Pending application(s), if any, shall stand disposed of.

……...…….……………………. J.

(AHSANUDDIN AMANULLAH)

……...…….……………………. J.

(K. VINOD CHANDRAN)

NEW DELHI JANUARY 06, 2026.

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