High Court of Punjab and HaryanaCWP/17357/2015allowed

Ramesh Kumar Khanna v. Allahabad Bank And ORS.

2023-10-09Mr. Justice Jagmohan Bansal32 pages

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Bank (supra) read as:

6. Rule 12(1)(b) of the Regulations of 1976 provides that an officer/employee may be placed under suspension by the competent authority where a case against him in respect of criminal offence is under inspection, inquiry or trial. Rule 12(2) of the Regulations provides that an officer/employee shall be deemed to have been placed under suspension by an order of the competent authority w.e.f. the date of detention, if he is detained in custody, whether on a criminal charge or otherwise for a period exceeding 48 hours. Rule 12(5) provides that an order of suspension made or deemed to have been made under this Regulation shall continue to remain in force until it is modified or revoked by an authority competent authority to do so. Sub-rule (b) of Rule 12(5) provides that an order of suspension made or deemed to have been made under this Regulation may at any time be modified or revoked by the authority which made or deemed to have made the order.

7. Initially the petitioner herein was placed under suspension vide order dated 24.12.2012 under Regulation 12(2), referred to above, on the ground of his detention exceeding 48 hours in connection with a criminal charge. By the time his application for revocation of the suspension under Regulation 12(5)(b) came up for consideration, not only the competent authority had sanctioned his prosecution under Section 19 of the Act on being satisfied that a prima facie case existed against him, but the criminal case also became pending against him before the Special Judge, Anti Corruption, C.B.I. (West), Lucknow, thereby attracting the provisions contained in Regulation 12(1)(b) allowing the suspension to continue on account of pendency of an investigation, inquiry or trial in respect of any criminal offence. In these circumstances, on a perusal of the impugned order, we find that it contains cogent reasons for declining to revoke the suspension which does not suffer from any error in the eyes of law. We do not find any valid ground for

interference in the matter under Article 226 of the Constitution of India, specially in view of the judgments cited by the learned counsel for the opposite party and referred hereinabove.

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! " % !3 3 / 1$ " ! % !3 "6. The decision of Ranchhodji Chaturji Thakore (supra) was followed by this Court in Union of India and Others v. Jaipal Singh (supra) to refuse back wages to an employee who was initially convicted for an offence under Section 302 read with Section 34 IPC and later acquitted by the High Court in a criminal appeal. While refusing to grant relief to the Petitioner

therein, this Court held that subsequent acquittal would not entitle an employee to seek back wages. However, this Court was of the opinion that if the prosecution is launched at the behest of the department and the employee is acquitted, different considerations may arise. The learned counsel for the Appellant endeavored to distinguish the prosecution launched by the police for involvement of an employee in a criminal case and the criminal proceedings initiated at the behest of the employer. The observation made in the judgment in Union of India and Others v. Jaipal Singh (supra) has to be understood in a manner in which the department would become liable for back wages in the event of a finding that the initiation of the criminal proceedings was mala fide or with vexatious intent.

In all other cases, we do not see any difference between initiation of the criminal proceedings by the department vis-avis a criminal case lodged by the police. For example, if an employee is involved in embezzlement of funds or is found indulging in demand and acceptance of illegal gratification, the employer cannot be mulcted with full back wages on the acquittal of the person by a criminal Court, unless it is found that the prosecution is malicious.

7. The point that remains to be considered is whether the Appellant is entitled to payment of full wages between 1979 and 1987. The Appellant was placed under suspension on 23.10.1979 and his suspension was revoked on 21.10.1987. An interesting development took place during the interregnum by which the disciplinary proceedings were dropped on 21.03.1983. It is clear from the record that the Appellant was the one who was seeking postponement of the departmental inquiry in view of the pendency of

criminal case. The order of suspension was in contemplation of disciplinary proceedings. By virtue of the disciplinary proceedings being dropped, the Appellant becomes entitled to claim full salary for the period from the date of his suspension till the date of closure of the departmental inquiry. Thereafter, the Respondents took four years to reinstate him by revoking his suspension. The order of suspension dated 23.10.1979 came to an end on 21.03.1983 which is the date on which disciplinary proceedings were dropped. The Appellant ought to have been reinstated immediately thereafter unless a fresh order was passed, placing him under suspension during the pendency of the criminal trial which did not happen. Ultimately, the Appellant was reinstated by an order dated 21.10.1987 by revocation of the order of suspension.

Though, technically, the learned Additional Solicitor General is right in submitting that the impugned judgment does not even refer to the I.A., we are not inclined to remit the matter to the High Court at this stage for fresh consideration of this point. We hold that the Appellant is entitled for full wages from 23.10.1979 to 21.10.1987 after adjustment of the amounts already paid towards subsistence allowance.

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8. Before delving into the contentious issues arising from the arguments advanced, the issue with regard to the applicability of the provisions of the Sastry Award may be dealt with in the first instance. According to us, the said provisions do not have any special significance inasmuch as there can be no doubt on the proposition that on the very same facts that give rise to a criminal offence it is always open to the employer to initiate a departmental proceeding which option the employer may or may not exercise. In the event the employer chooses to initiate a departmental proceeding, it would be open for such an employer to take disciplinary action against the erring employee if the charges levelled are found to be substantiated notwithstanding the acquittal of the employee in the criminal case that may have been lodged against him.

This is on the principle that standard of proof in a criminal case and a departmental proceeding is different. However, in a case where the employer chooses not to initiate a departmental proceeding and acts only on the basis of the conviction in the criminal prosecution, he would be bound by the final verdict in the same, i.e., in case of a reversal.

the Sastry Award, relied upon on behalf of the respondent, therefore, does not in any manner alter the basic principles surrounding the initiation of a criminal action and a departmental enquiry on the same set of facts and the consequences thereof. 9.

xxx xxx xxx xxx

10. The issue relating to entitlement to back wages, however, stands on a somewhat different footing. While in Ranchhodji Chaturji Thakore (supra), Jaipal Singh (supra) and Baldev Singh (supra), the basis of refusal of back wages by this Court would appear to be the inability of the employer to avail of the service of the employee due to his incarceration in jail, in Banshi Dhar (supra), the refusal of back wages by this Court was in a situation largely similar to the case before us, namely, where the employee was all along on bail and was thus available for work. In Banshi Dhar (supra), this Court answered the question against the employee by holding that grant of back wages is not automatic and such an entitlement has to be judged in the context of the totality of the facts of a given case.

It is on such consideration that back wages was declined. In the present case, it will not even be necessary for the Court to perform the said exercise and delve into the surrounding facts and circumstances for the purpose of adjudication of the entitlement of the respondent to back wages in view of the provisions of Section 10(1)(b)(i) of the Act. The said provisions impose a clear bar on a banking company from employing or continuing to employ a person who has been convicted by a criminal court of an offence involving moral turpitude.

498A of the Indian Penal Code and Section 4 of the Dowry Prohibition Act, 1961. No doubt, the respondent was not in custody during the period for which he has been denied back wages in as much as the sentence imposed on him was suspended during the pendency of the appeal. But what cannot be lost sight of is that the conviction of the respondent continued to remain on record until it was reversed by the appellate court on 22.02.2002. During the aforesaid period there was, therefore, a prohibition in law on the appellant-bank from employing him. If the respondent could not have remained employed with the appellant-bank during the said period on account of the provisions of the Act, it is difficult to visualise as to how he would be entitled to payment of salary during that period.

His subsequent acquittal though obliterates his conviction, does not operate to retrospectively wipe out the legal consequences of the conviction under the Act. The entitlement of the respondent to back wages has to be judged on the aforesaid basis. His reinstatement, undoubtedly, became due following his acquittal and the same have been granted by the appellant bank.

The respondent has relied upon Para 10 of the afore-cited judgment. In Para 8 of the judgment, the Court has held that if department opts not to initiate a departmental proceeding, the department is bound to rely upon outcome of criminal prosecution. The Court has declined claim of the respondent therein relying upon Section 10 (1) of Banking Regulation Act, 1949 which imposes a clear bar on a banking company from employing or continuing to employ a person who has been convicted by criminal Court of an offence involving moral turpitude. In the case in hand, Regulation 12(5) empowers respondent

to recall or revoke suspension order, thus, Regulation 12(5) provides for altogether different than Section 10 (1) of Banking Regulation Act. The petitioner was neither held guilty in departmental proceedings nor he has been convicted by criminal Court. The petitioner was acquitted by Trial Court. The department has not even initiated departmental proceedings and criminal trial was dropped, thus, Regulation 12 read with 15 of 1976 Regulations comes for the rescue of the petitioner. (55 The relevant extracts of Division Bench Judgment of Allahabad High Court in Mata Badal Singh Vs. Allahabad U.P. Gramin Bank (supra) cited by respondent read as:

16.

Thus, when the proceedings against the petitioner have been initiated under the provisions of Prevention of Corruption Act and in context of discharge of his official function/duties and in case the petitioner is allowed to discharge his duties, it shall not be in the interest of the equity rather shall be repugnant to the context. Hence, there is no justification to set aside the suspension order, because Apex Court in the case of Secretary to Govt., Prohibition and Excise Department Vs. L.

Srinivasan, (1996) 3 SCC 157, observed that even if a criminal trial or enquiry takes a long time, it is ordinarily not open to the Court to interfere in case of suspension as it is in the exclusive domain of the competent authority who can always review its order of suspension being an inherent power conferred upon him to place an employee under suspension and while exercising such a power, the authority can consider the case of an employee for revoking the suspension order if satisfied that the criminal case pending would be concluded after an unusual delay for no fault of the employee concerned. (See also: U.P.

Utpadan Mandi Parishad Vs. Sanjeev Ranjan (1993) Supp. (3) SCC 483; and State of Rajasthan Vs. B.K. Meena and others (1996) 6 SCC 417.

The Allahabad High Court has held that suspension order cannot be quashed by Court on the ground that criminal trial is going to take long time, however, it is open to competent authority to review its order of suspension being an inherent power conferred upon him. In the case in hand, the respondent carries expressed power to consider application seeking recalling of suspension order. The respondent did not pass any order on the application of the petitioner seeking recalling of suspension. The respondent did not think it appropriate to reconsider suspension order especially when no departmental proceeding was initiated and petitioner was willing to work. The respondent was bound to pass an appropriate order in terms of Regulation 12 when there was specific request on the part of petitioner. (- = #

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"22. Now we will try to explain the essential distinction between these two retirement benefits that an employee may derive at the time of his retirement from service. The C.P.F. was introduced with the object of providing social security to the employees working in factories and other establishments, after their retirement. The C.P.F. was instituted as a Compulsorily Contributory Provident Fund by the enactment of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as "the Provident Fund Act"). The employee registered under the Provident Fund Act shall be entitled to claim all benefits available under the C.P.F. Scheme framed under the Act. This CPF Scheme requires opening of the account for the employee by the employer. The Government/employer is under the continuous obligation to deposit equal or matching contribution made by the employee in his account till he retires. Once the employee is retired, then his rights qua Government/employer's contribution into his C.P.F. account finally crystallizes. After retirement, this entire C.P.F.

amount is paid to the employee as a retrial benefit. On the receipt of C.P.F. amount, the relationship between employee and employer ceases to exist without leaving any further legal right or obligation qua each other." The Hon'ble Court has held that on receipt of CPF amount, the relationship of employee and employer ceases to exist without leaving any further legal right or obligation qua each other. In the case in hand, the petitioner well within time had filed option for pension. The respondent in 2014 released employee's contribution and thereafter in 2015 employer's contribution. Initially, the stand of the respondent was that the petitioner had not filed option for pension, however, on being confronted with documents on record, the respondent has conceded that petitioner had filed option.

The petitioner was paid employer's contribution in 2015 and in the same year he approached this Court seeking pension on the basis of option filed by him. The petitioner was released employer's contribution under wrong notion and impression of the respondent. The petitioner at the first available opportunity has approached this Court and he has expressed his willingness to return employer's contribution alongwith interest @ 12% in lieu of pension.

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The respondent in support of his contention has further cited judgment of Supreme Court in Amandeep Singh (supra). The relevant extracts of said judgment read as:

"23. In view of the above, it is well settled that the notice inviting option need not to be personally served to the employees unless the Regulation or any instruction so provides. The Regulations 1992 which are being considered in the present case had already been interpreted in PEPSU Road Transport

Corporation v. Mangal Singh as noticed above. This Court having already held that Regulations 1992 do not contemplate any personal service of notice to employees the finding in the judgment of the courts below holding otherwise for decreeing the suit of the plaintiff are unsustainable. From the facts of the present case it is clear that although Regulations were in force from 1992, plaintiff retired on 30th November, 2011 and after retirement received CPF benefits without any protest and at no point of time before retirement he has raised any grievance. The benefit which was available to him under CPF scheme was received by the plaintiff, he cannot be allowed to another benefit flowing from the pension scheme which he never opted.

Extending benefit of the pension scheme to the plaintiff shall be extending double benefits- CPF benefit as well as pension scheme which was never contemplated by the Regulations. In any view of the matter, the issue in the present case is covered by the judgment in PEPSU Road Transport Corporation v. Mangal Singh (supra) and we do not propose to take any different view in the matter. Learned counsel for the respondents has also contended that in so far as the outstanding amount of CPF is concerned the said amount could have been deducted by virtue of Regulation 24 and which amount is to be adjusted against death-cum-retirement gratuity. In the present case the plaintiff having not opted for pension scheme, the requirement from refunding the advance taken from CPF within six months is not attracted.

More so, in the present case as has been stated by the appellant in the written statement in the suit even after retirement an amount of L 4999/was due from the advance taken by the respondents from his CPF amount."

Hon'ble Court has held that the respondent has availed benefit available to him and he cannot be allowed another benefit flowing from pension scheme which he never opted.

The Supreme Court denied benefit of pension because respondent therein availed benefit of CPF and had never opted for pension scheme whereas in the case in hand, the petitioner opted for pension and he has approached this Court as soon as employer's contribution was released to him.

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